Ord 2023-042 authorizing the issuance and sale of an amount not to exceed $1,120,000.00 of Combination Tax and Surplus Revenue Certificates of Obligation, Series 2023

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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, if any,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. (d) Chapter 1208, Texas Government Code, applies to the issuance of the Certificates and the pledge of the taxes and Surplus Revenues granted by the Issuer under Sections 8 and 9 of this Ordinance, and is therefore valid, effective, and perfected. If Texas law is amended at any time while the Certificates are outstanding and unpaid, such that the pledge of the taxes and Surplus Revenues granted by the Issuer under Sections 8 and 9 of this Ordinance is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code,then, in order to preserve to the registered owners of the Certificates the perfection of the security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. Section 9. REVENUES; RATES AND CHARGES. (a) That the Certificates of Obligation are additionally secured by and shall be payable from the Surplus Revenues. The 14 SAN MARCOS(TWD13)CTRCO 2023&2023A:Ordinance($1,120,000)