OR 243 Authorized $1.2M water & sewer bonds ORDINANCE NO. 243
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF
COPPELL, TEXAS, AUTHORIZING THE ISSUANCE OF $1,200,000
"CITY OF COPPELL, TEXAS, WATER AND SEWER SYSTEM
REVENUE BONDS, SERIES 1981", DATED AUGUST 1, 1981, FOR
THE PURPOSE OF IMPROVING AND EXTENDING THE WATER-
WORKS SYSTEM IN AND FOR SAID CITY, AS AUTHORIZED BY
THE GENERAL LAWS OF THE STATE OF TEXAS, PAR-
TICULARLY V.A.C.S., ARTICLE 1111, et. seq.; PRESCRIBING
THE FORM OF THE BONDS AND THE INTEREST COUPONS;
PLEDGING THE NET REVENUES OF THE CITY'S COMBINED
WATERWORKS AND SANITARY SEWER SYSTEM TO THE PAY-
MENT OF THE PRINCIPAL OF AND INTEREST ON SAID BONDS;
PROVIDING FOR THE SALE AND DELIVERY THEREOF; ENACT-
ING PROVISIONS INCIDENT AND RELATED TO THE SUBJECT
AND PURPOSES OF THIS ORDINANCE;
WHEREAS, under the provisions of Article 1111 et. seq., V.A.C.S., the
City is authorized to issue revenue bonds for the purpose o'Y'improving and
extending the waterworks system in and for said City; and
WHEREAS, the City is authorized to provide that such obligations will be
payable from and secured by the net revenues of the City's waterworks and
sanitary sewer system; and
WHEREAS, the City has currently outstanding in the amount of $312,000
certain City of Coppell, Texas, Water and Sewer System Revenue Bonds, Series
1966, payable from and secured by a first lien on the net revenues of the City's
· combined waterworks and sanitary sewer system; and
WHEREAS, the City Council has found and determined that it is necessary
and in the best interest of the City and its citizens that it issue the Water and
Sewer System Revenue Bonds authorized by this ordinance; and
WHEREAS, notice of intention to issue Water and Sewer System Revenue
Bonds of this City payable from the net revenues of the City's combined water
and sanitary sewer system, in an amount not to exceed $1,200,000 was published
· in a newspaper of general circulation in said City on the 9th day of July, 1981,
and the 16th day of July, 1981, the date of the first publication of said Notice
being at least fourteen (14) days prior to the date set for the passage of this
ordinance; and
WHEREAS, a copy of the aforesaid notice of intention to issue Water and
Sewer System Revenue Bonds was posted at the City Hall of the City of Coppell,
Texas, for at least fourteen (14) days prior to the date of this ordinance; and
WHEREAS, no petition of any kind has been filed with the City Secretary,
and members of the City Council or any other official of the City, protesting
the issuance of such bonds; and
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WHEREAS, the City Council of the City of Coppell, Texas, acting for and
on behalf of said City, is in now authorized and empowered to issue the
aforesaid bonds; therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COPPELL,
TEXAS:
Section 1. Authorization - Principal Amount - Designation. That for the
purpose of improving and extending the existing Waterworks System in and for
said City and for the payment of necessary and incidental expenses related
thereto, there shall be and there is hereby ordered to be issued, under and by
virtue of the Constitution and laws of the State of Texas, particularly V.A.C.S.,
Article 1111 et. seq., a series of coupon bonds, to be known as "CITY OF
COPPELL, TEXAS, WATER AND SEWER SYSTEM REVENUE BONDS, SERIES
1981," dated August 1, 1981, in the principal amount of ONE MILLION TWO
HUNDRED THOUSAND DOLLARS ($1,200,000).
