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<br />(i) Annual Budget and Rate Covenant. The Issuer shall prepare, prior to the beginning of
<br />each fiscal year, an annual budget, in accordance with law reflecting an estimate of cash receipts and
<br />disbursements for the ensuing fiscal year in sufficient detail to indicate the probable Gross Revenues
<br />and Net Revenues for such fiscal year.
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<br />G) Records. The Issuer shall keep proper books of record and account in which full, true,
<br />proper, and correct entries will be made of all dealings, activities, and transactions relating to the
<br />System, the Net Revenues, and the Funds created pursuant to this Ordinance, and all books,
<br />documents, and vouchers relating thereto shall at all reasonable times be made available for
<br />inspection upon request of any Bondholder or citizen of the Issuer. To the extent consistent with the
<br />provisions of this Ordinance, the Issuer shall keep its books and records in a manner conforming to
<br />standard accounting practices as usually would be followed by private corporations owning and
<br />operating a similar system, with appropriate recognition being given to essential differences between
<br />municipal and corporate accounting practices.
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<br />(k) Audits. After the close of each fiscal year while any of the Bonds, the Outstanding
<br />Bonds, and any Revenue Bonds are outstanding, an audit will be made of the books and accounts
<br />relating to the System and the Net Revenues by an independent certified public accountant or an
<br />independent firm of certified public accountants. As soon as practicable after the close of each such
<br />year, and when said audit has been completed and made available to the Issuer, a copy of such audit
<br />for the preceding year shall be mailed to the Municipal Advisory Council of Texas, to each paying
<br />agent for any bonds payable from Net Revenues, to any Bondholders who shall so request in writing,
<br />and to Southwest Securities Incorporated. The annual audit reports shall be open to the inspection
<br />of the Bondholders and their agents and representatives at all reasonable times.
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<br />(1) Governmental Agencies. It will comply with all of the terms and conditions of any and
<br />all franchises, permits, and authorizations applicable to or necessary with respect to the System, and
<br />which have been obtained from any governmental agency; and the Issuer has or will obtain and keep
<br />in full force and effect all franchises, permits, authorization, and other requirements applicable to
<br />or necessary with respect to the acquisition, construction, equipment, operation, and maintenance
<br />of the System.
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<br />(m) No Comoetition. It will not operate, or grant any franchise, to the extent it legally may,
<br />permit the acquisition, construction, or operation of, any facilities which would be in competition
<br />with the System, and to the extent that it legally may, the Issuer will prohibit any such competing
<br />facilities.
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<br />(n) District or River Authoritv Contract. Nothing herein shall be construed to prevent the
<br />Issuer from making contracts with a district or river authority operating pursuant to Article 16,
<br />Section 59 of the Texas Constitution, as authorized by Chapter 30, Texas Water Code, or Article
<br />4413 (32c), V.A.T.C.S. (now referred to as Chapter 791, Texas Government Code), under which a
<br />district or river authority will make a sewer system or water system or portions thereof available to
<br />the Issuer, and will furnish waste water collection, transportation, treatment, disposal services or
<br />water treatment or water transportation facilities to the Issuer, through the district's or river
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