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1975B7- IMPROVE AND EXTEND THE WATERWORKS SYSTEM THE STATE OF TEXAS x COUNTY OF GUADALUPE x CITY OF SCHERTZ x On this, the 12th day of March, 1975, at 7:00 o'clock P.M., the City Council of the City of Schertz, Texas, convened for a special meeting in the Municipal Building of said City, which meeting was at all times open to the public, and the roll was called of the duly constituted officers and members of said City Council, namely: ROBERT C. BUEKER MRS. NELL G. FUNK ROBERT E. SCHWARTZ DONALD J. SEEBA MRS. BOBBIE L. KOCH TOM KOOLE MAYOR COUNCILWOMAN COUNCILMAN COUNCILMAN COUNCILWOMAN COUNCILMAN AND DENNY ARNOLD MRS. JUNE G. KRAUSE CITY MANAGER CITY SECRETARY There being a quorum present, the meeting was called to order by the Mayor, and among other proceedings had were the following: The Mayor introduced the following captioned ordinance ~~}(ad in full by the City Secretary. Councilmember , ? (;;~'j6--d._-) moved that said ordinance be considered by the ouncil as an emergen~measure. Said motion was seconded by Councilmember 71Lv I:1e.M {)'f-~/L ; whereupon said motion was fully discussed and considered. The Mayor put the motion to consider said motion as an emergency measure to the members of the Council and said motion was approved and adopted by the fol- lowing vote: AYES: All members of said City Council shown present above voted "AYE11 NOES: None. The Mayor then introduced the hereinafter set forth or- emergenc~easure. Thereupon it was moved by Coun- /1 j}--J. 4J.J-<-<-f, and seconded by Councilmember that said ordinance be finally passed and adop- ~ut the motion to a vote of the members of the ordnance was finally passed and adopted by the dinance as an 9)ilmember J)u'1LJ f &1 - c)Ul: ted. The Mayor Council and the following vote: AYES: All members of said City Council shown present above voted lIAYE" NOES: None. AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, AUTHORIZING THE ISSUANCE OF $325,000 PRINCIPAL AMOUNT OF SPECIAL OBLIGATION BONDS OF THE CITY OF SCHERTZ TO BE KNOWN AS "$325,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1975," FOR THE PURPOSE OF SECURING FUNDS IN THE AMOUNT OF $275,000 TO BE USED TO ~KPROVE AND EXTEND THE WATERWORKS SYSTEM OF SAID CITY AND FOR THE PURPOSE OF SECURING FUNDS IN THE AMOUNT OF $50,000 TO BE USED TO IMPROVE AND EXTEND THE SANITARY SEWER SYSTEM OF SAID CITY; PRESCRIBING THE MATURITIES OF SAID BONDS AND THE IN- TEREST RATES; PRESCRIBING THE FORM OF SAID BONDS AND THE INTER- EST COUPONS; PLEDGING THE NET REVENUES OF THE CITY'S COMBINED WATERWORKS AND SANITARY SEWER SYSTEMS TO PAY THE PRINCIPAL OF AND INTEREST ON SAID BONDS; PROVIDING THAT IN THE EVENT OF A LA- TER ACQUISITION OF AN ELECTRIC LIGHT AND POWER SYSTEM AND/OR A NATURAL GAS SYSTEM, SAID BONDS, THE PREVIOUSLY ISSUED BONDS, AND ANY OR ALL REVENUE BONDS ISSUED FOR THE PURPOSE OF ACQUIRING ANY SUCH SYSTEM (EITHER OR BOTH), SHALL BE PAYABLE FROM AND EQUALLY SECURED BY A FIRST LIEN ON AND PLEDGE OF THE NET REVENUES OF THE CITY'S COMBINED WATERWORKS, SANITARY SEWER, ELECTRIC LIGHT AND POWER AND/OR NATURAL GAS SYSTEMS; PROVIDING THAT SAID BONDS SHALL OCCUpy A POSITION OF PARITY AND EQUAL DIGNITY WITH THE OUTSTANDING "CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1973," DATED APRIL 1, 1973, THE OUTSTANDING "CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1972," DATED MARCH 1, 1972, AND THE OUTSTANDING .CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1968," DATED MARCH 1, 1968; PROVIDING FOR ADDITIONAL PARITY BONDS; PROVIDING THAT THE HOLDER OR HOLDERS OF SAID BONDS SHALL NEVER HAV~THF. RIGHT~Q~M~NQ_PAYMENT OF SAID BONDS OUT OF ANY FUNDS RAISED, OR TO BE RAISED, BY TAXATION; CONFIRMING THE SALE OF SAID BONDS; DECLARING AN EMERGENCY; AND MAKING CERTAIN FINDINGS AND COVENANTS AND ENACTING OTHER PROVISIONS INCIDENT AND RELATING TO THE SUBJECT AND PURPOSE OF THIS ORDI- NANCE. WHEREAS, heretofore on the 2nd day of July, 1974, the City Council of the City of Schertz, Texas, by an ordinance duly and legally passed, called an election to be held in said City on the 27th day of July, 1974, for the purpose of submitting to the resident qualified electors of said City, for their action there- upon, the following propositions, to-wit: PROPOSITION NO. 1 "Shall the City Council of the City of Schertz, Texas, be authorized to issue SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000) of revenue bonds of said City for the purpose of securing funds to be used for ~~P.:r._9_Y-.:!d1.g. and extending the Waterworks System of said city; said bonds to mature serially over a period not to exceed forty (40) years from their date, as may be determined by the City Council of said City; and any issue or series of said bonds to bear interest per annum at any rate or rates as shall be determined within the discretion of the City Council of said City, provided that such rate of interest shall not exceed the maximum rate per annum authorized by law at the time of the issuance of any issue or series of said bonds; said revenue bonds to be special obligations of the City of Schertz, Texas, payable both as to principal and interest solely from and secured by a first lien on and pledge of the reve- nues of the City's combined Waterworks and Sanitary Sewer systems, after deduction of reasonable operation and maintenance expenses, as such expenses are defined by statute; and in the event of the later acquisition by said City of its Electric Light System and Natural Gas System, either or both, to then and thereupon and thereafter have all of such bonds, including those revenue bonds that may be issued in the acquisition of said Electric Light System and/or Natural Gas System, payable both as to principal and interest solely from and secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer and Electric Light and/or Natural Gas System; and in the event that the City Council of said City shall also be authorized to issue the revenue bonds submitted in proposition No.2, then and in that event, to issue combined revenue bonds of the City of Schertz in the aggregate principal amount so authorized by both Proposition No. 1 and Proposition No.2 and in such manner that said aggregate amount of such revenue bonds shall be ratably secured by a first lien on and pledge of the net revenues from the operation of the City's combined Waterworks and Sanitary Sewer System, and in the event of the later acquisition by said City of its Electric Light and/or System and Natural Gas System, either or both, to then and thereupon and thereafter have all of such bonds, including those bonds that may be issued in the acquisition of said Electric Light and/or Natural Gas System, payable both as to principal and interest solely from and secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer and Electric Light and/or Natural Gas System; each such bond to be on a parity and equal dignity with the other bonds; and each such bond that is issued to be conditioned so that the holder thereof shall never have the right to demand payment of said obligation out of any funds raised, or to be raised, by taxation; all in accordance with and as authorized by the Constitution and laws of the State of Texas, including Articles 1111 to 1118, both inclusive, Revised Civil Statutes of Texas, as amended?" . PROPOSITION NO. 2 "Shall the City Council of the City of Schertz, Texas, be authorized to issue FIFTY THOUSAND DOLLARS ($50,000) of revenue bonds of said City for the purpose of securing funds to be used for improving and extending the Sanitary Sewer System of said City; said bonds to mature serially over a period not to exceed forty (40) years from their date, as may be determined by the City Council of said City; and any issue or series of said bonds to bear interest per annum at any rate or rates as shall be determined within the discretion of the City Council of said City, provided that such rate of interest shall not exceed the maximum rate per annum authorized by law at the time of the issuance of any issue or series of said bonds; said revenue bonds to be special obligations of the City of Schertz, Texas, payable both as to principal and interest solely from and secured by a first lien on and pledge of the revenues of the city's combined Waterworks and Sanitary Sewer Systems, after deduction of reasonable operation and maintenance expenses, as such expenses are defined by statute; and in the event of the later acquisition by said City of its Electric Light System and Natural Gas System, either or both, to then and thereupon and thereafter have all of such bonds, including those revenue bonds that may be issued in the acquisition of said Electric Light System and/or Natural Gas System, payable both as to principal and interest solely from and secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer and Electric Light and/or Natural Gas System; and in the event that the City Council of said City shall also be authorized to issue the revenue bonds submitted in Proposition No.1, then and in that event, to issue combined revenue bonds of the City of Schertz in the aggregate principal amount so authorized by both Proposition No. 1 and Proposition No. 2 and in such manner that said aggregate amount of such revenue bonds shall be ratably secured by a first lien on and pledge of the net revenues from the operation of the Cityls combined Waterworks and sanitary Sewer System, and in the event of the later acquisition by said City of its Electric Light System and Natural Gas System, either or both, to then and thereupon and thereafter have all of such bonds, including those bonds that may be issued in the acquisition of said Electric Light and/or Natural Gas System, payable bo.th as to principal and interest solely from and secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer and Electric Light and/or Natural Gas System; each such bond to be on a parity and equal dignity with the other bonds; and each such bond that is issued to be conditioned so that the holder thereof shall never have the right to demand payment of said obligation out of any funds raised, or to be raised, by taxation; all in accordance with and as authorized by the Constitution and laws of the State of Texas, including Articles 1111 to 1118, both inclusive, Revised Civil Statutes of Texas, as amended?" and WHEREAS, this City Council affirmatively finds that notice of said election was duly and legally given by publication of a notice in a newspaper of general circulation in Schertz, Texas; the date of the first publication being not less than four- teen (14) days prior to the date of said election; and WHEREAS, notice of said election was also given by posting notices of said election at the City Hall of said City and at two (2) other public places within said City, the date of said posting being not less than fourteen (14) days prior to the date of said election; and WHEREAS, by ordinance duly passed on the 6th day of August, 1974, this City Council canvassed the returns of said election and affirmatively found that it was authorized to issue the bonds in accordance with the authority granted in the propositions and with law; and WHEREAS, the City Council heretofore examined into and investigated the regularity of the proceedings of said election and found that