Section 2. Date - Numbers - Matt~rity - Option. That said Bonds shall
be dated August 1, 1981, shall be numbered consecutively from One (1) through
Two Hundred Forty (240), shall each be in denomination of Five Thousand Dollars
($5,000) and shall become due and payable serially on May .1 in each of the
years in accordance with the following schedule:
BOND NUMBERS YEARS
(all inclusive) (May 1) AMOUNTS
1 - 15 1982 $ 75,000
16 - 30 1983 75,000
31 - 50 1984 100,000
51 - 70 1985 100,000
71 - 90 1986 100,000
91 - 110 1987 100,000
111 - 130 1988 100,000
131 - 150 1989 100,000
151 - 170 1990 100,000
171 - 190 1991 100,000
191 - 215 1992 125,000
216 - 240 1993 125,000
PROVIDED, HOWEVER, that the City of Coppell reserves the right, at its option,
to redeem Bonds maturing on May 1, 1990 and thereafter, in whole or in part,
on May 1, 1989 or on any interest payment date thereafter, for the principal
amount thereof and accrued interest to the date fixed for redemption; and
PROVIDED, FURTHER, that at least thirty (30) days prior to any interest
payment date upon which any of-said Bonds are to 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 FIRST CITY
BANK OF DALLAS, Dallas, Texas, (the paying agent named in each of said
Bonds); and if by the date so fixed for redemption, the City shall have made
available to the paying agent bank funds in amounts sufficient to pay the Bonds
and accrued interest thereon to the date of redemption, pursuant to such notice,
the same shall cease to bear interest from and after the date so fixed for
redemption and shall not be deemed to be outstanding for any purpose except for
the purpose of receiving such funds.
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Section 3. Interest. That said Bonds shall bear interest from their date to
maturity at thawing rates per annum:
Bonds maturing in each of the years 1982 through 1983 12.00%;
Bonds maturing in each of the years 1984 through 1989 10.00%;
Bonds maturing in the year 1990 7.875%;
Bonds maturing in each of the years 1991 through 1993 1.09%;
such interest to be evidenced by proper coupons attached to each of said Bonds;
and said interest shall be payable on May 1, 1982, and semi-annually thereafter
on November 1 and May I in each year.
That both the principal of and the 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 holders, at the FIRST CITY BANK OF
DALLAS, Dallas, Texas. Interest on the Bonds shah be payable upon
presentation and surrender of the proper interest coupons.
Section 4. Execution of Bonds and Coupons. 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 the said Bonds. The Bonds and interest coupons
appertaining 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
for 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 heroinafter provided, all in accordance with the provisions of V.A.C.S.,
Article 717j-1.
Section 5. Form of Bonds. That the form of said Bonds shall be
substantially as follows:
NO. $5,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DALLAS
CITY OF COPPELL, TEXAS
WATER AND SEWER SYSTEM REVENUE BOND
SERIES 1981
FOR VALUE RECEIVED, t~s City of Coppoll, in the County of Dallas, the
State 0f Texas, hereby acknowledges itself indebted to and promises to pay to
bearer, as heroinafter stated, on the FIRST DAY OF MAY, , the sum of
FIVE THQUSAND DOLLARS
($5,000) in lawful money of the United States of America, with interest thereon
from the date hereof to maturity, or earlier redemption, at the rate of
( %) per annum, payable on May 1, 1982, and semi-annually thereafter on
November 1 and May 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.
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BOTH PRINCIPAL AND INTEREST shall be payable at the FIRST CITY
BANK OF DALLAS, Dallas, Texas, without exchange or collection charges to
the owner or holder, and the said City of Coppell, Texas, is hereby held and
firmly bound to apply the pledged appropriate net revenues of its combined
Waterworks and Sanitary Sewer System to the prompt payment 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, right of prior redemption and maturity, aggregating
ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000), numbered
consecutively from One (1) through Two Hundred Forty (240), in the denomi-
.nation of Five Thousand DoLlars ($5,000) each; for the purpose of improving and
extending the Waterworks System in and for said City, in accordance with the
Constitution and laws of the State of Texas, particularly V.A.C.S., Article 1111
e__t. seq., and in accordance with an ordinance duly passed and adopted by the
City Council of the City of Coppell, Texas, duly recorded in the minutes of said
City Council.
AS SPECIFIED in the ordinance hereinabove mentioned, the City reserves
the right to redeem bonds maturing on May 1, 1990, and thereafter, in whole
or in part, on May 1, 1989, or on any interest payment date thereafter for the
principal amount thereof and accrued interest to the date fixed for redemption;
PROVIDEDp/HOWEVER, that 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 FIRST CITY
BANK OF DALLAS, Dallas, Texas; 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.
