HomeMy WebLinkAboutO-345-5-81u►<ut�v�uv� i. ivv. 34'er
AN ORDINANCE by the City Council of the City of
Allen, Texas, authorizing the issuance of $500,000
"CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 1981", dated June 1, 1981,
as authorized by the General Laws of the State of
Texas, particularly Article 1111 et seq., V.A.T.C.S.
prescribing the form of said bonds and the form of
the interest coupons; pledging the net revenues of
the City's combined Waterworks and Sanitary Sewer
System to the payment of the principal of and
interest on said bonds; enacting provisions incident
and related to the subject and purpose of this
ordinance;.and providing an effective date.
WHEREAS, pursuant to an election held within the City of
Allen on June 30, 1979, revenue bonds payable from and secured
by a pledge of the net revenues of the City's Waterworks and
Sanitary Sewer System were approved and authorized to be issued
by the City Council, a summary of the amount of revenue bonds
voted, the respective purposes for which the same can be issued,
amounts heretofore issued and amounts remaining to be issued
being as follows:
ANDLVT
AMOUNTS
UNISSUED
AUTHORIZED PURPOSE
ISSUED
BALANCE
$2,300,000 Water
Imp. & Ext.
$600,000
$1,700,000
$ 700,000 Sewer
Imp. & Ext.
$298,000
402,000
AND WHEREAS,
this Council hereby finds and
determines that
revenue bonds in
the total
principal amount of $500,000 should
be issued and sold
at this
time for the purpose
of making
improvements and
extensions
to the City's Waterworks System;
and
WHEREAS, this Council further finds and determines that
the revenue bonds authorized herein can be issued on a parity
with the City's outstanding and unpaid revenue bonds payable
from and secured by a first lien on and pledge of the net revenue:
of the City's combined Waterworks and Sanitary Sewer System
(hereinafter referred to and defined as "previously issued bonds")
in that (Q the City is not now in default as to any covenant,
condition or obligation prescribed in the ordinances authorizing
the issuance of the previously issued bonds, (ii) each of the
special Funds created for the payment and security of the pre-
viously issued bonds contains the amount of money now required
to be on deposit therein, (iii) the City can obtain a report of
an accountant showing the net earnings of the City's Waterworks
and Sewer -System for the 12_months'"'period next preceding
the adnntinn of this nrainanee are emial to at least 1-1/4 times
the average annual pr
bonds to be secured b
revenues of said Syst
the bonds herein auth
shall mature on June
provide for deposits
the payment and secur
additional bonds issu
sufficient to pay the
herein authorized and
to not less than the
of principal of and i
lien on and pledge of
effect to the issuanc
and the additional re
within five years anc
this ordinance; now,
Lncipal and interest requirement of all
y a first lien on and pledge of the net
am after giving effect to the issuance of
Drized, (iv) the bonds herein authorized -
L in each year and (v) this ordinance shall
to be made in the special Funds created for
ity of the previously issued bonds and
ed on a parity therewith of amounts
principal of and interest on the bonds
to accumulate and maintain a reserve equal
average annual requirement for the payment
nterest on all bonds to be secured by a firs
the net revenues of said System after givin
e of the bonds herein authorized to be issue
serve amount required shall be accumulated
one month from the date of the adoption of
therefore,
Ordinance NO. 345
Page 2
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
TEXAS:
SECTION 1: That, in order to borrow the sum of FIVE
HUNDRED HO AND DOLLARS ($500,000), for the purpose of making
permanent public improvements, to wit: constructing improve-
ments and extensions to the City's Waterworks System, the
City Council of the City of Allen, Texas, by -virtue -of -:the
authority expressly conferred at the aforesaid election and
pursuant to the General Laws of the State of Texas, particularly
Articles 1111 et seq., V.A.T.C.S., has determined that there
shall be issued and there is hereby ordered to be issued a
series of coupon bonds, payable to bearer, in the total
principal amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000),
to be designated "CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 1981", which bonds, together
with the outstanding and unpaid previously issued bonds
(hereinafter defined), shall be payable as to both principal
and interest solely from and equally secured by a first lien
on and pledge of the net revenues of the City's combined
Waterworks and Sanitary Sewer System.
