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Ordinance No. 15-90-6 v4 t R � • 10 DRD/f'/I?n/Ce- l5 -90-4o AUTHORIZING ORDINANCE OF THE CITY COMMISSION OF CITY OF ATLANTIC BEACH, FLORIDA Relating to the issuance of $5,000,000 City of Atlantic ReBondsFSeries 1990 Water and Sewer Refunding Revenue Enacted tL 101 �, 1990 1 r 4 TABLE OF CONTENTS Page ARTICLE I STATUTORY AUTHORITY, DEFINITIONS, AND FINDINGS SECTION 1.01. AUTHORITY FOR THIS ORDINANCE ............... 1 SECTION 1.02. DEFINITIONS ..........................•.••.. 1 SECTION 1.03. FINDINGS ................................... 14 SECTION 1.04. ORDINANCE CONSTITUTES CONTRACT ............. 15 ARTICLE II AUTHORIZATION OF REFUNDING; DESCRIPTION, DETAILS AND FORM OF BOND SECTION 2.01. AUTHORIZATION OF REFUNDING ................. 17 SECTION 2.02. AUTHORIZATION OF BONDS ..................... 17 SECTION 2.03. DESCRIPTION OF BONDS ....................... 17 SECTION 2.04. EXECUTION OF BONDS ......................... 18 SECTION 2.05. NEGOTIABILITY AND REGISTRATION ............. 18 SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST 19 SECTION 2.07. TEMPORARY BONDS ......................•....• 20 SECTION 2.08. BOND ANTICIPATION NOTES .................... 20 SECTION 2.09. PROVISIONS FOR REDEMPTION .................. 21 SECTION 2.10. FORM OF BONDS .............................. 22 ARTICLE III BONDS NOT GENERAL OBLIGATION OF CITY; PLEDGE OF REVENUES AND APPLICATION THEREOF SECTION 3.01. BONDS NOT GENERAL OBLIGATION OR INDEBTEDNESS ARTICLE IV APPLICATION OF BOND PROCEEDS; REDEMPTION OF OUTSTANDING BONDS SECTION 4.01. APPLICATION OF BOND PROCEEDS 31 SECTION 4.02. REDEMPTION OF REFUNDED BONDS ............... 32 • OF CITY ................................... 23 SECTION 3.02. BONDS SECURED BY PLEDGED REVENUES .......... 23 SECTION 3.03 CREATION OF FUNDS AND ACCOUNTS ............. 23 SECTION 3.04. APPLICATION OF PLEDGED REVENUES ............ 24 SECTION 3.05. UNCLAIMED MONEY ......................••••. 29 ARTICLE IV APPLICATION OF BOND PROCEEDS; REDEMPTION OF OUTSTANDING BONDS SECTION 4.01. APPLICATION OF BOND PROCEEDS 31 SECTION 4.02. REDEMPTION OF REFUNDED BONDS ............... 32 • u TABLE OF CONTENTS (Continued) ARTICLE V COVENANTS OF THE CITY REMEDIES SECTION 5.01. COVENANTS OF THE CITY ...................... 33 SECTION 5.02. REMEDIES .........................••••.••••• 40 ARTICLE VI MISCELLANEOUS PROVISIONS SECTION 6.01. SALE OF 1990 BONDS ......................... 42 SECTION 6.02. NOTICES TO CREDIT FACILITY ISSUER .......... 42 SECTION 6.03. DEFEASANCE ..................•..•..........• 42 SECTION 6.04. NO RECOURSE................................42 SECTION 6.05. MODIFICATION OR AMENDMENT .................. 42 SECTION 6.06. SEVERABILITY OF INVALID PROVISIONS ......... 44 SECTION 6.07. REPEALING CLAUSE ........................... 44 SECTION 6.08. EFFECTIVE DATE ............................. 45 ii ril ORDINANCE NO. 15-90-6 AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA, PROVIDING FOR THE REFUNDING OF CERTAIN OUTSTANDING REVENUE OBLIGATIONS OF THE CITY; PROVIDING FOR THE ISSUANCE OF WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1990, OF THE CITY TO FINANCE THE COST THEREOF; PROVIDING FOR THE PAYMENT OF SUCH BONDS; PROVIDING FOR THE RIGHTS, SECURITY, AND REMEDIES OF THE REGISTERED OWNERS OF SUCH BONDS; AND PROVIDING AN EFFECTIVE DATE. BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF ATLANTIC BEACH, FLORIDA: ARTICLE I STATUTORY AUTHORITY, DEFINITIONS, AND FINDINGS SECTION 1.01. AUTHORITY FOR THIS ORDINANCE. This Ordinance is enacted pursuant to the provisions of Chapter 166, Part II, Florida Statutes, and other applicable provisions of law. SECTION 1.02. DEFINITIONS. Capitalized terms used in this Ordinance shall have the following meanings, unless the context clearly requires otherwise. Words importing singular number shall include the plural number in each case and vice versa, and words of one gender shall be deemed to include the other genders, and words importing persons shall include firms and corporations. In this Ordinance: "Accreted value" shall mean, with respect to any Compounding Interest Bonds, the amount representing the value of such Bonds as of any semiannual compounding date. "Act" shall mean Chapter 166, Part II, Florida Statutes, and other applicable provisions of law. "Additional Parity Bonds" shall mean any obligations hereafter issued pursuant to the terms and conditions of this Ordinance and payable from the Pledged Revenues on a parity with the Series 1990 Bonds originally issued hereunder. Such Additional Parity Bonds shall be deemed to have been issued pursuant to this Ordinance the same as the Series 1990 Bonds, and all of the covenants and other provisions of this Ordinance (except as to details of such Additional Parity Bonds inconsistent herewith), shall be for the equal benefit, protection and security of the Registered Owners of the Series 1990 Bonds and the Registered Owners of any Additional Parity • Bonds evidencing additional obligations subsequently issued within the limitations of and in compliance with this Ordinance. All of such Additional Parity Bonds, regardless of the time or times of their issuance, shall rank equally with other Bonds with respect to their lien on and source and security for payment from the Pledged Revenues without preference of any Bond over any other. "Amortization Installment" shall mean, with respect to any Term Bonds of a series of Bonds, the amount of money designated for the Term Bonds of such series and required to be deposited into the Bond Amortization Account within the Sinking Fund to pay the principal amount of Term Bonds to be redeemed on the Interest Payment Date or Maturity Date so designated; provided that the aggregate of such installments for each maturity of Term Bonds of any series shall equal the aggregate principal amount (including Compounded Amounts) of each maturity of Term Bonds of such series delivered on original issuance. "Annual Capital Facilities Charges Debt Service Requirement" shall mean for any Bond Year, as applied to the Bonds of any series additionally secured by Capital Facilities Charges, the component of the Debt Service Requirement attributable to the Capital Facilities Charges, initially set forth in the Project Certificate with respect to the issuance of such series and thereafter from time to time as necessary as determined by the City, but limited to the Capital Facilities Charges Debt Service Component for such series of Bonds. "Annual Sewer Generation Charges Debt Service Requirement" shall mean for any Bond Year, as applied to the Bonds of any series additionally secured by Sewer Generation Charges, the component of the Debt Service Requirement attributable to the Sewer Generation Charges, initially set forth in the Project Certificate with respect to the issuance of such series and thereafter from time to time as necessary as determined by the City, but limited to the Sewer Generation Charges Debt Service Component for such series of Bonds. "Atlantic Beach System" means the water and sewer system of the City serving primarily the incorporated area of the City. "Authorized Investments" means the following obligations, but only to the extent the moneys to be invested therein may, at the time such investments are made or retained, lawfully be invested therein: (1) United States Obligations. (2) Obligations or portions thereof issued or guaranteed by the following instrumentalities or agencies: (a) Federal Home Loan Bank System. • 2 I It (b) Export -Import Bank of the United States. (c) Federal Financing Bank. (d) Government National Mortgage Association. (e) Farmers Home Administration. (f) Federal Home Loan Mortgage Company. (g) Federal Housing Administration. (h) Federal National Mortgage Association (3) Pre -refunded local government obligations rated in the highest rating category by a Rating Agency and meeting the following conditions: (a) the municipal obligations are (i) not to be redeemed prior to maturity or the trustee or escrow agreement therefor has been given irrevocable instructions concerning their calling and redemption and (ii) the issuer of such municipal obligations has covenanted not to redeem such bonds other than as set forth in such instructions. (b) the municipal obligations are secured by cash or direct and general obligations of the United States of America that may be applied only to interest, principal and premium payments of such bonds. (c) the principal of and interest on such direct and general obligations (plus any cash in the escrow fund) are sufficient to meet the liabilities of the municipal obligations. (d) the United States Obligations serving as security for the municipal obligations are held by an escrow agent or trustee. (e) the United States Obligations are not available to satisfy any other claims, including those against the trustee or escrow agent. (4) Direct and general long-term obligations of any state or commonwealth of the United States of America, to the payment of which the full faith and credit of the state or commonwealth is pledged and that are rated in either of the two highest Rating • Categories by a Rating Agency. 3 (5) Direct and general short-term obligations of any state or commonwealth of the United States of America, to the payment of which the full faith and credit of the state or commonwealth is pledged and that are rated in the highest Rating Category by a Rating Agency. (7) Long-term or medium-term corporate debt guaranteed by any corporation that is rated by a Rating Agency in one of their two highest rating categories. (8) Repurchase agreements, the maturities of which are thirty (30) days or less, entered into with financial institutions such as banks or trust companies organized under state law or national banking associations, insurance companies, or government bond dealers reporting to, trading with, and recognized as a primary dealer by, the Federal Reserve Bank of New York and a member of the Security Investors Protection Corporation ("SIPC") or with a dealer or parent holding company that is rated "A" or better by Moody's and S&P. The repurchase agreement should be in respect of United States Obligations or obligations described in paragraph (2) of this definition and shall be collateralized by United States Obligations the fair market value of which, together with the fair • market value of the repurchase agreement securities, exclusive of accrued interest, shall be 4 ­­.�. , A,,,,')ossa (6) Interest-bearing demand or time deposits or interests in money market portfolios issued by state banks or trust companies or national banking associations and savings and loan associations that are members of the Federal Deposit Insurance Corporation ("FDIC"). These deposits or interests must either (a) be continuously and fully insured by FDIC and be with banks that are rated at least P-1 or Aa by Moody's and at least A-1 or AA by S&P, or (b) be fully secured by United States Obligations or (c) be secured as provided in Chapter 280, Florida Statutes. If said deposits or interests are secured by United States Obligations, such United States Obligations must be valued daily and have a market value at all times at least equal to the principal amount of the deposits or interests. The United States Obligations must be held by the City, or by a Federal Reserve Bank or Depository, as custodian for the institution issuing the deposits or interests. The City shall have a first lien on the United States perfected Obligations serving as collateral, and such collateral is to be free from all third -party liens. (7) Long-term or medium-term corporate debt guaranteed by any corporation that is rated by a Rating Agency in one of their two highest rating categories. (8) Repurchase agreements, the maturities of which are thirty (30) days or less, entered into with financial institutions such as banks or trust companies organized under state law or national banking associations, insurance companies, or government bond dealers reporting to, trading with, and recognized as a primary dealer by, the Federal Reserve Bank of New York and a member of the Security Investors Protection Corporation ("SIPC") or with a dealer or parent holding company that is rated "A" or better by Moody's and S&P. The repurchase agreement should be in respect of United States Obligations or obligations described in paragraph (2) of this definition and shall be collateralized by United States Obligations the fair market value of which, together with the fair • market value of the repurchase agreement securities, exclusive of accrued interest, shall be 4 ­­.�. , A,,,,')ossa valued daily and maintained at an amount at least equal to the amount invested in the repurchase agreements. In addition, the provision of the repurchase agreement shall meet the following additional criteria: (a) the City or a third party acting solely as agent for the City has possession of the repurchase agreement securities and the United States Obligations collateral. (b) failure to maintain the requisite collateral levels will require the City or such third party to liquidate such securities immediately. (c) the City or such third party hereunder has a perfected, first priority security interest in such securities. 5 �.en inn.• .Lnn'f /wAA (d) such securities are free and clear of third - party liens, and in the case of an SIPC broker, were not acquired pursuant to a repurchase or reverse repurchase agreement. (9) Prime commercial paper of a United States corporation, finance company or banking institution rated at least 11P-1" by Moody's and at least "A-1" by S&P. (10) Public housing bonds issued by public agencies. Such bonds must be fully secured by a pledge of annual contributions under a contract with the United States government; temporary notes, preliminary loan notes or project notes secured by a requisition or payment agreement with the United States; or state or public agency or municipality obligations rated in the highest rating category by a Rating Agency; (11) Shares of beneficial interest in an investment fund or trust substantially all of the assets of which are invested in obligations described in (1) and (2), above. (12) Guaranteed investment contracts, with United States corporations the debt of which is rated by a Rating Agency in one of the two highest rating categories. (13) State pooled investment funds invested in one or more of the securities described in paragraphs (1) through (12) of this definition; provided that • 5 �.en inn.