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Section 1. (a) Pursuant to Article V~I, Section 10 (a) (2) of the 1970 Constitution of Virginia, and Chapter 5 of Title 15.1 of the Code of Virginia, in order to make certain capital improvements, extensions and additions to the water and sewage system, which constitutes a revenue producing undertaking of the City,-it is expedient that the City of Portsmouth shall borrow the sum of Nine Million, Eight Hundred Fifty Thgusand Dollars ($9,850,000), . and there shall be issued in the name of and on behalf of the City of Portsmouth, Virginia, Nine Million, Eight Hundred Fifty Thousand Dollars ($9,850,000) of Public Utility Bonds, and the proceeds arising from the sale of said bonds, or any of them, shall be applied to the payment of the costs of such improvements, extensions and additions and to no other purpose. (b) The said bonds shall be issued at one time, or part thereof from time to time as the City Council shall direct, and each.issue shall be payable not exceeding forty years from its date and said bonds shall bear interest at the rate or rates to be hereafter deter- mined by the City Council, upon the sale of said bonds, provided that the maximum rate of interest shall not exceed the maximum rate of interest authorized.by law at the time of sale of the bonds. (c) The principal and interest of said bonds shall be payable from ad valorem taxes without limitation of rate or~ amount, if the revenues of the water and sewage system undertaking are insufficient for that purpose. Said bonds are to be issued pursuant to Article VII, Section 10 (a) (2) of the Constitution of Virginia, and are not to be included in determining the power of the City to incur .indebtedness within the limitation prescribed by Article VII, Section 10 (a) of the Constitution of Virginia, but from and after five years from the date of the election on the question of the issuance of said bonds, whenever and for so long as such revenue producing undertaking fails to produce sufficient revenue to pay for cost of operation and administration (including interest on bonds issued therefor) and the cost of insurance against loss by injury to persons or property and an annual amount to be placed in~o a sinking fund-sufficient to pay, at or before maturity, all bonds issued on account of said undertaking, all such bonds outstanding shall be included in determining the limitation of the power of the City to incur indebtedness.