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1981B8- AUTHORIZING THE ISSUANCE OF $475,000 PRINCIPAL AMOUNT I THE ,STATE OF TEXAS COUNTY OF GUADALUPE CITY OF SCHERTZ On this, the 16th day of March , 1981, at 7:00 o'clock P.M., the City Council of the City of Schertz, Texas, convenedfor a Special meeting in the Ci ty Ila 11 0 f 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: Jack M. ~tomackin, Sr., Richard L. Howe, Sr., Jeff Duffield Jacqueline Lawler Earl W. S!1wyer Barbara 'l'a,ylor ; . Mayor Mayor Pro-Tern Councilman Councilwomiln Councilwomiln Councilwoman and . . . J~mmy G."G~lmore June G. Ilrause City Manager City Secretary There being a quorum present, the meeting was called to order by the Mayor, and among other proceedi~gs had were the following: The Mayor introduced the following captioned ordinilnce, the caption of which was read in full by the City Secretary: AN ORDINANCE BY TIlE CITY COUNCIL OF THE CITY OF SCIlERTZ, TEX7\S, 7\UTIlORIZlNG TIlE ISSU7\NCE OF $475,000 PRINCIP7\L 7IflOUNT OF SPECIAL OBLIG7\TION BONDS OF TilE CITY OF SClIERTZ TO BE KNOWN 7\S "$475,000 CITY OF SCIlERT?, TEX7\S, UTILITY SYSTEM REVENUE BONDS, SERIES 198]" FOR TilE PUHPOSE OF SECURING FUNDS TO BE USED TO IMPROVE 7\ND EXTEND THE W7\TEHWORKS SYSTEM OF 57\10 CITY; PRE5CRIllING TilE M7\TURITIES OF S7\ID llONDS AND TilE INTEREST H7\'I'ES; PLEDGING THE NET I<EVENUES OF TilE CITY'S COMBINED W7\TERWORKS 7\ND SANIT7\RY SEWER SYSTE~1S TO P7\Y TilE PRINCIPAL OF AND INTEREST ON SAID nONCS; PROVIDING THAT IN THE EVENT OF A LATER ACQUISITION OF AN ELECTRIC LIGHT AND POWER SYSTEM AND/OR A NATUR7\L G7\S SYSTEM, SAID BONDS,' THE PREVIOUSLY ISSUED BONDS, AND 7\NY OR ALL REVENUE BONDS ISSUED FOR THE PURPOSE OF 7\CQUIRING ANY SUCH SYSTP.M (EITIlER OR BOTH), SIIATJL BE PAYABLE FROM AND EQUALLY SF,CURED BY A FIRST LIEN ON AND PLEDCE OF TIlE NET REVENUES OF TilE CITY'S COMBINED W7\TERloJOHKS, S7\NIT7\RY SEWER, ELECTRIC LIGHT AND POWER AND/OR NATUH7\L G7\S SYS'I'f.~lS; PROVIDJllG 'I'11AT, SAID BONDS SIl7\LL OCCUpy A POSITION OF P7\RITY AND EQUAL DIGNITY WITH TIlE OU'l'ST7\NDING CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE DONDS, SERIES 1975, DATED MARCH 1, 1975; TIlE CITY OF SCIlERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1973, DATED APRlT. I, 1973, AND TilE OUTSTANDING CITY OF' SCIIERT?, TEXAS, UT ILITY ~;YSTEM IlEVENUE BONDS, SERIES 1%8, D7\TED MI\HCIl 1, l'JGR; r'IWVlLJlNG HJR ADDITION7\L P7\IlITY f\(lNDc;; PROVlDH1G l' II 11'1' TilE 1I0l.DElt OR HOLDEIlS OF S7\ID llONDS SII7\LL NEVER lI7\VE TilE rUGllT TO DEMAND p7\Yf,mNT OF S7\ll) BONDS OUT 01' 7\NY FUNDS R7\I.SED, OR TO BE RAISED, BY TI\XATION; CONF'ImHNG TilE S7\LE OF S7\J\) BONDS; Df.CL7\RINC 7\N f.MEHGENCY; AND M7\KINC Cr::Il'l'7\IN FINDINGS 7\ND COVENANTS AND ENACTING OTIIEIl PI<OVISIONS HJC WENT 7\ND RELATING TO THE SUBJECT AND PURPOSE OF TillS ORDINANCE. """'. '" Councilmember Howe moved that said ordinance be considered EY--the Council-as an emergency measure. Said motion was seconded by Counc ilmember Lawler : whereupon said motion was fully discussed and considered. dicMayor' 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 following vote: AYES: Ail members of said City Council shown present above voted "Aye". NOES: Nope. .' The Mayor';'then introduced said ordinance as an emergency measure. Th~reupon it was moved by Councilmember Sawyer and seconded.by Councilmember Howe that said ordinance be~finally passed and adopted. The Mayor put the motion to a vote of the members of the Council and the ordinance was finally passed and adopted by the following vote: AYES: All members of said City Council shown present above voted "Aye". NOES: None. , , . ;' .,' =# 'ii/-IJ-3' AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, AUTHORIZING THE ISSUANCE OF $475,000 PRINCIPAL AMOUNT OF SPECIAL OBLIGATION BONDS OF TilE CITY OF SCHERTZ TO BE KNOWN AS "$475,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1981" FOR THE PURPOSE OF SECURING FUNDS TO BE USED TO IMPROVE AND EXTEND THE WATERWORKS SYSTEM OF SAID CITY; PRESCRIBING THE MATURITIE~ OF SAID BONDS AND THE INTEREST RATES; PLEDGING WE NET REVENUES OF TilE 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 LATER ACQUISITION OF AN ELECTRIC LIGHT AND ?OWER 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 SE<eURED BY A FIRST LIEN ON AND PLEDGE OF TilE NET REVENU~S 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 1975, DATED MARCH 1, 1975; THE CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1973, DATED APRIL 1, 1973, 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 HAVE THE RIGHT TO DEMAND PAyMENT OF SAID BONDS OUT OF ANY FUNDS RAISED, OR TO BE RAISED, BY TAXATION; CONFIRMING THE SALE OF Sl\ID BONDS; DECLARING AN EMERGENCY; AND Ml\KING CERTl\IN FINDINGS AND COVENANTS AND ENACTING OTHER PROVISIONS INCIDENT AND RELATING TO THE SUBJECT AND PURPOSE OF THIS ORDINANCE. : , ! ~ " 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 pur!,osc of submitting to the resident qualified electors of said City, for their action thereupon, the following propositions, among others, to-wit: : ~ .~ ~ " . ! ',.