The gross income and revenues of the system shall be set aside into a separate and special fund designated the Combined Utilities System Revenue Fund ("Revenue Fund") to be used and apportioned as follows:
(A) (1) There shall be set aside from the Revenue Fund such portion thereof as will be sufficient to pay the interest on and the principal of any bonds of the city issued to finance improvements to the system ("bonds"). Such portion shall be deposited in a Utilities System Bond Payment Account of the city ("Bond Fund"), which shall be used for the payment, or reimbursement to the city for payment, when due of interest on and principal of the bonds ("Bond Fund obligations").
(2) Such payments into the Bond Fund for the Bond Fund obligations shall be made in equal monthly installments on or before the tenth day of each month, and it is hereby determined that the minimum amounts to be paid into the Bond Fund each month for the Bond Fund obligations shall be as follows:
(a) An amount which together with other funds available for such purpose will be equal to one-sixth of the interest falling due on the bond fund obligations on the next succeeding interest payment date shall be deposited in the Bond Fund; provided that no later than the tenth day of the month before the first interest payment date following the issuance of the any bonds, there shall be paid into the Bond Fund the amount of any deficiency in the amount of interest to be due on such first interest payment date.
(b) An amount which together with other funds available for such purpose will be equal to one-twelfth of the principal amount of the Bond Fund obligations coming due on the next principal payment date shall be deposited in the principal account.
(3) No further payments need be made into the Bond Fund when the amount then held in the Bond Fund is at least equal to the entire amount required for retiring all outstanding bonds and paying all interest that will accrue at the time of such retirement.
(4) If for any reason there should be a failure to pay into the Bond Fund the full amount above stipulated, then an amount equivalent to such deficiency shall be set apart and paid into the Bond Fund from the first available income and revenues.
(5) All moneys held in the Bond Fund, shall be deposited in a bank or banks which are members of the Federal Deposit Insurance Corporation ("FDIC") or one of its agencies and all such deposits which cause the aggregate deposits of the city in any one bank to be in excess of the amount insured by the FDIC or one of its agencies shall be continuously secured by a valid pledge of direct obligations of the United States of America having an equivalent market value. All or any part of the Bond Fund may, be invested in investment obligations, as defined in this chapter, maturing or being subject to retirement at the option of the holder on such dates as the same may be needed for meeting interest and/or principal payments and all such investments shall be carried to the credit of the Bond Fund.
(6) It is specifically acknowledged and ordered that the revenue of the system and amounts in the Bond Fund are not pledged to or hereby for the benefit of the holders of any bonds and that the provisions of this division (B) are enacted solely for the administration, convenience and benefit of city government.
(B) (1) There shall be continued an account of the city known as the Depreciation Fund, and from the balance of the income and revenues remaining after the aforesaid payments into the Bond Fund there shall be set aside on or before the tenth day of each month into the Depreciation Fund at least 10% of the balance remaining in the Revenue Fund or at least $10,000, whichever is greater, until there is accumulated and there is being maintained in the Depreciation Fund a balance of at least $500,000, being the required minimum balance for the Depreciation Fund. Whenever withdrawals are made from the Depreciation Fund reducing the balance therein to less than such minimum balance, the prescribed payments shall continue to be made therein so as to restore the amount to at least such minimum balance. The Depreciation Fund shall be used to provide reasonable reserves for renewals, replacements, improvements, extensions, extraordinary major repairs and contingencies in the operation of the system, provided also that withdrawals may be made from the Depreciation Fund to fund any deficiency in the Bond Fund.
(2) All funds in the Depreciation Fund shall be kept apart from all other municipal funds and shall be deposited and secured in the same manner as herein provided for the deposit and security of the Bond Fund, or all or any part of the Depreciation Fund may be invested in the same manner as herein provided for the investment of moneys in the Bond Fund, and all such investments shall be carried to the credit of the Depreciation Fund and the income from such investments shall be credited to the Depreciation Fund.
(C) There shall be continued an account of the city known as the Operation and Maintenance Fund, and from the balance of the income and revenues remaining after the aforesaid payments into the Bond Fund and the Depreciation Fund there shall be set aside on or before the tenth day of each month into the Operation and Maintenance Fund such amount as may be determined, pursuant to an annual budget for the system which shall be adopted annually by the City Council (and which the Council may amend from time to time), to be necessary and sufficient to pay the reasonable and current expenses of operating, maintaining and insuring the system for the current and the next ensuing months. After the tenth day of each month further transfers may be made in like manner only if and to the extent it may be found to be necessary to pay such expenses actually accrued and payable. All funds in the Operating and Maintenance Fund shall be kept apart from all other municipal funds and shall be deposited and secured in the same manner as herein provided for the deposit and security of the Bond Fund, or all or any part of the Operation and Maintenance Fund may be invested in the same manner as herein provided for the investment of moneys in the Bond Fund, and all such investments shall be carried to the credit of the Operation and Maintenance Fund and the income from such investments shall be credited to the Operation and Maintenance Fund.
(D) Whenever, at the end of any fiscal year, all specified and required transfers and payments into the special funds hereinbefore provided have been made and there is a balance in the Revenue Fund in excess of the amounts required to be transferred during the first two months of the ensuing fiscal year into said special funds, all or any part of such excess may be used as follows:
(1) To retire or redeem any debt obligation of the city issued to finance improvements to the system, as may be determined by the City Council;
(2) To transfer additional amounts to the Operation and Maintenance Fund;
(3) To transfer additional amounts to the Depreciation Fund; or
(4) For any other lawful corporate purpose of the city.
(Ord. B2010-09, passed 6-15-10)