CITY COUNCIL REGULAR MEETING AGENDA 9-15-26

15 additions, improvements and extensions for the first 36-month period in which each addition, improvement or extension is respectively to be in operation, all as shown in the written report of an Independent Consultant engaged by the City; and (ii) An allowance for revenues projected to arise from any increase in the Charges which has been approved by the City Council prior to the incurring of such additional indebtedness but which, during all or any part of such Fiscal Year or such 12-month period, was not in effect, in an amount equal to the amount by which the Net Revenues would have been increased if such increase in Charges had been in effect during the whole of such Fiscal Year or such 12- month period, all as shown in the written report of an Independent Consultant engaged by the City. For the avoidance of doubt, a Charge shall be considered to have been approved by the City Council and may be considered in the calculation of the allowance described in the previous sentence if the Charge is part of a rate increase that has been approved by the City Council, even if the specific Charge will not take effect until a subsequent Fiscal Year. (c) The Parity Debt Instrument providing for the issuance of such Parity Debt under the Installment Sale Agreement shall: (i) Provide that the proceeds of such Parity Debt will be applied to the acquisition, construction, improvement, financing or refinancing of additional facilities, improvements or extensions of existing facilities within the Water System, or otherwise for facilities, improvements or property which the City determines are of benefit to the Water System, or for the purpose of refunding any Parity Debt in whole or in part, including all costs (including costs of issuing such Parity Debt and including capitalized interest on such Parity Debt during any period which the City deems necessary or advisable) relating thereto; (ii) Specify the date on which interest on such Parity Debt will be payable; and (iii) Specify the date on which principal on such Parity Debt will be payable. (d) Notwithstanding the foregoing, Parity Debt proposed to be issued for the purpose of refunding any Parity Debt may be issued without compliance with subsection (b) and (c)(i), so long as such refunding results in the same or lower total Debt Service in each Fiscal Year after such refunding. As used above, “Maximum Annual Debt Service” means, as of the date of calculation, the maximum amount of Debt Service (as defined in the Indenture and set forth in Appendix A hereto) for the current or any future Fiscal Year. No Senior Debt The City covenants in the Installment Sale Agreement to not issue or incur any additional bonds or other obligations during the term thereof having any priority in payment of principal or interest out of the Net Revenues over the Installment Payments. However, this covenant does not limit or affect the ability of the City to issue, enter into or incur additional Page 225 of 318