RES 02047 - Laserfiche WebLink

Payment The Bonds are payable solely from and secured solely by the net revenues pledge under the indenture, together with amounts on deposit from time to time in certain funds and accounts held by the trustee, If for any reason the City does not collect sufficient net revenues to pay the Bonds, the City \\~ll not be obligated to use any of its other funds, other than amounts on deposit in the reserve fund and certain other amounts on deposit in the funds and accounts established under the indenture to pay debt service on the Bonds. Sewer Enterprise Demand There can be no assurance that the local .demand for service provided by the sewer enterprise will be maintained at levels described in this official statement. Reduction in the level of demand could require an increase in rates or charges in order to pro- duce net revenues sufficient to comply with the City's rate covenant in the indenture. Such rate increases could increase the likelihood of nonpayment. and could also further decrease demand. Furthermore. there can be no assurance that any other entity with regulatory authority over the enterprise will not adopt further restrictions on operation of the enterprise. Sewer Enterprise Expenses There can be no assurance that maintenance and operation costs of the sewer enterprise will be consistent with the levels described in this official statement. Changes in tech- nology, increases in the cost of energy or other expenses could reduce net revenues. and could require substantial increases in rates or charges in order to comply with the rate covenant. Such rate increases could increase the likelihood of nonpayment. and could also decrease demand. Earthquakes, Floods, and Other Natural Disasters Earthquakes, floods, and other natural disasters could interrupt operation of the enterprise and result in unanticipated expenses. thereby interrupting the ability of the City to meet its financial obligations. The City estimates that about 5 percent of the City is within the I DO-year flood plain, The City is not obligated under the indenture to procure and main- tain earthquake insurance, Limits on Remedies and Bankruptcy The enforceability of the rights and rernedies of the owners and the obligations of the City may becorne subject to federal bankruptcy code and applicable bankruptcy. insolvency. reorganization. moratorium. or similar laws relating to or affecting the enforcement of creditors' rights generally. now or hereafter in effect: equitable principles which may Iirnit the specific enforcement under state law of certain remedies: the exer- cise by the United States of America of the powers delegated to it by the federal consti- tution: and the reasonable and necessary exercise. in certain exceptional situations, of the police power inherent in the sovereignty of the state and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings. or the exercising of powers by the federal or state government. if initiated. could subject 17