THE DATE of this bond in conformity with the ordinance above mentioned
is August 1, 1981.
THIS BOND and the series of which it is a part constitute special
obligations of the City of CoppeLl, 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.
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 further 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 full and complete 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,
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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 heroinabove mentioned; that this series of revenue bonds does not
exceed any constitutional or statutory limitations; 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 the
combined Waterworks and Sanitary Sewer System of the City of Coppell, Texas.
IN WITNESS WHEREOF, this bond and the interest coupons initially
attached hereto have been signed by the imprinted or lithographed facsimile
signature of the Mayor of said City and countersigned by the imprinted or
lithographed facsimile signature of its City Secretary, and the official seal of
said City has been duly impressed, or printed, or lithographed on this bond.
City Secretary, City of Coppen, Mayor, City of Coppall,
Texas Texas
[SEAL]
I ·
Section 6. Coupon Form. The form of said 'ntere t coupons shah be
~ s
substantially as follows: ,.
NO.' $
ON THE FIRST DAY OF
The City of Coppoll, in the County of Dallas, State of Texas, unless due
provision has been made for the redemption prior to maturity of the bond to
which this interest coupon appertains, promises to pay to bearer, the amount
shown on this interest coupon, in lawful money of the United States of America,
without exchange or collection charges to bearer, at FIRST CITY BANK OF
DALLAS, Dallas, Texas, said amount being interest due that day on CITY OF
COPPELL, TEXAS, WATER AND SEWER SYSTEM REVENUE BONDS, SERIES
1981, dated August 1, 1981. 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. Bond No.
City Secretary Mayor
Section 7. Form of Comptroller's Registration Certificate. That the
following certificate shall be printed on the [~ack 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 t6 the effect that this
bond has been examined by him as required by law, and that it is a valid and
binding special obligation of the City of Coppell, 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 this
Comptroller of Public Accounts of the State of Texas
Section 8. Definitions. 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 thereto;
(b) The term "Net Revenues" means the gross revenues of the
System less the expense of operation and maintenance, including all
salaries, labor, materials, repairs and extensions necessary to render
sufficient service, provided, however, that only such repairs and exten-
sions, 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 the Prior Bonds, the Bonds authorized by
this ordinance and the Additional Bonds permitted to be issued under
Section 20 hereof, shall be deducted in determining "Net Revenues";
(c) The term "Bonds" means the $1,200,000 revenue bonds
authorized by this ordinance;
(d) The term "Additional Bonds" means the additional parity
revenue bonds which the City reserves the right to issue under Section 20
hereof;
(e) The term "Fiscal Year" means the twelve-month period'
ending September 30 of each year;
(f) The term "Prior BOnds" means the City's presently out-
standing City of Coppell, Texas, Water and Sewer System Revenue Bonds,
Series 1966, dated May 1, 19661, originally issued in the principal amount
of $345,000, payable from and secured by a first lien on the Net Revenues
of the System; and
(g) The term "City" means the City of Coppell, Texas.
Section 9. 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 provided, are hereby irrevocably pledged for the
payment of the Prior Bonds, the Bonds, and of the Additional Bonds if issued
under the conditions and in the manner specified in this ordinance, and the
interest thereon, and it is hereby ordained that the Prior Bonds, the Bonds and
the Additional Bonds if so issued, and the interest thereon, shall constitute a
first lien upon said Net Revenues.
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Section 10. Rates and Charges. The City covenants and agrees with the
holders of the Prior Bonds, the Bonds and of the Additional Bonds, if and when
issued:
(a) · That it will at all times charge and collect for services
rendered by the System, on a fully metered basis, rates sufficient to pay
all operating, maintenance, depreciation, replacement and betterment
expenses, and other costs deductible in determining Net Revenues as
hereby defined, and to pay the interest on and principal of the Prior
Bonds, the Bonds and to establish and maintain the Funds as hereinafter
provided.
(b) If Additional Bonds are issued or the System should become
legally liable for any other indebtedness, the City will fix and main~.ain
rates and collect charges for the services of the System sufficient to
.discharge such indebtedness.