the same was duly and legally held, that the notices required by law to be given had been duly and legally given and that said election was conducted in conformity with all require- ments of law; and WHEREAS, the $750,000 of Waterworks Revenue Bonds and the $50,000 Sanitary Sewer System Revenue Bonds authorized at said election held on July 27, 1974, when issued are to be payable solely from and secured by a first lien on and pledge of the net revenues derived from the operation of the City's combined Water- works and Sanitary Sewer Systems, and in the event of the later acquisition of an electric light and power system and/or a natural gas system, may also be secured by a pledge of the net revenues of all of such combined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems; and WHEREAS, the City Council of said City now desires to issue Utility System Revenue Bonds of the City of Schertz in the principal amount of $325,000, for the purpose of securing funds in the amount of $275,000 to be used to improve and extend the Waterworks System of said City (being the first installment of bonds authorized by and under Proposition No. 1 submitted at the aforesaid election) and for the purpose of securing funds in the amount of $50,000 to be used to improve and extend the Sanitary Sewer System of said City, and that such bonds authorized by and under this ordinance shall be authorized and issued in such a manner that they shall occupy a position of parity and equal dig- nity with the outstanding bonds of the Series 1968, Series 1972 and Series 1973 bonds; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: SECTION 1: AMOUNT, PURPOSE, NAME AND AUTHORIZATION - That for the purpose of securing funds in the amount of THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($325,000), of which the sum of Two Hundred Seventy-five Thousand Dollars ($275,000) is to be used to improve and extend the Waterworks System of said City (being the first installment of bonds authorized by and under Proposition No. 1 at an election held in said City on July 27, 1974) and of which the sum of Fifty Thousand Dollars ($50,000) is to be used to im- prove and extend the Sanitary Sewer System of said City, there shall be issued Utility System Revenue Bonds of said City, to be known as "$325,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1975," in the aggregate principal amount of THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($325,000), under and pursu- ant to the Constitution and laws of the State of Texas, including particularly Articles 1111 to 1118, both inclusive, Revised Civil Statutes of Texas, as amended, and the authority of the resident qualified electors of the City of Schertz, at the aforesaid elec- tion held on the 27th day of July, 1974. SECTION 2: DATE, NUMBERS, DENOMINATION, AMOUNT AND MATURITY SCHEDULE - That said bonds shall be serial coupon bonds, shall be dated MARCH 1, 1975, shall be numbered consecutively from One (1) to Sixty-five (65), both inclusive, shall be in the denomination of Five Thousand Dollars ($5,000) each, aggregating the principal sum of THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($325,000), and shall become due and payable in each of the years and in the re- spective amounts shown in the schedule as follows, to-wit: BOND NOS. (Both Incl.) DATE OF MATURITY AMOUNT 1 2 3 4 5 6 7 8 9 10 11 - 12 13 - 14 September 1, 1979 September 1, 1980 September 1, 1981 September 1, 1982 September 1, 1983 September 1, 1984 September 1, 1985 September 1, 1986 September 1, 1987 September 1, 1988 September 1, 1989 September 1, 1990 $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 10,000 15 - 16 17 - 18 19 - 20 21 - 22 23 - 24 25 - 26 27 - 29 30 - 32 33 - 35 36 - 40 41 - 45 46 - 50 51 - 55 56 - 60 61 - 65 September 1, 1991 September 1, 1992 September 1, 1993 September 1, 1994 September 1, 1995 September 1, 1996 September 1, 1997 September 1, 1998 September 1, 1999 September 1, 2000 September 1, 2001 September 1, 2002 September 1, 2003 September 1, 2004 September 1, 2005 10,000 10,000 10,000 10,000 10,000 10,000 15,000 15,000 15,000 25,000 25,000 25,000 25,000 25,000 25,000 SECTION 3: REDEMPTION PROVISION - That the City of Schertz expressly reserves the right to redeem before maturity Bonds Nos. 15 to 65, both inclusive, being the bonds maturing September 1 in the years 1991 through 2005, on any interest payment date on and after September 1, 1990, by paying the principal and accrued in- terest therefor to the interest payment date fixed for redemption; and in case any of said Bonds Nos. 15 to 65, both inclusive, shall be called for redemption before maturity, notice thereof shall be given in writing to the SCHERTZ STATE BANK, SCHERTZ, TEXAS, at least thirty (30) days before the interest payment date fixed for redemption, and notice of such redemption shall be published at least one time in a financial journal of general circulation in the State of Texas, and should such bond, or bonds, not be presented for redemption after the same have been properly called and notice given as aforesaid and provisions for payment and redemption duly made, the same shall cease to bear interest from and after the in- terest payment date so fixed for redemption. SECTION 4 : INTEREST RATES AND INTEREST PAYMENT DATES - That said bonds shall bear interest per annum from their date until paid at the following rates, respectively: Bonds Nos. 1 to S-, both inc. , at the rate of Ii. 7S- % . , Bonds Nos. fa to ~O both ine.. , at the rate of 100 % . , Bonds Nos. ~I to {~i-, both ine.. , at the rate of r-r. t 0 %; r;A~ '2-.0, ./ Bonds Nos.. to both inc.. , at the rate of '7h~ % . , Bonds Nos. d-I to tdJ both ine.. , at the rate of '{ , '-I 0 % . , said interest being payable on September 1, 1975, and semi-annually thereafter on March 1 and September 1 of each year while said bonds or any of them are outstanding, which interest shall be evidenced by coupons attached to each of said bonds. SECTION 5: PLACE OF PAYMENT - That said bonds shall be payable, both as to principal and interest, in lawful money of the United States of America, without exchange or collection charges to the owners or holders of the bonds or interest coupons, at the SCHERTZ STATE BANK, SCHERTZ, TEXAS. The principal of such bonds shall be payable only upon presentation and surrender of the bonds as they respectively become due, and interest falling due on and prior to the respective maturity dates of said bonds shall be payable only upon presentation and surrender of the interest coupons attached to said bonds as such coupons severally become due. SECTION 6: EXECUTION OF BONDS AND INTEREST COUPONS - That, in accordance with the provisions of Article 7l7j-l, as amended, Revised Civil Statutes of Texas, each of said bonds shall be executed by the imprinted facsimile signature of the Mayor and countersigned by the imprinted facsimile signature of the City Secretary of the City of Schertz, Texas; and each of the interest coupons attached to said bonds shall be executed by the imprinted facsimile signatures of said Mayor and City Secretary; and such imprinted facsimile signa- tures of said Mayor and said City Secretary shall have the same effect as if such bonds and interest coupons had been manually signed by each of said officials; and the City Secretary is hereby authorized to cause the seal of said City to be imprinted in fac- simile upon each of said bonds; and the imprinting of the seal of said City on each of said bonds shall have the same legal effect as the impression of the seal of said City on each of said bonds. SECTION 7: THE FORM OF THE BONDS - That the form of said bonds shall be substantially as follows, to-wit: NO. $5,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF GUADALUPE, BEXAR AND COMAL CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BOND, SERIES 1975 ****************************************************** FOR VALUE RECEIVED, the City of Schertz, a municipal corporation of the State of Texas, hereby acknowledges itself indebted to and hereby promises to pay to bearer, as hereinafter stated, on the 1st day of September, the sum of FIVE THOUSAND DOLLARS ($5,000), in lawful money of the United States of America with interest thereon from date hereof at the rate of per cent %) per annum until the principal sum hereof shall have been paid; said interest being payable on September 1, 1975, and semi-annually thereafter on March 1 and September 1 of each year upon presentation and surrender of bond or properly annexed interest coupon as they severally mature. BOTH PRINCIPAL OF and interest on this bond are here- by made payable at the SCHERTZ STATE BANK, SCHERTZ, TEXAS, without exchange or collection charges to the owner or holder, and the City of Schertz is hereby held and firmly bound to apply the pledged revenues of its combined Water- works and Sanitary Sewer Systems to the prompt payment of the principal of and interest on this bond, providing that in the event of the later acquisition of an electric light and power and/or natural gas system, the net reve- nues of the City's combined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems shall be and are hereby pledged to pay the principal of and interest on this bond as the same matures. (NOTE TO PRINTER: Insert here in Bonds Nos. 15 to 65, both inclusive, the redemption paragraph which is Section 8 hereof) THIS BOND is one of a series of sixty-five (65) bonds of like tenor and effect (except as to number, in- terest rate, maturity and right of prior redemption), numbered consecutively from one (1) to Sixty-five (65), both inclusive, in the denomination of Five Thousand Dollars ($5,000) each, aggregating the principal amount of THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($325,000), of which the sum of $275,000 is to be used to improve and extend the Waterworks System of the City of Schertz, and of which the sum of $50,000 is to be used to improve and extend the Sanitary Sewer System of said City, in accordance with the Constitution and laws of the State of Texas, including Articles 1111 to 1118, both inclusive, Revised Civil Statutes of Texas, as amended, and pursuant to an ordinance passed by the City Council of the City of Schertz, Texas, which ordinance is duly recorded in the Mintues of said City Council. THE DATE of this bond, in conformity with the ordi- nance above referred to is MARCH 1, 1975. THIS BOND and the series of which it is a part con- stitute special obligatiomof the City of Schertz, Texas, and together with the outstanding bonds of said City en- titled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1968, dated March 1, 1968, the outstanding bonds of said City enritled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1972, dated March 1, 1972, and the outstanding bonds of said City entitled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES, 1973, dated April 1, 1973, are payable both as to principal and interest solely from and are secured by a first lien on and pledge of the revenues of the City's combined Waterworks and Sanitary Sewer Systems, after deduction of reasonable expenses of operation and main- tenance; providing that in the event of the later ac- quisition of an electric light and power and/or a natural gas system, and the issuance of revenue bonds