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OR 36 Authorizes issuance of $345,000 Water & Sewer System Revenue Bonds ORDINANCE NO. 36 AN ORDINANCE by the City Council of the City of Coppell, Texas, authorizing the issuance of $345,000 'CITY OF COPPELL, TEXAS, WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 1966,' dated May1, 1966, of which the sum of $150,000 shall be for the purpose of con- structing improvements and extensions to the City's Waterworks System, and $195,000 shall be for the purpose of constructing or pur- chasing, improving and extending a Sanitary Sewer System in and for said City, as author- ized by the General Laws of The State of Texas, particularly Article 1111 et seqq., V.A.T.C.S., prescribing the form of the 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; enact- ing provisions incident and related to the sub- ject and purpose of this ordinance; and declar- ing an emergency." k~RF_~S, at an election held on the 27th day of March, 1965, more than a majority of the duly qualified resident electors of said City, ~ho ovr~ed taxable property within said City and who had duly rendered the same for taxation, who participated in the electicn~ voted in favor of the issuance of $150,000 revenue bonds for the purpose of constructing im- provements and extensions to the City's Waterworks System and $195,000 revenue bonds for the purpose of constructing or pur- chasing, improving and extending a Sanitary Sewer System in and for said City, and it is now found and determined that all of said bonds should be issued at this time; and, ~E-LEREAS, it has been determined that the City Council of the City of Coppall, Texas, acting for and on behalf of said City, is in all respects duly and legally empowered to issue the aforesaid bonds; therefore, , BE IT ORDAINED BY TF2 CITY COLTI~CiL OF THE CITY OF COPPELL, TEXAS: SECTION 1: Authorization - Princioa! Amount - Desi~nation. That in order to borrow the sum of T~L~EE HUNDED FORTY FIVE TEOUS~j~D D0vJARS ($345,000), of which the sum of $150,000 shall be fcr the purpose of conszructing imorovements an~ extsns~ons to the City's Waterworks System and $!95,00_p_0shali be for the purpose of constructinc or purchasing. ihprovin~ and extending a ~anitzry S~.~er System in and fcr said City, the City Counlil of zhs City of Coppeli, Texas, by virtue of the authority ex- press!7 conferred by the resident qualified property taxpaying electors, who o~med tm~able properny in said City, and who had duly r&ndered the same for taxation, voting at the aforesaid e!ecticn, and pursuant to the General Laws of the State of Texas, parzicuiarly Article i!il st seqq., V.A.T.C.S., has determined -thal there shall be issued and tkere is hereby ordered to be i£i~ed ~ series of coupon bonds, Zo be designated "CITY OF OCt?ELL, TEXAS, WATER ~2qD SF~R SYSTDiREVENUE BONDS, SERIES 19~5," dated May !, 1966, a~q%regating ~he sum of T}r-~Z2 HUNDRED .... '~" payable as to both , u FIVE THOUSAiqD DOLLAPJ ($345,000), principal and interesZ solely from and secured by a first Cit ' lien on and pledge of the revenues of the y s combined Wa~en~orks and Sanitary Sewer System, after deduction of reasonable operation and maintenance expenses, as said ex- penses are defL~ed by s~a=uze, hereinafmer referred to as "net revenues". SECTION 2: Date - Numbers - Maturity - ODtion. Said bonds shall be-dated Fmy 1, 1966; shall be numbered consecu- tively from One (1) through Three Hundred Forty-Five (345); shall be in denomination of One Thousand Dollars ($1,000) each, aggregating the principal sum of Tt!REE tIUNDRED FORTY FiVE %HOUS~YD DOLLARS ($345,000) and payable serially onM ay 1 in each of with the following schedule: BO~NUMBERS (All Inclusive) 1 2 3 4 5 6 7 and 8 9 to 11 12 to 15 16 to 20 21 to 26 27 to 33 34 to 40 4! to 48 49 zo' 56 57 to 64 65 to 73 74 Eo 82 83 to 91 92 to !00 i0! to 110 ili to 120 !21 to !31 132 to 142 143 to 153 L54 to 165 166 to 177 178 to 190 191 to 203 204 to 217 218 to 231 232 tO 246 247 to 261 262 to 277 278 to 293 294 to 310 3~1 to 327 328 ~o 345 shall become due and the years in accordance i,!~.TURITY AMOUNT 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 i981 1982 1983 !984 1985 Ic86 1987 !98~ 1989 1990_ 1991 1992 19~! i994 1995 1996 i9~7 1998 1995 2000 200~ 2002 2003 2004 2005 2006 $ !,000 !,000 1,000 t,000 1,000 t,000 '2,000 __3,000 j,000 . 5,000 5,000 7,000 7,000 8,000 8,000 8,000 9,000 9,000 9,000 9,000 ~0,000 ...... 