O-127-5-72ORDINANCE N0. 127
MINUTES PERTAINING TO PASSAGE AND ADOPTION OF
AN ORDINANCE AUTHORIZING ISSUANCE OF $1,500,000
"CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 1972," DATED JUNE 1, 1972
THE STATE OF TEXAS X
X
COUNTY OF COLLIN X
X
CITY OF ALLEN X
ON THIS, the 4th day of May, !972, the City Council of
the City of Allen, Texas, convened in regu:ar session at the
regular meeting place thereof in the City Hamel, the meeting being
open to the public and notice of said meeting, giving the date,
place and subject thereof, having been posted as prescribed by
Article 6252-17, Section 3A, V.A.T.C.S., tare being present and
in attendance the following members, to wit:
FRANK DUGGER MAYOR
ROBERT LOWMAN
C. D. WHITAKER )
CLIFFORD HART ) ALDERMEN
JOHNNY PANNELL )
JOHNNY BLANKENSHIP )
and with the following absent: -7-,�,,,,� ,
constituting a quorum; and among other proceedings had were the
following:
The Mayor introduced a proposed ctoinanee. The ordi-
nance was read in full.
Alderman made a-.otion that any rale
requiring ordinances to be read more than o:._ time or at more
than one mem ing be spended. The mot;.or, wa.s seconded by
Alderman and carried :.;eche .,Mowing vote:
YES: Aldermen Lawman, Whitaker, Hart, Pannell
and Blankenship.
NOES: None.
Alderman then m.,ue � motion that the
or 'nonce be passed(finally. The motion waq seconded by Alderman
and carried by the foLlowin„ vote:
AYES: Aldermen Lowman, Whitake., Sart, Pannell
and Blankenship.
NOES: None.
The Mayor announced that the ordinaace hid been finally
passed.
The ORDINANCE is as follows:
AN ORDINANCE by the City Council of the City of
Allen, Texas, authorizing the issuance of
$1,500,000 "CITY OF ALLEN, TEXAS, WATERWORKS
AND SEWER SYSTEM REVENUE BONDS, SERIES 1972,",
dated June 1, 1972, of which the sum of
$402,000 shall be for the purpose of refund-
ing, cancelling and in lieu of a like principal
amount of outstanding revenue bonds of the City
(evidenced by $107,000 "City of Allen, Texas,
Waterworks and Sewer System Revenue Bonds,"
dated April 1, 1958; $60,000 "City of Allen,
Texas, Waterworks and Sewer System Revenue
Bonds, Series 1961," dated July 1, 1961;
$160,000 "City of Allen, Texas, Waterworks
and Sewer System Revenue Bonds, Series 1966,"
dated November 1, 1966 and $75,000 "City of
Allen, Texas, Waterworks and Sewer System
Revenue Bonds, Series 1968," dated June 1,
1968);and the sum of $900,000 shall be for
the purpose of improving an: extending the
City's Waterworks System, and $198,000 for
the purpose of improving and extending the
City's Sanitary Sewer System, 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 the bonds and the form
of the interest coupons; pledging the net reve-
nues 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 relating to
the subject and purpose of this ordinance;
and declaring an emergency.
