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<br /> <br /> <br /> <br /> <br /> <br /> be fully responsible therefor, the Issuer shall not be required to carry insurance on the work being <br /> constructed if the contractor is required to carry appropriate insurance. All such policies shall be <br /> open to the inspection of the Bondholders and their representatives at all reasonable times. Upon <br /> the happening of any loss or damage covered by insurance from one or more of said causes, the <br /> Issuer shall ~make due proof of loss and shall do all things necessary or desirable to cause the <br /> insuring companies to make payment in full directly to the Issuer. The proceeds of insurance cov- <br /> ering such property, together with any other funds necessary and available for such purpose, shall <br /> be used forthwith by the Issuer for repairing the property damaged or replacing the property <br /> destroyed; provided, however, that if said insurance proceeds and other funds are insufficient for <br /> such purpose, then said insurance proceeds pertaining to the System shall be deposited in a special <br /> and separate trust fund, at an official depository of the Issuer, to be designated the Insurance <br /> Account. The Insurance Account shall be held until such time as other funds become available <br /> which, together with the Insurance Account, will be sufficient to make the repairs or replacements <br /> originally required. <br /> <br /> (2) The annual audit hereinafter required may contain a section commenting on whether or <br /> not the Issuer has complied with the requirements of this Section with respect to the maintenance <br /> of insurance, and shall state whether or not all insurance premiums upon the insurance policies <br /> to which reference is made have been paid. <br /> <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 <br /> and disbursements for the ensuing fiscal year in sufficient detail to indicate the probable Gross <br /> Revenues and Net Revenues for such fiscal year. <br /> <br /> <br /> (j) 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 <br /> the provisions of this Ordinance, the Issuer shall keep its books and records in a manner <br /> conforming to standard accounting practices as usually would be followed by private corporations <br /> owning and operating a similar system, with appropriate recognition being given to essential <br /> differences between municipal and corporate accounting practices. <br /> <br /> (k) Audi s. After the close of each fiscal year while any of the Bonds, the Outstnading <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 <br /> such year, and when said audit has been completed and made available to the Issuer, a copy of <br /> such audit for the preceding year shall be mailed to the Municipal Advisory Council of Texas, to <br /> each paying agent for any bonds payable from Net Revenues, to any Bondholders who shall so <br /> request in writing, and to Southwest Securities Incorporated. The annual audit reports shall be <br /> <br /> 31 <br />