Res 2017-084/approving a principal forgiveness agreement with the Texas Water Development Board that forgives an amount not to exceed $961,821 out of $1,961,821 in principal funds to the city from the Clean Water State Revolving Fund to finance the planni

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39. the Obligations must contain a provision providing that additional revenue obligations �.., may only be incurred if: (a) the City is not then in default as to any covenant, condition, or obligation prescribed in an ordinance authorizing the issuance of outstanding parity obligations; (b) the proposed additional revenue obligations have been approved by the Texas Attorney General; (c) each of the respective funds created and dedicated to the payment, security, and benefit of the additional revenue obligations contains the amount of money then required to be on deposit therein; (d) the City has secured from a Certified Public Accountant a certificate or report reflecting that for the fiscal year next preceding the date of the proposed additional revenue obligations, or a consecutive twelve (12) month period out of the fifteen (15) month period next preceding the month in which the ordinance authorizing the proposed additional revenue obligations is adopted, the "net revenues" of the System (after operations and maintenance is considered, but not deducting depreciation or expenditures, which under standard accounting practices are classed as capital expenditures) are equal to at least 1.20 times the combined average annual principal and interest requirements on all outstanding revenue obligations to be outstanding after the issuance of the proposed parity revenue obligations. An authorized representative of the City must provide the calculations, identifying reasonable assumptions, in a manner and format that is acceptable to the Executive Administrator. In making a determination of such net revenues, the CPA may take into consideration a change in the rates and charges for services and facilities afforded by the City's systems that became effective at least sixty (60) days prior the last day of the period for which such net revenues are determined and, for purposes of satisfying such net revenues text, make a pro forma determination of such net revenues for the period of time covered by the certificate or report based upon such change in rates and charges as be in in effect for the entire period covered by the certificate or report, and; (e) the additional revenue obligations are made to mature on February 15 or August 15, either or both,of each year in which they are scheduled to mature. PROVIDED, however,the commitment is subject to the following special conditions: Special Conditions: 40. prior to closing, the City shall execute a Principal Forgiveness Agreement in a form and substance acceptable to the Executive Administrator; and 1.18 TWDB Commitment No.L1000601 Exhibit A,Page 9 of 10