SECTION 2: That said bonds shall be dated June 1, 1981;
shall be num Bred consecutively from One (1) through One Hundred
(100); shall each be in the denomination of Five Thousand
Dollars ($5,000); and shall become due and payable serially,
without right of prior redemption, on June 1 in each of the
years and bear interest at the per annum rates in accordance
with the following schedule:
BOND
NUMBERS
INTEREST
(All
Inclusive)
MATURITY
AMOUNT
RATE
1
and
2
1985
$10,000
%
3
and
4
1986
10,000
—`— %
5
to
7
1987
15,000
- ,. %
8
to
10
1988
15,000
11
to
13
1989
15,000
, 7.
14
to
16
1990
15,0007-7-7,
17
to
19
1991
15,000
,
20
to
23
1992
20,000
7.
24
to
27
1993
20,000
%
28
to
31
1994
20,000
%
32
to
36
1995
25,000
`�-'%
37
to
41
1996
25,000
7.
42
to
46
1997
25,000
47
to
51
1998
25,000
J— %
52
to
57
1999
30, 0007.
58
to
63
2000
30,000
y—%
64
to
69
2001
30,000.
70
to
76
2002
35,000
-%
77
to
83
2003
35,000
84
to
91
2004
40,000x
92
to
100
2005
45,000
SECTION 3: That said bonds shall bear interest from
date to maturity at the per annum rates sho,.,n above, such
interest to be evidenced by proper coupons attached to each
of said bonds; and said interest shall be payable on December 1,
1981, and semiannually thereafter on June 1 and December 1 in each
year.
SECTION 4: That both principal of and interest on
this issue of—bonds shall be payable in lawful money of the
United States of America, without exchange or collection
charges to the owner or holder, at the MERCANTILE NATIONAL BANK
AT DALLAS, Dallas, Texas, upon presentation and surrender of
bonds or proper coupons.
ordinance No. 345
Page 3
SECTION 5: That the seal of said City may be impressed
on each of said bonds, or in the alternative, a facsimile of
such seal may be printed on said bonds. The bonds and
interest coupons appurtenant thereto may be executed by the
imprinted facsimile signatures of the Mayor and City Secretary
of the City and execution in such manner shall have the same
effect as if such bonds and coupons had been signed by the
Mayor and City Secretary in person by their manual signatures.
Inasmuch as such bonds are required to be registered by the
Comptroller of Public Accounts of the State of.Texas, only
his signature (or that of a deputy designated in.writing to
act for the Comptroller) shall be required to be manually
subscribed to such bonds in connection with his registration
certificate to appear thereon, as hereinafter provided; all
in accordance with the provisions of Article 717j-1, V.A.T.C.S.
SECTION 6: That the form of said bonds shall be
substantially -as follows:
NO. UNITED STATES OF AMERICA $5,000
STATE OF TEXAS
COUNTY OF COLLIN
CITY OF ALLEN, TEXAS,
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1981
FOR VALUE RECEIVED, the City of Allen, a municipal
corporation of the State of Texas, hereby acknowledges
itself indebted to, and promises to pay to bearer, without
of prior redemption and as hereinafter stated, on the FIRST
DAY OF JUNE, , the principal sum of
FIVE THOUSAND DOLLARS
($5,000), in lawful money of the United States of America,
with interest thereon from the date hereof to maturity, at the
rate of PER CENTUM ( %) per
annum, such interest being payable on December T; X981, and
semiannually thereafter on June 1 and December 1 in each
year, and evidenced by interest coupons attached hereto.
BOTH PRINCIPAL AND INTEREST are payable only upon
presentation and surrender of this bond and the interest
coupons hereto attached as the same severally become due at
the MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, without
exchange or collection charges to the owner or holder, and
the bearer of this bond and its appurtenant coupons shall be
deemed the owner thereof for purposes of receiving payment
and all other purposes, and neither the City nor the afore-
mentioned place of payment shall be affected by any notice
to the contrary.
THIS BOND is one of a series of bonds, dated June 1, 1981,
numbered consecutively from One (1) through One Hundred (100)
each in the denomination of Five Thousand Dollars ($5,000)
a gregating in principal amount FIVE HUNDRED THOUSAND DOLLARS
(500,000), issued for the purpose of making permanent public
improvements, to wit: constructing improvements and extensions
to the City's Waterworks System, in accordance with the
Constitution and laws of the State of Texas, particularly
Articles 1111 et seq., V.A.T.C.S., and by authority of an election
held for that purpose within said City, and pursuant to an
ordinance passed by the City Council of the City of Allen, Texas,
and duly recorded in the Minutes of said City Council.
