9672-06 Authorizing the Acquistion and Installation of Improvements to the City's Sewage Works

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Fund referred to below if necessary to prevent a default in the payment of principal or interest on outstanding bonds. Section XI. Sewage Works Sinking Fund. There shall be deposited from the Revenue Fund into the "Sewage Works Sinking Fund," created under the Prior Bond Ordinances and continued hereby, for the payment of the interest on and principal of revenue bonds which by their terms are payable from the revenues of the Sewage Works, and the payment of any fiscal agency charges in connection with the payment of such bonds and interest thereon, a sufficient amount of the net revenues of said Sewage Works (defined as gross revenues of the sewage works after deduction only for the payment of the reasonable expenses of operation, repair and maintenance but not including depreciation and payments in lieu of taxes) to meet the requirements of the Bond and Interest Account and the Debt Service Reserve Account each created under the Prior Bond Ordinances and continued hereby, in said Sewage Works Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account, equals the principal of and interest on all of the then outstanding bonds to the final maturity thereof. (a) Bond and Interest Account. Beginning with the first calendar month following the date of issuance of each series of the Bonds herein authorized, there shall be credited on the first day of each calendar month to the Bond and Interest Account an amount equal to the sum of one-sixth(1/6) of the interest on all then outstanding bonds payable during the then next succeeding six calendar months and one-twelfth (1/12) of the principal on all then outstanding bonds payable during the then next succeeding twelve calendar months; provided that such fractional amounts shall be appropriately increased, if necessary, to provide for the first interest and first principal payments. There shall similarly be credited to the account the amount necessary to pay the bank fiscal agency charges, if any, for paying principal and interest on the bonds as the same become payable. The City shall, from the sums deposited in the Sewage Works 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 any bank fiscal agency charges. (b) Debt Service Reserve Account. On the first day of each calendar month, after making the credits to the Bond and Interest Account, there shall be credited from available net revenues to the Debt Service Reserve Account an amount not less than an amount which will produce, in equal monthly installments over a sixty (60) month period, an amount equal to the least of (i) maximum annual debt service on all bonds payable from the net revenues of the Sewage Works, (ii) 125% of the average annual principal and interest payable on all bonds payable from the net revenues of the Sewage Works, or (iii) ten percent (10%) of the proceeds of all bonds payable from the net revenues of the Sewage Works, plus a minor portion thereof as defined in the Internal Revenue Code of 1986, as amended (the "Code") (the "Debt Service Reserve Requirement"). Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal the Debt Service Reserve Requirement. The Debt Service Reserve Account shall constitute the margin for safety as a protection against default in BDDBOI 4347413v2 - 14 -