WHEREAS, the governing body of the City of Allen, Texas,
has heretofore authorized the issuance of the following described
bonds:
"City of Allen, Texas, Waterworks and Sewer
System Revenue Bonds," dated April 1, 1958,
bearing interest at the rate of 5-3/4%, which
are now outstanding in the principal amount
of $107,000;
"City of Allen, Texas, Waeerwu,ks a:.a hewer
System Revenue Bonds, Series '96-,' datad
July 1, 1961, bearing interest at the rate
of 5-1/2%, which are now outsta..3ing in the
principal amount of $60,000;
"City of Allen, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1966," dated
November 1, 1966, bearing interest at the
rate of 5-3/4%, which are now outstanding
in the principal amount of $160,000; and
"City of Allen, Texas, Waterworks and Sewer System
Revenue Bonds, Series 1968," dated June 1, 1968,
bearing interest at the rate of 5-3/4%, which are
now outstanding in the principal amount of $75,000;
and, it is to the best interest of the City to provide for the re-
funding of such revenue bonds; and
WHEREAS, as the result of an election held on the 15th
day of January, 1972, this governing body became authorized and
empowered to issue bonds in the following amounts and for the
following purposes:
$1,200,000 for the purpose of improving and extend-
ing the City's Waterworks System; and
$ 300,000 for the purpose of improving and extend-
ing the City's Sanitary Sewer System;
and, it is now proper and advisable for this governing body to
provide for the issuance of $900,000 for waterworks purposes and
$198,000 for sewer system purposes of said voted bonds, combining
them with refunding bonds so as to provide a single series, and
that all of the aforesaid bonds would be secured by a pledge of
the net revenues from the operation of the City's combined Water-
works and Sanitary Sewer System; and
WHEREAS, the City reserves the right to issue the re-
mainder of the voted bonds at such time as the proceeds thereof
are needed to accomplish the voted purposes; and
WHEREAS, it is now found and determined that none of the
bonds being refunded were ever held for the Interest and Sinking
Fund established for their payment and such refunding is authorized
under the provisions of Article 717k-3, V.A.T.C.S.; now therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ALLEN,
TEXAS:
SECTION 1: Authorization - Principal Amount - Designa-
tion. That, in order to borrow the sum of ONE MILLION FIVE HUN-
DRED THOUSAND DOLLARS ($1,500,000) of which the hum of $402,000
shall be for the purpose of refunding, cancelling and in lieu of
a like principal amount of outstanding revenue bonds heretofore
issued (evidenced by $107,000 "City of Allen, Texas, Waterworks
and Sewer System Revenue Bonds," dated Az i.. 1 1958; $60,000
"City of Allen, Texas, Waterworks and Sewer 3-1:tem Revenue Bonds,
Series 1961," dated July 1, 1961; $160,000 "City of Allen, Texas,
Waterworks and Sewer System Revenue Bonds, Series 1966," dated
November 1, 1966, and $75,000 "City of A.en, Texas, Waterworks
and Sewer System Revenue Bonds, Series 1998," dated June 1, 1968);
and the sum of $900,000 shall be for the purpose of improving and
extending the City's Waterworks System, and $198,000 for 7..e purpc
of improving and extending the City's Sanitary Sewer Systea:.
the City Council of the City of Allen, Texas, ay virtue of '.ae
authority expressly conferred at an election, and pursuant to t`ic
Cenral Laws of the State of Texas, particularly Article 11:'._
seq., V.A.T.C.S., has determined that there shall be issued c:,.,.
there is hereby ordered to be issued a series of coupon bonds
be designated "CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER SY_:i:M
REVENUE BONDS, SERIES 1972," aggregating the sum of ONE M7—LION
FIVE HUNDRED THOUSAND DOLLARS ($1,500,000), 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: Date - Numbers - Maturity. Said bonds shall
be dated June 1, 1972; shall be numbered consecutively from One
(1) through Three Hundred (300); shall each be in denomination of
Five Thousand Dollars ($5,000); aggregating the principal sum of
ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000); and shall
become due and payable serially on June 1 in each of the years in
accordance with the following schedule:
BOND NUMBERS
(All Inclusive) MATURITY AMOUNT
1
to
5
1974
$25,000
6
to
10
1975
25,000
11
to
15
1976
25,000
16
to
20
1977
25,000
21
to
26
1978
30,000
27
to
32
1979
30,000
33
to
38
1980
30,000
39
to
45
1981
35,000
46
to
52
1982
35,000
53
to
59
1983
35,000
60
to
67
1984
40,000
68
to
75
1985
40,000
76
to
83
1986
40,000
84
to
92
1987
45,000
93
to
101
1988
45,000
102
to
111
1989
50,000
112
to
121
1990
50,000
122
to
131
1991
50,000
132
to
142
1992
55,000
143
to
154
1993
60,000
155
to
166
1994
60,000
167
to
179
1995
65,000
180
to
192
1996
65,000
193
to
206
1997
70,000
207
to
220
1998
70,000
221
to
235
1999
75,000
236
to
250
2000
75,000
251
to
266
2001
80,000
267
to
283
2002
85,000
284
to
300
2003
85,000
PROVIDED, HOWEVER, that the City of Allen reserves the right to
redeem bonds maturing in each of the years 1993 through 2003 of
said series, in whole or in part, but in inverse numerical order
if less than all, on June 1, 1992, or on any interest payment date
thereafter, at the price of par plus accrued interest to: ne date
fixed for redemption; PROVIDED, FURTHER, that at least tl:'._ty (30)
days prior to any interest payment date upon which any of said
bonds are to be redeemed, notice of redemption, signed by the
City Secretary (specifying the serial numbers and amount of bonds
to be redeemed) shall have been filed with the paying agent named
in each of said bonds; and should any bond or bonds not be pre-
sented for redemption pursuant to such notice, the same shall
cease to bear interest from and after the date so fixed for redemp-
tion.