• .Lnn'f /wAA shares or units of participation in such funds shall be held directly by, or registered in the name of, the City. (14) units of participation in the Local Government Surplus Funds Trust Fund established pursuant to Chapter 218, Part IV, Florida Statutes, or any other similar common trust fund which is established pursuant to State law as a legal depository for public money and for which the State Board of Administration of the State acts as the custodian. (15) obligations issued by the Resolution Funding Corporation under the authority of Title 12, United States Code, Section 1441b. "Bond Counsel" shall mean counsel experienced in matters relating to the validity of, and the state and federal income tax treatment of interest on, obligations of states and their political subdivisions as selected by the City. "Bond Registrar" shall mean the person or corporation designated by the City to maintain the registration books required to be maintained hereunder and to serve as paying agent for purposes of making payments of principal of and interest on isthe Bonds to the Registered Owners. "Bond Year" shall mean, with respect to any series of Bonds, the year commencing on the date following each Principal Maturity Date and ending on the next succeeding Principal Maturity Date. "Bonds" shall mean the Water and Sewer Refunding Revenue Bonds, Series 1990 (the "Series 1990 Bonds"), and any Additional Parity Bonds hereafter issued pursuant to the terms and conditions of this Ordinance. "Buccaneer System" means that portion of the System which the City acquired from the Buccaneer Utility Company. "Capital Facilities Charges" shall mean any fee or charge levied and collected by the City upon new users of the facilities of the System to finance all or a portion of the cost of excess System capacity, if any, existing at the time of acquisition of the System, or any Facilities comprising a part of the System, or additions, extensions or improvements to the System anticipated to be necessary to replace capacity made or to be made available to lands or persons to be served by the System. "Capital Facilities Charges Debt Service Component" shall mean, as of any particular date of calculation, for each series of Bonds additionally secured by Capital Facilities Charges, an amount of Capital Facilities Charges determined by (1) multiplying the aggregate Debt Service Requirements for each such series of Bonds by the Expansion Percentage, and (2) subtracting from the product so obtained all amounts previously transferred from the Capital Facilities Charges Fund to the Sinking Fund and the Bond Amortization Account therein. "City" shall mean City of Atlantic Beach, Florida, a municipal corporation of the State. "Code" shall mean the Internal Revenue Code of 1986, as amended, including, when appropriate, the statutory predecessor of the Code, and all applicable regulations (whether proposed, temporary or final) under that Code and the statutory predecessor of the Code, and any official rulings and judicial determinations under the foregoing applicable to the Bonds. "Commission" shall mean the City Commission, as the governing body of the City. "Compounding Date" with respect to any Compounding Interest Bonds shall mean the date on which interest is compounded and a new Accreted value established for such Bonds. "Compounding Interest Bonds" shall mean Bonds, the interest on which (1) shall be compounded periodically, (2) shall be payable at maturity or redemption prior to maturity, and (3) shall be determined by reference to the Accreted values. "Credit Facility" shall mean a policy of municipal bond insurance, a letter of credit, or other insurance or financial product which guarantees prompt payment of all or any portion of the principal of, premium, if any, and interest on all or any portion of the Bonds. "Credit Facility Issuer" shall mean an insurance company, bank, or other organization which has provided a Credit Facility in connection with the issuance of any series of Bonds or any Bonds within a series. "Current Interest Paying Bonds" shall mean Bonds, the interest on which shall be payable on a periodic basis. "Debt Service Requirement" shall mean, for any Bond Year, as applied to the Bonds of any series, the sum of: (1) the amount required to pay the interest becoming due on the Current Interest Paying Bonds during such Bond Year; (2) the aggregate amount required to pay the principal becoming due on Current Interest Paying Bonds for such Bond Year; and 7 . (3) the aggregate amount required to pay the Maturity Amount due on any Compounding Interest Bonds maturing in such Bond Year. In calculating the Debt Service Requirement for any period for any series of Bonds or the bonds of any lien status: (A) the City shall deduct from the amounts calculated in Subparagraphs (1) through (3) above: (a) any capitalized interest deposited into the Sinking Fund for such period from the proceeds of the sale of such Bonds or otherwise and (b) any investment earnings to be received on moneys on deposit in the Sinking Fund and accounts therein established with respect to such series of Bonds and required by the terms of this Ordinance to be retained in such Sinking Fund; (B) the interest due in any ensuing Bond Year on variable Rate Bonds shall be assumed to be one hundred ten percent (110%) of the greater of (a) the daily average interest rate on such variable Rate Bonds during the twelve (12) months ending with the month preceding the date of calculation, or such shorter period that such variable Rate Bonds shall have been outstanding, or (b) the rate of interest on such variable Rate Bonds on the date of such calculation; (C)(i) the stated maturity date of any Current Interest Paying Term Bonds shall be disregarded and the Amortization Installments applicable to such Current Interest Paying Term Bonds in such Bond Year shall be deemed to mature in such Bond Year, and (ii) the principal amount of any Current Interest Paying Term Bonds having a single principal maturity and no Amortization Installments therefor shall be calculated as if the amount of such single maturity had been amortized over a term of years and was payable in such payments of principal and interest as shall be set forth in a subsequent resolution of the Board adopted on or prior to the delivery of such Bonds; and (D) the stated maturity date of any Compounding Interest Term Bonds shall be disregarded and the Amortization Installments applicable to such Compounding Interest Term Bonds in such Bond Year shall be deemed to mature in such Bond Year. "Escrow Deposit Agreement" shall mean the agreement(s) between the City and the Escrow Holder, in form and substance to be approved by the City at or prior to the time of issuance of the Series 1990 Bonds, and providing for the deposit of a portion of the proceeds of the Series 1990 Bonds in trust with the Escrow Holders for the purpose of making payment of the principal, premium, if specified, and interest on the Refunded Bonds as provided in such Escrow Deposit Agreement. "Escrow Holder" shall mean the bank or trust company, or such other facility as the City may designate, which may be located within or without the State, to be selected by resolution 1.1 of the Commission prior to the time of issuance of the Series 1990 Bonds, to hold a portion of the proceeds of the sale of the Series 1990 Bonds in trust pursuant to the provisions of the Escrow Deposit Agreement(s), to be applied to pay the principal of, premium, if specified, and interest on the Refunded Bonds as provided in such Escrow Deposit Agreement. "Expansion Facilities" shall mean additions, extensions and improvements to the System, together with all lands or interests therein, including plants, buildings, machinery, pipes, mains, fixtures, equipment, franchises, and all property, real or personal, tangible or intangible, heretofore or hereafter constructed or acquired in order to meet the increased demand upon the System, whether actual or anticipated, created by new users connecting to the System. "Expansion Percentage" shall mean a fraction having a numerator equal to that portion of the total original principal amount of all Bonds issued hereunder that are attributable to Expansion Facilities, if any, as shall be determined by the Independent Consultant and as set forth in the Project Certificate relating to such Bonds and a denominator equal to the total original principal amount of all Bonds issued hereunder. "Facilities" shall mean all of the physical assets of the System, and all parts thereof, existing at the time of the enactment of this Ordinance, and also any physical assets which may hereafter be added to the System, or any part thereof, by any additions, betterments, extensions, improvements thereto, or property of any kind or nature, real or personal, tangible or intangible, hereafter constructed or acquired. "Financial Advisors" shall mean Burton & Associates and A. G. Edwards & Sons, Inc. or such other financial advisor or advisors employed by the City to assist in its financial matters. "Fiscal Year" shall mean the period commencing on October 1 of each year and ending on the succeeding September 30, or such other period as may be prescribed from time to time as the fiscal year for the City. "Gross Revenues" or "Revenues" shall mean all fees, rentals, connection fees, or other charges or other income (including income on investments of moneys in all funds and accounts, except the Project Fund, herein created or authorized, to the extent that such income is required to be deposited into the Revenue Fund herein created, and excluding all Capital Facilities Charges and investment earnings thereon), received by the City, or accruing to the City or to any other board or agency of the City in control of the management and operation of said System, all as calculated in accordance with generally accepted governmental accounting practices. • 9 L k "Independent Certified Public Accountant" shall mean such firm of certified public accountants, not in the regular employ of the City, as shall be retained by the City for the purpose of auditing the books and records of the System and performing such other functions as are specified in this Ordinance. "Independent Consultant" shall mean such firm consisting of or employing registered professional accountants, attorneys, engineers or architects and having favorable repute for the design, maintenance and operation of facilities such as the System, not in the regular employ of the City, engaged by the City to perform the tasks set forth to be performed by such Independent Consultant by the provisions of this Ordinance "Interest Payment Date" shall mean, with respect to any series of Bonds, the semiannual or other periodic dates on which interest is payable on the Current Interest Paying Bonds, as determined by subsequent resolution of the Commission adopted at or prior to the time of issuance of such Bonds. "Maturity Amount" with respect to any Compounding Interest Bonds shall mean the value of such Bonds at the stated maturity thereof. "Maximum Debt Service Requirement" shall mean, as of any IV particular date of calculation, and, with respect to the particular series of Bonds, or all Bonds, as the case may be, the Debt Service Requirement for the then current or any future Bond Year which is greatest in dollar amount. "Moody's" means Moody's Investor's Service, Inc., 99 Church Street, New York, New York 10007 or any successor thereto. "Net Revenues" shall mean the Gross Revenues remaining after deduction only of Operating Expenses. "Oak Harbor System" means that portion of the System acquired by the City from the Oak Harbor utility Company and serving primarily the Oak Harbor subdivision. "Operating Expenses" shall mean the current expenses, paid or accrued, of operation, maintenance and repair of the System and its Facilities (including the City's proportionate share of joint expenses in a regional system in which the City has an undivided ownership interest) and shall include, without limiting the generality of the foregoing, (i) insurance premiums, (ii) charges for the accumulation of appropriate reserves not annually recurrent but which are such as may reasonably be expected to be incurred in accordance with generally accepted governmental accounting practices, and (iii) the cost of product and services purchased at wholesale by the City for resale to 40 10 e.a--&nn1)isee customers of the System in lieu of the production of such product and services by the City directly. "Operating Expenses" shall not include any allowance for depreciation or any other non-cash expenses except to the extent expressly herein provided. "Pledged Revenues" shall mean the (i) Net Revenues, (ii) the Capital Facilities Charge Debt Service Component, (iii) the Sewer Generation Charge Debt Service Component, and (iv) until expended and subject to application as provided hereunder, the amounts on deposit in the funds and accounts established hereunder (except the Rebate Fund and, with respect to the Reserve Account, as may be more particularly provided by subsequent resolution of the City establishing separate subaccounts within the Reserve Account for different series or installments of Bonds). "Principal Maturity Date" shall be the stated date on which principal matures on Current Interest Paying Bonds or on which the Maturity Amount becomes payable on Compounding Interest Bonds. "Project Certificate" shall mean that certificate of the Independent Consultant filed with the City at or prior to the date of delivery of any series of Bonds and setting forth the estimated total cost of the project to be constructed with the proceeds of such Bonds and, if said series of Bonds is additionally secured by Capital Facilities Charges or Sewer Generation Charges, or both, the estimated cost of the Expansion Facilities portion of the Project, the Expansion Percentage, the Annual Capital Facilities Charges Debt Service Requirement, the Sewer Facilities Percentage, and the Annual Sewer Generation Charges Debt Service Component, as appropriate. with respect to the issuance of a series of Bonds, the purpose of which is to refund prior obligations, the proceeds of which prior obligations were use to construct a project, and such Series of Bonds are additionally secured by Capital Facilities Charges, the Project Certificate shall set for the the cost of the Expansion Facilities portion of the project, the Expansion Percentage, and the Annual Capital Facilities Charges Debt Service Requirement, as appropriate. "Rating Agency" shall mean Moody's, S&P, or such other nationally recognized company rating debt obligations of public and private obligors. "Rate Ordinance" shall mean the ordinances incorporating a schedule of rates fees and/or charges to be imposed for the use of the System or any Facilities. "Record Date" shall mean the fifteenth day of the month prior to an Interest Payment Date, or such other date as may be specified by subsequent resolution of the Commission. 