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O-29-M . . MISC. ORDINANCES N~ 95 ORDINANCE NO. 29 - M ORDINANCE PROVIDING FOR THE ACQUISITION AND CONSTRUCTION OF A NEW SEWER SYSTEM FOR THE CITY OF CLERMONT, FLORIDA: PROVIDING FOR THE ISSUANCE OF NOT EXCEEDING $1,700,000 WATER AND SEWER REVENUE BONDS OF SUCH CITY TO PAY THE COST OF SUCH PROJECT: PROVIDING FOR THE RIGHTS OF THE HOLDERS OF SUCH BONDS: PROVIDING FOR THE PAY- MENT THEREOF: AND MAKING CERTAIN OTHER COVENANTS AND AGREEMENTS œN CONNECTION WITH THE ISSUANCE OF SUCH BONDS. THE CITY OF CLERMONT HEREBY ORDAINS: SECTION 1. AUTHORITY OF THIS ORDINANCE. This ordinance is enacted pursuant to Chapter 67-1217, Laws of Florida, Acts of 1967, as amended and supplemented, and other applicable provisions of law. SECTION 2. DEFINITIONS. The following terms shall have the following meanings herein, unless the text otherwise expressly requires: A. "Issuer" shall mean the City of C1ermont,F10rida. B. "Act" shall mean Chapter 67-1217, Laws of Florida, Acts of 1967, as amended and supplemented. C. "Obligations" shall mean the Water and Sewer Revenue Bonds herein authorized to be issued, together with any additional parity obligations hereafter issued under the terms, conditions and limitations contained herein. D. "Holder of obligations" or "obligation holders" or any similar term shall mean any person who shall be the bearer or owner of any outstanding obligation or obligations registered to bearer, or the registered owner of any such obligation or ob- ligations which shall at the time be registered other than to bearer. E. "Additional parity ob1igatidns" shall mean additional obligations issued in compliance with the terms, conditions and limitations contained in subsection W of Section 16 hereof, which have an equal lien on the revenues and excise taxes, as herein de- fined, and rank equally in all respects with such obligations ini- tial1y issued hereunder. · .' MISC. ORDINANCES N~ 96 F. "System" shall mean the complete water distribution facilities now owned, operated and maintained by the issuer and the new sewerage collection facilities to be financed in part by the proceeds of the obligations herein authorized, together with any and all improvements, extensions and additions thereto here- after constructed or acquired, all to be operated by the issuer as a single combine utility. G. "Gross revenues" or "revenues" shall mean all income ' or earnings, including any income from the investment of funds as herein provided, derived by the issuer from the operation of the sys tem. H. "Cost of operation and maintenance" of the system shall mean the current expenses, paid or accrued, of operation, maintenance and repaor of the system, as calculated in accordance with sound accounting practice, but shall not include any reserves or renewals and replacements, extra-ordinary repairs or any allo- wance for depreciation. I. "Net revenues" of the system shall mean the revenues or gross revenues, as defined in subsection G above, after deduction of the cost of operation and maintenance, as defined in subsection H. above. J. "Utilities services taxes" shall mean such tax as levied and collected by the issuer, pursuant to a non-emergency ordinance, enacted on October 4, 1957, on every purchase of electricity, gas (natural, liquefied petroleum gas or manufactured), water service and local telegraph and telephone service within the corporate limits of the issuer under the authority of Section 167.431, Florida Statutes. K. "Cigarette tax" shall mean the p1edgeab1e portion of the proceeds derived by the issuer, pursuant to an ordinance enacted on October 18, 1949, as amended and revised, imposing a tax upon each and every sale, receipt, purchase, possession, consumption, handling, distribution and use of cigarettes within the corporate limits of the 2 . . MISC. ORDINANCES N~ 97 issuer under the authority of Chapter 210, Florida Statutes. L. "Franchise taxes" shall mean any and all moneys received by the issuer from the Lake Apopka Natural Gas District, its legal representatives, successors or assigns under the franchise granted pursuant to ordinance duly enacted on November 16, 1954, and any and all moneys received by the issuer from the Lake Apopka Natura] Gas District, its legal representatives, successors or assigns, under any extension or renewal of said franchise or from any new fran- chise granting the right to supply natural gas to the issuer or its inhabitants, and received by the issuer from the Florida Power Corpora- tion, its legal representatives, successors and assigns under the fran- chise granted pursuant to ordinance duly enacted on ,;9¡'.~2,.1970~:, and any and all moneys received by the issuer from the Florida Power Cor- poration, its legal representatives, successors or assigns, under any extension or renewal of said franchise or from any new franchise granting the right to supply electric power to the issuer or its in- habitants. M. "Excise taxes" shall mean collectively: the utilities services taxes, the cigarette tax, and the franchise taxes. N. "Consulting engineers" shall mean such qualified and recognized consulting engineers, having a nationwide and favorable repute for skill and experience in the construction and operation of such facilities as the system, at the time retained by the issuer to perform the acts and carry out the duties as herein provided for such consulting engineers. O. "Fiscal year" shall mean the period commencing on November 1 of each year and ending on the succeeding October 31. P. Words importing singular number shall include the plural number in each case and vice versa, and words importing per- sons shall include firms and corporations. SECTION 3. FINDINGS. It is hereby ascertained, determined and declared that: 3 . . MISC. ORDINANCES N~ 98 A. The issuer now owns, operates and maintains a muni- cipal water distribution system and derives revenues from rates, fees, rentals and other charges made and collected for the services and facilities thereof. B. Pursuant to Section 167.431, Florida Statutes, the issuer did, on October 10, 1957, enact non-emergency Ordinance No. 156 levying and imposing the utilities services taxes. C. Pursuant to Chapter 210, Florida Statutes, the issuer did under date of October 18, 1949, enact Ordinance No. 94 levying the cigarette tax, as amended by Ordinance "No. 37 on March 26,1968. Pursuant to law, the issuer on- 9-22-1970,,:'~, under authority of an ordinance duly enacted, entered into an agreement with the Florida Power Corporation fora period of thirty (30) years whereby the issuer would receive a franchise tax by reason of having granted to Florida Power Corpøration the right to supply electric power services to the issuer and its inhabitants; and the issuer on November 16, 1954, under authority of an ordinance duly enacted, entered into an agreement with the Lake Apopka Natural Gas District for a period of thirty (30) years whereby the issuer would receive a franchise tax by reason of having granted to Lake Apopka Natural Gas District the right to supply natural gas service to the issuer and its inhabitants. E. It is necessary and desirable to acquire and construct new sewerage collection facilities within the corporate territory of the issuer, including force mains, pumping stations, interceptor lines, treatment facilities and appurtenant facilities, as pÐovided herein (hereinafter called "project"), to be operated by the issuer in com- bination with its existing water distribQtion facilities as a single utility, in order to preserve and protect the public health, safety and welfare of the inhabitants of the issuer. F. (1) The net revenues derived from the operation of the system are not now pledged or encumbered in any manner. 