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ARTICLEV <br />AUTHORITY <br />Section 5.01. Authority. This Agreement is entered into under the <br />statutory authority of SECTION 54.016 OF THE TEXAS WATER CODE AND SECTION 42.042 AND <br />212.172 <br />OF THE TEXAS LOCAL GOVERNMENT CODE. The parties intend that this Agreement guarantee <br />the continuation of the extraterritorial status of the Land within the District; authorize certain <br />general uses and development on the Land; provide for infrastructure for the Land; specify the <br />uses and development of the Land after annexation; and provide other lawful terms and <br />considerations relating to the Land. <br />ARTICLE VI <br />ISSUANCE OF BONDS; SETTING TAX RATES: <br />Section 6 .01. Issuance of Bonds; The District and any resulting district may <br />issue Bonds as permitted by SECTION 70.053 OF THE CITY OF SAN MARCOS CODE <br />OF ORDINANCES and this Agreement, as each may be amended from time to time. <br />TCEQ administrative rule 30 TAC 293.47 shall apply in determining the bonding allowed <br />for water, wastewater and drainage. Except as authorized by this Agreement, the District and <br />any resulting district shall not issue Bonds without the prior approval of the City Council <br />and not until the documents required by Article II are executed in accordance therewith. <br />Bonds shall be issued only for the purposes authorized in this consent agreement and bonds <br />authorized for one purpose shall not be used for another purpose. <br />Section6.02. Bond Requirements. The District and any resulting district <br />s h al l obtain all necessary authorizations for Bonds in accordance with this Agreement and with <br />CHAPTER 70, SECTION 70.053 OF THE C I T Y 0 F SAN MARCOS C 0 D E OF ORDINANCES. To <br />the extent of a conflict with Section 70.053 of the San Marcos Code, this Agreement shall <br />control. All Bonds, including refunding bonds, issued by the District and any Resulting <br />District shall comply with the following requirements: <br />a. Maximum maturity of 25 years from the date of issuance for any one series of <br />Bonds; and <br />b. The net effective interest rate will not exceed two percent (2%) above the <br />highest average interest rate reported by the Daily Bond Buyer in its weekly "20 Bond <br />Index" during the one month period immediately preceding the date that the notice of sale of <br />such Bonds is given; and <br />C. The Bonds shall expressly provide that the District and any resulting district <br />shall reserve the right to redeem Bonds at any time beginning not later than the tenth (10th) <br />anniversary of the date of issuance, without premium. No variable rate Bonds shall be issued <br />by the District and any resulting district; and <br />d. Any refunding Bonds of the District and any resulting district must provide for a <br />minimum of three percent (3%) present value savings, and, further, must provide that the <br />latest maturity of the refunding Bonds may not extend beyond the latest maturity of the <br />refunded Bonds. <br />9 <br />