1983B3- EXTENSIONS TO THE CITY'S COMBINED WATERWORKS AND SANITARY SEWER SYSTEMS
ORDINANCE NO.
?3-/3-3
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS, AUTHORIZING THE ISSUANCE OF
$1,250,000 PRINCIPAL AMOUNT OF CERTIFICATES OF OB-
LIGATION OF SAID CITY TO BE KNOWN AS "CITY OF
SCHERTZ, TEXAS, COMBINATION TAX AND JUNIOR LIEN
WATERWORKS AND SEWER SYSTEM REVENUE CERTIFICATES
OF OBLIGATION, SERIES 1983" "'FOR THE PURPOSE OF
CONSTRUCTING IMPROVEMENTS AND EXTENSIONS TO THE
CITY'S COMBINED WATERWORKS AND SANITARY SEWER
SYSTEMS; PRESCRIBING THE MATURITIES OF SAID
CERTIFICATES AND THE INTEREST RATES; PROVIDING
THAT SAID CERTIFICATES SHALL BE PAYABLE FROM THE
PROCEEDS OF AD VALOREM TAXES AND CERTAIN NET
REVENUES OF THE CITY'S COMB INED WATERWORKS AND
SANITARY SEWER SYSTEMS; PROVIDING THE FORM OF SAID
CERTIFICATES; CONFIRMING THE SALE OF SAID
CERTIFICATES; MAKING OTHER PROVISIONS PERTAINING
TO THE SUBJECT AND PURPOSE OF THIS ORDINANCE; AND
DECLARING AN EMERGENCY.
* * * * * * * * * * * * * * * * * * * * * * * * *
WHEREAS, the City Council of the City of Schertz, Texas
(the "City"), heretofore determined that it was necessary to
construct needed improvements and extensions to the City's
Waterworks and Sanitary Sewer Systems; and
WHEREAS, the City Council, having found that the City
did not have available unencumbered funds for the purpose of
making such improvements, determined that it would be in the
best interest of the City and its residents to issue and
sell certificates of obligation for such purposes; and
'WHEREAS, the City Council caused notice of intention to
issue certificates of obligation to be published in a news-
paper of general circulation in the City once a week for two
(2) consecutive weeks, the date of the first publication of
said notice being at least fourteen (14) days prior to the
date set forth in said notice that the City Council tenta-
tively proposed to authorize the issuance of said certifi-
cates of obligation; and
WHEREAS, no petition of any kind has been filed with
the City Secretary, any member of this Councilor any other
officer of the City protesting the issuance of said Certifi-
cates of Obligation; and
WHEREAS, the City Council of the City now desires to
issue combination tax and revenue certificates of obligation
of the City in the principal amount of $1,250,000 for the
purpose of securing funds to pay contractual obligations
incurred in making the aforesaid improvements; now, there-
fore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS:
Section 1: That there shall be and there is hereby
ordered to be issued under and by virtue of the provisions
of Article 823, Article 1175, Articles 1111 to 1118,
inclusive, and Article 2368a.1, Texas Revised Civil
Statutes, a series of certificates of obligation of the City
of Schertz, Texas (the "City"), to be known as "CITY OF
SCHERTZ, TEXAS, COMBINATION TAX AND JUNIOR LIEN WATERWORKS
AND SEWER SYSTEM REVENUE CERTIFICATES OF OBLIGATION, SERIES
1983" in the principal amount of $1,250,000 for the purpose
of constructing improvements and extensions to the City's
combined Waterworks and Sanitary Sewer Systems.
Section 2: That said certificates of obligation shall
be numbered from One (1) to Two Hundred Fifty (250), both
inclusive, in the denomination of Five Thousand Dollars
($5,000) each.
