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3 If interim financing is used, although a binding commitment has been made by the Government, only those funds advanced to pay for construction and other authorized and legally eligible expenses incurred by the Entity will be deemed by the Government to be interim commercial indebtedness and retired by FmHA with permanent instruments. Farmers Home Administration must be sure the construction loan is properly administered and when the FmHA loan is closed, there is no doubt FmHA is fully secured. The FmHA must insist on the following at loan closing: 1. An affidavit by the general contractor that he has been paid -in full, in accordance with the terms of the contract, and that he has paid all sub -contractors, materialmen, and laborers with respect to the construction of the project. (It may be that he will have to get his final payment at the bond. closing, from bond proceeds, and perhaps make some disbursements at that time to subcontractors and suppliers.) 2. A certificate by the consulting engineer.that the system has been constructed in accordance with applicable laws and according to the plans and specifications approved by the Government. 3. A statement from the attorney that he has been paid to date in accordance with his agreement. An unqualified opinion from bond counsel will be required. It will be the responsibility of the Entity and its commercial lender to be certain that bond counsel employed will issue an unqualified opinion. Bond counsel will be required to furnish evidence the interim financing has been paid in full. When interim financing funds have been expended, the FmHA loan will be closed and permanent instruments will be issued to evidence the FmHA indebtedness. Business Operations:. ti_ The -bond ordinance will require the Entity establish, as soon as the system becomes revenue producing, a depositary in the State of Florida which is a member of the FDIC and which is eligible under the laws of Florida to receive municipal funds and maintain for the term of the loan a special fund known as "Indian River County Water and Sewer System Revenue Fund (Treasure Coast Utility & Ixora Utility Areas)." These funds are to be kept separate from all other funds of the Entity and will be expended and used only as stipulated .in the bond ordinance approved by FmHA.' A reserve account will be accumulated at the rate of one-tenth of the annual payment until the account reaches the amount of one annual payment. The Entity will adopt an ordinance in accordance with Guide 8 or 9 of Florida .Instruction 1942-A outlining operation procedures for the facility. The Entity will furnish an outline of the management procedures for the facility to include the name of the person(s) who will operate the facility, along with a brief agreement between the person(s) and the Entity showing services to be performed and wages to be paid. APR 211982 25 425