4 . . MISC. ORDINANCES N~ 99 (2) The proceeds from the excise taxes are not now pledged or encumbered in any manner. $. The gross revenues, as herein defined, to be derived from the operation of the system are estimated to average $201,832 annually in the years 1970 to 2003 inclusive; the cost of operation and maintenance, as herein defined, of the system is estimated to average $80,479 annually in the years 1970 to 2003 inclusive; and the net revenues, as herein defined, to be derived from the operation of the system are estimated to average $121,353 annually in the years 1970 to 2003 inclusive. The proceeds to be derived from the excise taxes are estimated to average $110,000 annually in the years 1970 to 2003 inclusive. The estimated net revenues to be derived from the operation of the system and the proceeds of the excise taxes will be sufficient to pay all of the principal of and interest on the obligations to be issued hereunder, as the same become due, and to make all required sinking fund, reserve or other payments. H. The principal of and interest on the obligations and all required sinking fund, reserve and other payments shall be payable solely from the net revenues derived from the operation of the system and from the procees of the excise taxes, as herein provided. The issuer shall never be required to levy ad valorem taxes on any property therein to pay the principal of and interest on the obligations or to make any of the required sinking fund, reserve or other payments and such obligations shall not constitute a lien upon any property of or in the issuer. SECTION 4. AUTHORIZATION OF CONSTRUCTION AND ACQUISITION OF PROJECT. There is hereby authorized the construction and acquisition of the project pursuant to the plans and specificiations of the con- sulting engineers, presently on file with the issuer. The cost of such project, in addition to the items set forth in the plans and specifi- cations, may include, but need not be limited to, the acquisition of any lands or interest therein or any other properties deemed necessary 5 . . MISe. ORDINANCES N~ 100 or convenient therefor; engineering, legal, and financing expenses; expenses for estimates of costs and of revenues; expenses for plans, specifications and surveys; the fees of fiscal agents, financial ad- visors or consultants; administrative expenses relating solely to the construction and acquisition of the project; interest upon the ob- ligations herein authorized during the period of construction of the project; the creation and establishment of reasonable reserves for debt services; and such òther costs and expenses as may be necessary or incidental to the financing herein authorized and the construction and acquisition of the project and the placing of same in operation. SECTION 5. ORDINANCE TO CONSTITUTE CONTRACT. In con- sideration of the acceptance of the obligations authori zed to be issued hereunder by those who shall hold the same from time to time, this ordinance shall be .deemed to be and shall constttute a contract between the issuer and such holders. The covenants and agreements herein set forth to be performed by the issuer shall be for the equal benefit, protection and security of the legal holders of any and all of such obligations and the coupons attached thereto, all of which shall be of equal rank and without preference, priority or distinction of any of the obligations or coupons over any other thereof, except as expressly provided therein and herein. SECTION 6. AUTHORIZATION OF OBLIGATIONS. Subject and pur- suant to the provisions hereof, obligations of the issuer to be known as "Water and Sewer Revenue Bonds," herein sõmetimes referred to as the "obligations" are authorized to be issued in the aggregate principal amount of not exceeding One Million Seven Huridred:Thousand'Dô11ars ($1,700,000) . SECTION 7. DESCRIPTION OF OBLIGATIONS. The obligations shall be dated November 1,1970; shall be numbered consecutively from one upward; shall be in the denomination of $5,000 each; shall bear interest at such rate or rates not exceeding the maximum rate fixed by the Act or by other applicable law, such interest to be payable semi-annually 6 . . MISC. ORDINANCES N~ 101 May 1 and November 1 of each year; and shall mature serially in numerical order, lowest numbers first, on November 1 in the years and amounts as follows: YEAR AMOUNT YEAR AMOUNT 1975 $ 5,000 1988 $ 50,000 1976 5,000 1989 50,000 1977 10,000 1990 55,000 1978 15,000 1991 60,000 1979 20,(}00 1992 65,000 1980 25,000 1993 70,000 1981 30,000 1994 75,000 1982 30,000 1995 80,000 1983 30,000 1996 85,000 1984 35,000 1997 90,000 1985 40,000 1998 95,000. 1986 40,000 1999 105,000 1987 ¥"OOO 2000 110,000 2001 120,000 2002 125,000 2003 135,000 Such obligations shall be issued in coupon form; shall be payable with respect to both principal and interest in lawful money of the United States of America at a bank or banks to be subsequently determined by the issuer prior to the delivery of the obligations; and shall bear interest from their date, payable in accordance with and upon surrender of the appurtenant interest coupons as they seve- rally mature. SECTION 8. EXECUTION OF OBLIGATIONS AND COUPONS. The obligations shall be executed in the name of the issuer by its Mayor and countersigned and attested by its City Clerk, and its corporate seal or a facsimile thereof shall be affixed thereto or reproduced thereon. The facsimile signatures of the Mayor or the City Clerk may be imprinted or reprotluced on the obligations, provided that at least one signature required to be placed thereon shall be manually subscribed. In case any officer'whose signature shall appear on any obligations shall cease to be such officer before the delivery of such obligations, such signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. Any obligation may be signed and sealed on behalf of the .'~ 7 . . MISC. ORDINANCES N~ 102 issuer by such person who at the actual time of the execution of such obligations shall hold the proper office with the issuer, although at the date of such obligations such person may not have held such office or may not have been so authorized. The coupons attached to the obligations shall be authenticated with the facsimile signatures of any present or future Mayor and City Clerk of the issuer, and the validation certificate on the obligations shall be executed with the facsimile signature of the Mayor. The issuer may adopt and use for such purposes the facsimile signatures of any persons who shall have been such Mayor and City Clerk at any time on or after the date of the obligations notwithstanding that they may have ceased to be such officers at the time such obligations shall be actually delivered. SECTION 9. NEGOTIABILITY AND REGISTRATION. The obligations issued hereunder shall be, and shall have all of the qualities and in- cidents of, negotiable instruments under the law merchant and the Laws of the State of Florida, and each successive holder, in accepting any of such obligations or the coupons appertaining thereto, shall be con- c1usive'J'ÿ,Y deemed to have agreed thllt such obngations shall be and have all of the the qualities and incidents of negotiable instruments under the law merchant and the Laws of the State of Florida. The obligations may be registered at the option of the holder as to principal only at the office of the City Clerk, as Registrar, or such other Registrar as may be hereafter duly appointed, such registration to be noted on the back of the obligations in the space provided therefor. After such registration as to principal only, no tr~nsfer of the obligations shall be valid unless made at such office , , "- by written assignment of the registered owner, or by his duly authorized attorney in a form satisfactory to the Registrar, and similarly noted ontthe obligations, but the obligations may be discharged from re- gistration by being in like manner transferred to bearer and thereupon transferability by del ivery shall be restored. At the option of the 8 . . MISC. ORDINANCES N~ 103 holder, the obligations may thereafter again from time to time be registered or transferred to bearer as before. Such registration as to principal only shall not affect the negotiability of the coupons which shall continue to pas's' bY' d·e·lfverY.. SECTION 10. . 'OBL'I"GATTONS, MUTILATED, DESTROYED, STOLEN OR LOST. In case a'ny 'oblfg'a'tfo'n's sha'll become mutilated, or be de- stroyed, stolen or 10's't'; 't'he' 'is's'u'e'r may in its discretion issue and deliver a new obligation w'fth' all unmatured coupons attached, if any, of 1 i ke tenor as the obll g'a'tfo'n' an'd attached coupons, if any, so muti- 1ated' destroyed, stolen or 10~t, in ~xchange and substitution for such muti 1 ated 0,b1 igation, upon surrender and cance11 ation of such muti 1 ated obligation and attached coupons, if any, or in lieu of and substitution for the obligation and attached coupons, if any, destroyed, stolen or lost, and upon the holder furnishing the issuer proof of his ownership ~thereof and satisfactory indemnity and complying with such other rea- sonable reguTations and conditions as the issuer may prescribe and paying such expenses as the issuer may incur. All obligations and coupons so surrendered shall be cancelled by the City Clerk of the issuer. If any such obligations or coupons shall have matured or be about to matur.e, instead of issuing a substitute obligation or coupon, the issuer may pay the same, upon being indemnified as aforesaid, and if such obligation or coupon be lost, stolen or destroyed, without surrender thereof. Any such duplicate obligations and coupons issued pursuant to this section shall constitute original, additional contractual ob- ligations on the part of the issuer whether or not the lost, stolen or destroyed obligations or coupons be at any time found by anyone, and such duplicate obligatIons and coupons shall be entitled to equal and proportionate benefits and rights as to lien on and source and security for payment from the funds, as hereinafter pledged, to the same extent as all other obligations and coupons issued hereunder. 