Section 11. 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) "Water and Sewer System Revenue Fund" hereinafter called
"System Fund". This Fund shall be kept in the City's depository bank,
which bank shall be a member of the Federal Deposit Insurance
Corporation, as Trustee.
(b) "Water and Sewer System Revenue Bond Interest and Sinking
Fund" hereinafter called "Interest and Sinking Fund". This Fund shall be
deposited with the FIRST CITY BANK OF DALLAS, Dallas, Texas, as
Trustee of the pledged revenues.
(e) "Water and Sewer System Replacement and Repair Fund"
hereinafter called "Replacement and Repair Fund". This Fund shall be
deposited with the City's depository bank, which bank shall be a member
of the Federal Deposit Insurance CorpOration, as Trustee.
(d) "Water and Sewer System Reserve Fund" hereinafter called
"Reserve Fund." This Fund shall be deposited with the City's depository
bank, which bank shall be a member of the Federal Deposit Insurance
Corporation, as Trustee.
Section 12. System Fund. All revenues of every nature received through
the operation of the System or as a result of it~ ownership of the System, shall
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 System Fund, as the same shall become due and payable.' The City
hereby covenants and agrees that the current expenses of the operation of the
System in any year shall not exceed the reasonable and necessary amounts
therefor, and that current expenses shall include all reasonable and necessary
costs of operation, maintenance, repairs and extensions necessary to render
efficient service and insurance of the System, but shall exclude depreciation and
payments into the Interest and Sinking Fund and the Replacement and Repair
Fund; provided that only such repairs necessary to keep the .System in operation
and render adequate service to the City and the inhabitants thereof, or such as
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might be necessary to meet some physical accident or condition which would
· otherwise impair the security for the Prior Bonds and the Bonds, shall be a lien
prior to any existing lien. All revenues of the System not actually required to
pay expenses and costs incurred or permitted by this Section shall be deposited
in the other Funds created by this ordinance, each of which shall have priority
thereto in the order in whleh they are created in the following Sections.
Section 13. Interest and Sinking Fund. Upon the delivery of the Bonds,
the City Treasurer shall calculate the amount of debt service requirements to
become due on said Bonds on the next interest payment date, and such amount
shall be deposited in the Interest and Sinking Fund in equal monthly installments
· on or before the 10th day of any intervening months or, if there be no
intervening months, the entire amount due on such interest payment date shall
be deposited in said· fund on the date of such delivery. On the 10th day of each
month following such interest payment date and on the 10th day of each month
thereafter, there shall be deposited into said Fund one-fifth of the next maturing
interest and one-tenth of the next maturing principal payment and such deposits
shall continue until such time as the funds and/or investments in the Interest and
Sinking Fund are sufficient to pay debt service requirements on the outstanding
Prior Bonds and Bonds for the then current year plus a debt sarvtee reserve in
the amount of $18,500, as provided in the ordinance authorizing the Prior Bonds,
and thereafter such sums as may be necessary to pay the current year's debt
service and maintain the debt service reserve in the amount of $18,500. At such
time as the amount on hand in said Fund is fully sufficient to. pay principal and
interest requirements of the Prior Bonds and the Bonds to their final maturity,
such deposits may be discontinued.
Moneys in said Fund shall be used only for the purpose of paying principal
of and interest on Prior Bonds and the Bonds payable from the Net Revenues of
the System, Accrued interest received upon the delivery of the Bonds herein
authorized shall be deposited in said Fund. The deposits herein required to be
made into said Fund shall be made from the moneys remaining in the System
Fund after payment of the maintenance and operating expenses.
Section 14. Replacement and Repair Fund. As soon as the required
reserve is accumulated in the said Interest and Sinking Fund and so long as any
of the Prior Bonds and the Bonds are outstanding and unpaid, the 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, as provided in the ordinance authorizing the Prior Bonds.
Funds in said Water and Sewer System Replacement and Repair Fund are to be
used to pay for any extraordinary repairs or replacements to the System for
which funds are not otherwise avallab_le and to pay maturing principal or interest
on the Prior Bonds and the Bonds when funds in the Interest and Sinking Fund
are inadequate for such purposes. Whenever any funds are paid out of said
Replacement and Repair Fund, payments into the account shall be resumed 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 to those required to
be made into the Interest and Sinking Fund.
