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

Home Browse Search

affects the rights of such owners so long as any of said bonds or the interest thereon remains unpaid. (i) The provisions of this Ordinance shall be construed to create a trust in the proceeds of the sale of the Bonds herein authorized for the uses and purposes herein set forth, and the owners of the Bonds shall retain a lien on such respective proceeds until the same are applied in accordance with the provisions of this Ordinance and of the Act. The provisions of this Ordinance shall also be construed to create a trust in the portion of the net revenues herein directed to be set apart and paid into the Sewage Works Sinking Fund for the uses and purposes of said fund as in this Ordinance set forth. The owner of said Bonds shall have all of the rights, remedies and privileges set forth in the provisions of the Act, including the right to have a receiver appointed to administer said Sewage Works in the event of default in the payment or the principal of or interest on any of the Bonds herein authorized or in the event of default in respect to any of the provisions of this Ordinance or the Act. The Common Council reserves the right, however, to amend this Ordinance from time to time to preserve the Tax Exemption described in Section XIX hereof without the approval of any owner of the bonds so long as the Common Council certifies that such amendment does not violate subsection (i) of Section XVII. Section XVIII. Permitted Actions Relating to Preservation of Exclusion of Interest from Federal Gross Income. (a) The Controller is hereby authorized to invest moneys pursuant to the provisions of this Ordinance at a restricted yield (subject to applicable requirements of federal law to insure that any such investment is acquired for fair market value) to the extent necessary or advisable to preserve the exclusion from gross income of interest on the Bonds, or the tax exempt status of interest on the Bonds, under federal law. (b) The Controller shall keep full and accurate records of investment earnings and income from moneys held in the funds and accounts created or referenced herein. In order to comply with the provisions of this Ordinance, the Controller is hereby authorized and directed to employ consultants or attorneys from time to time to advise the City as to requirements of federal law to preserve the tax exclusion or exemption. Section XIX. Tax Covenants. In order to preserve the exclusion of interest on the Bonds from gross income for federal income tax purposes and as an inducement to purchasers of the Bonds, the City represents, covenants and agrees that: (a) No person or entity, other than the City or another state or local governmental unit, will use proceeds of the Bonds or property financed ~by the Bond proceeds other than as a member of the general public. No person or entity other than the City or another state or local governmental unit will own property financed by the Bond proceeds or will have actual or beneficial use of such property pursuant to a lease, a management or incentive payment contract, an arrangement such as take-or-pay or output BDDB01 4347413v2 - 19 -