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HomeMy WebLinkAbout075 - 07/21/1992 - AUTHORIZINGTHE ISSUANCE OF SEWER REVENUE BOND CERTIFIED RECORD OF PROCEEDINGS OF THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO RELATING TO AN ORDINANCE AUTHORIZING THE ISSUANCE OF ITS SEWER REVENUE BOND SERIES 1992 DATED JULY 15 , 1992 IN THE PRINCIPAL AMOUNT OF $24 , 540 ,580 i STATE OF COLORADO ) COUNTY OF LARIMER ) ss. CITY OF FORT COLLINS ) The Council of the City of Fort Collins, Colorado, held a regular meeting at Council Chambers, City Hall, 300 West LaPorte Avenue, Fort Collins, Colorado, on Tuesday, the 7th day of July, 1992 , at the hour of 6: 30 p.m. The following persons were present: Council Members: Susan E. Kirkpatrick, Mayor Ann Azari, Mayor Pro Tem Dave Edwards Cathy Fromme Gerry Horak Loren R. Maxey Bob Winokur City Manager: Steven C. Burkett City Clerk: Wanda M. Krajicek Financial Officer: Alan J. Krcmarik City Attorney: Stephen J. Roy The following persons were absent: None The following Ordinance was introduced and read by title, copies of the full Ordinance having been available in the office of the City Clerk at least forty-eight (48) hours prior to the time the Ordinance was introduced for each Council Member and for inspection and copying by the general public: 1 ORDINANCE NO. 75, 1992 AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT, DATED AS OF JULY 15, 1992 , BETWEEN THE COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY AND THE CITY OF FORT COLLINS, COLORADO, THE ISSUANCE OF A GOVERNMENTAL AGENCY BOND (CITY OF FORT COLLINS, COLORADO, SEWER REVENUE BOND, SERIES 1992, DATED JULY 15, 1992 , IN THE AGGREGATE PRINCIPAL AMOUNT OF $25, 000, 000) EVIDENCING THE CITY'S OBLIGATIONS UNDER THE LOAN AGREEMENT AND THE UNDERTAKING AND COMPLETION OF A PROJECT RELATING TO THE SEWERAGE FACILITIES OF THE CITY OF FORT COLLINS, COLORADO. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, THAT: Section 1. Definitions and Construction. A. Definitions. In this Ordinance the following terms have the following respective meanings unless the context hereof clearly requires otherwise: (1) Additional Parity Bonds: any Parity Securities issued after the issuance of the Bonds. (2) Authority: the Colorado Water Resources and Power Development Authority, its successor and assigns. (3) Average Annual Debt Service Requirements: the aggregate of all Debt Service Requirements (excluding any redemption premiums) due on any issue of securities payable from the Net Pledged Revenues for all Bond Years beginning with the Bond Year in which Debt Service Requirements of such securities are first payable and ending with the Bond Year in which the last of the Debt Service Requirements are payable divided by the number of such years. (4) Bonds: the Governmental Agency Bond (City of Fort Collins, Colorado, Sewer Revenue Bond, Series 1992 , dated July 15, 1992 , in the aggregate principal amount of $25, 000, 000) . (5) Bond Year: the twelve (12) months commencing on the second day of December of any calendar year and ending on the first day of December of the next succeeding calendar year. (6) Charter: the Home Rule Charter of the City as amended. (7) City: the City of Fort Collins, Colorado. 2 (8) Commercial Bank: a state or national bank or trust company which is a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, which has a capital and surplus of $10,000,000 or more, and which is located within the United States of America. (9) Comparable Bond Year: in connection with any Fiscal Year, the Bond Year which ends in such Fiscal Year. For example, for the Fiscal Year commencing on January 1, 1993, the Comparable Bond Year for the Bonds commences on December 2, 1992 , and ends on December 1, 1993 . (10) Costs of the Project: all or any part of the cost of the acquisition, construction, installation and equipment of all or any part of the Project, to the extent eligible for payment or reimbursement under the Loan Agreement. (11) Council: the governing body of the City. (12) Debt Service Requirements: the principal of, interest on, and any premium due in connection with the redemption of any securities payable from the Net Pledged Revenues, whether at maturity or otherwise. (13) Event of Default: any of the events described in Section 10A hereof. (14) Federal Securities: bills, certificates of indebtedness, notes, or bonds which are direct obligations of the United States of America or obligations the principal and interest of which are unconditionally guaranteed by the United States of America. (15) Fiscal Year: the twelve (12) months commencing on the first day of January of any calendar year and ending on the last day of December of such calendar year or such other twelve (12) month period as may from time to time be designated by the Council as the Fiscal Year of the City. (16) Income: all income from rates, fees, tolls, and charges and tap fees and plant investment fees, or any combination thereof, for the services furnished by, or the direct or indirect connection with, or the use of the Sewerage Facilities, including, without limiting the generality of the foregoing, minimum charges, charges for the availability of service, disconnection fees, reconnection fees, and reasonable penalties for any delinquencies, all supplemental user fees payable pursuant to any contract between the City and any user of any Sewerage Facilities, and all income or other gain, if any, from any investment of Net Pledged Revenues and of the proceeds of securities payable from Net Pledged Revenues 3 (except income or other gain from any investment of moneys held in any escrow or other similar fund or account for the defeasance and/or payment of securities payable from the Net Pledged Revenues) , but not including sewer trunk line assessments and sewer main line assessments. (17) Interest Payment Date: a date designated by ordinance (or, in the case of the Bonds, by the Loan Agreement) for the payment of interest on any securities payable from the Net Pledged Revenues. (18) Loan Agreement: the Loan Agreement, dated as of July 15, 1992, between the Authority and the City, including the exhibits thereto. (19) Maturity Date: a date designated by ordinance (or, in the case of the Bonds, by the Loan Agreement) for the payment of principal of any securities payable from the Net Pledged Revenues. (20) Net Pledged Revenues: all Income remaining after the deduction of Operation and Maintenance Expenses. (21) Operation and Maintenance Expenses: such reasonable and necessary current expenses of the City, paid or accrued, of operating, maintaining and repairing the Sewerage Facilities as may be determined by the Council, including, except as limited by contract or otherwise limited by law, without limiting the generality of the foregoing: (a) Engineering, auditing, legal and other overhead expenses of the City directly related and reasonably allocable to the administration, operation and maintenance of the Sewerage Facilities; (b) Insurance and surety bond premiums appertaining to the Sewerage Facilities; (c) The reasonable charges of any paying agent, registrar, transfer agent, depository or escrow bank appertaining to securities payable from the Net Pledged Revenues; (d) Annual payments to pension, retirement, health and hospitalization funds appertaining to the Sewerage Facilities; (e) Any taxes, assessments, franchise fees or other charges or payments in lieu of the foregoing; (f) Ordinary and current rentals of equipment or other property; 4 (g) Contractual services, professional services, salaries, administrative expanses, and costs of labor appertaining to the Sewerage Facilities and the cost of materials and supplies used for current operation of the Sewerage Facilities; (h) The costs incurred in the collection of all or any part of the Net Pledged Revenues; (i) Any costs of utility services furnished to the Sewerage Facilities by the City or otherwise. "Operation and Maintenance Expenses" does not include: (a) Any allowance for depreciation; (b) Any costs of reconstruction, Improvement, extensions, or betterments; (c) Any accumulation of reserves for capital replacements; (d) Any reserves for operation, maintenance, or repair of the Sewerage Facilities; (e) Any allowance for the redemption of any bonds or other securities or the payment of any interest thereon; (f) Any liabilities incurred in the acquisition of any properties comprising the Sewerage Facilities; (g) Any other ground of legal liability not based on contract. (22) Operation and Maintenance Fund: the special fund created by and designated as such in Ordinance No. 101, 1982 , and referred to in Section 5C hereof. (23) Ordinance: this Ordinance No. 75, 1992, of the City. (24) outstanding: as of any particular date, all the Prior Bonds, Bonds, Additional Parity Bonds, Parity Securities or any such other securities payable in whole or in part from the Net Pledged Revenues which have been authorized, executed and delivered except the following: (a) Any Prior Bond, Bond, Additional Parity Bond, Parity Security or other security cancelled by or on behalf of the City on or before such date; 5 (b) Any Prior Bond, Bond, Additional Parity Bond, Parity Security or other security held by or on behalf of the City; (c) Any Prior Bond, Additional Parity Bond, Parity Security or other security of the City for the payment or the redemption of which moneys or Federal Securities sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount wholly or in part may be initially invested) to pay all of the Debt Service Requirements of such Prior Bond, Additional Parity Bond, Parity Security or other security to the Maturity Date or specified Redemption Date thereof shall have theretofore been deposited in escrow or in trust with a Trust Bank for that purpose; (d) Any Bond for the payment or redemption of which moneys equal to the Debt Service Requirements until maturity or redemption shall have been paid to the Authority under the Loan Agreement; and (e) Any lost, destroyed, or wrongfully taken Prior Bond, Bond, Additional Parity Bond, Parity Security or other security of the City in lieu of or in substitution for which another bond or other security shall have been executed and delivered. (25) Owner: the holder of any bearer instrument or registered owner of any registered instrument. (26) Parity Securities: bonds, warrants, notes, securities, leases or other contracts evidencing borrowings and payable from the Net Pledged Revenues equally or on a parity with the Bonds. (27) Permitted Investments: any legal investment or deposit authorized by State statute or City ordinance adopted pursuant to the Charter. (28) Person: any individual, firm, partnership, corporation, company, association, joint stock association or body politic or any trustee, receiver, assignee or similar representative thereof. (29) Prior Bonds: the City of Fort Collins, Colorado, Sewer Revenue Refunding Bonds, Series 1986, dated August 1, 1986, in the original aggregate principal amount of $36, 950, 000. (30) Prior Bonds Debt Service Reserve Fund: the special fund created by and designated in Ordinance No. 9, 6 1975, of the City as the "City of Fort Collins Sewer Refunding Revenue Bonds Reserve Fund" and referred to in Section 5E hereof. (31) Prior Bonds Principal and Interest Fund: the special fund created by and designated in Ordinance No. 9 , 1975, of the City as the "City of Fort Collins Sewer Refunding Revenue Bonds, Series 1975, Bond Fund" and referred to in Section 5D hereof. (32) Project: the acquisition, construction, installation and equipment of that portion of the Sewerage Facilities for which the Bonds are issued. (33) Project Loan Subaccount: the special fund or account of the Authority referred to in Section 5A hereof. (34) Redemption Date: the date fixed for the redemption prior to maturity of any Bonds or other designated securities payable from the Net Pledged Revenues in any notice of prior redemption given by or on behalf of the City. (35) Security or securities: any bond issued by the City or any other evidence of the advancement of money to the City. (36) Sewerage Facilities: any one or more of the various devices used in the collection, treatment, or disposition of sewage and industrial wastes of a liquid nature, including, without limitation, all inlets; collection, drainage, or disposal lines; intercepting sewers; sewage disposal plants; outfall sewers; sewage lagoons; all pumping, power, and other equipment and appurtenances; all extensions, improvements, remodeling, additions and alterations thereof; any and all rights or interests for such sewerage facilities; and all other necessary, incidental, or appurtenant properties, equipment, and facilities relating to the foregoing. (37) Sewer Fund: the special fund created by and designated as such in Ordinance No. 67, 1974 , of the City and referred to in Section 5B hereof. (38) State: the State of Colorado. (39) Subordinate Bonds or Subordinate Securities: bonds or securities payable from the Net Pledged Revenues having a lien thereon subordinate or junior to the lien thereon of the Bonds. 7 (40) Subsequent Bonds Debt service Reserve Fund: the special fund created by and referred to in Section 5G hereof. (41) Subsequent Bonds Principal and Interest Fund: the special fund created by and referred to in Section 5F hereof. (42) Superior Bonds or Superior Securities: bonds or securities payable from the Net Pledged Revenues having a lien thereon superior or senior to the lien thereon of the Bonds. (43) Trustee: First Interstate Bank of Denver, N.A. , or its successors, as trustee for the bonds of the Authority issued to finance the loan to the City under the Loan Agreement. (44) Wastewater Utility Capital Reserve: the special fund created by the City and referred to in Section 5I hereof. B. Construction. This Ordinance, except where the context by clear implication herein otherwise requires, shall be construed as follows: (1) Words in the singular include the plural, and words in the plural include the singular. (2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender refer to any gender. (3) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter, or otherwise, correspond to the respective articles, sections, subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise so designated. (4) The titles and headlines applied to articles, sections and subsections of this Ordinance are inserted only as a matter of convenience and ease in reference and in no way define or limit the scope or intent of any provisions of this Ordinance. Section 2 . The Project. A. Necessity. The City has need for and desires to acquire, construct, install and equip the Project. 8 B. Authorization. The Council hereby authorizes the undertaking and completion of the Project. Section 3 . The Loan Agreement. Pursuant to art. XX, §6 of the State Constitution and Art. V, Section 19. 3 of the Charter, the City is authorized by Council action and without an election to execute and deliver the Loan Agreement. The Council hereby authorizes the Mayor, the City Clerk and the Financial Officer of the City to execute and deliver the Loan Agreement on behalf of the City. Section 4. The Bonds. A. Authorization. Pursuant to art. XX, sec. 6 of the Colorado Constitution and Art. V, Section 19 . 3 of the Charter, the City is authorized by Council action and without an election to issue the Bonds to evidence its obligations under the Loan Agreement. The Council hereby authorizes the issuance of the Bonds, payable as to all Debt Service Requirements solely out of Net Pledged Revenues, for the purpose of acquiring, constructing, installing and equipping the Project. B. Bond Details. (1) Generally. The Bonds shall mature and bear interest as provided in the Loan Agreement. (2) Redemption. The Bonds shall be redeemable or prepayable as provided in the Loan Agreement. (3) Interest Rates. The maximum net effective interest rate authorized for the Bonds is 15% per annum, and the actual net effective interest rate for the Bonds is % per annum. (4) Execution. The Bonds shall be executed by and on behalf of the City with the manual signature of the Mayor, shall bear the seal of the City, shall be attested with the manual signature of the City Clerk, and shall be countersigned with the manual signature of the Financial Officer of the City. Should any officer whose manual signature appears on the Bonds cease to be such officer before delivery of the Bonds to the Authority, such manual signature shall nevertheless be valid and sufficient for all purposes. (5) Registration and Transfer. The Bonds shall be in registered form and shall be transferable to the extent and as provided in the Loan Agreement. (6) Replacement of Bonds. If any Bond shall have been lost, destroyed or wrongfully taken, the City shall 9 provide for the replacement thereof in the manner set forth and upon receipt of the evidence, indemnity bond and reimbursement for expenses provided in Ordinance No. 80, 1984 . (7) Recitals in Bonds. Each Bond shall recite in substance that the Bond is a special and limited obligation of the City payable solely out of and secured by an irrevocable pledge of and second lien (but not necessarily exclusive second lien) upon the Net Pledged Revenues, that the Bond does not constitute a debt or an indebtedness of the City within the meaning of any constitutional, Charter or statutory provision or limitat"ion, that" the Bond is not payable in whole or in part from the proceeds of general property taxes, and that the full faith and credit of the City is not pledged for the payment of the principal of or interest on the Bond. (8) Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit D of the Loan Agreement. C. Special Obligations. The Bonds, as to all Debt Service Requirements thereof, shall be payable solely out of the Net Pledged Revenues. The Authority may not look to the general fund or any other fund of the City for the payment of the Debt Service Requirements thereof, except the special funds pledged therefor. The Bonds shall not constitute a debt or indebtedness of the City within the meaning of any constitutional, charter or statutory provision or limitation, and the Bonds shall not be considered or held to be general obligations of the City but shall constitute special and limited obligations of the City. The Bonds are not payable in whole or in part from the proceeds of general property taxes, and the full faith and credit of the City is not pledged for payment of the Bonds. Section 5. Disposition of Bond Proceeds and Income; Funds and Accounts Adopted or Created by Ordinance; Security for Bonds. The proceeds of the Bonds and the Income shall be deposited by the City in the funds described in this Section 5, to be accounted for in the manner and priority set forth in this Section 5. The Net Pledged Revenues and all moneys and securities paid or to be paid to or held or to be held in any fund hereunder are hereby pledged to secure the payment of the Debt Service Requirements of the Prior Bonds, the Bonds and any other Parity Securities and any Subordinate Bonds or other Subordinate Securities as provided herein. This pledge shall be valid and binding from and after the date of the first delivery of the Bonds, and the moneys, as received by the City and hereby pledged, shall immediately be subject to the lien of this pledge without any physical delivery thereof, any filing, or further act. The lien of this pledge and the obligation to perform the contractual 10 provisions hereby made shall have priority over any or all other obligations and liabilities of the City (except as herein otherwise expressly provided) , and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City (except as herein otherwise expressly provided) , irrespective of whether such parties have notice thereof. A. Project Loan Subaccount. The net proceeds of the Bonds shall be held by the Trustee in the Project Loan Subaccount and disbursed to the City for payment of Costs of the Project as provided in the Loan Agreement. B. Sewer Fund. Except as otherwise provided herein, the entire Income, upon receipt thereof from time to time by the City, shall be set aside and credited immediately to the Sewer Fund. In