When the City is authorized to acquire or operate any public utility as defined in Section 23 of Article VIII of the Michigan Constitution, it may issue mortgage bonds therefor beyond the general limit of bonded indebtedness prescribed by law; provided that such mortgage bonds issued beyond such limit of bonded indebtedness shall not impose any liability upon the 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 years from the date of the sale of such utility and franchise on foreclosure. Such mortgage bonds shall be sold to yield not to exceed six percentum per annum. In the event of the issuance of such mortgage bonds there shall be created a sinking fund 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.