2.0. ERMUSR 08-29-2018 - Laserfiche WebLink

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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. F nds and Accounts T le following summary of certain covenants in the Awarding Resolution are not to be considered a full statement of the provisions of the Awarding Resolution and are qualified by reference to the Awarding R•solution. Tie Awarding Resolution will provide for the continuation of the Electric Fund (the"Fund") established u der prior resolutions of the Commission and the accounts therein. All Gross Revenues of the Electric S stem are irrevocably pledged and appropriated and shall be credited to the Fund as received. Within th- Fund, the accounts discussed below will be maintained, and Gross Revenues received in the Fund s all be apportioned to the said accounts as described below. Project Account into which there shall be paid the proceeds from the sale of the Bonds, plus available C'ty funds, less the proceeds of the Bonds deposited into the Reserve Account, and less any accrued interest paid by the Purchaser of the Bonds and other amounts deposited into the Debt Service Account as d termined by the Finance and Office Manager of the Commission. Operating Account into which all Gross Revenues are received. There shall be paid form the Operating A count 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 r Operating Expenses then due and payable and to become due and payable during such calendar month, p s (ii)the Operating Reserve Requirement, shall constitute Net Revenues and shall be credited to other al counts in the Electric Fund. - 11 - 20