SECTION 3: Interest. That said bonds shall bear inter-
est from date to maturity at the following rates per annum:
(a) Bonds maturing in each of the years 1974
through 1978 at 6.00%;
(b) Bonds maturing in each of the years 1979
through 1983 at 6.50%;
(c) Bonds maturing in each of the years 1984
through 1988 at 6.75%;
(d) Bonds maturing in each of the years 1989
through 1992 at 7.00%; and
(e) Bonds maturing in each of the years 1993
through 2003 at 7.375%;
such interest to be evidenced by proper coupons attached to each
of said bonds; and said interest shall be payable on June 1, 1973,
and semiannually thereafter on December 1 and June 1 in each year.
SECTION 4: Place of Payment. Both principal of and
interest on this issue of bonds aha 11 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.
SECTION 5: Execution of Bonds and Coupons. The seal of
said City may be impressed on each of said bonds or, in the alter-
native, 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 Comp-
troller of Public Accounts for the State of Texas, only his signa-
ture (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: Form of Bonds. That the form of said bonds
shall be substantially as follows:
N0. UNITED STATES OF AMERICA $5,000
STATE OF TEXAS
COUNTY OF COLLIN
CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER
SYSTEM REVENUE BOND, SERIES 1972
The CITY OF ALLEN, a municipal corporation of the State
of Texas, acknowledges itself indebted to and FOR VALUE RECEIVED
hereby promises to pay to bearer the sum of
FIVE THOUSAND DOLLARS
($5,000), in lawful money of the United States of America on the
FIRST DAY OF JUNE, , with interest thereon from the date
hereof to maturity at the rate of PER CENTUM (%)
per annum, payable on June 1, 1973, and semiannually thereafter
on December 1 and June 1 in each year, and interest falling due on
or prior to maturity hereof is payable only upon presentation and
surrender of the interest coupons hereto attached as they severally
become due.
BOTH PRINCIPAL of and interest on this bond are hereby
made payable at the MERCANTILE NATIONAL BANK AT DALLAS, Dallas,
Texas, without exchange or collection charges to the owner or
holder, and the said City of Allen, Texas, is hereby held and
firmly bound to apply the pledged appropriated net revenues of its
combined Waterworks and Sanitary Sewer System to the prompt pay-
ment of principal of and interest on this bond at maturity and to
pay said principal and interest as they mature.
THIS BOND is one of a series of bonds of like tenor and
effect, except as to number, interest rate, maturity and right of
prior redemption, aggregating in amount ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($1,500,000), numbered consecutively from One (1)
through Three Hundred (300), each in denomination of Five Thousand
Dollars ($5,000), of which the sum of $402,000 is for the purpose
of refunding, cancelling and in lieu of a like principal amount of
outstanding revenue bonds heretofore issued (evidenced by $107,000
"City of Allen, Texas, Waterworks and Sewer System Revenue Bonds,"
dated April 1, 1958; $60,000 "City of Allen, Texas, Waterworks and
Sewer System Revenue Bonds, Series 1961," dated July 1, 1961;
$160,000 "City of Allen, Texas, Waterworks and Sewer System Revenue
Bonds, Series 1966," dated November 1, 1966, and $75,000 "City of
Allen, Texas, Waterworks and Sewer System Revenue Bonds, Series
1968," dated June 1, 1968); and the sum of $900,000 is for the
purpose of improving and extending the City's Waterworks System,
and the sum of $198,000 is for the purpose of improving and extend-
ing the City's Sanitary Sewer System, in accordance with the Consti
tution and laws of the State of Texas, particularly Article 1111
et seq., V.A.T.C.S., and by authority of an eLeetion held for that
purpose within said City, and pursuant to a. ordinance passed by
the City Council of the City of Allen, Texas, .-.no daly recorded
in the Minutes of said City Council.
