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5/6/74
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<br /> (r) "Authorized investments" means any negotiable direct obligations of the United States,
<br />or any negotiable obligations for which the full faith and credit of the United States are pledged for
<br />the payment of principal and interest, or any obligations issued by federal land banks or federal
<br />intermediate credit banks established under the Federal Farm Loan Act, as amended, bonds or
<br />debentures of the Federal Home Loan Bank Board or of any federal home loan bank established
<br />under the Federal Home Loan Bank Act, obligations of the Federal National Mortgage Association
<br />established under the National Housing Act, as amended, and debentures and consolidated debentures
<br />issued by the Central Bank for Cooperatives and banks for cooperatives established under the Farm
<br />Credit Act of 1933, as amended.
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<br /> Section 2. Eqnality of Bonds, Pledge of Revenues. Pursuant to the Revenue Bond Law and this
<br />resolution, outstanding bonds shah rank on a parity and shall be equally secured by a pledge, charge and
<br />lien upon the gross revenues of the enterprise without priority for number, date of bonds, date of sale,
<br />date of execution, or date of delivery, and the payment of the interest on and principal of outstanding
<br />bonds and any premiums upon the redemption of any thereof shall be and are secured by an exclusive
<br />pledge, charge and lien upon the gross revenues of the enterprise, and all of the gross revenues of the
<br />enterprise (including revenues of improvements and extensions later constructed or acquired and revenues
<br />of existing systems, plants, works or undertakings to be acquired, improved or extended or for the acquisi-
<br />tion, improvement or extension of which said bonds are to be issued) are hereby pledged, charged
<br />assigned for the security of outstanding bonds, and such gross revenues shall constitute a trust fund for the
<br />security and payment of the interest on and principal of outstanding bonds and so long as any of
<br />outstanding bonds or interest thereon are unpaid said gross revenues and interest thereon shall not be used
<br />for any other purpose, except as permitted by this resolution and any subsequent resolution, and shall
<br />be held in trust for the benefit of the bondholders and shall be applied pursuant to this resolution, or to
<br />this resolution as modified pursuant to provisions herein, and any subsequent resolution.
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<br /> Nothing in this resolution or in any subsequent resolution shall preclude: (a) the redemption
<br />prior to maturity of any bonds subject to call and redemption and payment of said bonds from proceeds
<br />of refunding bonds issued under the Revenue Bond Law as the same now exists or as hereafter amended,
<br />or under any other law of the State of California; (b) the issuance, subject to the limitations in Covenant
<br />11 in Section 12 hereof, of additional indebtedness evidenced by revenue bonds, revenue notes or any
<br />other evidences of indebtedness payable out of the revenues of the enterprise and ranking on a parity with
<br />said bonds.
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<br /> Section 3. Amount, Issuance, Purpose and Nature of Bonds. Under and pursuant to the Revenue
<br />Bond Law and Article 8, Chapter 3, Part 1, Division 2, Title 5 of the Government Code, revenue bonds
<br />of the City in the amount of $1,950,000 shall be issued for the purpose stated in the recitals hereof. Said
<br />revenue bonds shall be and are special obligations of the city and shall be and are secured by a pledge
<br />of and lien upon, and shall be and are a charge upon, and shall be and are payable as to the principal
<br />thereof and interest thereon and any premiums upon the redemption of any thereof, solely from the
<br />gross revenues of the enterprise, such gross revenues being hereby pledged, charged and assigned for
<br />the security of the bonds. Upon the issuance of said bonds, the unissued balance of the bonds authorized
<br />at the election referred to in the recitals hereof shall be canceled and shall not be issued.
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<br /> Section 4. No General City Liability. The general fund of the City is not liable for the payment
<br />of the bonds or their interest, nor is the credit or taxing power of the City pledged for the payment
<br />of the bonds or their interest. The holder of the bonds or coupons shall not compel the exercise of the
<br />taxing power by the city or the forfeiture of any of its property. The principal of and interest on the
<br />bonds and any premiums upon the redemption of any thereof are are not a debt of the city nor a legal or
<br />equitable pledge, charge, lien, or encumbrance, upon any of its property, or upon any of its income,
<br />receipts, or revenues, except the gross revenues of the enterprise which are, under the terms of this
<br />resolution and said Revenue Bond Law, pledged to the payment of said bonds and interest.
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