03-10-10 Regular Meeting of the La Porte Area Water Authority

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or accounts created and established for the payment and security of all outstanding obligations payable from and secured by a pledge of the Pledged Revenues have been made in full and that the amounts on deposit in such funds are the amounts then required to be on deposit therein. Such certificate shall be dated as of the date of such Additional Bonds. B. Capital Acquisitions, Capital Improvements and any Lawful Purpose except Capital Additions or refunding. No Additional Bonds will be issued for the purpose of financing Capital Acquisitions, Capital Improvements or any other lawful purpose (except for Capital Additional or for refunding, which are to be issued in accordance with the provisions of paragraph C, D or E) unless and until the conditions precedent in paragraph A have been satisfied and, in addition thereto, the Authority has secured a certificate or opinion of an Accountant to the effect that, according to the books and records of the Authority, the Pledged Revenues for the preceding fiscal year or any consecutive 12 month period ending within 120 days of the date of such certificate or opinion equals or exceeds 125% of the Average Annual Principal and Interest Requirements for the outstanding Parity Bonds and for the proposed Additional Bonds. In making a determination of the Pledged Revenues, the Accountant may (i) take into consideration a change in the rates and charged for services and facilities afforded by the System that became effective at least 60 days prior to the last day of the period for which Pledged Revenues are determined, and (ii) for purposes of satisfying the above Pledged Revenue test, make a pro forma determination of the Pledged Revenues for the period of time covered by the certification or opinion based on such change in rates and charges being in effect for the entire period covered by the certificate or opinion. In addition, the revenues and expenses of any Capital Acquisition may be added to the Pledged Revenues of the Authority for determinations made under this paragraph. C. Capital Additions - Initial Issue. Additional Bonds shall be issued for the purpose of financing Capital Additions unless the conditions in paragraphs A and B above have been satisfied or, in the alternative, the Authority shall have obtained: (1) from the Engineer of Record a comprehensive report for each Capital Addition to be financed, which report shall (a) contain (I) detailed estimates of the cost of acquiring and constructing the Capital Addition, (II) the estimated date the acquisition and construction of the Capital Addition will be completed and commercially operative, and (III) a detailed analysis of the impact of the Capital Addition on the financial operations of the System during the construction thereof and for at least five Years after the date the Capital Addition becomes commercially operative, and (b) conclude that (I) the Capital Addition will substantially increase the capacity, or is needed to replace existing facilities, to meet current and projected demands for the service or product to be provided thereby, and (II) the estimated cost of providing the service or product from the Capital Addition will be reasonable in comparison with projected costs for furnishing such service or product from other reasonably available sources; and (2) a certificate of the Engineer of Record to the effect that, based on the report prepared for each Capital Addition, the projected Pledged Revenues for each of the five Years subsequent to the date the Capital Addition becomes commercially operative (as estimated in such report) will be equal to at least 125% of the Average Annual Principal and Interest Requirements for Parity Bonds then outstanding or incurred and all 29 HOUJ003369.]