11 odcn/am iknn7/LLA "Redemption Date" shall mean any date on which Bonds are called for redemption prior to maturity. "Refunded Bonds" shall mean the following outstanding bonds of the City: A loan from the State of Florida for the purpose of financing certain wastewater treatment facilities pursuant to a certain loan agreement among the City and the State of Florida Department of Environmental Regulation and the Division of Bond Finance of the State of Florida Department of General Services, dated as of May 29, 1985; Buccaneer Water and Sewer District Revenue Bonds, dated as of June 3, 1985; Oak Harbor Water and Sewer District Revenue Bonds, dated as of February 28, 1989. "Refunding" shall mean the program for refinancing all or a portion of the outstanding debt of the City through the issuance of the Series 1990 Bonds authorized by this Ordinance and the deposit of a portion of the proceeds thereof with the Escrow Holder to be applied pursuant to the provisions of the Escrow Deposit Agreement to pay the principal of, premium, if any, and interest on the Refunded Bonds, all as recommended to the City by its Financial Advisors at or prior to the time of sale of the Series 1990 Bonds. "Refunding Costs" shall mean but shall not necessarily be limited to: the cost of payment of the principal of, premium, if specified, and interest on the Refunded Bonds; expenses for ks estimates of costs and of revenues; the fees of fiscal agents, Financial Advisors and consultants; administrative expenses; the establishment of reasonable reserves for the payment of debt service on the Series 1990 Bonds; discount upon the sale of the Series 1990 Bonds; the expenses and costs of issuance of the Series 1990 Bonds; the cost of purchasing any Credit Facility or Reserve Account Credit Facility with respect to the Series 1990 Bonds; such other expenses as may be necessary or incidental to the financing authorized by this Ordinance, to the Refunding, and to the accomplishing thereof and reimbursement to the City for any sums expended for the foregoing purposes. "Registered Owner" or "Owner" shall mean any person who shall be the owner of any outstanding Bond or Bonds as shown on the registration books maintained by the Bond Registrar. C I "Reserve Account Credit Facility" shall mean a surety bond, a policy of insurance, a letter of credit, or other insurance or financial product which provides for payment of amounts equal to all or a portion of the Reserve Account Requirement in the event of an insufficiency of moneys in the Sinking Fund to pay principal of and interest on the Bonds when due, which Reserve Account Credit Facility meets the requirements set forth in Section 3.04 hereof. 12 "Reserve Account Credit Facility Issuer" shall mean an insurance company, bank, or other organization which has provided a Reserve Account Credit Facility in connection with the establishment of a reserve account for any series or installment of Bonds. "Reserve Account Requirement" shall mean, for any series or installment of Bonds or for all Bonds, as the context may require, an amount equal to the lesser of (i) the Maximum Debt Service Requirement for such Bonds, (ii) the maximum amount allowed under the provisions of the Code to be funded as a reasonably required reserve from the proceeds of the Series 1990 Bonds or Additional Parity Bonds. "S&P shall mean "Standard and Poor's Corporation, 25 Broadway, New York, New York 10004, or any successor thereto. "Serial Bonds" shall mean any Current Interest Paying or Compounding Interest Bonds for the payment of the principal of which, at the maturity thereof, no fixed mandatory sinking fund or bond redemption deposits are required to be made prior to the 12 -month period immediately preceding the stated date of maturity of the such Serial Bonds. "Series 1990 Bonds" shall mean the Water and Sewer Refunding Revenue Bonds, Series 1990, originally authorized and 4V issued pursuant to this Ordinance. "Sewer Facilities" means that portion of the Facilities used for the collection, treatment and discharge of wastewater. "Sewer Facilities Percentage" means as fraction having a numerator equal to that portion of the total original principal amount of all Bonds issued hereunder that are attributable to Sewer Facilities, if any, as shall be determined by the Independent Consultant and as set forth in the Project Certificate relating to such Bonds and a denominator equal to the total original principal amount of all Bonds issued hereunder. "Sewer Generation Charges" means the surcharge for sewer generation required by the Federal Environmental Protection Agency and the Florida state department of Environmental Regulation levied and collected by the City. "Sewer Generation Charges Debt Service Component" means, as of any particular date of calculation, for each series of Bonds additionally secured by Sewer Generation Charges, an amount of Sewer Generation Charges determined by (i) multiplying the aggregate Debt Service Requirement for each such series of Bonds by the Sewer Facilities Percentage, and (ii) subtracting from the product so obtained all amounts previously transferred from the Sewer Generation Charges Fund to the Sinking Fund and the Bond 40 Amortization Account therein. 13 • CJ • "State" shall mean the State of Florida. "Subordinate Bonds" shall mean any obligations issued or incurred by the City and payable from the Pledged Revenues subject and subordinate to the rights of the Registered Owners of any Bonds issued pursuant to this Ordinance as to security for payment from such Pledged Revenues and in all other respects, in accordance with the provisions of this Ordinance. "System" shall mean, collectively, all of the water and sewer systems now owned, operated and maintained by the City, including the Atlantic Beach System, the Buccaneer System, the Oak Harbor System and the City's undivided ownership interest in the Duval Beaches Regional Sewer Utility or any other regional system, together with any and all improvements, extensions and additions thereto hereafter constructed or acquired, together with all lands or interest therein, including plants, buildings, machinery, franchises, pipes, mains, fixtures, equipment and all property, real or personal, tangible or intangible, now or hereafter owned or used in connection therewith. "Term Bonds" shall mean the Current Interest Paying or Compounding Interest Bonds of a series, all of which shall be stated to mature on one date and which shall be subject to retirement by operation of the Bond Amortization Account in the Sinking Fund herein established. "United States Obligations" shall mean any bonds or other obligations which as to principal and interest constitute direct obligations of, or are unconditionally guaranteed by, the United States of America. "Variable Rate Bonds" shall mean Bonds, the interest rate on which is subject to adjustment at such times and in such manner as shall be determined by the Commission prior to the sale thereof. SECTION 1.03. FINDINGS. It is hereby ascertained, determined and declared that: A. The City has previously issued the Refunded Bonds, of which $4,339,100 aggregate principal amount is outstanding as of the date of enactment of this Ordinance. B. The City deems it necessary and in its best interest to provide for the refunding of the Refunded Bonds, through the issuance of the Series 1990 Bonds herein authorized. The refunding program herein described will be advantageous to the City by revising certain covenants contained in the proceedings which authorized the Refunded Bonds and permitting the City's systems revenue streams to be combined for debt servicing purposes. 14 C. The funds needed for the refunding as above described shall be derived from the sale of the Series 1990 Bonds herein authorized, and, if necessary, other legally available funds of the City. An amount which, together with the income on the investment thereof, will be sufficient to effect the refunding of the Refunded Bonds, will be deposited in an irrevocable escrow account established for the holders of such Refunded Bonds and invested in United States Obligations. The principal amounts of such United States Obligations, together with the interest earnings thereon, plus any amounts held in cash, will be sufficient to make timely payments of all presently outstanding principal, interest and redemption premium, if any, to be paid from such escrow account in respect to such Refunded Bonds, and all costs associated with the acquisition and subsequent management of such United States Obligations. D. The Pledged Revenues are not now pledged or encumbered in any manner except to the payment of the Refunded Bonds to the extent set forth in the resolutions or ordinances of the Commission authorizing the issuance of the Refunded Bonds. The pledge of the Pledged Revenues for the benefit of the holders of such bonds will be defeased on or prior to the issuance of the Bonds. E. The principal of and interest on the Bonds and all required sinking fund, reserve and other payments shall be payable solely from the Pledged Revenues as herein provided. Neither the City nor the State of Florida or any political subdivision thereof or governmental authority or body therein shall ever be required to levy ad valorem taxes to pay the principal of and interest on the Bonds or to make any of the required sinking fund, reserve or other payments required by this Ordinance or the Bonds; and such Bonds shall not constitute a lien upon any property owned by or situated within the corporate territory of the City, except as provided herein with respect to the Pledged Revenues. G. The estimated Pledged Revenues will be sufficient to pay all principal of and interest on the Bonds to be issued hereunder, as the same become due, and to make all required sinking fund, reserve or other payments required by this Ordinance. SECTION 1.04. ORDINANCE CONSTITUTES CONTRACT. In consideration of the acceptance of the Bonds authorized to be issued hereunder by those who shall be the Registered Owners of the same from time to time, this Ordinance shall be deemed to be and shall constitute a contract between the City and such Registered Owners, and the covenants and agreements herein set forth to be performed by the City shall be for the equal benefit, protection, and security of the Registered Owners of any and all 00 such Bonds, all of which shall be of equal rank and without is . preference, priority, or distinction of any of other thereof, except as expressly provided Additionally this Ordinance shall be deemed to contract between the City and any Credit providing a Credit Facility with respect to the LJ 16 the Bonds over any therein or herein. be and shall be a Facility Issuer Bonds. ARTICLE II AUTHORIZATION OF REFUNDING; DESCRIPTION, DETAILS AND FORM OF BOND SECTION 2.01. AUTHORIZATION OF REFUNDING. The Refunding is hereby specifically authorized. SECTION 2.02. AUTHORIZATION OF BONDS. Subject and pursuant to the provisions of this Ordinance, obligations of the City, to be known as "Water and Sewer Refunding Revenue Bonds, Series 1990", are hereby authorized to be issued in an aggregate principal amount on original issuance not to exceed Five Million Dollars ($5,000,000), for the purpose of financing Refunding Costs. SECTION 2.03. DESCRIPTION OF BONDS. The Series 1990 Bonds shall be numbered; shall be in the denomination or Maturity Amount of $5,000 each or integral multiples thereof; shall be dated as of the date of their delivery or such other date prior to the date of their delivery; shall bear interest at not exceeding the maximum rate allowed by law; payable on such dates; shall mature on the first day of such month, in such years, not to exceed thirty (30) years from the date thereof, and in such amounts; and shall be issued as Current Interest Paying Bonds, Compounding Interest Bonds, variable Rate Bonds, Serial Bonds, Term Bonds, or any combination thereof; all the foregoing as shall be determined by subsequent resolution of the Commission adopted at or prior to the time of sale of the Series 1990 Bonds. The Bonds may be issued all at one time or in installments from time to time. Different installments and series of the Bonds may have such characteristics as shall be provided herein and by subsequent ordinance or resolution of the Commission and shall bear a designation to distinguish such series or installment from other series or installments of the Bonds. The Bonds shall be issued in fully registered form; shall be payable with respect to principal or maturity amount at the office of the Bond Registrar, as paying agent, or such other paying agent as shall be subsequently determined by the Commission; shall be payable in lawful money of the United States of America; and shall bear interest from their date, or from the most recent date to which interest has been paid, payable, in the case of Current Interest Paying Bonds, by check or draft mailed to the Registered Owner at his address as it appears upon the books of the Bond Registrar as of 5:00 p.m. Eastern Time on the Record Date, provided that, for any Registered Owner of one million dollars of more in principal amount of Bonds, such payment shall, upon the written request and at the expense of such Registered Owner, be by wire transfer or other medium • acceptable to the City and to such Registered Owner. 17 SECTION 2.04. EXECUTION OF BONDS. The Bonds shall be executed in the name of the City by the Mayor and the City Manager of the City, attested by the City Clerk, and approved as to form, sufficiency and correctness by the City Attorney, and its corporate seal of facsimile thereof shall be affixed thereto or reproduced thereon. The signatures of the Mayor, City Manager and City Clerk and City Attorney may be manual or facsimile signatures imprinted or reproduced thereon. There shall be a Certificate of Authentication of the Bond Registrar on the Bonds, and no Bond shall be valid or obligatory for any purpose or be entitled to any security or benefit under the provisions of this Ordinance unless such certificate shall have been duly executed on such Bond. The authorized signature for the Bond Registrar shall be either manual or in facsimile, provided, however, that at least one of the above signatures, including that of the authorized signature for the Bond Registrar, appearing on the Bonds shall be a manual signature. In case any one or more of the officers who shall have signed or sealed any of the Bonds shall cease to be such officer of the City before the Bonds so signed and sealed shall have been actually sold and delivered, such Bonds may nevertheless be sold and delivered as herein provided and may be issued as if the person who signed or sealed such Bonds had not ceased to hold . such office. Any Bond may be signed and sealed on behalf of the City by such person as at the actual time of the execution of such Bond shall hold the proper office in the City, although at the date of such Bonds such person may not have held such office or may not have been so authorized. • SECTION 2.05. NEGOTIABILITY AND REGISTRATION. The Bonds shall be and have all the qualities and incidents of negotiable instruments under the Uniform Commercial Code - Investment Securities Laws of the State of Florida, and each successive Registered Owner, in accepting any of said Bonds shall be conclusively deemed to have agreed that the Bonds shall be and have all of the qualities and incidents of such negotiable instruments. There shall be a Bond Registrar, who may also be the paying agent for the Bonds, which shall be a bank or trust company located within or without the State of Florida. The Bond Registrar shall be responsible for maintaining the books for the registration of the transfer and exchange of the Bonds. The City and the Bond Registrar may treat the Registered Owner of any Bond as the absolute owner thereof for all purposes, whether or not such Bond shall be overdue, and shall not be bound by any notice to the contrary. 