RES 02047 - Laserfiche WebLink

Rate Covenant The City covenants in the indenture to fix, prescribe. revise and collect rates. fees, and charges for the sewer service which are reasonably fair and nondiscriminatory and which are at least sufficient. after making allowances for contingencies and error in the estirnates, to yield gross revenues in each fiscal year sufficient to: · Pay the maintenance and operation costs, bond payments, principal and interest on any parity debt and other City obligations payable from the gross revenues. · Restore the balance of the reserve fund to the full amount of the reserve requirement, if required. · Yield net revenues of at least 125 percent of annual bond pa}ments and pa}ments on parity debt. Reserve Fund The indenture establishes a reserve fund as a reserve for the payment of the Bonds. The reserve fund will be initially funded from proceeds of the Bonds, and will be held by the trustee and.maintained in the amount of the reserve requirement. It is anticipated that the reserve requirement is 10 percent of the principal amount of the Bonds being issued. If the balance in the reserve fund exceeds the reserve requirement. the trustee will transfer the excess to the debt service account at least semiannually or prior to each interest payment date. Issuance of Parity Debt Pursuant to the indenture. the City rnay at any time issue any parity bonds or execute any contract the payment of which are payable from the net revenues on a parity "';th the pa}ment of the Bonds provided that certain covenants contained in the indenture are met, including the following: · Net revenues for the most recent completed fiscal year for which audited financial statements have been prepared. or for any other more recent 12-month period, equal at least 125 percent of maximum annual debt service on the Bonds and parity debt. · Ninety-five percent of additional revenues from adopted rate increases or system additions may be added to net revenues for this purpose. · All payments of parity debt will occur on the due date of the Bonds and the terms structured to ensure that they are in all respects payable on a parity with the payment of the Bonds and not prior thereto. The City may not issue or incur any obligations which are superior to the Bonds. but may issue or incur obligations which are either unsecured or subordinate to the Bonds or to finance cornpletion of any uncompleted improvements to the enterprise or refund any outstanding bonds or contracts. 4