O-2017-3666 Certificate of Obligation, Series 2017

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sewer system that remain after the payment of all operation and maintenance expenses thereof, and all debt service, reserve and other requirements in connection with the City's revenue obligations (now or hereafter outstanding) that are secured by a lien on all or party of the net revenues of the System (the "Surplus Revenues") to the payment of the principal of and interest on the Certificates. The City shall such Surplus Revenues to the credit of the Debt Service Fund created pursuant to Section 5.2 hereof to the extent necessary to pay the principal of and interest on the Certificates. If Surplus Revenues are used in lieu of ad valorem taxes for the payment of the debt service requirements of System debt, the City shall maintain and collect sufficient rates and charges to produce System revenues in any amount necessary to meet the debt service requirements of all outstanding obligations payable from System revenues. The City further agrees to maintain the funds established by and required by the Certificates. (d) If Net Revenues are actually on deposit in the Debt Service Fund prior to the annual tax levy, the City shall reduce the amount of the tax levy by the amount of Net Revenues on deposit in the Debt Service Fund on such date. However, if the determination of Net Revenues to be deposited in the Debt Service Fund is based on budgeted amounts, (i) the City shall transfer and deposit in the Debt Service Fund each month an amount not less than 1112th of the annual debt service on the Certificates until the amount on deposit in the Debt Service Fund equals the amount required for annual debt service on the Certificates; (ii) the City shall not transfer any pledged Net Revenues to any fund other than the Debt Service Funds until such time as an amount equal to the annual debt service on the Certificate for the then current fiscal year has been deposited in the Debt Service Fund; (iii) each year that the Certificates are outstanding, and prior to the time taxes are to be levied for such year, the City shall establish, adopt, and maintain an annual budget that provides for either the monthly deposit of sufficient Net Revenues, ad valorem tax revenues or other legally available funds, or a combination thereof, into the Debt Service Fund for the repayment of the Certificates; and (iv) the City will either maintain and collect sufficient rates and charges to produce revenues in an amount not less than 1.10 times debt service requirements for all outstanding obligations of the City secured by Net Revenues, or shall provide documentation evidencing the levy and collection of an ad valorem tax rate sufficient to provide for the payment of annual debt service requirements. Section 5.2: Debt Service Fund. The "Certificates of Obligation, Series 2017, Debt Service Fund"(the"Debt Service Fund") is hereby created as a special fund solely for the benefit of the Certificates. The City shall establish and maintain such fund at an official City depository and shall keep such fund separate and apart from all other funds and accounts of the City. Any amount on deposit in the Debt Service Fund shall be maintained by the City in trust for the Registered Owners of the Certificates. Such amount, plus any other amounts deposited by the City into such fund and any and all investment earnings on amounts on deposit in such fund, shall be used only to pay the principal of, premium, if any, and interest on the Certificates. Section 5.3: Further Proceedings. After the Certificates to be initially issued have been executed, it shall be the duty of the Mayor to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General for examination and approval. After the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller for registration. Upon registration of the Certificates to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's registration certificate prescribed herein to 10 HOU:3746876.1