(A) The authority may make loans to a local government to pay all or any part of the cost of a project. The authority may require the local government to issue bonds or revenue bonds as evidence of its loan obligation. The authority and a local government may enter into the loan commitments and option agreements as may be determined appropriate by the authority.

(B) The authority may require as a condition of any loan to a local government that the local government shall perform any or all of the following:

(1) establish and collect rents, rates, fees, and charges so as to produce revenues sufficient to pay all or a specified portion of:

(a) costs of operation, maintenance, renewal, replacement, and repairs of the project of such local government; and

(b) outstanding indebtedness incurred for the purposes of such project, including the principal of and interest on the bonds, revenue bonds, notes, or other obligations issued by the local government, as the same shall become due and payable, and to create and maintain any required reserves;

(2) create and maintain a special fund or funds, as additional security for the payment of the principal of the loan obligations and the interest thereon and any other amounts becoming due under any agreement, entered into in connection therewith and for the deposit therein of the revenues as shall be sufficient to make the payment as the same shall become due and payable;

(3) create and maintain other special funds as may be required by the authority; and

(4) perform those other acts, including the conveyance of real and personal property together with all right, title, or interest therein to the authority, or take other actions as may be considered necessary or desirable by the authority to secure the payment of the principal of and interest on the loan obligations and to provide for the remedies of the authority in the event of a default by the local government in the payment.

(C) In connection with the making of any loan authorized by this chapter, the authority may fix and collect the fees and charges including, but not limited to, reimbursement of all costs of financing by the authority, the authority determines to be reasonable.

(D) As a condition to the receipt of a loan authorized by this chapter for the construction of water or sewer services, or both, the authority, as it determines appropriate, may require a local government to submit a financial plan which demonstrates that user charge rate levels will produce sufficient revenues to properly operate and maintain the system and build a reserve for improvements.