Loading...
HomeMy WebLinkAboutOrdinance No. 121-E ORDINANCE N0. 121-E ORDINANCE AUTHORIZING THE ISSUANCE OF CITX OF FRIENDSWOOD, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM REVENUE BONDS, SERIES 196g , $700 ,000 THE STATE OF TEXAS § COUNTY OF GALVESTON § CITY OF FRIENDSWOOD § WHEREAS, the City of Friendswood, Texas (sometimes herein�fter called the "City" ) is authorized to extend and improve the City 's waterworks and sanitary sewer system; and wHEREAS, the City Council of the City has determined to issue and deliver the negot�able revenue bonds of said City in the aggregate amount of $700,000 for such purpose pur- suant to an election held w�thin the City on November 23 , 1968 ; and WHEREAS, said bonds , hereinafter authorized, are to be issued pursuant to Vernon' s Articles 1111 through 1118 , as amended; and WHEREAS, the following described bonds have heretofore been issued by the Galveston County Water Control and Improvement District Noo 15 of Galveston County, Texas (sometimes herein- after called "District Noe 15" ) : (1) Galveston County Water Control and Tmprovement District Noe 15 Waterworks and Sanitary Sewer System Combination Revenue and Unlimited Tax Bonds, Series 1957 , dated July 1 , 1957, now outstanding in the aggregate amount of $232, 000, maturing serially on the lst day of March in each of the years as follows : $�+ ,000 �970/7� 5,000 1972/7�+ 6, 000 1975/76 7 ,000 1977/80 8 ,000 1981I8? 10,000 �983/84 11,000 1985/86 12 ,000 1987/88 13,000 1989 14,000 1990 15,000 1991 20 ,000 1992 25,000 1993 (2 ) Galveston County Water Control and Improvement District No . 15 Waterworks and Sanitary Sewer System Combination Revenue and Unlimited Tax Bonds , Series 1958 , dated July 1, 1958, now out- standing in the aggregate amount of $25 ,000, and maturing on March l, 1994 ; and WHEREAS , the following described bonds ha�e hereto�ore been issued by the Galveston County Water Cuntrol and Improvement District Noo 21 of Galveston County, Texas (sometimes herein- af'ter called "District Noe 21" ) : Galveston County Water Control and Improvement District Noo 21 Waterworks and Sewer System Combination Tax and Revenue B�nds, Series 1964 , dated November l , 1964 , now outstand�ng in the aggregate amount of$600,OOO, maturing serially on the lst day of August in each o�° the years as f°ollows : $10 ,000 1972/'76 15,000 19?7/81 20 ,000 1982/86 25 ,000 1g87�'91 30 ,000 1992i'97 35 ,000 1998/99 and WHEREAS, the City, having been incorporated on or about November 1, 1960 , as a municipal corporation under the general laws of the State of Texas , annexed all of the territory with- in District Noo ?5 in 1g64 , and thereafter annexed all oi' the territory within District Noe 21 in 1967; and -2- WHEREAS, the City has heretofore adopted the p�ovisions of Vernon' s Artiele 1182c-1 , as amended, as authorized and in the manner provided by Section 6 thereof; and WHEREAS, the City has heretofore taken ove� all p��- perties and assets , assumed all debts , liabilities and obli- gations and now performs all functions and services of both said Districts , and both such Districts have been abolished as provided by law; and WHEREAS, at the time the City took over all properties and assets and assumed all debts , liabilities and �bligations of District Noo 15 the City did not have outstanding revenue bonds , warrants or other obligations payab:le �rom, or secured by a pledge of, the net revenues of the City' s waterworks and sewer system, and the City immediately combined the waterworks and sewer system of District Noo 15 with the City 's waterworks and sewer system; and WHEREAS, at the time the City took ove� all p�ope�ties and assets and assumed all debts , liabili�ies and obligations of District Noo 21 the City did have outstanding bonds payable from, and secured by a pledge of the net �evenues of, the City 's waterworks and sanitary sewer system and the City has continued to operate the waterworks and sewer system of District Noo 21 separ°ate and apart from the City 's wa�erworks and sewer system, and the City has not commingled in any way the �evenues of such several systems ; THEREFORE, BE TT ORDAINED BY THE CTTY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS : -3- I Section 1, 01 : That every matter and fact recited in the above preamble of° this ordinance is hereby found to be true and correcto Section 1002 : That said City ' s negotiable, ser^ial, coupon bonds to be designated "City of Friendswood, Texas , Waterworks and Sanitary Sewer System Revenue Bonds , Series 196g" (hereinafter sometimes called the "Bonds" ) are hereby authorized to be �.ssued and delivered in the principal amount of$700 ,000 for� the purpose of EXTENDING AND IMPROVING THE CITY' S WATERWORKS AND SANITARY SEWER SYSTEMo �e�tion 2 � That the Bonds shall be dated MAY l, 1969, shall be numbered consecutively from 1 THROUGH 140 , shall be in the denomination of$5 ,000 EACH, and s�all mature and become due and payable serial.ly on MARCH 1 in each of' the years , and in the amounts , respectively, as set forth in the f°ollowing schedule : Y'EARS AMOUNTS 1971 $ 5, 000 1972/75 �09000 1976/81 15 ,000 1982/86 209000 �-987/89 259000 1.990/9� 30,000 1992/9�+ 35 ,000 1995f96 40 ,000 1997 �15,000 1998/99 50 ,000 Said Bonds may be redeemed prior to their stated maturities , at the option of the City , on the dates stated, and in the manner provided in the FORM OF BOND set forth in this ordinancee -4- Section 3 : That the Bonds shall bear interest �rom their date, until maturity or redemption, at the �oll�w�ng rates per annum: Bonds maturing 197�- through 19 90 , 6-1/22� Bonds maturing 19�1 through 19�, 6_118q Bonds matur�ing 19_ through 19 , % Bonds maturing 19� through 19 , % Bonds maturing 19� through 19 , % Said interest shall be e�idenced by interest coupnns which shall appertain to sald Bonds , and which shall be payable on the dates set f°orth in the FORM OF BOND set �°or�th in t�is ordera Section 4 : That the Bonds , and the �nterest cd�pona appertaining thereto, shall be payable, shall have the charac- teristics , and shall be signed and executed (and said Bonds shall be sealed) all as provided, and in the manner indica�ed, in the FORM OF BOND set forth in this order�o Section 5 : That the form of said Bonds , including the form of Registration Certificate of the Comptroller� �f Public Accounts of' the State of Texas to be printed and endorsed on each of said Bonds , and the form of the af`oresaid interest coupons which shall appertain and be attached initially to each of said Bonds , shall be, respectively, substantially as follows : -5- - . . , . � � FORM OF BOND: N0. __ $5, 000 UNITED STATES OF AMERTCA STATE OF TEXAS COUNTY OF GALVESTON CITY OF FRIENDSWOOD, TEXAS, WATERWORKS AND SANITARY SEt�IER SYSTEM REVENUE BON1� SERIES 1969 ON MARCH l, , THE CITY OF FRIENDSWOOD IN GALVESTON COUNTY, TEXAS, promises to pay to bearer the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the rate of _ % per an.num, evideneed by interest coupons payable SEPTEMBER 1 , 196g, and semifannually thezaeaf'ter on each MARCH 1 and SEPTEMBER 1 while this bond is outstandingo The principal of this bond and the interest coupons appertaining hereto shall be payable to bearer, in lawful money of° the United States of America, without exchange or collection char�ges to the bearer, upon presentation and surrender of this bond or proper interest coupon at the Ho is�pn National 6ank 9 Hou�ton , Texas _, which shall be the paying agent for this Series of bondso THIS BOND is one of a Ser�es of negotiable, serial, coupon bonds , dated MAY 1 , 196g, issued in the principal amount of $700 ,000 in accordance with Articles 1111 through 1118 , a� amended, Vernon' s Annotated Texas Statutes , and authorized pursuant to an o�dinance duly adopted by the City Council of said City , for the purpose of EXTENDING AND IMPROVING THE CITY' S WATERWORKS AND SANITARY SEWER SYSTEM, -6- ON MARCH l, 1g87, OR ON ANY INTEREST PAYMENT DATE THERE- AFTER, the outstanding bonds of this Series may be redeemed prior to their scheduled maturities, at the option of said City, IN WHOLE, OR IN PART, IN INVERSE NUMERICAL ORDER, for the principal amount thereof and accrued interest thereon to the date fixed for redemption. AT LEAST thirty days prior to the date fixed for any such redemption said City shall cause a written notice of such redemption to be mailed to the bank at which said bonds are payable and published at least once in a financial pub- lication published in the City of New York, New York, or in the City of Austin, Texas . By the date fixed for any such redemption due provision shall be made with the paying agent for the payment of the required redemption price . If such written notice of redemption is published and if due provision for such payment is made , all as provided above , the bonds which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the purpose of being paid by the paying agent with the funds so provided for such payment . IT IS HEREBY certified, recited, and covenanted that this bond has been duly and validly issued and delivered; that all acts, conditions, and things required or proper to be per- formed, exist , and be done precedent to or in the issuance and delivery of this bond have been performed, existed, and been done in accordance with law; and that the interest on -7- and principal of this bond and the Series of which it is a part are secured by and payable from an irrevocable first lien on and pledge of the Net Revenues to be derived from the operation of the waterworks and sanitary sewer system of said City, subject only to the prior lien and pledge presently existing thereon in connection with the outstanding bonds of the Galveston County Water Control and Improvement District No . 15 Waterworks and Sanitary Sewer System Combination Revenue and Unlimited Tax Bonds, Series 1957 , dated July 1, 1957 , and Series 1958, dated July 1, 1958, (the "Outstanding Senior Lien Bonds" ) as defined and provided in the ordinance authorizing this Series of bonds . SAID CITY has reserved the right, subject to the restric- tions stated in the said ordinance authorizing this Series of bonds, to issue additional parity revenue bonds which also may be secured by and made payable from an irrevocable first lien on and pledge of the aforesaid Net Revenues to be derived from the operation of the waterworks and sanitary sewer system of said City, subject only to the prior lien and pledge presently existing thereon in connection with said Outstanding Senior Lien Bonds . 