~. PROPOSITION NO. 3 "Shall the City Council of the City of Schertz, Texas, be ~uthorized to issue bonds of. said City in the prin- cipal amount of ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($125,000), for the purpose of constructing permanent improvements to lands and buildings for park purposes: said bonds to mature serially or otherwise, as may be determi~ed by the City Council of said City, the maximum maturit~ being not more than forty (40) years from their date; and any issue or series of said bonds to bear in- terest per annum (payable annually or semi-annually) at any rate~or rates to be determined within the discretion of the City Council of said City, provided that such rate or ~ates shall not exceed the maximum rate per annum authorized by law at the time of the issuance of any issu~ or series of said bonds; and shall the City Council Ve authorized to levy an annual ad valorem tax on all taxable property in said City sufficient to pay the interest on said bonds and to create a sinking fund sufficient to pay the principal thereof as the same matures as au~horized by the Constitution and laws of the State of Texas?" PROPOSITION NO. 4 "Shall the City Council of the City of Schertz,Texas, be authorized to issue bonds of said City in the prin- cipal amount of TWO HUNDRED THOUSAND DOLLARS ($200,000), for the purpose of the construction of a permanent pub- lic building within said City to be used as a municipal building for said City; said bonds to mature serially or otherwise, as may be determined by the City Council of said City, the maximum maturity being not more than forty (40) years from their date; and any issue or series of said bonds to bear interest per annum (pay- able annually or semi-annually) at any rate or rates lo be determined \vithln the discretion of t.l1B city Council of said City, provided that such rate or rates 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; and shall the City Council be authorized to levy an annual ad valorem tax on all taxable property in said City sufficient to pay the interest on said bonds and to create a sinking fund sufficient to pay the principal thereof as the same matures as authorized by the Conztitution and laws of the State of Texas?" '., 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; a~a 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 sa~d 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 ~nds; said revenue bonds to be special obligations of the City of Schertz, Texas, payable both as to principal and inteiest solely from and secured by a first lien on and piedge 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 co~birled 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 Ligllt System and Natural Gas SysteJ\t, 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 inte~est solely from and secureu by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer and Electric Ligllt 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 ,ny funds raised, or to be raised,: by taxation; all in accordance with aIld as autllorized by the Constitution and laws of the State of Texas, including Articles 1111 to IllS, both inclusive, Revised Civil Statutes of Texas, as a~ended7t' . " .,' . I, \ 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 improving 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 C~ty 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 ~nterest shall not exceed the maximum rate per annum authorized by law at the time of the issuance of any i;~ueor series of said bonds; said revenue bonds to be sPflcial obligations of the City of Schertz, Texas, payable both as to principal and interest solely from and secu~ed 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 f~om 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 syst~m, 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 funas 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?" ~ ~ -( t . . ' ~ -, and WHEREl\S, 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 fourteen (14) days prior to the date of said election; and WHEREAS, hotice of said election was also given by posting notices of said election at the City Hall of said City and at three (3) other public places within said City, the date of said posting being not less than fourteen (14) days prior t~.the date of said election; and WHEREAS, bOy'. ordinance duly passed on the 6th day of August, 1974, this Ciey Council canvassed the returns of said election and affirmatively found that it was authorized to issue the bonds in acca~dance with the authority granted in the a~oresaid propositions and with law; and WHEREAS, the City Council heretofore examined into and investigated the regularity of the proceedings of said election and fcund Lhat 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 requirements of law; and WHEREAS, the $750,000 of Waterworks Revenue Bonds and the $50,000 Sanitary Sewer System Revenue Bonds authorized at said election~eld 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 Waterworks 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 W~terworks, Sanitary Sewer, Electric Light and Power and/or Natural Gas Systems; and WHEREl\S, the City Council of said City by ordinance ,passed, adopted and approved on the 12th day of Marcil, 1975, authorized the issuance, sale and delivery of $325,000 "City of Schertz, Texas, Utility System Revenue Bonds, Series 1975" dated March 1, 1975, for the purpose of obtaining funds necessary to improve the Waterworks and Sanitary Sewer Systems 'of the City, being the $50,000 of bonds authorized by Proposition No.2 of the aforesaid election of July 27, 1974 and $275,000 of the bonds ~uthorized by Proposition No. 1 of the aforesaid election of July 27, 1974, which said bonds have been approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts bearing Register No. 42526; and , " WHEREl\S, the City Council of said City now desires to issue Utility System Revenue Bonds of the City of Schertz in the principal amount of $475,000 for the purpose of securing funds in the amou~t of $475,000 to be used to improve and extend the Waterworks System of ,"aid City (beinq the second installment of bonds authorized by and under Proposition No. 1 submitted at the aforesaid election ), and that