4.1. ERMUSR 02-11-2014 - Laserfiche WebLink

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SOURCES AND USES OF FUNDS The composition of the Bonds is estimated to be as follows: Sources of Funds: Principal Amount $2,125,000 Transfer from Prior Issue Debt Service Reserve Funds 359,500 Total Sources of Funds $2,484,500 Uses of Funds: Deposit to Refunding Account $2,200,656 Deposit to Reserve Account 212,500 Costs of Issuance 53,282 Allowance for Discount Bidding 18,062 Total Uses of Funds $2,484,500 SECURITY AND FINANCING The Bonds are special limited obligations of the City payable, together with the Outstanding Bonds, solely from Net Revenues of the Electric System. Net Revenues of the Electric System are defined as Gross Revenues less Operating Expenses. Operating Expenses are defined as the current expenses of operation, maintenance and minor or current repair of the Electric System for any specified period. Operating Expenses include, without limitation, administrative expenses of the Commission relating to the Electric System, franchise fees, premiums for insurance relating to the Electric System, and amounts necessary to accumulate and maintain the Operating Reserve Requirement. Operating Expenses do not include depreciation, amortization, or interest expense. Gross Revenues are defined as all revenues and receipts from rates, fees, charges, and rentals imposed by the Commission for the availability, benefit, use and products of the Electric System or any part thereof, and any penalties and interest thereon, and income from the investment thereof. Gross Revenues do not include amounts received from the sale of property which is part of the Electric System or amounts borrowed with respect to the Electric System The Bonds have a first charge and lien on the Net Revenues of the Electric System and are issued on a parity with the Outstanding Bonds. Rate Covenant The Commission has pledged to establish user rates and charges for the Electric System so that annual Net Revenues shall not be less than 110% of the average annual debt service on the Parity Bonds and any additional parity bonds. The City and the Commission covenant: to charge reasonable and just rates; to maintain the Electric System in efficient operating condition; to keep proper books and records; to have an annual audit prepared by an independent auditor in accordance with generally accepted accounting principles; to maintain proper billing procedures; to carry insurance; and not to dispose of the Electric System until all Parity Bonds are paid in full or otherwise discharged. - 11 - 92