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(d) All current expenses for the necessary and reasonable maintenance and operation costs of the enterprise; and the charges shall be so fixed that the net revenues shall be at least 1.25 times the amounts payable under (a). Covenant 10. No priority for Additional Bonds. The city covenants that no additional bonds shall be issued pursuant to said Revenue Bond Law or any other law of the State of California having any priority in payment of principal or interest out of the revenues of the enterprise over the bonds hereby authorized to be issued and payable out of said revenues. Covenant 11. Limits on Additional Debt. The city covenants that, except for bonds issued to refund said bonds, no additional indebtedness evidenced by revenue bonds, revenue notes or any other evidences of indebtedness payable out of the Revenue Fund and ranking on a parity with these bonds shall be created or incurred unless: First: That the principal of and interest on the bonds have been paid as the same have become due; and that payments into the Retirement Fund and the Reserve Fund have been made, all in conformity with this resolution, and Second: That the last maturity date of any parity bonds shall not be earlier than the last maturity date of any bonds then outstanding and that any parity bonds shall mature on .luly 1, and Third: The net revenues of the enterprise, calculated on sound accounting principles, as shown by the financial report of the Director of Finance for the latest fiscal year or by a special financial report for the last completed 12 month period ended 60 days prior to the adoption of the resolution of issuance for such additional indebtedness, plus, at the option of the city, either or all of the items hereinafter in this Covenant 11 designated (a) and (b), shall have amounted to at least 1.25 times the maximum amount of annual debt service in any fiscal year thereafter on all indebtedness to be outstanding immediately subsequent to the incurring of such additional indebtedness. For the purposes of this Covenant 11, the net revenues of the enterprise shall not include any sum transferred from the Construction Fund under the provisions of Section 10(a) hereof. The items either or all of which may be added to such net revenues for the purpose of applying the restriction contained in this Covenant 11 are the following: (a) An allowance for net revenues from any additions to or improvements or extensions of the enterprise to be made with the proceeds of such additional indebtedness, and also for net revenues from any such additions, improvements or extensions which have been made from moneys from any source but which, during all or any part of such fiscal year or last completed 12 month period, were not in service, all in an amount equal to 75% of the estimated additional average annual net revenues to be derived from such additions, improvements and extensions for the first 36 month period in which each addition, improvement or extension is respectively to be in opera- tion, all as shown by the certificate or opinion of a qualified independent engineer employed by the city. (b) An allowance for earnings arising from any increase in the charges made for service from the enterprise which has become effective prior to the incurring of such additional indebtedness but which, during all or any part of such fiscal year or last completed 12 month period, was not in effect, in an amount equal to 75% of the amount by which the net revenues would have been increased if such increase in charges had been in effect during the whole of such fiscal year or last completed 12 month period, as shown by the certificate or opinion of a qualified independent engineer employed by the city. 13