THE DATE of this bond in conformity with the ordinance
above mentioned is June 1, 1972.
THIS BOND and the series of which it is a part constitute
special obligations of the City of Allen, Texas, and are 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.
EXCEPT AS otherwise specified in the proceedings author-
izing this series of bonds, including any change or adjustment in
the provisions of the funds for the payment and security thereof,
the holders of the bonds of this series issued for refunding pur-
poses shall be subrogated to and shall possess all the rights and
remedies of the holders of the original bonds being refunded.
THE CITY expressly reserves the right to issue further
and additional revenue bond obligations in all things on a parity
with the bonds of this series and 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, limitations,
conditions 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 authorize
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 that 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 said combined Water-
works and Sanitary Sewer System of the City of Allen, Texas.
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 with the imor:mted facsimile
signatures of the Mayor and City Secretary of said City, as of
the 1st day of June, 1972.
Mayor, City of Allen, Texas
COUNTERSIGNED:
City Secretary, City of Allen,
Texas
SECTION 7: Coupon Form. The form of said interest
coupons shall be substantially as follows:
NO. ON THE FIRST DAY OF , $
*(unless the bond to which this coupon pertains has been properly
called for redemption in accordance with its terms,) the City of
Allen, a municipal corporation of the State of Texas, hereby
promises to pay to bearer, 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) and in lawful
money of the United States of America, without exchange or collec-
tion charges to the owner or holder, at the MERCANTILE NATIONAL BA;
AT DALLAS, Dallas, Texas, the sum of
'DOLLARS
($_ said am being months' interest due that day on
"CITY OF ALLEN, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND,
SERIES 1972," dated June 1, 1972. Bond No.
City Secretary Mayor
SECTION 8: Form of Comptroller's Certificate. Substan-
tially the following shall be printed on the back of each bond:
OFFICE OF COMPTROLLER X
X REGISTER NO.
STATE OF TEXAS X
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 con-
formity 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 )_' Texas
SECTION 9: Definitions. For all purposes of this ordi-
nance and in particular for clarity with =aspect to the issuance
of the bonds herein authorized and the pledge and appropriation
of revenues therefor, the following definitions are provided:
*NOTE TO PRINTER: The expression in parentheses to be included
only in coupons maturing December 1, 1992, and subsequent,
pertaining to optional bonds maturing in the years 1993 through
2003.
(a) The term "System" means the City's com-
bined Waterworks and Sanitary Sewer System, includ-
ing all present and future additions, extensions,
replacements and improvements in any wise appertain-
ing thereto, whether situated within or without the
limits of said City.
(b) The term "net revenues" means the gross
revenues of the System less the expense of operation
and maintenance, including all salaries, labor, mater-
ials, 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 security of any bonds payable from and
secured by a lien on the net revenues of the System
shall be deducted in determining "net revenues".
(c) The term "bonds" means the $1,500,000
revenue bonds authorized by this ordinance.
(d) The term "additional bonds" shall mean
the additional parity revenue bonds which the City
reserves the right to issue under Section 19 hereof.
(e) The term "fiscal year" shall mean the
twelve-month period ending June 30 of each year.
(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.
SECTION 10: Pledge. All of the net revenues of the
System, with the exception of those in excess of the amounts
required to establish and maintain the Funds as hereinafter pro-
vided, are hereby irrevocably pledged for the payment of the bonds
similarly secured and the interest there on, and it is hereby
ordained that such bonds and the interest thereon shall constitute
a first lien upon said net revenues.