addition, the City may at its option credit to the Sewer Fund any other moneys of the City legally available for expenditure for the purposes of the Sewer Fund as provided herein. The Sewer Fund shall be administered and the moneys on deposit therein shall be deposited and applied in the following order of priority: (1) First, to the Operation and Maintenance Fund to pay Operation and Maintenance Expenses in the manner set forth in Section 5C hereof; (2) Second, to the Prior Bonds Principal and Interest Fund to pay the Debt Service Requirements of the Prior Bonds then Outstanding in the manner set forth in Section 5D hereof; (3) Third, to the Prior Bonds Debt Service Reserve Fund in the manner set forth in Section 5E hereof; (4) Fourth, to the Subsequent Bonds Principal and Interest Fund to pay the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding in the manner set forth in Section 5F hereof; (5) Fifth, to the Subsequent Bonds Debt Service Reserve Fund in the manner set forth in Section 5G hereof; (6) Sixth, to the payment of the Debt Service Requirements of Subordinate Bonds or other Subordinate Securities in accordance with Section 5H hereof; (7) Seventh, to the accumulation or replenishment of the Wastewater Utility Capital Reserve in the manner set forth in Section 5I hereof; and 11 (8) Eighth, to be used in accordance with Section 5J hereof. C. Operation and Maintenance Fund. As a first charge on the Sewer Fund there shall be credited from time to time to the Operation and Maintenance Fund, Income sufficient to pay the Operation and Maintenance Expenses of the Sewerage Facilities as they become due and payable, and thereupon the Operation and Maintenance Expenses shall be promptly paid. Any surplus remaining in the Operation and Maintenance Fund and not needed for Operation and Maintenance Expenses shall be transferred to the Sewer Fund and used for the purposes thereof. D. Prior Bonds Principal and Interest Fund. The City shall deposit in the Prior Bonds Principal and Interest Fund from the Net Pledged Revenues on or before the last day of each month the following amounts: (1) Interest Payments. One-sixth (1/6) of the aggregate amount of the next installment of interest due in the then-current Bond Year plus any other amounts due for interest on the Prior Bonds then Outstanding. (2) Principal Payments. One-twelfth (1/12) of the aggregate amount of the next installment of principal due in the then-current Bond Year plus any other amounts due for principal of the Prior Bonds then Outstanding. Such interest and principal shall be promptly paid when due. The Net Pledged Revenues credited to the Prior Bonds Principal and Interest Fund shall be used to pay the Debt Service Requirements of the Prior Bonds then Outstanding, as such Debt Service Requirements become due, except as otherwise provided in this Ordinance. The Prior Bonds Principal and Interest Fund shall be maintained as a sinking fund for the mandatory redemption of Prior Bonds maturing in the years 2004 and 2010. Any mandatory sinking fund redemption shall be treated as an installment of principal for purposes of this Section 5D. E. Prior Bonds Debt Service Reserve Fund. Subject to the payments required by Section 5D hereof, there shall be credited as hereinafter provided to the Prior Bonds Debt Service Reserve Fund from the Net Pledged Revenues moneys sufficient to accumulate in and maintain the Prior Debt Service Reserve Fund at an amount at least equal to the Average Annual Debt Service Requirements of all Outstanding Prior Bonds. Said amount shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of the Prior Bonds. No payment need be made into the Prior Bonds Debt Service Reserve Fund so long as the moneys therein shall equal 12 not less than said amount. In the event that the amount on deposit in the Prior Bonds Debt Service Reserve Fund falls below the amount required to be maintained therein, the City shall credit to the Prior Bonds Debt Service Reserve Fund such Net Pledged Revenues as may be needed to accumulate or reaccumulate the amount therein so that at all times the amount of the Prior Bonds Debt Service Reserve Fund equals said amount. The moneys in the Prior Bonds Debt Service Reserve Fund shall be set aside, accumulated, and, if necessary, reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to be used only to prevent deficiencies in the Prior Bonds Principal and Interest Fund resulting from failure to deposit therein sufficient sums to pay such Debt Service Requirements of the Prior Bonds as the same become due. If at any time the City shall for any reason fail to pay into the Prior Bonds Principal and Interest Fund the full amount above stipulated, then an amount shall be paid into the Prior Bonds Principal and Interest Fund at such time from the Prior Bonds Debt Service Reserve Fund equal to the difference between that paid from the Net Pledged Revenues in the Sewer Fund and the full amount so stipulated. The money so used shall be replaced to the Prior Bonds Debt Service Reserve Fund from the Net Pledged Revenues thereafter received and not required to be otherwise applied by Section 5D hereof. If at any time the City shall for any reason fail to pay into the Prior Bonds Debt Service Reserve Fund the full amount stipulated herein from the Net Pledged Revenues in the Sewer Fund, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first Net Pledged Revenues thereafter received and not required to be applied otherwise by Section 5D hereof. Nothing in this ordinance shall be construed as limiting the right of the City to substitute for the cash deposit required to be maintained hereunder a letter of credit, surety bond, insurance policy, agreement guaranteeing payment, or other undertaking by a financial institution to ensure that cash in the amount otherwise required to be maintained hereunder will be available to the City as needed, provided that any such substitution shall first be approved in writing by Financial Guaranty Insurance Company and shall be submitted to Moody's Investors Service, Inc. and Standard & Poor's Corporation and shall not cause the then-current ratings of the Prior Bonds to be adversely affected. F. Subseouent Bonds Principal and Interest Fund. The City shall deposit in the Subsequent Bonds Principal and Interest Fund hereby created, forthwith upon receipt of the proceeds of the Bonds, interest accrued thereon from their date of issue to the date of delivery thereof to the Authority, to apply to the payment 13 of interest first due on the Bonds. In lieu of such deposit the City may permit the Authority to credit such accrued interest to any fund or account maintained by the Authority to account for payments by the City of Debt Service Requirements of the Bonds or payments under the Loan Agreement. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made, the City shall deposit in the Subsequent Bonds Principal and Interest Fund from the Net Pledged Revenues on or before the last day of August, 1992 , or as soon thereafter as the provisions hereof permit, the amount of interest accruing on the Bonds during said month (with a credit for the amount of any accrued interest, capitalized interest or investment earnings deposited in the Subsequent Bonds Principal and Interest Fund or credited to any fund or account maintained by the Authority for the purposes described above or herein and not theretofore credited) and on or before the last day of each month beginning September, 1992, or as soon thereafter as the provisions hereof permit, the following amounts (with a credit for the amount of any accrued interest, capitalized interest or investment earnings deposited in the Subsequent Bonds Principal and Interest Fund or credited to any fund or account maintained by the Authority for the purposes described above or herein and not theretofore credited) : (1) Interest Payments. One-third (1/3) of the aggregate amount of the next installment of interest due on the Bonds on the next Interest Payment Date in the then-current Bond Year plus any other amounts due for interest on the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding. (2) Principal Payments. One-twelfth (1/12) of the aggregate amount of the next installment of principal due on the Bonds on the next Maturity Date in the then-current Bond Year plus any other amounts due for principal of the Bonds, any Additional Parity Bonds and any other Parity Securities then outstanding. Such interest and principal shall be promptly paid when due. The moneys credited to the Subsequent Bonds Principal and Interest Fund shall be used to pay the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding, as such Debt Service Requirements become due, except as otherwise provided in this Ordinance. G. Subsequent Bonds Debt Service Reserve Fund. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required by Section 5F hereof, there shall be credited to the Subsequent Bonds 14 Debt Service Reserve Fund hereby created from the Net Pledged Revenues moneys sufficient to accumulate in and maintain the Subsequent Bonds Debt Service Reserve Fund at an amount at least equal to that amount, if any, specified in any ordinance authorizing the issuance of any Additional Parity Bonds or other Parity Securities. Said amount shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of any Additional Parity Bonds or other Parity Securities and, if any such ordinance so provides, the Bonds. In the event that the amount on deposit in the Subsequent Bonds Debt Service Reserve Fund falls below the amount required to be maintained therein, the City shall credit to the Subsequent Bonds Debt Service Reserve Fund such Net Pledged Revenues as may be needed to accumulate or reaccumulate the amount therein so that at all times the amount of the Subsequent Bonds Debt Service Reserve Fund equals said amount. The moneys in the Subsequent Bonds Debt Service Reserve Fund shall be set aside, accumulated, and, if necessary, reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to be used only to prevent deficiencies in the Subsequent Bonds Debt Service Reserve Fund resulting from failure to deposit therein sufficient sums to pay such Debt Service Requirements of any Additional Parity Bonds or other Parity Securities and, if any ordinance authorizing the issuance of any Additional Parity Bonds or other Parity Securities so provides, the Bonds as the same become due. If at any time the City shall for any reason fail to pay into the Subsequent Bonds Principal and Interest Fund the full amount above stipulated, then an amount shall be paid into the Subsequent Bonds Principal and Interest Fund at such time from the Subsequent Bonds Debt Service Reserve Fund equal to the difference between that paid from the Net Pledged Revenues in the Sewer Fund and the full amount so stipulated. The money so used shall be replaced to the Subsequent Bonds Debt Service Reserve Fund thereafter received and not required to be otherwise applied by Sections 5D through 5F hereof. If at any time the City shall for any reason fail to pay into the Subsequent Bonds Debt Service Reserve Fund the full amount stipulated herein from the Net Pledged Revenues in the Sewer Fund, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first Net Pledged Revenues thereafter received and not required to be applied otherwise by Sections 5D through 5F hereof. H. Payment of Subordinate Securities. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required by Sections 5F and 5G hereof, any remaining Net Pledged Revenues may be used by the City for the payment of Debt Service Requirements of Subordinate Securities payable from the Net Pledged Revenues and authorized to be issued in accordance with this Ordinance, 15 including reasonable reserves for such Subordinate Securities; but the lien of such Subordinate Securities on the Net Pledged Revenues and the pledge thereof for the payment of such Subordinate Securities shall be subordinate to the lien and pledge of the Bonds, any Additional Parity Bonds and any other Parity Securities as herein provided. I. Wastewater Utility Capital Reserve. The City shall, so long as any of the Prior Bonds remain Outstanding, maintain in the Wastewater Utility Capital Reserve an amount at least equal to 25% of the Operation and Maintenance Expenses budgeted for the then-current Fiscal Year and shall, after the redemption or defeasance of the Prior Bonds and so long as any Debt Service Requirements of the Bonds or amounts due under the Loan Agreement remain unpaid, maintain in the Wastewater Utility Capital Reserve an amount at least equal to 17% of the Operation and Maintenance Expenses budgeted for the then-current Fiscal Year. Said amounts shall be maintained as a continuing reserve for payment of costs of necessary capital improvements to the Sewerage Facilities and, subject to the foregoing, may be expended in the sole discretion of the City. If moneys in the Wastewater Utility Capital Reserve are expended so that the amount therein is less than the minimum amount required hereby, any deficiency shall, after the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required or permitted by Sections 5F through 5H hereof, be replenished over a period not exceeding twenty-four (24) months in substantially equal monthly installments. No payment need be made into the Wastewater Utility Capital Reserve so long as the moneys therein shall equal not less than the amount required hereby. J. Use of Remaining Revenues. After the payments required by Sections 5D and 5E hereof have been made in any Bond Year and subject to the payments required or permitted by Sections 5F through 5I hereof, any remaining Net Pledged Revenues may be used for any one or any combination of lawful purposes as provided in Art. XII, Section 6 of the Charter. K. Termination of Deposits. No payment need be made into the Prior Bonds Principal and Interest Fund or the Prior Bonds Debt Service Reserve Fund if the amount in the Prior Bonds Principal and Interest Fund and the amount in the Prior Bonds Debt Service Reserve Fund is at least equal to the entire amount of the Outstanding Prior Bonds, as to all Debt Service Requirements, to their respective Maturity Dates or to any Redemption Dates on which the City shall have exercised or shall have obligated itself to exercise its option to redeem,. prior to their respective Maturity Dates, any Prior Bonds then Outstanding and thereafter maturing (provided that, solely for the purpose of this Section 5K, there shall be deemed to be a credit to the Prior Bonds Debt Service 16 Reserve Fund moneys, Federal Securities and bank deposits, or any combination thereof, accounted for in any other fund or account of the City and restricted solely for the purpose of paying the Debt Service Requirements of the Prior Bonds, in which case moneys in the Prior Bonds Principal and Interest Fund and the Prior Bonds Debt Service Reserve Fund in an amount, except for any known interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B hereof from the time of any such investment or deposit to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, at least equal to such Debt Service Requirements, shall be used together with any such gain from such investments and deposits solely to pay such Debt Service Requirements as the same become due. No payment need be made into the Subsequent Bonds Principal and Interest Fund or the Subsequent Bonds Debt Service Reserve Fund if the amount in the Subsequent Bonds Principal and Interest Fund and the Subsequent Bonds Debt Service Reserve Fund is at least equal to the entire amount of the Outstanding Bonds and any Outstanding Additional Parity Bonds and Parity Securities, as to all Debt Service Requirements, to their respective Maturity Dates or to any Redemption Dates on which the City shall have exercised or shall have obligated itself to exercise its option to redeem, prior to their respective Maturity Dates, any Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding and thereafter maturing (provided that, solely for the purpose of this Section 5K, there shall be deemed to be a credit to the Subsequent Bonds Principal and Interest Fund moneys, Federal Securities and bank deposits, or any combination thereof, accounted for in any other fund or account of the City and restricted solely for the purpose of paying the Debt Service Requirements of the Bonds, any Additional Parity Bonds or any other Parity Securities) , in which case moneys in the Subsequent Bonds Principal and Interest Fund in an amount, except for any known interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B hereof from the time of any such investment or deposit to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, at least equal to such Debt Service Requirements, shall be used together with any such gain from such investments and deposits solely to pay such Debt Service Requirements as the same become due. L. Budget and Appropriation of Sums. The sums required to pay the Costs of the Project are hereby appropriated for said purpose. The sums required to make the payments specified in this Section 5 are hereby appropriated for said purposes. Said amounts for each year shall be included in the annual budget and the appropriation ordinance or measures to be adopted or passed by the Council in each year respectively while the Bonds, either as to principal or interest, are Outstanding and unpaid. No provisions of any constitution, charter, statute, ordinance, resolution, or 17 other order or measure enacted after the issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of the City to keep and perform the covenants contained in this Ordinance so long as any of the Bonds remain Outstanding and unpaid. Nothing herein shall prohibit the Council from appropriating other funds of the City legally available for this purpose to the Sewer Fund for the purposes thereof. Section 6. General Administration of Funds. A. Places and Times of Deposits. Each of the special funds created or'- adopted in Section 5 hereof shall be maintained in a Commercial Bank kept separate and apart from all other accounts or funds of the City as trust accounts solely for the purposes herein designated therefor. For purposes of investment of moneys, nothing herein prevents the commingling of moneys accounted for in any two or more such accounts or funds pertaining to the Income. Such accounts or funds shall be continuously secured to the fullest extent required or permitted by the laws of the State for the securing of public funds and shall be irrevocable and not withdrawable by anyone for any purpose other than the respective designated purposes of such accounts or funds. Each periodic payment shall be credited to the proper account or fund not later than the date therefor herein designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. B. Investment of Funds. Any moneys in any fund established in Section 5 hereof may be invested, reinvested or deposited only in Permitted Investments. Investments shall either be subject to redemption at any time at face value by the Owner thereof at the option of such Owner or shall mature at such time or times as shall most nearly coincide with the expected need for moneys from the fund in question. Investments so purchased in any such fund shall be deemed at all times to be a part of the applicable fund; provided that with the exception of the Prior Bonds Debt Service Reserve Fund the interest accruing on such investments and any profit realized therefrom shall be credited to the Sewer Fund, and any loss resulting from such investments shall be charged to the particular fund in question. Interest and profit realized from investments in the Prior Bonds Debt Service Reserve Fund shall be credited to the Prior Bonds Debt Service Reserve Fund, provided that, so long as the amount in the Prior Bonds Debt Service Reserve Fund equals at least the amount specified in Section 5E hereof, such interest and profit may be transferred to the Prior Bonds Principal and Interest Fund and distributed in the same manner as other moneys in the Prior Bonds Principal and Interest Fund. Any loss resulting from such investments in the Prior Bonds Debt Service Reserve Fund shall be charged to the Prior Bonds Debt Service Reserve Fund. Investments in the Prior Bonds Debt Service Reserve Fund shall be valued by the Financial Officer as frequently as deemed necessary by Financial Guaranty Insurance 18 Company, but not less often than quarterly, at the market value thereof. If on any valuation date the market value of investments in the Prior Bonds Debt Service Reserve Fund is less than the amount required by Section 5E hereof to be maintained therein due to market fluctuations, the deficiency shall be remedied no later than the next quarterly valuation date. The City shall present for redemption or sale on the prevailing market any securities or obligations so purchased as an investment of moneys in a given fund whenever it shall be necessary to do so in order to provide moneys to meet any required payment or transfer from such fund. C. