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<br />outstanding loan to make it financially possible for the <br />Contractor to repurchase the loan and that the Contractor has <br />demonstrated its ability to repay by virtue of its previous <br />record with Interior and that a Construction Fund loan to the <br />Contractor is feasible for this stated propose and in the <br />public interest: and <br /> <br />WHEREAS, the State has authority to enter this agreement <br />pursuant to section 37-60-119 and 37-60-122(1). CRS; and <br /> <br />WHEREAS. pursuant to section 37-60-120. the State is <br />required to assure repayment of loan funds by the Contractor: <br />and <br /> <br />WHEREAS. pursuant to the Contractor's home rule charter. <br />the Contractor has authority to contract to borrow money <br />provided that an Ordinance be duly passed by the City council <br />and to levy taxes and impose water charges assuring repayment <br />of the State according to the terms of the contract: "and <br /> <br />NOW. THEREFORE. in consideration of the mutual and <br />dependent covenants herein contained, it is agreed by the <br />parties hereto as follows: <br /> <br />A. The Contractor agrees that it shall: <br /> <br />1. Use funds loaned by the State for the sole purpose of <br />repurChasing its small project loan obligation from Interior <br />before August lB. 19BB. This loan .shall not be used by the <br />Contractor for any other purpose. In the event "that repurchase <br />is not accomplished by August 18. 1988. the Contractor shall <br />immediately repay this loan amount to the State. <br /> <br />2. Prior to the execution of this contract. adopt an <br />ordinance consistent with its home rule charter to authorize <br />the incurring of this debt. the levy of taxes and imposition of <br />water charges to repay the debt. and the execution of security <br />to assure repayment to the State. <br /> <br />3. Without expense to the State. manage. operate. -and <br />maintain the project continuously in"an efficient and <br />economical manner. and assume all legal liability for such <br />management, operation. and maintenance. The Contractor agrees. <br />to the extent permitted by law, to indemnify and hold the State <br />harmless from any liability as a result of the State's interest <br />in the project. <br /> <br />4. Pursuant to its home rule charter and ordinances. <br />continue its service charges and levy taxes or adjust as <br />necessary to provide sufficient funds for adequate operation <br />and maintenance. emergency repair services. obsolescence <br />reserves. and debt reserves. and to assure repayment of the <br />project loan to the State as provided herein. <br /> <br />5. Make the services of said project available within its <br />capacity to all persons in the Contractor's service area <br />without discrimination as to race. color, religion. or natural <br />origin at reasonable charges (inClUding assessments. taxes. or <br />fees). whether for one or more classes of service. in <br />accordance with a schedule of such charges formally adopted by <br />the Contractor through its city Council, as may be modified <br />from time to time. The current rate schedule must be approved <br />by the State. Thereafter. .the Contractor may, subject to the <br />approval of the State. make such modifications to the rate <br />schedule as the Contractor deems necessary to efficiently and <br />economically provide for the financial requirements of the <br />system as long as the rate schedule remains reasonable and <br />non-discriminatory. <br /> <br />6. Provide the State with such periodic reports as the <br />State may require aod permit periOdic inspections of its <br /> <br />Page ~ of 2 Pages <br />