20 000 1I 000 ~1 000 il 000 12 000 ~2,000 ~3,,000 ~3,000 ~4,000 ~4,000 !5,000 15,000 16,000 16,000 t7,000 &7,000 18,000 ( ~ PROVIDED· HOWEVER, thmt the City of Coppell reserves the right to redeem bonds maturing in 1977 and thereafter, in '~hole or in part, but in inverse numerical order if'less than all, on May i, 1976, or on any interest payment date thereafter at par and accrued interest to the date fixed for redemption plus a premiu~mof 4% on all bonds called for redemption at the expiration of the tenth year from the date of the bonds, with a reduction of 1/4th of 1% each year there- after until the expiration of the twenty-sixth year, on or after which date there s~m!l be no premium on any bonds so called; PROVIDED· FURTHER, mhat at least thirty (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 PiERCA~NTILE NATIONAL E~3~TX AT DALLAS, Dallas, Texas and with The Chase Ma?~f. attan Bank (National Association), New York, New York (the paying agents named in each of said bonds); and should any bond or bonds not be presented for redemption pursuant to such notice, the same shall cease to bear interest from and after the date so fixed for redemption. SECTION 3: Interest. That said bonds sh 1 bea~st from date to maturity at the rate of FOUR PER EN~~(4%) pe~ annum, such interest to be evidenced by proper coupons attac~ed to each of said bonds; and said interest shall be payable on/ SECTION 4: Place of ?s~ent. That both the principal of and the interest on tkis issue of bonds shall be payable in lawful money of uhe United S~ates of America, with- out exchange or collection charges to the owner or holder, at the FSRCANTILE NATIONAL ~_~ AT DALL~S~ Dallas, Texas, , or at the option of the holder, at The Chase Manhattan Bank ~Na=icna! Association)~ New York= New York interest on the bonds shall be payable upon presentation and surrender of the proper coupons. EECTION 5: Execution of Bonds and CouDons. The seal of said City may be impressed on each of said bonds or, in the alternative, a facsimile of such sea! may be printed on the z'-.id Bonds. The bonds and interest coupons appurtenant there- zc may be executed by the imprinted facsimile signatures of the F~yor and City Secretary of the City and execution in such manner shall have the same effect as if such bonds and coupons l~ad been signed by the Y.-"yor and City Secretary in person by Z>~eir manual signatures. Inas?-'ach as such bonds are required to be registered by the Comptroller of Public Accounts for the State of Texas, only his signature (or that of a deputy desig- nated 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 pro- vided; all in accordance with the provisions of Article 717j-1, V.A.T.C.S. SZdTION 6: Form of Bonds. That the form of said bonds ska!l be substantially as follows: NO. FNITED STATES OF ~-;v~RICA $1,000 STATE OF TEXAS CO'.3.qTY OF II~LL~S CITY OF COPPaLL, T-ZY~S, WATER AND SEWER SYSTEM REVENUE BOI~DS, SERIES 1966 FOR VALUE RECEIVE~D, the City of Coppall, a municipal cor- poration of the State of Texas, hereby acknowledges itself in- debted zo and promises to pay to bearer, as hereinafter stated, on the FIRST DAY OF MAY, , the s~ of ONE THOUS.~Z. CD DOLLAiIS ($I~00~ in lawful money of the United States of America, with interest thereon from the date hereof to maturity at the rate of FOUR PER CENTUM (4Z) per annum~ payable on November 1, 1966, and semi-annually thereafter on ~fy I and November 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 and INTEP~EST shall be payable at the ERCAhTiLE NATIONAL !~NX AT ~LLAS. Dallas; Texas , or at uhe option of the holder, at The Chase ManhatreD Bank [National Associatien)~ New York, New York , without exchange or collection charges to the owner or holder, and the said City of Coppal!, Texas, is hereby held and firmly bound to apply the pledged appropriated net revenues of its co~ined Waterworks and Sanitary Sewer System to the prompt payment of principal of and interest on this bond a~ maturity, and to pay said principal and interest as they mature. THiS BODDD is one of a series of bonds of like tenor and effect except as to number~ interest rate, right of prior re- der. ption and maturity, aggregating T}idE }FJNDRED FORTY FIVE TEOUSA?