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither the City nor any officer of the City shall be liable or responsible for any loss resulting from any investment or reinvestment made in accordance with this Ordinance. D. Character of Funds. The moneys in any fund herein authorized shall consist of lawful money of the United States of America or Permitted Investments or both such money and Permitted Investments. Moneys deposited in a demand or time deposit account in a Commercial Bank, appropriately secured according to the laws of the State, shall be deemed lawful money of the United States of America. E. Accelerated Payments Optional. Nothing contained herein prevents the accumulation in any fund herein designated of any monetary requirements at a faster rate than the rate or minimum rate, as the case may be, provided therefor, but no payment shall be so accelerated if such acceleration shall cause a default in the payment of any obligation of the City pertaining to the Income. Section 7 . Priorities; Liens: Issuance of Additional Bonds. A. Liens on Net Pledged Revenues; Eauality of Bonds. Additional Parity Bonds and Other Parity Securities. Except as expressly provided in Ordinance No. 98, 1986, with respect to the Prior Bonds and in this Ordinance with respect to Additional Parity Bonds, Parity Securities and Subordinate Securities, the Net Pledged Revenues shall be and hereby are irrevocably pledged and set aside to pay the Debt Service Requirements of the Bonds. The Prior Bonds constitute an irrevocable and first lien upon the Net Pledged Revenues. The Bonds constitute an irrevocable and second lien (but not necessarily an exclusive second lien) upon the Net Pledged Revenues. The Bonds, any Additional Parity Bonds and any other Parity Securities hereafter authorized to be issued and from time to time Outstanding are equitably and ratably secured by a lien on the Net Pledged Revenues and shall not be entitled to any priority one over the other in the application of the Net Pledged Revenues 19 regardless of the time or times of the issuance thereof, it being the intention of the Council that there shall be no priority among the Bonds, any Additional Parity Bonds and any other Parity Securities, regardless of the fact that they may be actually issued and delivered at different times. B. Issuance of Additional Parity Bonds. Nothing herein, subject to the limitations stated in Section 7F hereof, prevents the issuance by the City of Additional Parity Bonds payable from the Net Pledged Revenues and constituting a lien on the Net Pledged Revenues on a parity with, but not prior or superior to, the lien thereon of the Bonds; but before any such Additional Parity Bonds are authorized or actually issued the City shall satisfy the conditions set forth in the Loan Agreement. C. Certification of Revenues. Where certifications of revenues are required by this Ordinance or the Loan Agreement, the specified and required written certifications of the Financial Officer of the City that revenues are sufficient to pay the required amounts shall be conclusively presumed to be accurate in determining the right of the City to authorize, issue, sell and deliver Additional Parity Bonds. D. Subordinate Securities Permitted. Nothing herein, subject to the limitations stated in Section 7F hereof, prevents the City from issuing Subordinate Securities for any lawful purpose. E. Superior Securities Prohibited. The City has heretofore issued the Prior Bonds. The City shall not issue any additional Superior Bonds or Superior Securities. F. Supplemental Ordinances. Additional Parity Bonds or Subordinate Securities shall be issued only after authorization thereof by ordinance, supplemental ordinance or other instrument of the Council, stating the purpose or purposes of the issuance of such additional securities, directing the application of the proceeds thereof to such purpose or purposes, directing the execution thereof, and fixing and determining the date, series designation, principal amount, maturity or maturities, maximum rate or rates of interest, and prior redemption privileges of the City with respect thereto, and providing for payments to and from the Sewer Fund in accordance with this Ordinance. All additional securities shall bear such date, shall be payable as to principal on December 1 and as to interest on June 1 and December 1 and shall be subject to redemption prior to maturity on such terms and conditions, as may be provided, and shall bear interest at such rate or rates as may be fixed by ordinance, instrument or other document of the Council. Nothing herein shall be construed to prohibit the issuance of additional securities payable from the Net Pledged Revenues, the interest on which is payable more frequently than semiannually. 20 Section 8. Covenants. The City hereby incorporates by this reference all the covenants and agreements contained in the Loan Agreement and further covenants until the Bonds have been fully paid and discharged as follows: A. Rate Maintenance. The City shall prescribe, revise, and collect rates, fees, tolls, and charges and tap fees and plant investment fees, or any combination thereof, which may be imposed by the City whether for the direct or indirect connection with or the use of the Sewerage Facilities and reasonable penalties for any delinquencies, which shall produce Income sufficient, together with any other moneys legally available therefor and credited to the Sewer Fund, to make the payments and accumulations required by this Ordinance, and which shall produce Net Pledged Revenues sufficient, together with all other moneys legally available therefor and credited to the Sewer Fund after payment of Operation and Maintenance Expenses, to pay the amounts specified in paragraph (5) of Exhibit A of the Loan Agreement. In the event that such rates, fees, tolls, and charges and tap fees and plant investment fees at any time should not be sufficient to make all of the payments and accumulations required by this Ordinance, the Council shall increase its rates, fees, tolls, and charges and tap fees and plant investment fees to such extent as to insure the payments and accumulations required by the provisions of this Ordinance. B. Collection of Charges. The City shall cause all rates, fees, tolls, and charges and tap fees and plant investment fees pertaining to the Sewerage Facilities to be billed promptly and collected as soon as reasonable, shall prescribe and enforce rules and regulations or impose contractual obligations for , the payment thereof, to the end that the Net Pledged Revenues shall be adequate to meet the requirements of this Ordinance and any other ordinance or instrument supplemental thereto. The rates, fees, tolls, and charges and tap fees and plant investment fees due shall be collected in any lawful manner. C. Competent Management. The City shall employ experienced and competent management personnel for each component of the Sewerage Facilities. If the City shall fail to pay the Debt Service Requirements of the Bonds promptly as the same become due, or if the City shall fail to keep any of the covenants herein contained, and if such default shall continue for a period of sixty (60) days, or if the Net Pledged Revenues of the Sewerage Facilities in any Fiscal Year, together with other legally available revenue and money, shall fail to equal at least the amount of the Debt Service Requirements of the Bonds, and other obligations payable from the Net Pledged Revenues due in the Comparable Bond Year, the City shall retain a firm of competent 21 management Persons skilled in the operation of sewerage facilities to assist in the management of the Sewerage Facilities so long as such default continues or the said revenues, proceeds and income are less than the amount hereinabove designated. D. Performance of Duties. The City, acting by and through its officers, or otherwise, shall faithfully and punctually perform, or cause to be performed, all duties with respect to the Income and the Sewerage Facilities required by the Constitution and laws of the State and the ordinances, resolutions and contracts of the City, including, without limitation, the proper segregation of the proceeds of the Bonds and the Income and their application from time to time to the respective funds provided therefor. E. Costs of Bond Issue and of Performance. Except as otherwise specifically provided herein, all costs and expenses incurred in connection with the issuance of the Bonds, payment of the Debt Service Requirements thereof, or the City's performance of or compliance with any covenant or agreement contained in this Ordinance or in the Loan Agreement shall be paid exclusively (but only from the appropriate special fund in the manner authorized herein) from the proceeds of the Bonds, from the Net Pledged Revenues, or from other legally available moneys, and in no event shall any of such costs or expenses be required to be paid out of or charged to the general fund of the City. F. Contractual Obligations. The City will perform all contractual obligations undertaken by it under the Loan Agreement and any other agreements relating to the Bonds, the Income, or the Sewerage Facilities. G. Further Assurances. At any and all times the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge, deliver, and file or record all and every such further instruments, acts, deeds, conveyances, assignments, transfers, other documents, and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, the Net Pledged Revenues and other funds hereby pledged, or intended so to be, or which the City may hereafter become bound to pledge, or as may be reasonable and required to carry out the purposes of this Ordinance. The City, acting by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Net Pledged Revenues and other funds pledged hereunder and all the rights of the Authority against all claims and demands of all Persons whomsoever. H. Conditions Precedent. Upon the date of issuance of any of the Bonds, all conditions, acts and things required by the Constitution or laws of the United States of America, the Constitution or laws of the State, the Charter, and this Ordinance to exist, to have happened, and to have been performed precedent to 22 or in the issuance of the Bonds shall exist, have happened and have been performed, and the Bonds, together with all other obligations of the City, shall not contravene any debt or other limitation prescribed by the Constitution or laws of the United States of America or the Constitution or laws of the State or the Charter. I. Efficient Operation and Maintenance. The City shall at all times operate the Sewerage Facilities properly and in a sound and economical manner. The City shall maintain, preserve and keep the Sewerage Facilities 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 shall from time to time make or cause to be made all necessary and proper repairs, replacements and renewals so that at all times the maintenance of the Sewerage Facilities may be properly and advantageously conducted. All salaries, fees, wages and other compensation paid by the City in connection with the repair, maintenance and operation of the Sewerage Facilities shall be fair and reasonable. J. Records and Accounts. The City will keep proper books of record and account, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the funds referred to herein. K. Rules Regulations and Other Details. The City, acting by and through its officers, shall establish and enforce reasonable rules and regulations governing the construction, operation, care, repair, maintenance, management, control, use and services of the Sewerage Facilities. The City shall observe and perform all of the terms and conditions contained in this Ordinance and shall comply with all valid acts, rules, regulations, orders and directives of any legislative, executive, administrative or judicial body applicable to the Sewerage Facilities or the City. L. payment of Governmental Charges. The City shall pay or cause to be paid all taxes and assessments or other municipal or governmental charges, if any, lawfully levied or assessed upon or in respect of the Sewerage Facilities or upon any part thereof or upon any portion of the Income, when the same shall become due, and shall duly observe and comply with all valid requirements of any municipal or governmental authority relative to the Sewerage Facilities, or any part thereof, except for any period during which the same are being contested in good faith by proper legal proceedings. The City shall not create or suffer to be created any lien or charge upon the Sewerage Facilities, or any part thereof, or upon the Income, except the pledge and lien created by this Ordinance for the payment of the Debt Service Requirements due in connection with the Bonds and except as herein otherwise permitted. The City shall pay or cause to be discharged or shall make adequate provision to satisfy and to discharge, within ninety (90) days after the same shall become payable, all lawful claims and demands 23 for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon the Sewerage Facilities, or any part thereof, or the Income, but nothing herein requires the City to pay or to cause to be discharged or to make provision for any such tax, assessment, lien or charge, so long as the validity thereof is contested in good faith and by appropriate legal proceedings. M. Protection of Security. The City, its officers, agents and employees, shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Debt Service Requirements of the Bonds and any other securities payable from the Net Pledged -Revenues according to the terms thereof. No contract shall be entered into nor any other action taken by which the rights of any Owner of any Bonds or other security payable from Net Pledged Revenues might be prejudicially and materially impaired or diminished. N. Accumulation of Interest Claims. In order to prevent any accumulation of claims for interest after maturity, the City shall not directly or indirectly extend or assent to the extension of the time for the payment of any claim for interest on any of the Bonds or any other securities payable from the Net Pledged Revenues; and the City shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive any of such claims for interest. If the time for the payment of any such installment of interest is extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in case of default hereunder to the benefit or the security of this Ordinance, except upon the prior payment in full of the principal of all of the Bonds and any such securities the payment of which has not been extended. O. Prompt Payment of Bonds. The City shall promptly pay the Debt Service Requirements of every Bond at the places, on the dates, and in the manner specified herein and in the Bonds according to the true intent and meaning hereof. P. Use of Funds. The Prior Bonds Principal and Interest Fund, the Prior Bonds Debt Service Reserve Fund and the Subsequent Bonds Principal and Interest Fund and the Subsequent Bonds Debt Service Reserve Fund shall be used solely and only, and the moneys credited to such funds are hereby pledged, for the purpose of paying the Debt Service Requirements of the Prior Bonds, the Bonds, any Additional Parity Bonds and any other Parity Securities at maturity or upon prior redemption, subject to Section 9 hereof. Q. Additional Securities. The City shall not hereafter issue any bonds or securities relating to the Sewerage Facilities and payable from the Net Pledged Revenues without compliance with 24 the requirements with respect to the issuance of Additional Parity Bonds or other securities set forth herein to the extent applicable. R. Other Liens. Other than as provided herein, there are no liens or encumbrances of any nature whatsoever on or against the Sewerage Facilities, or any part thereof, or on or against the Net Pledged Revenues. S. Surety Bonds. Each official or other person having custody of any Net Pledged Revenues or responsible for their handling shall be fully bonded at all times, which bond shall be conditioned upon the proper application of said moneys. The cost of each such bond shall be considered an Operation and Maintenance Expense, unless otherwise provided by law. T. Disposal of Sewerage Facilities Prohibited. Subject to Section 8U hereof, except for the use of the Sewerage Facilities and services pertaining thereto in the normal course of business, neither all nor a substantial part of the Sewerage Facilities shall be sold, mortgaged, pledged, encumbered, alienated or otherwise disposed of, until all of the Bonds have been paid in full, as to all Debt Service Requirements thereof, or unless provision has been made therefor, or until the Bonds have otherwise been redeemed, including, without limitation, the termination of the pledge as herein authorized. Subject to Section 8U hereof, the City shall not dispose of its title to the Sewerage Facilities or to any material Income-producing part thereof, including any property necessary to the operation and use of the Sewerage Facilities and the lands and interests in lands comprising the Sewerage Facilities. U. Disposal of Property. No material Income-producing part of the Sewerage Facilities shall be sold, leased, mortgaged, pledged, encumbered or otherwise disposed of or otherwise alienated, until all of the Bonds have been paid in full, or unless provision has been made therefor, or until the Bonds have otherwise been redeemed; provided, however, that the City may sell, exchange or lease at any time and from time to time any property or facilities constituting part of the Sewerage Facilities and not useful in the construction, reconstruction or operation thereof; but any proceeds of any such sale or exchange received and not used to replace such property so sold or exchanged shall be deposited in the Sewer Fund, and any proceeds of any such lease received shall be deposited by the City as revenues of the Sewerage Facilities. V. Loss from Condemnation. If any part of the Sewerage Facilities is taken by the exercise of a power of eminent domain, the amount of any award received by the City as a result of such taking shall be expended upon the improvement of the Sewerage Facilities or shall be applied to the redemption of the outstanding Prior Bonds in accordance with the provisions of Ordinance No. 98, 25 1986, the outstanding Bonds, any Outstanding Additional Parity Bonds and any Outstanding Parity Securities in accordance with the provisions hereof and of any other instrument pertaining to the issuance of any such Additional Parity Bonds or Parity Securities any Outstanding Subordinate Bonds or Subordinate Securities in accordance with any instrument pertaining to the issuance of such Subordinate Bonds or Subordinate Securities at maturity or upon prior redemption if the authorizing ordinances authorize the prior redemption of such securities. W. Inspection of Records. The Authority and any Owner of any securities payable from the Net Pledged Revenues, any duly authorized agent or agents of the Authority or such Owner, shall have the right at all reasonable times to inspect all records, accounts and data relating thereto, concerning the Sewerage Facilities or the Income, to make copies of such records, accounts and data at the Authority's or Owner's expense, and to inspect the Sewerage Facilities and properties comprising the Sewerage Facilities. X. Audits Required. The City, annually following the close of each Fiscal Year, shall order an audit for the Fiscal Year of the books and accounts pertaining to the Sewerage Facilities to be made forthwith by an independent accountant, and order an audit report showing the receipts and disbursements for each fund or account pertaining to the Sewerage Facilities or the Income. All expenses incurred in the making of the audits and reports required by this subsection shall be regarded and paid as an Operation and Maintenance Expense. Y. Insurance and Reconstruction. The City shall at all times maintain with responsible insurers all such insurance reasonably required and obtainable within limits and at costs deemed reasonable by the City as is customarily maintained with respect to sewerage facilities of like character against loss of or damage to the Sewerage Facilities and against public and other liability to the extent at least reasonably necessary to protect the interest of the City and of each Owner of Bonds or any other securities payable from the Net Pledged Revenues, except as herein otherwise provided. If any useful part of the Sewerage Facilities shall be damaged or destroyed, the City shall, as expeditiously as possible, commence and diligently proceed with the repair or replacement of the damaged or destroyed property so as to restore the same to use. The proceeds of any insurance appertaining to the Sewerage Facilities shall be payable to the City and (except for proceeds of use and occupancy insurance) shall be applied to the necessary costs involved in such repair and replacement, and to the extent not so applied shall (together with the proceeds of any such use and occupancy insurance) be deposited in the Sewer Fund as Income. If the costs of such repair and replacement of the damaged or destroyed property exceed the proceeds of such property insurance available for payment of the same, moneys in the Sewer 26 Fund shall be used to the extent necessary for such purpose, as permitted by Section 5H hereof. Section 9 . Defeasance. When all Debt Service Requirements of the Bonds have been duly paid, the pledge and lien and all obligations hereunder shall thereby be discharged and the Bonds shall no longer be deemed to be Outstanding within the meaning of this Ordinance. There shall be deemed to be such due payment when the City has prepaid in whole all of its obligations under the Loan Agreement. Section 10. Default Provisions and Remedies of Bond Owners. A. Events of Default. Each of the events described in Section 5. 