ORDINANCE NO. 79
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ORDINANCE NO. ~
AN ORDINMfCE AUTHORIZING THE ISSUANCE OF $300,000 WATER-
WORKS AND SEWER SYSTEM REVENUE BONDS; PRESCRIBING THE
TERMS AND PROVISIONS THEREOF; MAKING PROVISION FOR THE
PAYMEVT OF THE PRINCIPAL THEREOF AND THE INTEREST THERE-
ON; AWARDING THE SALE THEREOF; CONTAINING OTHER PROVISIONS
RELATING TO THE SUBJECT; AND PROVIDING THAT THIS ORDINANCE
SHALL BE IN FULL FORCE AND EFFECT FROM AND AFTER ITS
ADOPTION
THE STATE OF TEXAS ~
COUNTY OF GUADALUPE ~
The City Council of the City of Schertz, Texas, convened
in Jrc./iI/ session at the City Hall within said City on the
:J. q~day of _ JaN'u.#.RY ,1963, with the following members
present, to-wit:
Dr. Roy W, Richard
Mayor
Ralph R. Ikels
Alderman
Elgin Beck
Alderman
George P. Bolton
Alderman
W. E. Ebert
Alderman
R. R. Cosby
Alderman
G. W. Pickrell
City Secretary
and the following member(s) absent, to-wit:
JlDN IE
when the following, among other business, was transacted, to-wit:
The Mayor introduced an ordinance which was read in full.
Alderman tD5Jy
made a motion that the ordinance be adopted
as read. Alderman i1 e(! A::
seconded the motion for adoption of
said ordinance. The motion, carrying with it the adoption of the
ordinance, prevailed by the following vote:
AYES: Aldermen Ikels, Beck, Bolton, Ebert,
Cosby, and Mayor Richard.
NOES: None.
The Mayor thereupon announced that the motion had duly and
lawfully carried, and that the ordinance had been duly and iawful~y
adopted. The ordinance thus adopted follows:
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AN ORDINANCE AUTHORIZING ,THE ISSUANCE OF $300,000 WATER-
WORKS AND SEWER SYSTEM REVENUE BONDS; PRESCRIBING THE
TERMS AND PROVISIONS THEREOF; MAKING PROVISION FOR THE
PAYMENT OF THE PRINCIPAL THEREOF AND THE INTEREST THERE-
ON; AWARDING THE SALE THEREOF; CONTAINING OTHER PROVISIONS
RELATING TO THE SUBJECT; AND PROVIDING THAT THIS ORDINANCE
SHALL BE IN FULL FORCE AND EFFECT FROM AND AFTER ITS
ADOPTION
WHEREAS, the City of Schertz, Texas, has no municipal water-
works system; and
WHEREAS, said City is now constructing a municipal sanitary
sewer system for said City; and
WHEREAS, at an election held in said City on the 15th day of
December, 1962, more than a majority of the duly qualified resident
electors of said City who owned taxable property within said City and
who had dUly rendered the same for taxation, voting at said election,
voted in favor of the issuance of revenue bonds of said City in the
principal amount of $600,000 for the purpose of purchasing a privately-
owned waterworks system which serves the inhabitants in and in the
vicinity of said City, and improving and extending said waterworks
system, said bonds to be payable from and secured by a pledge of the
net revenues of said waterworks system and from the operation of the
sanitary sewer system of said City, and said bonds to mature serially
within 35 years from their date or dates and to bear interest at a
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rate or rates not to exceed 5% per annum; and
WHEREAS, said election was called and notice Of said election
was given and said election was held under and in strict conformity
with the Constitution and laws of the State of Texas, and the City
Council of said City has heretofore officially canvassed the returns
of said election and determined the specific authority of the City to
issue said bonds; and
WHEREAS, the City Council has determined, and hereby affirma-
tively determines, that a portion and first installment of $300,000
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bonds out of said total authorized bonds should now be issued, re-
serving the right to issue the remaining $300,000 authorized bonds
when needed to carry out the voted purpose; and
WHEREAS, the City Council wishes to proceed with the
issuance and sale of said first installment bonds; Therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ,
TEXAS:
Section 1:
AMOUNT, NAME, PURPOSE 0 AND AUTHORIZATION OF REVENUE BONDS: Tha t
the serial coupon revenue bonds of the City of Schertz, Texas, be
issued in the principal amount of $300,000, to be known and designated
as "CITY OF SCHERTZ, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 1963", for the purpose of purchasing a privately-owned water-
works system which serves the inhabitants in and in the vicinity of
said City, and improving and extending said waterworks system under
and by virtue of and in strict conformity with the Constitution and
laws of the State of Texas, particularly Articles llll to 1118, both
inclusive, Vernon's Texas Civil Statutes, as amended, and pursuant
to the special election held in said City on the 15th day of December,
1962, the bonds hereby authorized being a portion and the first in-
stallment of bonds out of a total of $600,000 revenue bonds authorized
at said election.
