South Dakota Administrative Rules › Title 74 - Department of Environment And Natural Resources › Article 74:05 - Water development › Chapter 74:05:07 - Consolidated water facilities construction program › Section 74:05:07:20 - Funding agreements

Current through Register Vol. 51, page 10, July 15, 2024
If an application is approved for funding, the board shall execute a
	 funding agreement with the sponsoring entity which may include in its
	 provisions the following requirements of the sponsoring entity:
(1) To acquire all property rights necessary
  for the facility including water rights, rights-of-way, and interest in land
  needed for the construction, operation, and maintenance of the facility; to
  furnish title insurance, a title opinion, or other documents showing the
  ownership of the land, mortgages, encumbrances, or other lien defects; and to
  obtain and record the releases, consents, or subordinations to the property
  rights for holders of outstanding liens or other instruments as necessary for
  the construction, operation, and maintenance of the facility;
(2) To provide security as required in §
									74:05:07:13;
(3) To provide for the receipt of revenues to
  meet the requirements of debt service, operation, and maintenance and to
  establish reserves in an amount sufficient to assure that expenses and payments
  will be paid on time for loan installments, emergency maintenance, and
  replacement of assets that have a useful life less than the repayment period of
  the loan;
(4) To acquire and
  maintain insurance coverage, including fidelity bonds, as may be
  required;
(5) To establish and
  maintain books and records relating to the construction and operation of the
  facility and its financial affairs;
(6) To provide the board or its designated
  agent access to all books and records relating to the facility and access to
  the property of the system so that the board or its designated agent may
  ascertain whether the sponsoring entity is complying with the provisions of
  this chapter and with the funding agreement;
(7) Not to sell, transfer, lease, or
  otherwise encumber the facility, any portion of the facility, or interest in
  the facility without the prior written consent of the board while the funding
  agreement is in effect;
(8) In the
  case of a loan, if the undertaking would obligate the source of funds pledged
  to repay the loan, to agree not to enter into an agreement or incur other
  liabilities in connection with the facility, exclusive of normal maintenance,
  without the prior written consent of the board;
(9) In the case of a loan, to agree that upon
  default in the payments of principal and accrued interest on the loan or in the
  performance of any covenant or condition, the board, at its option, may do one
  or more of the following:
(a) Declare
  immediately due and payable the entire principal amount then outstanding and
  the accrued interest and all costs associated with collection of the
  outstanding balance;
(b) For the
  account of the borrower, incur and pay reasonable expenses for repair,
  maintenance, and operation of the facility and other expenses necessary to cure
  the cause of default; or
(c) Take
  possession of the facility and repair, maintain, or operate the facility or
  sell, lease, or otherwise dispose of the facility to another entity;
  and