51-06 Issuance/Sale of Water System Revenue Bonds $12,500,00

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income for federal income tax purposes, under the provisions of the Code and applicable amendments thereto, until and unless, and except to the extent the Issuer obtains a written Oþi:riión ofBönd Cotinse1 thatthis covenant need not be complied with in order for the interest on the Series 2006 Bonds to continue to be excludable ITom gross income for federal income tax purposes. The Issuer will, among öther acts of compliance, apply the proceeds of the Series 2006 Bonds, restrict the yield on investments of, or on obligations acquired with, such proceeds, make timely rebate payments to the federal ;government. maintain books and records, and refrain from certain uses of proceeds, all in such manner and to the extent necessary for the interest on the Series 2006 Bonds to be and.remain excluded ITom gross income for federal income tax purposes; and the Authorized Official and other appropriate officers are hereby authorized and directed to take any and all such actions, make such rebate payments, and make or give such reports and certifications as maybe appropriate to assure such exclusion of that interest. Section 10. Surety Bond and Bond Insurance for the Series 2006 Bonds: Ratings. The Legislative Authority hereby authorizes the Fiscal Officer, if recommended by the Original Purchaser and deterruined by the Fiscal Officer to be available and to be fuaancially beneficial to the Issuer to make application for, and to purchase, with respect to the Series 2006 Bonds, a surety bond in satisfaction of the Bond Reserve Requirement for the Series 2006 Bonds and hereby ratifies any such application heretofore made. Reasonably standard provisions pertaining to such surety bond and reasonable changes to the Third Supplemental Indenture relating to such surety bond shall be approved by the officers executing the Third Supplemental Indenture, which approval shall be evidenced by their execution thereof In connection with obtaining such a surety bond for the Series 2006 Bonds, the Legislative Authority hereby deterruines that it is (a) impractical to obtain such a surety bond under competitive bidding procedures and (b) cost-effective and in the best interests of the Issuer to purchase such surety bond without competitive bidding. The surety bond shall be in such form as, in the Fiscal Officer's judgment, will satisfy the Bond Reserve Requirement for the Series 2006 Bonds The Legislative.Authority hereby authorizes the Fiscal Officer, if recommended by the Original Purchaser and determined by the Fiscal Officer to be available and to produce an interest cost savings with respect to the Series 2006 Bonds (or any portion thereof), to make application for, and to purchase, with respect to the Series 2006 Bonds, a municipal bond insurance policy for the Series 2006 Bonds (or any portion thereof) and hereby ratifies any such application heretofore made. Reasonably standard provisions pertaining to such insurance policy and -reasonable changes to the Third Supplemental Indenture relating to such insurance policy shall be approved by the officers executing the Third Supplemental Indenture, which approval shall be evidenced by their execution thereof. In connection with obtaining such a municipal bond insurance policy, the Legislative Authority hereby determines that it is (a) impractical to obtain such a municipal bond insurance policy under competitive bidding procedures and (b) cost-effective and iu the best interests of the Issuer to purchase such insura:nce without competitive bidding" Prior to the passage of this Series 2006 Bond Legislation a form of the policy of municipal bond insurance from the provider selected by the Fiscal Officer shall be placed on file with the Clerk for the review and approval by the Legislative Authority, and passage of this Series 2006 Bond Legislation shall constitute approval of the form of such municipal bond insurance policy. If, in the judgment of the Fiscal Officer, the filing of an application for a rating on the Series 2006 Bonds by one or more nationally-recognized rating services is in the best interest of and financially advantageous to the Issuer, the Fiscal Officer is authorized to prepare and subrnit such application, to provide to each such service such infonnation as may be required for the purpose, and to provide further for the payment of the cost of obtaining each such rating, except to the extent paid by the Original Purchaser, from the proceeds of the Series 2006 Bonds to the extent available and otherwise from any other fuuds lawfully available and that are or that appropriated or shall be appropriated for that purpose. Section 11. Non-Utility Monevs. Nothiug contained in this Series 2006 Bond Legislation or in the Indenture shall be deemed to prevent the Issuer from creating or providing such funds or accounts which shall not be subject to the provisions of the Indenture for any ad valorem taxes, grants, gifts, moneys withdrawn by the Trustee and paid to the Issuer from the General Obligation Debt Service Fund or the Renewal and Replacement Fund, or any other moneys whatsoever which do not constitute Revenues as defined in the Indenture. Section 12. Compliance with Open Meeting Laws, It is found and determined that all fonual actions of this Legislative Authority concerning and relating to the passage of this Series 2006 Bond Legislation were taken in an open meeting of this Legislative Authority, and