|
"Maintenance and Operations Costs" is the reasonable and necessary costs spent or incurred by the City,
<br />for maintaining and operating the Water System, calculated in accordance with generally accepted accounting
<br />principles, including (among other things) all costs of water purchased or leased by the City, the reasonable
<br />expenses of management and repair and other expenses necessary to maintain and preserve the Water System in
<br />good repair and working order, and including administrative costs of the City attributable to the Project and the
<br />Installment Purchase Agreement, salaries and wages of employees, payments to employees retirement systems (to
<br />the extent paid from System Revenues), overhead, taxes (if any), fees of auditors, accountants, attorneys or
<br />engineers and insurance premiums, and including all other reasonable and necessary costs of the City or charges
<br />required to be paid by it to comply with the terms of the Obligations, including this Installment Purchase
<br />Agreement, including any amounts required to be deposited in the Rebate Fund pursuant to the Tax Certificate,
<br />and fees and expenses payable to any Credit Provider (other than in repayment of a Credit Provider
<br />Reimbursement Obligation), but excluding in all cases (i) depreciation, replacement and obsolescence charges or
<br />reserves therefor, (ii) amortization of intangibles or other bookkeeping entries of a similar nature, (iii) costs of
<br />capital additions, replacements, betterments, extensions or improvements to the Water System which under
<br />generally accepted accounting principles are chargeable to a capital account or to a reserve for depreciation, (iv)
<br />charges for the payment of principal and interest on any general obligation bond heretofore or hereafter issued for
<br />Water System purposes, and (v) charges for the payment of principal and interest on any debt service on account
<br />of any obligation on a parity with or subordinate to the Installment Payments. Payments with respect to
<br />Maintenance and Operation Obligations shall be considered Maintenance and Operation Costs if they are incurred
<br />in connection with the Maintenance and Operation Costs described in the preceding paragraph.
<br />"Maintenance and Operation Obligation" means any contract or lease for the purchase of any facilities,
<br />properties, structures, or works, or any loan of credit to or guaranty of debts, claims or liabilities of any other
<br />person for the purpose of obtaining any facilities, properties, structures or works, the final payments under which
<br />are due more than five years following the effective date thereof; so long as in each case the payments thereunder
<br />are to constitute Maintenance and Operation Costs. See "APPENDIX B — SUMMARY OF CERTAIN DEFINED
<br />TERMS AND PRINCIPAL LEGAL DOCUMENTS."
<br />Obligations of City Under Installment Purchase Agreement
<br />Pursuant to the Installment Purchase Agreement, the City commits, absolutely and unconditionally, to
<br />make Installment Payments to the Authority solely from Net System Revenues until such time as to the purchase
<br />price for the Project has been paid in full (or provision for the payment thereof has been made pursuant to the
<br />Indenture). The City will not discontinue or suspend any Installment Payments whether or not the Project or any
<br />part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced,
<br />curtailed or terminated in whole or in part, and such Installment Payments shall not be subject to reduction whether
<br />by offset or otherwise and shall not be conditional upon the performance or non-performance by any party of any
<br />agreement for any cause whatsoever.
<br />Rate Covenant
<br />The City hereby covenants to fix, prescribe, revise and collect rates and charges for the services and
<br />facilities furnished by the Water System during each Fiscal Year which (together with other funds accumulated
<br />from System Revenues and which are lawfully available to the City for payment of any of the following amounts
<br />during such Fiscal Year) are at least sufficient, after making allowances for contingencies and errors in estimates,
<br />to pay the following amounts in the following order:
<br />(i) all Maintenance and Operation Costs of the Water System estimated by the City to
<br />become due and payable in such Fiscal Year;
<br />(ii) all Debt Service coming due and payable in such Fiscal Year; and
<br />(iii) all payments required to meet any other obligations of the City which are charges, liens
<br />or encumbrances upon, or payable from, the Net System Revenues.
<br />12
<br />
|