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Show Midvale, Hie Midvale Sentinel Jordan Hie Guide Page 10 Utah Thursday, July 18, 1968. penses directly related to the system; but Excluding any allowance for depreciation or any (a) amounts for capital replacements, renewals, major repairs and maintenance items (or any combination thereof) of a type not recurring annually or at shorter intervals; (b) Excluding the costs of Improvements, extensions, enlargements and betterments (or any combination thereof), or any reserves therefor; any reserves Excluding ance or repair of the system; (c) for operation, mainten- (d) Excluding any allowance for the redemption of any bond or other security evidencing a loan, or the payment and of any interest thereon, or any reserve therefor; incurred by the City as the in the operation of the system or ground of legal liability not based on contract, or (e) Excluding liabilities result of its negligence other any reserve therefor. B. Principal, Interest and Reserve Requirements for and 1958 Bonds. Secondly, after making provision for operation and maintenance, as aforesaid, there shall be set aside and paid on each of said quarterly dates the amounts required by Paragraph (B) of Section 8 of Ordinance No. 1958-- 5, such payments to be from not to exceed fifty per centum (50) of said net revenues (i.e., of the moneys remaining in the Water Fund after payment only of operation and maintenance expense). 1955 C. Principal and Interest Payments for 1968 Bonds. Thirdly, from not to exceed fifty per centum (50) of said net revenues (I.e., of the moneys remaining in the Water Fund after payment only of operation and maintenance expense), there shall be credited to a separate account hereby created and to be known as the "Sandy City, Utah, Water Improvement Revenue Bonds, Series July 1, 1968, Interest and Bond Retirement Fund" (herein "1968 Bond Fund") , the following: (1) On the first day of the month immediately succeedthe delivery of any of the 1968 Bonds and thereafter ing on each of said quarterly dates commencing October 1, 1968, one half of the amount necessary to pay the next maturing installment of Interest on the outstanding 1968 Bonds. (2) On each of said quarterly dates, but commencing of the amount necessary on January 1, 1970, to pay the next maturing Installment of principal on the 1968 Bonds. one-quar- Reserve Fund Payments. Fourthly, and concurrently with the payments required by the next preceding paragraph C, except as provided in paragraphs E and F of this Section 14, from not to exceed fifty per centum (50) of said net revenues (i.e., of the moneys remaining in the Water Fund after payment only of operation and maintenance expense) there shall be credited an amount not less than $1,500.00 on the first day of the month immediately succeeding the delivery of any of the 1968 Bonds and thereafter on each of said quarterly dates, commencing October 1, 1968, into a separate account to be kept separate from all other accounts and to be known as the "Sandy City, Utah, Water Improvement Revenue Bonds, Series July 1, 1968, Reserve Fund," herein sometimes referred to as the "1968 Reserve Fund," until a reserve has been accumulated in an amount equal to not less than $30,000.00, such amount being herein sometimes referred to as the "Minimum Reserve," and thereafter such amount or amounts, if any, shall be deposited monthly from not to exceed fifty per centum (50) of the net revenues of the system and remaining in the Water Fund into the 1968 Reserve Fund necessary to maintain the 1968 Reserve Fund as a continuing reserve in an amount not less than the Minimum Reserve to meet possible deficiencies in the 1968 Bond Fund. No payment need be made into the 1968 Reserve Fund so so long as the moneys therein shall equal not less than the Minimum Reserve. The moneys in the 1968 Reserve Fund shall be accumulated and maintained as a continuing reserve to be used, except as hereinafter provided In said para graphs E and F of this Section 14, only to prevent deficiencies in the payment of the principal of and Interest on the 1968 Bonds hereby authorized resulting from the failure to deposit into the 1968 Bond Fund sufficient funds to pay said principal and interest as the same accrue. D. 1968 E. Termination Upon Deposits to Maturity. No payment need be made into the 1968 Bond Fund, and the 1968 Reserve Fund, or both, if the amounts in the designated two funds total a sum at least equal to the entire amount of the outstanding 1968 Bonds herein authorized, both as to principal and Interest to their respective maturities, and both accrued and not accrued, in which case moneys in said two funds in an amount at least equal to such principal and Interest requirements shall be used solely to pay such as the same accrue, and any moneys In excess thereof in said funds and any other moneys derived from the operation of the system may be used in any lawful manner determined by the Council. F. Defraying Delinquencies In 1968 Bond and Reserve Funds. If, In any month, the City shall, for any reason fail to pay Into the 1968 Bond Fund the full amount above stipulated from fifty per centum (50) of the net revenues of the system, then an amount shall be paid into the 1968 Bond Fund in such month from the 1968 Reserve Fund equal to the difference between that paid from said portion of the net Income and the full amount so stipulated. The money so used shall be replaced In the 1968 Reserve Fund from the first revenues thereafter received from the operation of the system, not required to be otherwise applied and not exceeding fifty per centum (50) of the net revenue of the system. If, In any month, the City for any reason, fail to pay Into the 1968 Reserve shall, Fund the full amount above