Section 2:
2.01 - DATE, BOND NUMBERS, DENOMINATION, AND MATURITIES: That said
revenue bonds shall be dated February 1, 1963, shall be numbered
consecutively from I to 300, both inclusive, shall be in the denom-
ination of $1,000 each, aggregating $300,000, and shall become due
and payable serially in their numerical order on June 1st in each
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of the years 1964 to 1993, both inclusive, in the respective amounts
shown in the following sCheule, to-wit:
Bond Numbers Year of Amount
(both incl.) Maturity Maturing
1 - ,5 1964 $ 5,000
6 - 10 1965 5,000
11 - 15 1966 5,000
16 - 21 1967 6,000
22 - 27 1968 6,000
28 - 33 1969 6,000
34 - 39 1970 6,000
40 - 46 1971 7,000
47- 53 1972 7,000
54 - 60 1973 7,000
61 - 68 1974 8,000
69 - 76 197,5 8,000
77 - 84 1976 8,000
85 - 93 1977 9,000
94 - 102 1978 9,000
103 - 112 1979 10,000
113 - 122 1980 10,000
123 - 132 1981 10,000
133 - 143 1982 11 , 000
144 - 154 1983 11,000
155 - 166 1984 12,000
167 - 178 1985 12,000
179 - 191 1986 13,000
192 - 205 1987 14,000
206 - 219 1988 14,000
220 - 234 1989 15,000
235 - 250 1990 16,000
251 - 266 1991 16,000
267 - 283 1992 17,000
284 - 300 1993 17,000
2.02 - OPTION OF PRIOR REDEMPTION; That each of the bonds of this
issue maturing on and after June I, 1984, shall be subject to redemp-
tion prior to maturity on June 1, 1983, and on any interest payment
date thereafter, at a price of par and unpaid accrued interest to
the date so fixed for redemption. Notice of the intention to redeem
shall be given in writing to the bank at which said bonds are payable,
and said notice shall be published at least one (1) time in a finan-
cial journal or publication of general circulation in the United
States of America, which notice shall be given to said bank and pub-
lished in said journal or publication at least thirty (30) days prior
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to the date fixed for redemption. If, by the date fixed for re-
demption, funds shall have been made available sufficient to pay
the principal of any bond so called for redemption and unpaid ac-
crued interest thereon to the date fixed for redemption, it shall
not thereafter bear interest,. In the event that less than all
bonds outstanding then eligible for redemption shall be thus called,
the bonds then proposed to be redeemed shall be called in inverse
numerical order.
Section 3:
3.01 - INTEREST RATES AND INTEREST PAYMENT DATES: That said bonds
shall bear interest per annum, represented by interest coupons at-
tached to such bonds, at the following rates, respectively:
Bonds Nos. 1 to 21, both inclusive, 5%,
Bonds Nos. 22 to 60, both inclusive, 4%,
Bonds Nos. 61 to 266, both inclusive, 4-1/2%, and
Bonds Nos. 267 to 300, both inclusive, 4-5/8%,
interest payable June 1, 1963, and semi-annually thereafter on
December 1st and June 1st of each year until the principal sum is
paid.
3.02 - MODE OF PAYMENT AND BANK OF PAYMENT: That both principal of
and interest on said bonds shall be payable in any coin or currency
of the United States of America which, on the respective dates of
payment of such principal and interest, is legal tender for the
payment of debts due the United States of America, at the Frost,
National Bank, San Antonio, Texas, without exchange or collection
charges to the owners of the bonds and/or interest coupons. The
principal of said bonds shall be payable only upon presentation and
surrender of said bonds as they respectively become due, and interest
falling due on and prior to the respective maturity dates of the
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bonds shall be payable only upon presentation and surrender of the
interest coupons attached to said bonds as such interest coupons
severally become due.
Section 4:
EXECUTION ,OF BONDS AND INTEREST COUPONS: That each of said bonds
shall be signed by the Mayor and countersigned by the City Secretary
of the City of Schertz, Texas, by the lithographed or printed fac-
simile signatures, and the facsimile of the corporate seal of said
City shall be lithographed or printed on each of said bonds. The
interest coupons attached to said bonds shall also be executed by
said facsimi~e signatures of the Mayor and City Secretary. Said
facsimile signatures on the bonds and interest coupons and said
facsimile seal on the bonds shall have the same effect as if said
bonds and coupons had been signed in person and manually by each of
such officers and the corporate seal of the City had been manually
impressed upon each of such bonds. The registration certificate of
the ComptrOller of Public Accounts of the State of Texas, which cer-
tificate is to be printed on the back of each of said bonds as pro-
vided hereafter in Section 7 of this ordinance, shall be manually
executed.