9 . . MISC. ORDINANCES N~ 104 SECTION 11. PROVISIONS FOR REDEMPTION. Allor a portion of the obligations of this issue may be redeemable prior to their respective stated dates of maturity, under such conditiort~ and in such manner as the City Council of the issuer may by resolution pro- vide prior to delivery of the obligations to the purchasers thereof. SECTION 12. FORM OF OBLIGATIONS AND COUPONS. The ob- ligations, the interest coupons to be attached thereto, and the certi- ficate of validation shall be in substantially the following form, with such omissions, insertions and variations as may be necessary and desirable and authorized or permitted by this ordinance or in any subsequent ordinance adopted prior to the issuance thereof: No. $ 5,000 UNITED STATES OF AMERICA STATE OF FLORIDA COUNTY 0 FLAKE CITY OF CLERMONT WATER AND SEWER REVENUE BOND KNOW ALL MEN BY THESE PRESENTS that the City of Clermont, Florida (hereinafter called the "City"), for value received, hereby promises to pay to the bearer, or if this bond be registered to the registered holder as' herein proOided, on the first day of November 19 , from the special funds hereinafter mentioned, the principal sum of FIVE THOUSAND DOLLARS and to pay solely from such special funds, interest thereon from the date hereof at the rate of per centum ( %) per annum until payment of the principal sum, such interest to the maturity hereof being payable semi-annually on the first day of May and the first day of November in each year upon the presentation and surrender of the annexed coupons as they severally fall due. Both principal of and interest on this bond are payable in lawful money of the United States of America at , or, at the option of the holder at This bond is one of an authorized issue of bonds in the 10 . . , MISC. ORDINANCES i N~ I IO.$'·¡ ,-"' tenor and . aggregate principal amou,nt of $ 1,700,000 of like date, 'effect, except as to number, interest rate (if all bonds do not bear the same rate of interest) and date of maturity, issued to finance the cost of the construction and acquisition of new sewer facilities in the City to be operated in combination with its existing water facilities as a single utility (hereinafter called the "system"), under the authority of and in full compliance withtthe Constitution and Statutes of the State of F10rÆda, including particularly Chapter 67-1217, Laws of Florida, Acts of 1967, as amended and supplemented, and other applicable provisions of law, and an ordinance duly en- acted by the City on , 19 (hereinafter called the "ordinance"), and is subject to all the terms and conditions of such ordinance. ~ ! , I This bond, and the coupons appertaining thereto, are payable solely from and secured by a prior lien upDn and pledge of the net revenues to be derived by the City from the operation of the system; the proceeds of the utilities services taxes imposed by the City on the purchase of certain utilities services within the corporate limits of the City, under the authority of ~ection 167.431, Florida Statutes, and pursuant to Ordinance No. 156, enacted by the City on October 10, 1957; the proceeds of the cigarette tax collected by the City pursuant to Ordinance No. 37 enacted by the City on March 26, 1968, levied upon each and every sale, receipt, purchase, possession, cDnsumption, handling, distribution and use of cigarettes within the corporate limits of the City under the authority of Section 210.03, Florida Statutes, as defined in the ordinance; and the proceeds of a franchise tax to be paid for a period of thirty (30) years from October 22, 1970 by Florida Power Corporation pursuant to Ordinance No. 27-M enacted by the City on September 22, 1970 and a franchise tax to be paid for a period of thirty (30) years from November 16, 1959, by Lake Apopka Natural Gas District pursuant to Ordinance No. 184 enacted by the City on November 16, 1959 (all of which taxes, above described, are herein collectively 11 . . MISC. ORDINANCES N~ 106 referred to as the "excise taxes"); in the manner provided in the ordinance. The bonds öf this issue maturing in the years 19 to 19 ,both inclusive, are not redeemable prior to their respective stated dates of maturity. The bonds maturing in 19 and thereafter are redeemable prior to their respective stated dates of maturity, at the option of the City, in whole or in part, in inverse numerical order, if less than all, on 1, 19 ,or on any interest payment date thereafter at par and accrued interest to the date of redemption plus the following premiums, expressed in percentages of the par value thereof, if redeemed in the following years: Notice of such redemption shall be given in the manner required by the ordinance. This bond does not constitute an indebtedness of the City within the meaning of any constitutional, statutory or charter provision or limitation, and it is expressly agreed by the holder of this bond and the coupons appertaining thereto that such holder shall never have the right to require or compel the exercise of the ad valorem taxing power of the City for the payment of the principal of and interest on this bond or the making of any sinking fund, reserve or other payments provided for in the ordinance. 12 . . MISC. ORDINANCES N~ 107 It is futther agreed between the City and the holder of this bond that this bond and the obligations evidenced thereby shall not constitute a lien upon the system, or any part thereof, or on any pther property of or in the City, but shall constitute a lien only on the net revenues derived from the operation of the system and on the excise taxes, in the manner provided in the ordinance. In and by the ordinance, the City has covenanted and agreed with the holders of the bonds of this issue that it will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the pr:oduct, services and facilities of the system which, to- gether with the proceeds of the excise taxes, will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, all cost of operation and maintenance of the system, the principal of and interest on the bonds and on all other obligations payable on a parity therewith, and all reserve and other payments pro- vided for in such ordinance, and that such rates, fees, rentals or other charges shall not be reduced so as to be insufficient to provide adequate revenues for such purposes; and the City has entered into certain further covenants with the holders of the bonds of this issue for the terms of which reference is made to the ordinance. The City in such ordinance has further covenanted and agreed with the holders of the bonds of this issue to levy and collect the excise taxes at such rates, not exceeding the maximum rates permitted by law, to the extent necessary to pay, as the same shall become due, the principal of and interest on bonds of this issue, all other bonds payable on a parity therewith and to make all reserve, sinking fund and other payments provided for in the ordinance and that the rates of such excise taxes shall not be reduced so as to be insufficient to pro- vide funds for such purposes. It is hereby certified and recited that all acts, conditions and things required to exist, to happen and to be performed precedent 13 . . MISC. ORDINANCES N~ 108 to and in the issuance of this bond exist, have happened and have been performed in regular and due form and time as required by the Laws and Constitution of the S ta te of Florida applicable thereto, and that the issuance of the bonds of this issue does not violate any constitutiDnal or statutory limitations or provisions. This bond, and the coupons appertaining thereto, are and have all the