stipulated from such portion of the net income, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first revenues thereafter received from the operation of the system not required to be otherwise applied in an aggregate amount not exceeding fifty per centum (50) of the net revenues of the system. The money in the 1968 Bond Fund and the 19G8 Reserve Fund shall be used solely and only for the purpose of paying the principal of and the Interest on the 19G8 Bonds Issued hereunder; that any moneys at any time In excess provided, however, of the Minimum Reserve of the 1968 Reserve Fund may be withdrawn therefrom and used for the redemption of 1968 Bonds hereby authorized as they become due or on any redemption date; and provided that any moneys in the 1968 Bond Fund and the 1968 Reserve Fund in excess of accrued and unaccrued principal and interest requirements to the respective maturities of the outstanding bonds may be used as hereinabove provided in paragraph E of this Section 14. G. Payment for Additional Obligations. Fifthly, any balance remaining in the Water Fund after making the payments hereinabove provided, may be used by the City for the payment of interest on and the principal of additional bonds or other obligations hereafter authorized to be issued and payable from the revenues of the system, including reasonable reserves therefor, as the same accrue; provided that the lien of such additional bonds or other obligations on the net Income and revenues of the system and the pledge thereof for the payment of such additional obligations shall be on a parity with, or subordinate to, the lien and pledge of the 1968 Bonds herein authorized, as hereinafter provided. H. Depreciation Fund; Payment in Lieu of Taxes; Use of Surplus. After making the payments hereinabove required to be made by paragraphs A to G, both Inclusive, of this Section 14 of this ordinance, the remaining income and revenues derived from the operation of the system, if any, shall be applied for the purposes and in the order and manner required or permitted by paragraphs (D), (E) and (F) of Section 8 of Ordinance No. 1958 -- 5, passed and approved the 7th day of August, 1958. Section 15. General Administration of Funds. The funds and accounts hereinabove designated shall be administered as follows: A. Places and Times of Deposits. Each of the special accounts expressly designated in this ordinance shall be maintained and kept separate from all other accounts as a trust account solely for the purposes herein designated therefor, which special accounts shall be in one bank account or more in a bank or banks which are members of the Federal Deposit Insurance Corporation and of the Federal Reserve System, and are qualified depositories for public funds under the laws of the State (herein "Insured Bank") as determined and designated by the Council. Each such fn ho fiillAet trusf nr.p.nnnf shall hp- rnnHnnnnclv comirori JV.V.V.i w ..... 'Uill. extent required or permitted by the laws of the State for the of funds and shall be irrevocable and not securing public withdrawable by anyone for any purpose other than the re spective designated purposes. Each periodic payment shall be credited to the proper account not later than the date therefor herein designated. exceDt that when anv such fate shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding secular day. Notwithstanding any other provision herein to the contrary, moneys shaH be deposited with the Paying Agent at least five (5) days prior to each interest payment date herein designated sufficient to pay the bond requirements then becoming due on the outstanding bonds. subject to the provisions of paragraph E of Section 18 hereof, with such details as the Council may by ordinance provide; but if only a part of the outstanding obligations is refunded, and if such obligations are refunded In such manner that the refunding obligations Increase the aggregate annual principal and interest requirements evidenced by such refunding obligations and by the outstanding obligations not refunded on and prior to the last maturity date of such obligations, then such obligations may not be refunded without the consent of the holder or holders of the unrefunded portion of said obligations. w..v.wj B. Investment of Moneys. Any moneys in any account expressly designated in this ordinance, and not needed for immediate use, may be invested or reinvested by the Treasurer by deposit in one or more Insured Banks, and In Federal Securities which either (1) shall be subject to redemption at any time at a fixed value by the holder thereof at the option of such holder, or (2) shall mature not later than five (5) days prior to the date or respective dates on which the proceeds are to be expended as estimated upon each date of such Investment or reinvestment, but Federal Securities In the Reserve Fund shall so be subject to redemption at the holder's option at face value or shall mature at least five (5) days prior to the last maturity date of the outstanding bonds but in no event exceeding ten(10) years from the date of investment or reinvestment. For the purpose of any such Investment or reinvestment, Federal Securities shall be deemed to mature at the earliest date on which the obligor is, on demand, obligated to pay a fixed sum in discharge of the whole of such obligations. Federal Securities so purchased as an investment or reinvestment of moneys In any such account shall be deemed at all times to be a part of the account, and any interest accruing thereon and any other gain realized therefrom, as well as any Interest and other gain from the deposit of moneys in an Insured Bank shall be credited to the account, and any loss resulting from such investment or reinvestment In Federal Securities or in a bank shall