in con- nection therewith, then These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds together with any such revenue bonds shall be payable from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems. THE CITY, however, expressly reserves the right to issue, in addition to the bonds for the electric light and power and/or natural gas system purposes, further and additional bond obligations, in all things on a parity with the bonds of this series and the aforesaid outstanding bonds, and payable from and equally secured by a first lien on and pledge of the net revenues of the city's combined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems; PROVIDED, HOWEVER, that any and all such additional parity bonds may be issued only in accordance with and subject to the covenants, conditions, limitations and restrictions re- lating thereto, which are set out and contained in the ordinances authorizing said Series 1968 Bonds, said Series 1972 Bonds, said Series 1973 Bonds and These Bonds, to which said ordinances reference is hereby made for more complete and full particulars. EACH HOLDER of this bond, payable to bearer, or of the interest coupons hereto attached, is conclusively presumed to forego and renounce his equities in favor of subsequent holders for value without notice, and to agree that, being payable to bearer, this bond and each of the interest coupons attached may be negotiated by delivery, however possession may be acquired, and that any subsequent holder or holders who may receive this bond, or any of the interest coupons attached, for value without notice, has thereby acquired absolute title, free from all equities and claims of ownership of any prior holder. The City of Schertz, Texas, its officers and the paying agent shall not be affected by any notice to the contrary. THE HOLDER HEREOF shall never have the right to de- mand payment of this obligation out of any funds raised, or to be raised, by taxation. AND IT IS HEREBY CERTIFIED AND RECITED that the issuance of this bond, and the series of which it is a part, is duly authorized by law; that all acts, conditions and things required to exist and to be done precedent to and in the issuance of this bond, and the series of which it is a part, to render the same lawful and valid, have been properly done, have happened and 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 irrevo- cably pledging the net revenues of the City's combined Waterworks and Sanitary Sewer Systems and, in the event of the later acquisition of an electric light and power and/or natural gas system, the net revenues of the com- bined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems of said City. IN WITNESS WHEREOF, the City of Schertz, Texas, by its City Council, has caused the corporate seal of said City to be imprinted hereon in facsimile, and this bond to be executed by imprinting hereon the facsimile signa- ture of the Mayor of the City of Schertz, Texas, and countersigned by imprinting hereon the facsimile signa- ture of the City Sceretary of said City, and the interest coupons hereto attached to be executed by the imprinted facsimile signatures of said Mayor and said City Secre- tary (all in accordance with the provisions of Article 7l7j-l, Revised Civil Statutes of Texas, as amended), as of the date of this bond, the 1ST DAY OF MARCH, 1975. MAYOR, City of Schertz, Texas COUNTERSIGNED: CITY SECRETARY (SEAL OF CITY) SECTION 8: REDEMPTION PARAGRAPH IN CERTAIN BONDS - That each of said Bonds Nos. 15 to 65, both inclusive, shall contain on its face these words (being the redemption paragraph): THE CITY of Schertz, Texas, hereby expressly reserves the right to redeem this bond before maturity on any interest payment date on and after September 1, 1990, by paying the principal of and accrued interest therefor to the interest payment date fixed for redemption; and in case this bond shall be called for redemption before maturity, notice thereof shall be given in writing to the SCHERTZ STATE BANK, SCHERTZ, TEXAS, at least thirty (30) days before the interest payment date fixed for redemption and notice of such redemption shall be pub- lished at least one time in a financial journal of general circulation in the State of Texas; and should this bond not be presented for redemption after the same is properly called and notice given as aforesaid and provisions for payment and redemption duly made, the same shall cease to bear interest from and after the interest payment date so fixed for redemption. SECTION 9: THE FORM OF THE INTEREST COUPONS - That the form of said interest coupons shall be substantially as follows, to-wit: NO. $ ON THE 1ST DAY OF , *(unless the bond to which this coupon appertains has been properly called for prior redemption and provisions for payment and redemption properly made in accordance with its terms,) THE CITY OF SCHERTZ, 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 collection charges at the SCHERTZ STATE BANK, SCHERTZ, TEXAS, the sum of DOLLARS ($ ), said sum being the interest due that day on "CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1975,. dated March 1, 1975, Bond No. City Secretary Mayor * (NOTE TO PRINTER: The expression in the first parentheses of the coupon form is to be inclu- ded in coupommaturing on March 1, 1991, and on all subs~quent coupons affixed to these bonds.) SECTION 10: FORM OF COMPTROLLER'S CERTIFICATE - That each of said bonds shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law, and as to the registration of such bonds, there shall be printed on the back of each of said bonds substantially the following certificate, which shall be manually signed by said Comptroller or by a deputy designated in writing to act for said Comptroller, to-wit: OFFICE OF THE COMPTROLLER X X STATE OF TEXAS X REGISTER NO. I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas, to the effect that this bond has been examined by him as required by law and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas and that it is a valid and binding special obligation of the City of Schertz, Texas, payable from 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, this, SECTION 11: Comptroller of Public Accounts of the State of Texas DEFINITIONS - That, for the purpose of this ordi- nance, the following words and terms shall mean and include, and are hereby defined as follows: (a) City - shall mean and refer to the City of Schertz, Texas, and where appropriate, the City Council of said City. (b) System or Systems - shall mean and refer to the Water- works and Sanitary Sewer Systems of the City of Schertz, Texas, and in the event of the later acquisition of an electric light and power and/or natural gas system, then the combined Waterworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems, including all present and future extension, additions, replace- ments and improvements thereto, whether situated within or without the limits of the City. (c) Net Revenues - shall mean and include the gross revenues derived from the operation of the System less the reasonable ex- penses of maintenance and operation of said System, including all salaries, labor, materials, interest, repairs and extensions ne- cessary to render efficient service, and every proper item of expense, as required by Article 1113, Revised Civil Statutes of Texas, as amended; said repairs and extensions as used herein shall mean and include only those as are found by the City to be neces- sary to keep the System in operation and to render efficient ser- - vice, or necessary to meet or remedy some physical accident, condition or defect which would otherwise impair the security of the bonds herunder authorized. (d) Series 1968 Bonds - shall mean and refer to the $579,000 of CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1968, dated March 1, 1968, authorized by ordinance of said City. (e) Series 1972 Bonds - shall mean and refer to the $35,000 of CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1972, dated March 1, 1972, authorized by ordinance of said City passed and adopted on March 2, 1972. (f) Series 1973 Bonds - shall mean and refer to the $165,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1973, dated April 1, 1973, authorized by ordinance of said City passed and adopted on May 1, 1973. (g) Series 1975 Bonds or These Bonds - shall mean and refer to the $325,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1975, dated March 1, 1975, authorized by this ordi- nance. (h) Additional Parity Bonds - shall mean the additional parity bonds which the City expressly reserves the right to issue in SECTION 21 of this ordinance. (i) Bonds Similarly Secured - shall mean the Series 1968 Bonds, the Series 1972 Bonds, the Series 1973 Bonds and These Bonds and any and all additional parity bonds which are payable from a first lien on and pledge of the net revenues of the System. SECTION 12: CONTINUING FISCAL YEAR; MAINTAINING SPECIAL FUNDS HERETOFORE CREATED; AND APPLICATION OF REVENUES - That the System shall continue to be operated on the basis of a fiscal year, the fiscal year as presently established commencing on October 1 of each year and ending on September 30 of the following year. That in accordance with the ordinances authorizing the issuance of the series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds, all revenues derived form the operation of the System shall be kept separate from other funds of the City. To that end, the fol- lowing special funds heretofore created are hereby reaffirmed: (a) City of Schertz Utility System Fund, hereinafter called SYSTEM FUND. depository bank. (b) City of Schertz Utility System Revenue Bond Interest This fund shall be kept in the City's and Sinking Fund, hereinafter called INTEREST AND SINKING FUND. This fund shall be deposited with the MAIN BANK AND TRUST, SAN ANTONIO, 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 Schertz Utility System Revenue Bond Reserve Fund, hereinafter called RESERVE FUND. This fund shall be deposited with the MAIN BANK AND TRUST, SAN ANTONIO, TEXAS, as Trustee, and shall be used to pay principal of or interest on the bonds similarly secured falling 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 re- ceived through the operation of the System shall be deposited from day to day as collected into the SYSTEM FUND, and the reasonable and proper expenses of operating and maintaining the System as set forth in section 11 (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 FUND - In addition to the deposits required to be made into the INTEREST AND SINKING FUND by the ordinances authorizing the issuance of the Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds, for the payment of the principal and interest requirements of such bonds, the City shall, on or before the 15th day of August, 1975, de- posit in the INTEREST AND SINKING FUND an amount of money not less than all of the interest to become due on the first installment of interest on These Bonds (interest falling due on September 1, 1975); and thereafter on the 15th day of each month, commencing / with the 15th day of September, 1975, the City shall deposit in said INTEREST AND SINKING FUND an amount of money not less than one-sixth (1/6) of the next semi-annual installment of interest to become due on These Bonds. In addition, commencing