O-1985-1469 - Laserfiche WebLink

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e . outstanding and on such Additional Bonds, when issued, sold and delivered1 provided, however, should the certificate of the accountant certify that the net earnings of the System for the fiscal year covered thereby were, in either case, less than required above, and a change in the rates and charges for services afforded by the System became effective at least sixty (60) days prior to the scheduled date of adoption of the ordinance authorizing such Additional Bonds, then such Additional Bonds may nevertheless be issued if an indepen- dent engineer or engineering firm having a favorable reputa- tion with respect to such matters certifies that, had such change in rates and charges been effective for the entire fiscal year covered by the accountant's certificate, the net earnings for the System for the fiscal year covered by the accountant's certificate would have met the tests specified in (i) and (ii) above. The term "net earnings" as used in this Section shall mean all of the net revenues of the System, exclusive of income received specifically for capital items, after deduction of the necessary and reasonable expenses of operation and maintenance of the System excluding expenditures which under standard accounting practice should be charged to capital expenditures or depreciation. (c) Such Additional Bonds are made to mature on March 15th in each of the years in which they are scheduled to mature. (d) The City shall establish a reserve fund for such Additional Bonds by providing a cash reserve fund therefor, a surety bond in lieu thereof or a combination of such cash reserve fund and surety bond, all as the the City Council deems reasonable and appropriate provided that (i) the amount of any such cash reserve fund or the coverage of any surety bond in lieu thereof or the amount of such cash reserve fund and the coverage of such surety bond when added together shall at least equal the maximum annual debt service requirements of such Additional Bonds, not to exceed the maximum permitted by applicable regulations, procedures or published rulings of the Internal Revenue Service (the "Reserve Minimum") 1 (ii) if any cash reserve fund is funded by making transfers of Net Revenues in the System Fund, such transfers shall be made each month in an amount reasonably sufficient to reach the Reserve Minimum (or the portion thereof which is to be provided by such cash reserve fund) within a period of not more than five years after such' Additional Bonds are sold and delivered; (iii) any such cash reserve fund may be combined with the Reserve Fund herein provided for the Bonds and with the cash reserve fund provided for any Additional Bonds then outstanding in order ratably to secure all such Bonds then outstanding and the Additional Bonds then being issued; (iv) any such surety bond provided in lieu of a cash reserve fund shall be issued by an insurance company or association of companies whose insured obligations are rated by Moody's Investors Service, Inc. ("Moody's") and by Standard's & Poor's Corporation ("S & P") in their highest rating categories; and (v) any such surety bond may be written (or amended) to provide coverage not only for such Additional Bonds but also pro rata for the Bonds and any Additional Bonds then outstanding, provided any existing cash reserve fund or surety fund in lieu thereof which secures any such outstanding Bonds is extended ratably to secure the Additional Bonds then being issued. It is the City's intention hereby to 002RDRAW/193B01 -13-