01 of the Loan Agreement is hereby declared to be and to constitute an Event of Default hereunder. B. Remedies for Defaults. Upon the happening and continuance of any Event of Default, the Authority may proceed against the City to protect and to enforce its rights under this Ordinance or the Loan Agreement as provided in the Loan Agreement or by mandatory injunction or by other suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, either for the appointment of a receiver or an operating trustee or for the specific performance of any covenant or agreement contained herein or in the Loan Agreement or for any proper legal or equitable remedy as the Authority may deem most effectual to protect and to enforce the rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in violation of any right of any Owner of any Bond, or to require the City to act as if it were the trustee of an expressed trust, or any combination of such remedies, or as otherwise may be authorized by any statute or other provision of law. All such proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of the Authority and all Owners of any Additional Parity Bonds or other Parity Securities then Outstanding. Any receiver or operating trustee appointed in any proceedings to protect the rights of the Authority and such Owners hereunder may collect, receive and apply all Income arising after the appointment of such receiver or operating trustee in the same manner as the City itself might do. The consent to any such appointment is hereby expressly granted by the City. C. Rights and Privileges Cumulative. The failure of the Authority to proceed in any manner herein provided shall not relieve the City or any of its officers, agents or employees of any liability for failure to perform to carry out any duty, obligation or other commitment. Each right or privilege of the Authority is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of the 27 Authority shall not be deemed a waiver of any other right or privilege of the Authority. The Authority shall be entitled to all of the privileges, rights and remedies provided or permitted in this Ordinance or the Loan Agreement and as otherwise provided or permitted by law or in equity or by statute, except as provided in Sections 12A and 12B hereof, and subject to the applicable provisions concerning the Income and the proceeds of the Bonds. Nothing herein affects or impairs the right of the Authority to enforce the payment of the Debt Service Requirements due in connection with the Bonds or the obligation of the City to pay the Debt Service Requirements of the Bonds at the time and- theplace expressed herein or in the Loan Agreement or the Bonds. D. Duties Upon Default. Upon the happening of any Event of Default, the City, in addition, will do and perform all proper acts on behalf of and for the Authority to protect and to preserve the security created for the payment of the Bonds and to insure the payment of the Debt Service Requirements of the Bonds promptly as the same become due. If the City fails or refuses to proceed as in this Section 10D provided, the Authority, after demand in writing, may proceed to protect and to enforce its rights as hereinabove provided; and to that end the Authority shall be subrogated to all rights of the City under any agreement or contract involving the Net Pledged Revenues entered into prior to the effective date of this Ordinance or thereafter while any of the Bonds are Outstanding. Nothing herein requires the City to proceed as provided herein if it determines in good faith and without any abuse of its discretion that if it so proceeds it is more likely than not to incur a net loss rather than a net gain or such action is likely to affect materially and prejudicially the Authority and the Owners of any Outstanding Parity Securities. Section 11. Amendment of Ordinance. A. Amendment of Ordinance Not Requiring Consent of the Authority. The City may, without the consent of, or notice to, the Authority, adopt such ordinances supplemental hereto (which amendments shall thereafter form a part hereof) for any one or more or all of the following purposes: (1) To cure or correct any formal defect, ambiguity or inconsistent provision contained in this Ordinance; (2) To designate a trustee for the Owners of the Bonds, to transfer custody and control of the Income to such trustee, and to provide for the rights and obligations of such trustee; (3) To add to the covenants and agreements of the City or the limitations and restrictions on the City set forth herein; 28 (4) To pledge additional revenues, properties or collateral to the payment of the Bonds; (5) To cause this Ordinance to comply with the Trust Indenture Act of 1939, as amended from time to time; or (6) To effect any such other changes hereto which do not in the opinion of nationally recognized bond counsel materially adversely affect the interests of the Owners of the Bonds. B. Amendment of Ordinance Reguiring Consent of the Authority. Exclusive of the amendatory ordinances covered by Section 11A hereof, this Ordinance may be amended or modified by ordinances or other instruments duly adopted by the Council, without receipt by it of any additional consideration, but with the written consent of the Authority, provided that no such amendatory ordinance shall permit: (1) Increased or Accelerated Payment. An increase in the amounts payable on any Maturity Date or Interest Payment Date or an acceleration of the time for payment of such amounts; or (2) Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or to the pledge created by this Ordinance; or (3) Priorities Among Bonds and Parity Securities. The establishment of priorities as among Bonds and other Parity Securities. C. Unanimous Consent. Notwithstanding anything in the foregoing provisions contained, the terms and the provisions of this Ordinance, or of any ordinance or instrument amendatory thereof, and the rights and the obligations of the City and of the Authority and the Owners of any Additional Parity Bonds or other Parity Securities may be modified or amended in any respect upon the adoption by the City and upon the filing with the City Clerk of an instrument to that effect and with the consent of the Authority and the Owners of all the then Outstanding Additional Parity Bonds or other Parity Securities. D. Notation on Bonds. After the effective date of any action taken as provided in Section 11B hereof, new Bonds so modified as in the opinion of the Council to conform to such action shall be prepared, executed and delivered and, upon demand of the City or the Authority, shall be exchanged without cost for Bonds then Outstanding upon surrender of such Outstanding Bonds. 29 Section 12 . Miscellaneous. A. Character of Agreement. None of the covenants, agreements, representations, or warranties contained herein or in the Bonds shall ever impose or shall be construed as imposing any liability, obligation, or charge against the City (except for the special funds pledged therefor) or against the general credit of the City payable out of general funds or out of any funds derived from general property taxes. B. No Pledge of Property. The payment of the Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City except for the Net Pledged Revenues. No property of the City, subject to such exception with respect to the Net Pledged Revenues, pledged for the payment of the Bonds, shall be liable to be forfeited or taken in payment of the Bonds. C. Statute of Limitations. No action or suit based upon any Bond or other obligation of the City shall be commenced after it is barred by any statute of limitations pertaining thereto. Any moneys from whatever source derived remaining in any fund or account reserved, pledged or otherwise held for the payment of any such obligation, action or suit, the collection of which has been barred, shall revert to the Sewer Fund. Nothing herein prevents the payment of the Bonds or other obligation after an action or suit for its collection has been barred if the Council deems it in the best interests of the City or the public so to do and orders such payment to be made. D. Delegated Duties. The officers of the City are hereby authorized and directed to enter into such agreements and take all action necessary or appropriate to effectuate the provisions of this Ordinance and to comply with the requirements of law, including, without limitation: (1) Preparation of Bonds. The preparation of typewritten Bonds in the form specified in Exhibit D of the Loan Agreement; (2) Execution Registration and Delivery of Bonds. The execution and registration of the Bonds and the delivery of the Bonds to the Authority pursuant to the provisions of this Ordinance; (3) Information. The assembly and dissemination to the Authority of financial and other information concerning the City and the Bonds; (4) Closing Certificates. The execution of such certificates as may be reasonably required by the Authority, relating, inter alia, to: 30 (a) The signing of the Bonds; (b) The tenure and identity of the officials of the City; (c) If in accordance with fact, the absence of litigation, pending or threatened, affecting the validity of the Bonds; (d) The delivery of the Bonds and the receipt of the Bond proceeds; and (e) the use of the Bond proceeds and the investment thereof pending such use. E. Successors. Whenever herein the City is named or is referred to, such provision shall be deemed to include any successors of the City, whether so expressed or not. All of the covenants, stipulations, obligations and agreements by or on behalf of and other provisions for the benefit of the City contained herein shall bind and inure to the benefit of any officer, board, district, commission, authority, agency, instrumentality or other Person or Persons to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the City or of its respective successors, if any, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions hereof. F. Rights and Immunities. Except as herein otherwise expressly provided, nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any Person, other than the City and the Authority, any right, remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof. All the covenants, stipulations, promises and agreements herein contained by and on behalf of the City shall be for the sole and exclusive benefit of the City and the Authority. No recourse shall be had for the payment of the Debt Service Requirements of the Bonds or for any claim based thereon or otherwise upon this Ordinance authorizing their issuance or any other ordinance or instrument pertaining thereto, against any individual member of the Council, or any officer or other agent of the City, past, present or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, statute or rule of law or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of the Bonds and as a part of the consideration of their issuance specially waived and released. G. Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City and after any 31 of the Bonds are issued, this Ordinance shall constitute an irrevocable contract between the City and the Owner or Owners of the Bonds; and this Ordinance, subject to the provisions of Sections 9 and 11 hereof, if any Bonds are in fact issued, shall be and shall remain irrepealable until the Bonds, as to all Debt Service Requirements, shall be fully paid, cancelled and discharged, as herein provided. H. Ratification. All action not inconsistent with the provisions of this Ordinance heretofore taken by the City or its officers, and otherwise by the City directed toward the issuance of the Bonds and the execution of the Loan Agreement is hereby ratified, approved and confirmed. I. Repealer. All ordinances, resolutions, bylaws, orders, and other instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaw, order, or other instrument, or part thereof, heretofore repealed. J. Severability. If any section, subsection, paragraph, clause or other provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs, clauses or provisions of this Ordinance. INTRODUCED, READ, APPROVED ON FIRST READING, AND ORDERED PUBLISHED BY NUMBER AND TITLE ONLY this 7th day of. July, 1992 . CITY OF FORT COLLINS, COLOttRADO By: (CITY) Mayor (SEAL) �ATTEST: 37, � • `�k�1 ll City Clerk 32 Council Member Azari moved that Ordinance No. 75, 1992, heretofore introduced and read by title be approved on first reading. Council Member Edwards seconded the motion. The question being upon the approval on first reading of Ordinance No. 75, 1992, the roll was called with the following results: Council Members voting "AYE" : Susan E. Kirkpatrick Ann Azari Dave Edwards Cathy Fromme Gerry Horak Loren R. Maxey Bob Winokur Council Members voting "NAY" : None The Mayor thereupon declared that, a majority of the Council Members present having voted in favor thereof, the motion was carried and Ordinance No. 75, 1992 , duly approved on first reading. The Council deeming it appropriate, the Mayor ordered Ordinance No. 75, 1992, published by number and title only together with a statement that the text thereof is available for public inspection and acquisition in the office of the City Clerk and a notice giving the date when the Ordinance will be presented for final passage in The Coloradoan, a newspaper of general circulation published in the City, at least seven (7) days before presentation for final passage. After consideration of other business to come before the Council, the meeting was adjourned. Mayor (CITY) City of Fort Collins, Colorado (SEAL) ATTEST: (� City Clerk City of Fort Collins, Colorado 33 STATE OF COLORADO ) COUNTY OF LARIMER ) ss. CITY OF FORT COLLINS ) The Council of the City of Fort Collins, Colorado, held a regular meeting at Council Chambers, City Hall, 300 West LaPorte Avenue, Fort Collins, Colorado, on Tuesday, the 21st day of July, 1992, at the hour of 6: 30 p.m. The following persons were present: Council Members: Susan E. Kirkpatrick, Mayor Ann Azari, Mayor Pro Tem Dave Edwards Loren R. Maxey Deputy City Manager: Diane Jones Deputy City Clerk: Molly J. Davis Financial Officer: Alan J. Krcmarik City Attorney: Stephen J. Roy The following persons were absent: Cathy Fromme Gerry Horak Bob Winokur Steven C. Burkett Wanda M. Krajicek The Mayor informed the Council that Ordinance No. 75, 1992, was duly published in The Coloradoan, a newspaper of general circulation published in the City, in its issue of July 12, 1992 . Council Member Azari then moved that Ordinance No. 75, 1992, be amended. The following Ordinance with amendments was then read by title, copies of the full Ordinance with• amendments, excepting only those read in public at the meeting, having been available in the office of the City Clerk at least forty-eight (48) hours prior to the time the Ordinance was considered for amendment for each Council Member and for inspection and copying by the general public: 34 ORDINANCE NO. 75, 1992 AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF A LOAN AGREEMENT, DATED AS OF JULY 15, 1992, BETWEEN THE COLORADO WATER RESOURCES AND POWER DEVELOPMENT AUTHORITY AND THE CITY OF FORT COLLINS, COLORADO, THE ISSUANCE OF A GOVERNMENTAL AGENCY BOND (CITY OF FORT COLLINS, COLORADO, SEWER REVENUE BOND, SERIES 1992, DATED JULY 15, 1992, IN THE AGGREGATE PRINCIPAL AMOUNT OF $24, 540, 580) EVIDENCING THE CITY'S OBLIGATIONS UNDER THE LOAN AGREEMENT AND THE UNDERTAKING AND COMPLETION OF A PROJECT RELATING TO THE SEWERAGE FACILITIES OF THE CITY OF FORT COLLINS, COLORADO. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS, COLORADO, THAT: section 1. Definitions and Construction. A. Definitions. In this Ordinance the following terms have the following respective meanings unless the context hereof clearly requires otherwise: (1) Additional Parity Bonds: any Parity Securities issued after the issuance of the Bonds. (2) Authority: the Colorado Water Resources and Power Development Authority, its successor and assigns. (3) Average Annual Debt Service Requirements: the aggregate of all Debt Service Requirements (excluding any redemption premiums) due on any issue of securities payable from the Net Pledged Revenues for all Bond Years beginning with the Bond Year in which Debt Service Requirements of such securities are first payable and ending with the Bond Year in which the last of the Debt Service Requirements are payable divided by the number of such years. (4) Bonds: the Governmental Agency Bond (City of Fort Collins, Colorado, Sewer Revenue Bond, Series 1992, dated July 15, 1992, in the aggregate principal amount of $24 , 540, 580) . (5) Bond Year: the twelve (12) months commencing on the second day of December of any calendar year and ending on the first day of December of the next succeeding calendar year. (6) Charter: the Home Rule Charter of the City as amended. (7) City: the City of Fort Collins, Colorado. 