(c) A municipality that is not an owner, operator or lessee may sponsor a project and apply for financial assistance from the Authority if the following conditions are met:
- (1) The applicant pledges sufficient collateral, provides sufficient guarantees or otherwise makes financial provisions to assure the Authority, to its satisfaction, that a loan it makes to the applicant will be repaid or that a loan or bond guarantee it provides the applicant will not be compromised.
- (2) The applicant enters into agreements with the operator of the project being financed by the Authority and a larger system of which it is a part, to assure the competent, professional operation of the project and system, as well as compliance with section 10(j) of the act (35 P. S. § 751.10(j)) as implemented in § 963.19 (relating to continuing education of system operators).