on or be- fore the 15th day of the twelfth month immediately next preceding the first maturity of principal of These Bonds (being the 15th day of August, 1978), the City shall deposit in the INTEREST AND SINKING FUND an amount of money not less than one-twelfth (1/12) of the installment of principal falling due on September 1, 1979, and on the 15th day of each month thereafter until the bonds are paid and retired, the City shall deposit in said INTEREST AND SINKING FUND an amount of money not less than one-twelfth (1/12) of the next maturing principal on These Bonds. SECTION 15: RESERVE FUND - After the requirements set forth in SECTIONS 13 and 14 have been satisfi2d, and all deficiencies in such requirements have been remedied, there shall be paid into the RESERVE FUND on or before April 15, 1975, and on or before the 15th ._) - ,. f./- day of each month thereafter, the sum of $ -",_' . per month until there shall have been accumulated in said fuman amount of not less than one and one-half (1-1/2) times the average annual prin- cipal 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 whenever said fund is reduced below such amount, monthly deposits shall be resumed as hereinafter specified and continued until such time as the fund has been fully restored. Monies in the RESERVE FUND, at the option of the City, may be invested in direct obligations of the United States of America having maturities not in excess of ten years from the date of making such investment, which securities shall be deposited and held by the Trustee bank, and if at any time uninvested funds shall be insufficient to permit payment of principal of or interest on These Bonds or any of the bonds similarly secured when needed for the purpose, said bank shall promptly sellon the open market such amount of securities as is required to pay said interest and/or principal when due, and shall give notice thereof to the City. Any money resulting from maturity of principal and/or of interest on the securities in which the RESERVE FUND is invested may be reinvested or accumulated in said RESERVE FUND and shall be considered a part thereof, and used for and only for the purposes specified herein with reference to said RESERVE FUND. SECTION 16: DEFICIENCIES IN FUNDS - If in any month the City shall, for any reason, fail to pay into the INTEREST AND SINKING FUND or the 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 addi- tion to the amounts hereinabove provided to be otherwise paid into said funds during such month or months. M 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 general or special purposes. SECURITY OF FUNDS - All special funds heretofore SECTION 18: created and herein reaffirmed for which this ordinance makes pro- vision (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 the State of Texas for the security of public funds, and such funds shall be used only for the purposes permitted by this ordinance and the ordinances authorizing the Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds. SECTION 19: PLEDGE OF NET REVENUES - That These Bonds, to- gether with the outstanding Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds, (and any and all Additional Parity Bonds when issued in accordance with the terms and provisions of this ordinance and the ordinances authorizing the Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bbnds), shall be payable solely from and secured by a first lien on and pledge of the Net Revenues of the System; and These Bonds are issued on a parity and equal dignity with said outstanding Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds; and the City hereby irrevocably pledges all of the Net Revenues from the operation of the System (with the exception of those amounts in excess of the amounts required to maintain the funds hereinabove provided for) to the payment of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds (and any and all Additional Parity Bonds when issued subject to the terms and provisions of this ordinance and the ordinances authorizing the Series 1968 Bonds, the Series 1972 Bonds and the Series 1973 Bonds). SECTION 20: RATES AND CHARGES - That the City covenants and agrees that it shall faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Texas, and that so long as any of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds (and any and all Additional Parity Bonds when issued), both as to principal and interest, remain outstanding and unpaid, it shall fix and maintain reasonable and sufficient rates and collect charges for the facilities and services afforded by the System which will produce income and revenues sufficient at all times to: (a) Pay all operation, maintenance, depreciation, replace- ment and betterment charges and expenses of the System; (b) Fully maintain the hereinabove prescribed INTEREST AND SINKING FUND and RESERVE FUND; and (c) Pay all outstanding indebtedness against the System, including These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds (and any and all Additional Parity Bonds) as and when the same become due. The City further covenants and agrees that no free ser- vice shall be rendered by the System to any customers; 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 derived from sources other than the revenues and income of the System. SECTION 21: ISSUANCE OF ADDITIONAL PARITY BONDS - That, (in addition to the right to issue junior lien bonds, as authorized by the laws of the State of Texas). the City reserves the right to issue Additional Parity Bonds payable from the Net Revenues of the System when issued in compliance with the law and the terms and conditions hereinafter appearing; such Additional Parity Bonds shall occupy a position of parity and equal dignity with These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds, and such Additional Parity Bonds shall be equally secured by a first lien on and pledge of the Net Revenues of the System. The Additional Parity Bonds, which the City reserves the right to issue, may be issued in one or more installments, provi- ded that the following conditions shall have been met: (a) That the City is not then in default as to any cove- nant, condition or obligation contained in the ordi- nances authorizing the issuance of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds; (b) That the laws of the State of Texas in force at such time provide for the issuance of such Additional Parity Bonds; (c) That each of the funds reaffirmed by this ordinance contains the amount of money then required to be on deposit therein; (d) The Net Revenues of the System for the completed twelve (12) months immediately preceding the adoption of the ordinance authorizing the issuance of the Additional Parity Bonds are equal to at least one and one-half (1-1/2) times the average annual requirement for the payment of principal and interest on the then outstand- ing bonds and on the Additional Parity Bonds, as such net revenues are shown by a report of a Certified Public Accountant or a licensed public accountant. The term "Net Revenues" as used in this SECTION shall ~ mean the gross revenues after deduction of expenses of operation and maintenance, but not deducting expenditures which, under standard accounting practice, should be charged to capital expenditures; PROVIDED, HOWEVER, that the requirement of this subparagraph (d) shall not apply or be a condition to the right of the City to issue bonds for the initial acquisi- tion (by purchase or construction) of an electric light and power and/or a natural gas system in and for said City, but such bonds may be issued at any time provided 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 average annual net income and revenues of the System (after providing for adequate maintenance and operation expenses) as estimated by him throughout the maturities of all of such outstanding bonds, will be at least one and one-half (1-1/2) times the average annual re- quirements for the payment of principal of and in- terest on all bonds to be payable from and 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 Parity Bonds, (e) The Additional Parity Bonds are made to mature on September 1 in each of the years in which they are scheduled to mature; (f) The ordinance authorizing the issuance of the Additional Parity Bonds provides for the accumula- tion in the INTEREST AND SINKING FUND of amounts sufficient to pay the principal of and interest on such Additional Parity Bonds as the same mature; and (g) The ordinance authorizing the issuance of the Additional Parity Bonds provides that the amount to be accumulated in the RESERVE FUND shall be not less than one and one-half (1-1/2) times 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 Parity Bonds, and provided that any additional RESERVE FUND amount which may thus be required shall be accumulated within sixty (60) calendar months from the date of the adoption of the ordinance authorizing such proposed Additional Parity Bonds. The term "Net Revenues. as used in this SECTION 21 shall mean all of the net revenues of the System (excluding income re- ceived specifically for capital items) after deduction of the reasonable expenses of maintenance and operation of the System (excluding expenditures for capital items). SECTION 22: ISSUANCE OF REFUNDING BONDS - That, if prior to the payment and discharge of all of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds, it shall be found desirable to refund any of such bonds under the provisions of any law then available, such first lien bonds or any part there- of may be refunded with the consent of the holders thereof, (ex- cept as to any bonds which are redeemable, and have been properly called for redemption, in which case such consent shall not be necessary), and the refunding bonds so issued shall enjoy complete equality of lien with the portion of any of the first lien bonds which is not refunded, if any there be, and such refunding bonds shall continue to enjoy the same priority of lien as was enjoyed by the bonds refunded; PROVIDED, HOWEVER, that if only a portion of said bonds is refunded in such manner that the interest on the refunding bonds is increased or any of the refunding bonds mature at a date earlier than the maturity dates of any of the bonds not refunded, then that portion of the first lien bonds desired to be refunded may not be refunded without the consent of the holders of the unrefunded portion of the first lien bonds then outstanding. SECTION 23: MAINTENANCE AND OPERATION - That the City hereby covenants and agrees to maintain the System in good condition and to 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 holders of such bonds of the kinds and in the amounts which are usually carried by private companies operating similar properties, and that during such time all policies of insurance shall be maintained in force and kept current as to premium pay- ments~ Monies received from losses under such insurance policies other than public liability policies, are hereby pledged as securi- ty for the bonds until and unless the proceeds are paid out in making good the loss or damage in respect of which such proceeds are received, either by replacing the property destroyed or by repairing the property damaged or adequate provisions for making good such loss or damage may be