~D DOLL~RS ($345,000), nu~.bered consecutively from One (i~ through Three Hmndred Forty-Five (345) in denomination · ~ of One Thousand Dollars ($I,000) each, of which the s'~ of $i~9,C$0 shall be for the purpose of constructing improvements an2 extensions to the City:s Waterworks System and $195,000 shill ~e for the purpose of constructing or purchasing, im- proving and extending a Sani%ary Sexqer System in and for said City, in accordance with the Constitution and laws of the Sza~e of Texas, particularly Article 11!i et seqq., V.A.T.C.S., ani by authority of avone of the resident qualified property taxpaying electors of said City, who o~vued taxable property therein and had duly rendered the same for taxation, voting at an election held for that purpose within said City on the 27th day of F~rch, 1965, and pursuant to an ordinance passed by nhe City Council of the City of Coppall, Texas, and duly recorded in the Minutes of said Ciny Council. AS SPECIFIED in the ordinance hereinshore mentioned, the City reserves the right to redeem Bonds maturing in 1977 and thereafter, in whole or in part, but in inverse numerical order if less than all, on Fmy 1, ~976, or on any interest payment date thereafter at par and accrued interest to-the date fixed for redemption plus a premium of 4% on all bonds called for redemption at the expiration of the tenth year from the date of the bonds, with a reduction of 1/4th of 1% each year thereafter until the expiration of the twenty- sixth year on and after which date there shall be no premi,~ on any bonds so called; PROVIDED, HOI..rE'v'ER, that at least thirty (30)' days prior to any interest payment date upon which any of said bonds are to be redeemed, notice of redemp- tion, signed by the City Secretary (specifying the serial numbers and amount of bonds to be redeemed), shall have been filed with the MZRC~NTILE NATIONAL E~NK AT DALLAS. Dallas, Texas. and with The Chase MenhEttan Bank (National Association), New York, Nex~ York, ; and should any bond or bonds not be presented for redemption pursuant to such notice, the same shall cease to bear interest from and after the date so fixed for redemption. TF~ DATE of this bond in conformity with the ordinance above mentioned is May 1, 1966. .~.qiS BOIleD and the series of ~ich it is a part constitute special obligations of the City cf Coppe!l: Texas, and are pay- able solely from and equally secured by a First Lien on and pledge of the net revenues of the City' combined Waterworks an~ Sanitary Sewer System. T}~ CITY expressly reset, as the right to issue further an~ 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 cn and pledge of the net revenues of the City's cor.~in~d ]CatzL~crks and Sanitary Sewer Syzzam; PROVIDED, F. OI,~2VER~ that any and all such further bonds may ba so issued only in accordance with and subject to the ccc~nants, conditions, lir~i~azic2s and restrictions relating thzre=D which are set out 27_d contained ip. the ordinance au- thorizing this series of bonds, and to which said ordinance reference is hereby made for full and complete particulars. THE HOLDER hereof shall never ~.ave the right zo demands,/ paL. Tae~tt of this obligation ouc cf ~:r.y f-~ds raised or to be raised by taxation. I~.CH HOLDER of this bDnd,.payable to bearer, or of the in~arasZ coupons hereto attached, is conclusively presumed tc forego and renounce his equities in favor of subsequent holders for value without notice -and to agree than, being payable to bearer, this bond and each of the interest coupons attached may be negotiated by delivery however possession may have been acquired, and that any subsequent holders ~ho may razeira this bond or any of the interest coupons attached, ="- value ~dthout notice, has thereby acouired absolute title free from all equities ~nd claims of ox~.ership of any prior holder. The City of Coppell, Texas, its officers and the paying agents shall not be affected by any n~tice to the contrary. AI~'D IT IS HEREBY CERTIFIED Ai'~D P~ECITED that the issu- ance 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 per- formed in regular and due time, form and manner as required by uhe 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 limita- tions; 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 part by irrevocably pledging the net revenues of the combined Waterworks and Sanitary Sewer System of the City of Coppell, Texas. iN TEST!M01~Y1~KEOF, the City Comnci! of the City of Coppe!l, Texas, in accordance with the provisions of Article 7!7j-1, V.A.T.C.S., has caused the seal of said City to be impres~.ed or a ~acsimiie thereof to be printed hereon, and this bond and its appurtenant coupons to be executed with the imprinted facsimile signatures of the Mayor and City Secretary of said City, as of the IsZ day of May, 1966. COL%~TERS iGNED: ~layor~ City of Coppall, Texas City Secretary, City of Coppell, Texas SECTION 7: Coupon Fe~..