Section 5:
FORM OF BONDS: That said bonds shall be in substantially the follow-
ing form:
No.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF GUADALUPE
$1,000
CITY OF SCHERTZ, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1963
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THE CITY OF SCHERTZ, in the County of Guadalupe, in the
State of Texas, FOR VALUE RECEIVED, hereby acknowledges itself in-
debted to and PROMISES TO PAY TO BEARER ON THE FIRST DAY OF JUNE,
I 9____, solely from the special fund hereinafter specified, the sum
of
ONE THOUSAND DOLLAR,S
($1,000), and to pay interest thereon from the date hereof at the
rate of % (NOTE TO PRINTER: For interest rates, see Section
3.01 of bond ordinance) per annum, interest payable June 1, 1963,
and semi-annually thereafter on December lst and June 1st of each
year until the principal sum hereof shall have been paid. Both
principal of and interest on this bond are payable in any coin or
currency of the United States of America which on the respective
dates of payment of such principal and interest is legal tender for
the payment of debts due the United States of America, at the Frost
National Bank, San Antonio, Texas, without exchange or collection
charges to the owner or holder. The prinCipal hereof shall be pay-
able only upon presentation and surrender of this bond, and interest
hereon falling due on and prior to the maturity of this bond shall be
payable only upon presentation and surrender of the interest coupons
hereto attached as such coupons severally become due.
THE DATE OF THIS BOND, in conformity with the ordinance
hereinafter mentioned, IS FEBRUARY 1, 1963.
THIS BOND IS ONE OF A SERIES OF 300 SERIAL BONDS of like
date and tenor, except as to serial number, interest rate, maturity,
and option of prior redemption, being numbered consecutively from
1 to 300, both inclusive, in the denomination of $1,000 each,
AGGREGATING $300,000 (being a portion and the first installment of
bonds out of a total of $600,000 bonds authorized at the election
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hereinafter mentioned), and, together with the other bonds of said
series, is issued for the purpose of purchasing a privately-owned
waterworks system which serves the inhabitants in and in the vicinity
of said City, and improving and extending said waterworks system,
under and by virtue of the Constitution and laws of the State of
Texas, particularly Articles 1111 to 1118, both inclusive, Vernon,' s
Texas Civil Statutes, as amended, and by authority of a vote of the
duly qualified resident electors of said City who owned taxable
property within said City and who had duly rendered the same for
taxation, at an election held within said City on the 15th day of
December, 1962, and pursuant to an ordinance lawfully adopted by
the City Council of said City and duly recorded in the official
minutes of said City Council, to all the provisions of which ordi-
nance the owner or holder of this bond and of the interest coupons
appurtenant hereto, by the acceptance thereof, expressly assents.
EACH OF THE BONDS OF THIS ISSUE MATURING ON AND AFTER
JUNE 1, 1984 (being Bonds Nos. 155 to 300, both inclusive) SHALL
BE SUBJECT TO REDEMPTION prior to maturity ON JUNE 1, 1983, and
on any interest payment date thereafter, at a price of par and
accrued interest to the date so fixed for redemption. If the City
elects to redeem all or any part of said bonds, notice of the in-
tention to redeem shall be given in writing to the bank at which
said bonds are payable, and said notice shall be published at
least one (I) time in a financial journal or publication of general
circulation in the United States of America, which notice shall be
given to said bank and published in said journal or publication at
least thirty (30) days prior to the date fixed for redemption. If,
by the date fixed for redemption, funds shall have been made avail-
able sufficient to pay the principal of any bond so called for
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redemption and unpaid accrued interest thereon to the date fixed
for redemption, it shall not thereafter bear interest. In the event
that less than all bonds outstanding then eligible for redemption
shall be thus called, the bonds then proposed to be redeemed shall
be called in inverse numerical order.
~ACH SUCCESSIVE HOLDER OF THIS BOND and each successive
holder of each of the interest coupons hereto attached is conclusively
presumed to forego and renounce his equities in favor of subsequent
holders for value and without notice, and to agree that this bond and
each of the coupons hereto attached may be negotiated by delivery by
any person having possession thereof, howsoever such possession may
have been acquired, and that any holder who shall have taken this bond
or any of the coupons from any person for value and without notice
thereby has acquired absolute title thereto, free from any defenses
enforceable against any prior holder and free from all equities and
claims of ownership of any such prior holder. The City of Schertz
and its official and fiscal agents shall not be affected by any
notice to the contrary.
THIS BOND SHALL NOT BE DEEMED TO CONSTITUTE A DEBT of the
City of Schertz or a pledge of its faith and credit, but shall be
payable, as to principal and interest, solely from the revenues
derived .from the operation of the waterworks and sanitary sewer sys-
tem of said City, including all additions, extensions, replacements,
and improvements thereto which may hereafter be made, after deduc-
tion therefrom of the reasonable expenses of maintenance and operation
of said System. The holder hereof Shall never have the right to
demand payment of this obligation out of any funds raised or to be
raised by taxation.
THE CITY EXPRESSLY RESERVES THE RIGHT TO ISSUE the remaining
bonds authorized at the election held on December 15, 1962, and
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additional bonds payable from the net revenues of said waterworks
and sanitary sewer system, and such remaining voted bonds and addi-
tional bonds may be on a parity and of equal dignity in all respects
with the bonds of this issue, but such remaining voted bonds and
additional parity bonds may be issued only pursuant to and subject
to the restrictions, covenants, and limitations contained in the
ordinance authorizing this issue of bonds, to which reference is
hereby made for all particulars.
