5.1. ERMUSR 06-14-2016 - Laserfiche WebLink

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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. Funds and Accounts The following summary of certain covenants in the Awarding Resolutions are not to be considered a full statement of the provisions of the Awarding Resolutions and are qualified by reference to the Awarding Resolutions. The Awarding Resolutions will provide for the continuation of the Electric Fund(the"Fund")established under prior resolutions of the Commission and the accounts therein. All Gross Revenues of the Electric System are irrevocably pledged and appropriated and shall be credited to the Fund as received. Within the Fund, the accounts discussed below will be maintained, and Gross Revenues received in the Fund shall be apportioned to the said accounts(other than the Refunding Account)as described below. Project Account into which there shall be paid the proceeds from the sale of the Series 2016A Bonds,less the proceeds of the Series 2016A Bonds deposited into the Reserve Account,and less any accrued interest paid by the Purchaser of the Series 2016A Bonds and other amounts deposited into the Debt Service Account as determined by the Finance and Office Manager of the Commission. Refunding Account into which there shall be paid the proceeds from the sale of the Series 2016B Bonds, less the proceeds of the Series 2016B Bonds deposited in the Reserve Account, and less any accrued interest paid by the Purchaser of the Series 2016B Bonds and other amounts deposited into the Debt Service Account as determined by the Finance and Office Manager of the Commission, plus available funds from the reserve account and the debt service account for the Series 2007A Bonds. The Commission will use these funds to redeem the Refunded Maturities on September 1,2016. Operating Account into which all Gross Revenues are received. There shall be paid form the Operating Account when due all reasonable, necessary, and current Operating Expenses of the Electric System. All money on hand in the Operating Account as of the first day of each month in excess of the sum of (i)Operating Expenses then due and payable and to become due and payable during such calendar month, plus (ii) the Operating Reserve Requirement, shall constitute Net Revenues and shall be credited to other accounts in the Electric Fund. Debt Service Account into which is deposited any accrued interest paid by the Purchaser(s) of the Bonds and other amounts deposited into the Debt Service Account as determined by the Finance and Office Manager of the Commission. There shall also be credited to the Debt Service Account, out of the Net Revenues on hand in the Operating Account, an amount equal to not less than 1/6 of the interest due within the next six months and 1/12 of the principal due within the next twelve months on all Parity Bonds; provided that the Commission shall be entitled to reduce a monthly apportionment by the amount of any surplus previously credited and then on hand in the Debt Service Account. Money on hand in the Debt Service Account shall be disbursed only to pay principal of and interest on the Parity Bonds when due; provided that on any date when the amount then on hand in the Debt Service Account, plus the - 12 - 130