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interest and sinking tax rate sufficient for the repayment of all system debt service FMIM <br />requirements; <br />13, prior to closing, and if not previously provided with the application, the City shall submit <br />executed contracts for engineering, and, if applicable, financial advisor and bond counsel <br />contracts, for the project that are satisfactory to the Executive Administrator. Fees to be <br />reimbursed under the contracts must be reasonable in relation to the services performed, <br />reflected in the contract, and acceptable to the Executive Administrator; <br />14. prior to closing, when any portion of the financial assistance is to be held in escrow or in <br />trust, the City shall execute an escrow or trust agreement, approved as to form and <br />substance by the Executive Administrator, and shall submit that executed agreement to <br />the TWDB; <br />15. the Executive Administrator may require that the City execute a separate financing <br />agreement in form and substance acceptable to the Executive Administrator; <br />Conditions Related to Tax -Exempt Status <br />16. the City's bond counsel must prepare a written opinion that states that the interest on the <br />Obligations is excludable from gross income or is exempt from federal income taxation. <br />Bond counsel may rely on covenants and representations of the City when rendering this <br />opinion; W" <br />17. the City's bond counsel opinion must also state that the Obligations are not "private <br />activity bonds." Bond counsel may rely on covenants and representations of the City <br />when rendering this opinion; <br />18. the Obligations must include a provision prohibiting the City from using the proceeds of <br />this loan in a manner that would cause the Obligations to become "private activity bonds" <br />within the meaning of § 141 of the Internal Revenue Code of 1986, as amended (Code) <br />and the Treasury Regulations promulgated thereunder (Regulations); <br />19. the Obligations must provide that no portion of the proceeds of the loan will be used, <br />directly or indirectly, in a manner that would cause the Obligations to be "arbitrage <br />bonds" within the meaning of § 148(a) of the Code and Regulations, including to acquire <br />or to replace funds which were used, directly or indirectly, to acquire Nonpurpose <br />Investments (as defined in the Code and Regulations) which produce a yield materially <br />higher than the yield on the TWDB's bonds that are issued to provide financing for the <br />loan (Source Series Bonds), other than Nonpurpose Investments acquired with: <br />a. proceeds of the TWDB's Source Series Bonds invested for a reasonable <br />temporary period of up to three (3) years after the issue date of the Source Series <br />Bonds until such proceeds are needed for the facilities to be financed; <br />TWDB Commitment No. L1000600 <br />Exhibit A, Page 5 of 10 <br />