SECTICN 11: Rates and Charger. Trt. City covenants and
agrees with the holders of the bonds similarly secured:
(a) That it will at all times charge and
collect for services rendered by the System rates
sufficient to pay all operating, maintenance,
depreciation, replacement and betterment expenses,
and other costs deductible in determing "net
revenues" as herein defined and to pay the inter-
est on and principal of the bonds similarly secured
and to establish and maintain the Funds as herein-
after provided;
(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 suffi-
cient to discharge such indebtedness.
SECTION 12: Fund Designations. All revenues derived
from the operation of the System shall be kept separate from other
funds of the City. To that end the following special Funds are
hereby created:
(a) City of Allen Waterworks and Sewer System
Fund, hereinafter called "System Fund". This fund
shall be kept in the City's depository bank.
(b) City of Allen Waterworks and Sewer System
Revenue Bond Interest and Sinking Fund, hereinafter
called "Interest and Sinking Fund". This Fund shall
be deposited with the MERCANTILE NATIONAL BANK AT
DALLAS, Dallas, Texas, as Trustee of the pledged
revenues, and shall be used to pay principal of and
interest on the bonds similarly secured when and as
the same shall become due and payable.
(c) City of Allen Waterworks and Sewer System
Revenue Bond Reserve Fund, hereinafter called
"Reserve Fund". This Fund shall be deposited with
the MERCANTILE NATIONAL BANK AT DALLAS, Dallas,
Texas, Trustee and shall be used to pay principal
of or interest on the bonds similarly secured fall-
ing due at any time when there is not sufficient
money available in the Interest and Sinking Fund.
SECTION 13: System Fund. All revenues of every nature
received through the operation of the System shall be deposited
from day to day as collected into the System Fund, and the reason-
able 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 appropriated and used for the purposes
and in the order of precedence hereinafter set forth.
SECTION 14: Interest and Sinking Fc:.c. Immediately
upon the issuance and delivery of the bonds hE�_In authorized,
t::e amount received from the purchasers of ;.ie uoads as interest
accrued thereon to the date of delivery shall be deposited in the
Interest and Sinking Fund. On or before tae 15th day of June, 1972
and on or before the 15th day of each montn thereafter through
May 15, 1973, the City shall deposit in said fund noL less than
one -twelfth (1/12) of the interest scheduled to become due on
June 1, 1973, and thereafter on or before June 15, 1973, and on or
before the 15th day of each month thereafter the City shall deposit
in said Fund not less than one-sixth (1/6) of the next semiannual
interest and one -twelfth (1/12) of the next annual principal matur-
ity. Said monthly deposits shall continue to be made until such ti:
as the amounts on deposit in the Interest and Sinking Fund and in t
Reserve Fund are equal to the amount of the outstanding �ndebtednes
which said Funds were established to pay by the provisions of
Sections 12(b) and 12(c) hereof. Any proceeds of the bonds found
not to be required for the construction of the System shall also
be placed in said Fund, which shall reduce by such amount the sums
which would otherwise be required to be placed therein from the
revenues of the System.
SECTION 15: Reserve Fund. It is the City's purpose and
intent and the City hereby covenants that it will provide for the
accumulation of and, when accumulated, will thereafter continuously
maintain in the Reserve Fund an amount not less than the average
annual principal and interest requirements of all bonds secured by
a first lien on and pledge of the net revenues of the System. When
fully accumulated in accordance herewith, no further payments need
be made into the Reserve Fund, except that whenever said Fund is
reduced below such amount, monthly deposits shall be resumed as
herein specified and continued until such time as the Fund 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 or or participation certificates guaranteed by
the Federal Intermediate Credit Banks, Federal Land Banks, Federal
National Mortgage Association, Federal Home Loan Banks, Banks for
Cooperatives, 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 obliga-
tions 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 bonds outstanding for which the Reserve Fund is established,
whichever is shorter. Any obligations in which money is so investe
shall be kept in escrow in the MERCANTILE NATIONAL BANK AT DALLAS,
Dallas, Texas, and shall be promptly sold and the 2roceeds of sale
applied to the making of payments required to be made from the
Reserve Fund whenever such payments are necessary to be made under
the provisions of Section 12(c). The deposits into this Fund shall
be subordinate to those required to be made into the Interest and
Sinking Fund.