Section 3: That said certificates shall be dated
May 1, 1983, shall bear interest rates and shall become due
and payable serially on May 1 of each of the years as shown
on the following schedule, to-wit:
CERTS. NOS. DATE OF INTEREST
(Both Incl.) MATURITY AMOUNT RATES
1 - 5 1984 $ 25,000 %
6 - 10 1985 25,000 %
11 - 16 1986 30,000 %
17 - 23 1987 35,000 %
24 - 30 1988 35,000 %
31 - 37 1989 35,000 %
38 - 45 1990 40,000 %
46 - 54 1991 45,000 %
55 - 65 1992 55,000 %
66 - 76 1993 55,000 %
77 - 88 1994 60,000 %
89 - 101 1995 65,000 %
10'2 - 116 1996 75,000 %
117 - 133 1997 85,000 %
134 - 153 1998 100,000 %
154 - 174 1999 105,000 %
175 - 206 2000 160,000 %
207 - 250 2001 220,000 %
PROVIDED, HOWEVER, the City of Schertz reserves the
right to redeem certificates of this series maturing on and
after May 1, 1998 in whole or any part thereof (but in
inverse numerical order if less than all), on May 1, 1997,
or on any any interest payment date thereafter, at a price
of par and accrued interest of the date fixed for
redemption.
PROVIDED FURTHER, that at least thirty (30) days prior
to the date any such certificates are to be redeemed, a
notice of redemption specifying the serial numbers and
amount of certificates to be redeemed, and shall be filed
with the Schertz Bank & Trust, Schertz, Texas (the Paying
Agent named in each of said certificates). If by the date
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so fixed for redemption the City shall have made available
funds in amounts sufficient to pay the redemption price of
the certificates called for redemption pursuant to such
notice and the provisions hereof, interest on and after the
date so fixed for redemption and said certificates shall not
be regarded as being outstanding for any purpose except to
receive the funds so provided for their payment.
Section 4: That said certificates shall bear interest
from date to maturity at the per annum rates shown above;
such interest to be evidenced by proper coupons attached to
each of said certificates and said interest shall be payable
on May 1, 1984, and semi-annually thereafter on November 1
and May 1 in each year.
Section 5: That both principal of interest on this
issue of certificates shall be payable in lawful money of
the United States of America, without exchange or collection
charges to the owner or holder, at Schertz Bank & Trust,
Schertz, Texas, upon presentation and surrender of cer-
tificates or proper coupons.
Section 6: That the seal of said City may be impressed
on each of said certificates, or in the alternative, a
facsimile of such seal may be printed on said certificates.
The certificates and interest coupons appurtenant thereto
may be executed by the imprinted facsimile signatures of the
Mayor and City Secretary of the City and execution in such
manner shall have the same effect as if such certificates or
coupons had been signed manually by the Mayor and City
Secretary. Inasmuch as such certificates are required to be
registered by the Comptroller of Public Accounts of the
State of Texas, only his signature (or that of a deputy
designated in writing to act for the Comptroller) shall be
required to be manually subscribed to such certificates in
connection with his registration certificate to appear
thereon, as hereinafter provided, all in accordance with the
provisions of Article 717j-1, V.A.T.C.S.
Section 7: That the form of said certificates shall be
substantially as follows:
NO.
$5,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF GUADALUPE, BEXAR AND COMAL
CITY OF SCHERTZ, TEXAS
COMBINATION TAX AND JUNIOR LIEN WATERWORKS AND SEWER SYSTEM
REVENUE CERTIFICATE OF OBLIGATION,
SERIES 1983
* * * * * * * * * * * * * * * * * * * *
KNOW ALL MEN BY THESE PRESENTS: That the City of
Schertz, Texas, a municipal corporation duly incorporated
and existing under the laws of the State of Texas, FOR VALUE
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RECEIVED, acknowledges itself indebted to and hereby
promises to pay to bearer
FIVE THOUSAND DOLLARS
($5,000) in lawful money of the United States of America, on
the 1st day of May, , with interest thereon from date
hereof at the rate of PERCENT
( %) per annum, said interest being payable on
May 1, 1984, and semi-annually thereafter on November 1 and
May 1 of each year, upon presentation and surrender of cer-
tificate or properly annexed interest coupon as they
severally mature.