IT IS HEREBY CERTIFIED, RECITED, AND REPRESENTED that the
issuance of this bond and the other bonds of the series of which
this bond is a part is duly authorized by law; that all acts, con-
ditions, and things required to exist and to be done precedent to
and in the issuance of this series of bonds to render the same law-
ful and valid have been properly done and performed and have happened
in regular and due time, form, and manner, as required by law; that
due provision has been made for the payment of the principal of and
interest on this bond and the other bonds of the series of which it
is a part by irrevocably pledging the net revenues of said water-
works and sanitary sewer system; and that the issuance of this series
of bonds does not exceed any Constitutional or statutory limitation,
IN TESTIMONY WHEREOF, the City Council of the City of
Schertz, Texas, has caused the facsimile of the corporate seal of
said City to be lithographed or printed hereon, this bond to be
signed by the Mayor of said City and countersigned by the City
Secretary by their lithographed or prtnted facsimile signatures, and
the interest coupons hereto attached also to be executed by said
facsimile signatures of the Mayor and City Secretary, all as of the
lst day of February, 1963.
Mayor, City of Schertz, Texas
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COUNTERSIGNED:
City Secretary
Section 6:
FORM OF INTEREST COUPONS: That the interest coupons attached to
said bonds shall be in substantially the following form:
No.
$
ON THE 1ST DAY OF
, 19
, * THE CITY OF
SCHERTZ, in the County of Guadalupe, State of Texas, PROMISES TO PAY
TO BEAREH, without exchange, or collection charges, at the Frost
National Bank, San Antonio, Texas, THE SUM OF $
, in any
coin or currency of the United States of America which on such date
is legal tender for the payment of debts due the United States of
America, solely from the special fund specified in the bond to which
this coupon appertains, said sum being interest due that date on
City of Schertz, Texas, Waterworks and Sewer System Revenue Bonds,
Series 1963, bearing the number hereinafter specified, dated February
1, 1963. The holder hereof shall never have the right to demand pay-
ment of this obligation out of any funds raised or to be raised by
taxation. Bond No.
Mayor
Ci ty Secre tary
*(Coupons maturing after June 1, 1983, shall
contain the followipg additional clause:
unless the bond to which this coupons ap-
pertains has been called for previous re-
demption and due provision made to redeem
same, )
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Section 7:
REGISTP~TION OF BONDS BY STATE COMPTROLLER AND FORM OF REGISTRATION
CERTIFICATE: That each of said bonds shall be registered in the
office of the Comptroller of Public Accounts of the State of Texas,
as provided by law, and the registration certificate of said Comp-
troller of Public Accounts, which certificate is to be printed on
the back of each of said bonds and is to be manually executed, shall
be in substantially the following form:
OFFICE OF THE C:OMPTP,OLLEF
REGISTER NOo
THE STATE OF TEXA,S
I HEEEBY CEETIFY 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 re-
quired by law, and that he finds that it has been issued in con-
formi ty with the Cons ti tution and laws of the State of ry:'exas, and
is a valid and bind.ing special obligation of the City of Schertz,
Texas, payable from the revenues pledged to its payment by and in
the ordinance authorizing the same; and said bond has this day
been registered by me,
WITNESS MY HAND AND SEAL OF OF.FICE at Aus tin, Texas,
Comptroller of Public Accounts
of the State of Texas
Section 8~
DEFINITIONS: That, as used in this ordinance, the following words
and terms shall mean and include, and are defined, as follows, to-
wit:
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(al Qity - the City of Schertz, Texas, and, where appro-
priate, the City Council thereof.
(b) ~stem - the waterworks system to be purchased by the
City with the proceeds of sale of the bonds authorized by this ordin.,
ance and the sanitary sewer system of said City now under construction,
including all present and future additions, extensions, replacements,
and improvements to sa.id waterworks system and sanitary sewer system.
(c) Net revenues - the gross revenues derived from the
operation of the System less the reasonable expenses of maintenance
and operation of said System, including all salaries, labor, materials,
interest and such repairs and extensions as in the judgment of the
governing body of the City are necessary to keep the plant or utility
in operation and render adequate service to such City and the inhabi-
tants thereof, or such as might be necessary to meet some physical
accident or condition which would otherwise impair the original
security.
(d) Bonds - the $,300,000 City of Schertz, Texas, Water-
works and Sewer System Revenue Bonds, Series 1963, dated February I,
1963, authorized by this ordinance,
(e)P.emaining Bonds - the remaining $300,000 revenue bonds
authorized at the election held .in the City on the 15th day of
December, 1962, and which the City expressly reserves the right to
issue in Section 10.06 of this ordinance.
(f) Additional Bonds - the additional parity revenue
bonds that the City expressly reserves the right to issue in Section
10.07 of this ordinance.