Section 15. Reserve Fund. That there shall be deposited into the
Reserve Fund on or before the 10th day of each month hereafter, an equal
amount per month which will in 60 monthly payments accumulate an amount
equal to not less than the average annual principal and interest requirements of
.:.
the Bonds and the Additional Bonds, if issued, which are from time to time'
outstanding. No deposits shall be required to be made into the Reserve Fund so
long as there is on deposit therein such amount, but whenever said Reserve Fund
is reduced below that amount, the aforesaid monthly deposits into the Reserve
Fund shall be resumed and continued until such time as the Reserve Fund has
been restored to such amount. The Reserve Fund shall be used to pay the
principal of or'interest on the Bonds and the Additional Bonds, if issued, at any
time when there is not sufficient money available in the Interest and Sinking
Fund for such purpose. The deposits into the Reserve Fund shall be subordinate
to those required to be made into the Interest and Sinking Fund and the
Replacement and Repair Fund.
Section 16. Investment of Funds. The City, at its option, may invest the
reserve portion of the Interest and Sinking Fund, the Replacement and Repair
Fund and the Reserve Fund in direct obligations of, or obligations the principal
and interest on which are guaranteed by, the United States Government, and if
at any time uninvested funds are insufficient to accomplish the purpose for
which said respective Funds are herein established, the respective custodian bank
shall sell on the open market such amount of the securities as may be required
to meet such deficiency, giving notice thereof to the City. Until such time as
the Interest and Sinking Fund, the Repair and Replacement Fund and the
Reserve Fund are fully established and contain the full amounts provided in the
preceding Sections, all money resulting from the maturity of principal of and
interest on the securities in which the aforesaid Funds are invested may be
reinvested or accumulated in the respective Funds and considered a part thereof
and. used for and only for the purposes hereinabove specified with respect
thereto, provided, however, when such funds are fully established such increment
may be transferred to the System Fund.
Section 17. Deficiencies in Funds. If in any month the City shall for any
reason fail to pay into the Interest and Sinking Fund the full amount above
stipulated, an amount equivalent to such deficiency shall be set apart and paid
into said Fund from the first available and unalloeated revenues of ',he following
month or months, and such payment shall be in addition to the amount
hereinabove provided to be otherwise paid into said Fund during such month or
months.
Section 18. Excess Revenues. Any revenues in excess of those required
to establish and maintain the Funds as above required may be used for the
purpose of paying the costs of unusual or extraordinary maintenance, repairs and
replacements, or for extensions and irfiprovements which will either enhance the
revenue producing capacity of the System or provide a higher degree of service,
or for purchasing, on the open market, the outstanding Prior Bonds or the Bonds
for cancellation, or for redeeming the outstanding Prior Bonds or the Bonds in
inverse numerical and maturity order, at not to exceed the call price or for any
other lawful purpose.
Section 19. Security in Funds. All Funds created by this ordinance shall.
be secured in the manner and to the fullest extent permitted by the laws of the
State of Texas for the security of public 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 reserves the right hereafter to issue additional bonds ("Additional
Bonds"). The Additional Bonds, when issued, shall be secured by and payable
from a first lien on and pledge of the Net Revenues of the Syst~_m in the same
manner and to the same extent as are the Prior Bonds and the Bonds, and the
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Prior Bonds, 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 following
conditions have been met:
(a) The City is not then in default as to any covenant, condition
or obligation prescribed by this ordinance or the ordinance authorizing the
Prior Bonds;
(b) The laws of the State of Texas in force at such time permit
the issuance of such bonds;
(e) Each or the Funds created by this ordinance and the
ordinances authorizing the Prior Bonds contains the amount of money then
required to be on deposit therein;
(d) The City has secured a certificate from an Engineer,
registered by the State Board of Registration for Professional Engineers
of the State of Texas, showing that the projected net income and
revenues.of the System, as estimated by him throughout the maturities of
all bonds payable from the revenues of the System, will be at least one
and forty hundredths (1.40) times the average annual requirements for the
payment of principal and interest on the then outstanding bonds and on
any Additional Bonds.