BOTH PRINCIPAL OF AND INTEREST ON this certificate are
hereby made payable without exchange or collection charges
to the holder, at Schertz Bank & Trust, Schertz, Texas, and
for the prompt payment of the interest on this certificate
and the principal thereof at maturity, the full faith,
credit and resources of the City of Schertz, Texas, are
hereby irrevocably pledged.
THIS CERTIFICATE is one of a series of certificates,
numbered consecutively from One (1) to Two Hundred Fifty
(250), both inclusive, in the denomination of Five Thousand
Dollars ($5,000) each, aggregating the principal sum of One
Million Two Hundred Fifty Thousand Dollars ($1,250,000),
issued for the purpose of obtaining funds to pay contractual
obligations to be incurred in constructing certain
improvements and extensions to the City's combined
Waterworks and Sanitary Sewer Systems, in and under strict
conformity with the Constitution and laws of the State of
Texas, particularly Articles 823, 1175, Articles 1111 to
1118, inclusive, and Article 2368a.l, Texas Revised Civil
Statutes, and in accordance with an ordinance duly passed by
the City Council of the City of Schertz, Texas, which
ordinance is of record in the minutes of said City Council
(the "Certificate Ordinance").
THE DATE of this certificate, in conformity with the
ordinance above referred to is May 1, 1983.
AS SPECIFIED in the ordinance hereinabove mentioned,
the City reserves the right to redeem the certificates of
this series maturing May 1, 1998 and subsequent, in whole or
in part (but in inverse numerical order if less than all),
on May 1, 1997, or on any interest payment date thereafter,
at the price of par and accrued interest to the date of
redemption; PROVIDED, HOWEVER, that at least thirty (30)
days notice of redemption, signed by the City Secretary
(specifying the serial numbers and amounts of certificates
to be redeemed), shall have been filed with Schertz Bank &
Trust, Schertz, Texas; and if the City shall have made
available by the date of redemption funds in amounts
sufficient to pay the certificates to be redeemed and
accrued interest thereon, any certificate or certificates
not presented for redemption pursuant to such notice shall
cease to bear interest from and after the date so fixed for
redemption.
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THIS CERTIFICATE and the series of which it is a part
are payable from a levy of ad valorem taxes upon all taxable
property in said City, and are further payable from and se-
cured by a lien on and pledge of certain net revenues
derived from the operation of the City's combined Waterworks
and Sanitary Sewer Systems (after first making all payments
required by the ordinances authorizing the issuance of the
outstanding First Lien Bonds, all as more particularly de-
scribed in the Certificate Ordinance and in the Ordinances
authorizing the issuance of the First Lien Bonds).
THE CITY, however, expressly reserves the right to
issue additional obligations on a parity with and payable
wholly or in part from the same revenues as the aforesaid
First Lien Bonds and further reserves the right to issue
additional obligations on a parity with certificates of this
series and payable from the same source or sources of net
revenues and/or taxes securing the payment of this certifi-
cate and the series of which it is a part; provided, howev-
er, that any and all such additional obligations may be
issued only in accordance with and subject to the covenants,
conditions, liens and restrictions relative thereto, which
are set out in the ordinances authorizing the issuance of
said First Lien Bonds and/or the Certificate Ordinance; to
which ordinances reference is hereby made for more complete
and full particulars.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of
this certificate, and the series of which it is a part, is
duly authorized by law; that all acts, conditions and things
required to be done precedent to and in the issuance of this
series of certificates of obligation, and of this certifi-
cate, have been properly done and performed, and have
happened in regular and due time, form and manner as
required by law; that sufficient and proper provision for
the levy and collection of taxes has been made, which taxes,
when collected, shall be appropriated exclusively to the
payment of this series of certificates and to the payment of
the interest coupons thereto annexed as the same shall
become due; that further provision for the payment of the
interest on this certificate and the series of which it is a
part has been made by irrevocably pledging the above men-
tioned net revenues; and that the total indebtedness of said
series of which it is a part, does not exceed any Constitu-
tional or statutory limitation.
