9937-09 Concerning the Construction of Improvements to the Municipal Waterworks of the City

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SECTION 14. Sinking Fund. There is hereby continued a fund of the utility created and designated in the Prior Ordinances as the Sinking Fund (the "Sinking Fund"), to be used for the payment of the principal of and interest on bonds which by their terms are payable from the Net Revenues, and for the payment of any fiscal agency charges in connection with such payment. The Sinking Fund is divided into two accounts designated as the Bond and Interest Account and the Debt Service Reserve Account, which are pledged for the purposes set forth below. There shall be set aside and deposited in the Sinking Fund, as available, and as hereinafter provided, a sufficient amount of the Net Revenues to meet the requirements of the Bond and Interest Account (also shown on the books of the utility as the Bond Sinking Fund) and of the Debt Service Reserve Account. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the amount needed to redeem all of the then outstanding bonds. (a) Principal and Interest Account. There shall be transferred, on the last day of each calendar month, from the Revenue Fund and credited to the Bond and Interest Account an amount equal to the sum of one-twelfth (1/12) of the principal and one-sixth (1/6) of the interest on all then outstanding bonds payable from Net Revenues on the next succeeding principal and interest payment dates, until the amount so credited shall equal the principal payable during the next succeeding twelve (12) calendar months and the interest payable during the next succeeding six (6) calendar months. There shall similarly be credited to the account any amount necessary to pay when due the bank fiscal agency charges for paying principal of and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sinking Fund and credited to the Bond and Interest Account, remit promptly to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of bank fiscal agency charges. (b) Debt Service Reserve Account. The City may, upon the issuance of the 2009 Bonds of any Series, establish within the Debt Service Reserve Account a subaccount for the 2009 Bonds of such Series (each, a "Subaccount"). The Debt Service Reserve Account (excluding any Subaccounts) shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the Bonds (as hereinafter defined) (excluding any 2009 Bonds of any Series for which a Subaccount was established), and the moneys in the Debt Service Reserve Account (excluding any Subaccounts) shall be used to pay current principal and interest on the Bonds (excluding any 2009 Bonds of any Series for which a Subaccount was established) to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. The Subaccount of the Debt Service Reserve Account for the 2009 Bonds of any Series shall constitute the margin for safety and as protection against default in the payment of principal of and interest on the 2009 Bonds of such Series, and the moneys in such Subaccount shall be used to pay current principal and interest on the 2009 Bonds of such Series to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. (c) No amounts in the Subaccount of the Debt Service Reserve Account for the 2009 Bonds of any Series shall be available to pay any principal of or interest or redemption premium, if arty, on any Bonds, except the 2009 Bonds of such Series. (d) No amounts in the Debt Service Reserve Account shall be available to pay any principal of or interest or redemption premium, if any, on any 2009 Bonds of any Series for -21-