2013-001 ORD AUTHORIZING ISSUANCE OF $2,900,000 COP COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION

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Section 15. SURPLUS PROCEEDS. The Issuer shall use any surplus proceeds from the Certificates of Obligation remaining after completion of the Project for the following purposes as approved by the Texas Water Development Board's Executive Administrator (the "Executive Administrator"): (1) to redeem, in inverse annual order, the Certificates owned by the Texas Water Development Board; (2) to deposit into the Interest and Sinking Fund for the payment of interest or principal on the Certificates owned by the Texas Water Development Board; or (3) to the extent not inconsistent with the notice of intent to issue the Certificates and this Ordinance, to pay eligible project costs as authorized by the Executive Administrator. Section 16. EFFECTIVE DATE. In accordance with the provisions of Texas Government Code, Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council of the Issuer. Section 17. COMPLIANCE WITH THE TEXAS WATER DEVELOPMENT BOARD'S RULES AND REGiJLATIONS. The provisions of this Section shall apply so long as the Certificates, or any of them, are owned by the Texas Water Development Board. (a) Annual Audit Reporting. The Issuer shall provide the Texas Water Development Board with an annual report prepared in accordance with generally accepted auditing standards by a certified public accountant or licensed public accountant, to be submitted without charge within 120 days of the close of each fiscal year. (b) Covenant to Abide with Rules. The Issuer will abide with all applicable laws of the State of Texas and Rules of the Texas Water Development Board relating to the loan of funds evidenced by the Certificates and the Project for which the Certificates are issued, sold and delivered. (c) Water Conservation Program. The Issuer agrees and covenants that it will implement an approved water conservation program in accordance with 31 TAC 371.71. (d) Records and Accounts. The Issuer agrees and covenants that it will maintain current, accurate and complete records and accounts regarding the System in accordance with 31 TAC 371.71. (e) Environmental Determinations. The Issuer agrees and covenants that it will comply with any special conditions of the environmental determination of the Executive Administrator in accordance with 31 TAC 371.71. (� Prohibition on Use of Proceeds. The Issuer covenants and agrees that none of the proceeds of the Certificates will be expended on costs incurred or to be incurred relating to the sampling, testing, removing or disposing of potentially contaminated soils and/or media at the project site. (g) Indemnification. The Issuer further agrees, to the extent permitted by law, to indemnify, hold harmless and protect the Texas Water Development Board from any and all claims or causes of action or damages to the person or property of third parties arising from the sampling, analysis, 23