-m. The form of said interest coupons shall be substantially as follows: N0. CN TiE FIRST DAY OF S *(unless the bond to which this. coupon pertains has been properly called for redemption in accordance with its terms,) the City of .Coppe!!, ~exas, a municipal corporation of the State of Texas, hereby promises to pay to bearer; out of fm~ds specified in the bond to which this coupon is attached (withou~ right to demand paEment out of any funds raised or to be raised by taxation), and in lawful money of the United States of America, without *~OTE TO PRINTER: The expression in parentheses to be included only in coupons maturing Novether 1, 1976, and subsequent, pertaining to optional bonds maturing May 1, 1977, and subsequent. exchange or collection charges to the o~vmer or holder, at the b~RCANTILE NATIONAL BANK AT DALLAS. Dallas, Texas , or at the option of the holder at The Chase Manhattan Bank {National Association). New York, New York , the sum of ($ ), said sum being months' interest due that day on "CITY OF COPPELL, T'?2~,S', ~ZATER AND SE~.TER SYSTEM RE'v'ENUE BOI~DS, SERIES 1966", dated >~y 1, 1966. Bond No. City Secretary Mayor SECTION 8: Form. of Comntrol!er's Certificate. Substan- tially the following form of Comp=roller's Certificate shall be printed on the back of each bond: OFICE OF COF~TROLLER l STATE OF TDiAS I REGISTER NO. i Fj~REBY CERTIFY tb~t there is on file and of record'in my office a certificate of ~he Attorney General of the State of Texas to the effect that this bond has been examined by h~n as required by lau, and that he finds that it has been issued in conformity x.3ith zhe Constitution and laws of the State of Texas, and that it is a valid and binding special ob!i~ation of the City cf Cc~'-.e~] Texas, payable from the re~;enuas pledged to ins paTmant by and in ~he ordinance au- thorizing same, and said bond has this day been registered by ~e. WI%tESS ~ FJ~ND _'-~2qD c~a- O,- . -,~:.~C~ at Austin, Texas, this Ccz-)Zro!ler of Public Accounts of the State of Texas SECTION 9: Defini'_izns. For all purposes of this ordinance in particular for clarL'~y x.7izi: ra,zp~=c% to the issuance of bonds herein author!z~L ~Ld z~_2 r~izdge and appropria=ion of re..'anuas therefor, the fo!lc~2inL ./efini~,ions are provided: (a) The term "Syszam'~ezns the City's combined Waten~orks and Sanitary Se~.~er System, including all present and future additioni~ extensions, replace- ments and improvements thereto; (b) The term "net revenues" means the gross revenues of the System less the expense of opera- tion and maintenance, including all salaries, i~bor, materials, repairs and extensions necessary to r~der efficient service, provided, however, that only such repairs and extensiona, 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, cr such as might be necessary to meet some physical accident or condition tqhich would otherwise impair zhe bonds authorized by this ordinance and the additional bonds permitted to be issued under Section 2D hereof, shall Be deducted in dete~ini~g "net revenues"; (c) The term "bonds" means the $345,000 revenue bonds authorized by ~his ordinance; (d) The term "additional bonds"means the addi- tional parity revenue bonds ~Thich the City reserves the right to issue under Section 20 hereof; (e) The terfa"fisca! year" means the ~qelve- month period ending September 50 of each year. SECTION 10: Pied~s. All of the net revenues of the Sys- tem with the exception of those in excess of the amotun~ required to establish and maintain the funds a~ hereinafter provided, are hereby irrevocably pledged for the pavement of the bonds, and of ~he additional bonds if issued under the conditions and in the manner specified in this ordinance, and the interest there- on, end it is hereby ordained that the bonds and the additional Bonds if so issued, and the interest thereon, shall constitute a first lien upon said net revenues. SECTION 11: Rates and Char~es. The City ccvenants and agrees x=Tith the holders of the bonds and of the additional bonds if and when issued: (a) That it x..