G�
J
Ordinance No. 345
Page 4
THIS BOND and the series of which it is a part constitute
special obligations of the City of Allen, Texas, and together
with the outstanding and unpaid previously issued bonds
(identified and defined in the ordinance authorizing this
series of bonds), are payable solely from and secured by a
first lien on and pledge of the net revenues of the City's
combined Waterworks and Sanitary Sewer System.
THE CITY expressly reserves the right to issue further
and additional revenue bond obligationb in all'things'on a
parity with the outstanding and unpaid previously issued
bonds and the bonds of this series, payable solely from and
equally secured by a first lien on and pledge of the net
revenues of the City's -combined Waterworks and Sanitary
Sewer System; PROVIDED, HOWEVER, that any and all such
additional bonds may be so issued only in accordance with and
subject to the covenants, conditions, limitations and
restrictions relating thereto which are set out and contained
in the ordinance authorizing this series of bonds and to
which said ordinance reference is hereby made for more
complete and full particulars.
THE HOLDER hereof shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxation.
AND IT IS HEREBY CERTIFIED AND RECITED that the issuance
of this bond, and the series of which it is a part, is duly
authorized by law; that all acts, conditions and things
required to exist and to be done precedent to and in the
issuance of this bond to render the same lawful and valid
have been properly done, have happened and have been performed
in regular and due time, form and manner as required by the
Constitution and laws of the State of Texas and the ordinance
hereinabove mentioned; that this series of revenue bonds
does not exceed any constitutional or statutory limitation;
and the provision has been made for the payment.of the
principal of and interest on this bond and the series of
which it is a part by irrevocably pledging the net revenues
of the combined Waterworks and Sanitary Sewer System of the
City of Allen, Texas, as hereinabove recited.
IN TESTIMONY WHEREOF, the City Council of the City of
Allen, Texas, in accordance with the provisions of Article
717j-1, V.A.T.C.S., has caused the seal of said City to be
impressed or a facsimile thereof to be printed hereon, and
this bond and its appurtenant coupons to be executed by the
imprinted facsimile signatures of the Mayor and City Secretary
of said City.
May r, City bf Allen, Texas
COUNTERSIGNED:
City Secretary, City of
Allen, Texas
Ordinance No. 345
SECTION 7: That the form of said interest coupons
shall be substantially as follows:
NO. ON THE FIRST DAY OF $
Page 5
the CITY OF ALLEN, a municipal corporation in the County of
Collin, State of Texas, hereby promises to pay'to bearer the
amount shown hereon, out of funds specified in the bond to
which this coupon is attached (without right to demand
payment out of any funds raised or to be raised by taxation),
in lawful money of the United States of America, upon
presentation and surrender of this coupon, at the MERCANTILE
NATIONAL BANK AT DALLAS, Dallas, Texas, without exchange or
collection charges, said amount being interest due on such
date on "CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BOND, SERIES 1981", dated June 1, 1981.
Bond No.
City Secretary
Mayor' I
SECTION 8: That substantially the following shall be
printed on the- back of each bond:
OFFICE OF COMPTROLLER §
§ REGISTER NO.
STATE OF TEXAS §
I HEREBY CERTIFY that there is on file and of record in
my office a certificate of the Attorney General of the State
of Texas to the effect that this bond has been examined by
him as required by law, and that he finds that it has been
issued in conformity with the Constitution and laws of the
State of Texas, and that it is a valid and binding special
obligation of the City of Allen, Texas, payable from the
revenues pledged to its payment by and in the ordinance
authorizing same, and said bond has this day been registered
by me.
WITNESS MY HAND AND SEAL OF OFFICE, at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
SECTION 9: That for all purposes of this ordinance
and in particular for clarity with respect to the issuance
of the bonds herein authorized and the pledge and appropriation
of revenues therefor, the following definitions are provided:
(a) The term "System" means the City's combined Waterworks
and Sanitary Sewer System, including all present and future
additions, extensions, replacements and improvements in any wise
appertaining thereto, whether situtated within or without the
limits of said City.
