C150317 Contract

• Contract/PO #: CT2015-013
• Contract/PO #: C150317
• Contractor Name: Lake Durango Water Authority
• Contract Type: Loan
• Loan Projects - Doc Type: Contract Documents

have priority over all other competing claims with respect to the Net Revenue,
except for the liens of the BORROWER'S existing loans as listed in Section 5
(Schedule of Parity Bonds), of the PROJECT SUMMARY, which sets forth the
position of the lien created by this CONTRACT in relation to any existing lien(s).
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 rates, charges and fees
as described in APPENDIX 3, in amounts sufficient to pay this loan as required
by the terms of 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 rate schedule or taxes,
if applicable.
d. Debt Service Reserve Account. To establish and maintain the debt
service reserve account, the BORROWER shall deposit an amount equal to one-
tenth of an annual payment into its debt service reserve fund on the due date of
its first annual loan payment and annually thereafter for the first ten years of
repayment of this loan. In the event that the BORROWER applies funds from this
account to repayment of the loan, the BORROWER shall replenish the account
within ninety (90) days of withdrawal of the funds.
e. Additional Debts or Bonds. The BORROWER shall not issue any
indebtedness payable from the NET REVENUE and having a lien thereon which
is superior to the lien of this loan. The BORROWER may issue additional Parity
Bonds only with the prior written approval of the CWCB and consent will be
provided only if the following occurs:
i. The BORROWER is currently and at the time of the issuance of the Parity Bonds
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 CWCB 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 Bonds, 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 NET REVENUE (as defined in the LOAN RESOLUTION),
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 NET
REVENUE. 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.
Loan Contract C150317
Page 4 of 12