The amount to be accumulated and maintained in said
Reserve Fund upon issuance of this series of bonds is hereby deter-
mined to be $110,500. To that end the City shall deposit the sum
of $1,840 in the Reserve Fund on or before the 15th day of each
month, beginning June 15, 1972, and continuing until such time as
said Fund shall total not less than $110,500 as aforesaid. In the
event said Fund is reduced below that amount, monthly deposits shal
be resumed and made on or before the 15th day of each month at the
rate of not less than $1,840.
SECTION 16: Deficiencies in Funds. 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 Funds from the first available and unallocated
revenues of 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: Excess Revenues. Any revenues in excess of
those required to fully establish and maintain the Funds herein
provided may be used for the redemption of bonds similarly secured,
or may be transferred to the general fund of the City and used for
any lawful purpose.
SECTION 18:Security of Funds. All special Funds for
which this 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 such Funds shall be used only for
the purposes permitted by this ordinance.
SECTION 19: Issuance of Additional Parity Bonds. In
addition to the right to issue bonds of inferior lien as autho-
rized by the laws of this State, the City reserves the right here-
after to issue additional parity bonds. The additional bonds when
issued 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 are the bonds authorized by this ordinance, and
the bonds similarly secured shall in all respects be of equal
dignity. The additional bonds may be issued in one or more install
ments, 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 this
ordinance.
(b) That each of the Funds created by this ordi-
nance 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 adop-
tion of an ordinance authorizing the issuance of the
proposed additional bonds or (2) the twelve (12) months
next preceding the adoption of such ordinance are equal
to at least one and one-fourth (1-1/4) times the aver-
age 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 by a Certified
Public Accountant or Licensed Public Accountant, pro-
vided, however, the remain -ng bonds voLed at the elec-
tion held on January 15, 1972, which remain unissued
(in the principal amount of $402,000) may be issued at
any time without the necessity of meeting the require-
ments of this subsection. The term "net earnings" as
used in this Section 19 shall mean the gross revenues
after deducting the expense of operation and mainte-
nance, 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 of each of the years in which they are scheduled
to mature.
(e) The ordinance authorizing 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 addi-
tional bonds as same mature.
(f) The ordinance authorizing issuance of
the additional bonds provides that the amount to
be accumulated and maintained in the Reserve Fund
shall be in an amount not less than the average
annual requirement for the payment of principal of
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 ordi-
nance 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
governing body of the City may deem to the best interest of the
City and its 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 issuance of the proposed refunding bonds (and shall
not give effect to the bonds being refunded following their can-
cellation or provision being made for their payment.)
SECTION 20: Maintenance and Operation - Insurance.
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 similarly secured are outstanding, the City
agrees to maintain insurance for the benefit of the holder or holds.
of the bonds on the System of a kind and in an amount which usually
would be carried by private companies 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 con-
strued as preventing the City from doing so.
SECTION 21: Records - Accounts - Accounting Reports.
The City hereby covenants and agrees that so long as any of the
bonds similarly secured 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 cpe-ation of the System
(separate and apart from all other records and accounts) in which
complete and correct 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 and
data relating thereto, and to inspect the System and all properties
comprising same. The City further agrees that within sixty (60)
days 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 Accoun-
tants. Each such audit, in addition to whatever other matters may
be thought proper by the Acdountant, shall particularly include the
following:
(a) A detailed statement of the income and
expenditures of the System for such fiscal year;
(b) A balance 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 re-
quirements of this ordinance and his recommenda-
tions for any changes or improvements in the opera-
tion, 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 proper-
ties, 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 immediately
furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, and to the origina
holders of the bonds and any subsequent holder at his request. At
the close of the first six months' period of each fiscal year, the
City Secretary is hereby directed to furnish a copy of an operating
and income statement in reasonable detail covering such period to
any bondholder upon his request therefor received not more than
thirty (30) days after the close of said six months' period. Any
bondholder shall have the right to discuss with the Accountant
asking the annual audit the contents thereof and to ask for such
additional information as he may reasonably require.