(b) The term "net revenues" shall mean the gross
revenues of the System, less the expense of operation and
maintenance, including all salaries, labor, materials,
repairs and extensions necessary to render efficient service.,
provided, however, that only such repairs and extensions as
in the judgment of the City Council, reasonably and fairly
exercised, are necessary to keep the System in operation and
render adequate service to the City and the inhabitants
thereof, or such as might be necessary to meet some physical
accident or condition which would otherwise impair the
s*Qdt`tt,► Of AnY b0hds payable from and secured .by a lien on
the net revenues of the System shall be deducted in determining
"net revenues".
C•.;�
ordinance No. 345
Page 6
(c) The term "bonds" means the $500,000 revenue bonds
authorized by this ordinance.
(d) The term "additional bonds" shall mean the additional
parity revenue bonds issued in accordance with the terms and
conditions prescribed in Section 19 hereof.
(e) The term "fiscal year" shall mean the twelve-month
period ending June 30 of each year; provided, however, at such
time as all the "City of Allen, Texas, Waterworks and Sewer System
Revenue Bonds, Series 1972", dated June 1, 1972 have been fully
paid as to principal and interest or refunded, the City Council
by ordinance duly passed and adopted may change the fiscal year
to another twelve-month period.
(f) The term "bonds similarly secured" shall mean
all bonds issued by the City which are secured by and payable
from a first lien on and pledge of the net revenues of the
System.
(g) The term "previously issued bonds" shall mean the
outstanding and unpaid revenue bonds described as follows:
(i) "CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 1972", dated June 1, 1972,
and originally issued in the aggregate principal
amount of $1,500,000; and
(ii) "CITY` -`OF ALLEN, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BONDS, SERIES 1979", dated August 1,:1979
and originally issued in the aggregate principal amount
of $1,300,000.
SECTION 10: The City hereby covenants and agrees that all of
the net revenues of the System with the exception of those in
excess of the amounts required to establish and maintain the
special Funds created for the payment and security of the bonds
similarly secured, are hereby irrevocably pledged for the
payment of the previously issued bonds, the bonds and additional
bonds, if issued, and the interest thereon, and it is hereby
ordained that the previously issued bonds, the bonds and additiona:
bonds, if issued, and the interest thereon, shall constitute a
first lien upon the net revenues of the System.
SECTION 11: The City hereby covenants and agrees with the
holders ot the bonds that:
(a) It will at all times charge and collect for
services afforded by the System rates sufficient to pay
all operating, maintenance, depreciation, replacement and
betterment expenses, and other costs incurred in the
maintenance and operation of the System and to pay the
interest on and principal of the previously issued bonds
and the bonds and to establish and maintain the special
Funds created for the payment and security of the bonds
similarly secured. I
(b) If additional bonds are issued, or if the
System should become legally liable for any other
indebtedness, the City will fix and maintain rates and
collect charges for the services of the System sufficient
to discharge such indebtedness.
SECTION 12: That the City hereby reaffirms its covenant
with the o ers of the previously issued bonds and agrees with
the holders of the bonds that all revenues derived from the
operation of the System shall be kept separate from other revenues
of the City, and the following special Funds heretofore created
and established are hereby reaffirmed, to wit:
(a) City of Allen Waterworks and Sewer System Fund
(hereinafter called "System Fund") which Fund is and
shall contipue to be maintained at the City's depository
bank.
6-d
Ordinance No. 345
Page 7
(b) City of Allen Waterworks and Sewer System Revenue
Bond Interest and Sinking Fund, hereinafter called "Interest
and Sinking Fund". This Fund is and shall continue to be
maintained at the MERCANTILE NATIONAL BANK AT DALLAS, Dallas,
Texas, as Trustee of the pledged revenues, and moneys
deposited therein shall be used solely for the purpose of
paying the principal of and interest on the bonds similarly
secured as the same become due.
(c) City of Allen Waterworks and Sewer System Revenue
Bond Reserve Fund, hereinafter called "Reserve Fund".
This Fund is and shall continue to be maintained at the
MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, Trustee,
and moneys deposited therein shall be used only for the
purpose of paying principal of and interest on bonds simi-
larly secured when there is insufficient money available
for -.such purpose in the Interest and Sinking Fund on an
interest and/or principal payment date.