,eection 9;
SECUR.ITY .FOR BONDS, REMAINING BOND~ AND ADDITIONAL BONDS: Tha t the
Bonds (and, when issued, the Remaining Bonds and the Additional Bonds)
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are payable from and secured by a first lien on and pledge of the
revenues of the System after deduction therefrom of the r~asonable
expenses of maintenance and operation of said Systemo The Bonds
and, when issued, the Remaining Bonds and the Additional Bonds
shall be in all respects on a parity and of equal dignity with one
another 0
Section 10:
PLEDGE OF NET RElrnNUES: That all of the net revenues from the
operation of the System, with the exception of those in excess of
the amounts required to establish and maintain the funds as herein-
after provided, are hereby irrevocably pledged to the payment of
the Bonds, and, when issued, the Remaining Bonds and the Additional
Bonds, subject to the terms and provisions of this ordinance 0 For
the benefit of the original purchaser of the Bonds and for the bene-
fit of any and all subsequent holders of said Bonds, interest coupons,
or any part thereof, and in addition to all other provisions and
covenants and the laws of the State of Texas and in this ordinance,
it is expressly stipulated:
10.01 - RATES: The City shall fix and maintain rates and collect
charges for the facilities and services afforded by the System which
will produce revenues sufficient at all times:
(a) To pay for all operation, maintenance, depreciation,
replacement, and betterment charges of the System;
(b) To produce net revenues each year in an amount not
less than one and one-half (1-1/2) times the average annual princi-
pal and interest requirements on all bonds then outstanding payable
from the revenues of the System;
(c) To establish and maintain the Bond Fund and the
Reserve Fund as provided in this ordinance and any ordinances
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authorizing the issuance of the Remaining Bonds and the Additional
Bonds; and
(d) To pay all outstanding indebtedness against the
System, other than the Bonds, the Remaining Bonds, and the Additional
Bonds, as and when the same become due, Provided, also, that no free
service or services of the System shall be allowed, and should the
City or any of its agencies or instrumentalities make use of the
services and facilities of the System, payment of a reasonable value
thereof shall be made by the City out of funds derived from sources
other than revenues and income of the System.
10002 - USE OF REVENUES: The City will deposit, as collected, all
revenues derived from the operation of the System into a separate
account (herein called the "System Fund"), which shall be kept
separate and apart from all other funds of the City. The System
Fund shall be administered as follows;
(a) Maintenance and Operation: From the moneys in the
System Fund, the City shall pay the expenses of maintenance and
opera tion of the Sys tem, including all salaries, labor, materials,
interest, and such repairs and extensions as in the judgment of the
governing body of the City are necessary to keep the plant or utility
in operation and render adequate service to such City and the inhabi-
tants thereof, or such as might be necessary to meet some physical
accident or condition which would otherwise impair the original secur-
ity.
(b) Bond Fund: There is hereby created and established a
special fund for the payment of the principal of and interest on the
Bonds, to be known as CITY OF SCHERTZ WATERWORKS AND SEWER SYSTEM
R~VENUE BOND INTEREST AND SINKING FUND, hereinafter referred to as
the "Bond Fund". After the payment of all expenses provided for in
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the next preceding paragraph, the City, on or before the 10th day of
each month, beginning with the month of March, 1963, and continuing
until all the Bonds have been finally paid, both as to principal and
interest, shall, from moneys in the System Fund, pay into the Bond
Fund the following amounts;
(1) On or before March 10, 1963, and on or before
the 10th day of each month thereafter to and
including the month of May, 1963, an amount
which is not less than one-third (1/3rd) of
the interest falling due on June 1, 1963, on
the Bonds; and
(2) On or before June 10, 1963, and on or before
the lOth day of each month thereafter, an
amount which is not less than:
one sixth (1/6th) of the next
maturing interest on the Bonds,
and
one-twelfth (1/12th) of the next
maturing principal of the Bonds.
If in any month the City shall, for any reason, fail to pay into
said Bond Fund the full amounts above stipulated, amounts equivalent
to such deficiency or deficiencies shall be set apart and paid into
said Bond Fund from the first available and unallocated revenues of
the following month or months and shall be in addition to the amounts
hereinabove- provided to be otherwise paid into said Bond Fund each
month. The moneys paid into the Bond Fund shall be deposited in the
official deposito.ry of the City, and shall be continuously secured by
a valid pledge to the City of direct obligations of the United States
of America, having an aggregate market value, exclusive of accrued
interest, at all times equal to such Bond .Fund. The amount received
from the purchaser of the Bonds as accrued interest thereon from the
date of the Bonds to the date of delivery shall also be placed in the
Bond Fund, which shall reduce by such amount the sums which would
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otherwise be required to be placed into the Bond Fund from the reve-
nues of the System.