be charged to the account; but any yield from Investments or reinvestments of moneys In the Reserve Fund in excess of the Minimum Bond Reserve may be credited to the Income Fund as the same is received. The Treasurer shall present for redemption or sale on the prevailing market at the best price obtainable any Federal Securities and tificates of deposit so purchased as an Investment or re investment of moneys In the account whenever it shall be necessary so to do in order to provide moneys to meet any withdrawal, payment or transfer from such account. C. Character of Funds. The moneys in any account herein authorized shall consist either of lawful money of the United States of America or Federal Securities, or both such money and such securities. Moneys deposited in a demand or time deposit account in or evidenced by a certificate of deposit of an Insured Bank appropriately secured according to the laws of the State, shall be deemed lawful money of the United States of America. D. Federal Securities Defined "Federal Securities" means bills, certificates of indebtedness, notes, bonds or similar securities which are direct obligations of, or the principal and Interest of which securities are unconditionally guaranteed by, the United States of America. Section 16. Bond Lien. The 1968 Bonds authorized herein, subject to the payment of operation and maintenance expenses of the system, and subject to the Hen of the 1955 and 1968 Bonds, the payment of which is limited as hereinabove recited, consitute an irrevocable and first (but not necessarily an exclusively first) lien upon the revenues derived from the operation of the system. Section 17. Equality of Bonds. The 1968 Bonds authorized to be issued hereunder and from time to time outstanding shall not be entitled to any priority one over the other in the application of the revenues of the system, regardless of the time or times of their issuance, It being the Intention of the Council that there shall be no priority among the 1968 Bonds regardless of the fact that they may be actually Issued and delivered at different times. Section 18. Additional Bonds or Other Obligations. A. Limitations Upon Issuance of Parity Obligations. Nothing in this ordinance contained shall be construed in such a manner as to prevent the Issuance by the Council of additional bonds or other obligations, for the purpose of improving or extending the system, payable from any income derived from the operation of the system and constituting a lien upon said revenues on a parity with, but not prior or superior to, the Hen of the 1968 Bonds, nor to prevent the issuance of obligations refunding all or a part of the 1968 Bonds; provided, however, that before any such additional parity obligations are authorized or actually issued, other than refunding obligations (unless any Hen on any revenues of the system of the bonds refunded Is subordinate to the lien of the 1968 Bonds and the lien on revenues of the system of the refunding obligations is on a parity with the lien thereon of the 1968 Bonds), firstly, the City shall not have been in default as to any payments required to be made in Section 14 of this ordlnace for the twenty-fomonths Immediately preceding the Issuance of such additional obligations, or if the 1968 Bonds have not been issued and outstanding for a period of at least twenty-fomonths, for the longest period any of the 1968 Bonds have been issued and outstanding, and secondly, the gross revenues derived from the operation of the system for the fiscal year immediately preceding the date of the authorization and issuance shall have been an amount which would be sufficient to pay the operation and maintenance expenses of the system for said year and sufficient to pay an amount representing FIFTY PERCENT (50) of the combined maximum annual principal and Interest requirements of the outstanding 1968 Bonds and any other obligations of the City payable from all or any part of the revenues of the system, and the obligations proposed to be issued, excluding the reserves therefor. ur ur B. Certification of Earnings. A written certification by certified public accountant, to be employed by the City, that the conditions hereinabove imposed for the Issuance of parity obligations have been met, shall be conclusively presumed to be accurate In deter mlng the right of said City to authorize, issue, sell and deliver said obligations on a parity with the 1968 Bonds. a C. Junior Obligations Permitted. Nothing herein contained, except as herein otherwise specifically stated, shall be construed so as to prevent the City from issuing obligations payable from the revenues of the system and having a lien thereon subordinate, Inferior and junior to the lien of the 1968 Bonds. D. Superior Obligations Prohibited. Nothing herein contained shall be construed so as to permit the City to issue obligations payable from the revenues of the system and having a lien thereon prior and superior to the 1968 Bonds. E. Payment Dates of Additional Obligations. Any additional parity or subordinate obligations issued in compliance with the terms hereof shall bear Interest payable semiannually on the first days of January and July in each year, except that the first coupon or coupons appertaining to any obligation may represent interest accruing for any period in excess of one year; and such obligations shall mature on the first day of January In the years designated by the Council during the term of said obligations. Section 19. Refunding Bonds. The provisions of Section hereof are subject to the exception that if at any time after the obligations herein or hereafter authorized, or any part thereof, shall have been issued, the Council shall find it desirable to refund said obligations, said obligations, or any