IN WITNESS WHEREOF, the City of Schertz, by its City
Council, has caused a facsimile of the seal of the City to
be imprinted hereon, and this certificate to be executed by
imprinting hereon the facsimile signature of the Mayor and
countersigned by imprinting hereon the facsimile signature
of the City Secretary and the interest coupons hereto
attached to be executed by the imprinted facsimile signa-
tures of said Mayor and City Secretary {all in accordance
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with the provisions of Article 7l7j-1, Revised Civil Stat-
utes of Texas, as amended), as of the date of this certifi-
cate, the 1ST DAY OF MAY, 1983.
Mayor, City of Schertz,
Texas
COUNTERSIGNED:
City Secretary, City of Schertz,
Texas
(SEAL OF CITY)
Section 8: That the form of the interest coupons shall
be substantially as follows:
NO.
$
ON THE FIRST DAY OF " unless the
certificate to which this coupon appertains has been re-
deemed in accordance with its terms, the City of Schertz,
Texas, hereby promises to pay to bearer, out of funds
specified in the certificate to which this coupon is at-
tached, the amount shown hereon in lawful money of the
United States of America, upon presentation and surrender of
this coupon, at Schertz Bank & Trust, Schertz, Texas,
without exchange or collection charges, such amount being
interest due on such date on CITY OF SCHERTZ, TEXAS,
COMBINATION TAX AND JUNIOR LIEN WATERWORKS AND SEWER SYSTEM
REVENUE CERTIFICATE OF OBLIGATION, SERIES 1983, dated May 1,
1983, Certificate No.
City Secretary
Mayor
Section 9: That substantially the following shall be
printed on the back of each certificate:
OFFICE OF THE COMPTROLLER ~
~
STATE OF TEXAS ~
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 certificate 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
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binding obligation of the City of Schertz, Texas, payable
from ad valorem taxes and the revenues pledged to its
payment by and in the ordinance authorizing same, an said
certificate has this day been registered by me.
this
WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
Section 10: That, for the purposes of this ordinance,
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 - shall mean and refer to the
combined Waterworks and Sanitary Sewer Systems of
the City, including all present and future
extensions, additions, replacements and
improvements thereto, whether situated within or
without the limits of the City.
(c) Net Revenues - as such term is used in
this ordinance shall mean and include the gross
revenues derived from the operation of the System
less the reasonable expense of maintenance and
operation of the System, including all salaries,
labor, materials, interest, repairs and extensions
necessary to render efficient service, and every
proper item of expense, as required by Article
1113, Revised Civil Statutes of Texas, as amended,
and after making all payments required by the
'ordinance authorizing the issuance of the First
Lien Bonds.
(d) First Lien Bonds - shall mean the
presently outstanding City of Schertz, Texas,
Waterworks and Sewer System Revenue Bonds of the
following series, to-wit:
(1) Series 1968, dated March 1,
1968; in the original principal amount
of $579,000;
(2) Series 1973, dated April 1,
1973, in the original principal amount
of $165,000;
(3) Series 1975, dated March 1,
1975, in the original principal amount
of $325,000;
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(4) Series 1981, dated February 1,
1981, in the original principal amount
of $475,000;
and additional bonds hereinafter issued by the
City secured by lien on the revenues of the System
on a parity with the presently outstanding First
Lien Bonds.
(e) Certificate Ordinance - shall mean this
Ordinance.
(f) Series 1983 Certificates or these
Certificates - shall mean the City of Schertz,
Texas, Combination Tax and Junior Lien Waterworks
and Sewer System Revenue Certificates of Ob-
ligation, Series 1983, dated May 1, 1983,
authorized by the Certificate Ordinance.
(g) System Fund - shall mean the special
fund heretofore created in the ordinances
authorizing the issuance of the First Lien Bonds
into which all revenues derived from the operation
of the System are paid.
(h) Interest and Sinking Fund (or
Certificate Fund) - shall mean the special fund or
account created in Section 11 of this ordinance to
provide for payment of principal and interest on
the certificates.
(i) Additional Parity Obligations - shall
mean and include any additional bonds or
certificates of obligation which the City
expressly reserves the right to issue in Section
21 of this ordinance.