18 All Bonds presented for transfer, exchange, redemption or payment (if so required by the City or the Bond Registrar) shall be accompanied by a written instrument or instruments of transfer or authorization for exchange, in form and with guaranty of signature satisfactory to the City or the Bond Registrar, duly executed by the Registered Owner or by his duly authorized attorney. The Bond Registrar may charge the Registered Owner a sum sufficient to reimburse it for any expenses incurred in making any exchange or transfer after the first such exchange or transfer following the initial delivery of the Bonds. The Bond Registrar or the City may also require payment from the Registered Owner or his transferee, as the case may be, of a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto. Such charges and expenses shall be paid before any such new Bonds shall be delivered. . The City and the Bond Registrar shall not be required (a) to issue, transfer or exchange any Bonds during a period beginning at the opening of business on the 15th day next preceding either any Interest Payment Date or any date of selection of Bonds or parts thereof to be redeemed and ending at the close of business on the Interest Payment Date or day on which the applicable notice of redemption is given, or (b) to transfer or exchange any Bonds selected, called or being called for redemption in whole or in part. New Bonds delivered upon any transfer or exchange shall be valid obligations of the City, evidencing the same debt as the Bonds surrendered, shall be secured by this Ordinance, and shall be entitled to all of the security and benefits hereof to the same extent as the Bonds surrendered. The City may elect to use a book -entry or immobilization system for issuance and registration of the Bonds, and the details of any such system shall be as fixed by subsequent resolution of the Board adopted prior to the time of issuance of the Bonds. Whenever any Bond shall be delivered to the Bond Registrar for cancellation, upon payment of the principal amount thereof, or for replacement, transfer or exchange, such Bond shall be cancelled and destroyed by the Bond Registrar, and counterparts of a certificate of destruction evidencing such destruction shall be furnished to the City. SECTION 2.06. BONDS MUTILATED, DESTROYED, STOLEN OR LOST. In case any Bond shall become mutilated or be destroyed, stolen or lost, the Bond Registrar may in its discretion issue and deliver a new Bond, of like tenor as the Bond, so mutilated, destroyed, stolen or lost, either in exchange and substitution for such mutilated Bond upon surrender and cancellation of such 19 mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon the Registered Owner's furnishing the Bond Registrar proof of his ownership thereof, furnishing satisfactory indemnity in favor of both the City and the Bond Registrar, complying with such other reasonable regulations and conditions as the Bond Registrar and City may prescribe, and paying such expenses as the City may incur. All Bonds so surrendered shall be cancelled. If any such Bond shall have been matured or be about to mature, instead of issuing a substitute Bond, the Bond Registrar may pay the same, upon compliance with the foregoing conditions and requirements. Any such duplicate Bonds issued pursuant to this section shall constitute original, additional contractual obligations on the part of the City, whether or not any lost, stolen or destroyed Bonds are found and shall be entitled to equal and proportionate benefits and rights with all other Bonds issued hereunder as to lien on and source and security for payment from the Pledged Revenues. SECTION 2.07. TEMPORARY BONDS. Until Bonds in definitive form of any series are ready for delivery, the City may execute, and upon its request in writing, the Bond Registrar shall authenticate and deliver in lieu of any thereof, and subject to the same provisions, limitations and conditions, one 49 or more printed, lithographed or typewritten Bonds in temporary form, substantially of the tenor of the Bonds hereinbefore described and with appropriate omissions, variations and insertions. The Bonds in temporary form will be in such principal amounts as the City shall determine. Until exchanged for Bonds in definitive form, such Bonds in temporary form shall be entitled to the lien and benefit of this Ordinance. The City shall, without unreasonable delay, prepare, execute and deliver to the Bond Registrar and thereupon, upon the presentation and surrender of the Bonds in temporary form to the Bond Registrar the Bond Registrar shall authenticate and deliver, in exchange therefor, a Bonds of the same maturity, in definitive form in the authorized denominations, and for the same aggregate principal amount, as the Bonds in temporary form surrendered. The expense of such exchange shall be paid by the City and there shall be made no charge therefor to any Registered Owner. SECTION 2.08. BOND ANTICIPATION NOTES. In anticipation of the delivery of the Bonds of any series and receipt of the proceeds thereof, the City may issue Bond Anticipation Notes, in the aggregate principal amount or original issuance not to exceed the aggregate principal amount of such Bonds authorized. Any Bond Anticipation Notes shall be considered to be Subordinate Bonds for the purposes of, and shall be entitled to the benefits and protections of this Ordinance, junior and subordinate to the 20 . rights of the Registered Owners of any outstanding Bonds. Provisions regarding the form of such Bond Anticipation Notes and the security for any Bond Anticipation Notes shall be set forth in a separate resolution of the Commission adopted at or prior to the time of sale of such Bond Anticipation Notes. SECTION 2.09. PROVISIONS FOR REDEMPTION. The Bonds may be redeemable, by operation of the Bond Amortization Account or at the option of the City, as provided by subsequent resolution of the Commission adopted prior to the delivery of the Bonds. Interest shall cease to accrue on any Bonds duly called for prior redemption on the redemption date, if payment thereof has been duly provided. Not more than sixty (60) days or less than thirty (30) days prior to the redemption date, notice of such redemption (i) shall be published in a financial journal published in the Borough of Manhattan, City and State of New York, (ii) shall be filed with the Bond Registrar, and (iii) shall be mailed, postage prepaid, to all Registered Owners of Bonds to be redeemed at their addresses as they appear on the registration books hereinabove provided for. Such notice shall be dated and shall state (a) the redemption date, (b) the redemption price, (c) the identification and respective principal amount of Bonds to be redeemed, if less than all Bonds are to be redeemed, (d) the place where the Bonds are to be surrendered for payment of the redemption price and (e) that on the redemption date the redemption price will become due and payable under any Bond or portion thereof called for redemption and (II) interest on each such Bond shall cease to accrue from and after such date. In addition to the foregoing notice, further notice shall be given as set out below, but no defect in any such notice nor any failure to give all or any portion of any notice shall in any manner defeat the effectiveness of a call for redemption with respect to an Owner as to which notice is given as prescribed above. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus: (i) the date of original execution and delivery of the Bonds; (ii) the rate of interest borne by each Bond being redeemed; (iii) the maturity date of each Bond being redeemed; and (iv) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption shall be sent at least 30 days before the redemption date by registered or certified mail or overnight delivery service (at the expense of the addressee) to all registered securities depositories then in the business of holding substantial amounts of obligations of types such as the Bonds (such depositories now being The • Depository Trust Company of New York, New York, Midwest 21 • • Securities Trust Company of Chicago, Illinois, and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania) and to one or more national information services that disseminate notices of redemption of obligations such as the Bonds (such as Financial Information, Inc.'s Financial Daily Called Bond Service, Interactive Data Corporation's Bond Service, Kenny Information Service's Called Bond Service and Standard & Poor's Called Bond Record). SECTION 2.10. FORM OF BONDS. The text of the Bonds shall be in substantially the form of Exhibit A hereto, with such omissions, insertions, and variations as may be necessary and desirable, and as may be authorized or permitted by this Ordinance or by subsequent resolution adopted prior to the issuance thereof. 22 ARTICLE III BONDS NOT GENERAL OBLIGATION OF CITY; PLEDGE OF REVENUES AND APPLICATION THEREOF SECTION 3.01. BONDS NOT GENERAL OBLIGATION OR INDEBTEDNESS OF CITY. Neither the Bonds nor the interest thereon shall be or constitute a general indebtedness of the City as "bonds" within the meaning of any constitutional, statutory, charter or code provision or limitation, but shall be special obligations of the City, the principal of, premium, if any, and interest on which are payable solely from the Pledged Revenues as herein provided. No Registered Owner or Owners of any Bonds issued hereunder shall ever have the right to require or compel the exercise of the ad valorem taxing power of the City, the State of Florida or any political subdivision thereof, or taxation in any form of any property of or in the City, the State of Florida or any political subdivision thereof, to pay the Bonds or the interest thereon. SECTION 3.02. BONDS SECURED BY PLEDGED REVENUES. The payment of the principal of, premium, if any, and interest on all of the Bonds issued hereunder shall be secured forthwith equally and ratably with the other Bonds by a first lien upon and pledge of the Pledged Revenues. The Pledged Revenues, in an amount sufficient both to pay the principal of and interest on the Bonds herein authorized and to make the payments into the Reserve Account and Sinking Fund and all other payments provided for in this Ordinance are hereby irrevocably pledged in the manner stated herein to the payment of the principal of, premium, if any, and interest on the Bonds herein authorized as the same become due; provided that said pledge and lien may be released and extinguished by defeasance as provided in Section 6.04 hereof. SECTION 3.03 CREATION OF FUNDS AND ACCOUNTS. There are hereby created and established the following funds and accounts: the Water and Sewer Refunding Revenue Bonds Revenue Fund, hereinafter referred to as the "Revenue Fund"; the Water and Sewer Refunding Revenue Bonds Sinking Fund, hereinafter called the "Sinking Fund", together with the subaccounts therein to be known as the "Bond Amortization Account" (together with any subaccounts therein), the "Reserve Account" and the "Redemption Account"; the Water and Sewer Refunding Revenue Bonds Operation and Maintenance Fund, hereinafter referred to as the "Operation and Maintenance Fund"; the water and Sewer Refunding Revenue Bonds Renewal, Replacement and Improvement Fund, hereinafter referred to as the "Renewal, Replacement and Improvement Fund"; the System Capital Facilities Charges Fund, hereinafter referred to as the "Capital Facilities Charges Fund," together with a separate account therein for the Atlantic Beach System, the Buccaneer System and the Oak Harbor System, as well as separate • 23 -- -. . ennI /SAI • subaccounts therein to segregate water and sewer Capital Facilities Charges; and the Sewer Facilities Sewer Generation �� Charges Fund, hereinafter referred to as the Sewer Generation Charges Fund. A. SEGREGATION OF FUNDS. ' The Funds and Accounts created and established above and any other special funds and accounts created and established by this Ordinance shall constitute trust funds for the purposes provided herein for such Funds and Accounts, and shall be kept separate and distinct on the books of the City from all other funds of the City and used only for the purposes and in the manner herein provided. All such Funds and Accounts shall be continuously secured in the same manner as municipal deposits are authorized to be secured by the laws of the State of Florida. B. MAINTENANCE OF FUNDS AND ACCOUNTS. The cash required to be accounted for in each of the Funds and Accounts established herein may be deposited in a single bank account, provided that adequate governmental accounting records are maintained to reflect and control the restricted allocation of the cash on deposit therein for the various purposes of such Funds and Account. The designation and establishment of the various Funds and Accounts in and by this Ordinance shall not be construed to require the establishment of any completely independent, self -balancing funds, as such term is commonly defined and used in governmental accounting practices, but rather is intended solely to constitute an earmarking of Revenues and certain assets of the System for certain purposes and to establish certain priorities for application of such Revenues and assets as herein provided. SECTION 3.04. APPLICATION OF PLEDGED REVENUES. For as long as any of the principal of and interest on any of the Bonds shall be outstanding and unpaid or until (a) there shall have been set apart in the Sinking Fund, herein established, including the Reserve Account and Bond Amortization Account, a sum sufficient to pay when due the entire principal of the Bonds remaining unpaid, together with the premium, if any, with respect thereto, and the interest accrued or to accrue thereon, or (b) provision for payment of the Bonds shall have been made in accordance with the terms of Section 6.04 of this Ordinance and the Bonds shall have been defeased, the City covenants with the Registered Owners of any and all Bonds as follows: A. REVENUE FUND. Revenues shall be deposited as received in the Revenue Fund and shall be disposed of on or before the 25th day of each month, commencing in the month immediately following the delivery of the Bonds, only in the following manner and in the following order of priority. 