~ill at a!'l tiraes charge and collect for services rendered by the System, on a fully metered basis, rates sufficient to pay all operating, maintenance, depreciation, rep!acer. enz and betterment expenses, and other costs deductible in deZe~-nining net revenues as hereby defined, ~ .... ., i..zy t~.e inZerest on and principal of the bonds and zD eztzbiiai~ and maintain the Funds as kereinafter provided. (b) If ~he additional bonds are issued, or if the Eystem should become legally liehie for any other indebtedness, ~ -. ..... ~.7it! == '~ ..~ ~=~y ~ and maintain rates and collect charges for zhe seaices of the System sufficient to disc~rge such indebtedness. SZCT!ON 12: Fund Deal?nations. All revenues derived from the operation cf the System shall be kept separate from other funds of the City. TD that end, the following special funds are hereby created: (a) "Water and Sewer System Zevc~ue Fund," here- inafter called "System Fun~". This Fund shall be kept in the City's depository ba~, ~ich.b~nk shall be a member of the Federal Deposit insurance Corporation, as Trustee. (b) "Water and Sewer System Revenue Bond and In- terest Sinking Fund," hereinafter called "interest Sink- ing Fund." This Fund shall be deposited with the MERC- ANTILE NATIONAL E~,NX AT DALe_AS, Dallas, Texas, as Trustee of the pledged revenues. (c) 'Water an6 Sewer S:,z:em Replacement and Repair Fund," hereinafter c~lled '~L~placement and Repair Fund." This Fund shall be deposited ~ith zhe City's depository bank, ~,yhich bank ak::LL be s ms:.~b~r of the Federal Deposit insurance Corporz:ion~ as Truedee. SECTiOE 13: System 2uzd. AL~ revenues of every nature received through tP~ o'~era'~icn of the Sys:em or as a result of its ownership of the Syztem~ skzi! be deposited by the City from day to day into the System Fund> and the current expenses of the System shall be payable from month to month as a first charge against said S stem y Fund, as the s~e shall become due and payable. The City hereby covenants and agrees that the current expenses of ~= operation of Zhe System in any year shall not exceed the reasonable and necessary amounts therefor, and tha~ current expenses shall inziude all reasonable and necessary costs of operation, maintenance, repairs and exten- sions necessary to render efficient service and insurance of the System, but shall exclude depreciation and pay-~ents into the Interest Sinking Fun~ and the laplacemeat and Repair Fund; orovided that only such repairs n~cessary to keep the System . .._ in operation and render adequate service to the City and the inhabitants thereof, or such as ~.ight be necessary to meet some physical accident or ccndizlon x,3hich would otherwise impair the bonds~ shall be a lien prior to ~Ly existing lien. All revenues of the System not actual!y-required to pay expenses and costs incurred or permitted by this Sec'.zizn shall be deposited in the other Funds created by this ordinance, each of which s~ll have priority thereto in the order in ~7hich they are created in the fo!lo~ing Sections. SZCTiON 14: inte'~ez~z Sinki~ciFund. This Fund is to be uz~d ~xc!usively for Ehe 'purpose of paying the principal of and inzerasz on the Water and Ss~.yer System Revenue Bonds. Into said F.ir.d there shall be deposized.ail accrued interest received from i~e sale of the Water and Se~.yer S~zzem Revenue Bonds. Thereafter, upon co~D!etion of the cor~rzrucz~.c~ of ~h~ ~p~,=~=~ts and after ~ "' payment of c~rrenz ~xpenses, on or before the 10th pr-v!a~ng for day of each month thereafter~ there shall be deposited into said Fund one-fifth of the next maturir=g interest and one-tenth of the next maturing principal payment from the ~ater and Sewer Sys- tem Revenue Fund until the funds and/or investments in the Inter- eat Sinking Fund are sufficient to pay debt service requirements on the outstanding Bonds for the then current year plus a debt service reserve in ~he s~ of $18,500, and thereafter such s~-=s as inay be necessary to pay when due the then curren~ ~ear's debt s~rviee and maintain a debt ~ervice reserve in the amount c'f $18,500; provided that at such time as the amount on hand in said Fund is fully sufficient to pay principal and in'zarest re- quirements of the bonds to their final maturity, such deposits may be discontinued. SECTION 15: ReDlacement and Repair Fund. As soon as the. required reserve is accumulated in the said Interest Sinking Fund, and so long as any of the Bonds are outstand- ing and unpaid, tb~ City shall deposit into the Replacement and Repair Fund the sum of $300 monthly from the net revenues of the System until the funds and/or investments therein shall amount to $18,000. Funds in said Water and Sewer System Re- placement and Repair Fund' are