part thereof, may be refunded (but only with the consent of the holder or holders thereof, unless the obligations, at the time or times of their required surrender for payment, shall then mature, or shall then be callable for prior redemption upon proper call), without changing the priority of the lien for the payment of the refunding obligations on the revenues o tne system, except as parenthetically provided in paragraph A of Section 18 hereof; and the refunding obligations so issued shall enjoy complete equality of lien with the portion of said obligations which is not refunded, if any there be; and the holder or holders of the refunding obligations shall be subrogated to all of the rights and privileges enjoyed by the holder or holders of the obligations refunded thereby. The refunding obligations shall be issued, 18 t Section 20. Protective Covenants. The City hereby covenants and agrees with each and every holder of the 1968 Bonds Issued hereunder: Performance of Duties. The City acting by and A. through the Council or otherwise, will faithfully and punctually perform or cause to be performed all duties with respect to the revenues and the system required by the Constitution and laws of the State and the various instruments of the City, including but not limited to the making and col- lection of reasonable and sufficient rates and charges for services rendered or furnished by or the use of the system, as herein provided, and the proper segregation of the rev- enues and their application from time to time to the re- spective accounts or funds provided therefor. The City B. Efficient Operation and Maintenance. will at all times operate the system properly and in a sound and economical manner; and the City will maintain, pre-- I serve and keep the same properly or cause the same so to be maintained, preserved, and kept, with the appurtenances and every part and parcel thereof In good repair, working order, and condition, and shaH from time to time make or cause to be made all necessary and proper re- -: pairs, replacements, and renewals so that at all times the operation of the system may be properly and advantageously The conducted. City presently employs a City Manager who has among his principal duties the management of the It is agreed between Council and City Manager, system. and is hereby agreed with the holders of the bonds, that for the benefit of the City in the maintenance and financing of the system, he will be legally obligated directly to the holders of the bonds as well as to the City to operate the system in accordance with this ordinance, including strict collection of water rates and charges. ' C. Rules, Regulations and Other Details. The City, acting by and through the Council, will establish and enforce reasonable rules and regulations governing the operation, use and services of the system. All salaries, fees, wages and other compensation paid by the City in connection with the maintenance, repair and operation of the system shall be reasonable and no more than would be paid by other corporations, municipalities or public bodies for services of similar quality. The City will observe and perform all of the terms and conditions contained in this ordinance and will comply with all valid acts, rules, regulations, orders and directions of any legislative, executive, administrative or judicial body applicable to the system or to the City. D. Protection of Security. No contract will be entered into nor any other action taken by which the rights of any holder of any bond payable from the revenues might be impaired or diminished. The City, the officers, agents and employees of the City, and the Council will not take any action In such manner or to such extent as might prejudice the security for the payment of the bond requirements of the bonds payable from the revenues according to the terms of such bonds. E. Outstanding Liens. There are no Hens or encumbrances of any nature whatsoever on or against the system, or any part thereof, or (except as herein recited and provided) against any revenues. F. Corporate Existence. The City will maintain its corporate Identity and existence so long as any of the bonds herein authorized remain outstanding, unless another body corporate and politic by operation of law becomes successor to the City and is obligated bylawto operate and maintain the system and to fix and collect the revenues as herein provided without adversely affecting to any substantial degree at any time the privileges and rights of any holder of any outstanding bond. G. Prohibited Disposition. Neither all nor any substantial part of the system will be sold, leased, mortgaged, pledged, encumbered, alienated or otherwise disposed of, until all the bonds have been paid in full, as to all bond requirements, or unless provision has been made therefor, or until the bonds have otherwise been redeemed, including but not necessarily limited to the termination of the pledge herein authorized; and the City will not dispose of its title to the system or to any useful part thereof, including any property necessary to the operation and use of the system and the lands and interest in lands comprising the sites of the system, except as provided in paragraph H of this section. O. CoUection of Charges. The City will cause all the system to rates, fees and other charges, appertaining to be collected as soon as is reasonable, will prescribe and enforce rules and regulations for the payment thereof and for the connection with and the disconnection from the system, and shall provide methods of collection and penalties, including but not limited to denial of service for nonpayment of such rates, fees and other charges, to the end that the revenues shall be adequate to meet the requirements hereof. Water