35 (8) Commercial Bank: a state or national bank or trust company which is a member of the Federal Deposit Insurance Corporation and of the Federal Reserve System, which has a capital and surplus of $10,000,000 or more, and which is located within the United States of America. (9) Comparable Bond Year: in connection with any Fiscal Year, the Bond Year which ends in such Fiscal Year. For example, for the Fiscal Year commencing on January 1, 1993 , the Comparable Bond Year for the Bonds commences on December 2, 1992, and ends on December 1, 1993 . (10) Costs of the Project: all or any part of the cost of the acquisition, construction, installation and equipment of all or any part of the Project, to the extent eligible for payment or reimbursement under the Loan Agreement. (11) Council: the governing body of the City. (12) Debt Service Requirements: the principal of, interest on, and any premium due in connection with the redemption of any securities payable from the Net Pledged Revenues, whether at maturity or otherwise. (13) Event of Default: any of the events described in Section 10A hereof. (14) Federal Securities: bills, certificates of indebtedness, notes, or bonds which are direct obligations of the United States of America or obligations the principal and interest of which are unconditionally guaranteed by the United States of America. (15) Fiscal Year: the twelve (12) months commencing on the first day of January of any calendar year and ending on the last day of December of such calendar year or such other twelve (12) month period as may from time to time be designated by the Council as the Fiscal Year of the City. (16) Income: all income from rates, fees, tolls, and charges and tap fees and plant investment fees, or any combination thereof, for the services furnished by, or the direct or indirect connection with, or the use of the Sewerage Facilities, including, without limiting the generality of the foregoing, minimum charges, charges for the availability of service, disconnection fees, reconnection fees, and reasonable penalties for any delinquencies, all supplemental user fees payable pursuant to any contract between the City and any user of any Sewerage Facilities, and all income or other gain, if any, from any investment of Net Pledged Revenues and of the proceeds of securities payable from Net Pledged Revenues 36 (except income or other gain from any investment of moneys held in any escrow or other similar fund or account for the defeasance and/or payment of securities payable from the Net Pledged Revenues) , but not including sewer trunk line assessments and sewer main line assessments. (17) Interest Payment Date: a date designated by ordinance (or, in the case of the Bonds, by the Loan Agreement) for the payment of interest on any securities payable from the Net Pledged Revenues. (18) Loan Agreement: the Loan Agreement, dated as of July 15, 1992, between the Authority and the City, including the exhibits thereto. (19) Maturity Date: a date designated by ordinance (or, in the case of the Bonds, by the Loan Agreement) for the payment of principal of any securities payable from the Net Pledged Revenues. (20) Net Pledged Revenues: all Income remaining after the deduction of Operation and Maintenance Expenses. (21) Operation and Maintenance Expenses: such reasonable and necessary current expenses of the City, paid or accrued, of operating, maintaining and repairing the Sewerage Facilities as may be determined by the Council, including, except as limited by contract or otherwise limited by law, without limiting the generality of the foregoing: (a) Engineering, auditing, legal and other overhead expenses of the City directly related and reasonably allocable to the administration, operation and maintenance of the Sewerage Facilities; (b) Insurance and surety bond premiums appertaining to the Sewerage Facilities; (c) The reasonable charges of any paying agent, registrar, transfer agent, depository or escrow bank appertaining to securities payable from the Net Pledged Revenues; (d) Annual payments to pension, retirement, health and hospitalization funds appertaining to the Sewerage Facilities; (e) Any taxes, assessments, franchise fees or other charges or payments in lieu of the foregoing; (f) Ordinary and current rentals of equipment or other property; 37 (g) Contractual services, professional services, salaries, administrative expenses, and costs of labor appertaining to the Sewerage Facilities and the cost of materials and supplies used for current operation of the Sewerage Facilities; (h) The costs incurred in the collection of all or any part of the Net Pledged Revenues; (i) Any costs of utility services furnished to the Sewerage Facilities by the City or otherwise. "Operation and Maintenance Expenses" does not include: (a) Any allowance for depreciation; (b) Any costs of reconstruction, Improvement, extensions, or betterments; (c) Any accumulation of reserves for capital replacements; (d) Any reserves for operation, maintenance, or repair of the Sewerage Facilities; (e) Any allowance for the redemption of any bonds or other securities or the payment of any interest thereon; (f) Any liabilities incurred in the acquisition of any properties comprising the Sewerage Facilities; (g) Any other ground of legal liability not based on contract. (22) Operation and Maintenance Fund: the special fund created by and designated as such in Ordinance No. 101, 1982 , and referred to in Section 5C hereof. (23) Ordinance: this Ordinance No. 75, 1992, of the City. (24) Outstanding: as of any particular date, all the Prior Bonds, Bonds, Additional Parity Bonds, Parity Securities or any such other securities payable in whole or in part from the Net Pledged Revenues which have been authorized, executed and delivered except the following: (a) Any Prior Bond, Bond, Additional Parity Bond, Parity Security or other security cancelled by or on behalf of the City on or before such date; 38 (b) Any Prior Bond, Bond, Additional Parity Bond, Parity Security or other security held by or on behalf of the City; (c) Any Prior Bond, Additional Parity Bond, Parity Security or other security of the City for the payment or the redemption of which moneys or Federal Securities sufficient (including the known minimum yield available for such purpose from Federal Securities in which such amount wholly or in part may be initially invested) to pay all of the Debt Service Requirements of such Prior Bond, Additional Parity Bond, Parity Security or other security to the Maturity Date or specified Redemption Date thereof shall have theretofore been deposited in escrow or in trust with a Trust Bank for that purpose; (d) Any Bond for the payment or redemption of which moneys equal to the Debt Service Requirements until maturity or redemption shall have been paid to the Authority under the Loan Agreement; and (e) Any lost, destroyed, or wrongfully taken Prior Bond, Bond, Additional Parity Bond, Parity Security or other security of the City in lieu of or in substitution for which another bond or other security shall have been executed and delivered. (25) Owner: the holder of any bearer instrument or registered owner of any registered instrument. (26) Parity Securities: bonds, warrants, notes, securities, leases or other contracts evidencing borrowings and payable from the Net Pledged Revenues equally or on a parity with the Bonds. (27) Permitted Investments: any legal investment or deposit authorized by State statute or City ordinance adopted pursuant to the Charter. (28) Person: any individual, firm, partnership, corporation, company, association, joint stock association or body politic or any trustee, receiver, assignee or similar representative thereof. (29) Prior Bonds: the City of Fort Collins, Colorado, Sewer Revenue Refunding Bonds, Series 1986, dated August 1, 1986, in the original aggregate principal amount of $36,950, 000. (30) Prior Bonds Debt Service Reserve Fund: the special fund created by and designated in Ordinance No. 9, 39 1975, of the City as the "City of Fort Collins Sewer Refunding Revenue Bonds Reserve Fund" and referred to in Section 5E hereof. (31) Prior Bonds Principal and Interest Fund: the special fund created by and designated in Ordinance No. 9, 1975, of the City as the "City of Fort Collins Sewer Refunding Revenue Bonds, Series 1975, Bond Fund" and referred to in Section 5D hereof. (32) Project: the acquisition, construction, installation and equipment of that portion of the Sewerage Facilities for which the Bonds are issued. (33) Project Loan Subaccount: the special fund or account of the Authority referred to in Section 5A hereof. (34) Redemption Date: the date fixed for the redemption prior to maturity of any Bonds or other designated securities payable from the Net Pledged Revenues in any notice of prior redemption given by or on behalf of the City. (35) Security or securities: any bond issued by the City or any other evidence of the advancement of money to the City. (36) Sewerage Facilities: any one or more of the various devices used in the collection, treatment, or disposition of sewage and industrial wastes of a liquid nature, including, without limitation, all inlets; collection, drainage, or disposal lines; intercepting sewers; sewage disposal plants; outfall sewers; sewage lagoons; all pumping, power, and other equipment and appurtenances; all extensions, improvements, remodeling, additions and alterations thereof; any and all rights or interests for such sewerage facilities; and all other necessary, incidental, or appurtenant properties, equipment, and facilities relating to the foregoing. (37) Sewer Fund: the special fund created by and designated as such in Ordinance No. 67, 1974, of the City and referred to in Section 5B hereof. (38) State: the State of Colorado. (39) Subordinate Bonds or Subordinate Securities: bonds or securities payable from the Net Pledged Revenues having a lien thereon subordinate or junior to the lien thereon of the Bonds. 40 (40) Subsequent Bonds Debt Service Reserve Fund: the special fund created by and referred to in Section 5G hereof. (41) Subsequent Bonds Principal and Interest Fund: the special fund created by and referred to in Section 5F hereof. (42) Superior Bonds or Superior Securities: bonds or securities payable from the Net Pledged Revenues having a lien thereon superior or senior to the lien thereon of the Bonds. (43) Trustee: First Interstate Bank of Denver, N.A. , or its successors, as trustee for the bonds of the Authority issued to finance the loan to the City under the Loan Agreement. (44) Wastewater Utility Capital Reserve: the special fund created by the City and referred to in Section 5I hereof. B. Construction. This Ordinance, except where the context by clear implication herein otherwise requires, shall be construed as follows: (1) Words in the singular include the plural, and words in the plural include the singular. (2) Words in the masculine gender include the feminine and the neuter, and when the sense so indicates words of the neuter gender refer to any gender. (3) Articles, sections, subsections, paragraphs and subparagraphs mentioned by number, letter, or otherwise, correspond to the respective articles, sections, subsections, paragraphs and subparagraphs of this Ordinance so numbered or otherwise so designated. (4) The titles and headlines applied to articles, sections and subsections of this Ordinance are inserted only as a matter of convenience and ease in reference and in no way define or limit the scope or intent of any provisions of this Ordinance. Section 2. The Project. A. Necessity. The City has need for and desires to acquire, construct, install and equip the Project. 41 B. Authorization. The Council hereby authorizes the undertaking and completion of the Project. Section 3 . The Loan Agreement. Pursuant to art. XX, §6 of the State Constitution and Art. V, Section 19 .3 of the Charter, the City is authorized by Council action and without an election to execute and deliver the Loan Agreement. The Council hereby authorizes the Mayor, the City Clerk and the Financial Officer of the City to execute and deliver the Loan Agreement on behalf of the City. Section 4. The Bonds. A. Authorization. Pursuant to art. XX, sec. 6 of the Colorado Constitution and Art. V, Section 19. 3 of the Charter, the City is authorized by Council action and without an election to issue the Bonds to evidence its obligations under the Loan Agreement. The Council hereby authorizes the issuance of the Bonds, payable as to all Debt Service Requirements solely out of Net Pledged Revenues, for the purpose of acquiring, constructing, installing and equipping the Project. B. Bond Details. (1) Generally. The Bonds shall mature and bear interest as provided in the Loan Agreement. (2) Redemption. The Bonds shall be redeemable or prepayable as provided in the Loan Agreement. (3) Interest Rates. The maximum net effective interest rate authorized for the Bonds is 15% per annum, and the actual net effective interest rate for the Bonds is 6.86% per annum excluding interest subsidies payable under the Loan Agreement and 4. 27% per annum including interest subsidies payable under the Loan Agreement. (4) Execution. The Bonds shall be executed by and on behalf of the City with the manual signature of the Mayor, shall bear the seal of the City, shall be attested with the manual signature of the City Clerk, and shall be countersigned with the manual signature of the Financial Officer of the City. Should any officer whose manual signature appears on the Bonds cease to be such officer before delivery of the Bonds to the Authority, such manual signature shall nevertheless be valid and sufficient for all purposes. (5) Registration and Transfer. The Bonds shall be in registered form and shall be transferable to the extent and as provided in the Loan Agreement. 42 (6) Replacement of Bonds. If any Bond shall have been lost, destroyed or wrongfully taken, the City shall provide for the replacement thereof in the manner set forth and upon receipt of the evidence, indemnity bond and reimbursement for expenses provided in Ordinance No. 80, 1984. (7) Recitals in Bonds. Each Bond shall recite in substance that the Bond is a special and limited obligation of the City payable solely out of and secured by an irrevocable pledge of and second lien (but not necessarily exclusive second lien) upon the Net Pledged Revenues, that the Bond does not constitute a debt or an indebtedness of the City within the meaning of any constitutional, Charter or statutory provision or limitation, that the Bond is not payable in whole or in part from the proceeds of general property taxes, and that the full faith and credit of the City is not pledged for the payment of the principal of or interest on the Bond. (8) Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit D of the Loan Agreement. C. Special Obligations. The Bonds, as to all Debt Service Requirements thereof, shall be payable solely out of the Net Pledged Revenues. The Authority may not look to the general fund or any other fund of the City for the payment of the Debt Service Requirements thereof, except the special funds pledged therefor. The Bonds shall not constitute a debt or indebtedness of the City within the meaning of any constitutional, charter or statutory provision or limitation, and the Bonds shall not be considered or held to be general obligations of the City but shall constitute special and limited obligations of the City. The Bonds are not payable in whole or in part from the proceeds of general property taxes, and the full faith and credit of the City is not pledged for payment of the Bonds. Section 5. Disposition of Bond Proceeds and Income_ Funds and Accounts Adopted or Created by Ordinance: Security for Bonds. The proceeds of the Bonds and the Income shall be deposited by the City in the funds described in this Section 5, to be accounted for in the manner and priority set forth in this Section 5. The Net Pledged Revenues and all moneys and securities paid or to be paid to or held or to be held in any fund hereunder are hereby pledged to secure the payment of the Debt Service Requirements of the Prior Bonds (including any costs incurred by the City in connection with any undertaking by a financial institution as described in Section 5E hereof) , the Bonds and any other Parity Securities and any Subordinate Bonds or other Subordinate Securities as provided herein. This pledge shall be valid and binding from and after the date of the first delivery of 43 the Bonds, and the moneys, as received by the City and hereby pledged, shall immediately be subject to the lien of this pledge without any physical delivery thereof, any filing, or further act. The lien of this pledge and the obligation to perform the contractual provisions hereby made shall have priority over any or all other obligations and liabilities of the City (except as herein otherwise expressly provided) , and the lien of this pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the City (except as herein otherwise expressly provided) , irrespective of whether such parties have notice thereof. A. Project Loan Subaccount. The net proceeds of the Bonds shall be held by the Trustee in the Project Loan Subaccount and disbursed to the City for payment of Costs of the Project as provided in the Loan Agreement. B. Sewer Fund. Except as otherwise provided herein, the entire Income, upon receipt thereof from time to time by the City, shall be set aside and credited immediately to the Sewer Fund. In addition, the City may at its option credit to the Sewer Fund any other moneys of the City legally available for expenditure for the purposes of the Sewer Fund as provided herein. The Sewer Fund shall be administered and the moneys on deposit therein shall be deposited and applied in the following order of priority: (1) First, to the Operation and Maintenance Fund to pay Operation and Maintenance Expenses in the manner set forth in Section 5C hereof; (2) Second, to the Prior Bonds Principal and Interest Fund to pay the Debt Service Requirements of the Prior Bonds then Outstanding in the manner set forth in Section 5D hereof; (3) Third, to the Prior Bonds Debt Service Reserve Fund in the manner set forth in Section 5E hereof; (4) Fourth, to the Subsequent Bonds Principal and Interest Fund to pay the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding in the manner set forth in Section 5F hereof; (5) Fifth, to the Subsequent Bonds Debt Service Reserve Fund in the manner set forth in Section 5G hereof; (6) Sixth, to the payment of the Debt Service Requirements of Subordinate Bonds or other Subordinate Securities in accordance with Section 5H hereof; 44 (7) Seventh, to the accumulation or replenishment of the Wastewater Utility Capital Reserve in the manner set forth in Section 5I hereof; and (8) Eighth, to be used in accordance with Section 5J hereof. C. Operation and Maintenance Fund. As a first charge on the Sewer Fund there shall be credited from time to time to the Operation and Maintenance Fund, Income sufficient to pay the Operation and Maintenance Expenses of the Sewerage Facilities as they become due and payable, and thereupon the Operation and Maintenance Expenses shall be promptly paid. Any surplus remaining in the Operation and Maintenance Fund and not needed for Operation and Maintenance Expenses shall be transferred to the Sewer Fund and used for the purposes thereof. D. Prior Bonds Principal and Interest Fund. The City shall deposit in the Prior Bonds Principal and Interest Fund from the Net Pledged Revenues on or before the last day of each month the following amounts: (1) Interest Payments. One-sixth (1/6) of the aggregate amount of the next installment of interest due in the then-current Bond Year plus any other amounts due for interest on the Prior Bonds then Outstanding. (2) Principal Payments. One-twelfth (1/12) of the aggregate amount of the next installment of principal due in the then-current Bond Year plus any other amounts due for principal of the Prior Bonds then Outstanding. Such interest and principal shall be promptly paid when due. The Net Pledged Revenues credited to the Prior Bonds Principal and Interest Fund shall be used to pay the Debt Service Requirements of the Prior Bonds then Outstanding, as such Debt Service Requirements become due, except as otherwise provided in this Ordinance. The Prior Bonds Principal and Interest Fund shall be maintained as a sinking fund for the mandatory redemption of Prior Bonds maturing in the years 2004 and 2010. Any mandatory sinking fund redemption shall be treated as an installment of principal for purposes of this Section 5D. E. Prior Bonds Debt Service Reserve Fund. Subject to the payments required by Section 5D hereof, there shall be credited as hereinafter provided to the Prior Bonds Debt Service Reserve Fund from the Net Pledged Revenues moneys sufficient to accumulate in and maintain the Prior Debt Service Reserve Fund at an amount at least equal to the Average Annual Debt Service Requirements of all 45 outstanding Prior Bonds. Said amount shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of the Prior Bonds. No payment need be made into the Prior Bonds Debt Service Reserve Fund so long as the moneys therein shall equal not less than said amount. In the event that the amount on deposit in the Prior Bonds Debt Service Reserve Fund falls below the amount required to be maintained therein, the City shall credit to the Prior Bonds Debt Service Reserve Fund such Net Pledged Revenues as may be needed to accumulate or reaccumulate the amount therein so that at all times the amount of the Prior Bonds Debt Service Reserve Fund equals said amount. The moneys in the Prior Bonds Debt Service Reserve Fund shall be set aside, accumulated, and, if necessary, reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to be used only to prevent deficiencies in the Prior Bonds Principal and Interest Fund resulting from failure to deposit therein sufficient sums to pay such Debt Service Requirements of the Prior Bonds as the same become due. If at any time the City shall for any reason fail to pay into the Prior Bonds Principal and Interest Fund the full amount above stipulated, then an amount shall be paid into the Prior Bonds Principal and Interest Fund at such time from the Prior Bonds Debt Service Reserve Fund equal to the difference between that paid from the Net Pledged Revenues in the Sewer Fund and the full amount so stipulated. The money so used shall be replaced to the Prior Bonds Debt Service Reserve Fund from the Net Pledged Revenues thereafter received and not required to be otherwise applied by Section 5D hereof. If at any time the City shall for any reason fail to pay into the Prior Bonds Debt Service Reserve Fund the full amount stipulated herein from the Net Pledged Revenues in the Sewer Fund, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first Net Pledged Revenues thereafter received and not required to be applied otherwise by Section 5D hereof. Nothing in this ordinance shall be construed as limiting the right of the City to substitute for the cash deposit required to be maintained hereunder a letter of credit, surety bond, insurance policy, agreement guaranteeing payment, or other undertaking by a financial institution to ensure that cash in the amount otherwise required to be maintained hereunder will be available to the City as needed, provided that any such substitution shall first be approved in writing by Financial Guaranty Insurance Company and shall be submitted to Moody's Investors Service, Inc. and Standard & Poor's Corporation and shall not cause the then-current ratings of the Prior Bonds to be adversely affected. 