C153670B PIF Contract - Laserfiche WebLink

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sufficient to pay the annual payment due under this contract ( "pledged revenues"), subject only to the BORROWER's pledges of funds for the repayment of its Water Revenue Refunding Bonds, Series 1995 and Series 1997, and its existing CWCB loans. Further, the BORROWER agrees to: a. Keep pledged revenues separate. The BORROWER shall set aside and keep the pledged revenues in an account separate from other BORROWER revenues, and warrants that these revenues will not be used for any other purpose. b. Security interest in pledged revenues. To provide a security interest to the STATE in the pledged revenues so that the STATE shall have priority over all other competing claims for said revenues, except for the liens of the BORROWER's Water Revenue Refunding Bonds, Series 1995 and Series 1997, and its existing CWCB loans, the BORROWER has duly executed a Security Agreement, attached hereto as Attachment D and incorporated herein. c. Rate Covenant. Pursuant to its statutory authority and as permitted by law, the BORROWER shall take all necessary actions consistent therewith during the term of this contract to establish, levy and collect water rates, charges and fees in amounts sufficient to pay this loan as required by this contract and the promissory note, to cover all expenditures for operation and maintenance and emergency repair services, and to maintain adequate debt service reserves, including obtaining voter approval, if necessary, of increases in the BORROWER's water user fees. d. Debt Service Reserve Account. Within fifteen working days after the effective date of this contract, the BORRO. hall .t an amount equal to one annual loan payment .� , _,. into its debt service reserve; cost he event that the Borrower applies funds from this account to repaymen .of thVoar l rrower shall replenish the account within ninety (90) days of withdrawal � ` funds e. Additional Debts nda he BORROWER shall not issue any indebtedness payable from the pledged revenues aritiaving a lien thereon which is superior to the lien of this loan. The BORROWER issue parity debt only with the prior written approval of the STATE, provided that: i. The BORROWER is cuNrrently and at the time of the issuance of the parity debt in substantial compliance with all of the obligations of this contract, including, but not limited to, being current on the annual payments due under this contract and in the accumulation of all amounts then required to be accumulated in the BORROWER's debt service reserve fund; ii. The BORROWER provides to the STATE a Parity Certificate from an independent certified public accountant certifying that, based on an analysis of the BORROWER's revenues, for 12 consecutive months out of the 18 months immediately preceding the date of issuance of such parity debt, the BORROWER's revenues are sufficient to pay its annual operating and maintenance expenses, annual debt service on all outstanding indebtedness having a lien on the pledged revenues, including this loan, the annual debt service on the proposed indebtedness to be issued, and all required deposits to any reserve funds required by this contract or by the lender(s) of any indebtedness having a lien on the pledged revenues. The analysis of revenues shall be based on the BORROWER's current rate structure or the rate structure most recently adopted. No more than 10% of total revenues may originate from tap and /or connection fees. Page 6 of 8