24 B. OPERATION AND MAINTENANCE FUND. Revenues shall . first be deposited into the Operation and Maintenance Fund in such sum as is necessary for the Cost of Operation and Maintenance for the next ensuing month as determined by the City Manager of the City, or his designee. C. SINKING FUND. Revenues shall next be applied and allocated to the Sinking Fund in such sums as will be sufficient to pay one sixth (1/6th) of all interest becoming due on the Current Interest Paying Bonds on the next semiannual interest payment date therefor, plus the amount of any prior deficiencies (if Bonds with a variable rate of interest are outstanding, the City shall deposit in lieu of the one sixth (1/6th) interest deposit described above, the interest actually accruing on such Bonds for such month, assuming the interest rate thereon on the first day of such month will continue through the end of such month, plus any deficiencies in interest deposits for the preceding month); 1/6th or 1/12th, as the case may be, of all principal maturing on the Current Interest Paying Serial Bonds on the next maturity date, plus the amount of any prior deficiencies; and 1/6th or 1/12, as the case may be, of the Maturity Amount next becoming due on any Serial Capital Appreciation Bonds whether by reason of maturity or earlier redemption thereof, plus the amount of any prior deficiencies; and an amount sufficient to pay the fees and charges of the Bond Registrar and paying agent. In the event the first interest payment date or first principal maturity date shall occur either more or less than 6 months or 12 months, as the case may be, after the delivery of any of the Bonds, then the payments required above shall be adjusted accordingly to provide for the payment of such principal and interest. Credit shall be allowed against the required deposit amounts due as prescribed in this paragraph C and the immediately succeeding paragraph D for the payment of principal of, interest on and Amortization Installment of the Bonds to the extent of any other funds on deposit and available for such purpose in the applicable account of the Sinking Fund, including amounts of Sewer Generation Charges and Capital Facilities Charges as may have been pledged for such payment, capitalized interest and any investment income, which amounts shall have been transferred into the Sinking Fund or account therein and available for such purposes. D. BOND AMORTIZATION ACCOUNT. On a parity with the deposits required by the preceding paragraph, Revenues shall simultaneously be applied and allocated to the Bond Amortization Account, to the extent required, in such sums as will be equal to 1/12th of the Amortization Installment required to be made on the next annual payment date for Term Bonds, plus the amount of any prior deficiencies. Such allocations shall be credited to a separate special account for each series of Term Bonds • 25 �.cn i.mm �cnn� lase outstanding, and if there shall be more than one stated maturity for Term Bonds of a series, then into a separate special account in the Bond Amortization Account for each such separate maturity of Term Bonds. Upon the sale of any Term Bonds, the City shall, by resolution of the Commission, establish the amounts and maturities of such Amortization Installments, and if there shall be more than one maturity of Term Bonds, the Amortization Installments for the Term Bonds of each maturity. Money held for the credit of the Bond Amortization Account shall be applied to the redemption or open market purchase (at not exceeding the price of par and accrued interest) of Term Bonds in accordance with the mandatory redemption provisions and/or the schedule of Amortization Installments for such Term Bonds. Amortization Installments for any Term Bonds shall be reduced on a reasonably proportionate basis to the extent that such Term Bonds are purchased in the open market. The City shall pay from the Sinking Fund all expenses in connection with such purchase or redemption. E. RESERVE ACCOUNT. Revenues shall next be applied by the City to maintain in the Reserve Account a sum equal to the Reserve Account Requirement. Such sum shall initially be deposited therein either (1) from the proceeds of sale of the Bonds, (2) from the money in the reserve accounts for any of the 41 Refunded Bonds or (3) from a combination of the foregoing. Any withdrawals from the Reserve Account shall be restored within 12 months by depositing therein an amount equal to 1/12th of such withdrawal. No further payments shall be required to be made into the Reserve Account when there has been deposited therein and as long as there shall remain on deposit therein a sum equal to the Reserve Account Requirement. with respect to all funds and accounts except the Reserve Account, valuation shall occur annually. Authorized Investments in the Reserve Account shall be valued semiannually, except in the event of a withdrawal from the Reserve Account, whereupon they shall be valued immediately after such withdrawal and monthly thereafter until the Reserve Account is at its required level. If amounts on deposit in the Reserve Account shall be less than the applicable requirement, the Credit Facility Issuer, if any, shall be notified immediately of such deficiency, and such deficiency shall be made up over a period of not more than four months, in four (4) substantially equal payments in the event such deficiency results from a decrease in the market value of the Authorized Investments on deposit in the Reserve Account. Notwithstanding the foregoing, the City shall not be required to fully capitalize the Reserve Account on the date of issuance of the Series 1990 Bonds from proceeds of the sale of 40 the Series 1990 Bonds, or from money in the reserve accounts for C� any of the Refunded Bonds, if it provides on the date of issuance of the Series 1990 Bonds, in form and substance acceptable to the Credit Facility Issuer (if applicable) (1) a Reserve Account Credit Facility issued by a reputable and recognized municipal bond insurer whose insurance policies generally result in insured issues being rated in the highest rating category by either S&P or Moody's, or (2) a letter of credit issued by any bank or national banking association insured by FDIC whose own debt securities are rated "AA" or the equivalent or better by either of the above rating agencies, in an amount equal to the difference between the Reserve Account Requirement and the amount otherwise deposited therein. At any time after the issuance of any Bonds, the City may, in its discretion, withdraw the amount of money on deposit in the Reserve Account and substitute in its place, a Reserve Account Credit Facility in form and substance acceptable to the Credit Facility Issuer or, if there is no Credit Facility, which otherwise meets the requirements for Reserve Account Credit Facilities set forth in the immediately preceding paragraph, in the face amount of such withdrawal, and deposit the surplus money so withdrawn into a construction fund which may hereafter be created by subsequent ordinance or resolution authorizing Additional Parity Bonds or into the Sinking Fund. Any repayments from Revenues for amounts drawn and/or received from a Reserve Account Credit Facility shall be made in the order of priority and otherwise pursuant to this Section 3.04. Money in the Reserve Account shall be used only for the purpose of the payment of maturing Amortization Installments or principal of or interest on the Bonds when the other money allocated to the Sinking Fund (other than the Reserve Account) is insufficient therefor, and for no other purpose. However, if and whenever the money applied and allocated to the Reserve Account exceeds the Reserve Account Requirement on all then outstanding Bonds, such excess shall be withdrawn and deposited into the Sinking Fund. F. COMPLETION OF FUNDING REQUIREMENT. The City shall not be required to make any further applications or allocations to the Sinking Fund (including the Bond Amortization Account and the Reserve Account therein) as long as the aggregate sums applied and allocated thereto are and remain at least equal to the sum of all of the annual Debt Service Requirements then due and becoming due in all ensuing years for the Bonds then outstanding, plus the amount of redemption premiums, if any, then due and thereafter to become due on the Bonds then outstanding by operation of the Bond Amortization Account. 27 G. RENEWAL, REPLACEMENT AND IMPROVEMENT FUND. Revenues shall next be applied and allocated to the Renewal, Replacement and Improvement Fund in an amount sufficient to provide an annual aggregate deposit therein equal to five percent (5%) of Gross Revenues.The money in the Renewal, Replacement and Improvement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to, or the replacement of capital assets of the System or for unusual or extraordinary repairs thereto, except that the money in such Fund shall first be used to supplement the Reserve Account whenever necessary to prevent a default in the payment of principal, Amortization Installments and interest on the Bonds, and to restore any deficiency in the Reserve Account. Notwithstanding the foregoing, the City shall not be required to make any deposit to the Renewal, Replacement and Improvement fund if at such time the amount then on deposit in the Renewal, Replacement and Improvement Fund shall be at least $500,000. H. BALANCE OF REVENUES. Thereafter the balance of any Revenues remaining after the above required payments (including deficiencies for prior payments) have been made may be used by the City for any lawful purpose. I. OPERATION OF CAPITAL FACILITIES CHARGES FUND; ADDITIONAL PLEDGE OF CAPITAL FACILITIES CHARGES. All Capital Facilities Charges shall immediately upon receipt thereof be deposited into the appropriate subaccounts in the Capital Facilities Charges Fund and shall be used only for the purpose of paying the cost of acquiring or constructing Expansion Facilities or Capital Facilities Charges Debt Service Components, if applicable. The payment of the principal of, premium, if any, and interest on any series of Bonds may additionally be secured by a pledge of and lien upon applicable Capital Facilities Charges collected by the City to the extent permitted by applicable law. If such Capital Facilities Charges shall be approved and the pledge thereof to pay any series or installment of Bonds provided for by the City, the City covenants to collect and deposit the Annual Capital Facilities Charges Debt Service Requirement and related earnings into the Sinking Fund established for any series of Bonds to which such Capital Facilities Charges Debt Service Component is pledged, but in no event shall such transfers in the aggregate exceed the applicable Capital Facilities Charges Debt Service Component. J. OPERATION OF SEWER GENERATION CHARGES FUND; ADDITIONAL PLEDGE OF SEWER GENERATION CHARGES. All Sewer Generation Charges shall immediately upon receipt thereof be deposited into the appropriate subaccounts in the Sewer Generation Charges Fund and shall be used only for the purpose of paying the cost of acquiring or constructing Sewer Facilities or 40 Sewer Generation Charges Debt Service Components, if applicable. 28 .......1 1 1-7 I. A A The payment of the principal of, premium, if any, and interest on any series of Bonds may additionally be secured by a pledge of and lien upon applicable Sewer Generation Charges collected by the City to the extent permitted by applicable law. If such Sewer Generation Charges shall be approved and the pledge thereof to pay any series of Bonds provided for by the City, the City covenants to collect and deposit the Annual Sewer Generation Charges Debt Service Requirement and related earnings into the Sinking Fund established for any series of Bonds to which such Sewer Generation Charges Debt Service Component is pledged, but in no event shall such transfers in the aggregate exceed the applicable Sewer Generation Charges Debt Service Component. K. INVESTMENT OF MONEYS AND DISPOSITION OF INVESTMENT INCOME. Revenues on deposit in the Revenue Fund, the Operation and Maintenance Fund, the Sinking Fund (excluding the Reserve Account therein), the Renewal, Replacement and Improvement Fund, the Sewer Generation Charges Fund, the Capital Facilities Charges Fund and the Construction Fund may be invested and reinvested only in Authorized Investments maturing not later than the date on which the money therein will be needed. The Revenues in the Reserve Account may be invested and reinvested in Authorized Investments, provided such investments mature not later than five years from the date of purchase. Any and all income received by the City from such investments of Revenues in the above Funds and Accounts (excluding the Reserve Account and the Construction Fund) shall be deposited into the Sinking Fund. Income received from the investment of money on deposit in the Reserve Account shall remain in the Reserve Account unless it is fully funded, in which case such income shall be deposited into the Sinking Fund on the next business day following the receipt thereof. Income received from the investment of money on deposit in the Construction Fund shall remain on deposit therein pending completion of the Project, and thereafter shall be deposited into the Sinking Fund. Income received from the investment of money on deposit in the Sewer Generation Charges Fund and the Capital Facilities Charges Fund shall be retained in said funds until applied for the purposes of such funds. All investments of money on deposit from time to time in the Funds and Accounts created and established by this Resolution, including the United States Obligations specified in Section 6.06 below, shall be valued at the cost thereof. SECTION 3.05 UNCLAIMED MONEY. Notwithstanding any provisions of this Ordinance, any money held by the paying agent for the payment of the principal or redemption price of, or interest on, any Bonds and remaining unclaimed for 1 year after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption), if such money were so held at such date, or 1 year after the date of deposit of such money if deposited after such date when all of the Bonds became due and payable, shall be repaid to the City free from the • 29 1 t provisions of this Ordinance, and all liability of the paying agent with respect to such money shall thereupon cease; provided, however, that before the repayment of such money to the City as aforesaid, the City first publish at least once in a financial newspaper or journal published and/or of general circulation in New York, New York, a notice, in such form as may be deemed appropriate by the City with respect to the Bonds so payable and not presented, and with respect to the provisions relating to the repayment to the City of the money held for the payment thereof. 