SECTION 13: The City hereby reaffirms its prior covenant
and agrees that all revenues of every nature received from the
operation of the System shall be deposited from day to day as
collected into the System Fund, and -the reasonable and proper
expenses of operating and maintaining the System, as set forth
in Section 9(b) hereof, shall be paid therefrom upon approval of
the City Council. All revenues of the System not actually required
to pay expenses and costs incurred as permitted by this Section
shall be deposited in the other Funds created for the payment and
security of the bonds similarly secured to the extent and in the manner
required by the ordinances authorizing the issuance of the
previously issued bonds and this ordinance.
SECTION 14: In addition to the amounts required to be
deposited in t e Interest and Sinking Fund from the net revenues
in the System Fund to pay the principal of and interest on the
previously issued bonds as the same becomes due, the City hereby
agrees to make monthly deposits to said Fund to pay the principal
of and interest on the bonds herein authorized as follows:
Beginning on or before July 15, 1981, and on or
before the 15th day of each month thereafter to and
including November 15, 1981, an amount equal to not
less than one-fifth (1/5) of the installment of interest
to become due on the bonds on December 1, 1981; and on
or before December 15, 1981, and on or before the 15th
day of each month thereafter, an amount equal to not less
than one-sixth (1/6) of the next semiannual installment
of interest to become due on the bonds; and, in addition,
beginning on or before June 15, 1984 and on or before the
15th day of each month thereafter, an amount equal to not
less than one -twelfth (1/12) of the next annual principal
payment to become due on the bonds.
The monthly deposits to the Interest and Sinking Fund for
the payment of principal and interest on the bonds shall continue
to be made as hereinabove provided until such time as (i) the
total amount on deposit in the Interest and Sinking Fund is equal
to the amount required to pay all outstanding bonds similarly
secured or (ii) the bonds are no longer outstanding, i.e., fully
paid as to principal and interest or refunded.
Accrued interest and premium, if any, received from the
purchaser of the bonds, as well as any proceeds of the bonds not
required to complete the improvements and extensions to the
System, shall be deposited in the Interest and Sinking Fund, and
may be taken into consideration and reduce the amount of the
monthly deposits hereinabove provided which would otherwise be
required to be deposited in the Interest and Sinking Fund
from the net revenues of the System for the bonds.
Ordinance No. 345 Page 8
SECTION 15: That the City hereby reaffirms its prior
covenant and agrees that there shall be accumulated, and when
accumulated, continuously maintained in the Reserve Fund an
amount equal to not less than the average. annual principal and
interest requirements for all outstanding bonds similarly secured
(calculated on a fiscal year basis as of the date of the bonds
of the last series of bonds similarly secured then outstanding).
The amount to be accumulated and maintained in the Reserve Fund
by virtue of the issuance of the bonds is hereby determined to
be $
In accordance with the ordinances authorizing the issuance of
the previously issued bonds, there is currently on deposit in the
Reserve Fund the sum of not less than $h Beginning on or
before July 15, 1981, and on or before t e tday of each
following month, there shall be deposited in the Reserve Fund
an amount equal to not less than $_ until the amount of
cash and investments in said Fund totals not less than $
When the total amount now required to be deposited in the Reserve
Fund has been fully accumulated, said monthly payments to said Fun
may be terminated; provided, however, should the amount on deposit
in said Fund be reduced below $ 'after the same has been
accumulated, monthly deposits to the Reserve Fund in the amount of
$ shall be resumed and continued to be made on or before
the 15th day of each month until the amount required to be
deposited therein has been fully restored.
Money in the Reserve Fund may be, at the option of the City,
invested or reinvested from time to time in direct obligations of
or obligations; the principal and interest of which are guaranteed
by the United States of America or invested in direct obligations
of or participation certificates guaranteed by the Federal Inter-
mediate Credit Banks, Federal Land Banks, Federal National
Mortgage Association, Federal Home Loan Banks, Banks for Coopera-
tives, and in certificates of deposit of any bank or trust company
the deposits of which are fully secured by a pledge of securities
of any of the kinds hereinabove specified, such obligations or
securities to_mature in not more than ten years from the date of
such investment or not later than the final maturity of the then
outstanding bonds similarly secured, whichever period is shorter.
Any obligations in which money is so invested shall be kept in
escrow with the custodian of said Fund, and shall be promptly
sold and the proceeds of sale applied to the making of payments
required to be made from the Reserve Fund whenver such payments
are necessary to be made under Section 12(c). During the time
said Fund contains the full amount required to be on deposit,
any interest income or increment by reason of such investments
shall be transferred to the System Fund. The deposits required
to be made into this Fund shall be subordinate to those required
to be made into the Interest and Sinking Fund.