46 After the delivery of any undertaking by a financial institution as described in this Section 5E, any costs incurred by the City in connection therewith shall be paid by the City to such financial institution as provided in any agreement between the City and such financial institution. The obligation of the City to make such payments shall have the same priority as its obligation to make payments to and replenishments of the Prior Bonds Debt Service Reserve Fund as provided in this Section 5E. If and to the extent that cash or investments are deposited in the Prior Bonds Debt Service Reserve Fund after the delivery of any such undertaking, all such cash shall be used, and all such investments shall be sold and the proceeds thereof shall be applied, for the purposes of the Prior Bonds Debt Service Reserve Fund before any claim is made on such undertaking, and payment of any costs incurred by the City in connection therewith shall be paid by the City to such financial institution before any such cash or investments are replenished to the Prior Bonds Debt Service Reserve Fund. If more than one such undertaking is delivered to the City, any claims against such undertakings shall be made in the manner specified herein on a pro rata basis (calculated with reference to the maximum amounts available thereunder) , and any payments of costs incurred by the City shall be made in the manner specified herein on a pro rata basis (calculated as provided above) . F. Subsequent Bonds Principal and Interest Fund. The City shall deposit in the Subsequent Bonds Principal and Interest Fund hereby created, forthwith upon receipt of the proceeds of the Bonds, interest accrued thereon from their date of issue to the date of delivery thereof to the Authority, to apply to the payment of interest first due on the Bonds. In lieu of such deposit the City may permit the Authority to credit such accrued interest to any fund or account maintained by the Authority to account for payments by the City of Debt Service Requirements of the Bonds or payments under the Loan Agreement. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made, the City shall deposit in the Subsequent Bonds Principal and Interest Fund from the Net Pledged Revenues on or before the last day of August, 1992, or as soon thereafter as the provisions hereof permit, the amount of interest accruing on the Bonds during said month (with a credit for the amount of any accrued interest, capitalized interest or investment earnings deposited in the Subsequent Bonds Principal and Interest Fund or credited to any fund or account maintained by the Authority for the purposes described above or herein and not theretofore credited) and on or before the last day of each month beginning September, 1992, or as soon thereafter as the provisions hereof permit, the following amounts (with a credit for the amount of any accrued interest, capitalized interest or investment earnings deposited in the Subsequent Bonds Principal and Interest Fund or credited to any fund or account maintained by the Authority 47 for the purposes described above or herein and not theretofore credited) : (1) Interest Payments. One-third (1/3) of the aggregate amount of the next installment of interest due on the Bonds on the next Interest Payment Date in the then-current Bond Year plus any other amounts due for interest on the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding. (2) Principal Payments. One-twelfth (1/12) of the aggregate amount of the next installment of principal due on the Bonds on the next Maturity Date in the then-current Bond Year plus any other amounts due for principal of the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding. Such interest and principal shall be promptly paid when due. The moneys credited to the Subsequent Bonds Principal and Interest Fund shall be used to pay the Debt Service Requirements of the Bonds, any Additional Parity Bonds and any other Parity Securities then Outstanding, as such Debt Service Requirements become due, except as otherwise provided in this Ordinance. After the payments required by Sections 5D and 5E hereof and those required above in this Section 5F for each current Bond Year have been made, all Net Pledged Revenues not exceeding the lesser of $2,900, 000 and the Debt Service Requirements of the Prior Bonds due in the next succeeding Bond Year shall be transferred to the Prior Bonds Principal and Interest Fund and used in the next succeeding Bond Year for the purposes thereof. G. Subsequent Bonds Debt Service Reserve Fund. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required by Section 5F hereof, there shall be credited to the Subsequent Bonds Debt Service Reserve Fund hereby created from the Net Pledged Revenues moneys sufficient to accumulate in and maintain the Subsequent Bonds Debt Service Reserve Fund at an amount at least equal to that amount, if any, specified in any ordinance authorizing the issuance of any Additional Parity Bonds or other Parity Securities. Said amount shall be maintained as a continuing reserve for the payment of the Debt Service Requirements of any Additional Parity Bonds or other Parity Securities and, if any such ordinance so provides, the Bonds. In the event that the amount on deposit in the Subsequent Bonds Debt Service Reserve Fund falls below the amount required to be maintained therein, the City shall credit to the Subsequent Bonds Debt Service Reserve Fund such Net Pledged Revenues as may be needed to accumulate or reaccumulate the amount therein so that at all times the amount of the Subsequent 48 Bonds Debt Service Reserve Fund equals said amount. The moneys in the Subsequent Bonds Debt Service Reserve Fund shall be set aside, accumulated, and, if necessary, reaccumulated as provided herein, from time to time, and maintained as a continuing reserve to be used only to prevent deficiencies in the Subsequent Bonds Debt Service Reserve Fund resulting from failure to deposit therein sufficient sums to pay such Debt Service Requirements of any Additional Parity Bonds or other Parity Securities and, if any ordinance authorizing the issuance of any Additional Parity Bonds or other Parity Securities so provides, the Bonds as the same become due. If at any time the City shall for any reason fail to pay into the Subsequent Bonds Principal and Interest Fund the full amount above stipulated, then an amount shall be paid into the Subsequent Bonds Principal and Interest Fund at such time from the Subsequent Bonds Debt Service Reserve Fund equal to the difference between that paid from the Net Pledged Revenues in the Sewer Fund and the full amount so stipulated. The money so used shall be replaced to the Subsequent Bonds Debt Service Reserve Fund thereafter received and not required to be otherwise applied by Sections 5D through 5F hereof. If at any time the City shall for any reason fail to pay into the Subsequent Bonds Debt Service Reserve Fund the full amount stipulated herein from the Net Pledged Revenues in the Sewer Fund, the difference between the amount paid and the amount so stipulated shall in a like manner be paid therein from the first Net Pledged Revenues thereafter received and not required to be applied otherwise by Sections 5D through 5F hereof. H. Payment of Subordinate Securities. After the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required by Sections 5F and 5G hereof, any remaining Net Pledged Revenues may be used by the City for the payment of Debt Service Requirements of Subordinate Securities payable from the Net Pledged Revenues and authorized to be issued in accordance with this Ordinance, including reasonable reserves for such Subordinate Securities; but the lien of such Subordinate Securities on the Net Pledged Revenues and the pledge thereof for the payment of such Subordinate Securities shall be subordinate to the lien and pledge of the Bonds, any Additional Parity Bonds and any other Parity Securities as herein provided. I. Wastewater Utility Capital Reserve. The City shall, so long as any of the Prior Bonds remain Outstanding, maintain in the Wastewater Utility Capital Reserve an amount at least equal to 25% of the Operation and Maintenance Expenses budgeted for the then-current Fiscal Year and shall, after the redemption or defeasance of the Prior Bonds and so long as any Debt Service Requirements of the Bonds or amounts due under the Loan Agreement 49 remain unpaid, maintain in the Wastewater Utility Capital Reserve an amount at least equal to 17% of the Operation and Maintenance Expenses budgeted for the then-current Fiscal Year. Said amounts shall be maintained as a continuing reserve for payment of costs of necessary capital improvements to the Sewerage Facilities and, subject to the foregoing, may be expended in the sole discretion of the City. If moneys in the Wastewater Utility Capital Reserve are expended so that the amount therein is less than the minimum amount required hereby, any deficiency shall, after the payments required by Sections 5D and 5E hereof for the current Bond Year have been made and subject to the payments required or permitted by Sections 5F through 5H hereof, be replenished over a period not exceeding twenty-four (24) months in substantially equal monthly installments. No payment need be made into the Wastewater Utility Capital Reserve so long as the moneys therein shall equal not less than the amount required hereby. J. Use of Remaining Revenues. After the payments. required by Sections 5D and 5E hereof have been made in any Bond Year and subject to the payments required or permitted by Sections 5F through 5I hereof, any remaining Net Pledged Revenues may be used for any one or any combination of lawful purposes as provided in Art. XII, Section 6 of the Charter. K. Termination of Deposits. No payment need be made into the Prior Bonds Principal and Interest Fund or the Prior Bonds Debt Service Reserve Fund if the amount of cash and investments in the Prior Bonds Principal and Interest Fund and the Prior Bonds Debt Service Reserve Fund is at least equal to the entire amount of the Outstanding Prior Bonds, as to all Debt Service Requirements, to their respective Maturity Dates or to any Redemption Dates on which the City shall have exercised or shall have obligated itself to exercise its option to redeem, prior to their respective Maturity Dates, any Prior Bonds then Outstanding and thereafter maturing (provided that, solely for the purpose of this Section 5K, there shall be deemed to be a credit to the Prior Bonds Debt Service Reserve Fund any cash or investments, accounted for in any other fund or account of the City and restricted solely for the purpose of paying the Debt Service Requirements of the Prior Bonds, in which case cash or investments in the Prior Bonds Principal and Interest Fund and the Prior Bonds Debt Service Reserve Fund in an amount, except for any known interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B hereof from the time of any such investment or deposit to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, at least equal to such Debt Service Requirements, shall be used together with any such gain from such investments and deposits solely to pay such Debt Service Requirements as the same become due. 50 No payment need be made into the Subsequent Bonds Principal and Interest Fund or the Subsequent Bonds Debt Service Reserve Fund if the amount in the Subsequent Bonds Principal and Interest Fund and the Subsequent Bonds Debt Service Reserve Fund is at least equal to the entire amount of the Outstanding Bonds and any Outstanding Additional Parity Bonds and Parity Securities, as to all Debt Service Requirements, to their respective Maturity Dates or to any Redemption Dates on which the City shall have exercised or shall have obligated itself to exercise its option to redeem, prior to their respective Maturity Dates, any Bonds, any Additional Parity Bonds and any other Parity Securities then outstanding and thereafter maturing (provided that, solely for the purpose of this Section 5K, there shall be deemed to be a credit to the Subsequent Bonds Principal and Interest Fund moneys, Federal Securities and bank deposits, or any combination thereof, accounted for in any other fund or account of the City and restricted solely for the purpose of paying the Debt Service Requirements of the Bonds, any Additional Parity Bonds or any other Parity Securities) , in which case moneys in the Subsequent Bonds Principal and Interest Fund in an amount, except for any known interest or other gain to accrue from any investment or deposit of moneys pursuant to Section 6B hereof from the time of any such investment or deposit to the time or respective times the proceeds of any such investment or deposit shall be needed for such payment, at least equal to such Debt Service Requirements, shall be used together with any such gain from such investments and deposits solely to pay such Debt Service Requirements as the same become due. L. Budget and Appropriation of Sums. The sums required to pay the Costs of the Project are hereby appropriated for said purpose. The sums required to make the payments specified in this Section 5 are hereby appropriated for said purposes. Said amounts for each year shall be included in the annual budget and the appropriation ordinance or measures to be adopted or passed by the Council in each year respectively while the Bonds, either as to principal or interest, are Outstanding and unpaid. No provisions of any constitution, charter, statute, ordinance, resolution, or other order or measure enacted after the issuance of the Bonds shall in any manner be construed as limiting or impairing the obligation of the City to keep and perform the covenants contained in this Ordinance so long as any of the Bonds remain Outstanding and unpaid. Nothing herein shall prohibit the Council from appropriating other funds of the City legally available for this purpose to the Sewer Fund for the purposes thereof. Section 6. General Administration of Funds. A. Places and Times of Deposits. Each of the special funds created or adopted in Section 5 hereof shall be maintained in a Commercial Bank kept separate and apart from all other accounts or funds of the City as trust accounts solely for the purposes herein designated therefor. For purposes of investment of moneys, 51 nothing herein prevents the commingling of moneys accounted for in any two or more such accounts or funds pertaining to the Income. Such accounts or funds shall be continuously secured to the fullest extent required or permitted by the laws of the State for the securing of public funds and shall be irrevocable and not withdrawable by anyone for any purpose other than the respective designated purposes of such accounts or funds. Each periodic payment shall be credited to the proper account or fund not later than the date therefor herein designated, except that when any such date shall be a Saturday, a Sunday or a legal holiday, then such payment shall be made on or before the next preceding business day. B. Investment of Funds. Any moneys in any fund established in Section 5 hereof may be invested, reinvested or deposited only in Permitted Investments. Investments shall either be subject to redemption at any time at face value by the Owner thereof at the option of such Owner or shall mature at such time or times as shall most nearly coincide with the expected need for moneys from the fund in question. Investments so purchased in any such fund shall be deemed at all times to be a part of the applicable fund; provided that with the exception of the Prior Bonds Debt Service Reserve Fund the interest accruing on such investments and any profit realized therefrom shall be credited to the Sewer Fund, and any loss resulting from such investments shall be charged to the particular fund in question. Interest and profit realized from investments in the Prior Bonds Debt Service Reserve Fund shall be credited to the Prior Bonds Debt Service Reserve Fund, provided that, so long as the amount in the Prior Bonds Debt Service Reserve Fund equals at least the amount specified in Section 5E hereof, such interest and profit may be transferred to the Prior Bonds Principal and Interest Fund and distributed in the same manner as other moneys in the Prior Bonds Principal and Interest Fund. Any loss resulting from such investments in the Prior Bonds Debt Service Reserve Fund shall be charged to the Prior Bonds Debt Service Reserve Fund. Investments in the Prior Bonds Debt Service Reserve Fund shall be valued by the Financial Officer as frequently as deemed necessary by Financial Guaranty Insurance Company, but not less often than quarterly, at the market value thereof. If on any valuation date the market value of investments in the Prior Bonds Debt Service Reserve Fund is less than the amount required by Section 5E hereof to be maintained therein due to market fluctuations, the deficiency shall be remedied no later than the next quarterly valuation date. The City shall present for redemption or sale on the prevailing market any securities or obligations so purchased as an investment of moneys in a given fund whenever it shall be necessary to do so in order to provide moneys to meet any required payment or transfer from such fund. C. No Liability for Losses Incurred in Performing Terms of Ordinance. Neither the City nor any officer of the City shall be liable or responsible for any loss resulting from any investment or reinvestment made in accordance with this Ordinance. 