5.3. SR 08-02-2004 - Laserfiche WebLink

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Section 12. Covenants. For the protection of the Holders of the Bonds, the City and the Commission hereby covenant and agree to and with the Holders thereof from time to time as follows: (a) They will at all times adequately maintain and efficiently operate the Electric System. They will from time to time make all needful and proper repairs, replacements, additions and betterments to the equipment and facilities of the Electric System so that it may at all times be operated properly and advantageously and so that the value and efficiency of the facilities shall be at all times fully maintained and its revenues unencumbered by reason thereof. (b) In order to ensure the efficient and economical operation of the Electric System and the proper maintenance thereof, the Commission on behalf of the City will employ an experienced manager to operate and maintain the Electric System. Such manager shall be employed on a full-time basis and the compensation shall be paid as an operating expense of the Electric System. (c) The rates for all service and the charges for all electricity and services supplied by the Electric System to the City and its residents and to all consumers shall be reasonable and just, taking into account the cost and value of the Electric System, the cost of maintaining and operating the Electric System and the proper and necessary allowances for depreciation and amounts required for the payment of principal and interest on the bonds payable from the revenues. Charges to all customers shall be uniform for all users of the same class. The Commission on behalf of the City will bill its customers and the City on a monthly basis and, subject to the requirements of Minnesota law, will discontinue public utility service to any customer whose bill remains unpaid 30 days following the mailing of such bill, and service will not be restored until the bill and penalties have been paid in full. (d) They will establish, maintain and collect such charges and rates as will produce revenues sufficient to pay the reasonable cost of operation and maintenance of the Electric System and to produce, in each Fiscal Year, Net Revenues at least equal to the annual interest and principal requirements of the Series 2004A Bonds in such Fiscal Year. Such rates and charges will be increased from time to time whenever necessary to carry out the obligations of this Resolution. (e) The City and the Commission will not sell, lease, mortgage, or in any manner dispose of all or substantially all of properties of the Electric System until all of the Bonds have been paid in full; provided, however, that the City or the Commission may sell the Electric System as a whole if, simultaneously with the sale of the Electric System, there is deposited with the Registrar the amount necessary to retire all of the Outstanding Bonds payable from the revenues of the Electric System, including interest to accrue to the date when said Bonds are callable, or if the Bonds are then called in accordance with their terms, to the date of redemption. This covenant shall not be construed to prevent the sale by the City or the Commission at fair market value of real estate, equipment or other non-revenue-producing properties which in the judgment of the City or the Commission and a consulting engineer have become unnecessary, 167057Svl 22