ALTERNATIVE FINANCING PROCEDURE

(a) This subchapter does not affect the right of a municipality or a river authority to finance all of the cost of a water supply project, or any part of the cost of the project that is not payable by the municipality, by revenue bonds issued by the river authority and based on the contract described by Section 1501.251(2). (b) The municipality and river authority may amend the contract described by Section 1501.251(2) to implement the financing procedure provided by this subchapter, including amending the contract to: (1) define the extent of the municipality's rights in the water supply project; (2) prescribe arrangements for auditing the funds and accounts used in the construction program; and (3) provide procedures under which the municipality will make available to the river authority proceeds from revenue bonds issued under this subchapter, as necessary to pay construction costs, including: (A) the cost of the municipality's intake structures and pumping and filtration equipment; and (B) the portion of costs that, under the contract, the river authority is not required to pay by the proceeds of the authority's revenue bonds. (c) The municipality may: (1) issue its revenue bonds, payable from the revenues of the municipality's: (A) waterworks system; or (B) waterworks and sanitary sewer system, if the systems are combined in the municipality; and (2) use the proceeds of the bonds as provided by this subchapter.