Section 11: That, for the purpose of paying the interest on
and to provide a sinking fund for the payment, redemption
and retirement of the Series 1983 Certificates, there is
hereby created and established a special Fund designated
"Special City of Schertz, Texas, Combination Tax and Junior
Lien Waterworks and Sewer System Revenue Certificate of
Obligation Fund", (hereafter called "Certificate Fund"), and
all monies deposited therein shall be used for no other pur-
pose. This Fund shall be kept and maintained with the
Schertz Bank & Trust, Schertz, Texas, and the custodian of
the Fund is hereby authorized and directed to make withdraw-
als from said Fund in such amounts required to pay the
principal of and interest on the certificates as the same
become due and mature.
Section 12: That, to provide for the payment of the
debt service requirements on the certificates herein au-
thorized to be issued, being (i) the interest on said
certificates and (ii) a sinking fund for their redemption at
maturity or a sinking fund of 2% (whichever amount shall be
the greater), there shall be and there is hereby levied for
the current year and each succeeding year thereafter while
said certificates or any interest thereon shall remain
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outstanding and unpaid, a sufficient tax on each one hundred
dollars' valuation of taxable property in said City, ade-
quate to pay such debt service requirements, full allowance
being made for delinquencies and costs of collection; said
tax shall be assessed and collected each year and applied to
the payment of the debt service requirements, and the same
shall not be diverted to any other purpose. The taxes so
levied and collected shall be paid into the Certificate
Fund. The governing body of the City hereby declares its
purpose and intent to provide and levy a tax legally and
fully sufficient to pay the said debt service requirements,
it having been determined that the existing and available
taxing authority of the City for such purpose is adequate to
permit a legally sufficient tax in consideration of all
other outstanding obligations.
The amount of taxes to be provided annually for the
payment of principal of and interest on the certificates
herein authorized to be issued shall be determined and
accomplished in the following manner:
(a) The City's annual budget shall reflect
(i) the amount of debt service requirements to
become due on the certificates herein authorized
to be issued in the next succeeding fiscal year of
the City, (ii) the amount on deposit in the
Certificate Fund, as of the date such budget is
prepared (after giving effect to any payments
required to be made during the remainder of the
then current fiscal year) for the payment of the
certificates herein authorized to be issued and
(iii) the amount of net revenues of the System
estimated and budgeted to be available for the
payment of such debt service requirements on the
certificates herein authorized to be issued during
the next succeeding fiscal year of the City (based
upon the amount of net revenues of the System
available from the preceding fiscal year of the
System).
(b) The amount required to be provided in
the succeeding fiscal year of the City from ad
valorem taxes shall be the amount, if any, the
debt service requirements to be paid on the
certificates herein authorized to be issued in the
next succeeding fiscal year of the City exceed the
sum of (i) the amount shown to be on deposit in
the Certificate Fund at the time the annual budget
is prepared, and (ii) the net revenues of the
System budgeted and shown to be available for the
payment of said debt service requirements.
(c) Following the final approval of the
annual budget of the City, the governing body of
the City shall, by ordinance, levy an ad valorem
tax at a rate sufficient to produce taxes in the
amount determined in paragraph (b) above, to be
utilized for purposes of paying the principal of
and interest on the certificates herein authorized
to be issued in the next succeeding fiscal year of
the City.
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Section 13: That the City hereby covenants and agrees
that all of the net revenues of the System, with the excep-
tion of those in excess of the amounts required to be
deposited to the Certificate Fund as hereafter provided, are
hereby irrevocably pledged to the payment of the principal
of and interest on the certificates as the same becomes due.
Section 14: That the City hereby covenants and agrees
that as received all revenues and income of every nature
derived from the operation and ownership of the System shall
be first deposited in the "System Fund", and all moneys
deposited therein shall be pledged and appropriated as
follows:
FIRST: To the payment of all necessary and
reasonable maintenance and operation expenses
of the System.
SECOND: To the payments and requirements
required to be made in the ordinance as
authorizing the First Lien Bonds and
additional First Lien Bonds hereinafter
issued.
