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of the Water System. Any real or personal property which has become nonoperative or which is not needed for the efficient and proper operation of the Water System, or any material or equipment which has become worn out, may be sold if such sale will not materially reduce the Net System Revenues and if the proceeds of such sale are deposited in the Water Revenue Fund. SECTION 6.05. Against Competitive Facilities. The City will not, to the extent permitted by existing law, construct, acquire, maintain or operate and will not, to the extent permitted by existing law and within the scope of its powers, permit any other public or private agency, authority, district or political subdivision or any person whomsoever to acquire, construct, maintain or operate within the City any water system competitive with the Water System. SECTION 6.06. Prompt Acquisition and Construction. The City will take all necessary and appropriate steps to construct, acquire and install the Project, as agent of the Authority, with all practicable dispatch and in an expeditious manner and in conformity with law so as to complete the same as soon as possible. SECTION 6.07. Maintenance and Operation of the Water System; Budgets. The City will maintain and preserve the Water System in good repair and working order at all times and will operate the Water System in an efficient and economical manner and will pay all Maintenance and Operation Costs as they become due and payable. The City will adopt and file with the Authority, on or before the effective date hereof, a budget approved by the City Council of the City setting forth the estimated Maintenance and Operation Costs for the period from such date until the close of the then current Fiscal Year. On or before August 1, of each Fiscal Year, the City will adopt, and on or before one hundred and twenty (120) days after the beginning of the Fiscal Year, file with the Authority a budget approved by the City Council of the City setting forth the estimated Maintenance and Operation Costs for such Fiscal Year. Any budget may be amended at any time during any Fiscal Year and such amended budget shall be filed by the City with the Authority. SECTION 6.08. Amount of Rates and Charges; Rate Stabilization Fund. (a) The City hereby covenants to fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water System during each Fiscal Year which (together with other funds accumulated from System Revenues and which are lawfully available to the City for payment of any of the following amounts during such Fiscal Year) are at least sufficient, after malting allowances for contingencies and errors in estimates, to pay the following amounts in the following order: (i) all Maintenance and Operation Costs of the Water System estimated by the City to become due and payable in such Fiscal Year; (ii) all Debt Service coming due and payable in such Fiscal Year; and (iii) all payments required to meet any other obligations of City which are charges, liens or encumbrances upon, or payable from, the Net System Revenues. 55394,00011 \8819608.3 20