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Requirements for the Issuance of Future Parity Bonds <br />("Parity Conditions") <br />(a) Conditions to the Issuance of Future Parity Bonds. The City may issue Future Parity <br />Bonds secured by a lien and charge on the Net Revenues and ULID Assessments on a parity with the <br />Bonds and the Outstanding Parity Bonds if and only if the following conditions are met and complied <br />with at the time of issuance of those proposed Future Parity Bonds: <br />(1) The City shall not have been in default of its Rate Covenant for the <br />immediately preceding fiscal year, without regard to transfers from the Coverage Stabilization <br />Account; and <br />(2) The Future Parity Bond Authorizing Ordinance must include a covenant that <br />the City will establish, maintain, and collect such rates and charges for service of the Water & Sewer <br />System for so long as any Parity Bonds are outstanding as will maintain the Rate Covenant. <br />There shall have been filed a certificate (prepared as described in subsection (c) or (d) <br />below) demonstrating fulfillment of the Parity Requirement, commencing with the first full fiscal <br />year following the date on which any portion of interest on the series of Future Parity Bonds then <br />being issued no longer will be paid from the proceeds of such series of Future Parity Bonds. For <br />purposes of this certificate: <br />(i) "Parity Requirement" means Net Revenue equal to or greater than <br />125% of Average Annual Debt Service for all Parity Bonds, computed by deducting from Annual <br />Debt Service the Annual Debt Service for each series or issue of Parity Bonds that is covered by <br />ULID Assessments. In determining the amount of Annual Debt Service "covered by ULID <br />Assessments," Annual Debt Service for each future year is reduced by the dollar amount of ULID <br />Assessments projected to be received during such future year, and the remaining outstanding ULID <br />Assessments are assumed to be paid in the remaining number of annual installments with no <br />prepayments. For purposes of determining whether the Parity Requirement has been met, transfers <br />from the Coverage Stabilization Account shall not be taken into account. <br />(ii) "Historical Net Revenue" or "Net Revenue" means Gross Revenue <br />(or the relevant part or parts thereof) (A) less the normal expenses of maintenance and operation of <br />the Water & Sewer System (or the relevant part or parts thereof), (B) before depreciation, and (C) <br />adjusted to reflect the rates and charges effective on the date of such certificate if there has been any <br />change in such rates and charges during or after such Base Period. <br />(b) No Certificate Required. The certificate described in the foregoing subsection (a)(3) <br />shall not be required as a condition to the issuance of Future Parity Bonds: <br />(1) If the Future Parity Bonds being issued are for the purpose of refunding <br />Outstanding Parity Bonds; or <br />(2) If the Future Parity Bonds are being issued to pay costs of construction of <br />facilities of the Water &Sewer System for which Future Parity Bonds have been issued previously <br />and the principal amount of such Future Parity Bonds being issued for completion purposes does not <br />exceed an amount equal to an aggregate of 15% of the principal amount of Future Parity Bonds <br />theretofore issued for such facilities and reasonably allocable to the facilities to be completed as <br />shown In a written certificate of the Finance Director, and there is delivered a Designated <br />