Ord 2022-053/authorizing the issuance and sale of an amount not to exceed $1,200,000.00 of Combination Tax and Surplus Revenue Certificates of Obligation, Series 2022A, for (1) planning, acquisition, design and

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body of the Issuer shall compute and ascertain the rate and amount of ad valorem tax,based on the latest approved tax rolls of the Issuer, with full allowances being made for tax delinquencies and the cost of tax collections,which will be sufficient to raise and produce the money required to pay the interest on the Certificates as such interest comes due, and to provide a sinking fund to pay the principal of the Certificates as such principal matures, but never less than 2% of the original amount of the Certificates as a sinking fund each year. Said rate and amount of ad valorem tax is hereby ordered to be levied against all taxable property in the Issuer for each year while any of the Certificates are outstanding and unpaid, and said ad valorem tax shall be assessed and collected each such year and deposited to the credit of the Interest and Sinking Fund. Said ad valorem taxes necessary to pay the interest on and principal of the Certificates, as such interest comes due and such principal matures, are hereby pledged for such payment, within the limit prescribed by law. (b) To the extent necessary, the payments into the Interest and Sinking Fund as hereinabove required shall be made from funds derived from taxation. For each year that the Certificates are outstanding, prior to the time taxes are to be levied for such year, the City shall establish, adopt and maintain an annual budget that provides for either the monthly deposit of sufficient Surplus Revenues and/or tax revenues,the monthly deposit of any other legally available funds on hand at the time of the adoption of the annual budget, or a combination thereof, into the Interest and Sinking Fund for the repayment of the Certificates.The amount of taxes to be provided annually for the payment of principal of and interest on the Certificates shall be determined and accomplished as follows:the Issuer=s annual budget shall reflect(i)the amount of the debt service requirements to become due on the Certificates in the next succeeding fiscal year of the Issuer, (ii) the amount on deposit in the Interest and Sinking Fund, as of the date such budget is approved (after giving effect to any payments required to be made during the remainder of the then current fiscal year of the Issuer), and (iii) the amount of Surplus Revenues estimated and budgeted to be available for the payment of such debt service requirements on the Certificates during the next succeeding fiscal year of the Issuer. The amount required to be provided in the succeeding fiscal year of the Issuer from ad valorem taxes shall be the amount, if any,the debt service requirements on the Certificates in such fiscal year exceed the sum of(i)the amount shown to be on deposit in the Interest and Sinking Fund at the time the annual budget is approved, and (ii) the Surplus Revenues shown to be budgeted and available for payment of such debt service requirements. Following final approval of the Issuer=s annual budget, the City Council of the Issuer shall levy an ad valorem tax at a rate sufficient to produce taxes in the amount so determined,to be used for the purpose of paying the principal of and interest on the Certificates in the next succeeding fiscal year of the Issuer.However,if Surplus Revenues are actually on deposit in the Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount of taxes which otherwise would have been required to be levied and collected may be reduced to the extent and by the amount of revenues then on deposit in the Interest and Sinking Fund. (c) In accordance with the foregoing, the Issuer hereby covenants and agrees to transfer and deposit to the Interest and Sinking Fund each month an amount not less that 1/12th of the annual debt service on the Certificates until the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt service on the Certificates; further,the Issuer shall not transfer any funds, including Surplus Revenues, from the utility fund to any fund other than the Interest and Sinking Fund until such time as an amount equal to the annual debt service on the Certificates for the then-current fiscal year, less any of such amount for which ad valorem taxes have been levied for such fiscal year, has been deposited in the Interest and Sinking Fund. 14 SAN MARCOS(TWDB)CTRCO 2022:Ordinance