SECTION 16: If in any month the City shall, for any reason,
fail to pay into the Interest and Sinking. Fund and Reserve Fund
the full amounts above stipulated, amounts equivalent to such
deficiencies shall be set apart and paid into said special Funds
from the first available and unallocated net revenues of the
System in the following month or months and such payments shall be
in addition to the amounts hereinabove provided to be otherwise
paid into said Funds during such month or months.
SECTION 17: Any revenues in excess of those required
to fully estaETish and maintain the special Funds created for
the payment and security of the bonds similarly secured may be
used for the redemption of the bonds similarly secured, or may
be transferred to the general fund of the City and used for
general or special purposes.
SECTION 18: All moneys deposited in the special Funds
for which thi ordinance makes provision (except any portions
thereof as may be at any time properly invested) shall be secured
in the manner and to the fullest extent required by the laws of
Texas for the security of public funds, and moneys oncbposit in
such Funds shall be used only for the purposes permitted by this
ordinance.
'2J
Ordinance No. 345
Page 9
SECTION 19: In addition to the right to issue bonds of
inferior lien—as authorized by the laws of this State, the City
reserves the right to hereafter issue additional parity bonds
which shall be payable from and secured by a first lien on and
pledge of the net revenues of the System in the" same manner and
to the same extent as the previously issued bonds and the bonds,
and the previously issued bonds, the bonds and additional bonds
shall in all respects be of equal dignity. The additional bonds
may be issued in one or more installments, provided, however,
that none shall be issued unless and until the following conditions
have been met:
(a) The City is.not then in default as to any covenant,
condition or -obligation prescribed by -an ordinance authorizing
the issuance of the then outstanding bonds similarly secured.
(b) That each of the Funds created for the payment
and security of the bonds similarly secured contains the
amount of money then required to be on deposit therein.
(c) The net earnings of the System for (1) the
City's completed fiscal year next preceding the adoption
of the ordinance authorizing the issuance of the proposed
additional bonds or (2) the twelve (12) months next
preceding the adopt ion.)of-;such ordinance are equal to at
least one and one-fourth (1-1/4) times the average annual
principal and interest requirements of all the bonds to be
secured by a first lien on and pledge of the net revenues
of the System after giving effect to the issuance of the
proposed additional bonds, as such net earnings are shown
by a report of a Certified Public Accountant or Licensed
Public Accountant. The term net earnings as used in this
Section 19 shall mean the gross revenues after deducting the
expense of operation and maintenance, but not deducting
depreciation or expenditures which, under standard accounting
practice, should be charged to capital expenditures.
(d) The additional bonds are made to mature on
June 1 in each of the years in which they are scheduled
to mature.
(e) The ordinance authorizing the issuance of the
additional bonds provides for the accumulation in the
Interest and Sinking Fund of amounts sufficient to
pay the principal of and interest.on such additional
bonds as same mature..
(f) The ordinance authorizing the -issuance of -the
additional bonds provides that the amount to be accumulated
and maintained in the Reserve Fund shall be an amount equal
to not less than the average annual requirement for the
payment of principal and interest on all bonds to be secured
by a first lien on and pledge of the net revenues of the
System after giving effect to the issuance of the proposed
additional bonds, and provides that any additional Reserve
Fund amount which may thus be required shall be accumulated
within not more than five years and one month from the date
of the passage of the ordinance authorizing the issuance of
the proposed additional bonds.
Bonds similarly secured may be refunded (pursuant to any
law then available) upon such terms and conditions as the governi
body of the City may deem to the best interest of the City and it
inhabitants, and, if less than all such outstanding revenue bonds
are refunded, the proposed refunding bonds shall be considered as
"additional bonds" under the provisions of this Section and the
report required in subdivision (c) shall give effect to the issua
of-the,proposed refunding bonds (and shall not give effect to the
bon -do butha refunded following their cancellation or provision be
WAdO for th0te p"nt).
l�
Ordinance No. 345
Page 10
SECTION 20: The City shall maintain the System in good
condition and operate the same in an efficient manner and at
reasonable cost. So long as any of the bonds are outstanding, the
City agrees to maintain insurance for the benefit of the holder
or holders of the bonds on the System of a kind. and iT} an amount
which usually would be carried by municipal corporations of the
State of Texas engaged in a similar type of business. Nothing in
this Section shall be construed as requiring the City to expend
any funds which are derived from sources other than the operation
of the System but nothing herein shall be construed as preventing
the City from doing so.
