Agmt 2011 California State Water Resources Control Board SWRCB

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City of San Leandro Agreement No.: 11- 806 -550 Project No.: C -06- 7002 -110 Enterprise Fund for any lawful purpose of the Recipient, including payment of subordinate debt. This requirement'applies to Recipients that are public agencies. (d) Rates, Fees and Charges. The Recipient agrees, to the extent permitted by law, to fix, prescribe and collect rates, fees and charges for the System during each Fiscal Year which are reasonable, fair and nondiscriminatory and which will be at least sufficient to yield during each Fiscal Year Net Revenues equal to the debt service on System Obligations, including the Obligation, for such Fiscal Year. The Recipient may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the Net Revenues from such reduced rates, fees and charges will at all times be sufficient to meet the requirements of this section. The Recipient agrees to promptly challenge any initiative that would impair the Obligation and publicly state its opposition to any rate challenges. This requirement applies to Recipients that are public agencies. (e) Future Debt. The Recipient's future debt may not be senior to CWSRF debt. The Recipient's future local debt may be on parity with the CWSRF debt if the following conditions are met: (1) The Recipient's net revenues pledged to pay all senior debts relying on the pledged revenue source are at least 1.2 times the highest year's debt service and net revenues pledged to pay all debts are at least 1.1 times the highest year's debt service; and (2) One of the following conditions is met: (A) The Recipient's proposed parity Additional Obligation is rated "A," or higher, by at least two nationally recognized rating agencies; or (B) The Recipient is a disadvantaged community and the Division determines that it would be economically burdensome for the agency to obtain nationally recognized ratings for its parity debt; or (C) The Recipient is a disadvantaged community and the Division determines that requiring the proposed Additional Obligations to be subordinate to the Recipient's Obligations hereunder will unduly restrict the Recipients from obtaining future system debt necessary for water quality improvements. • 3.8 Financial Management System and Standards. The Recipient agrees to comply with federal standards for financial management systems. The 'Recipient agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to permit preparation of reports required by the federal government and tracking of Project funds to a level of expenditure adequate to establish that such funds have not been used in violation of federal or state law or the terms of this Agreement. To the extent applicable, the Recipient agrees to be bound by and to comply with, the provisions and requirements of the federal Single Audit Act of 1984 (Pub. L.98 -502) Office of Management and Budget (OMB) Circular No. A -133, and updates or revisions, thereto. • 3.9 Accounting and Auditing Standards. The Recipient will maintain separate Project accounts in accordance with generally accepted accounting principles. The Recipient shall comply with "Standards for Audit of Governmental Organizations, Programs, Activities and Functions" promulgated by the U.S. General Accounting Office. (40 CFR § 35.3135(I).) 13