to be used to pay for any extra- ordinary repairs or replacements to the System'for which funds are.not otherwise available and to pay maturing principal or interest on'the Bonds ~-?hen funds in zhe Interest Sinking Fund are it. adequate for such purposes. Whenever any funds are paid out of said Replacement and Repair Fund,.payments into the account shall be restLed and continued until such time as the account has been restored to the level of $18,000. The deposits into this Fund shall be subordinate tc those required to be made into the Interest Sinking Fund. SECTION 16: Investn-=nt of ?'dnds. The City, at its option, may invest the reserve portion of Zi'~e interest Sinking Fund and the Reolacement and RsDai-- !'und in direct obligations of, or olbiga~ions the principal and interest on which are guaranteed by~ the.United States Govarr~:ent, and if at any t~e minvested f,ads are insufficient to zccompiisP~ tb.e purpose for which said respective Funds are herein estab!isked, the respective custo- di~ bank shall sell on the open market such mount of the se- curities as may be required no meet such deficiency, giving no- tice thereof to the City. Until such t~e as the Interest Sink- 4~6- Fund and the Repair and Reoizcement Fund are fully established and contain the full amounts provided in the ~.:o preceding Sec- tions, all money resulting from the maturity of principal md interest of the securities it. x-i~ich the aforesaid Fm~ds are in- vested may be reinvested or icc'.rj..ula%ed in the respective Funds and considered a part thoreLf a'j.d used for and only for the purposes hereinabove specified xTi'zl~ respecE thereto, provided, hencevet, when such funds cue fully established such increment ~iy be transferred to the y Fund. SZCTIOiq 17. DefiCiencies in Funds. If in any month the City s~.zli for any reason fail to pay into the Interest Sinking Fund the full ~.~ount above szipu!ated, an amount equivalent to such deficiency shall be sea aT, art and paid into said Fund from the first available and unzilcnazed revenues of the fo!- Io'~ring month or montb. s~ and such ~ayzanz shall be in addition to the F'~OLL~t hereinabove provided tD be otherwise paid into said Fund during such month or-Imcnths. EZCTZO~ 18: Excess R=Jvenuas. Any revenues in excess of those required to estab!iah arid maintain the Funds as above required may be used for Eke purpose of paying the cost of usual or extraordinary maintenanze~ repairs and replacements, or for extensions and -:,~,-provements which will either enhance zha revenue producing capacity of the System or provide a higher degree of service= or for purchasing, on the open market, the outstanding bonds for cancellation, or for re- deeming the outstanding bonds in inverse numerical and tur{ty 9rder, at not to exceed the call price or for any other lawful purpose~ ., SECTION 19: Securit~ ef Tunds. All Funds created by this ordinance shall be secured in ~he manner and to the fuilest extent permitted ~y !-~.Ts cf Texas for the security of pu~Dlic funds, and such Funds shall be used only for the purposes permitted by this ordinance. SECTION 20: Issuance of Additional Parity Bonds. In addition tO the.right to issue bonds of inferior lien as authorized by the laws of the State of Texas, the City re- serves the right hereafter zo issue additional bonds. The addi:~:Dna! bonds, when issued, shall be secured by and pay- able from a first lien on and pledge of the net revenues of the System in the same manner a.~~ zo the same extent as are the bonds authorized by this ordinence~ and the bonds and the additional bonds shall be in all respects 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 fo!io~.:ing conditions have been met: (a) The Ci.ty is no't than in default as to any covenant, condition or obligation prescribed by this ordinance; (b) The iax.Ts of the State of Texas in force at such time provide .Deraission for the issuance of such bonds; (c) Each of the Funds created by this ordinance contains the mount of money then required to be on deposit therein; L%The City has secured a certificate from an lEt%in registered by the State Board of Registration for Professional Engineers of the State of Texas, shox~ing that the projected net income and revenues oft he System, as estimated by hi~z~-oughout the maturities of all bonds payable from the revenues of the System, ~.