DUBLIN SAN RAMON SERVICES DISTRICT FINANCING ADMINISTRATION

Section 5.7. Rate Stabilization Fund. The District, fer its own account and Pleasanton's, hereby creates and herein agrees to maintain, a fund, to be called the "Rate Stabilization rand," which the District agrees to maintain, so long as t_ne L.=1VWi1~l~: 3onds (when, as, and if issued) and the Installment Sale Agreement, the Cerrscates and anv Parity Obiigaticns are Outstanding, subject to the following conditions: (1) All Regional Connection Fees, whether collected by the District or collected by Pleasanton and paid to the District, shall be deposited into the Rate Stabilization F~.ind. (2) All amounts in the Rate Sta'r,111T.atinn Fund shall be available to oav the following; (a) Expa.*~sion Project Debt Service; (b) Repie_*~ishment or the Reserve Fund under the Trust Agreement and the Reserve Account u_*~der the Indenture; (c) Bond Redemptions; (d) anv capital improvements permired to be paid for from the Regional Connection Fees under the Regional Agreement, as well as anv reimbursement of replacement reserves and anv funds other than Regional Connection Fees which have been deposited therein or which have been advanced by the District or Pleasanton from User Charges to pay Expansion Project Debt Service; and (e) anv other purpose agreed to between t_he District and Pleasanton. (3) The District shall attempt to maintain the Rate Stabilization Fund at the Target Level; provided, that tlhe District shall not be required to fund the Rate Stabilization Fund from revenues derived from User Charges assessed wastewater customers. (4) Amounts in the Rate Stabilization Fund shall be available to pay the items listed in Section 5.7 (2)(a) through (e) above; provided, that draws on the Rate Stabilization Fund shall not cause the funds therein to fall below the Target Level, except as expressly hereinafter provided. In the event draws on the Rate Stabilization Fund would cause the Rate Stabilization Fund balance to tall below the Target Level, such draw shall be limited to pay Expansion Project Debt Service, in an amount equal to the sum of: (i) one-third of the lesser of (a) the Target Level, or (b) the amount then on hand in the Rate Stabilization Fund; plus (ii) the amount then on hand in the Rate Stabilization Fund iri excess of the Target Level. (5) The Rate Stabilization Fund may be depleted and closed if: (i) Expansion Project Debt Service is in fact being paid entirely from User G`~arges; or (ii) if Expansion Project Debt Service has been paid or provided for. (6) For purposes of dete_Trnining the sufficiency of amounts held in the Rate Stabilization Fund, the District shall receive a credit for amounts held by the Trustee in the Debt Service Fund created colder Section -1.03 of the Indenture and the Installment Payment Fund created under Section 5.02 of the Trust :~~ Bement. t( }~