The City shall have power to issue mortgage bonds beyond the general limits of bonded indebtedness prescribed by law for the acquiring, owning, purchasing, constructing, improving or operating of any public utility; provided, such mortgage bonds issued beyond the general limit of bonded indebtedness prescribed by law shall not impose any liability upon such city but shall be secured only upon the property and revenues of such public utility, including a franchise, stating the terms upon which, in case of foreclosure, the purchaser may operate the same, which franchise shall in no case extend for a longer period than twenty (20) years from the date of the We of such utility and franchise on foreclosure. Such mortgage bonds shall be sold to yield not to exceed the limit set by State law. A sinking fund shall be created in the event of the issuance of such bonds, by setting aside such percentage of the gross or net earnings of the public utility as may be deemed sufficient for the payment of the mortgage bonds at maturity, provided, however, than no such fund need be created if serial bonds are issued of such nature that they are paid annually and no sinking fund is required.