qualities and incidents of a negotiable instrument under the law merchant and the Laws of the State of Florida. This bond may be registered as to principal only in accord- ance with the provisions endorsed hereon. IN WITNESS WHEREOF, the City of Clermont, Florida, has issued this bond and has caused the same to be signed by its Mayor and attested and countersigned by its City Clerk, either manually or with their facsimile signatures, and the corporate seal of said City or a facsimile thereof to be affixed, impressed. imprinted, lithographed or reproduced hereon and the interest coupons hereto attached to be executed with the facsimile signatures of such officers all as of the 1st day of November, 1970. CITY OF CLERMONT, FLORIDA Mayor (SEAL) ATTESTED AND COUNTERSIGNED: City Cl erk FORM OF COUPON No. $ On the 1st day of , 19 , the City of C1er.mont, Florida, will pay to the bearer at , or at the option of the holder at , from the special funds described in the bond to 14 . . MISC. ORDINANCES N~ 109 which this coupon is attached, the amount shown hereon in lawful money of the United States of America, upon presentation and surrender of this coupon, being six months interest then due on its Water and Sewer Revenue Bond, dated November 1, 1970, No. CITY OF CLERMONT, FLORIDA (SEAL) Mayor ATTESTED AND COUNTERSIGNED: Ci ty C1 erk (To be inserted in coupons maturing after callable date) "Unless the bond to which this coupon is attached shall have been previously duly called for prior redemption and payment thereof duly made or provided for." VALIDATION CERTIFICATE This bond is one of the series of bonds which were validated and confirmed by judgment of the Circuit Court for Lake County, Florida, rendered on the day of , 19 Mayor PROVISION FOR REGISTRATION This bond may be registered as to principal only in the name of the holder on the books to be kept by the City Clerk as Registrar, or such other Registrar as may be hereafter duly appointed, such registration being nòted hereon by such Registrar in the re- gistration blank below, after which no transfer shall be valid unless made by written assignment on said books by the registered holder or attorney duly authorized and similarly noted in the registration blank below, but it may be discharged from registration by being transferred 15 . . MISC. ORDINANCES N~ 110 to bearer, after which it shall be transferable by delivery, but it may be again registered as before. Such registration shall not re- strain the negotiability of the coupons by delivery. DATE OF REGISTRATION IN WHOSE NAME REGI SHRED SIGNATURE OF REGISTRAR . SECTION 13. OBLIGATIONS NOT DEBT OR ISSUER. Neither the obligations nor coupons shall be or constitute general obligations or indebtedness of the issuer as "Bonds" within the meaning of the Con- stitution of Florida, but shall be payable solely from and secured by a lien upon and a pledge of the special funds as herein provided. No~ holder or holders of any obligations issued hereunder or of any coupons appertaining thereto shall ever have the right to compel the exercise· of the ad valorem taxing power of the issuer or taxation in any form of any real property therein to pay such obligations or the interest thereon or be entitled to payment of such principal and interest from any other funds of the issuer except from the special funds in the manner pcovided herein. SECTION 14. PLEDGE OF NET REVENUES. The payment of the principal of and interest on the obligations shall be secured forth- with equally and ratably by an irrevocable lien on the net revenues, as defined herein, derived from the operation of the system prior and superior to all other liens or encumbrances on such net revenues, and the issuer does hereby irrevocably pledge such net revenues from the system to the payment of the principal of and interest on the obligations, for the reserves therefor and for all other required payments. SECTION 15. p,[EDG§eOF EXCISE TAXES. The payment of the principal of and interest on the obligations shall 16 . . MISC. ORDINANCES N~ 111 be additionally secured forthwith equally and ratably by a pledge of and a prior lien upon the proceeds received by the issuer from the exc.i se taxes, as herei nafter provided, and the issuer does hereby irrevocably pledge such funds to the payment of the principal of and interest on the obligations, for reserves therefor and for all other required payments. SECTION 16. COVENANTS OF THE ISSUER. For as long as any of the principal of and interest on any of the obligations shall be outstanding and unpaid or until there shall have been set apart in the Sinking Fund, herein established, including the Reserve Account therein, a sum sufficient to pay when due the entire principal of the obligations remaining unp~id, together with interest accrued or to accrue thereon, the issuer covenànts with the holders of any and all obligations as follows: A. REVENUE FUND. The entire gross revenues derived from the operation of the system shall upon receipt thereof be deposited in the "Clermont Water and Sewer System Revenue Fund" (hereinafter called the "Revenue Fund"), hereby created and established. Such Revenue Fund shall constttòte a trust fund for the purposes herein provided and shall be kept separate and distinct from all other funds of the issuer and used only for the purposes and in the manner herein provided. B. EXCISE TAXES FUND. All of the proceeds of the excise taxes, as defined herein, as soon as the same are collected by the issuer shall be forthwith deposited in the "Clermont Excise Taxes Fund" (hereinafter called the "Excise Taxes Fund"), hereby created and established. Such Excise Taxes Fund shall constitute a trust fund for the purposes herein provided and shall be kept separate and distinct from all other funds of the issuer and used only for the purposes and in the manner herein provided. C. DISPOSITION OF REVENUES. All revenues at any time re- maining on deposit in the Revenue Fund shall be disposed of on or before 17 . . MISC. ORDINANCES N~ 112 the fifteenth day of each month, commencing in the month immediately following the delivery of the obligations only in the following manner and in the following order of priority: (1) Revenues shall first be used for deposit into a fund to be known as the "Clermont Water and Sewer System Operation and Maintenance Fund" (hereinafter called the "Operation and Maintenance Fund"), which is hereby created and established, such sums as shall be necessary in order that the moneys on depost therein shall be suffi- cient to pay the cost of operation and maintenance, as hereinabove de- fined, through the next ensuing month, in accordance with the annual budget, and maintain additionally therein an operation and maintenance reserve in the amount of $7,000. (2) From the moneys remaining in the Revenue Fund, the issuer shall next deposit into a separate fund, which is hereby created and designated "Clermont Water and Sewer Revenue Bonds Sinking Fund" (hereinafter called the "Sinking Fund"), such sums as will be sufficient to pay one-sixth (1/6) of all interest becoming due on the obligations on the next semi-annual interest payment date and one-twelfth (1/12) of all principal maturing on the obligations on the next maturity date. All such payments, as provided above, shall include an amount sufficient to pay the fees and charges of the paying agents. Such monthly pay- ments shall be increased proportionately to the extent required to pay principal and interest becoming due during the first fiscal year, after making allowance for the amounts of money, if any, which will be de- posited in the Sinking Fund out of proceeds from the sale of the obligations. (3) Moneys remaining in the Revenue Fund shall next be applied by the issuer to maintain a Reserve Account in the Sinking Fund, which Reserve Account is hereby created and established: The issuer shall deposit in such Reserve Account the monthly sum of not less than twenty per centum (20%) of the amount required by the next preceding paragraph (2) to be deposited in the Sinking Fund, until 18 . . MISC. ORDINANCES N~ 113 there shall be on deposit in such Reserve Account a sum equal to the maximum amount of principal and interest on all outstanding obligations becoming due in anyone ensuing fiscal year. No further payments shall be required to be made into such Reserve Account as long as there re- main on deposit therein a sum equal to the maximum amount of principal and interest on all outstanding ob1~gations becoming due