Res 2013-019/LCRA Participation Agreement w/Thomas C. Ferguson

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Lr6;LJkUL � :. sixty (60) days that the disputed amount was not due, LCRA will refund any disputed amounts paid by San Marcos or credit such amounts to San Marcos on the next subsequent statement; provided, however, that San Marcos must dispute a payment within one (1) year of receipt of the statement under Article 5(d) above. If LCRA disagrees with the disputed amount, or fails to make a determination within the sixty (60) day period, then both Parties will follow the procedure in Article 14 for dispute resolution as the sole and exclusive remedy for such disputed payments, unless San Marcos is in Default. (iv) Accounting. Participation Expenses will be recorded in the accounting records in accordance with generally accepted accounting principles as implemented by LCRA. (f) Payments to Constitute Operating Expenses of San Marcos. San Marcos represents and covenants that the Services to be obtained under this Agreement are essential and necessary to San Marcos in the provision of electric service to its customers, and that all payments to be made hereunder by it will constitute reasonable and necessary operating expenses of its electric distribution and retail systems, within the meaning of Chapter 1502 of the Texas Government Code, and the provisions of any ordinances or resolutions authorizing the issuance of any bonds of San Marcos that are payable from revenues of San Marcos's electric distribution and retail system. San Marcos agrees to establish and collect rates and charges for electric distribution and retail electric service that will make possible the prompt remittance of all payments due to LCRA under this Agreement. Unless otherwise specifically provided by subsequent written agreement between LCRA and San Marcos, LCRA will not have the right to demand payment by San Marcos of any obligation under this Agreement from funds raised or to be raised by taxation or out of San Marcos's general funds, it being expressly understood that all payments due by San Marcos to LCRA under this Agreement are to be made from the revenues and income received by San Marcos from its electric distribution and retail electric systems. ARTICLE 6. INSPECTION. REPORTING AND AUDIT RIGHTS (a) Audit. During ordinary business hours and upon reasonable notice, San Marcos may audit, at its expense, any books, records or data insofar as may be necessary for the purpose of ascertaining the accuracy of any statement of Participation Expenses for the prior Fiscal Year. If the audit uncovers cost discrepancies, San Marcos may request an adjustment to the aggregate amount which was billed by LCRA for the prior Fiscal Year; provided, however, that San Marcos must request such adjustment within thirty (30) days of completion of the audit, but no later than the end of the current Fiscal Year. If LCRA determines within sixty (60) days that the adjustment is appropriate, LCRA will reimburse or otherwise credit San Marcos within thirty (30) days of this determination. If LCRA disputes the adjustment, or fails to make a determination within the sixty (60) day period, then both Parties will follow the procedure under Article 14 for dispute resolution Participation Agreement between Lower Colorado River Authority Page 9 of 26 and City of San Marcos