(e) The City has secured from an independent Certified Public
Accountant or a 'Licensed Public Accountant a certificate showing that
the Net Earnings of the System for the Fiscal Year preceding the
adoption of the ordinance authorizing the Additional Bonds is equal to at
least one and forty hundredths (1.40) times the average annual principal
and interest requirements of all outstanding bonds; and ':
(f) The Additional Bonds are made to mature on May 1 in each
of the years in which they are scheduled to mature.
The term "Net Earnings" as used in this Section 20 shall mean the gross
revenues after deducting the expenses of operation and maintenance, but not
deducting expenditures which under standard accounting practice should be
charged to capital expenditures.
PROVIDED, HOWEVER, any o~all of the conditions hereinabove set for
the issuance of Additional Bonds may be waived by an instrument or instruments
in writing executed by the holders of at least 75% of the principal amount of
the bonds outstanding.
Section 21. 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. As long as any of the Prior Bonds or 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 a~ 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 22. Records - Accounts '- Accounting Reports. The City hereby
covenants and agrees that, so long as any ~f the Prior Bonds and the Bonds
herein authorized or any interest thereon remain outstanding and unpaid, it will
keep proper records, books and accounts, relating to the operation of the System
and other facilities, the revenues of which are pledged to secure the Prior Bonds
and the Bonds, separate from sll other records and accounts, in accordance with
generslly accepted accounting practices followed on privately-owned facilities of
like type and size, in which complete and correct entries shail be made of all
pertaining transactions, as provided by V.A,C.S., Article 1113, and that such
records, books and accounts shall be open to inspection by the bondholders and
their agents and representatives. So long as any of the Prior Bonds or any of
the Bonds remain outstanding, the City will furnish, upon request, to any
bondholder (or Trustee when applicable) (1) on or before thirty (30) days after
the close of each six months' period of the Fiscal Year a copy of a report or
statement on operations of the pledged facilities for the said period, in form and
content in the minimum hereinafter specified, and (2) on or before ninety (90)
days after the close of each Fiscal Year a copy of a report by a certified pubMe
accountant, a pubMe accountant, or an auditing official of the State of Texas
(authorized respectively by the laws of the State of Texas to perform such
independent audits), on the operations of the pledged facilities for the. next
preceding Fiscal Year including therein the following information:
(a) Comment regarding the manner in which the City has
complied with covenants in this ordinance and the ordinance authorizing
the Prior Bonds and recommendations for any changes or improvements in
the operation of the pledged facilities;
{b) Statement of Income and Expense;
(e) 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, the expiration date, and the name of the insurer;
(e) Schedule of the number of customers (connected and uncon-
nected to the System) by classifications set forth in the rate ordinance,
and showing the rate schedule .currently in effect; and
(f) Current assessed property valuation, report on tax rates,
levies and collections of the incorporated City.
Expenses incurled 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 the State of Texas at his office in Austin,
Texas, and to any holder of any Prior Bond or Bond who shall request the same.
Any such bondholder shall have the right to discuss with the accountant making
the annual audit the contents thereof and to ask for such additional information
as he may reasonably require.
Section 23. Remedies in Event of Default. In addition to all the rights
and remedies provided by the 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, the Replacement and Repair Fund and
the Reserve Fund as required by this ordinance or (b) defaults in the observance
or performance of any other of the covenants, conditions or' obligations set forth
in this ordinance, (c) defaults in the observance or performance or any of the
rules or regulations of the Texas Water Development Board as set forth in the
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Permanent Rules of such Board as such are applicable to loan assistance funds,
the following remedies shall be available:
(1) The holder or holders of any Prior Bonds and 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, condition or obligation prescribed
in this ordinance and the ordinance authorizing the Prior Bonds.
(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 an 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 heroin provided shall be cumulative of all other
existing remedies and the specification of such remedies shall not be deemed to
be exclusive.
Section 24. Special Covenants. The City further covenants as follows:
(a) That it has the lawful power to pledge the revenues
supporting this issue of Bonds and the Prior Bonds, and has lawfully
exercised such power under the Constitution and laws of the State of
Texas, including such power existing under V.A.C.S., Articles 1111 to
1118, both inclusive, that the Prior Bonds, the Bonds, and the Additional
Bonds when issued, shall be ratably secured under said pledge of income
in such manner that one bond shall have no preference over any other
bond of any sueh issue.
