Item 38 - Water Revenue Bonds - Laserfiche WebLink

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The City shall fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which are sufficient to yield Net System Revenues, at least equal to 120% of the amounts payable under the preceding clause (ii) in such Fiscal Year. The City may establish, as a fund within the Water Revenue Fund, a fund denominated the Rate Stabilization Fund. From time to time the City may deposit into the Rate Stabilization Fund, from current System Revenues, such amounts as the City shall determine and the amount of available current System Revenues shall be reduced by the amount so transferred. Amounts may be transferred from the Rate Stabilization Fund solely and exclusively to pay Maintenance and Operation Costs, and any amounts so transferred shall be deemed System Revenues when so transferred. All interest or other earnings upon amounts in the Rate Stabilization Fund may be withdrawn therefrom and accounted for as System Revenues. Pledge Under the Indenture Pursuant to the Indenture, the Authority has irrevocably pledged all Revenues and amounts on deposit in the funds and accounts established under the Indenture (other than amounts on deposit in the Rebate Fund and the Cost of Issuance Fund) to the payments of principal and interest on the Bonds. The Indenture defines the term "Revenues" to mean all Installment Payments paid by the City pursuant to the Installment Purchase Agreement, including interest or profits from the investment of money in any account or fund (other than the Rebate Fund). In order to secure the pledge of the Revenues, the Authority has transferred, conveyed and assigned to the Trustee, for the benefit of the Owners, all of the Authority's rights under the Installment Purchase Agreement (excluding its right to indemnification thereunder), including the right to receive Installment Payments from the City, the right to receive any proceeds of insurance maintained thereunder or any condemnation award rendered with respect to the Project and the right to exercise any remedies provided therein in the event of a default by the City thereunder. The Trustee will establish and maintain a special trust fund to be held by the Trustee called the Payment Fund. Within the Payment Fund, the Trustee will establish and maintain the Interest Account, the Principal Account, the Sinking Account, and the Redemption Account. Under the Installment Purchase Agreement, the City will pay the Installment Payments out of the Water Revenue Fund to the Trustee for deposit into the Payment Fund. Subject to the provisions of the Indenture, all money in the Payment Fund will be set aside by the Trustee in the following respective special accounts within the Payment Fund in the following order of priority: (i) Interest Account, (ii) Principal Account, and (iii) Redemption Account. A debt service reserve fund has not been established for the Bonds. Application of System Revenues The City has covenanted that all System Revenues, when and as received, will be received and held by the City in trust for the benefit of Bondholders and payments with respect to Parity Obligations, and will be deposited by the City immediately upon receipt in the Water Revenue Fund, which the City has covenanted to establish and maintain throughout the term of the Bonds. All Net System Revenues shall be disbursed, allocated and applied solely to the uses and purposes set forth in the Indenture, and shall be accounted for separately and apart from all other money, funds, accounts or other resources of the City. All System Revenues in the Payment Fund shall be set aside by the City and applied in the following order of priority: (1) Maintenance and Operation Costs. The City has covenanted to pay all Maintenance and Operations Costs (including all Maintenance and Operation Obligations as both terms are defined in the Master Installment Purchase Agreement) of the Water System, including (among other things) amounts reasonable and necessary for maintaining and operating the Water System, all costs of water purchased or leased, reasonable expenses of management and repair and other expenses necessary to maintain and preserve the Water System in good repair and working order, and including administrative costs of the City attributable to the Project and the Installment Purchase Agreement, as they become due and payable. 13