Section 365.940  Dedicated Source of Revenue

a)         A source of revenue shall be dedicated and pledged to make the loan repayments.  Prior to loan approval, the Agency shall review the proposed dedicated and pledged revenue source to assure that it will generate revenues adequate to make the loan repayments and will provide a continuing source of revenue adequate to make loan repayments for the term of the loan.  If the source of revenue is pledged in a subordinate position to a revenue bond ordinance, the convenants regarding coverage and reserve for the revenue source shall be equivalent to those in the revenue bond ordinance.  At a minimum, the reserve account shall be equal to the annual principal and interest payment funded within 2 years after the loan award.

b)         The necessary legislative enactments to dedicate and pledge the source of revenue must be in place before the Agency can make the first loan disbursement.

c)         The loan recipient shall maintain a separate account in its books to record the dedicated revenues for loan repayment.

d)         The loan recipient shall, for the term of the loan, review and adjust the dedicated source of revenue as necessary to provide adequate funds for the repayment of the loan.  The loan recipient shall timely notify the Agency of all proposed changes to the dedicated source of revenue.

e)         Upon request, the loan recipient shall submit to the Agency a statement on the status of the account required by subsection (c) that contains the status of the dedicated revenue account, including the projected revenues, actual revenues fund balance, debt service obligations and other requirements of the loan agreement.  The Agency's review shall be based on, but not limited to, ensuring that the dedicated source of revenue is legally authorized, generates sufficient revenue and is otherwise in accordance with this Part 365.

f)          In the event that the actual revenues fall short of the amount required to retire the loan, the Agency shall require the loan recipient to re-examine the dedicated revenue source and restructure it as necessary.

(Source:  Amended at 34 Ill. Reg. 17582, effective November 8, 2010)