7-A IIMT I Knn9 /Esd 30 ARTICLE IV . APPLICATION OF BOND PROCEEDS; REDEMPTION OF OUTSTANDING BONDS SECTION 4.01. APPLICATION OF BOND PROCEEDS. All moneys received from the sale of any or all of the Series 1990 Bonds originally authorized and issued pursuant to this Ordinance, shall be disbursed as follows: (A) Accrued interest received upon the delivery of the Series 1990 Bonds shall be deposited into the Sinking Fund and applied to the interest coming due on the Series 1990 Bonds on the first Interest Payment Date. (B) A sum which, together with other legally available funds of the City (including a Credit Facility) shall be deposited in the Reserve Account, in an amount equal to the Reserve Account Requirement for the Series 1990 Bonds. (C) To the extent not paid or reimbursed therefor by the original purchaser of the Series 1990 Bonds, the City shall pay all costs and expenses in connection with the preparation, issuance and sale of the Bonds, including bond insurance and bond reserve insurance, if applicable. (D) A sum specified in the Escrow Deposit Agreement which, together with the other funds described in the Escrow Deposit Agreement to be deposited in escrow, and together with the investment income thereon, will be sufficient to pay the principal of, interest and redemption premiums, if any, as applicable, on the Refunded Bonds as the same shall become due or may be redeemed, shall be deposited into the Escrow Account established by the Escrow Deposit Agreement in the respective amounts sufficient for such purposes. Simultaneously with the delivery of the principal amount of Series 1990 Bonds necessary to accomplish the refunding program specified in this Ordinance, the City shall enter into the Escrow Deposit Agreement which shall provide for the deposit of sums into the Escrow Account established therein, and for the investment of such money in appropriate United States Obligations so as to produce sufficient funds to make all of the payments described in the first paragraph of this Section 4.01D. At the time of execution of the Escrow Deposit Agreement, the City shall furnish to the escrow holder named therein appropriate documentation to demonstrate that the sums being deposited and the investments to be made will be sufficient for such purposes. (E) All such proceeds disbursed in accordance with this Section 4.01 shall be and constitute trust funds for such purposes and, to the extent not required to be rebated to the 40 United States Treasury, there is hereby created a lien in favor 31 —n /RMT i cnn-5 isae • • • of the Owners of the Series 1990 Bonds upon such money until so applied. Once money is deposited in Escrow Agreement 1990 Bondholder's have no lien on it. SECTION 4.02. REDEMPTION shall call for prior redemption Bonds, if any, specified in Commission adopted at or prior to 1990 Bonds. OF REFUNDED BONDS. The City the portions of the Refunded subsequent resolution of the the time of sale of the Series 32 ARTICLE V COVENANTS OF THE CITY REMEDIES SECTION 5.01. COVENANTS OF THE CITY. So long as any of the principal of, premium, if any, or interest on any of the Bonds shall be outstanding and unpaid, or until there shall have been set apart in the Sinking Fund and the accounts therein, a sum sufficient to pay, when due, or to redeem prior to maturity, the entire principal of the Bond remaining unpaid, together with interest accrued and to accrue thereon, the City covenants with the Registered Owners of any and all of the Bond issued pursuant to this Ordinance as follows: (A) RATE COVENANT. The City will fix, establish and maintain such rates and collect such fees, rentals, or other charges for the services and facilities of the System, and will revise the same from time to time whenever necessary, so as to provide (i) Revenues in each Fiscal Year, equal to one hundred percent (100%) of (a) the Operating Expenses of the System for such year, (b) the required deposits into the Reserve Account, the Renewal, Replacement and Improvement Fund, in such year, and (c) the Debt Service Requirement on the Bonds in such year; and (ii) Net Revenues in each Fiscal Year equal to one hundred ten percent (110%) of the Debt Service Requirement on the Bonds in such year. (B) OPERATION AND MAINTENANCE. The City will maintain the System and all parts thereof in good condition, and will operate the same in an efficient and economical manner, making such expenditures for equipment and for renewal, repair and replacement as may be proper for the economical operation and maintenance thereof and, subject to the provisions of this Ordinance, will continuously operate the System as a revenue producing enterprise of the City until all of the Bonds and the interest thereon, are finally paid and retired, or until the Bonds have been defeased in accordance with the provisions hereof. (C) INSPECTION AND REPORT. The City will cause the Facilities of the System to be inspected by the Independent Consultants in accordance with prudent water and wastewater system utility practice. (D) INSURANCE. The City will carry such insurance as is ordinarily carried by private corporations owning and operating Facilities similar to the System with a reputable insurance carrier or carriers, including liability insurance, for which the City may be a self -insurer, and insurance against loss or damage by fire, explosion, hurricane, earthquake, cyclone, occupancy or other hazards and risks, and said property loss or • damage insurance shall at all times be in an amount or amounts 33 equal to the fair appraisal value of the buildings, properties, furniture, fixtures and equipment of the System. In time of war, the City shall also carry in said amount such insurance as may be available against loss or damage by the risks and hazards of war. (E) BOOKS AND RECORDS. ' The City will keep books and records of the System, which shall be separate and apart from all other books, records and accounts of the City, and in which complete and correct entries shall be made in accordance with standard principles of governmental accounting of all transactions relating to the System; any Registered Owner of Bonds issued pursuant to this Ordinance shall have the right at all reasonable times to inspect the System and all parts thereof, and all records, accounts and data of the City relating thereto. The City shall, within 180 days after the close of each Fiscal Year, cause the books, records and accounts of the System for such preceding Fiscal Year to be properly audited by the Independent Certified Public Accountants, and shall file with the City such report which shall cover in reasonable detail the operation of the System and the insurance carried with respect thereto. The City shall mail upon written request, and make available generally, said report, or a reasonable summary thereof, to any Registered Owner of Bonds issued pursuant to this Ordinance. (F) SALE OF THE SYSTEM. The System may be sold, mortgaged, leased or otherwise disposed of only as a whole or substantially as a whole, and only if the net proceeds to be realized from such transaction shall be sufficient fully to retire all of the Bonds and all other obligations outstanding pursuant to the provisions of this Ordinance which have a lien on the Pledged Revenues. The proceeds from such sale, mortgage, lease or other disposition of and shall be used only for the purpose of paying the principal of and interest on the Bonds and other obligations outstanding pursuant to the provisions of this Ordinance as the same shall become due, or the redemption of callable Bonds, provided, however, that any excess of such proceeds not needed for such purpose may be used by the City for any purpose permitted by law. The foregoing provision not withstanding, the City shall have and hereby reserves the right to sell, lease or otherwise dispose of any of the property comprising a part of the System which may hereafter be determined in the manner provided herein to be no longer necessary, useful, or profitable in the operation thereof. Prior to any such sale, lease, or other disposition of said property the duly authorized officer in charge of such System shall make a finding in writing determining that such property comprising a part of said System is no longer necessary, useful, or profitable in the operation thereof. If the amount to be received as a result of such sale or other disposition is in excess of $5,000, such finding shall be 40 approved by resolution of the governing body of the City, and, if 34 the amount to be received 'as a result of such sale or other disposition is in excess of $25,000, such finding shall be approved by the Independent Consultant and by resolution of the governing body of the City. Any proceeds of such sale or other disposition shall be deposited in the Renewal Replacement and Improvement Fund created by this Ordinance and used only as provided herein for moneys on deposit in such fund. Such payment of such proceeds into said Renewal Replacement and Improvement Fund shall not reduce the amounts required to be paid into said fund by other provisions of this Ordinance. The foregoing provision notwithstanding, the City shall have and hereby reserves the right to sell, lease, or transfer operating control of, or otherwise dispose of, the property comprising the System as a whole to any public board or body, whether created by the City or created pursuant to the laws of the State, for the purpose of owning and operating the System, whether independent of or together with any other utility systems of the City. Any such transfer shall be expressly made subject to the rights of the Registered Owners of any Bonds issued hereunder, and in particular subject to the lien upon the Pledged Revenues of the Bond. Additionally, notwithstanding the foregoing provisions, the City is authorized and empowered to combine and consolidate any portion of the System and to combine into and consolidate with the System any other water systems, sewer system, or ts combined utility, within or without the City, whether acquired or constructed by the City, and after such combination and consolidation, such systems shall thereafter be deemed to be part of the System, to the extent not previously a part of the System and subject to the provisions of this Ordinance. (G) ISSUANCE OF OTHER OBLIGATIONS PAYABLE OUT OF REVENUES. The City will not issue any other obligations, except Additional Parity Bonds hereafter issued under the conditions and in the manner provided herein, payable from the Pledged Revenues nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or any other charge having priority to or being on a parity with the lien of the Bonds issued pursuant to this Ordinance and the interest thereon, upon any of the Pledged Revenues. Any other obligations issued by the City, in addition to the Bonds authorized by this Ordinance or Additional Parity Bonds provided for in Subsection 5.01(H) below, shall contain an express statement that such obligations are junior, inferior, and subordinate in all respects to the Bonds issued pursuant to this Ordinance and any such Additional Parity Bond as to lien on and source and security for payment from the Pledged Revenues, and in all other respects. (H) ISSUANCE OF ADDITIONAL PARITY BONDS. No Additional Parity Bonds shall be issued after the issuance of any Bonds • pursuant to this Ordinance, except upon the following terms and conditions: tE Additional Parity Bonds payable from the Pledged Revenues may be issued by the City (i) for the purposes of financing the construction and acquisition of additions, extensions and improvements to the System only if the requirements of either (1) or (2) below have been met (as evidenced by the certificate of an Independent Consultant or Independent Certified Public Accountant). (1) Adjusted Net Revenues during the Computation Period (exclusive of Capital Facility Charges and Sewer Generation Charges) shall have at least equalled the sum of: (i) one hundred ten percent (110%) of the Debt Service Requirement for the then current Bond Year on all Bonds to be Outstanding as of the date of such issuance; plus (ii) amounts, if any, required to be deposited in the Reserve Account during such Computation Period (less any portion thereof which is to be deposited from proceeds of Bonds) and any amounts due to a Reserve Account Credit Facility Issuer payable in such Computation Period; plus (iii) amounts required to be deposited in the Renewal, Replacement and Improvement Account during tssuch period. (2) Adjusted Net Revenues for such Computation Period (inclusive of Capital Facilities Charges and Sewer Generation Charges) shall have equalled at least the sum of: (i) one hundred twenty percent (120%) of the Debt Service Requirement for the then current Bond Year on all Bonds to be Outstanding as of the date of such issuance; plus (ii) amounts, if any, required to be deposited in the Reserve Account during such Computation Period (less any portion thereof which is to be deposited from proceeds of Bonds) and any amounts due to a Reserve Account Credit Facility Issuer payable in such Computation Period; plus (iii) amounts required to be deposited in the Renewal, Replacement and Improvement Account during such period. For purposes of this Section 5.01(H), the term "Computation Period" shall mean (A) any twelve consecutive months of the twenty-four months immediately preceding the sale of the Additional Parity Bonds or (B) the most recent Fiscal Year of the • City. 36 Completion Bonds may be issued without any financial tests, provided that such Completion Bonds may be issued only in a principal amount not greater than fifteen percent (15%) of the principal amount of Bonds initially issued to fund the applicable capital Project, or may be issued without regard to the fifteen percent (15%) limitation upon the approval of the Credit Facility Issuer and delivery to the City of a certificate of an Independent Consultant stating that the proceeds of such Completion Bonds will be sufficient to complete the acquisition, construction and installation of such Project substantially in accordance with the plans and specifications therefor in effect at the time of issuance of the Bonds originally issued for such Project. Additional