made within ninety (90) days from the date of loss. Nothing in this ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so. SECTION 24: RECORDS AND ACCOUNTS AND FISCAL YEAR - That 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 operation of the System, separate and apart from all other records and accounts in which complete and correct entries shall be made and maintained of all transactions relating to said System as provided by Article 1113, Revised Civil Statutes of Texas, as amended. Any holder of the bonds similarly secured or any duly authorized agent or agents of such holder or 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 following close of each fiscal year, it will cause an audit of such books and accounts to be made by an independent Certified Public Accountant or a licensed public accountant within sixty (60) days after the close of each fiscal year. Each such audit, in addition to what other matters may be thought proper by the accountant, shall contain the following: A statement of the income and expenditures of the System for such fiscal year; A balance sheet as of the end of such fiscal year; The accountant's comments regarding the manner in which the City has carried out the requirements of all ordi- nances authorizing bonds then outstanding, and his re- commendations for any change or improvement in the operation, records and accounts of the System; (d) A list of the insurance policies in force at the end of J (a) J j (b) (c) ~ the fiscal year on the System properties, setting out as to each policy the amount thereof, the risk covered the name of the insurer, and the policy's expiration date; (el A list of the securities which have been on deposit as security for the money in the INTEREST AND SINKING FUND and the RESERVE 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 the money in the SYSTEM FUND has been secured in such fiscal year; and (f) The number of properties connected to the System at the end of the fiscal year. Expenses incurred in making the audits above required are to be regarded as maintenance and operation expenses and paid as such. Copies of the aforesaid annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory Coun- cil of Texas, at his office in Austin, Texas, and to the original 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 month's period. Any 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 25: ARBITRAGE BOND AND DEPOSIT OF FUNDS COVENANTS - That the City Council of said City hereby specially covenants and agrees with the original owners and holders of the bonds autho- rized hereby and with all subsequent owners and holders from time to time of said bonds that: (1) The City Council of said City will promptly proceed to utilize the proceeds from the sale of said bonds (other than accrued interest to date of delivery) for the purpose set forth in SECTION 1 of this ordinance; and (2) No portion of the bonds hereby authorized is issued as a part of an issue, all or a major portion of the proceeds of which are reasonably expected to be used directly or indirectly (a) to acquire securities (within the meaning of Section 165 (g) (2) (A) or (B) of the Internal Revenue Code) or obligations other than obligations described in Section 103 (a) (1) of the Internal Revenue Code (except for a temporary period of time to the extent permitted by Section 103 (d) (4) (A) of the Internal Revenue Code) which may be reasonably expected at the time of the issuance of such issue to produce a yield over the term of the issue which is materially higher (taking into account any discount or premium) than the yield on obligations of such issue, or (b) to replace funds which were used directly or in- directly to acquire securities or obligations described in subparagraph (a). (3 ) The City Council of said City will take such action in accordance with regulations prescribed from time to time by the Secretary of the Treasury or his delegate to carry out the purposes of Section 103 Cd) of the Internal Revenue Code so that no portion of the bonds authorized hereby shall be classified as an "arbitrage bond" within the meaning of Section 103 (d) of the Internal Revenue Code. Specifically, but not by way of limitation, said City Council covenants that it will make no use of the proceeds of such bonds at any time during the term thereof which would cause such bonds to be arbitrage bonds within the meaning of Section 103 (d) of the Code as interpreted by Sections 1.103-13 and 1.103-14 of the regulations promulgated for such purpose by the United States Treasury Department interpreting such Code Section. (4) Said City Council covenants that it will not permit to be deposited to the credit of the SYSTEM FUND or the INTEREST AND SINKING FUND or the RESERVE FUND or applied to the payment of the principal of or interest on the bonds authorized hereby, any proceeds from any grant, donation or income re- ceived from the United States Government whether pursuant to agreement or otherwise, if such deposit or application would result in interest payable on said bonds being includable in whole or in part in Gross Income, under Section 103 of the Internal Revenue Code for Federal income taxes. SECTION 26: REMEDIES IN EVENT OF DEFAULT - That in addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees that in the event the City (a) fails to make the payments required by SECTIONS 14 and 15 of this ordinance to be made into the INTEREST AND SINKING FUND and the RESERVE FUND, or (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in the ordinances authorizing the issuance of any of the bonds similarly secured, the following remedies shall be available: .,,~, 'i:'~ 1;".:,., :1-,0:. ~~ (1) The holder or holders of any of the bonds similarly secured 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, obligation or condition prescribed by said ordinances. (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 cumulative of all other existing remedies, and the specification of such re- medies shall not be deemed to be exclusive. SECTION 27: FURTHER COVENANTS - That the City further cove- nants and agrees by and through this ordinance, as follows, to- wit: (a) That These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds (and any Addi- tional Parity Bonds when issued), including the in- terest coupons thereto attached, shall be special obligations of the City, and the holder or holders thereof shall never have the right to demand payment of said obligations out of any funds raised, or to be raised, by taxation; (b) That it has the lawful power to pledge the revenues supporting These Bonds, and has lawfully exercised said power under the Constitution and laws of the State of Texas, including the power existing under Articles 1111 to 1118, both inclusive, as amended, Revised Civil Statutes of Texas; that These Bonds issued hereunder shall be ratably secured in such manner that no one bond shall have preference over any other bond of said issue; and that These Bonds are issued on a parity and equal dignity with the outstanding Series 1973 Bonds, Series 1972 Bonds and the Series 1968 Bonds; (c) That other than for payment of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds, the rents, revenues and income of the System are not in any manner pledged to the payment of any debt or obligation of the City; and said System is otherwise free and clear of all other liens and en- cumbrances whatsoever; and (d) That so far as it legally may do so, for the protection and security of These Bonds, the Series 1973 Bonds, the Series 1972 Bonds and the Series 1968 Bonds and the holders thereof from time to time, the City will not grant a franchise for the operation of any com- peting waterworks or sewer system in the City until all said bonds shall have been retired. (e) That so long as any of the bonds similarly secured or any interest thereon remain outstanding, the City will not sell or encumber the System or any substan- tial part thereof, and that with the exception of the Additional Parity 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, (provided that this covenant shall not b8 construed to prevent the disposal by the City of property which in its judgment has become inex- pedient to use in connection with the System when other property of equal value has been substituted therefor). SECTION 28: ORDINANCE TO CONSTITUTE CONTRACT - That the pro- visions of this ordinance shall constitute a contract between the City and the holder or holders from time to time of These Bonds, and that after the issuance of any of These Bonds, no change, alter- ation or variation of any kind of the provisions of this ordinance may be made (except as herein otherwise provided), until all of said bonds shall have been paid both as to principal and interest SECTION 29: BONDS AS NEGOTIABLE INSTRUMENTS - That each of the bonds herein authorized shall be deemed and construed to be a IISecurity'l and as such a negotiable instrument, within the meaning of Article 8 of the Uniform Commercial Code. SECTION 30: DUTIES OF MAYOR - That the Mayor of the City is hereby authorized to take and have charge of all necessary records pending investigation by the Attorney General of the State of Texas and shall take and have charge and control of These Bonds pending approval by said Attorney General of the State of Texas, and registration by the Comptroller of Public Accounts of the State of Texas. When These Bonds have been registered, said Comptroller is hereby authorized and instructed to deliver These Bonds to THE CITY NATIONAL BANK OF AUSTIN, AUSTIN, TEXAS, where they will be taken up and paid for by the purchaser. -,CTION 31: CON -~' /1 . --Vl--/ [xl:~ ~ SALE - That the bid of e..Lt./Li:b.