52 D. Character of Funds. The moneys in any fund herein authorized shall consist of lawful money of the United States of America or Permitted Investments or both such money and Permitted Investments. Moneys deposited in a demand or time deposit account in a Commercial Bank, appropriately secured according to the laws of the State, shall be deemed lawful money of the United States of America. E. Accelerated Payments Optional. Nothing contained herein prevents the accumulation in any fund herein designated of any monetary requirements at a faster rate than the rate or minimum rate, as the case may be, provided therefor, but no payment shall be so accelerated if such acceleration shall cause a default in the payment of any obligation of the City pertaining to the Income. Section 7. priorities• Liens• Issuance of Additional Bonds. A. Liana on Net Pledged Revenues• Equality of Bonds. Additional Parity Bonds and Other Parity Securities. Except as expressly provided in Ordinance No. 98, 1986, with respect to the Prior Bonds and in this Ordinance with respect to Additional Parity Bonds, Parity Securities and Subordinate Securities, the Net Pledged Revenues shall be and hereby are irrevocably pledged and set aside to pay the Debt Service Requirements of the Bonds. The Prior Bonds (including any costs incurred by the City in connection with any undertaking by a financial institution as described in Section 5E hereof) constitute an irrevocable and first lien upon the Net Pledged Revenues (provided, however, that the City shall not pay any such costs unless all payments then due under Sections 5C and 5D hereof have been made) . The Bonds constitute an irrevocable and second lien (but not necessarily an exclusive second lien) upon the Net Pledged Revenues. The Bonds, any Additional Parity Bonds and any other Parity Securities hereafter authorized to be issued and from time to time Outstanding are equitably and ratably secured by a lien on the Net Pledged Revenues and shall not be entitled to any priority one over the other in the application of the Net Pledged Revenues regardless of the time or times of the issuance thereof, it being the intention of the Council that there shall be no priority among the Bonds, any Additional Parity Bonds and any other Parity Securities, regardless of the fact that they may be actually issued and delivered at different times. B. Issuance of Additional Parity Bonds. Nothing herein, subject to the limitations stated in Section 7F hereof, prevents the issuance by the City of Additional Parity Bonds payable from the Net Pledged Revenues and constituting a lien on the Net Pledged Revenues on a parity with, but not prior or superior to, the lien thereon of the Bonds; but before any such 53 Additional Parity Bonds are authorized or actually issued the City shall satisfy the conditions set forth in the Loan Agreement. C. Certification of Revenues. Where certifications of revenues are required by this Ordinance or the Loan Agreement, the specified and required written certifications of the Financial Officer of the City that revenues are sufficient to pay the required amounts shall be conclusively presumed to be accurate in determining the right of the City to authorize, issue, sell and deliver Additional Parity Bonds. D. Subordinate Securities Permitted. Nothing herein, subject to the limitations stated in Section 7F hereof, prevents the City from issuing Subordinate Securities for any lawful purpose. E. Superior Securities Prohibited. The City has heretofore issued the Prior Bonds. The City shall not issue any additional Superior Bonds or Superior Securities. F. Supplemental Ordinances. Additional Parity Bonds or Subordinate Securities shall be issued only after authorization thereof by ordinance, supplemental ordinance or other instrument of the Council, stating the purpose or purposes of the issuance of such additional securities, directing the application of the proceeds thereof to such purpose or purposes, directing the execution thereof, and fixing and determining the date, series designation, principal amount, maturity or maturities, maximum rate or rates of interest, and prior redemption privileges of the City with respect thereto, and providing for payments to and from the Sewer Fund in accordance with this Ordinance. All additional securities shall bear such date, shall be payable as to principal on December 1 and as to interest on June 1 and December 1 and shall be subject to redemption prior to maturity on such terms and conditions, as may be provided, and shall bear interest at such rate or rates as may be fixed by ordinance, instrument or other document of the Council. Nothing herein shall be construed to prohibit the issuance of additional securities payable from the Net Pledged Revenues, the interest on which is payable more frequently than semiannually. Section 8. Covenants. The City hereby incorporates by this reference all the covenants and agreements contained in the Loan Agreement and further covenants until the Bonds have been fully paid and discharged as follows: A. Rate Maintenance. The City shall prescribe, revise, and collect rates, fees, tolls, and charges and tap fees and plant investment fees, or any combination thereof, which may be imposed by the City whether for the direct or indirect connection with or the use of the Sewerage Facilities and reasonable penalties for any delinquencies, which shall produce Income sufficient, together with 54 any other moneys legally available therefor and credited to the Sewer Fund, to make the payments and accumulations required by this Ordinance, and which shall produce Net Pledged Revenues sufficient, together with all other moneys legally available therefor and credited to the Sewer Fund after payment of Operation and Maintenance Expenses, to pay the amounts specified in paragraph (5) of Exhibit A of the Loan Agreement. In the event that such rates, fees, tolls, and charges and tap fees and plant investment fees at any time should not be sufficient to make all of the payments and accumulations required by this Ordinance, the Council shall increase its rates, fees, tolls, and charges and tap fees and plant investment fees to such extent as to insure the payments and accumulations required by the provisions of this Ordinance. B. Collection of Charaes. The City shall cause all rates, fees, tolls, and charges and tap fees and plant investment fees pertaining to the Sewerage Facilities to be billed promptly and collected as soon as reasonable, shall prescribe and enforce rules and regulations or impose contractual obligations for the payment thereof, to the end that the Net Pledged Revenues shall be adequate to meet the requirements of this Ordinance and any other ordinance or instrument supplemental thereto. The rates, fees, tolls, and charges and tap fees and plant investment fees due shall be collected in any lawful manner. C. Competent Management. The City shall employ experienced and competent management personnel for each component of the Sewerage Facilities. If the City shall fail to pay the Debt Service Requirements of the Bonds promptly as the same become due, or if the City shall fail to keep any of the covenants herein contained, and if such default shall continue for a period of sixty (60) days, or if the Net Pledged Revenues of the Sewerage Facilities in any Fiscal Year, together with other legally available revenue and money, shall fail to equal at least the amount of the Debt Service Requirements of the Bonds, and other obligations payable from the Net Pledged Revenues due in the Comparable Bond Year, the City shall retain a firm of competent management Persons skilled in the operation of sewerage facilities to assist in the management of the Sewerage Facilities so long as such default continues or the said revenues, proceeds and income are less than the amount hereinabove designated. D. Performance of Duties. The City, acting by and through its officers, or otherwise, shall faithfully and punctually perform, or cause to be performed, all duties with respect to the Income and the Sewerage Facilities required by the Constitution and laws of the State and the ordinances, resolutions and contracts of the City, including, without limitation, the proper segregation of the proceeds of the Bonds and the Income and their application from time to time to the respective funds provided therefor. 55 E. Costs of Bond Issue and of Performance. Except as otherwise specifically provided herein, all costs and expenses incurred in connection with the issuance of the Bonds, payment of the Debt Service Requirements thereof, or the City's performance of or compliance with any covenant or agreement contained in this Ordinance or in the Loan Agreement shall be paid exclusively (but only from the appropriate special fund in the manner authorized herein) from the proceeds of the Bonds, from the Net Pledged Revenues, or from other legally available moneys, and in no event shall any of such costs or expenses be required to be paid out of or charged to the general fund of the City. F. Contractual Obligations. The City will perform all contractual obligations undertaken by it under the Loan Agreement and any other agreements relating to the Bonds, the Income, or the Sewerage Facilities. G. Further Assurances. At any and all times the City shall, so far as it may be authorized by law, pass, make, do, execute, acknowledge, deliver, and file or record all and every such further instruments, acts, deeds, conveyances, assignments, transfers, other documents, and assurances as may be necessary or desirable for the better assuring, conveying, granting, assigning and confirming all and singular the rights, the Net Pledged Revenues and other funds hereby pledged, or intended so to be, or which the City may hereafter become bound to pledge, or as may be reasonable and required to carry out the purposes of this Ordinance. The City, acting by and through its officers, or otherwise, shall at all times, to the extent permitted by law, defend, preserve and protect the pledge of the Net Pledged Revenues and other funds pledged hereunder and all the rights of the Authority against all claims and demands of all Persons whomsoever. H. Conditions Precedent. Upon the date of issuance of any of the Bonds, all conditions, acts and things required by the Constitution or laws of the United States of America, the Constitution or laws of the State, the Charter, and this Ordinance to exist, to have happened, and to have been performed precedent to or in the issuance of the Bonds shall exist, have happened and have been performed, and the Bonds, together with all other obligations of the City, shall not contravene any debt or other limitation prescribed by the Constitution or laws of the United States of America or the Constitution or laws of the State or the Charter. I. Efficient Operation and Maintenance. The City shall at all times operate the Sewerage Facilities properly and in a sound and economical manner. The City shall maintain, preserve and keep the Sewerage Facilities 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 shall from time to time make or cause to be made all necessary and proper repairs, replacements and renewals so that at 56 all times the maintenance of the Sewerage Facilities may be properly and advantageously conducted. All salaries, fees, wages and other compensation paid by the City in connection with the repair, maintenance and operation of the Sewerage Facilities shall be fair and reasonable. J. Records and Accounts. The City will keep proper books of record and account, separate and apart from all other records and accounts, showing complete and correct entries of all transactions relating to the funds referred to herein. K. Rules Regulations and Other Details. The City, acting by and through its officers, shall establish and enforce reasonable rules and regulations governing the construction, operation, care, repair, maintenance, management, control, use and services of the Sewerage Facilities. The City shall observe and perform all of the terms and conditions contained in this Ordinance and shall comply with all valid acts, rules, regulations, orders and directives of any legislative, executive, administrative or judicial body applicable to the Sewerage Facilities or the City. L. Payment of Governmental Charges. The City shall pay or cause to be paid all taxes and assessments or other municipal or governmental charges, if any, lawfully levied or assessed upon or in respect of the Sewerage Facilities or upon any part thereof or upon any portion of the Income, when the same shall become due, and shall duly observe and comply with all valid requirements of any municipal or governmental authority relative to the Sewerage Facilities, or any part thereof, except for any period during which the same are being contested in good faith by proper legal proceedings. The City shall not create or suffer to be created any lien or charge upon the Sewerage Facilities, or any part thereof, or upon the Income, except the pledge and lien created by this Ordinance for the payment of the Debt Service Requirements due in connection with the Bonds and except as herein otherwise permitted. The City shall pay or cause to be discharged or shall make adequate provision to satisfy and to discharge, within ninety (90) days after the same shall become payable, all lawful claims and demands for labor, materials, supplies or other objects which, if unpaid, might by law become a lien upon the Sewerage Facilities, or any part thereof, or the Income, but nothing herein requires the City to pay or to cause to be discharged or to make provision for any such tax, assessment, lien or charge, so long as the validity thereof is contested in good faith and by appropriate legal proceedings. M. Protection of Security. The City, its officers, agents and employees, shall not take any action in such manner or to such extent as might prejudice the security for the payment of the Debt Service Requirements of the Bonds and any other securities payable from the Net Pledged Revenues according to the terms thereof. No contract shall be entered into nor any other action 57 taken by which the rights of any Owner of any Bonds or other security payable from Net Pledged Revenues might be prejudicially and materially impaired or diminished. N. Accumulation of Interest Claims. In order to prevent any accumulation of claims for interest after maturity, the City shall not directly or indirectly extend or assent to the extension of the time for the payment of any claim for interest on any of the Bonds or any other securities payable from the Net Pledged Revenues; and the City shall not directly or indirectly be a party to or approve any arrangements for any such extension or for the purpose of keeping alive any of such claims for interest. If the time for the payment of any such installment of interest is extended in contravention of the foregoing provisions, such installment or installments of interest after such extension or arrangement shall not be entitled in case of default hereunder to the benefit or the security of this Ordinance, except upon the prior payment in full of the principal of all of the Bonds and any such securities the payment of which has not been extended. O. Prompt Payment of Bonds. The City shall promptly pay the Debt Service Requirements of every Bond at the places, on the dates, and in the manner specified herein and in the Bonds according to the true intent and meaning hereof. P. Use of Funds. The Prior Bonds Principal and Interest Fund, the Prior Bonds Debt Service Reserve Fund and the Subsequent Bonds Principal and Interest Fund and the Subsequent Bonds Debt Service Reserve Fund shall be used solely and only, and the moneys credited to such funds are hereby pledged, for the purpose of paying the Debt Service Requirements of the Prior Bonds, the Bonds, any Additional Parity Bonds and any other Parity Securities (including any costs incurred by the City in connection with any undertaking by a financial institution as described in Section 5E hereof) at maturity, upon prior redemption or otherwise, subject to Section 9 hereof. Q. Additional Securities. The City shall not hereafter issue any bonds or securities relating to the Sewerage Facilities and payable from the Net Pledged Revenues without compliance with the requirements with respect to the issuance of Additional Parity Bonds or other securities set forth herein to the extent applicable. R. Other Liens. Other than as provided herein, there are no liens or encumbrances of any nature whatsoever on or against the Sewerage Facilities, or any part thereof, or on or against the Net Pledged Revenues. S. Surety Bonds. Each official or other person having custody of any Net Pledged Revenues or responsible for their handling shall be fully bonded at all times, which bond shall be 58 conditioned upon the proper application of said moneys. The cost of each such bond shall be considered an Operation and Maintenance Expense, unless otherwise provided by law. T. Disposal of Sewerage Facilities Prohibited. Subject to Section 8U hereof, except for the use of the Sewerage Facilities and services pertaining thereto in the normal course of business, neither all nor a substantial part of the Sewerage Facilities shall be sold, mortgaged, pledged, encumbered, alienated or otherwise disposed of, until all of the Bonds have been paid in full, as to all Debt Service Requirements thereof, or unless provision has been made therefor, or until the Bonds have otherwise been redeemed, including, without limitation, the termination of the pledge as herein authorized. Subject to Section 8U hereof, the City shall not dispose of its title to the Sewerage Facilities or to any material Income-producing part thereof, including any property necessary to the operation and use of the Sewerage Facilities and the lands and interests in lands comprising the Sewerage Facilities. U. Disposal of Property. No material Income-producing part of the Sewerage Facilities shall be sold, leased, mortgaged, pledged, encumbered or otherwise disposed of or otherwise alienated, until all of the Bonds have been paid in full, or unless provision has been made therefor, or until the Bonds have otherwise been redeemed; provided, however, that the City may sell, exchange or lease at any time and from time to time any property or facilities constituting part of the Sewerage Facilities and not useful in the construction, reconstruction or operation thereof; but any proceeds of any such sale or exchange received and not used to replace such property so sold or exchanged shall be deposited in the Sewer Fund, and any proceeds of any such lease received shall be deposited by the City as revenues of the Sewerage Facilities. V. Loss from Condemnation. If any part of the Sewerage Facilities is taken by the exercise of a power of eminent domain, the amount of any award received by the City as a result of such taking shall be expended upon the improvement of the Sewerage Facilities or shall be applied to the redemption of the Outstanding Prior Bonds in accordance with the provisions of Ordinance No. 98, 1986, the Outstanding Bonds, any Outstanding Additional Parity Bonds and any Outstanding Parity Securities in accordance with the provisions hereof and of any other instrument pertaining to the issuance of any such Additional Parity Bonds or Parity Securities any Outstanding Subordinate Bonds or Subordinate Securities in accordance with any instrument pertaining to the issuance of such Subordinate Bonds or Subordinate Securities at maturity or upon prior redemption if the authorizing ordinances authorize the prior redemption of such securities. W. Inspection of Records. The Authority and any Owner of any securities payable from the Net Pledged Revenues, any duly 59 authorized agent or agents of the Authority or such Owner, shall have the right at all reasonable times to inspect all records, accounts and data relating thereto, concerning the Sewerage Facilities or the Income, to make copies of such records, accounts and data at the Authority's or Owner's expense, and to inspect the Sewerage Facilities and properties comprising the Sewerage Facilities. X. Audits Recruired. The City, annually following the close of each Fiscal Year, shall order an audit for the Fiscal Year of the books and accounts pertaining to the Sewerage Facilities to be made forthwith by an independent accountant, and order an audit report showing the receipts and disbursements for each fund or account pertaining to the Sewerage Facilities or the Income. All expenses incurred in the making of the audits and reports required by this subsection shall be regarded and paid as an Operation and Maintenance Expense. Y. Insurance and Reconstruction. The City shall at all times maintain with responsible insurers all such insurance reasonably required and obtainable within limits and at costs deemed reasonable by the City as is customarily maintained with respect to sewerage facilities of like character against loss of or damage to the Sewerage Facilities and against public and other liability to the extent at least reasonably necessary to protect the interest of the City and of each Owner of Bonds or any other securities payable from the Net Pledged Revenues, except as herein otherwise provided. If any useful part of the Sewerage Facilities shall be damaged or destroyed, the City shall, as expeditiously as possible, commence and diligently proceed with the repair or replacement of the damaged or destroyed property so as to restore the same to use. The proceeds of any insurance appertaining to the Sewerage Facilities shall be payable to the City and (except for proceeds of use and occupancy insurance) shall be applied to the necessary costs involved in such repair and replacement, and to the extent not so applied shall (together with the proceeds of any such use and occupancy insurance) be deposited in the Sewer Fund as Income. If the costs of such repair and replacement of the damaged or destroyed property exceed the proceeds of such property insurance available for payment of the same, moneys in the Sewer Fund shall be used to the extent necessary for such purpose, as permitted by Section 5H hereof. Section 9. Defeasance. When all Debt Service Requirements of the Bonds have been duly paid, the pledge and lien and all obligations hereunder shall thereby be discharged and the Bonds shall no longer be deemed to be Outstanding within the meaning of this Ordinance. There shall be deemed to be such due payment when the City has prepaid in whole all of its obligations under the Loan Agreement. 