Parity Bonds payable from the Pledged Revenues may be issued by the City for refunding purposes without regard to the foregoing tests, provided that (1) the maximum Debt Service Requirement in any future Bond Year is not increased, and (2) the final maturity of the Bonds is not extended, as a result of such refunding. For purposes of this Subsection 5.01(G), the term "Adjusted Net Revenues" shall mean the Net Revenues, as set forth in a written certificate of the Certified Public Accountants, for the Computation Period specified in the preceding paragraph, adjusted by the Independent Consultant in the following manner: (1) In the event the City shall be constructing or acquiring additions, extensions and improvements to the System from the proceeds of such Additional Parity Bonds and shall have established rates, fees and charges to be charged and collected from the users of such facilities when service is rendered, such Net Revenues may be adjusted by adding thereto (a) in the case of acquisition of existing facilities, the actual amount of Net Revenues which the Independent Consultant certifies to have been collected from the customers of the existing system being acquired during the Computation Period, and (b) in the case of the construction of additions, extensions and improvements to the System, the amount of Net Revenues which the Independent Consultant estimates would have been received have such additions, extensions and improvements been completed and in operation during the Computation Period. (2) In the event that the City shall have increased the rates, fees and charges for the services and facilities of said System during the Computation Period immediately preceding the date of sale of such Additional Parity Bonds, or subsequent to the end of the Fiscal Year immediately preceding the sale of the additional Parity Obligations but prior to the date of sale of the Additional Parity Bonds, the Net Revenues may be adjusted by the Independent Consultant by adding thereto the additional Net Revenues which the Independent • 37 Consultant estimate would have been received from said System if such increased fees, rates or other charges had been in effect for said entire preceding Fiscal Year or Computation Period as applicable. No Additional Parity Bonds, shall be issued at any time, however, unless all of the payments into the respective funds provided for in this Ordinance on Bonds then outstanding, and all other Sinking Fund, Reserve Account or other payments provided for in this Ordinance, shall have been made in full to the date of issuance of said Additional Parity Bonds, and the City shall be in substantial compliance with all of the covenants, agreements and terms of this Ordinance. (I) NO FREE SERVICE OR PREFERENTIAL RATES. The City will not render or cause to be rendered any free services of any nature by the System, or any part thereof, nor will any preferential rates be established for users of the same class; in the event the City, or any department, agency, or instrumentality, or any officer or employee thereof, shall avail itself of the facilities or services provided by said System, or any part thereof, the same rates, fees, or charges applicable to other customers receiving like services under similar circumstances shall be charged to the City and to any such department, agency, instrumentality, officer, or employee. Such charges shall be paid as they accrue, and the City shall transfer from its general funds sufficient sums to pay such charges. The Revenues so received shall be deemed to be Revenues derived from the operation of the System, and shall be deposited and accounted for in the same manner as other Revenues derived from the operation of the System; provided, however, that this paragraph shall not require the City to have the same rates for users of the services and facilities of the System residing or located within different areas of the City, and the City may have different rates for users of the services and facilities of the System located outside the boundaries of the City, as long as such rates comply with this paragraph, insofar as they relate to the users within any particular area or areas located without the City. (J) ENFORCEMENT OF COLLECTIONS. The City will diligently enforce and collect all fees, rentals, or other charges for the services and facilities of the System and all parts thereof. The Commission will establish written policies regarding the enforcement of collections of such fees, rentals, and other charges and take all steps, actions and proceedings for the enforcement or collection of such fees, rentals or other charges to the full extent permitted or authorized by law, consistent with such reasonable policy. The City will, to the full extent permitted by law and consistent with such reasonable policy, shut off and • discontinue the supplying of the services and facilities of the System for the nonpayment of fees, rentals, or other charges for W r� such services, and will not restore said services until all delinquent charges, together with interest and reasonable penalties, have been paid in full. (K) USE OF SYSTEM. The City will, to the full extent permitted by law, require all persons, lands, buildings, and structures located within the service area of the System or which can use the facilities and services of the System to connect with and use the facilities and services of the System and will cease all other means and methods for the supply of water and the collection, purification, treatment and disposal of sewage and waste matter. (L) NO COMPETING FACILITIES. The City, to the extent permitted by law, will not grant any franchise, license, or permit, or cause or voluntarily agree to the granting of any franchise, license, or permit, for the construction or operation of any facilities which will be competitive with the services and facilities of the System; provided, however, that this subsection shall not affect the vested rights of any persons, firms, or corporations now owning or operating such facilities. Notwithstanding any other provisions of this Ordinance to the contrary, the City shall be authorized to construct or acquire non -competing systems providing products and services similar to those provided by the System in areas of the City geographically distinct from those of the System, and none of the revenues derived from such non -competing systems shall be deemed to be Revenues of the System pursuant to this Ordinance; provided, however, that if the City shall furnish products and services from the System to any non -competing systems, which the City is hereby authorized to do, at rates comparable to the rates charged to other customers served by the System, the cost of products and services so supplied shall be deemed to be an operating expense of such other non -competing systems and an amount of the revenues derived from said other non -competing systems, which shall not be less than the cost of such products and services shall be transferred from the revenues of said non - competing systems and deposited in the Revenue Fund created herein, and shall be deemed to be Revenues derived from the operation of the System as fully and to the same extent as other Revenues derived from the operation of the System. (M) TAX COMPLIANCE. The City will take all actions and do all things necessary or desirable in order to maintain the exclusion from gross income for federal income tax purposes of interest on the Bonds, to the same extent as such existed on the date of issuance thereof, under the provisions of the Code. 39 SECTION 5.02. REMEDIES. Any Registered Owner of Bonds issued under the provisions of this Ordinance, or any trustee acting for such Registered Owners in the manner hereinafter provided, may, either at law or in equity, by suit, action, mandamus, or other proceedings, in any court of competent jurisdiction, protect and enforce any and all rights, either under the laws of the State of Florida or granted and contained in this Ordinance and may enforce and compel the performance of all duties required by this Ordinance or by any applicable statutes to be performed either by the City or by any officer thereof, including the fixing, charging, and collecting of rates, fees or other charges for the services and facilities of the System. In the event that (i) default shall be made in the payment of the interest on or the principal of any of the Bonds issued pursuant to this Ordinance as the same become due, or in the making of the payments into the Sinking Fund or the Reserve Account or any other payments required to be made by this Ordinance; or (ii) the City or any officer, agent, or employee thereof shall fail or refuse to comply with provisions of this Ordinance, or shall default in any covenant made herein, and any such default shall continue for a period of thirty (30) days after the giving of notice thereof to the City; the Registered Owners of not less than twenty-five percent (25%) in aggregate principal amount of Bonds outstanding, or any trustee appointed to represent Registered Owners as hereinafter provided, shall be entitled as of right to the appointment of a receiver of the System in an appropriate judicial proceeding in a court of competent jurisdiction, whether or not such Registered Owners or trustee is also seeking or shall have sought to enforce any other right or exercise any other remedy in connection with Bonds issued pursuant to this Ordinance. The receiver so appointed shall forthwith, directly or by his agents and attorneys, enter into and upon and take possession of the System, and each and every part thereof, and shall hold, operate and maintain, manage and control such System, and each and every part thereof, and in the name of the City shall exercise all the rights and powers of the City with respect to the System as the City itself might do. Such receiver shall collect and receive all Revenues and maintain and operate such System in the manner provided in this Ordinance, and comply, under the jurisdiction of the court appointing such receiver, with all of the provisions of this Ordinance. whenever all principal that is due upon Bonds issued pursuant to this Ordinance, together with interest thereon, and all payments required under any covenants of this Ordinance for reserve, sinking funds, or other funds, and all principal upon any other obligations, together with interest thereon, having a charge, lien or encumbrance upon the Pledged Revenues, shall have been paid and made good, and all defaults under the provisions of 40 this Ordinance shall have been cured and made good, possession of 40 the System shall be surrendered to the City upon the entry of an order of the court to that effect. Upon any subsequent default, any Registered Owner of Bonds issued pursuant to this Ordinance, or any trustee appointed for Registered Owners as hereinafter provided, shall have the right to secure the further appointment of a receiver upon any such subsequent default. Such receiver shall, in the performance of the powers hereinabove conferred upon him, be under the direction and supervision of the court making such appointment, shall at all times be subject to the orders and decrees of such court and may be removed thereby and a successor receiver appointed in the discretion of such court. Nothing herein contained shall limit or restrict the jurisdiction of such court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any function not specifically set forth herein. Any receiver appointed as provided herein shall hold and operate such System in the name of the City and the Registered Owners of Bonds issued pursuant to this Ordinance. Such receiver shall have no power to sell, assign, mortgage, or otherwise dispose of any assets of any kind or character belonging or pertaining to such System, but the authority of such receiver shall be limited to the possession, operation, and maintenance of the System for the sole purpose of the protection of both the City and said Registered Owners. The Registered Owners of Bonds in an aggregate principal amount of not less than twenty-five per centum (25%) of Bonds issued under this Ordinance then outstanding may, by a duly executed certificate in writing, appoint a trustee for Registered Owners of Bonds issued pursuant to this Ordinance with authority to represent such Registered Owners in any legal proceedings for the enforcement and protection of the rights of such Registered Owners. Such certificate shall be executed by such Registered Owners or their duly authorized attorneys or representatives, and shall be filed in the office of the City Clerk and with the Mayor. 