in any ensuing fiscal year. Any withdrawals from the Reserve Account shall be sub- sequently restored from the first moneys available in the Revenue Fund afte~ all required current payments for the Operation and Maintenance Fudd, Sinking Fund and Reserve Account, including all deficiencies for prior payments, have been made in full. Moneys in the Reserve Account shall be used only for the r I purpose of the payment of maturing principal of or interest on the obligations when the other moneys in the Sinking Fund are insufficient therefor, and for no other purpose. (4) Upon the issuance of any additional parity obligations under the terms, limitations and conditions as herein provided, the payments into the several accounts in the Smnking Fund shall be in- creased in such amounts as are necessary to make the payments required above for the principal of and interest on, and reserves for such additional parity obligations, on the same basis as hereinabove pro- vided with respect to the outstanding obligations. The issuer shall not be required to make any further payments into the Sinking Fund or into the Reserve Account in the Sinking Fund when the aggregate amount of moneys in both the Sinking Fund and the Reserve Account are at least equal to the aggregate principal amount.of obligations then outstanding, plus the amount of interest then due or thereafter to become due on such obligations then outstanding. (5) The issuer shall next apply and deposit monthly from the moneys in the Revenue Fund, into a special account to be known as the "Clermont Water and Sewer System Improvement, Repair and Replacement 19 . . MISe. ORDINANCES N~ 114 Fund" (hereinafter called the "Improvement, Repair and Replacement Fund"), which fund is hereby created and established, an amount equal to five per centum (5%) of the gross revenues of the immediate pre- cedin9 month, until there shall be on deposit in such Improvement, Repair and Replacement Fund the sum of $150,000. The moneys in said Improvement, Repair and Replacement Fund shall be used only for the purpose of paying the cost of extensions, enlargements or additions to. or the replacement of capital assets of the system and emergency re- pairs thereto. Such moneys on deposit in such Fund shall also be used to implement the Reserve Account if necessary, in order to prevent a default in the payment of the principal of and interest on the ob- ligations. The moneys on deposit in sDch fund shall be withdrawn only upon the authorization of the City Council upon a recommendation of the consulting engineers. (6) Whenever by reason of the insufficiency of moneys on deposit in the Revenue Fund, the issuer is not able to make promptly the current monthly payments hereinabove required to be made into the Sinking Fund and Reserve Account, there shall be paid from the amount of excise taxes on deposit in the Excise Taxes Fund whatever sums are necessary to cure such existing deficit. Whenever all of the above required current payments have been made into the Sinking Fund and Reserve Account, the balance of any moneys on deposit in the Excise Taxes Fund may be withdrawn and used by the issuer for any lawful purpose. (7) The balance of any moneys remaining in the Revenue Fund, after the above=required payments shall have been made and the maximum required amounts shall be held on deposit to the credit of the Reserve Account and the Improvement, Repair and Replacement Fund, may be used for the purchase and redemption of the obligations or for any lawful purpose. (8) The Operation and Maintenance Fund, the Sinking Fund, the Reserve Account, the Improvement, Repair and Replacement Fund, 20 . . MISC. ORDINANCES N~ 115 the Revenue Fund, the Excise Taxes Fund and any other special funds herein established and created shall constitute trust funds for the purposes provided herein for such funds. All such funds shall be continuously secured in the same manner as state and municipal deposits are required to be secured by the Laws of the State of Florida. Moneys on deposit in the Sinking Fund (except the Reserve Account therein) may be invested and reinvested only in direct obligations of the United States of America maturing not later than ten (10) days prior to the date in which the moneys therein will be needed. Moneys in the Reserve Account in the Sinking Fund and the Improvement, Repair and Replacement Fund may be invested and reinvested in direct obli- gations of the United States of America or in time deposits in banks or trust companies represented by certificates of deposits and con- tinuously secured as above provided, maturing not later than five (5) years from the date of purchase or must otherwise be maintained in cash. Any and all income received by the issuer from such investments shall be deposited in to the Sinking Fund. Moneys in the Revenue Fund, the Excise Taxes Fund, and the Operation and Maintenance Fund shall not be invested at any time. D. LEVY OF EXCISE TAXES. The issuer will not repeal the ordinances now in effect levying the excise taxes and will not amend or modify said ordinances in any manner so as to impair or adversely affect the power and obligation of the issuer to levy and collect such excise taxes or impair or adversely affect in any manner the pledge of such excise taxes made herein or the rights of the holders of the ob- 1igations. The issuer shall be unconditionally and irrevocably ob- ligated, so ~ong as any of the oß1igations or the interest thereon are outstanding and unpaid, and the lien upon the excise taxes shall not have been released in the manner provided in subsection G hereof, to levy and collect such excise taxes, at the maximum rates permitted by law, to the extent necessary to pay the principal of and interest on the obligations and to make the other payments provided for herein. 21 . . MISC. ORDINANCES N~ 116 This provision shall not be construed to prevent reasonable revisions of the rates of such excise taxes as long as the proceeds of such excise taxes to be collected by the issuer in each year thereafter, together with the net revenues, will be sufficient to pay the principal of and interest on the obligations as the same become due and to make all Sinking Fund, Reserve Account and other payments herein required in such year. E. EXCISE TAXES NOT SUBJECT TO REPEAL. The issuer has full power to irrevocably pledge such excise taxes to the payment of the principal of and interest on the obligations, and the pledging of such excise taxes in the manner pr.ovided herein shall not be subject to repeal, modification, or impairment by any subsequent ordinance, resolution or other proceedings of the governing body of the issuer or by any subsequent act of the Legislature of Florida. The pledge of the excise taxes herein made shall be for the benefit of any additional obligations payable on a parity with the obligations herein authorized from the proceeds of the excise taxes to the same extenttas if such additional parity obligations had been originally issued hereunder. F. SUBSTITUTION OF FRANCHISE TAX. The issuer hereby covenants with the holders of the obligations that in the event it shall acquire the properties and facilities of the Florida Power Corporation and/or the properties and facilities of the Lake Apopka Natural Gas District within the issuer, or i~ the event it shall acquire and operate an electric power plant and/or natural gas distribution facilities within the issuer, and all or part of the franchise taxes are not available to the issuer to make the provisions hereof, the issuer will make payment from the net revenues first available to it from the operation of any such system or service so owned, acquired, constructed or operated by it of the amounts herein required to be paid from the franchise taxes. G. RELEASE OF EXCISE TAXES. At such time as the issuer 22 . . MISC. ORDINANCES N~ 117 may be able to obtain and file in the minutes of its City CODnci1 a certificate of an independent certified public accountant stating that for the next pr.eceding two (2) fiscal years the net revenues derived from the operation of the system exceeded One Hundred Thirty Five per centum (135%) of the maximum amount of principal and interest on all outstanding obligations to become due in anyone .nsuing fiscal year, then the lien hereby impressed upon the excise taxes shall be permanently released, and thereafter the payment of the obligations shall be solely secured by a 1 ien upon and pledge of the net revenues to bedderived from