Ord 2025-013 authorizing the issuance and sale of an approximate amount of $30,450,000.00 of Waterworks and Wastewater System Revenue Bonds, Series 2025, pledging the revenues of the water and wastewater system in support of the bonds

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accordance with this Section,an amount sufficient to cause the cash or investments credited to the Reserve Account to accumulate to the Required Reserve Amount,or(ii)replace such instrument with a surety bond or insurance policy meeting the requirements of 1 and 2 above, within six months of such occurrence. (4) The Paying Agent/Registrar shall ascertain the necessity for a claim or draw upon any Reserve Account Obligation and provide notice to the issuer of the Reserve Account Obligation in accordance with its terms not later than three days (or such appropriate time period as will, when combined with the timing of required payment under the Reserve Account Obligation, ensure payment under the Reserve Account Obligation on or before the interest payment date) prior to each date upon which the principal of or interest on the Parity Obligations will be due. It is recognized that a Reserve Account Obligation may be issued which is payable only with respect to a part of the Bonds with the remainder of the Required Reserve Amount being satisfied by monies and investments and in that case any draws upon the Reserve Account will have to be made on a pro-rata basis. Therefore, (i) draws upon one or more such Reserve Account Obligations shall be made on a pro-rata basis with cash and investments available in the Reserve Account and (ii) deposits and credits to the Reserve Account to restore it to the Required Reserve Amount shall be utilized on a pro-rata basis to pay Reserve Account Obligation Payments to reimburse the issuers of the Reserve Account Obligations,thus restoring that part of the Required Reserve Amount, and to restore with cash and investments the balance of the Required Reserve Amount. (f)In connection with the issuance of the Bonds,the City is satisfying the Required Reserve Amount by meeting the standard described in Section 4.03(d) above which provides that the Required Reserve Amount in the Reserve Account shall be suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.30 times the average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year are less than 1.30 times the average Annual Debt Service Requirements, the City will fund the Reserve Account according to the provisions herein. ARTICLE V COVENANTS REGARDING TAX EXEMPTION Section 5.01. COVENANTS REGARDING TAX EXEMPTION. (a) Covenants. The City covenants to take any action necessary to assure, or refrain from any action which would adversely affect,the treatment of the Bonds as obligations described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on which is not includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance thereof, the City covenants as follows: (1) to take any action to assure that no more than 10 percent of the proceeds of the Bonds or the projects financed therewith(less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if ,more than 10 percent of the proceeds of the Bonds or the projects financed therewith are so used, such amounts, whether or not received by the City, with respect to such private 15 San Marcos I WWSRB 2025 11"Supplemental ordinance