--C-t:~{j--<- D-i-a L,,~.. , 7~ayJ for These Bonds at the price of par and accrued interest to the such bonds, which approving opinion is to be dated as of the date of payment for and delivery of the bonds herein authorized, the printing of a true and correct copy of said approving opinion on the reverse side of each of said bonds with an appropriate certificate pertaining thereto executed by the facsimile signature of the City Secretary of the City of Schertz is hereby approved and authorized. PASSED AND ENACTED this 12th day of March, 1975. A// j /.) ~ ~ /"~~ L ~~_____ MAYOR, City of Schertz, Texas ATTEST: ~~. . -U1;,n.w Y SECRETAR1 (SEAL OF CITY) OFFICIAL NOTICE OF SALE CITY OF SCHERTZ, TEXAS (Guadalupe, Bexar & comal Counties) $325,000 UTILITY SYSTEM REVENUE BONDS SERIES 1975 & $235,000 GENERAL OBLIGATION SERIES 1975 BONDS Date of Sale: March 12, 1975 Time: 7:00 P.M., C.D.S.T. Place of Sale: Council Chamber 401 Oak Street Schertz, Texas 78154 CITY OFFICIALS Hon. Robert C. Bueker Robert E. Schwartz Donald J. Seeba Mrs. Bobbie L. Koch Tom Koole Mrs. Nell G. Funk Mayor Alderman Alderman Alder~JOman Alderman Alderwoman Denny L. Arnold June G. Krause City Manager City Secretary Prepared by TEXAS SECURITIES CORPORATION 5701 Broadway San Antonio, Texas 78209 Financial Advisors to the City OFFICIAL NOTICE OF SALE $325,000 UTILITY SYSTEM REVENUE BONDS SERIES 1975 & $235,000 GENERAL OBLIGATION BONDS SERIES 1975 of the CITY OF SCHERTZ, TEXAS (Guadalupe, Bexar & Comal Counties) SELLING: Wednesday, March 12, 1975, at 7:00 P.M., C.D.S.T. PLACE AND TIME OF SALE: The City Council of the City of Schertz, Texas will receive sealed bids at the Council Chamber, 401 Oak St., Schertz, Texas, 78154 until 7:00 P.M.,C.D.S.T. on Wednesday March 12, 1975 for the above bonds, more completely described in the Official Notice of Sale which is made a part hereof. ADDRESS OF BIDS: Sealed bids, plainly marked "Bid For Bonds", should be addressed to the Honorable Robert C. Bueker, Mayor and City Council of the City of Schertz, Texas 78154. All bids must be submitted on the"Official Bid Form". TYPE OF BIDS AND INTEREST RATES: The bonds will be sold in two separate blocks: (1) $325,000 Utility System Revenue Bonds, Series 1975;(2) $235,000 General Obligation Bonds, Series 1975. Bids must be submitted for all or none of the separate blocks bid upon. No bid of less L~an par and accrued interest will be considered. Bidders must specify the rate or rates of interest the bonds will bear. No more than five separate rates or four coupon changes will be considered and all bonds within a maturity must bear the same interest rate. The difference between the highest rate bid and the lowest rate bid shall not exceed 2%. Coupon rates must be in multiples of 1/8th or 1/20th of 1%. Supplemental coupons will not be considered. BASIS OF AWARD: The interest cost of each bid will be computed by determining the total dollar value of all interest on the bonds from the date thereof to their respective maturities at the coupon rates specified therein, less any prauium tendered. The bonds will be awarded to the bidder whose bid on the above computation produces the lowest interest cost to the City, subject to the right reserved to the City to reject any or all bids. -1- GOOD FAITH DEPOSIT: Each bid must be accompanied by a Cashier's Check payable to the City of Schertz, Texas: (1) in the amount of $6,500.00 with bids for the $325,000 utility System Revenue Bonds, Series 1975; (2) in the amount of $4,700.00 with bids for the $235,000 General Obligation Bonds, Series 1975. The check of the successful bidder for each block will be considered as a Good Faith Deposit and will be retained by the City to assure performance of the contract on the part of the successful bidder. In the event such bidder should fail or refuse to take up and pay for the bonds in accordance with his bid, then said check shall be cashed and accepted by the City as fUll,and complete liquidated damages. The above mentioned Cashier's Checks may accompany the "Official Bid Form" or they may be submitted separately; if sub- mitted separately, they shall be made available to the payee prior to the opening of the bids and shall be accompanied by instructions by the banks on which drawn which authorizes its use as a good faith deposit by the successful bidder who shall be named in such instruc- tions. PRINTED BONDS AND LEGAL OPINION: The City will furnish printed bonds on lithographed borders with fac- simile signatures, a complete transcript of proceedings had incident to the authorization and issuance of the bonds, together with the final unqualified approving opinion of Messrs. Dobbins, Howard & Harris, Bond Attorneys, San Antonio, Texas. The legal opinion will be printed on the back of each bond. DELIVERY: The purchaser must agree to accept delivery of and make payment for the bonds in immediately available funds, when presented, at the City National Bank, Austin, Texas. If for any reason the City is unable to make delivery within sixty (60) days from the date of sale, the successful bidder may accept delivery of the bonds at his option for the next succeeding thirty (30) days. NO-LITIGATION CERTIFICATE: The City will execute, and deliver to the successful purchaser, a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain or enjoin the issuance or delivery of said bonds or the coupons appertaining thereto, or which would affect the pro- visions made for their payment or security, or in any manner question- ing the validity of said bonds or coupons. CUSIP NUMBERS: It is anticipated that CUSIP identification numbers will be printed on said bonds, but neither the failure to print such number on any bond nor any error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for said bonds in accordance with the terms of the purchase contract. All expenses in relation to the printing of CUSIP numbers on said bonds shall be paid for by the issuer; provided, however, that the CUSIP Service Bureau charge for the assignment of said numbers shall be the res- ponsibility of and shall be paid for by the purchaser. -2- THE CITY RESERVES THE RIGHT to reject any or all bids and to waive any irregularities. Additional copies of this Notice of Sale and Bid Forms may be obtained from Texas Securities Corporation, 5701 Broadway, San Antonio, Texas 78209, the City's Financial Consultants, or Mr. Denny L. Arnold, City Manager, City of Schertz, Texas 78154. /s/ ROBERT C. BUEKER Mayor, City of Schertz, Texas Dated: February 18, 1 9 7 5 -3- INTEREST EXEMPT FROM ALL PRESENT FEDERAL INCOME TAXES MOODY'S RATING Preliminary Circular "provisional BAA-l" $325,000 CITY OF SCHERTZ, TEXAS (Guadalupe, Bexar & Comal Counties) UTILITY SYSTEM REVENUE BONDS, SERIES 1~75 Dated: March 1, 1975 Denomination: $5,000 Principal and semi-annual interest (September 1 & March 1) payable at the Schertz State Bank, Schertz, Texas. First interest coupon due September 1, 1975. MATURITY SCHEDULE (Due September 1) Amount Rate Maturity Yield Amount Rate Maturity Yield $ 5,000 1979 $10,000 1992* 5,000 1980 10,000 1993* 5,000 1981 10,000 1994* 5,000 1982 10,000 1995* 5,000 1983 10,000 1996* 5,000 1984 15,000 1997* 5,000 1985 15,000 1998* 5,000 1986 15,000 1999* 5,000 1987 25,000 2000* 5,000 1988 25,000 2001* 10,000 1989 25,000 2002* 10, 000 1990 25,000 2003* 10,000 1991* 25,000 2004* 25,000 2005* (*) Bonds maturing September 1, 1991 and thereafter are to be optional on September 1, 1990, or on any interest payment date thereafter at par and accrued interest. THESE BONDS were authorized at an election held on July 27, 1974, and $275,000 being the first installment of $750,000 (for water- works purposes) and $50,000 being the total amount authorized for sewer purposes, constitute special obligations of the City of Schertz, Texas and are payable solely from a first lien on and pledge of the revenues of the City's combined Waterworks and Sanitary Sewer System, after de- duction of reasonable expenses of operation and maintenance, as provided by the General Laws of the State of Texas, particularly Articles 1111 to 1118, both inclusive, Revised Civil Statutes of Texas, as amended. PROCEEDS from the sale of these bonds will be used for improving and extending the Waterworks and Sanitary Sewer System of said City. -4- PAYMENT RECORD: The City of Schertz, Texas, has never defaulted. LEGALITY Messrs. Dobbins, Howard & Harris, Bond Attorneys, San Antonio, Texas, and the Attorney General of the State of Texas. DELIVERY : When issued and received, expected on or about April 2, 1975. WATERWORKS & SEWER SYSTEM OPERATING STATEMENT 2-1-74 to Year Endinq: 1-31-75** 9-30-74 9-30-73 9-30-72 9-30-71 Income $303,019 $267,897 $232,376 $174,923 $164,009 Expense 191,741 '171,995* 93,741 81,509 62,554 Available for Debt Service $111,278 $ 95,902 $138,635 $ 93,414 $101,455 * Increase in Operating Expense due to Sewage Disposal Contract with cibolo Creek Municipal Authority. ** Net Revenues for 12 months period ending 1-31-75 reflects Sewer Rate increase that was put into effect on 10-1-1974. Average Annual Principal and Interest Requirements using an assumed rate of 7-1/2% on this issue - 1975-2005. .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .. .. . $ 68,430 Coverage of Average Annual Requirements by Net Income for the 12 month period 2-1-74 through 1-31-75($111,278).... 1.63X Coverage of Average Annual Requirement based upon Engineer's Projection of Average Net Income avail- able. 1975-2005 ($391,195) ................................ 5.72X -5- DEBT STATEMENT (As of 1-31-75) Waterworks and Sewer System Revenue Bonds outstanding after the issuance of these bonds ..................... Less: Interest & Sinking, Reserve & Repair Funds ...... $1,010,000.00 81,020.00 NET DEBT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. $ 928,980.00 Net Debt Per Combined Connections (3,471) . . . . . . . . . . . . . . . $ 267.64 CONNECTIONS 9-30-74 9-30-73 9-30-72 9-30-71 9-30-70 Water 1,771 1,700 1,417 1,207 1,071 Sewer 1,701 1,640 1,317 1,116 1,024 Totals 3,471 3,340 2,734 2,323 2,095 WATER RATES Residential (5/8" - 3/4" First 3,000 gallons Next 10,000 gallons Next 10,000 gallons Over 23,000 gallons Service) $4.00 (Min) .60/M gals .50/M gals .35/M gals Commercial (1" Service) First 7,000 gallons Next 10,000 gallons Next 10,000 gallons Over 27,000 gallons $7.00 (Min) .60/M gals .50/M gals .35/M gals Commercial (1-1/2" Service) First 10,000 gallons $12.50 (Min) Next 10,000 gallons .60/M gals Next 10,000 gallons .50/M gals Over 30,000 gallons .35/M gals SEWER RATES* (Based on water consumption) Residential First 3,000 Next 12,000 OVer 15,000 gallons gallons gallons $4.00 (Min) . 45/M No Charge commercial First 3,000 gallons OVer 3,000 gallons $5.00 .60/M gallons (*) These Sewer Rates went into effect on 10-1-1974. -6- CITY'S EQUITY IN WATERWORKS & SEWER SYSTEM (As of 9-30-1974) RESOURCES: Utility Plant Less: Depreciation $ 1,268,364 239,763 Cash & Other OBLIGATIONS: Revenue Bonds Less: Funds on Hand $ 685,000 81,020 Total Deductions NET EQUITY ( 46.79%) SOURCE OF WATER SUPPLY The City presently secures water from two wells. SPECIAL SEWAGE DISPOSAL CONTRACT $ 1,028,601 106,482 $1,135,083 $ 603,980 $ 531,103 The City contracted with Cibolo Creek Municipal Authority in June 1973, and subsequently amended, whereby the Authority will take the City's sewage at the rate of 549/M gallons of sewage. REVENUE BONDS AUTHORIZED BUT UNISSUED Date of Authorization Issued To Date Authorized Purpose 7-18-70 Sewer $ 600,000 -0- 7-27-74 750,000 275,000 Water -7- unissued $ 600,000 475,000 BOND ORDINANCE PROVISIONS The City covenants the usual protective features in a Revenue Bond. Among other things, the ordinance authorizing the issuance of these bonds will contain the following: 1. The City will agree to charge and collect rates suffi- cient to pay all operation, maintenance, depreciation, replacement and betterment expenses and to produce each year net revenues suffi- cient to pay the principal of and interest on said bonds as they become due. 2. All revenues derived from the operation of the system will be kept separate from other funds of the City. The Reserve Fund will provide for one year's average principal and interest requirement on all outstanding bonds. 