~il! be at least one and forty hradredths [1.4Q) times the ayerage annual requiremalts for the payment of princi- pal and interest on tee then outstanding bonds and on the additional bonds. (e~ The City has secured from an independent ~ertified Public Accounta~ or a Licensed Public Ac- co,~ntant a certificate shcuing that the net e~rnings of the System for the fiscal year preceding the adop- tion of the ordinance authorizing the additional bonds is equal to at least one and forty hundredthz (!.40~ times the a~annua! prinicipa! and interest re~ quiremania of all outstanding bonds; and, (f) The additional bonds are made to maeure on FmF ~ in each of the years in tchich they are scheduled fomature. The term "net earnings" as used in this Section 20 shall meaT., the gross revenues after deducting the'~eXpenses of oper- ation and maintenance, but not deducting expenditures which under standard account practice should be charged to capital expenditures. PROVIDED, HOWEVER, anZ or all of the conditions hereinab0ve set for the issuance of additional bonds may be waived by an lnstr,~ent or Instruments ~ ~ it~,,g executed by the holders of o= bonds outstanding £ZCTION 21: Maintenatce and 0Deration - 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 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 in an amount which usually would be carried by private companies engaged in similar types of business. Nothing in this ordinance shall be construed as requiring the City to expend any funds ~nich are derived from sources other then the operation of the Sys- tem, but nothing herein shall be construed as preventing the City from doing so. SECTION 22: Records - Accounts - Accountin~ Reports. ~e City hereby covenants = agrees that so long as any of the bonds herein authorized or any interest thereon remain oczsZanding and unpaid: ir ~.-~ii! ~eD proper records, books and accounts, relating to the operation of the System and other ~ .... ~es the revenues of ?bach are pledged to secure ~he beards; separate fr~ all other records and agcounts~ in accord- azae wi~h generally accepted accz, unzing practices followed on privazely-O~.med faciliti.~z ~;'f !i!ca type and size= in which corn- plate and correct enzri~ ~=.ali ~,~ nzde of all pertaining transactions, as provided ky ArtinCa 1113, V.A.T.C.S., and that such records, books and ac=cc. unts ~l-.ili be open =o inspection by the bondholders ar.d zL-~=r agents and representatives. So long as any of the bonds r~ra~.ir. cuzst~nding, the City will furnish; upon request, Zc any b~ndhzlder (or Trustee when ap- '~ days after the close piiazble) (1) on or Before thirty ,,~., of each six months' pario~ of ..... fizcal year a copy of a re- ~.rt cr statement cn z~r. ar~'l-Lrr=z .i. 2' tht piedgad faci!izies for zi-~a said period. in fzr~z az~ zg~;zent in ~he minimum herein- afzer specified, and (2) c~ of bafc~8 ninety (90) days after the clsse of each fiscal y~ir ~ colby of a report by a certified pu~.!ic accountant, a public zcce~nzant~ or a State ~udizing official (authorized respectively by State laws to perfo~ such ir.~e~2ndent audits), on the oper_zizns of the pledged facilities f-~r ~l-.a next preceding fiscal year inziuding therein zi~e fcilow- {-.c. info~ation: ~a) Cogent regarding the mannerin which the City has complied with cc'.~nanzs in this ordinance and recommendations for any changes or improvements in the operaLion of the pledged facilities; Statement of Income and ~x'~nse; (c) Balance Sheet; (d) Schedule of insurance policies and fidelity bonds showing with respect to each policy and bond the nature and amount of risk covered, =b~ expiration date, and the name of the insurer; (e) Schedule of the number of customers (connected and unconnected to the System) by classifications set forth in the Xate Ordinance, and showyinS the rate schedule currently in effect; and, (f) Current asseased property vs.!uation, report on tax rates, levies s.d cc!!ections of the incor- porated City. Expenses incurred in r. iking zka audits above referred to are =o be regarded as maintoner. co and operating expenses and paid as such. Copies cf the aforesaid annual audit sb~ll be ~,ediate!y furnished to Zke Executive Director of the Munici- pal Advisory Council of the State of Texas at his office in Austin~ Texas, and to any holder of any ~venue bond or bonds authorized by this ordinance who s'na!i request the same. Any bond holder shall have the right to discuss with the acco'~.t- ant making the annual audit the contents thereof and to ask for such additional information as he may reasonably require. SECTION 