THIRD: To the Certificate Fund, to the
extent and in the manner provided in Section
13 hereof; and
FOURTH: To any other proper City purposes
now or hereafter permitted by law.
Section 15: That the City hereby agrees and covenants
to cause to be deposited in the Certificate Fund the follow-
ing amounts from the pledged net revenues in the System Fund
for the payment of the certificates herein authorized to be
issued as follows:
Beginning on or before the 15th day of
October, 1983, and on or before each April 15 and
October 15 thereafter (during the period of time
the certificates herein authorized remain
outstanding), an amount equal to not less than the
sum of (i) the full amount of interest due on the
certificates on the interest payment date next
succeeding the date of such deposit (provided,
however, that the first installment of interest
being due on May 1, 1984, the full amount of such
interest shall be deposited to the Certificate
Fund on or before April 15, 1984), and (ii)
one-half (~) of the total principal payment to
become due on the certificates on the next
succeeding May 1.
The deposits to be made to the Certificate Fund, as
hereinabove provided, shall be made until such time as such
Fund contains an amount equal to pay the principal of and
interest on the certificates to maturity. Accrued interest
received from the purchaser of the certificates shall be
deposited to the Certificate Fund and ad valorem taxes
levied, collected and deposited in the Certificate Fund for
and on behalf of this series of certificates may be taken
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into consideration and reduce the amount of the deposits
hereinabove provided, which would otherwise be required to
be deposited in the Certificate Fund from the net revenues
of the System. In addition, any certificate proceeds in
excess of the amount required to pay the contractual obliga-
tions to be incurred shall be deposited in the Certificate
Fund, which amount shall reduce the sums otherwise required
to be deposited in said Fund from ad valorem taxes and the
net revenues of the System.
Section 16: That all moneys on deposit in the special
Funds for which this ordinance makes provision (except any
portion thereof as may be at any time properly invested)
shall be secured in the manner and to the fullest extent
required by the laws of Texas for the security of public
funds, and moneys on deposit in such Funds shall be used
only for the purposes permitted by this ordinance.
Section 17: That the City covenants and agrees with
the holder or holders of the certificates that it will
maintain and operate the System with all possible efficiency
while any certificates remain outstanding and unpaid; that
it will faithfully and punctually perform all duties with
reference to the System required by the Constitution and
laws of the State of Texas, including the making and col-
lecting of reasonable and sufficient rates for services
furnished by the System as required by the provisions of
this ordinance; and that no free service shall be provided
to any customers or persons utilizing the System.
Section 18: That the City further covenants and agrees
to keep proper books of records and accounts in which
complete and correct entries shall be made of all trans-
actions relating to the System. The City shall furnish to
any holder of any of the certificates at the written request
of such holder, as soon as possible after the close of each
fiscal year, a complete operating statement of the System in
reasonable detail covering such fiscal year, certified by
independent auditors. Such annual operating statement may
be a part of the annual audit of the City.
Section 19: That the owner or holder of the certifi-
cates herein authorized shall have the right at all reason-
able times to inspect the System and all records, accounts
and data of the City relating thereto.
Section 20: That, in addition to all the rights and
remedies provided by the laws of the State of Texas, the
City covenants and agrees particularly that in the event the
City (a) defaults in the payments to be made to the Certifi-
cate Fund, or (b) defaults in the observance or performance
of any other of the covenants, conditions or obligations set
forth in this ordinance, the holder or holders of any of the
certificates shall be entitled to a writ of mandamus issued
by a court of proper jurisdiction compelling and requiring
the governing body of the City and other officers of the
City to observe and perform any covenant, condition or
obligation prescribed in this ordinance.
No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or
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~
power, or shall be construed to be a waiver of any such de-
fault 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 remedies shall not be deemed to be
exclusive.
Section 21: That the City reserves the right to issue
additional obligations on a parity with the First Lien Bonds
when issued in compliance with law and the terms and con-
ditions set forth in the ordinance authorizing said Bonds.