SECTION 21: The City hereby covenants and agrees that so lonE
as any of the -Fonds or any interest thereon remain outstanding and
unpaid, it will keep and maintain a proper and complete system of
records and accounts pertaining to the operation of the System
(separate and apart from all other records and accounts) in which
complete and corrent entries shall be made of all transactions
relating to said System, as provided in Article 1113, V.A.T.C.S.,
and that the holder or holders of any of such bonds or any duly
authorized agent or agents of such Holders shall have the right
at all reasonable times to inspect all such records, accounts d
data relating thereto, and to inspect the System and all properanties
comprising same. The City further agrees that as soon as possible
following the close of each fiscal year, it will cause an audit
of such books and accounts to be made by an independent firm of
Certified Public Accountants or Licensed Public Accountants. Each
such audit, in addition to whatever other matters may be thought
proper by the Accountant, shall particularly include the
following:
(a) A detailed statement of the income and expenditures
of the System for such fiscal year;
(b) A bdlance sheet as of the end of such fiscal
year;
(c) The Accountant's comments regarding the manner
in which the City has carried out the requirements of this
ordinance and his recommendations for any changes or improve-
ments in the operation, records and accounts of the System;
(d) A list of the insurance policies in force at the
end of the fiscal year on the System properties, setting
out as to each policy the amount thereof, the risk covered,
the name of the insurer, and the policy's expiration date;
(e) A list of the securities which have been on
deposit as security for the money in the Interest and Sinking
Fund throughout the fiscal year, a list of the securities,
if any, in which the Reserve Fund has been invested, and a
statement of the manner in which money in the System Fund
has been secured in such fiscal year;
(f) The number of properties connected with the System.
Expenses incurred in making the audits above referred to
are to be regarded as maintenance and operating expenses and paid
as such. Copies of the aforesaid annual audit shall be immediatel,
furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, to the original
purchaser of the bonds and., upon written request, to any sub-
sequent holder of the bonds. Any bondholder shall have the right
to discuss with the Accountant making the annual audit the content;
thereof and to ask for such additional information as he may
reasonably require.
Ordinance No. 345
Page 11
SECTION 22: In addition to all the rights and remedies
provi3ed by t e laws of the State of Texas, the City covenants
and agrees particularly that in the event the City (a) defaults
in payments to be made to the Interest and Sinking Fund or Reserve
Fund, or (b) defaults in the observance or performance of any
other of the covenants, conditions or.obligations set forth in
this ordinance, the holder or holders of any of the bonds shall
be entitled to a writ of mandamus issued by a court of proper
Jurisdiction compelling and requiring the City Council and other
officers of the City to observe and perform any covenant, conditioi
or obligation prescribed in the bond ordinance.
No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power, or shall
be,construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised from
time to time and as often as may be deemed expedient. The specifi,
remedies herein provided shall be cumulative of all other existing
remedies and the specification of such remedies shall not be deeme,
to be exclusive.
SECTION 23: The City hereby further covenants as follows:
(a) That it has the lawful power to pledge the revenues
supporting this issue of bonds and has lawfully exercised said
power under the Constitution and laws of the State of Texas,
including said power existing under Article 1111 et seq.,
V.A.T.C.S.; that the previously issued bonds and the bonds shall
be ratably secured under said pledge of income in such manner that
one bond shall have no preference over any other bond of said
issues.
(b) That other than for the payment of the previously issued
bonds and the bonds, the net revenues of the System have not in
any manner been pledged.to the payment of any debt or obligation
of the City or of the System.
(c) That, so long as any of the bonds, or any interest
thereon, remain outstanding, the City will not sell, lease
or encumber the System or any substantial part thereof, provided
that this shall not be construed to prohibit the sale of such
machinery, or other properties or equipment which has become
obsolete or otherwise unsuited to the efficient operation of the
System; also, with the exception of the additional bonds expressly
permitted by this ordinance to be issued, it will not encumber the
net revenues thereof unless such encumbrance is made junior and
subordinate to all of the provisions of this ordinance.