3. ADDITIONAL BONDS. The City reserves the right to issue additional bonds payable from revenues of the system provided: a. Interest & Sinking Fund, Reserve Fund and Emergency Fund all contain the amount of money then required to be on deposit. b. For the completed twelve months immediately preceding the adoption of additional bonds ordinance net revenues shall have been not less than l~ times average annual requirements, after giving effect of the additional bonds. However, additional Parity Bonds for the purpose of purchasing or constructing an electric light and power system and/or a natural gas system may be issued provided that a registered professional Engineer certi- fies that the average annual net revenues of the system will be at least l~ times average annual requirements, after giving effect of the additional bonds. -8- $325,000 CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1975 Present Proposed 7-1/2% Total Year Outstanding New Issue Interest Due New Issue Reqmts 9-30 Requirements Due 9-1 9 - 1 & 3 - 1 Reqmts All Issues 1975 $ 56,393 $ $ 12,187.50 $ 12,187.50 $ 68,580.50 1976 55,468 24,375.00 24,375.00 79,843.00 1977 54,543 24,375.00 24,375.00 78,918.0C 1978 53, 618 24,375.00 24,375.00 77,993.0rj 1979 47,693 5,000 24,375.00 29,375.00 77,068.0C 1980 52,018 5,000 24,000.00 29,000.00 81,018.00 1981 51,118 5,000 23,625.00 28,625.00 79,743.00 1982 50,218 5,000 23,250.00 28,250.00 78,468.00 1983 49,318 5,000 22,875.00 27,875.00 77,193.00 1984 48,418 5,000 22,500.00 27,500.00 75,918.00 1985 52,518 5,000 22,125.00 27,125.00 79,643.00 1986 51,393 5,000 21,750.00 26,750.00 78,143.00 1987 50,268 5,000 21,375.00 26,375.00 76,643.00 1988 49,143 5,000 21,000.00 26,000.00 75,143.00 1989 47,706 10,000 20,625.00 30,625.00 78,331.00 1990 51,268 10,000 19,875.00 29,875.00 81,143.00 1991 49,543 10,000 19,125.00 2-9,125.00 78,668.00 1992 47,818 10,000 18,375.00 28,375.00 76,193.0C 1993 51,093 10,000 17,625.00 27,625.00 78,718.0r, 1994 49,081 10,000 16,875.00 26,875.00 75,956.0- 1995 52,068 10,000 16,125.00 26,125.00 78,193.0 1996 49,768 10,000 15,375.00 25,375.00 75,143.0' 1997 47,328 15,000 14,625.00 2-9,625.00 76,953.0( 1998 44,888 15,000 13,500.00 28,500.00 73,388.0C 1999 47,588 15,000 12,375.00 27,375.00 74,963.0C 2000 25,000 11,250.00 36,250.00 36,250.0C 2001 25,000 9,375.00 34,375.00 34,375.0C 2002 25,000 7,500.00 32,500.00 32,500.0C 2003 25,000 5,625.00 30,625.00 30,625.0C 2004 25,000 3,750.00 28,750.00 28,750.0C 2005 25,000 1,875.00 26,875.00 26,875.0C -9- ooO~~~~NMMMNro~~~~~O~~N~M~~~ro~rooo~ ~~Noom~mrl~~M~Mro~~~~oomMOMm~~OO~~rlmON ~rlmMrl~~~~MOmMmmrlo~ooro~m~M~m~~~MMM ;:J !:; !:; ..; C/l rei OC/l 2OE-t 1'-120 :>reI 1'-1:;: ~reI ~ C/lH C/l0 00 ~reI ,,~ Q) ;:J 00 00 00 H ~+> n:l S 00 +> O'-,-i o Q).c: E-t~+> .. +> 00,Q~ 00 Q) () Q) 0 !:; H H{J}- C/l "- o -rei UlU 20H 0:> H~ E-t1'-1 UC/l 1'-1 2OE-t ~&5 00 U o -20 20..; o HUl E-t1'-1 ::S~ 01'-1 il<:> 01'-1 il<~ Ii-IE-t 01'-1 2020 o HC/l E-t1'-1 UUl rei 20 f-J1'-1 Oil< g;f;i ~ 0 Q) 4-1 () Q) -,-i ;:J Q) :> !:;~ ~ Q),Q Q) :> n:l C/l Q)~ ~ -,-i +> n:l ~ ~ 0 IJ1 !:; .,-i +> 00 III Q) ~ 00 Q) !:; 0. 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" 0 .,-i is: !:; 0 +> '0 ~ ~ ..; III ~ !:; 0 n:l II: C/l Q) ~ () III ~ ~ ~ ~ ro ~ 0 ~ N M ~ ~ ~ ~ ro ~ 0 ~ '" M ~ ~ ~ ~ ro ~ 0 ~ N M ~ ~ ~ () n:l ~ ~ ~ ~ ~ ro ro ro ro ro ro ro ro ro ro ~ ~ m m ~ ~ m m ~ ~ 0 0 0 00 0 ;:J 00 Q) ~ ~ m ~ m ~ ~ m ~ ~ ~ ~ ~ ~ m ~ ~ ~ ~ ~ ~ (l) m ~ ~ 0 0 0 00 0 0 .,-i >< ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ N N N NN N C/l r.. -10- INTEREST EXEMPT FROM ALL PRESENT FEDERAL INCOME TAXES MOODY'S RATING Preliminary Circular IIprovisional BAAIl $235,000 CI'rY OF SCHERTZ, TEXAS (Guadalupe, Bexar & Comal Counties) GENERAL OBLIGATION BONDS SERIES 1975 Dated: March 1, 1975 Denomination: $5,000 Principal and semi-annual interest (September 1 & March 1) payable at the Schertz State Bank, Schertz, Texas. First interest coupon due September 1, 1975. MA TURI TY SCHEDULE ( Due September 1) Amount Rate Maturity Yield Amount Rate Maturity Yield $ 5,000 1978 $ 5,000 1990 5,000 1979 5,000 1991* 5,000 1980 5,000 1992* 5,000 1981 10,000 1993* 5,000 1982 10,000 1994* 5,000 1983 10,000 1995* 5,000 1984 20,000 1996* 5,000 1985 20,000 1997* 5,000 1986 20,000 1998* 5,000 1987 20,000 1999* 5,000 1988 20,000 2000* 5,000 1989 30,000 2001* (*) Bonds maturing September 1, 1991 and thereafter are to be optional on September 1, 1990, or on any interest payment date thereafter at par and accrued interest. THESE BONDS were authorized at elections for the following purposes: 10-30-71 $ 25,000 Street Improvements, second & final installment; 10-30-71 85,000 Drainage - total amount authorized; and 7-27-74 125,000 Park Improvements - total amount authorized. The bonds will constitute direct and general obligations of the City of Schertz, Texas, payable from ad valorem taxes levied against all taxable property located therein, within the limits prescribed by law. PROCEEDS from the sale of these bonds will be used for Street Improve- ments, Drainage and Park Improvements. -11- PAYMENT RECORD: The City of Schertz, Texas, has never defaulted. LEGALITY Messrs. Dobbins, Howard & Harris, Bond Attorneys, and the Attorney General of the State of Texas. DELIVERY When issued and received, expected on or about April 2, 1975. FINANCIAL STATEMENT (As of 1-31-1975) 1974 Assessed Valuation (50% of Actual)................... $16,310,976 Total General ObI. Debt (Including this Issue)..$659,000 LESS: Self-supporting Debt........ $249,000 I & S Funds................. 16,790 265,790 NET DEBT (2.41% of A. V. - $60.37 per capita)........... $ 393,210 Population - 1950 1960 1970 Estimated 1974 Unincorporated 2,281 4,061 6,513 TAX DATA Tax Assessed Tax % Collections Year Year Valuation Rate Current Total Endinq - 1969 $ 4,880,413 $1.00 98.89 101.88 9-30-70 1970 5,874,234 1.00 99.09 99.95 9-30-71 1971 7,877,766 1.00 95.49 96.33 9-30-72 1972 9,657,845 1.00 98.73 100.68 9-30-73 1973 12,217,028 1.00 96.74 97.74 9-30-74 1974 16,310,976 1.00 92.73 As of 1-31-75 TAX RATE DISTRIBUTION 1974 1973 1972 1971 1970 General Fund $0.73 $0.70 $0.83 $0.79 $0.75 I & S Fund .27 .30 .17 .21 .25 Totals $1.00 $1. 00 $1. 00 $1. 00 $1. 00 TAX RATE LIMITATION Imposed by Texas Constitution: $2.50 per $100 assessed valuation, by local referendum, $2.50 for all city purposes. -12- COMPUTATION OF SELF-SUPPORTING DEBT Net System Revenue Available for Year ending 1-31-75 Less: Average Annual Requirements for Rev. Bonds,inc. Balance available for other purposes Average Annual Requirements for System G. O. Percentage of System G. O. Bonds Self-Supporting $111,278 this issue 68,530 42,748 14,536 100% TAX ADEQUACY 1974 Assessed Valuation of $16,310,976 computed with a Tax Rate Levy of $0.32 @ 90% Collections Produces .........$46,520 Average Annual Principal & Interest Requirements........... $46,976 MUNICIPAL SALES TAXES The City has adopted the provisions of Article 1066c, VCS, and levies a 1% sales tax, effective October 1, 1970, which has produced net collections on a full Calendar Year basis as follows: Calendar Year Total Collected 1971 1972 1973 1974 $19,612 23,008 26,503 41,163 GENERAL OBLIGATION BONDS AUTHORIZED BUT UNISSUED Taxinq Body Bexar County Bexar Co. Hosp.Dist Bexar Co. Rd. #3 cibo1o Creek Mun Authority Comal County Coma1 ISD Guadalupe County San Antonio River Authority Schertz-cibo1o Universal City ISD 6,162,250 TOTAL Net OVlpg Debt SCHERTZ, City of 393,210 TOTAL Direct & OV1pg Debt (12.52% - A. V. - $313.67 per Date of Authorization 12-16-61 7-18-70 Purpose Authorized Issued To Date Unissued Sewer $315,000 $ 14,000 $301,000 Sewer 250,000 -0- 250,000 ESTIMATED OVERLAPPING DEBT STATEMENT Net Debt Amount Ovlpq $ 144 37 12 Amount $14,428,519 3,718,168 588,769 % OV1pq 0.001 .001 .002 As Of 5-31-74 6-30-74 5-31-74 190,000 178,845 8,627,053 115,726 6-30-74 9-30-74 8-31-74 9-30-74 21. 96 .28 .48 8.97 41,724 501 41,410 10,381 13,090,802 6-30-74 .001 131 8-31-74 25.24 1,555,352 $1,649,692 3<n,?lO 1-31-75 100.00 capita) $2,042,902 -13- $235,000 CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION BONDS Present Proposed 7"/0* Total Year Outstanding New Issue Interest Due New Issue Reqmts 9-30 Requirements Due 9-1 9 - 1 & 3 - 1 Reqmts. All Issues 1975 $ 34,455 $ $ 8,225 $ 8,225 $ 42,680 1976 34,750 16,450 16,450 51,200 1977 34,000 16,450 16,450 50,450 1978 30,247 5,000 16,450 21,450 51,697 1979 28,657 5,000 16,100 21,100 49,757 1980 29,134 5,000 15,750 20,750 49,884 1981 28,565 5,000 15,400 20,400 48,965 1982 28,01l 5,000 15,050 20,050 48,061 1983 28,457 5,000 14,700 19,700 48,157 1984 28,867 5,000 14,350 19,350 48,217 1985 29,227 5,000 14,000 19,000 48,227 1986 28,513 5,000 13,650 18,650 47,163 1987 28,799 5,000 13,300 18,300 47,099 1988 30,049 5,000 12,950 17,950 47,999 1989 29,103 5,000 12,600 17,600 46,703 1990 29,157 5,000 12,250 17,250 46,407 1991 28,174 5,000 11,900 16,900 45,074 1992 28,192 5,000 11,550 16,550 44,742 1993 28,147 10,000 11,200 21,200 49,347 1994 28,066 10,000 10,500 20,500 48,566 1995 28,924 10,000 9,800 19,800 48,724 1996 14,683 20,000 9,100 29,100 43,783 1997 14,248 20,000 7,700 27,700 41,948 1998 14,813 20,000 6,300 26,300 41, 113 1999 14,341 20,000 4,900 24,900 39,241 2000 14,870 20,000 3,500 23,500 38,370 2001 10,363 30,000 2,100 32,100 42,463 (*) 7"/0 Interest Rate used for calculation purposes only. Average Annual Requirements 1975/2001 $ 46,520 $0.32 Tax Levy @ 90"/0 Collection $ 46,976 -14- PRINCIPAL TAXPAYERS Name Lucille's Inc. Val Verde Apartments Schertz State Bank Guadalupe Valley Elec.Co-op Wuest's, Inc. Royal Crest Southwestern Bell Tel. Co. Wayne Kinzel Rubin Beck Roy R. Richards Type of Property Commercial Property Apartments Bank Electric Utility Grocery Store Chain Residential Property Telephone Utility Rest Home Commercial & Res. property Commercial & Res. Property 1974 Assessed Valuation $ 341,172 311,106 203,693 111,445 111,150 108,025 90,460 65,158 58,749 55,945 THE CITY OF SCHERTZ, 1974 estimated population of 6,513 is a retail center in a rapidly developing urban area. The City is located approximately 15 miles east of the City of San Antonio and has 32 business establishments rated by Dun and Bradstreet. The Schertz State Bank held deposits of $5,863,755, as of December 31, 1974. The City's proximity to both City of San Antonio and Randolph Air Force Base benefits its future growth. There is a considerable amount of undeveloped acreage within the corporate limits and the majority of this property has been purchased by leading San Antonio Developers. Schertz contains a majority of the schools of the Schertz-cibolo- Universal City Independent School District; to include the Samuel Clemens High School, O'Henry Middle School and the Schertz Elementary School, and sites for an additional Elementary School and Junior High School. The Public Housing Authority of Schertz received approval for a Housing Grant totaling $1,848,000 to build 26 housing units for the elderly and for the acquisition of land. A bid has been awarded to a Contractor and construction is now under way for the building of said housing units. ECONOMIC BACKGROUND County Characteristics: Guadalupe County, South Central Texas County component of the San Antonio Metropolitan Area, traversed by Inter- state Highway 10, 1970 population 33,554, increasing 15.6% from 1960, economy based on agriculture, manufacturing and mineral production. 1972 cash receipts from agriculture $14.4 million, with livestock and livestock products contributing $8.7 million. 1973 production included 2.5 million dozen eggs and 2.4 million bushels of grain sorghums. Beef cattle, hogs, dairy products, hay, peanuts, pecans, wheat and corn also produced. The county's principal employer manufactures automobile radios and presently employs 800 persons, with 1,800 expected at full capacity. A structural steel products manufacturer employs over 500 persons. Fiberglass cloth, dressed poultry, farm-supply products and cotton garments also manufactured. Many county residents commute to jobs in San Antonio. 