21 ATTACHMENT 3 - Laserfiche WebLink

15 service on the 2021 Bonds is limited to the extent that it receives the Fixed Cost Allocation for Debt Service component of the Payments from the Members and that other Payments from the Members are sufficient to pay LAVWMA Maintenance and Operation Costs; the Fixed Cost Allocation for Debt Service component of Payments is sized to be equal to the scheduled debt service on the 2021 Bonds (without any coverage). See, however, “ – Rate Stabilization Fund” for a discussion of other moneys that may be available to pay debt service on the 2021 Bonds. Sewer Service Contract Payments Comprise LAVWMA Gross Revenues. As explained in the previous section, LAVWMA Gross Revenues principally consist of Payments from DSRSD, on behalf of itself and Pleasanton (see “DUBLIN SAN RAMON SERVICES DISTRICT - Rates and Charges”), and Livermore under the Sewer Service Contract. The Payments made by each Member consist of a fixed percentage (the “Fixed Cost Allocation”) of the debt service on the 2021 Bonds and the LAVWMA Maintenance and Operation Costs, in consideration of the provision by LAVWMA of Sewer Service capacity. The obligation of the Members to make payments of Fixed LAVWMA Maintenance and Operation Costs (as defined below) is subject to abatement during any period in which there is a material interruption in the Sewer Service to the Members. However, the Members’ Payments for their Fixed Cost Allocation for Debt Service are not subject to abatement. Security for the Obligation to Make the Payments. Pursuant to the Sewer Service Contract, the Members pledge and create, in favor of LAVWMA and the Trustee for the 2021 Bonds, a lien on the Net Revenues of their respective Sewer Systems, to pay to LAVWMA the amounts owed in order for LAVWMA to pay debt service on the 2021 Bonds. There are three important limitations with respect to this pledge of Net Revenues: First, this lien is subordinate to the Members’ existing Obligations that are payable from Member Net Revenues as well as Obligations secured by a pledge of Member Net Revenues to be issued in the future by the Members to finance or refinance improvements to their respective Sewer Systems. For avoidance of doubt, the Net Revenues of the District do not include District Local Charges and the Net Revenues of Pleasanton do not include Pleasanton Local Charges or Pleasanton Local Maintenance and Operation Costs. “Obligations” is defined in the Sewer Service Contract as bonds, notes, installment sale agreements or other obligations issued or to be issued by the Members, the proceeds of which are applied to finance or refinance improvements or repair to their respective Sewer Systems, and payable from Charges. Second, for DSRSD and Pleasanton, “Net Revenues” is not defined in the Sewer Service Contract to include all of the fees, rates and charges collected by DSRSD and Pleasanton in connection with their respective Sewer Systems; DSRSD and Pleasanton have only pledged Regional Service Charges and Regional Capacity Reserve Buy-In Fees (but not Regional Capacity Reserve Fees) as security for their obligation to make the Payments. Livermore, on the other hand, has made a more traditional Net Revenue pledge as security for its obligation to make Payments, as can be seen by reference to the definition of the term “Charges” (see below). The following are the relevant definitions from the Sewer Service Contract: “Net Revenues” means, for each Member, such Member’s Gross Revenues, less (i) such Member’s Maintenance and Operation Costs and (ii) such Member’s share of