the operation of the system. Any one of the excise taxes may be similarly released, so long as the proceeds of the excise taxes which shall not be released and the net revenues of the system shall have been certified as having exceeded such 135% requirement. Provided, however, no excise taxes may be released unless all payments required by this ordinance to have been made to the Sinking Fund, Reserve Account and Improvement, Repair and Replacement Fund shall have been made in full, and the Reserve Account shall have on deposit therein the maximum amount required to be maintained therein. H. OPERATION AND MAINTENANCE. The issuer will maintain the system and all parts thereof in good condition and will operate the same in an efficient and economical manner making such expenditures for equipment and for renewals, repairs and replacements as may be proper for the economical operation and maintenance thereof. I. RATE ORDINANCE. The issuer will enact a rate ordinance and thereby will fix, establish, revise from time to time whenever necessary, maintain and collect always such fees, rates, rentals and other charges for the use of the product, services and facilities of the system which, together with the proceeds of the excise taxes, will always produce cash revenues sufficient to pay, and out of such funds pay, as the same shall become due, all costs of operation and maintenance of the system, the principal of and interest on the bonds and on all other obligations payable on a parity therewith, and all reserve and 23 . . MISC. ORDINANCES N~ 118 other payments provided for in this ordinance. Such rates, fees rentals or other charges shall not be reduced so as to be insufficient to provide revenues for such purposes. J. BOOKS AND RECORDS. The issuer shall keep, separate and apart from all other books, records and accounts of the issuer, books and records of the net revenues of the system and books and records of the collection of the excise taxes, and the holders of not less than ten per centum (10%) of the obligations shall have the right at all reasonable times to inspect all records, accounts and data of the issuer relating to the operation of the system and the collection of the excise taxes. K. ANNUAL AUDIT. The issuer shall also, at least once a year, within 60 days after the close of its fiscal year, cause the books, records and accounts relating to the system and to the excise taxes to be properly audited by a recognized independent firm of certi- fied public accountants and shall make generally available the rpport of such audits to any holder or holders of obligations. Such audits shall contain a complete report of operations of the system including, but not limited to, a comparison with the operations in previous years, the balance sheet, a schedule of insurance in existence, a schedule of the application of all proceeds of the excise taxes, a schedule of reserves and investments, a schedule showing the number of customers connected with the system at the end of the fiscal year, and a certi- ficate by the auditors stating that no default on the part of the issuer of any covenant herein has been disclosed by reason of such audit. The auditors selected shall be changed at any time by a written request signed by a majority of the holders of the obligations or their duly authorized representatives. A copy of such annual audit shall regularly be furnished to al1'Y holder' of an obligation who shall have requested in writing thàt a copy 6f such rpports be furnished him. L. NO MORTGAGE OR SALE OF THE SYSTEM. The issuer will not sell, mortgage, pledge or otherwise encumbert~be system, or any part 24 . . MISC. ORDINANCES N~ 119 thereof, or any revenues to be derived therefrom, and will not sell, lease or otherwise dispose of any substantial portion of the system, except as hereinafter provided. The issuer shall have and hereby re- serves the right to sell, lease or otherwise dispose of, in the manner provided herein, any of the property comprising a part of the system hereafter determined to be no longer necessary, useful or profitable in the operation thereof. Prior to any such sale, lease or other disposition of said property, if the amount to be received therefor is not in excess of $50,000 the general manager of the system shall make a finding in writing determining that such property comprising a part of the system is no longer necessary, useful or profitable in the operation thereof. If the amount to be received from such sale, lease or other disposition of said property shall be in excess of $50,000, but not in excess of $100,000, the general manager shall first make a finding in writing determining that such property comprising a part of the system is no longer necessary, useful or profitable in the iperation thereof, and the governing body of the issuer shall by resolution approve and concur in the finding of such general manager, and authorize such sale, lease or other disposition of said property. If the amount to be received from such sale, lease or other disposition of said property shall be in excess of $100,000, but not in excess of 10% of the value of fixed assets of the system according to the most recent annual audit report, the general manager shall first make a finding in writing determining that such property comprising a part of the system is no longer necessary, useful or profitable in the operation thereof, and the consulting engineers shall make a finding that it is in the best interest of the system that such property be disposed of, and the governing body of the issuer shall by resolution approve and concur in the findings of such general manager and the consulting engineers and shall authorize such sale, lease or other disposition of said property. 25 . . MISC. ORDINANCES N~ 120 The proceeds derived from any such sale, lease or other disposition of said property shall be placed in the Improvement, Repair and Replacement Fund or in the Sinking Fund, in such propor- tions to be determined by the governing body of the issuer upon the recommendations of the general manager. Such payment of such pro- ceeds into the Sinking ~und or the Improvement, Repair and Replacement Fund shall not reduce the amounts required to be paid into said Funds by other provisions herein. No sale, 1e~~e or other disposition of the properties of the system shAll be made by the issuer if the proceeds to be derived therefrom shall be in excess of 10% of the value of the fixed assets of the system according to the most recent annual audit report and in- sufficient to pay all of the principal of the obligations then out- standing and all interest thereon to their respective dates of maturity, without the prior apporva1 and consent in writing of the holders or their duly authorized representatives of sixty-six and two-thirds per centum ( 66 2/3%) in amount of obligations then outstanding. The issuer shall prepare the form of such approval and consent for execution by the holders of obligations or by their duly authorized representative, which form shall provide for the disposition of the proceeds of the sale, lease or other disposition of such properties of the system. M. INSURANCE. For so long as any of the obligations are outstanding, the issuer will carry adequate fire and windstorm insurance on all buildings and structures of the works and properties of the system which are subdect to loss thcough fire or windstorm, will carry adequate pub 1ic liability insurance, and will .otherwise carry insurance of all kinds and in the amounts normally carried in the operation of similar facilities and properties in Florida. Any such insurance shall be carried for the benefit of the holders of the obligations. All moneys received for losses under any or such insurance, except public liability, are hereby pledged by the issuer as security for the obligations, until and unless such proceeds are used to remedy the loss or damagéofor which 26 . . MISC. ORDINANCES N~ 121 such proceeds are received, either by repairing the property damaged or replacing the property destroyed within ninety (90) days from the receipt of such proceeds. N. NO FREE SERVICE. The issuer will not render or cause to be rendered any free services of any nature by its system, nor will any preferential rates be established for users of the same class. The issuer, including its departments, agencies and instrumentalities, shall avail itself of the facilities or services provided by the system, or any part thereof, and the same rates, fees