The City further reserves the right to issue additional ob-
ligations on a parity with these certificates when issued in
compliance with law and the terms and conditions hereinafter
appearing; such additional parity obligations, when so
issued, shall occupy a position of parity and equal dignity
with these certificates and shall be equally secured by the
same lien on and pledge of the net revenues of the System as
is enjoyed by these certificates. The City hereby covenants
and agrees that no additional First Lien Bonds and no
additional parity obligations payable in whole or in part
from the net revenues of the System shall be issued unless
and until the following conditions have been met, to-wit:
(a) The City is not then in default as to
any covenant, condition or obligation contained in
this ordinance.
(b) That the laws of the State of Texas in
force at such time provide for the issuance of
such additional parity obligations.
Such additional obligations, when issued in
accordance with the above, may be secured in whole
or in party by a pledge of the net revenues of the
System prior to or on a parity with the pledge
securing these certificates.
Section 22: That the City hereby further covenants as
follows:
(a) That it has the lawful power to pledge
the revenues supporting this issue of certificates
and has lawfully exercised said power under the
Constitution and laws of the State of Texas,
including said power existing under Article
2368a.l, V.A.T.C.S., that the certificates shall
be ratably secured under said pledge of income in
such manner that one certificate shall have no
preference over any other certificate of the
issue.
(b) That, other than for the First Lien
Bonds and certificates herein authorized to be
issued, the net revenues of the System have not in
any manner been pledged to the payment of any debt
or obligation of the City or of the System.
(c) That, as long as any certificates or any
interest thereon remain outstanding, the City will
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not sell, lease, or encumber the System, or any
substantial part thereof, provided that this shall
not be construed to prohibit the sale of such ma-
chinery, or other properties or equipment which
has become obsolete or otherwise unsuited to the
efficient operation of the System.
Section 23: That each of the certificates herein au-
thorized shall be deemed and construed to be a "security",
and as such a negotiable instrument, within the meaning of
Article 8 of the Uniform Commercial Code.
Section 24: That the sale of the certificates herein
authorized to be issued to
at the price of par and accrued interest to the date of
delivery, plus a premium of $ is hereby confirmed.
Delivery of such certificates shall be made to said
purchaser as soon as may be after the adoption of this
ordinance, upon payment therefor in accordance with the
terms of sale.
Section 25: That the purchasers' obligation to accept
delivery of the certificates herein authorized is subject to
their being furnished a final opinion of Messrs. Dumas,
Huguenin, Boothman and Morrow, Attorneys at Law, approving
such certificates as to their validity, said opinion to be
dated and delivered as of the date of delivery and payment
of such certificates. Printing of a true and correct copy
of said opinion on the reverse side of each of such certifi-
cates with appropriate certificates pertaining thereto
executed by facsimile signature of the City Secretary is
hereby approved and authorized.
Section 26: That the Mayor of the City shall be and he
is hereby authorized to take and have charge of all neces-
sary orders and records pending investigation by the Attor-
ney General of the State of Texas, and shall take and have
charge and control of the certificates herein authorized
pending their approval by the Attorney General, registration
by the Comptroller of Public Accounts and delivery to the
purchaser thereof.
Section 27: That the City hereby covenants that the
proceeds from the sale of said certificates will be used as
soon as practicable for the purpose for which said certifi-
cates are issued; that such proceeds will not be invested in
any securities or obligations except for the temporary
period pending such use; and that such proceeds will not be
used directly or indirectly so as to cause all or any part
of said certificates to be or become "arbitrage" obligations
within the meaning of Section l03(c) of the Internal Revenue
Code of 1954, as amended, or any regulations or rulings
prescribed or made pursuant thereto.
Section 28: By reason of the urgent necessity to issue
certificates as soon as possible to enable the City to
proceed with needed improvements and extensions to the
City's combined waterworks and sanitary sewer systems, an
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emergency is hereby declared to exist making it necessary to
the preservation of the public peace, property, health and
safety that this ordinance become effective immediately upon
its passage, and it is so enacted.
PASSED AND APPROVED,
1983.
ATTEST:
(CITY SEAL)
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