SECTION 22: Remedies in Eent of Desault. In addition
to all the rights and remedies provi3ed by rhe 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 obli-
gations set forth in any ordinance authorizing the issuance of
bonds similarly secured, the following remedies shall be available:
(1) The holder or holders of any of the bonds
similarly secured shall be entitled to a writ of man-
damus issued by a court of proper jurisdiction com-
pelling and requiring the City Council and other
officers of the City to observe and perform any cove-
nant, condition or obligation prescribed in the bond
ordinance.
(2) 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 specific remedies herein provided shall be cumula-
tive of all other existing remedies and the specification of such
remedies shall not be deemed to be exclusive.
SECTION 23: Special Covenants. 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 Consti-
tution and laws of the State of Texas, including
said power existing under Article 1111 et seq.,
and Article 717k-3, V.A.T.C.S.; that the bonds
similarly secured 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
bonds similarly secured, the rents, revenues and
income 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 other than made for the
bonds being refunded hereby.
(c) That, so long as any of the bonds simi-
larly secured or any interest thereon remain outstand-
ing, 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 effi-
cient 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 reve-
nues thereof unless such encumbrance is made junior and
subordinate to all of the provisions of this ordinance.
(d) That no free service oZ tha 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 imcome 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 similarly secured 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 operation of any such systems by any-
one other than the City is hereby prohibited.
SECTION 24: Bonds Are Special Obligations. The bonds
are special obligations of the City payable from the pledged reve-
nues, 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: Bonds as Negotiable Instruments. 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: Mayor to Have Charge of Records and Bonds.
The Mayor of the City of Allen shall be and he 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 author-
ized pending their approval by the Attorney General, registration
by the Comptroller of Public Accounts, and delivery to the pur-
chasers thereof.
SECTION 27: Subrogation of Rights. Except as otherwise
specified in the proceedings authorizing this series of bonds,.
including any change or adjustment in the provisions of the funds
for the payment and security thereof, the holders of the bonds of
this series issued for refunding purposes shall be subrogated to
and shall possess all the rights and remedies of the holders of
the original bonds being refunded.
SECTION 28: Exchange of Bonds. Bonds numbered 1 through
81 of the series herein authorized representing $405,000 in princi-
pal amount of bonds shall be registered by the Comptroller of
Public Accounts only at such time as the $402,000 in principal
amount of bonds being refunded hereby have been surrendered to him
and duly cancelled. Bonds Numbered 1 through 80 of this series
in the aggregate principal amount of $400,000, and $2,000 out of
bond number 81 (being an undivided interest of two-fifths (2/5) of
the principal amount of bond number 81) are being delivered in lieu
of and exchange for the bonds being refunded hereby.
SECTION 29: Confirmation of Sale. An undivided interest
in bond number 81 (three-fifths (3 5) of the principal amount) and
bonds numbered 82 through 300 are hereby sold to WHITE WELD & CO.,
INCORPORATED, Dallas, Texas, at the price of par and accrued
interest to date of delivery, is hereoy corfirme2. Delivery of
said bonds shall be made to said purchasers as soon as may be after
the adoption of this ordinance upon payment therefor in accordance
with the terms of sale.
SECTION 30: Printed Legal Opinion on Bonds. The pur-
chasers' obligation to accept delivery of the bonds herein
authorized 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. Printing of a
true and correct copy of said opinion on the reverse side of each
of such bonds with appropriate certificate pertaining thereto
executed by facsimile signature of the City Secretary is hereby
approved and authorized.
SECTION 31. Emergency. The fact that it is to the best
interest of the City to provide funds for refunding and cancell-
ing the outstanding revenue bonds described in the preamble hereof
and to providing for improving and extending the City's Waterworks
and Sanitary Sewer Systems at the earliest possible date consti-
tutes and creates an emergency and an urgent public necessity
requiring that this ordinance be passed and take effect as an
emergency measure, and that any rule requiring ordinances to be
read more than one time or at more than one meeting be suspended,
and any such rule is hereby suspended and this ordinance is accor-
dingly passed as an emergency measure and shall take effect and
be in force immediately from and after its passage.
PASSED AND APPROVED, this the 4th day of May, 1972.
Mayor, City of Al nJ Texas
ATTEST:
City Secretary, City of A1(151
n, Texas
(City Seal)