60 Section 10. Default Provisions and Remedies of Bond Owners. A. Events of Default. Each of the events described in Section 5. 01 of the Loan Agreement is hereby declared to be and to constitute an Event of Default hereunder. B. Remedies for Defaults. Upon the happening and continuance of any Event of Default, the Authority may proceed against the City to protect and to enforce its rights under this Ordinance or the Loan Agreement as provided in the Loan Agreement or by mandatory injunction or by other suit, action, or special proceedings in equity or at law, in any court of competent jurisdiction, either for the appointment of a receiver or an operating trustee or for the specific performance of any covenant or agreement contained herein or in the Loan Agreement or for any proper legal or equitable remedy as the Authority may deem most effectual to protect and to enforce the rights aforesaid, or thereby to enjoin any act or thing which may be unlawful or in violation of any right of any Owner of any Bond, or to require the City to act as if it were the trustee of an expressed trust, or any combination of such remedies, or as otherwise may be authorized by any statute or other provision of law. All such proceedings at law or in equity shall be instituted, had and maintained for the equal benefit of the Authority and all Owners of any Additional Parity Bonds or other Parity Securities then Outstanding. Any receiver or operating trustee appointed in any proceedings to protect the rights of the Authority and such Owners hereunder may collect, receive and apply all Income arising after the appointment of such receiver or operating trustee in the same manner as the City itself might do. The consent to any such appointment is hereby expressly granted by the City. C. Rights and Privileges Cumulative. The failure of the Authority to proceed in any manner herein provided shall not relieve the City or any of its officers, agents or employees of any liability for failure to perform to carry out any duty, obligation or other commitment. Each right or privilege of the Authority is in addition and is cumulative to any other right or privilege, and the exercise of any right or privilege by or on behalf of the Authority shall not be deemed a waiver of any other right or privilege of the Authority. The Authority shall be entitled to all of the privileges, rights and remedies provided or permitted in this Ordinance or the Loan Agreement and as otherwise provided or permitted by law or in equity or by statute, except as provided in Sections 12A and 12B hereof, and subject to the applicable provisions concerning the Income and the proceeds of the Bonds. Nothing herein affects or impairs the right of the Authority to enforce the payment of the Debt Service Requirements due in connection with the Bonds or the obligation of the City to pay the Debt Service Requirements of the Bonds at the time and the place expressed herein or in the Loan Agreement or the Bonds. 61 D. Duties Upon Default. Upon the happening of any Event of Default, the City, in addition, will do and perform all proper acts on behalf of and for the Authority to protect and to preserve the security created for the payment of the Bonds and to insure the payment of the Debt Service Requirements of the Bonds promptly as the same become due. If the City fails or refuses to proceed as in this Section 10D provided, the Authority, after demand in writing, may proceed to protect and to enforce its rights as hereinabove provided; and to that end the Authority shall be subrogated to all rights of the City under any agreement or contract involving the Net Pledged Revenues entered into prior to the effective date of this Ordinance or thereafter while any of the Bonds are Outstanding. Nothing herein requires the City to proceed as provided herein if it determines in good faith and without any abuse of its discretion that if it so proceeds it is more likely than not to incur a net loss rather than a net gain or such action is likely to affect materially and prejudicially the Authority and the Owners of any Outstanding Parity Securities. Section 11. Amendment of Ordinance. A. Amendment of Ordinance Not Requiring Consent of the Authority. The City may, without the consent of, or notice to, the Authority, adopt such ordinances supplemental hereto (which amendments shall thereafter form a part hereof) for any one or more or all of the following purposes: (1) To cure or correct any formal defect, ambiguity or inconsistent provision contained in this Ordinance; (2) To designate a trustee for the Owners of the Bonds, to transfer custody and control of the Income to such trustee, and to provide for the rights and obligations of such trustee; (3) To add to the covenants and agreements of the City or the limitations and restrictions on the City set forth herein; (4) To pledge additional revenues, properties or collateral to the payment of the Bonds; (5) To cause this Ordinance to comply with the Trust Indenture Act of 1939, as amended from time to time; or (6) To effect any such other changes hereto which do not in the opinion of nationally recognized bond counsel materially adversely affect the interests of the Owners of the Bonds. B. Amendment of Ordinance Requiring Consent of the Authority. Exclusive of the amendatory ordinances covered by 62 Section 11A hereof, this Ordinance may be amended or modified by ordinances or other instruments duly adopted by the Council, without receipt by it of any additional consideration, but with the written consent of the Authority, provided that no such amendatory ordinance shall permit: (1) Increased or Accelerated Payment. An increase in the amounts payable on any Maturity Date or Interest Payment Date or an acceleration of the time for payment of such amounts; or (2) Prior Lien. The creation of a lien upon or a pledge of revenues ranking prior to the lien or to the pledge created by this Ordinance; or (3) Priorities Among Bonds and Parity Securities. The establishment of priorities as among Bonds and other Parity Securities. C. Unanimous Consent. Notwithstanding anything in the foregoing provisions contained, the terms and the provisions of this Ordinance, or of any ordinance or instrument amendatory thereof, and the rights and the obligations of the City and of the Authority and the Owners of any Additional Parity Bonds or other Parity Securities may be modified or amended in any respect upon the adoption by the City and upon the filing with the City Clerk of an instrument to that effect and with the consent of the Authority and the Owners of all the then Outstanding Additional Parity Bonds or other Parity Securities. D. Notation on Bonds. After the effective date of any action taken as provided in Section 11B hereof, new Bonds so modified as in the opinion of the Council to conform to such action shall be prepared, executed and delivered and, upon demand of the City or the Authority, shall be exchanged without cost for Bonds then Outstanding upon surrender of such Outstanding Bonds. Section 12. Miscellaneous. A. Character of Agreement. None of the covenants, agreements, representations, or warranties contained herein or in the Bonds shall ever impose or shall be construed as imposing any liability, obligation, or charge against the City (except for the special funds pledged therefor) or against the general credit of the City payable out of general funds or out of any funds derived from general property taxes. B. No Pledge of Property. The payment of the Bonds is not secured by an encumbrance, mortgage or other pledge of property of the City except for the Net Pledged Revenues. No property of the City, subject to such exception with respect to the Net Pledged 63 Revenues, pledged for the payment of the Bonds, shall be liable to be forfeited or taken in payment of the Bonds. C. Statute of Limitations. No action or suit based upon any Bond or other obligation of the City shall be commenced after it is barred by any statute of limitations pertaining thereto. Any moneys from whatever source derived remaining in any fund or account reserved, pledged or otherwise held for the payment of any such obligation, action or suit, the collection of which has been barred, shall revert to the Sewer Fund. Nothing herein prevents the payment of the Bonds or other obligation after an action or suit for its collection has been barred if the Council deems it in the best interests of the City or the public so to do and orders such payment to be made. D. Delegated Duties. The officers of the City are hereby authorized and directed to enter into such agreements and take all action necessary or appropriate to effectuate the provisions of this ordinance and to comply with the requirements of law, including, without limitation: (1) Preparation of Bonds. The preparation of typewritten Bonds in the form specified in Exhibit D of the Loan Agreement; (2) Execution Registration and Delivery of Bonds. The execution and registration of the Bonds and the delivery of the Bonds to the Authority pursuant to the provisions of this Ordinance; (3) Information. The assembly and dissemination to the Authority of financial and other information concerning the City and the Bonds; (4) Closing Certificates. The execution of such certificates as may be reasonably required by the Authority, relating, inter alia, to: (a) The signing of the Bonds; (b) The tenure and identity of the officials of the City; (c) If in accordance with fact, the absence of litigation, pending or threatened, affecting the validity of the Bonds; (d) The delivery of the Bonds and the receipt of the Bond proceeds; and (e) the use of the Bond proceeds and the investment thereof pending such use. 64 E. Authorization and Approval of Documents. Appendix C to the official statement pertaining to the bonds of the Authority issued to finance the loan to the City under the Loan Agreement and Exhibit I thereto are hereby approved. The underwriters of said bonds of the Authority are hereby authorized to use and distribute said Appendix C and Exhibit I thereto in connection with said official statement. The Financial Officer of the City is hereby authorized to execute and deliver to said underwriters a certificate deeming final said Appendix C and Exhibit I thereto. F. Successors. whenever herein the City is named or is referred to, such provision shall be deemed to include any successors of the City, whether so expressed or not. All of the covenants, stipulations, obligations and agreements by or on behalf of and other provisions for the benefit of the City contained herein shall bind and inure to the benefit of any officer, board, district, commission, authority, agency, instrumentality or other Person or Persons to whom or to which there shall be transferred by or in accordance with law any right, power or duty of the City or of its respective successors, if any, the possession of which is necessary or appropriate in order to comply with any such covenants, stipulations, obligations, agreements or other provisions hereof. G. Rights and Immunities. Except as herein otherwise expressly provided, nothing herein expressed or implied is intended or shall be construed to confer upon or to give to any Person, other than the City and the Authority, any right, remedy or claim under or by reason hereof or any covenant, condition or stipulation hereof. All the covenants, stipulations, promises and agreements herein contained by and on behalf of the City shall be for the sole and exclusive benefit of the City and the Authority. No recourse shall be had for the payment of the Debt Service Requirements of the Bonds or for any claim based thereon or otherwise upon this Ordinance authorizing their issuance or any other ordinance or instrument pertaining thereto, against any individual member of the Council, or any officer or other agent of the City, past, present or future, either directly or indirectly through the City, or otherwise, whether by virtue of any constitution, statute or rule of law or by the enforcement of any penalty or otherwise, all such liability, if any, being by the acceptance of the Bonds and as a part of the consideration of their issuance specially waived and released. H. Ordinance Irrepealable. This Ordinance is, and shall constitute, a legislative measure of the City and after any of the Bonds are issued, this Ordinance shall constitute an irrevocable contract between the City and the Owner or Owners of the Bonds; and this Ordinance, subject to the provisions of Sections 9 and 11 hereof, if any Bonds are in fact issued, shall be and shall remain irrepealable until the Bonds, as to all Debt 65 Service Requirements, shall be fully paid, cancelled and discharged, as herein provided. I. Ratification. All action not inconsistent with the provisions of this Ordinance heretofore taken by the City or its officers, and otherwise by the City directed toward the issuance of the Bonds and the execution of the Loan Agreement is hereby ratified, approved and confirmed. J. Repealer. All ordinances, resolutions, bylaws, orders, and other instruments, or parts thereof, inconsistent herewith are hereby repealed to the extent only of such inconsistency. This repealer shall not be construed to revive any ordinance, resolution, bylaw, order, or other instrument, or part thereof, heretofore repealed. K. Severability. If any section, subsection, paragraph, clause or other provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability thereof shall not affect any of the remaining sections, subsections, paragraphs, clauses or provisions of this Ordinance. READ, AMENDED, FINALLY PASSED AS AMENDED ON SECOND READING AND ORDERED PUBLISHED ONCE BY NUMBER AND TITLE ONLY this 21st day of July, 1992. CITY OF FORT COLLINS, COLORADO By: (CITY) Mayor (SEAL) ATTEST: City Clerk ' 66 Council Member Edwards seconded the motion. The question being upon the amendment of Ordinance No. 75, 1992, the roll was called with the following results: Council Members voting "AYE" : Susan E. Kirkpatrick Ann Azari Dave Edwards Loren R. Maxey Council Members voting "NAY" : None The Mayor declared that, a majority of the Council Members present having voting in favor thereof, the motion was carried and Ordinance No. 75, 1992, duly amended. Council Member Azari then moved the final passage of Ordinance No. 75, 1992, as amended. Council Member Edwards seconded the motion. The question being upon the final passage of Ordinance No. 75, 1992, as amended, the roll was called with the following results: Council Members voting "AYE" : Susan E. Kirkpatrick Ann Azari Dave Edwards Loren R. Maxey Council Members voting "NAY" : None The Mayor thereupon declared that a majority of the Council Members present having voted in favor thereof, the motion was carried and Ordinance No. 75, 1992, finally passed as amended. The Council deeming it appropriate, the Mayor ordered Ordinance No. 75, 1992, published by number and title only together with a statement that the text thereof is available for public inspection and acquisition in the office of the City Clerk and a notice of the final passage of the Ordinance in The Coloradoan, a newspaper of general circulation published in the City, within seven (7) days after final passage. 67 After consideration of other business to come before the Council the meeting was adjourned. Mayor City of Fort Collins, Colorado (CITY) (SEAL) ATTEST: City Clerk ` City of Fort Collins, Colorado 68 STATE OF COLORADO ) COUNTY OF LARIMER ) ss. CITY OF FORT COLLINS ) I, Wanda M. Krajicek, City Clerk of the City of Fort Collins, Colorado, do hereby certify that the attached copy of Ordinance No. 75, 1992, is a true and correct copy; that the Ordinance was introduced and approved on first reading by the Council of the City of Fort Collins, Colorado, at a regular meeting thereof held at Council Chambers, City Hall, 300 West LaPorte Avenue, Fort Collins, Colorado, the regular meeting place thereof, on Tuesday, the 7th day of July, 1992 ; that the Ordinance was amended and finally passed as amended on second reading by the Council at a regular meeting thereof held at Council Chambers, City Hall, 300 West LaPorte Avenue, Fort Collins, Colorado, the regular meeting place thereof, on Tuesday, the 21st day of July, 1992; that a true copy of the Ordinance has been authenticated by the signatures of the Mayor of the City and myself as City Clerk thereof, sealed with the seal of the City, and numbered and recorded in a book marked "Ordinance Record" kept for that purpose in my office; that the Ordinance was duly published by number and title only together with a statement that the text thereof was available for public inspection and acquisition in the office of the City Clerk and a notice giving the date when the Ordinance would be presented for final passage and again by number and title only together with a statement that the text thereof was available for public inspection and acquisition in the office of the City Clerk and a notice of the final passage thereof in The Coloradoan, a newspaper of general circulation published in the City, in its issues of July 12, 1992, and July 26, 1992, as evidenced by the certificates of the publisher attached hereto at pages 70 and 71. I further certify that the foregoing pages 1 through 68, inclusive, constitute a true and correct copy of the record of the proceedings of the Council at its aforesaid regular meetings, insofar as the proceedings relate to the Ordinance; that the proceedings were duly had and taken, that the meetings were duly held; and that the persons were present at the meetings as therein shown. IN WITNESS WHEREOF, I have hereunto set my .hand and the seal of the City of Fort Collins, Colorado, this day of July, 1992 . � ��1,K.4kCs.JR (CITY) City Clerk T� (SEAL) City of Fort Collins, Colorado 69