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<br />e
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<br />e
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<br />(a) the Board makes a forecast (the "Forecast") of the operations of the System demonstrating the System's ability to
<br />payoff obligations payable from the Pledged Revenues of the System to be outstanding after the issuance of the
<br />Bonds then being issued for the period (the "Forecast Period") of each ensuing Year through the fifth Year
<br />subsequent to the latest estimated date such Capital Addition is expected to be commercially operative, and
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<br />(b) the Engineer of Record reviews the Forecast and executes a certificate to the effect that the Forecast is
<br />reasonable, and that based thereon (and such other factors deemed to be relevant), the Pledged Revenues of the
<br />System will be adequate to pay all the obligations payable from the Pledged Revenues to be outstanding after the
<br />issuance of the Bonds then being issued for the Forecast Period.
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<br />Refundin~ Bonds. The Authority reserves the right to issue refunding bonds to refund all or any part of the
<br />outstanding Bonds (pursuant to any law then available), upon such tenns and conditions as the Board may seem to'be in the
<br />best interest of the Authority and its inhabitants, and if less than all such outstanding Bonds are refunded, the conditions
<br />precedent (for the issuance of Additional Bonds) set forth in clauses (a) and (b) of this Section shall be satisfied and the
<br />Accountant's certificate or opinion required by clause (b) shall give effect to the issuance of the proposed refimding bonds (and
<br />sha1l not give effect to the obligations being refunded following their cancellation or provision being made for their payment).
<br />No Accountant's certificate otherwise required by clause (b) will be required for refunding bonds, after giving effect to such
<br />proposed refunding, if there is no increase in debt service for any Year before or including any Year in which there will be debt
<br />service on Bonds outstanding both before and after such refunding and any such refunding bond does not have lien a on
<br />Pledged Revenues superior to the obligation which it refunds.
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<br />Detennination of Averaee Annual PrinciDal and Interest Reauirements. With reference to Additional Bonds
<br />anticipated and estimated to be issued or incurred, the Average Annual Principal and Interest Requirements therefor shall be
<br />those reasonably estimated and computed by the officer of the Authority then having the primary responsibility for the financial
<br />affairs of the Authority. In the preparation of the report required in clause (c Xi) above, the Engineer of Record may rely on
<br />other experts or professionals, including those in the employment of the Authority, provided such reports disclose the extent of
<br />such reliance and concludes it is reasonable so to rely. In connection with the issuance of Additional Bonds for Capital
<br />Additions, the certificate of the authority's officer and the Engineer of Record, together with the appropriate report for the
<br />initial issue and the Forecast for a subsequent issue, shall be conclusive evidence and the only evidence required to show
<br />compliance with the provisions and requirements of this section.
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<br />Combined Issues. Bonds for Capital Additions may be combined in a single issue with Bonds, as the case may be, for
<br />Capital Acquisitions or Capital hnprovements, or for any lawful purpose, provided the conditions precedent set forth in clauses
<br />(b) through (e) are complied with as the same relate to the appropriate purpose.
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<br />Reserve Fund. The Authority shall increase the Reserve Fund for such Additional Bonds by (i) providing cash from
<br />the proceeds of sale of the Additional Bonds or any other lawfully available source, (ii) a surety bond in lieu thereof, (iii) a
<br />combination of such cash and surety bond, or (iv) making equal monthly installment payments to the Reserve Fund over the 24
<br />month period following the issuance of such additional Bonds, all as the Authority deems reasonable and appropriate; provided,
<br />however, that (A) the amount of any such cash, the coverage of any surety bond in lieu thereof, the amount of such cash and the
<br />coverage of such surety bond, and the sum of the monthly payments when added together shall at least equal the Reserve
<br />Requirement; (B) any such surety bond provided in lieu of cash shall be issued by an insurance company or association of
<br />companies whose insured obligations are rated by a nationally recognized rating agency in its highest rating categories; and (e)
<br />any such surety bond may be written (or amended) to provide coverage not only for such Additional Bonds but also pro rata for
<br />the Bonds then outstanding, provided, any existing cash or surety fimd in lieu thereof which secures any such outstanding
<br />Bonds is extended ratably to secure the Additional Bonds then being issued. It is the Authority's intention hereby to provide
<br />maximum flexibility with respect to the Reserve Fund to be provided for any Additional Bonds which may be issued hereafter
<br />and the foregoing provisions shall be liberally construed in order to achieve that objective without materially prejudicing the
<br />rights and interests of the owners of any Bonds at the time outstanding.
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<br />Oneration of System: No Free Service. It shall continuously and efficiently operate the System and maintain the
<br />System in good condition, repair, and working order, all at reasonable cost. No free service of the System shall be allowed, and
<br />should the Authority; or any of its agencies or instrumentalities, lessees, or concessionaires, make use of the services and
<br />facilities of the System, payment monthly of the standard retail price of the services provided shall be made by the Authority, or
<br />any of its agencies or instrumentalities, lessees, or concessionaires, out of funds from sources other than the revenues of the
<br />System, unless made from surplus Net Revenues.
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<br />Further Encumbrance. The rents, revenues, and income of the System have not in any manner been pledged to the
<br />payment of any debt or obligations of the Authority or of the System; and it shall not additionally sell or encumber the Net
<br />Revenues in any manner, except as permitted in the Parity Bonds Resolutions in connection with Additional Bonds, unless said
<br />encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants, and agreement of "the Prior Lien
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