or charges applicable to other customers receiving like services under similar circumstances shall be charged to the issuer and any such department, agency or in- strumentality. Such charges shall be paid as they accrue, and the issuer shall transfer from its general funds sufficient sums to pay such charges. The revenues so received shall be deemed to be revenues derived from the operation of the system, and shall be deposited and accounted for in the same manner as other revenues derived from such operation of the system. O. MANDATORY CUT OFF. Upon failure of any user to pay for services rendered by the system within sixty (60) days, the issuer shall shut off the connectton of such user and shall not furnish him or per- mit him to receive from the system further service until all obligations owed by bim to the issuer on account of services shall have been paid in full. This covenant shall not, however, prevent the issuer from causing the system connection to be shut off sooner. P. ENFORCEMENTJOF COLLECTIONS. The issuer will diligently enforce and collect the rates, fees and other charges for the services and facilities of the system and the excise taxes herein p1ed~ed; will take all steps, actions and proceedings for the enforcement and col- lection of such rates, charges fees and excise taxes as shall become delinquent to the full extent permitted or authorized by law; and will maintain accurate records with respect thereof. All such fees, rates, charges, revenues and excise taxes herein pledged shall, as collected, 27 . . MISC. ORDINANCES N~ 122 be held in trust to be applied as herein provided and not otherwise. Q. REMEDIES. Any holder of obligations or any coupons appertaining thereto, issued under the provisions hereof or any trustee acting for the holders of such obligations may either at law or in equity, by suit, action, mandamus or other proceedings in any court of competent jurisdiction, protect and enforce any and all rights, including the right to the appointment of a receiver, existing under the Laws of the State of Florida, or granted and contained herein, and may enforce and compel the performance of all duties required herein or by any applicable statutes to be performed by the issuer or by any officer thereof, including the collection of excise taxes. Nothing herein, however, shall be constructed to grant to any holder of such obligations any lien on any real pr.operty of the issuer. R. OPERATING BUDGET. The issuer shall annually at least forty-five (45) eays preceding each of its fiscal years, prepare and adopt a detái1ed budget of the estimated expenditures for operation and maintenance of the system during such next succeeding fiscal year. No expenditures for the operation and maintenance of the system shall be made in any fiscal year in excess of ten per centum (10%) of the amounts provided therefor in such budget without a written finding and recommendation by the general manager of such system or other duly authorized officer in charge thereof, which finding and recommendation shall state in detail the purpose of and necessity for such increased expenditures, or until the governing body of the issuer shall have ap- proved such finding and recommendation by a resolution du1yaadopted, and there shall have been obtained and filed in the minutes of the govern- ing body of the issuer a certification of the consulting engineers that such increased expenditures are necessary and essential to the continuance in operation of the system. The issuer shall mail copies of such annual budgets and all resolutions authorizing increased expenditures for opera- tion and maintenance to any holder or holders of obligations who shall 28 ·1 . . MISC. ORDINANCES N~ 123 file his address with the issuer and request in writing that copies of all such budgets and resolutions be furnished him and shall make available such budgets and all resolutions authorizing increased ex- penditures for operation and maintenance of the system at all reason- able times to any holder or holders of obligations or to anyone acting for and on behalf of such holder or holders. S. CONNECTION WITH SEWER SYSTEM. The issuer will, tb2the full extent permitted by law, require all lands, buildings and structures within the boundaries of the issuer which can use the sewage collection facilities of the system, to connect with and use such sewage collection facilities, and to cease all other means and methods for the collection, purification, treatment and disposal of sewage and waste matter. T. CÐNSULTING ENGINEER. The issuer will annually retain an independent consulting en9ineer or engineering firm having a favorable reputation for skill and experience for the design, construction and operation of systems of comparable size and character as the system, for the purpose of providing the issuer competent engineering counsel affecting the economical and efficient operation of the system and in connection with the making of capital improvements and renewals and replacements to the system. The issuer may, however, employ additional engineers at any time with relation to specific engineering and op- eration problems arising in connection with the system. The issuer shall annually cause to be prepared by the con- sulting engineers a report or survey of the system, with respect to the management of the properties thereof, the sufficiency of the rates, and charges for services, the proper maintenance of the properties of the system and the necessity for capital improvements and recommendations therefor. Such a report or survey shall also show any failure of the issuer to perform or comply with the covenants herein contained. If any such report or survey of the consulting engineers shall set forth that the provisions hereof or any reasonable re- commendations of such consulting engineers have not been complied with, 29 . . MISC. ORDINANCES N~ 124 the issuer shall immediately take such reasonable steps as are necessary to comply with such requirements and recommendations. In making such r~port or survey the consulting engineers shall accept certified statements of the independent certified public accountants. Copies of each report or survey shall be placed on file with the Clerk and shall be open to the inspection of any holder of obligations or other interested parties. U. NO COMPETING SYSTEM. To the full extent permitted by law, the issuer will not grant, or cause, consent to, or allow the granting of, any franchise or permit to any person,firm, corporation or body, or agency or instrumentality whatsoever, for the furnishing of water or sewer services to or within the boundaries of the issuer. V. ISSUANCE OF OTHER OBLIGATIONS. The issuer will not issue any other obligations, except under the conditions and in the manner provided herein, payable from therrevenues of the system or from the excise taxes, nor voluntarily create or cause to be created any debt, lien, pledge, assignment, encumbrance or other charge having priority to or being on a parity with the lien upon said revenues or excise taxes in favor of the obligations issued pursuant to this ordinance and the interest thereon. Any ob1igat~ons issued by the issuer, other than the obligations herein authorized or additional parity obligations provided for in subsection W below, payable from such revenues and excise taxes, shall contain an express statement that such obligations are junior and subordinate in all respects to the obligations herein authorized, as to lien on and source and security for payment from such revenues and such excise taxes. W. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. The issuer covenants and agrees that in the event the cost of construction or completion of the project shall exceed the dollar amount of obligations herein authorized, it will deposit into the Construction Fund from any funds of the issuer legally available to it for such purpose the amount of such excess. The issuer may provide such excess, and only such excess, 30 . . MISC. ORDINANCES N~ 125 through the issuance of additional oDligations payable on a parity with the obligations herein autborized from the net revenues of the system and the proceeds of the excise taxes. Except for the issuance of parity obligations to provide funds for any such excess, no addi- tional parity ob1igations payable on a parity from the net revenues of the system and from the proceeds of the excise taxes with the ob- ligations herein authorized shall be issued after the issuance of any obligations herein authorized, except upon the conditions and in the manner hereinafter provided: (1) There shall have been obtained and filed in the minutes of the governing body of the issuer a certificate of an independent certified public accountant of suitable experience and responsibility stating: (a) that the books and records of the issuer relating to the collection and receipt of the revenues derived from the operation of the system and of the proceeds of the excise taxes have been audited by him; (b) the amount of the net revenues and the proceeds of the excise taxes, as defined herein, received by the issuer for the two fiscal years immediately preceding the date of delivery of such addi- tional parity obligations with respect to which such certificate is made; and (c) that the average annual net revenues and proceeds of the excise taxes for such preceding years will together equal at least 1.40 times the maximum annual principal and interest requirements on (i) all obligations and all additional parity obligations, if any, then out- standing and (ii) the additional parity obligations with respect to which such certificate is made. (2) If desirable, the net revenues for such two preceding fiscal years may be adjusted as follows: (a) to reflect for the two preceding fiscal years changes made in the rates, fees, rentals or other charges from the operation of the system dur~ng such two preceding fiscal years; (b) to reflect any change in such net revenues caused by any new projects of the system having been placed into use and op- eration subsequent to the date of commencement of such two preceding 31 . . MISC. ORDINANCES N~ 126 fiscal years and not less than six months prior to the date of such certificate provided for in paragraph (1) above; and (c) to include for each such fiscal year the average annual estimated net revenues to be derived from the first two full fiscal years' operation of the project to be acquired or constructed out of the proceeds of such additional parity obligations. (3) Each ordinance authorizing the issuance of additional parity obligations will recite that all of the covenants herein con- tained will be applicable to such additional parity obligations. (4) The issuer shall not be in default in performing any of the covenants and obligations assumed hereunder, and all payments herein required to have been made into the account and funds, as pro- vided hereunder, shall have been made to the full extent required. (5) The additional parity obligations shall be dated May 1 or November 1 of the year of issuance thereof, shall bear interest payable semi-annually on May 1 and November 1 of each year, and shall mature on November 1 of the year of maturity thereof. X. COMPLETION OF PROJECT. The issuer will complete the project in an economical and efficient manner and with all practicable dispatch. Thereafter, the issuer will maintain the system in good condition and continuously operate the same in an efficient manner and at a reasonable cost. SECTION 17. APPLICATION OF PROCEEDS OF OBLIGATIONS. All moneys received from thessãleo6ftthe obligations shall be deposited by the issuer in a special account in a bank or trust company and ap- plied by the issuer as follows: A. All accrued interest p1 us a sum equal to the interest which will accrue on the obligations for a period of two years while the project shall be under construction shall be deposted in the Sinking Fund. B. The issuer shall next use the moneys in said special account to pay all engineering fees, legal fees, fees of financial advisors, cost of the issuance of the obligations, and all other similar 32 . . MISC. ORDINANCES N~ 127 costs incurred in connection with the acquisition and construction of the project and the issuance of the obligations to finance the cost thereof. C. A special fund is heeeby created, established and de- signated as the "Clermont Water and Sewer System Construction Fund" (herein called the "Construction Fund"). There shall be paid into the Construction Fund the balance of the moneys remaining after making all the deposits and payment provided for in paragraphs A and B, above. Such fund shall be kept separate and apart from all öther accounts of the issuer, and the moneys on deposit therein shall be withdrawn, used and applied by the issuer solely to the payment of the cost of thepproject and purposes incidental thereto, as hereinabove described and set forth. If for any reason such proceeds or any part thereof are not necessary for or are not applied to the payment of such cost, then the unapplied proceeds shall be deposited by the issuer in the Reserve Account in the Sinking Funds. All such proceeds shall be and constitute trust funds for such purposes~ and there is hereby created a lien upon such moneys until so applied in favor of the holders of the obligations. Any funds on deposit in the Construction Fund which, in the opinion of the issuer, acting upon the recommendation of the consulting engineers, are not immediately necessary for expenditure, as hereinabove provided, may be invested in direct ob1igat'ons of the United States of America maturing in a period of 360 days or less. All such securities shall be held by the depository bank, and all income derived therefrom shall be deposited in the Sinking Fund. Immediately prior to the delivery of the obligations to the -purchasers thereof, the issuer shall enter into a written agreement with the depository bank for the Construction Fund, which agreement shall provide that all expenditures or disbursements from the Construction Fund shall be made after such expenditures or disbursements shall have been approved in wftttng by the consulting engineers. The date of tbm- . . MISC. ORDINANCES N~ 128 p1etion of the project shall be determined by the consulting engineers, who will certify such facts in writing to the governing body of the issuer. SECTION 18. MODIFICATION OR AMENDMENT. No material modification or amendment of this ordinance or of any r.esolution or ordinance amendatory hereof or supplemental hereto may be made without the CDnsent in writing of the holders of two-thirds or more in the principal amount of the obligations then outstanding; provided, however, that no modification or amendment shall permit a change in the maturity of such obligations or a reduction in the rate of interest thereon or in the amount of the principal obligation thereof or affecting the promise of the issuer to pay the principal of and interest on the ob- ligations as the same shall come due from the revenues of the system and from the proceeds of the excise taxes or reduce the percentage of the holders of the ob1igat$ons required to CDnsent to any material modi- fication or amendment hereof without the consent of the holder or holders of all such obligations. SECTION 19. SEVERABIlITY OF INVALID PROVISIONS. If any one or more of the covenants, agreements or provisions herein con- tained shall be held contrary to any express provision of law or con- trary to the policy of express law, though not expressly prohibited, or against public policy, or shall for any reason whatsoever be held invalid, then such covenants, agreements or provisions shall be null and void and shall be deemed separable from the remaining covenants, agreements or provisions and shall in no way affect the validity of any ofcthe other provisions hereof or of the obligations or coupons issued hereunder. SECTION 20. SALE OF OBLIGATIONS. The obligations shall be issued and sold in such manner and at such price or prices consistent with the Act, all at one time or in installments from time to time, as shall be hereafter determined by the governing body of the issuer. SECTION 21. VALIDATION AUTHORIZED. The attorney for the 34 e· . MISC. ORDINANCES N~ 129 issuer is authorized and directed to prepare and file proceedings to validate the obligations in the manner provided by law. SECTION 22. REPEALING CLAUSE. All ordinances or parts thereof of the issuer in conflict with the provisions herein contained are, to the extent of such conflict, hereby superseded and repealed. SECTION 23. EFFECTIVE DATE. This ordinance shall take effect in the manner provided by law. FIRST READING THIS 28th OF DECEMBER, 1970. PASSED AND ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLERMONT, LAKE COUNTY, FLORIDA, THIS 12th DAY OF JANUARY, 1971. CITY OF CLERMONT ATTEST: IC/J~'1ÂMJ ~J. r~.t City Clerk By: ~ ( ~ Chairman of the City Council APPROVED by me this 12th day of January, 1971'~[Ld- Mayor