(b) The City covenants and represents that other than for the
payment of the Bonds and the Prior Bonds, the rents, revenues and the
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.
(e) That, as long as any of the Prior Bonds and Bonds remain
outstanding, the City will not sell .or encumber the System or any
substantial part thereof, and that, with the exception of-the Additional
Bonds expressly permitted by this ordinance to be issued~ it will not
encumber the revenues thereof unless such encumbrance is made junior
and subordinate to all of the provisions of this ordinance.
should the City or any of its agents 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.
Section 25. Bonds are Special Obligations. The Bonds are special
obligations of the City payable from the pledged revenues and the holder thereof
shall never have the right to demand payment thereof out of funds raised or to
be raised by taxation.
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Section 26. Mayor to Have Charge of Records and Bonds. The Mayor of
the City of Coppoll, Texas, shah 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 heroin authorized pending their approval by the 'Attorney General and
their registration by the Comptroller of Public Accounts.
Section 27. Confirmation of Sale. The 'sale of the bonds heroin
authorized to the Texas Water Development Board, at the price of par and
accrued interest to the date of delivery, plus a premium of $
is hereby confirmed. Delivery of the bonds shall be made to said purchasers as
soon as may be practical after the adoption of this ordinance, upon payment
therefor in accordance with the terms of sale.
Section 28. Certificate of Completion. That in conformity with the
applicable rules and regulations of the Texas Water Development Board, the
payments under the contract or contracts for the project to which the Bonds
relate are to be paid in installments as the construction work progresses, which
payment shall not exceed ninety (90) percent of the amount due at the time of
such payment, as shown by the City's engineer, and that upon completion of said
contract or contracts, the remaining ten (10) percent due thereafter may be paid
only after approval of the City's engineer and certification by said Board that
the work to be done under said contract or contracts has been completed and
performed in a satisfactory manner and in accordance with. soung engineering
principals and practices, and the City shall, upon completion of the project to
whi6h the Bonds relate (a) furnish to said Board a complete and final accounting
of all costs, expenses and expenditures in connection with said project, including
a statement of the source or sources of funds therefor; (b) submit "as built"
plans of the project to which the Bonds relate; (c) remit to the Texas Water'
Development Board, Austin, Texas, any surplus remaining from the Bonds, to the
nearest $5,000, whereupon, a like amount of said Bonds, in inverse numerical
order beginning with the last numbered Bond, shall be cancelled and returned to
the City as having been retired ~and paid in full; and (d) comply with all
applicable requirements of V.T.C.A., Water Code, Chapter 17, with respect to
the project to which the Bonds relate and the Bonds.
Section 29. Legal Opinion. The purchasers' obligation to accept delivery
of the bonds heroin authorized is subject to their being furnished a final opinion
of Messrs. Hutehison Price Boyle & Brooks, 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 such bonds with appropriate
certificate pertaining thereto executed by facsimile signature of the City
Secretary is hereby approved and authorized.
Section 30. No Arbitrage. That the City hereby covenants that the
proceeds from the sale of said bonds will be used as soon as practicable for the
purpose for which said Donds are issued; that such proceeds will not be invested
in any securities or obligations except for the temporary period pending such
use; and that sdch proceeds will not be used directly or indirectly so as to cause
all or any part of said bonds to be or become "arbitrage bonds" within the
meaning of Section 103(e) of the Internal Revenue Code of 1954, as amended,
or any regulations or rulings prescribed or made pursuant thereto.
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Section 31~ Confirmation of Publication. That the action of the City
Secretary in causing the publication on July 9, 1981 and July 16, 1981, of the
notice of intention to issue the City's Water and Sewer System Bonds, payable
from the net revenues of the City's combined water and sanitary sewer system,
in an amount not to exceed $1,200,000, which publication was in a newspaper of
general circulation within the City and the date of the first publication being at
least fourteen (14) days prior to the date of the passage of this ordinance, is
hereby in all things ratified and confirmed.
-, PASSED AND APPI~,OVED thi _____- ) , 1981o
ATTEST:
[SEAL]