23: Remedies in E~'ent of Default. In addition to all the rights and rszsdias provided by the la,~s of the State of Texas, the Ci;y covenants and agrees particularly that, in the event the City (a} defaults in payments to be made to the Interest SirKing Fund and the Replacement and Re- pair Fund as required hy this ordinance or (b) defaults in the observance or performance cf any'other of the covenants, condi- tions or obligations sea forth in this ordinance, the following remedies sb~ll be available: (1) The holder or holders of any of the bonds sh_il be entitled to a '~rit cf mandamus issued by a court of proper jurisdiction compelling and re- quiring the City Ccunci! and other officers of the City to observe and perform any covenant, condition or obligation prescribed in the bond ordinance. (2) IIo delay or omission tc exercise any right or power accruing upon any default shall impair any such right or p~cer, or shall be construed to be a ~aiver of any such default or an acquiescence therein, and every such right and power may be ex- ercised from time to time and as often as may be deemed expedient. .The specific remedies harein provided shall be cumulative cf all .~.ther existing remedies and the specification of such remedies'shall not be deemed to be exclusive. "SECTION 24: tents as follows: SDeCiai Covenants. The City further cove- (a) That it has the im.zful power to pledge the revenues supporting this issue of bonds, and has lawfully.exercised such power under the Constitution and laws of the State of Texas, including such ~c~jer existing under Articles 11!1 to 1118, b~zi~ inclusive, V.A.T.C.S., that the bonds issued kereur_der~ and the additional bonds ~...~en issusd~ shall be ratably secured under said pledge cf i~:ccme in such manner that one bond shall have r.D preference over any other bond of said issue. (b) The City covenants and represents that other than for the paDs. lent of the bonds herein authorized, the rents, revenues ard the income of the System have not in any u__L-.Ler been pledged to the payment of any debt cr ebllgazion of the City or of the System. That, so long as any cf said bonds remain out- standLng, the Cizy ~ill not sell or encumber the System or any s~b. szantia! part thereof, and that, with the exception of the additional bonds ex- pressly pe~itzed by this ordinance to be issued, it will not ericusher the revenues thereof unless such enc~.~brance is made junior and subordinate to all of the provisions of this ordinance. That no free service cf zhe System shall be allowed, and should ~he City or a~y of its agents or instru- menZa!izies make ~secf the services and facilities of the System, pzL~ent. of the reasonable value thereof shall be made by the City out of funds from sources other tb~n the revenues and income of the System. SECTION 25: Bonds are S~ecia! Obligations. The bonds ,~r%e special obligations of the Cizy payable from the pledged J venues and the holder thereof shall never have the right to demand payment thereof cut of f~ds raised or to be raised by taxzzion. SZZTiON 26: Mayor to Hove Char~e of Records and Bonds. The Xzycr of the City of Coppail shall be and he is hereby auzhorized to take and have charge of all necessary orders ~-= records pending investigation by zhe Attorney General of the State of Texas, and sbsli take and h_ve charge and control of zhe bonds herein auzhcrized pcn~ini their approval by ~he Attorney General and their regisataVism by the Comptroller of Public Accounts. SECTION 27: Sale and Delivery of Bonds. Delivery of the bonds herein authorized shall be made to the. purchaser upon payment therefor in accordance ~ith the terms of sale. SECTION 28: Emer~enc..,,E. The fact that it is to the best interest of the City to -rcvide funds for the construction . Cit ' of imorove~ents and extensions to the y s Waterworks Sys- tem, a~nd for the construction or purchase, improvement and extension of a Sanitary Se~er System in and for said City st the earliest possible date constizuEes and creates an emergency and~an urgent public neca!sity raq'j_-iLE that this ordinance be pasted and take effect as an emar~ency ~easure and this ordi- nance ~s accordingly passed zz an emergency measur~ and shall take effect and be in force i.--nediateiy from and after its passage. PASSED A~D APPROVED~ this the 3rd day of October , lo~6 ATTEST: S/'~.7, T. CozbV l,{aycr> City of Coppall, Texas S/E. City C. Gentry Secretary, City of Cc. ppei! Texas (City Seal)