(c) Reserve Fund; There is hereby created and established
a special fund as a reserve for the Bonds, to be known as CITY OF
SCHERTZ WATERWORKS AND SEWER SYSTEM REVENUE BOND RESERVE FUND, here-
inafter referred to as the "He serve .Fund", After the payments re-
quired by the next two preceding paragraphs have been made, the City,
on or before the 10th day of each month, beginning with the month of
,
March, 1963, shall, from moneys in the System Fund, pay into the v
___Reserve Fund an amount which is not less than $340 per month, and
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such monthly payments shall be continued until such time as there is
in the Heserve Fund an amount not less than $21,000. If in any month
the City shall, for any reason, fail to pay into the Reserve Fund the
full amount above stipulated, amounts equivalent to such deficiency
or deficiencies shall be set apart and paid into 'the Heserve Fund
from the first avail~ble and unallocated revenues of the following
month or months and shall be in addition to the monthly deposit here-
inabove provided to be otherwise paid into said Reserve Fund, The
moneys paid into the Reserve Fund shall be deposited in the official
depository of the City and shall be continuously secured by a valid
pledge to the City of direct obligations of the United States of
America, having an aggregate market value, exclusive of accrued
interest, at all times at least equa.l to such Reserve Fund, The
moneys in the Reserve Fund, at the option of the City, may be invested
in direct obligations of the United States of America maturing within
IO years from the date of purchase or maturing before the final matur-
ity of the Bonds then outstanding, whichever shall first occur, which
shall be deposited in escrow with the local depository under an escrow
agreement. If such moneys are so invested and deposited in escrow,
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the City shall have the right to have sold and shall sell through
the escrow agent on the open market a sufficient amount of such
securities in order to meet its obligations of principal and inter-
est in the event that it does not have sufficient uninvested funds
on hand for such purpose. Under such circumstances, the Mayor is
hereby authorized, ordered, and directed to give fifteen (15) days)
written notice to such escrow agent of the necessity to sell such
securities on the open market. After said sale, the moneys re-
sul ting therefrom shall belong to the Reserve .Fund and shall be
available to pay such obligations of' principal and interest as above
provided. So long as the Eeserve Fund contains a balance of not less
than $21,000, no further payments need be made into said Reserve J"und;
however, in the event that said balance is ever reduced to an amount
less than $21,000, the monthly payments, as provided above, shall be
continued and resumed until said balance of not less than $21,000 is
again reached and maintained.
(d) Trust Punds: Moneys in the Bond Fund and in the
Eeserve Fund shall constitute trust funds, and shall be used solely
for the aforesaid purposes until all of the Bonds have been retired,
both as to principal and interest. The appropriate officials of the
City shall a~sure that moneys are transferred from the Bond Fund
(and, if necessary, from the Reserve Pund) to the bank of payment
at the proper times so that funds will be available for the payment
of the interest on and principal of the Bonds as such interest and
principal respectively become due and payable. When there are moneys
in the Bond Fund and Reserve Fund sufficient to make all interest
payments and all principal payments due and to become due to the
final maturity of all bonds then outstanding payable from the reve-,
nues of the System, no further payments need be made into said Bond
Fund and Eeserve .Fund.
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(e) Surplus: Any funds remaining in the System Fund after
provision has been made for the pa.yment of the reasonable costs of
maintaining and operating the System, and for the payments into the
I Bond Fund and the Reserve Fund, as above provided, and after provi-
,
sion has been made for all payments that may be required by ordinances
or proceedings pertaining to Remaining .Bonds or Additional Bonds, may
be used for the retirement of Bonds, Remaining Bonds, or Additional
Bonds, or may be used for any other purpose or purposes permitted by
law.
10003 - MAINTENANCE AND OPERATION: The City shall maintain the
System in good condition and operate the same in an efficient manner
and at a reasonable cost. So long as any of the Bonds are outstanding,
the City agrees to maintain insurance, for the benefit of the holder
or holders of said Bonds, on the System of a kind and in an amount
which would usually be_carried by private companies engaged in a simi-
lar type of business. Nothing in this ordinance shall be construed as
requiring the City to expend any funds for this purpose which are de-
rived from sources other than the operation of the System, but nothing
herein shall be construed as preventing the City from doing so,
10.04 - ACCOUNTS, FISCAL YEAR, AND ACCOUNTING REPORTS:
(a) The City
shall keep proper records and accounts (separate from all other
records and accounts of the City) in which complete and correct entries
shall be made of all transactions relating to the System. The City will
operate the System on the basis of a fiscal year ending /)E~EMB!1e
3/4.
(b) Not later than the 15th day of each month, beginning
with the month of
II ~/Ci/
. 1963, the City will furnish, with-
out cost to:
M. E. Allison & Coo, Inc.,
San Antonio, Texas, and
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Any holder of any Bond or Bonds
who may so request in writing,
a copy of a monthly operating statement signed by an official of the
City, covering the next preceding calendar month, showing the fol-
lowing information relating to the System:
(1) Income and expense statement;
(2) Balance in each of the Funds created by this
ordinance;
(3) Number of billings for water services of System; and
(4) Number of billings for sanitary sewer services of
System.
(c) Not later than 90 days after the close of each fiscal
year, beginning with the fiscal year ending lJ.Ee,EMI$ER.