41 • ARTICLE VI V MISCELLANEOUS PROVISIONS SECTION 6.01. SALE OF 1990 BONDS. The Series 1990 Bonds shall be issued and sold at public sale, private placement, or negotiated sale at one time or in installments from time to time and at such price or prices consistent with the provisions of the Act and the requirements of this Ordinance. SECTION 6.02. NOTICES TO CREDIT FACILITY ISSUER. whenever a Credit Facility Issuer shall be providing a Credit Facility with respect to any Bonds issued hereunder, such Credit Facility Issuer shall be entitled to receive and shall be provided by certified mail all notices and reports which are required herein to be prepared and to be sent or made available to Registered Owners of such Bonds. SECTION 6.03. DEFEASANCE. Notwithstanding the foregoing provisions of this Ordinance, if, at any time, the City shall have paid, or shall have made provision for payment of, the principal, interest and redemption premiums, if any, with respect to any Bonds, then, and in that event, the pledge of and lien on the Pledged Revenues in favor of the Registered Owners of such Bonds shall be no longer in effect. For purposes of the preceding sentence, deposit of United States Obligations in irrevocable trust with a banking institution or trust company, for the sole benefit of the Registered Owners of such Bonds, in respect to which such United States Obligations, the principal and interest received will be sufficient to make timely payment of the principal, interest, and redemption premiums, if any, on such outstanding Bonds designated to be defeased, shall be considered "provision for payment". Nothing herein shall be deemed to require the City to call any of the outstanding Bonds for redemption prior to maturity pursuant to any applicable optional redemption provisions, or to impair the discretion of the City in determining whether to exercise any such option for early redemption. SECTION 6.04. NO RECOURSE. No recourse shall be had for the payment of the principal of, premium, if any, and interest on the Bonds, or for any claim based thereon or on this Ordinance, against any present or former member or officer of the Commission or any person executing the Bonds. SECTION 6.05. MODIFICATION OR AMENDMENT. No material modification or amendment of this Ordinance or of any ordinance or resolution amendatory hereof or supplemental hereto, may be made without the consent in writing of the Registered Owners of fifty-one percent (51%) or more in principal amount of the Bonds 42 then outstanding, provided, however, that no modification or amendment shall permit a change in the maturity of such Bonds, a reduction in the rate of interest thereon, or a reduction in the amount of the principal obligation represented thereby; nor shall any modification or amendment either affect the unconditional promise of the City to pay the principal of and interest on the Bonds, as the same shall become due, from the Pledged Revenues, or reduce the percentage of Registered Owners of Bonds above required to consent to such material modifications or amendments, without the consent of the Registered Owners of all such Bonds; provided further, however, that no such modification or amendment shall allow or permit any acceleration of the payment of principal of or interest on the Bonds upon any default in the payment thereof whether or not the Registered Owners of the Bonds consent thereto. The City, from time to time and at any time and without the consent or concurrence of any Registered Owners of any Bonds, may adopt a resolution amendatory hereof or supplemental hereto, if the provisions of such supplemental resolution shall not adversely affect the rights of the Registered Owners of the Bonds then outstanding, for any one or more of the following purposes: (1) to make any changes or corrections in this Ordinance which the City shall have been advised by counsel are required for the purpose of curing or correcting any ambiguity or defect or inconsistent provision or omission or mistake or manifest error contained herein, or to insert in this Ordinance such provisions clarifying matters or questions arising hereunder as are necessary or desirable; (2) to add additional covenants and agreements of the City for the purpose of further securing the payment of the Bonds; (3) to surrender any right, power or privilege reserved to or conferred upon the City by the terms hereof; (4) to confirm by further assurance any lien, pledge or charge created or to be created by the provisions hereof; (5) to grant to or confer upon the Registered Owners any additional right, remedies, powers, authority or security that lawfully may be granted to or conferred upon them; (6) to assure compliance with the Code; (7) to provide such changes which, in the opinion of the City, based upon such certificates and opinions of the Independent Consultant , Independent Certified Public Accountant, Bond Counsel, Financial Advisors or other appropriate advisors as 40 43 —4A1ATr.l Ann?/ALA the City may deem necessary or appropriate, will not materially . adversely affect the security of the Registered Owners, including, but not limited to, such changes as may be necessary in order to adjust the terms hereof so as to facilitate the issuance of other types of obligations, including, but not limited to, bonds, notes, certificates, warrants or other evidences of indebtedness, which are Subordinated Bonds; 0 • (S) to modify any of the provisions of this Ordinance in any other respects, provided that such modification shall not be effective (a) with respect to the Bonds outstanding at the time such amendatory or supplemental resolution is adopted or (b) shall not be effective (i) until the Bonds outstanding at the time such amendatory or supplemental resolution is adopted shall cease to be outstanding, or (ii) until the Reaistered Owners thereof consent thereto. The foregoing provisions notwithstanding, (1) no consent of any Registered Owners shall be required with respect to modification or amendment with respect to Bonds as to which a Credit Facility is in place and to which modification or amendment the Credit Facility Issuer has provided its prior written consent and (2) no modification or amendment shall be effective with respect to any Bonds as to which a Credit Facility is effective without the prior written consent to such modification or amendment of the Credit Facility Issuer. SECTION 6.06. SEVERABILITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions of this Ordinance should be held to be contrary to any express provision of law or to be contrary to the policy of express law, though not expressly prohibited, or to be against public policy, or should for any reason whatsoever be held invalid, then such covenants, agreements, or provisions shall be null and void and shall be deemed separate from the remaining covenants, agreements, or provisions of, and in no way affect the validity of, all the other provisions of this Ordinance or of the Bonds. SECTION 6.07. REPEALING resolutions of the City, or parts provisions of this Ordinance are hereby superseded and repealed. 44 CLAUSE. All ordinances and thereof, in conflict with the to the extent of such conflict SECTION 6.08. EFFECTIVE DATE. This Ordinance shall take effect in the manner provided by law. PASSED on First Reading November 26, 1990. PASSED on Second Reading , 1990. Approved as to form, sufficiency and correctness: City Attorney ATTEST: City Clerk • IA&A /ATTA Ann?/LAd 45 Mayor/Presiding Officer • No. EXHIBIT A UNITED STATES OF AMERICA STATE OF FLORIDA CITY OF ATLANTIC BEACH, FLORIDA WATER AND SEWER REFUNDING REVENUE BONDS, SERIES 1990 [FORM OF FIRST PARAGRAPH OF CURRENT INTEREST PAYING BOND] RATE OF INTEREST MATURITY DATE DATE OF ORIGINAL ISSUE CUSIP REGISTERED OWNER: PRINCIPAL AMOUNT: KNOW ALL MEN BY THESE PRESENTS, that City of Atlantic Beach, Florida (the "City"), for value received, hereby promises to pay to the Registered Owner designated above, or registered assigns, solely from the special funds hereinafter mentioned, on the Maturity Date specified above, the principal sum shown above, upon presentation and surrender hereof at the corporate trust office of as Bond Registrar and Paying Agent, and to pay solely from such funds, interest thereon from the date of this Bond or from the most recent Interest Payment Date to which interest has been paid, whichever is applicable, until payment of such sum, at the rate per annum set forth above until payment of the principal sum, such interest to the maturity hereof being payable on 1, 1991, and thereafter on 1 and 1 o each year by check or draft mailed to the Registered Owner at his address as it appears, at 5:00 P.M. Eastern Time on the fifteenth day of the month preceding the applicable interest payment date, on the registration books of the City kept by the Bond Registrar; provided, that for any Registered Owner of one million dollars or more in principal amount of Bonds, such payment shall, at the written request of such Registered Owner be by wire transfer or other medium acceptable to the City and to such Registered Owner. The principal of, premium, if any, and interest on this Bond are payable in lawful money of the United States of America. 46 • • [FORM OF FIRST PARAGRAPH OF COMPOUNDING INTEREST BOND] DATE OF RATE OF ORIGINAL INTEREST MATURITY DATE ISSUE REGISTERED OWNER: MATURITY AMOUNT: PRINCIPAL AMOUNT AT ISSUANCE PER $5,000 MATURITY AMOUNT CUSIP KNOW ALL MEN BY THESE PRESENTS, that City of Atlantic Beach, Florida (the "City"), for value received, hereby promises to pay to the Registered Owner designated above, or registered assigns, solely from the special funds hereinafter mentioned, on the Maturity Date specified above, the Maturity Amount shown above, upon presentation and surrender hereof at the corporate trust office of as Bond Registrar and Paying Agent; provided, that for any Registered Owner of one million dollars or more in principal amount of Bonds, such payment shall, at the written request of such Registered Owner be by wire transfer or other medium acceptable to the City and to such Registered Owner. The Maturity Amount and premium, if any, of this Bond are payable in lawful money of the United States of America. This Bond is payable solely from and secured by a first lien upon and pledge of the all revenues and receipts derived from the operation of the Project [insert additional security, if any] (hereinafter the "Pledged Revenues") accruing to the City, as defined and provided in Ordinance No. of the City (the "Ordinance") hereinafter referred to. This Bond does not constitute a general obligation or indebtedness of the City as a "bond" within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the Registered Owner of this Bond that such Registered Owner shall never have the right to require or compel the exercise of the ad valorem taxing power of the City, or the taxation of any property of or in the City, for the payment of the principal of and interest on this Bond or for the making of any sinking fund, reserve or other payments provided for in said Ordinance. It is further agreed between the City and the Registered Owner of this Bond, that this Bond and the obligation evidenced hereby shall not constitute a lien upon the Project or any part thereof, or on any other property of or in the City, but shall constitute a lien only on the Pledged Revenues, in the manner provided in the Ordinance. 47 • REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND APPEARING ON THE REVERSE SIDE HEREOF AND SUCH FURTHER PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH ON THE FACE HEREOF. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent to and in the issuance of this Bond, exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the State of Florida applicable thereto, and that the issuance of this Bond, and of the issue of Bonds of which this Bond is one, does not violate any constitutional or statutory limitation. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Ordinance until the Certificate of Authentication hereon shall have been executed by the Bond Registrar. IN WITNESS WHEREOF, City of Atlantic Beach, Florida has issued this Bond and has caused the same to be executed by its Mayor and City Manager, either manually or with their facsimile signatures, and the corporate seal of said City or a facsimile thereof to be affixed hereto or imprinted or reproduced hereon and attested by the manual or facsimile signature of the City Clerk and approved as to form, sufficiency and correctness by the City Attorney, all as of the day of (SEAL) ATTEST: City Clerk Approved as to form, sufficiency and correctnes City Attorney n.cni. �. .tnne/ASA 48 Mayor City Manager BOND REGISTRAR'S CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds of the issue described in the within -mentioned Ordinance. Date of Authentication: CJ • As Bond Registrar By Authorized Signature 49 11 1 . b • • • (MATERIAL APPEARING ON REVERSE OF BONDS) This Bond is one of an authorized issue of Series 1990 Bonds, originally issued in the aggregate principal amount of $ , of like date, tenor and effect, except as to number, interest rate, and date of maturity, issued to refund certain outstanding obligations of the City, under the authority of and in full compliance with the Constitution and Statutes of the State of Florida, including particularly Chapter 166, Part II, and other applicable provisions of law, and an Ordinance duly enacted by the City Commission of the City on the day of r , as supplemented (hereinafter collectively called "Ordinance"), and is subject to all the terms and conditions of said Ordinance. Capitalized terms used herein shall have the meaning specified in the Ordinance. The City has entered into certain covenants with the Registered Owners of the Bonds of this issue for the terms of which reference is made to said Ordinance. In particular, the City has reserved the right to issue additional obligations payable from and secured by a lien upon and pledge of the Pledged Revenues on a parity with the Bonds of this issue and series, upon compliance with certain conditions set forth in the Ordinance. The City has also reserved the right to defease the lien of the Bonds of this issue upon the Pledged Revenues upon making provision for payment of the Bonds as provided in the Ordinance. The Bonds maturing in the years to are not subject to redemption prior to their stated dates of maturity. The Bonds maturing on ? and thereafter are redeemable prior to maturity, at the option of the City, in inverse order of maturity, and by lot within maturity if less than a full maturity, from any moneys legally available therefor, at a redemption price, expressed as a percentage of the principal amount of the Bonds so redeemed, if redeemed during the following periods: Redemption Period (Both dates inclusive) Redemption Price (�) (INSERT TABLE) The Bonds maturing in the year are subject to mandatory redemption prior to maturity by lot at a redemption price of par plus accrued interest to the date of such redemption on ? of each year in the years and amounts as follows: II— I.mr I Itnn.) i.se Year Amount (INSERT TABLE) 50 Year Amount Notice of such redemption shall in the Ordinance. be given in the manner provided This Bond is and has all the qualities and incidents of a negotiable instrument under the Uniform Commercial Code - Investment Securities Laws of the State of Florida, and the Registered Owner and each successive Registered Owner of this Bond, shall be conclusively deemed by his acceptance hereof to have agreed that this Bond shall be and have all the qualities and incidents of negotiable instruments under the laws of the State of Florida. STATEMENT OF INSURANCE [INSERT STATEMENT OF INSURANCE, IF ANY] The following abbreviations, when used in the inscription on the face of the within bond, shall be construed as though they were written out in full according to applicable laws or regulations: • UNIF GIF MIN ACT - (Cust.) Custodian for (Minor) under Uniform Gifts to Minors Act of (State) Additional abbreviations may also be used though not in list above. 51 TEN COM - as tenants in common TEN ENT - as tenants by the entireties JT ENT - as joint tenants with right of survivorship and not as tenants in common • UNIF GIF MIN ACT - (Cust.) Custodian for (Minor) under Uniform Gifts to Minors Act of (State) Additional abbreviations may also be used though not in list above. 51 r� ASSIGNMENT FOR VALUE RECEIVED, the undersigned sells, assigns and transferees to [PLEASE INSERT NAME, ADDRESS AND SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE], the within bond and does hereby irrevocably constitute and appoint as his agent to transfer the bond on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature guaranteed: (Bank, Trust Company or Firm) (Authorized Officer) LJ • 52 NOTICE: The signature to this assignment must correspond with the name of the Registered Owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever.