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.
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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.
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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.
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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:
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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?"
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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'
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PROPOSITION NO. 1
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"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?"
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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
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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,
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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.
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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;
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8 10 1985 15,000 ~,JlL__ 0
- (,
11 13 1986 15,000 __LO,~lL-__ o.
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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 %
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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
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CITY OF SCHERTZ, TEXAS,
UTILITY SYSTEM REVENUE BOND, SERIES 1981
* * * * * * * ~* * * * * * * * * * * * * * * * * * * * * * * * * *
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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.
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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.
"
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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.
,
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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.
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.
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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. .
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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.
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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.
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Section 29: CONFIR."1ATION OF SALE - That the bid of
Underwood Neuha ~-&-eu:-;--Tnr.--"---------
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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
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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.
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APPROVED this, the 16th day
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a~-{fY of S~h~~;', /T'8xa~'
of
PASSED, AD~PTED AND
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ATTEST:
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of Schertz, Texas
(SEAL OF CITY)
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