2.L, 1963,
the City will furnish, without cost, to:
M. E. Allison & Co., Inc.
San Antonio, Texas
Municipal Advisory Council of Texas
Austin, Texas, and
Any holder of any Bond or Bonds who
may so request in writing,
a signed or certified copy of a report of an independent certified
public accountant or firm of certified public accountants, covering
the next preceding fiscal year, showing the following information
relating to the System:
(1) Income and expense statement;
(2) Balance sheet;
(3) Accountant's comment regarding the manner in which
the City has complied with the requirements of this ordinance, and
his recommendations for any changes or improvements in the accounting
procedures;
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(4) List of insurance policies in force at end of the
fiscal year, showing as to each policy, the risk covered, the name
of the insurer, and the expiration date;
(5) The number of unmetered water customers of the System
at the end of said fiscal year, if any; and
(6) The number of gallons of water pumped into or taken
by the System and the number of gallons of water sold by the System
during said fiscal year.
10.05 - INSPECTIONS: Any purchaser of 25% or more in principal amount
of the Bonds, and any holder of 25% or more in principal amount of the
Bonds then outstanding Shall have the right at any reasonable time to
inspect the System and all records, accounts, and data of the City
relating thereto.
10.06 - REMAINING VOTED BONDS: The City expressly reserves the right
to issue the remaining $300,000 bonds authorized at the election held
in said City on the 15th day of December, 1962, in one or more in-
stallments, and such Remaining Bonds, when issued, shall be payable
from and secured by a first lien on and pledge of the net revenues of
the System in the same manner and to the same extent as are the Bonds,
and such Remaining Bonds shall be in all respects on a parity and of
equal dignity with the Bondso No Remaining Bonds, however, shall be
issued unless:
~(a) The City is not then in default as to any covenant,
condition, or obligation prescribed by this ordinance;
(b) Each of the funds created by this ordinance contains
the amount of money then required to be on deposit therein;
(c) The average annual net revenues of the System for
either of the following two-year periods:
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the 24-month period ending on the last day
of the month preceding the month in which the
bond ordinance is adopted authorizing such
Remaining Bonds,
or
the then two preceding fiscal years,
as certified by an independent certified public accountant or firm
of certified public accountants, were equal to at least one and one-
half (1-1/2) times the average annual principal and interest require-
ments on all first-lien revenue bonds payable from the net revenues of
the System that will be outstanding after the Remaining Bonds then
proposed to be issued are issued and sold and delivered (such average
annual prinCipal and interest requirements to be computed on a calen-
dar year basis and as of the date of the Remaining Bonds then pro-
posed to be issued); provided that if during any part of the two-year
period all or any part of the System may have been owned and operated
by a private corporation or person, the earnings and expenses during
such time will be adjusted to reflect municipal ownership and opera-
tion;
(d) Provision is made in the bond ordinance authorizing
the Remaining Bonds then proposed to be issued for additional pay-
ments into the Reserve Fund (in addition to payments required by
this ordinance) so that said Reserve Fund will in not later than
five (5) years from the date of such Remaining Bonds contain a bal-
ance of not less than the average annual principal and interest
requirements on all first-lien revenue bonds payable from the net
revenues of the System that will be outstanding after the Remaining
Bonds then proposed to be issued are issued and sold and delivered
(such average annual principal and interest requirements to be com-
puted on a calendar year basis and as of the date of the Remaining
Bonds then proposed to be issued; and
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(e) The Remaining Bonds then proposed to be issued are
made to mature on June 1st in each of the years in which they are
scheduled to mature,
The term "net revenues" as used herein shall mean all of
the net revenues of the System (excluding income received specifically
for capital items) after deduction of the reasonable expenses of main,-
tenance and operation of the System (excluding expenditures for capi-
tal items).
!O,07 - ADDITIONAL PARITY BONDS: In addition to inferior lien bonds
authorized by Chapters 249 and 250, Acts of the 51st Legislature of
Texas, Regular Session, 1949, as amended, the City expreSSly reserves
the right to issue additional parity revenue bonds in one or more in-
stallments, and such Additional Bonds, when issued, shall be payable
from and secured by a first lien on and pledge of the net revenues
of the System in the same manner and to the same extent as are the
Bonds and the Remaining Bonds, and such Additional Bonds shall be in
all respects on a parity and of equal dignity with the Bonds and the
Remaining Bonds. No Additional Bonds, however, shall'be issued unless
the conditions and terms set forth in Section 10,.06 hereof relating to
the Remaining Bonds are met, and said conditions and terms shall apply
with equal force to the issuance of such Additional Bonds.
Section 11:
SYSTEM OF RECORDS AND ACCOUNTS: That the Mayor, City Secretary, and
City Treasurer are hereby instructed and directed to do any and all
things necessary in reference to the installing and maintaining of a
complete system of records and accounts pertaining to the System and
to make the moneys available for the payment of the Bonds in the
manner provided by law.