1973 estimated county retail sales, $61.6 million. Texas Lutheran College had a Fall, 1973 enrollment of 1,063. Six county banks held combined 12-31-73 deposits of $63,618,441. 1972 value of all minerals produced, $9.8 million, 1973 crude oil production, 2.6 million barrels; sand and gravel, clays and natural gas also recovered. Hunting, fishing and county historic sites attract additional income. -15- OFFICIAL BID FORM Honorable Mayor and city council City of Schertz Schertz, Texas 78154 Gentlemen: Reference is made to your "Notice of Sale" dated February 18, 1975, covering $325,000 CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1975, which is made a part hereof. For your legally issued bonds, as described we will pay par plus accrued interest from delivery to us, plus a cash premium of $ and bearing interest as follows: in said IINotice date of issue to for bonds of Salell, date of maturing September 1, 1979 through September 1, 19_, 0/0 September 1, 19_ through September 1, 19 -' 0/0 September 1, 19_ through September 1, 19_, 0/0 September 1, 19 through September 1, 19_, 0/0 September 1, through September 1, 0/0 Interest cost in accordance with the above bid is: Gross Interest Cost.................... $ Les s : Premium. . . . . . . . . . . . . . . . . . . . . . . .. $ Net Interest Cost...................... $ EFFECTIVE INTEREST RATE ............... 0/0 Cashier's Check No. issued by Bank, and payable to your order in the amount of $6,500.00 (is attached hereto) (has been made available to you prior to the opening of this bid) as a Good Faith Deposit for disposition in accordance with the Official Notice of Sale. Respectfully submitted, By Authorized Representative The above and foregoing bid City Council of the City of 12th day of March, 1975. is hereby in all things accepted by' the Schertz, Texas, in session this the Mayor, city of Schertz, Texas ATTEST: City Secretary, City of Schertz, Texas **************** Return of Good Faith Check is hereby acknowledged. By (See Reverse Side for Bona Years) BOND YEARS $325,000 CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS SERIES 1975 YEAR Dated: 3-1-1975 PRINCIPAL ( 9 - 1 ) ACCUMULATED BOND YEARS 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 15,000 15,000 15,000 25,000 25,000 25,000 25,000 25,000 25,000 22.5 50.0 82.5 120.0 162.5 210.0 262.5 320.0 382.5 450.0. 595.0 750.0 915.0 1090.0 1275.0 1470.0 1675.0 1890.0 2227.5 2580.0 2947.5 3585.0 4247.5 4935.0 5647.5 6385.0 7147.5 AVERAGE MATURITY - 21.992 YEARS OFFICIAL BID FOill1 Honorable Mayor and City Council City of Schertz Schertz, Texas 78154 Gentlemen: Reference is made to your "Notice of Sale" dated February 18, 1975, covering $325,000 CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1975, which is made a part hereof. For your legally issued bonds, as described in said "Notice of Sale", we will pay par plus accrued interest from date of issue to date of delivery to us, plus a cash premium of $ for bonds maturing and bearing interest as follows: September 1, 1979 through September 1, 19_ September 1, 19 through September 1, 19_, September 1, 19 through September 1, 19_, September 1, 19 through September 1, 19_, September 1, through September 1, , Interest cost in accordance with the above bid is: % % % % % Gross Interest Cost.................... $ Less: Premium. . . . . . . . . . . . . . . .. . . . . . . .. $ Net Interest Cost...................... $ EFFECTIVE INTEREST RATE ............... % Cashier's Check No. issued by Bank, and payable to your order in the amount of $6,500.00 (is attached hereto) (has been made available to you prior to the opening of this bid) as a Good Faith Deposit for disposition in accordance with the Official Notice of Sale. Respectfully submitted, By Authorized Representative The above and foregoing bid City Council of the City of 12th day of March, 1975. is hereby in all things accepted by the Schertz, Texas, in session this the Mayor, City of Schertz, Texas ATTEST: City Secretary, City of Schertz, Texas **************** Return of Good Faith Check is hereby acknowledged. By (See Reverse Side for Bond Years) BOND YEARS $325,000 CITY OF SCHERTZ, TEXAS UTILITY SYSTEM REVENUE BONDS SERIES 1975 YEAR Dated: 3-1-1975 PRINCIPAL ( 9 - 1 ) ACCUMULATED BOND YEARS 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 15,000 15,000 15,000 25,000 25,000 25,000 25,000 25,000 25,000 22.5 50.0 82.5 120.0 162.5 210.0 262.5 320.0 382.5 450.0. 595.0 750.0 915.0 1090.0 1275.0 1470.0 1675.0 1890.0 2227.5 2580.0 2947.5 3585.0 4247.5 4935.0 5647.5 6385.0 7147.5 AVERAGE MATURITY - 21.992 YEARS OFFICIAL BID FORM Honorable Mayor and City Council City of Schertz Schertz, Texas 78154 Gentlemen: Reference is made to your "Notice of Sale" dated February 18, 1975, covering $235,000 CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION BONDS, SERIES 1975, which is made a part hereof. For your legally issued bonds, as described in said "Notice of Sale", we will pay par plus accrued interest from date of issue to date of delivery to us, plus a cash premium of $ for bonds maturing and bearing interest as follows: % % % % % September 1, 1978 through September 1, 19 -' September 1, 19_ through September 1, 19_, September 1, 19 through September 1, 19 -' - September 1, 19_ through September 1, 19_, September 1, through September 1, Interest cost in accordance with the above bid is: Gross Interest Cost ......................$ Less: Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Net Interest Cost.........................$ EFFECTIVE INTEREST RATE................... % Cashier's Check No. issued by Bank, and payable to your order in the amount of $4,700.00 (is attached hereto) (has been made available to you prior to the opening of this bid) as a Good Faith Deposit for disposition in accordance with the Official Notice of Sale. Respectfully submitted, By Authorized Representative The above and foregoing bid is hereby in all things accepted by the City council of the City of Schertz, Texas, in session this the 12th day of March, 1975. ATTEST: Mayor, City of Schertz, Texas city Secretary, City of Schertz, Texas ***************** Return of Good Faith Check is hereby acknowledged. By (See Reverse Side for Bond Years) YEAR 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 BOND YEARS $235,000 CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION BONDS SERIES 1975 Dated: 3-1-1975 PRINCIPAL ( 9 - 1 ) $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 20,000 20,000 30,000 AVERAGE MATURITY - 19.223 YEARS ACCUMULATED RON!) YRI\R~ 17.5 40.0 67.5 100.0 137.5 180.0 227.5 280.0 337.5 400.0 467.5 540.0 617.5 700.0 787.5 972.5 1167.5 1372.5 1802.5 2252.5 2722.5 3212 . 5 3722.5 4517.5 OFFICIAL BID FORM Honorable Mayor and City Council City of Schertz Schertz, Texas 78154 Gentlemen: Reference is made to your "Notice of Sale" dated February 18, 1975, covering $235,000 CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION BONDS, SERIES 1975, which is made a part hereof. For your legally issued bonds, as described in said "Notice of Sale", we will pay par phlS accrued in.terest from date of issue to date of delivery to us, plus a cash premium of $ for bonds maturing and bearing interest as follows: % % % % % Gross Interest Cost ......................$ Less: Premium. . . . . . . . . . . . . . . . .. . . . . .. . ... $ Net Interest cost.........................$ EFFECTIVE INTEREST RATE................... % Cashier's Check No. issued by Bank, and payable to your order in the amount of $4,700.00 (is attached hereto) (has been made available to you prior to the opening of this bid) as a Good Faith Deposit for disposition in accordance with the Official Notice of Sale. Respectfully submitted, By Authorized Representative The above and foregoing bid is hereby in all things accepted by the city C9uncil of the City of Schertz, Texas, in session this the 12th day of March, 1975. ATTEST: Mayor, City of Schertz, Texas City Secretary, city of Schertz, Texas ***************** Return of Good Faith Check is hereby acknowledgeC!-. By (See Reverse Side for Bond Years) YEAR 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 BOND YEARS $235,000 CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION BONDS SERIES 1975 Dated: 3-1-1975 PRINCIPAL ( 9 - 1 ) $ 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 10,000 10,000 10,000 20,000 20,000 20,000 20,000 20,000 30,000 AVERAGE MATURITY - 19.223 YEARS ACCUMULATED RONn VP.I\RS 17.5 40.0 67.5 100.0 137.5 180.0 227.5 280.0 337.5 400.0 467.5 540.0 617.5 700.0 787.5 972.5 1167.5 1372.5 1802.5 2252.5 2722.5 3212 . 5 3722.5 4517.5 I Texas Securities Corporation Dcalc,. In Municipal ; ands anel Special Assessment Certificates March 10, 1 9 7 5 TELEPHONE 828-1482 5701 8ROADWAY SAN ANTONIO, TEXAS 78209 Mr. Mike .All,en,President Schertz State Bank P. O. Box "00 Schertz, Texas 78154 Re: $325,000 City of Schertz, Texas Utility System Revenue Bonds, Series 1975 & 235,000 city of Schertz, Texas General Obligation Bonds, Series 1975 . It Dear Mr. Allen: We serve as Financial Advisors to the City of Schertz and enclose herewith three copies of the Official Notice of Sale on the above bonds. The local bank is requested sometimes by out of town bidders to submit a bid on their behalf, and accordingly you will find Bid Forms attached to each Notice. Please do not hesitate to call the writer if you have any questions or problems concerning the matter. With kind regards, we remain Very tr~yours, TEXA~i;E06RI:tIE CO - d ./ ~/t~l /-~ ~hom~Anderlitch, Arnold ~' --, 'i President THAIP ~ncB . cc: Mr. Denny L. City Manager P. O. Drawer 1 Schertz, Texas 78154 I DOBBINS. HOWARD & HARRIS WILLIAM P. DOBBINS VAN H. HQWARD.,JR RICHARD W. HARRIS ATTORN EYS AT ~AW AREA CODE 512 TEL.EPHONE TOWER LIFE BUILDING 223-2641 SAN ANTONIO, TEXAS 78205 19 March 1975 Mrs. June G. Krause City Secretary City of Schertz P. O. Drawer I Schertz, Texas 78154 Re: Bond Ordinances Dear Mrs. Krause: I have enclosed herewith two (2) executed copies of the bond ordinances. One copy is the General Obligation Bond Ordinance and the other is the Revenue Bond Ordinance. These ordinances whould be retained in your minute book. Yours very truly, OWARD & HARRIS C /f'--t:<---I" ~-C-.Y~/;{-e ard W. Harris C--~C<J RWH:maz Enclosures I- I Texas Securities Corporation Dealers In Municipal Bonds and Special Assessment Ce,tificates March 10, 1 9 7 5 TELEPHONE 828-1482 5701 8ROADWAY SAN ANTONIO, TEXAS 78209 Mr. Mike Allen,President Schertz State Bank P. O. Box 400 Schertz, Texas 78154 Re: $325,000 City of Schertz, Texas Utility System Revenue Bonds, Series 1975 & 235,000 City of Schertz, Texas General Obligation Bonds, Series 1975 Dear Mr. Allen: We serve as Financial Advisors to the City of Schertz and enclose herewith three copies of the Official Notice of Sale on the above bonds. The local bank is requested sometimes by out of town bidders to submit a bid on their behalf, and accordingly you will find Bid Forms attached to each Notice. Please do not hesitate to call the writer if you have any questions or problems concerning the matter. with kind regards, we remain Very tru ours, TEXASPU~I:IE~O . '- dr.[ ~ho s M. Anderlitch, Arnold ~/ President TMA:P Encs. cc: Mr. Denny L. city Manager P. O. Drawer 1 Schertz, Texas 78154