such bonds authorized by and under this ordinance shall be i1\lthorized and issued in such a manner that they shall occupy a position of pi1rity and equal dignity with the outstandinq bonds of tha Series 196B Series 1973 and Series 1975 Bonds; NOW, THEREFORE, , ~ . BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section 1: That for the purpose of sC'curinq funds in the amount of FOUR HUNDRED SEVENTY-FIVE THOUSAND DOLLARS ($475,000), to be used to improve and extend the Waterworks System of said City (being the second installment of bonds authorized by and under Proposition No. 1 at an election held in said City on July.27, 1974), there shall be issued utility System Revenue Bonds of said City, to be known as "$475,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 19B1", in the aggregate principal amount of Four HundredSeventy-Five Thousand Doll~rs ($475,000), under and pursuant to the Constitution and laws of the State of Texas, including particularly 6rticles 1111 to 1118, both inclusive, R~vised Civil Statute~:of Texas, as amended, and the authority of the resident qua\{fied electors of the City of Schertz, at the aforesaid ele~tion held on the 27th day of July, 1974. " , Section 2:' That said bonds shall be dated FE8RUARY I, 1981, sharr-be numbered consecutively from One (1) to Ninety-Five (95), both inclusive, shall be in the denomination of Five Thousand Dollars ($5,000) each, aggregating the principal sum of Four Hundred Seventy-Five Thousand Dollars ($475,000), and shall'bear interest at the rates and become due and payable serially on September 1 in each of the years and in the respective amounts shown in the schedule as follows, to-wit: BONDS NOS. (Both Inc 1. ) DATE OF MATURITY AMOUNT INTEREST . RATES 1 - 2 1982 $ 10,000 10.00 % 3 - 4 1983 10,000 -"1J.Ucr-- % 5 7 1984 15,000 -Io.~- 1; -~--- 8 10 1985 15,000 ~,JlL__ 0 - (, 11 13 1986 15,000 __LO,~lL-__ o. " 14 16 1987 15,000 10.00 ~ 0 17 20 1988 20,000 -1 o. O~,____ " 0 21 - 24 1989 20,000 _~OO ____ % 25 - 28 1990 20,000 10.00 % 29 - 33 1991 25,000 9.80 % 34 - 38 1992 25,000 9.00 % 39 - 44 1993 30,000 9.10 % 45 - 51 : 1994 35,000 9.20 % 52 - 58 1.995 35,000 __2.40 % 59 - 65 1996 35,000 9.60 % 66 - 72 1997 35,000 9.80 % 73 - 79 1998 35,000 10.00 % 87 1999 40,000 -..----% 80 - 10.00 8B - 95 2000 40',000 10 00 % " 't " " PROVIDED, HOWEVER, the City of Schertz, Texas, reserves the right to redeem the bonds of this series maturing September 1, 1996 and subsequent, in whole or in part (but in inverse numerical ord~r if less than all), on September 1, 1995, or on any interest payment date thereafter, at the price of par and accrued interest to the date of redemption; PROVIDED, FURTHER, that at least thirty (30) days prior to a date any of said bonds are to be redeemed, a notice of redemption, signed by the City Secretary (specifying the serial numbers and amount of bonds to be redeemed), shall have been filed wi"th the SCHERTZ STATE BANI(, Schertz, Texas (the paying agent hamed in each of said bonds); and if the City shall have made .available by the date of redemption funds in amounts sufficient to pay the bonds to be redeemed and accrued interest ther~on, any bond or bonds not presented for redemption puisuant to such notice shall cease to bear interest from and afte~cthe date so fixed for redemption. Section 3:~ That said bonds shall bear interest from date to maturitY-'~t the per annum rates shown above; such interest to be evidenc~d by proper coupons attached to each of said bonds, and said interest shall be payable on September 1, 1981, and semi-annually thereafter on March 1 and September 1 in each year. Section 4: That both principal of and interest on this issue of bonds shall be payable in lawful money of the United States of America, without exchange or collection charges to the owner or holder, at the Schertz State Bank, Schertz, Texas, upon ,presentation and surrender of bonds or proper coupons. Section 5: '. That the seal of said City may be impressed on each of said bonds, or in the alternative, a facsimil.e of such seal may be printed on the said bonds. The bonds and interest coupons appurtenant thereto may be executed by the imprinted facsimile signatures of the Mayor and City Secretary of the City and execution in such manner shall have the same effect a~ if such bonds or coupons had been signed manually by the Mayor and City Secretary. Inasmuch as such bonds arc required to be registered by the Comptroller of Public Accounts for the State of Texas, only his signature (or that of a deputy designated in writing to act for the Comptroller) shall be required to be manually subscribed to such bonds in connection with his registration certificate to appear thereon, as hereinafter provided, all in accordance with the provisions of Article 717j-l, V.A.T.C.S. Section 6: That the form of said bonds shall be substantially as follc)ws',-- $ 5,000 NO. UNITED STATES OF AMERICA STATE OF TEXAS COUNTIES OF GUADALUPE, BEXAR AND COMAL . . CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BOND, SERIES 1981 * * * * * * * ~* * * * * * * * * * * * * * * * * * * * * * * * * * '. FOR VALUE:RECEIVED, the City of Schertz, a municipal corporation q~ 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 Percent ( %) per annUIn until the principal sum here("jj'shall have been pa'Id; said interest being payable on September I, 1981 and semi-annually thereafter on March 1 anq 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 hereby 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 Wil terworks "nd Silni tary Sewer Systems to the prompt payment of the princirCll of and interest on this bond, providing thilt in the event of the later acquisition of an electric light and power and/or natural gas system, the net revenues of the City's combined Waterworks Sanitary Sewer, Electric Light "nd Power and/or , Natural Gas Systems shall be and are hereby pledged to p"y the principal of and interest on this bond as the same matures. THIS BOND is one of a series of Ninety-Five (95) bonds of like tenor and effect (except as to number, interest rate, maturity and right of prior redemption), numbered consecutively from One (1) to Ninety-Five (95), both inclusive, in the denomination of Five Thousand Dollars ($5,000) each, aggregating the principal amount of Four Hundred Seventy-Five Thousand Dollars ($475,000), to be used to improve and extend the Waterworks System of said City, in accordance with the Constitution and laws of the Stilte of Texas, including Articles 1111 to 1118, both inclusive, Revised Civil Statutes of ' Texas, ilS "mended, and pursuant to iln ordinance passed by the City Council of the City of Schertz, Texas, whi,ch ordinance is duly recorded in the Minutes of said City Council. :' THE DATE of this bond, in conformity with the ordinance above referred to is FEBRUARY 1, 1981. AS SPECIFIED in the ordinance hereinabove mentioned, the City reserves the right to redeem the bonds of said series maturing September 1, 1996 and subsequent, in whole or in part (but in inverse numerical order if less than all), on September 1, 1995, 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 prior to a date any of said bonds are to be redeemed, a notice of redemption, signed by the City Secretary (specifying the serial numbers and amounts of bonds to be redeemed), shall have been filed with the SCHERTZ STATE BANK, SCHERTZ, TEXAS; and if the City shall have maae available by the date of redemption funds in amounts su~ficient to pay the bonds to be redeemed and accrued inter@st thereon, any bond or bonds not presented for redemption p~rsuant to such notice shall cease to bear interest from and aft~T the date so fixed for redemption. . THIS BOND and the series of which it is a part constitute special obligations of the City of Schertz, Texas, and together with the outstanding bonds of said City entitled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1968, dated March 1, 1968, the outstanding bonds of said City entitled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1973, dated April 1, 1973, and the outstanding bonds of said City entitled CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1975, dated March 1, 1975, 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 maintenance; providing that in the event of the later acquisition of an electric light and power and/or a natural gas system, and the issuance of revenue bonds in connection therewith, then These Bonds, the Series 1975 Bonds, the Series 1973 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 th~ 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 t~e 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 relating thereto, which . > " t, .t : are set out and contained in the ordinances author~zing said Series 196B Bonds, said Series 1973 Bonds, said Series 1975 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 ~n favor of subsequent holders for value without notice, and to agree that, being payable to bearer, tbis bond and each of the interest coupons attached maybe negoti~ted 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 ~quities and claims of ownership of any prior holder. The City of schertz, Texas, its officers and the paying agent shall ncr.t be affected by any notice to the contrary. ". THE HOLDE~~HEREOF shall never have the right to demand payment of this oblig~tion 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 have been performed in regular and due time, form and manner, as required by the Constitution and laws of the State of Texas and the ordinance hereinabove mentioned; that this ser{es of revenue bonds does not exceed any constitutional or statutory limitation, and that provision has been made for the payment of the principal of 3nd interest on this bond, and the series of which it is a part, by irrevocably 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 na~ural ga~ system, the net revenues of the combined 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 impressed or a facsimile thereof to be printed hereon, and this bond to be executed by imprinting hereon the facsimile signatures of the Mayor of the City of Schertz, Texas, and countersigned by imprinting hereon the facsimile signatures of the City Secr~tary of said City, and the interest coupons hereto attached to b~ executed by the imprinted facsimile signatures of said Mayor and City Secretary (all in accordance with the provisions of Article 717j-l, Revised Civil Statutes of Texas, as amended), as of the date of this bond, the 1ST DAY OF FEBRUARY, 1981. Mayor, City of Schertz, Texas COUNTERSIGNED: City Secretary, City of Schertz, Texas " (SEAL OF CITY) , ~, . . Section 7: That the form of said interest coupons shall be substantially as follows: $ NO. ON THE FIRST DAY OF , ] 9____ *(Unless the bond to which this coupon appertajns has been redeemed in accordance with its terms), the City of Schert~, in the Counties of Guadalupe, Bexar and Comal, Sta~e 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), the amount ~hown hereon in lawful money of the United States of hf!\erica, upon presentation and surrender of this couPQ~, at the Schertz State Bank, Schertz, Texas, without ex'fhange or collection charges, such amount being interest cille on such date on CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1981, dated February 1, 19B1. Bond No. (:i tySecretary-'--- Mayor *NOTE TO !:!,.!N'I.'.ER.;. The expression in parentheses to be i nc 1 uded only in coupons maturing on March 1, 1996 and subsequent pertaining to. optional bonds maturing in the years 1996 through 1998. Section 8: That substantially the following shall be printed on-the back of each bond: OFFICE OF TilE COMPTROLLER ~ REGISTER NO. STATE OF TEXAS ~ I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas 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 ot Schertz, Texas, payable from the revenues pledged to its payment by and in the ordinance authorizing same, and said bond has this day been registered by me. WITNESS MY llANO AND SEAL OF OFFICE at Austin, Texas, this Comptrol] E;;:'-of-p;jhIIcl\ccou;1 ts-of the State of Texas . . Section 9: Thut, for the purpose of this ordinunce,the following words und terms shall mean and include, and are hereby defined as follows: (a) Texas, City - shull mean and refer to the City of Schertz, and where appropriate, the City Council of said City. (b) ~tem or Systems - shall mean and refer to the combined Waterworks and Sanitary Sewer System 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 extensions, additions, replacements and improvements thereto, whether situated within or without the limits of the City. . (c) Net R!Cvenues - shall mean and include the gross revenues derived from '~he operation of the System less the reasonable expenses of maintenance and operation of said 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; said repairs and extensions as used herein shall mean and include only those as are found by the City to be necessary to keep the System in operation and to render efficient service, or necessary to meet or remedy some physical accident, condition or defect which would otherwise impair the security of the bonds hereunder authorized. (d) Series 1968 Bonds - shall mean and refer to the $579,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1968J dated March 1, 1968, authorized by ordinance of said City. (e) 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. (f) ~eri~s 1975 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 ordinance of said City passed and adopted on March 12, 1975. (g) Series 1981 Bonds or These Bonds - shall mean and refer to the $475,000 CITY OF SCHERTZ, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1981, dated February 1, 1981, authorized by this ordinance. (h) Additional Parity Bonds - shall mean the additional parity bonds which the City expressly reserves the right to issue in Section 19 of this ordinance. (i) Bonds Similarly Secured - shall mean the Series 1968 Bonds, the Series 1973 Bonds, the Series 1975 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 10: 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, toe Series 1973 Bonds, and the Series 1975 Bonds, all revenues derived from the operation of the System shall be kept separ~te from other funds of the City. To that end, the followinq special funds heretofore created are hereby reaffirmed: ~ (a) City bf Schertz called SYSTEM FUND. depository bank. Utility System Fund, hereinafter This fund shall be kept in the City's (b) City of Schertz Utility System Revenue Bond Interest and Sinking Fund, hereinafter called INTEREST AND SINKING FUND. This fund shall be deposited with the FIRST INTERNATIONAL BANK IN SAN ANTONIO, 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 FIRST INTERNATIONAL BANK IN SAN ANTONIO, 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 11: All revenues of every nature received through the-operation-of the System shall be deposited from day to day as collected into the SYSTEM FUND, and the reasonable and proper expenses of operating and maintaining the System as set forth in Section 9(c) 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 12: 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 1973 Bonds and the Series 1975 Bonds, for the payment of the principal and interest requirements of . , such bonds, the City shall, on or befor!' the 15th dilY of August, 1981, deposit in the INTEREST AND SINKING FUND an amount of money not less than nil of tile interest to become due on the first installment of interest on These Bonds (interest falling due on September 1, 1981); and thereafter on the 15th day of each month, commencing with the 15th day of Septembor, 19 81 ,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 'o.ecome due on These Bonds. In addi tion, commencing on or before the 15th day of August, 1981, the City shall deposi t in the INTEREST AND SINKING FUND an amount of money not less than one-twelfth (1/12), of the installment of principal falling due o~ September 1, 1982, and on the 15th day of each month thereafter until the bonds are paid and retiree!, the City shall deposit'.in said INTEREST AND SINKING FUND an amount of money not le5i than one-twelfth (1/12) of the next maturing principal on ~hese Bonds. Section 13~ After the requirements set. forth in Sections 11 and l2have been satisfied, and all deficiencies in such requirements have been remedied, there shall be paid into the RESERVE.FUND on or before April 15, 1981, and on or before the 15th day of each month thereafter, the sum of $..1.J1~_...9Q__,____ per month until there shall have been accumulated in said fune! an amount of not less than one and one-half (l~) times the ilvoraqe annual principal and interest requirements of all bonds secured by a first lien on and pledge of the net revonues of the System. When fully accumulated in accordance herewith, no further payments need.be made into the RESERVE FUND, except whenever said fund is r'educed below such amount, monthly deposits shall be resumed ,as hereinafter specified and continued unt.i] 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 th(' date of making such investment, which securities shall be depos.ited 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 sim.ilarly 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 result.ing 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 qnly for the purposes specified herein with reference to said RESERVE FUND. , ''"'''. Section 14: 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 una~located revenues of the following month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said funds during such month or months. Section 15.: 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 pu~poses. Section 16",.'. SECURITY OF FUNDS - All special funds heretofore created and herein reaffirmed for which this ordinance makes provision (ex<;ept any portions thereof as may be at any time properly inv~~ted) 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 1973 Bonds and the Series 1975 Bonds. Section 17: That These Bonds, together with the outstanding Series 1968 Bonds, the Series 1973 Bonds and the Series 1975 Donds, (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 1973 Bonds and the Series 1975 B6nds), 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 1973 Bonds and the Series 1975 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 1975 Bonds, the Series 1973 Bonds and the Series 1968 Bonds (and any and all Additiona~ Parity Bonds when issued subject to the terms and provisions of this ordinance and the ordinances authorizing the Series 1968 Bonds, the Series 1973 Bonds and the Series 1975 Bonds.) Section 18: 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 ~f Texas, and that so long as any of These Bonds, the Series 1975 Bonds, the Series 1973 Donds 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, replacement and betterment charges and expenses of the System; (b) Fully maintain the hereinabove prescribed INTEREST AND SINKING FUND and RESERVE FUND; and (e) Pay all outstanding indebtedness against the System, including These Bonds, ihe Series 1975 Bonds, the Series 1973 Bond~, and the Series 1968 Bonds (and any and all Additiona~Parity Bonds) as and when the same become due. The City fUTther covenants and agrees that no free service shall be rendDred by the System to any customers; and should the City or a~.y of its agencies or instrumentalities make use of the sC'l'vices and fac i Ii ties of the Sys tern, payment of the reasonab~~ value thereof shall be made by the City out of funds derited from sources other than the revenues and income of the System. Section 19: That, (in addition to the right to issuc junior lie~ 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 1975 Bonds, the Series 1973 Bonds, and the Series 1968 Bonds, and such Additional Parity Bonds shall be equally sccured 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, provided that the following oonditions shall have been met: (a) That the City is not then in default as to any covc'nan!, condition or obligation contained in the ordinances authorizing the issuance of These Bonds, the Series 1975 Bonds, the Series 1973 Bonds and the Series 1968 Bonds; (h) 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 the!rein; (d) The Net Revenues of the System for the completed twelve (12) months immediately preceding the adoption of t~e ordinance authorizing the issuance of the Additional Parity Bonds are equal to at least one and one-half (l~) times the average annual requirement for the payment of principal and interest on the then outstanding bonds and on the Additional Parity Bonds, as such net revenues arc 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 exp~nditures which, under stilndanl accounting pr,lcti ce, should be charged to cilpi ta 1 expendi tures; PROVI DED, II0\'1EVER, thil t the requirement of this subparagraph (dl shilll not apply or be a condition to the right of the City to issue bonds for the initial acquisition (by purchase or construction) of an electric light and power and/or a natural gas system in ilnd for said City, but such bonds may be issued ill any time provIded the City has secured a certificate from an engineer r~gistered by the State Board of Registration for Professional Engineers of the State of Texas, showing that the average ilnnual net income and revenues of the System (afber providing for adeguClte maintenil.llCe anel operation e,xp,enses) as estimated by him throu(lhout the maturities"&f all of such outstanding bonds, wi]] be at least one .a~d one-half (l~) times the ?verage annual requiremeri~s for the payment of principal of and interest on all borrd~ to be paYilble from and secured by a first lien on and pled.]e 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; If) The ordinance authorizing the issuance of the Additional Parity Bonds provides for the accumulation in the INTEHEST AND SINKING FUND of amonnts sufficient to pay the principal of and interest on such Additional Parity Bonds as th~ same mature; and (g) The ordinanceauthorizinq the issuance of the l\rld it; anal Parity Bonds provides that the amount to be accumulated in the RESEHVE FUND shall be not less than one and one-hidf (l~) times the average annual requirement for the payment of principal of a~d interest on all bonds to be secured by a first lien on iJnd pledge of the net revenues of the System after qivinCJ effect to the issuilnce of tl,,' proposed ^ddi tional Par i ty 130nd s, and provid('d thil t allY add i tiollal RESERVE FUND amount which may thus be required shall be accumulated within sixty (60) calend,lr months from the dilte of the iJdoption of the ordinance authorizing such proposed Additional Parity Bonds. " ,--., " Sec tion_~_~ Tha t, if pr ior to the paymen t and discharge of all of These Bonds, the Series 1975 Bonds, the Series 1973 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 thereof may be refunded with the consent of the holders thereof (except 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 ~ame 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 earl:ier than the maturity dates of any of the bonds not refunded,~~en that portion of the first lien bonds desired to be refunde~~ay not be refunded without the consent of the hc;>lders of the unrefunded' portion of the first lien bonds then outstanding. .... . Section 21; 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 oE the bonds similarly secured arc 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 payments. Monies received from losses under such insurance policies othet than public liability policies, arc hereby pledged as sec'urity for the bonds until and unless the proceeds are paid out in making good the loss or damage in respect of which such proceeds arc received, either by replacing the property destroyed or by repairing the property damaged. Adequate provisions for making good such loss or damage shall be made within ninety (90) days from the date of loss. Nothing in this ordinance shall be construed as requiring the Ci.ty to expend any funds which arc derived from sources other thell1 the, operation of the System, but nothing herein shall be construed as preventing the City from doing so. Section 22: 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 oper~tion 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 rel~tin0 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 ~t 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 followinq close of each fiscal yeur, it will cause un alldit of such books und C1ccounts to be mude by an independent Certified Public Accountant or a licensed public accountant within sixty (60) days after the close of each fiscal year. Rach such audit, in addition to what other nmtters may be thought proper by the accountant, shall contain the following: (a) A st~tement of the income and expenditures of the System for'. such fiscal year; (b) A balance sheet as of the end of such fiscal year; (c) The ac.countant's comments regarding the manner in which the City has carried out the requirements of all onlinunces';authorizing bonds then outstanding, und his recommendi\,tions 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 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; (e) A list of the securities which halle been on deposit as security for the money in the INTEREST ANn SINKING FUND and the RESEHVE FUND throughout the fiscul yeClr, a list of the securities, if any, in which the RESERVE FUND has been invested, and a stCltement 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 inCtlrred in making tIle audits a}Jovc rccluircrl are to be regarded as main tenance and operu t ion expenses und p,a id as such. Copies of the aforesaid annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory Council of Texas, at his office in Austin, Texas, and to the 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 ari operating and income statement in reasonable detail coverin'g such period to any bondholder l1pon his l('quest therefor received not more than thirty (10) days a[tcr the close of said six nlenths period. Any bondholder sllilll have the right to discuss with the accountant making the annual audit the contents thereof and to ask for such additional information as he may reasonably require. , ~, , . Section 23: 0rJ:'i~!~Sle Bond CovenClnt - ThClt the City hereby represents~nd certifies that based on facts, estimCltes and circumstances expected to exist on the dClte of the issuClnce of the bonds it is not reasonable to anticipate that the proceeds thereof will be used in a manner which would cause them to be "arbitrage bonds" within the meaning of Section 103(c) of the InternCll Hevenue Code of 1954, as Clmemled, or the regulCltionsthereunder applicable thereto, and the officers of the City charged with the responsibilities in the issuance of the bonds are authorized and directed to make, execute and deliver certifications as to facts, estimates and circumstances in existence '8S of the date of the issue of the bonds Clnd stating whether to the best of their knowledge and belief there are any facts, estimates or circumstances which would materially change the City's present expectations. The covenants her~in made and the certifications herein authorized are for the b~nefit of the holders from time to time of the bonds and the "coupons appertaining thereto and may be relied upon by said~olders and by bond counsel. ~ . . . Section 24: Hemedies in Even~ of Default: That in addition to all th'e rigl1tsand- remedies provldecf-bythe la\'ls 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 12 and 13 of this ordinance to be'milde into' the INTEHEST MoJD SINKING FUND and the RESERVE FUND, or (h) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in the ordinances iluthorizing the issuance of any of the bonds similarly secured, the following remedies shall be available: (1) The holder or holders of any of the bonds simi lurly secured shall be entitled to il writ of milnclamus issnecl by a court of proper jurisdiction, compellinq i1nel requiring the City Council and other officers of thee City to observe and perform any covenant, obligation or condition prescribed by said ordinances. (2) No deelay or omission to exercise any riqht or power accruing upon any default shall impair any such right or power or shall bee 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 reemeedies heerein provided Shilll be cumulutivc of all other existing remedies, and the specification of such remedies shalt not be deemed to be exclusive. . ,. , . . . . , " Section 25: FURTHER COVENANTS - That the City further covenants and agrees-by and through this ordinance, as follows, to-wit: (a) That These Bonds, the Series 1975 Bonds, thc Series 1973 Bonds and the Series 1968 Bonds (and ~ny Additional Parity Bonds when issued), including the interest coupons thereto attached, shall be special obligations of the City, and the holder or holders thereof shall never have the right to ?emand payment of said obligations out of any funds rai~d, 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 undeF the Constitution and laws of the State of Texas, including ihe power existing under Articles 1111 to 1118, both inclu;ive, as amended, Revised Civil Statutes of Texas; that Thesq Bonds issued hereunder shall be ratably secured in such manner that no one bond shall have preference over any other'~ond of said issue; and that These Bonds are issued on a parity and equal dignity with the outstanding Series 1975 Bonds, Series 1973 Bonds, and the Series 1968 Bonds; (c) That so far as it legally may do so for the protection and security of These Bonds, the Series 1975 Bonds, the Series 1973 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 competing waterworks or sewer system in the City until all said bonds shall have been retired. (d) 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 substantial 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 be construed to prevent the disposal by the City of property which in its judgment has become inexpedient to use in connection with the System when other property of equal value has been substituted therefor). Section 26: ORDINANCE TO CONSTITUTE CONTRACT j That the provisions 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, alteration or variation of any kind of the provisions of this ordin~nce may be made (except as herein otherwise provided), until all of said bonds shall have been paid both as to principal and interest. i , . . . , ' Section' 27: BONDS AS NEGOTIABLE INSTHUHENTS - Tha t e"ch of the bonds herein a u thai: i zed shi1TT-be dcemcCl- and construed to be a "security" and as such a negotiable instrumellt, within the meaning of Article 8 of the Uniform Commercial Code. Section 28: DUTIES OF MAYOR - That the Mayor of the City is hereby-authoriz-ed-t.o takea'i1d have charge of all necessal:y 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'~exas, and registration by the Comptroller of Public Acccunls of the Sta~e of Texas. When These Bonds have been registered, said Comptroller is hereby authorized and instructed to deliver These Bonds to TilE CITY NATIONAL BANK OF AUSTIN, AU~TIN, TEXAS, where they will be taken up and paid for by the purchaser. . . ", Section 29: CONFIR."1ATION OF SALE - That the bid of Underwood Neuha ~-&-eu:-;--Tnr.--"--------- ----~--- . -------_._------*~------ for These Bon~s at the price of par and accrued interest to the da te of de Ii very, plus a cash premium of $ -0- , having been heretofore accepted, the sale of These"Bonds is-hereby confirmed to said purchaser, and the Mayor and City Manager of the City of Schertz are hereby authorized, directed and instructed to do all things necessary to deliver These Bonds to said purchaser at TilE CITY NATIONAL BANK OF AUSTIN, AUSTIN, TEXAS, at the aforesaid price, and it is hereby officilllly FOUND, DETEHMINED AND DECLARED that said purchaser is the highest bidder for said bonds as a result of competitive bids having been submitted to this City Council in response to public advertisement therefor made. Section 30: INVALIDITY OF PART OF ORDINANCE - That, if any sectlon;-p'aragr-a-ph ;cbuseor-provTsion--C"iT-thi S ord inance s ha 11 be held to be invalid for any reason, the invalidity thereof shall not affect any of the remaining sections, paragraphs, clauses or provisions of this ordinance. Section 31: EMERGENCY CLAUSE - That the public importance of 'thi-s measure-and-t:he-presslng need of the City to obtain funds for the purposes set forth in Section 1 of this ordinance, for the immediate preservation of the public peace, health and safety of the citizens of said City, constitute and create an urgent public necessity requiring that this ordinance be passed and take effect as an e~ergency measure, and this ordinance is accordingly passed as an emergency measure, and shall take effect and be in force immediately from and after its passage. Section 32~ PRINTING OF LEGAL OPINION ON BONDS - That the pl,lrchase'r-iibovenamed-hav lng-pUre ha sedt"hc;-Sondshere in a IJ t hor i zed subject to the final opinion of Messrs. Dumas, HUCfuenin, Boothman & Morrow, Attorneys at Law, San Antonio, Te~as, approving the validity of such bonds, which approving opinion is to be dated ;'. .10," .. '. 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 eilch of said bon(ls with an appropriate certificate pertaining thereto executed by the facsimile signature of the City Secretary of the City of Schertz is hereby ~pproved and authorized. ~ectiri 33: CUSIP NUMBERS - That CUSIP numbers may be printed ontlie bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the bonds shall be of ~o significance or effect as regards the legality thereof and ~either the City nor attorneys approving said bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the bonds. .~ . APPROVED this, the 16th day , 19B,~. / /J~ ' (lc/'I/ ..."/ I a~-{fY of S~h~~;', /T'8xa~' of PASSED, AD~PTED AND 1:1-arch . . ATTEST: l~_ ______________ of Schertz, Texas (SEAL OF CITY) li!(_ ! ,