and sewer charges will be billed and collected together, with separate Itemization for each, as required by Ordinance No. 60-- 2, passed and approved the 3rd day of February, 1960. Records. Proper books of record and account will be kept by the City separate and apart from all their records and accounts, showing complete and correct entries of all transactions relating to the system; and the holders of any of the bonds, or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect all records, accounts, and data relating thereto and to inspect the system and all properties comprising said system, and upon request the City will furnish to any holder or holders financial statements and other information relating to the City and the system as such holder or holders may from time to time reasonably require. The City further agrees that it within sixty (60) days following the close of each will, fiscal year, cause an audit of such books and accounts to be made by an independent firm of certified public accountants, and that such audit will be available for inspection by the holders of any of the bonds. Each such audit, In addition to whatever matters may be thought proper by the accountant to be included therein, will include the following: P. (1) A statement in detail of the Income and expenditures of the system for such fiscal year; (2) A balance sheet as of the end of such fiscal year; (3) The accountant's comment regarding the manner in which the City has carried out the requirements of this ordinance, and the accountant's recommendation for any change or Improvements in the operation of the system; (4) A list of the insurance policies in force at the end of the fiscal year, setting out as to each policy the amount thereof, the risks covered, the name of the Insurer and the expiration date of the policy; and (5) The number of metered water customers at the end of the year, and the number of unmetered water customers at the end of the year. All expenses Incurred in the making of the audits required by this section will be regarded and paid as a maintenance and operation expense. The City agrees to furnish a copy of each audit to the holder of any of the bonds at his request after the close of each fiscal year, and that any such holder will have the right to discuss with the accountant making the audit the contents of the audit and to ask for such additional information as he may reasonably require. The City in its operation of the system Q. Insurance. will carry insurance, including fire and extended coverage insurance, workmen's compensation insurance, and public liability insurance, in such amounts and to such extent as Is normaUy carried by private corporations operating public utilities of the same type. The cost of such Insurance will be considered one of the operating costs of the system. In the event of loss or damage, insurance proceeds will be used first for the purpose of restoring or replacing the property lost or damaged, and any remainder will be applied and distributed in the manner provided by Section 14 hereof as if such proceeds were ordinary net revenues derived from the operation of the system. In order to insure the comR. Performance Bonds. pletion of the Project and to protect the holder or holders of any bonds, the City will require each firm, corporation or other person with whom it may contract for labor or for materials of construction, if any, to furnish a performance bond in the full amount of any contract exceeding $5,000.00 In amount. Any such contract for labor and materials will provide that payment thereunder shall not be made by the City in excess of ninety per centum (90) of current estimates until the such completion of the construction under the contract and the acceptance of the construction by the City. Section 21. Revenues and Income Defined. As used herein, the term "revenues" or "income" from the system will include all income and revenue derived by said City from the operation of the municipal water system, or any part thereof, whether resulting from additions, improvements, enlargements, extensions, repairs or betterments to the system, or otherwise, and will include all revenues received by the City or any municipal corporation succeeding to the rights of the City, from the system and from the sale H. Disposal of Unnecessary Property. The City may of water and water facilities to the inhabitants of what is now at of or time lease otherwise any sell, exchange, dispose and from time to time any property constituting a part of the City of Sandy City (Including all territorial annexations which may be made while said revenue bonds or any part the system and not useful in the construction, reconstructhereof are outstanding), or from the sale of water or tion, or operation thereof, or which shaH cease to be necwater facilities distributed by means of the system owned and which or the the for efficient of system, essary operation will have been replaced by other property of at least equal operated by the City as the same may at any time exist to value. Any proceeds of any such sale, exchange or other serve customers outside the city limits asweUas customers within the city limits. disposition received and not used to replace such property so disposed of will be applied and distributed in the Section 22. Defeasance. When all principal and interest manner provided by Section 14 hereof as If such proceeds were ordinary net revenues derived from the operation of requirements of the 1968 Bonds have been duly paid, the pledge and lien and all obligations hereunder shall thereby the system. be discharged and the bonds shall no longer be deemed to be I. Competing System. The City wiU not grant any outstanding within the meaning of this ordinance. There shall be deemed to be