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Section 12~
SPECIAL COVENANTS; That the City covenants, by and through this
ordinance, as follo1ATs;
12.01- POWER TO PLEDGE F~VENUES: That it has lawful power to pledge
the revenues supporting this issue of Bonds and has lawfully exercised
such power under the Cons titution and laws of the State of Texas, in-,
cluding said power existing under Articles 1111 to IIIB, both inclusive,
Vernon's Texas Civil Statutes, as amended; and that the Bonds issued
hereunder shall be ratably secured under said pledge of net revenues
and in such manner that one Bond shall have no preference over any
other Bond of said issue.
12,02 - RE\ffiNUES NOT ENCUMBERED: That, other than the pledge of net
revenues in support of the Bonds as provided in this ordinance, the
rents, revenues, properties, and income of the System are not in any
manner pledged to the payment of any debt or obligation of the City,
nor of said System.
12.03 - SALE OF ENCUMBEANCE OF SYSTEM AND ISSUANCE OF REFUNDING BONDS:
That, so long as any of the Bonds authorized herein remain outstanding,
the City will not sell or encumber the System or any substantial part
thereof, and that, with the exception of the Remaining Bonds mentioned
in Section 10.06 hereof and the Additional Bonds mentioned in Section
10.07 hereof, when issued in accordance with all the terms and condi-
tions of this ordinance, it will not encumber the revenues of the
System unless such encumbrance is made junior and subordinate to the
Bonds and to all the provisions of this ordinance. Provided, however,
that the Bonds, Remaining Bonds, and Additional Bonds may be refunded
with the consent of the holders thereof (except that as to Bonds,
Remaining Bonds, or Additional Bonds which have matured by normal
maturity or through the exercise of option of prior redemption
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provisions, such consent shall not be necessary), and the refunding
bonds so issued shall enjoy complete equality of lien with the por-
tion of outstanding first,-lien revenue bonds which is not so refunded,
if any there be, and the refunding bonds shall continue to enjoy the
priority of lien that may have been enjoyed by the bonds refunded;
provided, if only a portion of the first-lien revenue bonds then out-
standing is so refunded and if the refunding bonds are issued in such
manner that the interest rate is increased or that any refunding bond
matures earlier than any of the outstanding first-lien revenue bonds
which are not refunded, then such refunding bonds may be issued only
if the terms and conditions set forth in Section 10.06 hereof with
respect to Eemaining Bonds are mef., and such terms and conditions
shall apply with equal force to such refunding bonds. Any refunding
bonds may be either delivered to the holders of a like amount of the
underlying bonds upon simultaneous surrender- and cancellation of such
underlying bonds, or, if authorized by law, may be sold and delivered
to purchasers pursuant to payment therefor for not less than par and
accrued interest, in which event the proceeds of sale and delivery
shall be applied to the payment of the underlying bonds authorized
to be refunded.
12.04 - NO COMPETING SYSTEM: That the City further covenants and
agrees, to the extent it legally may, that so long as any of the
Bonds or interest thereon are outstanding, no franchise shall be
granted for the installation or operation of any competing system,
that the City will prohibit the operation of any system other than
those owned by the City, and that the operation of any such system
by anyone other than the City is hereby prohibited.
Section 13:
OHDINANGE IS CONTEACT: That the provisions of this ordinance shall
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constitute a contract between the City and the holder or holders
from time to time of the Bonds, and after the issuance of any of
said Bonds, no change, variation, or alteration of any kind in the
provisions of this ordinance may ,be made until all of said Bonds
have been paid in full as to both principal and interest.
Section 14;
APPROVAL AND REGISTRATION OF BONDS BY STATE OFFICERS: That it: shall
be the duty of the Mayor to submit the record of said Bonds and the
Bonds to the Attorney General of the State of Texas for examination
and approval, and. thereafter to have such Bonds registered by the
Comptroller of Public Accounts of the State of Texas.
Section 15:
SALE OF BONDS: That the sale of said Bonds to M. Eo Allison & Co.,
Inc" San Antonio, Texas, at a price equal to the principal amount
thereof plus accrued interest thereon from the date thereof to the
date of actual delivery, subject to the unqualified approving opinion
as to the legality of said Bonds by the Attorney General of the State
of Texas and Vinson, Elkins, Weems & Searls, Houston, Texas, market
attorneys, is here by authorized, approved, ratified, and. confirmed 0
When said Bonds have been approved by said Attorney General and
registered by the Comptroller of Public Accounts of the State of
Texas, they shall be delivered to the purchasers upon receipt of the
full purchase priceo
~tion 16:
DUTIES OF CITY OFFICERS: That the Mayor, the City Secretary, and
other appropriate officials of the City are hereby authorized and
directed to do any and all things necessary or convenient to carry
out the provisions of this ordinance.
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Section 17:
EFFECTIVE DATE OF ORDINANCE: That this ordinance shall be in full
force and effect from and after its adoption.
PASSED AND APPROVED this 29# day of J"'Nul9ay
1963.
Texas
ATTEST:
If. #, Q;1AflP},
City Secretary
r' co. "
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