(d) That no free service of the System shall be allowed,
and should the City or any of its agencies or instrumentalities
make use of the services and facilities of the System, payment
of the reasonable value thereof shall be made by the City out
of funds from sources other than the revenues and income of
the System.
(e) To the extent that it legally may, the City further
covenants and agrees that, so long as any of the bonds, or any
interest thereon are outstanding, no,franchise shall be granted
for the installation or operation of any waterworks or sanitary
sewer systems other than those owned by the City, and the operatiot
of any such system by anyone other than the City is hereby
prohibited.
16
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Ordinance No. 345
Page 12
SECTION 24: That the bonds are special obligations of
the City payaSTe from the pledged net revenues and the
holders thereof shall never have the right to demand payment
thereof out of funds raised or to be raised by taxation.
SECTION 25: That each of the bonds herein authorized
shall be deemed and construed to be a "security", and as
such a negotiable instrument, within the meaning of Article
8 of the Uniform Commercial Code.
SECTION 26: That the Mayor of the City shall be and is
hereby authorized to take and have charge of all necessary
orders and records pending investigation by the Attorney
General of the State of Texas and shall take and have charge
and control of the bonds herein authorized pending their
approval by the Attorney General and their registration by
the Comptroller of Public Accounts.
SECTION 27: That the provisions of this ordinance shall
constitute a contract between the City of Allen and the holder
or holders from time to time of the bonds herein authorized to
be issued, and after the issuance of any of said bonds, no change,
variation or alteration of any kind of the provisions of this
ordinance may be made, unless as herein otherwise:provided, until
all of the bonds issued hereunder shall have been paid as to
both principal and interest.
SECTION 28: That the sale of the bonds authorized
herein to S HNEIDER, BERNET & HICKMAN, INC., Dallas, Texas
at the price of par and accrued interest to the date of
delivery, plus a premium of $ , is hereby confirmed.
Delivery of said bonds shall be made to said purchaser as
soon as may be after the adoption of this ordinance, upon
payment therefor in accordance with the terms of sale.
SECTION 29: That the purchaser's obligation to accept
delivery of the bonds is subject to their being furnished a
final opinion of Messrs. Dumas, Huguenin, Boothman and
Morrow, Attorneys, Dallas, Texas, approving such bonds as to
their validity, said opinion to be dated and delivered as of
the date of delivery and payment for such bonds. Printing
of a true and correct copy of said opinion on the reverse
side of each of said bonds with appropriate certificate
pertaining thereto executed by facsimile signature of the
City Secretary is -hereby approved and authorized.
SECTION 30: That the City hereby covenants that the proceed;
of the bonds are needed at this time to finance the costs of
capital improvements planned by the City; based on current facts,
estimates and circumstances, it is reasonably expected final
disbursement of the bond proceeds will occur within three years
from the date of the receipt thereof by the City; it is not
reasonably expected that the proceeds of the bonds or moneys
deposited in the special Funds referred to herein for the pay-
ment and security of the bonds will be used or invested in a
manner that would cause the bonds to be "arbitrage bonds" within
the meaning of Section 103(c) of the Internal Revenue Code of
1954, as amended, or any regulations or published rulings per-
taining thereto; and save and except for the special Funds referri
to herein, no other funds or accounts have been established or
pledged for the payment of the bonds. Proper officers of the
City charged with the responsibility in the issuance of the bonds
are hereby authorized and directed to make, execute and deliver
certifications as to facts, estimates and circumstances in
existence as of the date of issue of the bonds and stating
i`i
Ordinance No. 345 J
whether there are any facts, estimates or circumstances which
would materially change the City's current expectations, and
the covenants herein made and certifications herein authorized
are for the benefit of the holders of the bonds and coupons
appertaining thereto and may be relied upon by the bondholders
and bond counsel for the City.
SECTION 31: That CUSIP numbers may be printed on the
bonds herein authorized. It is expressly provided, however,
that the presence or absence of CUSIP numbers on the bonds
shall be of no significance or effect as regards the legality
thereof and neither the City nor the attorneys approving
said bonds as to legality are to be held responsible for
CUSIP numbers incorrectly printed on the bonds.
SECTION 32: That this ordinance shall take effect and
be in full foFFe immediately from and after its passage.
PASSED AND APPROVED, this the 21st day
q
May,
1981.
a or, City`of
Allen,
Texas
ATTEST:
City Secretaity, City of
Allen, Texas
(City Seal)
7J