such due payment when the City has placed franchise or license to a competing system, nor will it perin escrow or in trust with a commercial bank located within mit, within the corporate city boundaries, any person, asor without the State and exercising trust powers, an amount sociation, firm or corporation to sell water to any consufficient (including the known minimum yield available for sumer, public or private, within the City. such purpose from Federal Securities In which such amount J. Fidelity Bonds. Each official of the City or other wholly or in part may be initially invested) to meet all such person having custody of any revenues or of any other bond requirements of the 1968 Bonds, including any required redemption premiums, as the same become due at final moneys appertaining to the system, Including without limitation bond proceeds, or responsible for the handling of maturity or on designated redemption dates. The Federal Sesuch moneys, will be bonded at all times in an amount of curities will become due prior to the respective times on at least $5,000.00, which bond shall be conditioned upon which the proceeds thereof shall be needed, in accordance the proper application of such funds. The costs of each such with a schedule established and agreed upon between the City bond or a reasonably allocated share of the costs of any such and such bank at the time of the creation of the escrow or blanket bond, will be considered as operation and maintenance trust, or the Federal Securities shall be subject to redemption at the option of the holders thereof to assure such expenses of the system. availability as so needed to meet such schedule. K. The and Council officials of the City will Budgets. Section 23. Delegated Powers. The officers of the City annually and at such other times as may be provided by law prepare and adopt a budget appertaining to the system. be, and they hereby are, authorized and directed to take all action necessary or appropriate to effectuate the provisions L. Reasonable Charges. While the bonds, or any of of this ordinance, including without limitation: them remain outstanding and unpaid, the rates, fees, and A. Printing Bonds. The printing of the bonds, other charges for the use of or otherwise appertaining to including and all services rendered by the system to the City and to its without limitation, if requested by the Purchaser, the printon bond each a of certified true copy of bond counsel's ing inhabitants and to all other consumers will be reasonable and just, taking Into account and consideration the cost and approving opinion; and value of the system, the operation and maintenance ex- B. Final Certificates. The execution of such certificates penses thereof, the proper and necessary allowances for the as may be reasonably required by the Purchaser, depreciation thereof, and the amounts necessary to meet the relating, inter alia, to the signing of the bonds, the tenure and identity bond requirements of all bonds, and any other obligations of the of officials the of and the Council, payable from any of the revenues, including without limiCity, the delivery of the bonds, the receipt of the bond purchase tation reserves and replacement funds therefor. price, and if it be in accordance with fact, the absence of litigation, M. Adequacy and Applicability of Charges. There pending or theatened, affecting the validity thereof. shall be charged against all purchasers of water and recipients Section 24. Bondholder's Remedies. Each holder of of service, including the City, such rates and amounts as will be adequate to meet the requirements of this and the any bond issued hereunder shall be entitled to all of the privileges, rights and remedies provided at law or in equity preceding sections hereof, and adequate to provide net revenues from the system In an amount at least equal to two or by statute, except no real or personal property appertainhundred eighty per centum (280) of the next succeeding ing to the system or otherwise has been conveyed to secure the payment of the bonds by deed of trust, or mortgage to a year's principal and interest requirements on all bonds payable from the revenues of the system, all of which gross trustee for the benefit and the security of the holder or holders revenues, Including those received from the City, will be from time to time of the bonds authorized hereunder subject to distribution to the payment of the cost of operating or by any other encumbrance or other pledge of property' and maintaining the system and keeping the system in good subject to the provisions herein concerning the pledge of and the covenants and the other contractual provisions repair and working condition. revenues of the system. Nothing in this articleconcerning contained shall affect or impair the right of any holder of any bond N. Limitations upon Free Service. No free service Issued hereunder to enforce the payment of the bond reor facilities will be furnished by the system, except as hereinafter provided. Should the City elect in any manner to use quirements due in connection with his bond or the obligation the system or any part thereof, any such use will be paid for of the City to pay the bond requirements of each bond issued hereunder to the holder thereof at the time and the from the City's general fund or from other available rev place enues other than the revenues at the reasonable value of the expressed In the bond and In the appurtenant coupons. use so made. All the Income derived from the City shall Section 25. Events of Default. Each of the be deemed to be income derived from the operation of the following system, to be used and to be accounted for in the same manner as any other income derived from the operation of the system. (Continued on page 11) |