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. IN WITNESS WHEREOF, this bond and the interest coupons appertaining hereto have been signed with the facsimile signa- ture of the Mayor and countersigned with the facsimile signa- ture of the City Secretary, and the official seal of said City has been duly impressed, or placed in facsimile, on this bond . COUNTERSIGNED: Mayor, City of Friendswood, Texas City Secretary, City of Friendswood, Texas -8- FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER N0. I hereby certify that this bond has been examined, cer- tified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas . Witness my signature and seal this Comptroller of Public Accounts of the State of Texas FORM OF INTEREST COUPON: N0. $ ON 1, THE CITY OF FRIENDSWOOD IN GALVESTON COUNTY, TEXAS, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, unless due provision has been made for the redemption prior to maturity of the bond to which this interest coupon appertains, upon presentation and surrender of this interest coupon, at the , , , said amount being interest due that day on the bond, bearing the number hereinafter designated, of that issue of CITY OF FRIENDSWOOD, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM, REVENUE BONDS, SERIES 1969, DATED MAY l, 1969e The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxationa Bond No . City Secretary Mayor _9_ Section 6 : That throughout this ordinance the following terms as used herein shall have the meanings set forth below, unless the text hereof specifically indicates otherwise : City - the City of Friendswood, Texas , and, where appro- priate, the City Council thereof. System - the waterworks and sanitary sewer system of the City, including all present and future extensions , additions , replacements , and improvements thereto, excluding the water= works and sanitary sewer system of Galveston County Water Control and Improvement District Noe 21 of Galveston County, Texas , which is a system separate and apart from the water- works and sanitary sewer system of the City . Gross Revenues - all of the revenues and income of every nature derived from the operation and/or ownership of the System, Current Expenses - the reasonable expenses of operation and maintenance 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 the City and the inhabitants thereo�, or such as migr.t be necessary to meet some physical accident or condition which would otherwise impair the original security . Net Revenues - all Gross Revenues after deduction of" the Current Expenses therefromo Bonds - the $700,000 revenue bonds authorized by this ordinance . -10- � Outstanding Senior Lien Bonds - the outstanding bonds of the following described issues : Galveston County Water Control and Improvement District No . 15 Waterworks and Sanitary Sewe� System Combination Revenue and Unlimited Tax Bonds , Series 1957, dated July l , 1957; Galveston County Water Control and Improvement District No . 15 waterworks and Sanitary Sewer System Combination Revenue and Unlimited Tax Bonds , Series 1958 , dated Ju1y 1, 1958. Additional Bonds - the additional parity revenue bonds that the City expressly reserves the right to issue in this ordinance . Section 7 : That the Bonds and Additional Bonds are and shall be secured by and payable from an �r�evocable first lien on and pledge of the Net Revenues , sub�ect only to the prior lien and pledge presently existing thereon in connection with the Outstanding Senior Lien Bonds , and said Net Revenues are further pledged irrevocably to the establishment and main- tenance of the Bond Fund and the Reserve Fund, here�nafte� created. Section 8 : That the Bonds and Additional Bonds , and interest coupons appertaining thereto, shall constitute spec�al obligations of the City, payable solely from the pledged Net Revenues , and the holders of the Bonds and Additiona� Bonds , and the coupons attached thereto, shall never have the right to demand payment out of funds raised or to be raised by taxatione Section 9 : (a) That there is hereby created and ordered to be established on the books of the City a separate account to be entitled the "System Fundm " -11- (b ) That commencing immediately after the delivery of the Bonds , all Gross Revenues of the System shall be credited to the System Fund. The Current Expenses shall be paid when due from the Gross Revenues in the System Fund, as a first charge against said Gross Revenueso Section 10 : That there is hereby created and ordered to be established, at an official depository of the City, a separate fund to be known as the "Bond Fund. " Section 11 : That there is hereby created and ordered to be established, at an official depository of the City, a separate fund to be known as the "Reserve Fundo " The Reserve Fund shall be used finally in retiring the last of the out- standing Bonds and Additional Bonds , if any, or �o� paying principal of and interest on any outstanding Bonds and Additional Bonds , when and to the extent the amount in the Bond Fund is otherwise insufficient for such purposeo Section 12 : Money in every Fund and account created by this order may , at the option of the City, be placed in time deposits or be invested in direct obligations o� the United States of Ameri�a; obligations which, in the o�inicn of the Attorney General of the United States , are gene�al obligations of the Unived States and backed by its �ull faith and credit ; all obligations guaranteed by the United State� of America; evidences of indebtedness o� the Federal Land Banks , Federal Inte�mediate Credit Banks , Banks for Cooperatives , Federal Home Loan Banks , or Federal National Mortgage Association; provided that all such deposits and investments shall be made in such manner that the money -12- required to be expended from any Fund will be available at the proper time or timese Any obligations in which money is so invested shall mature in not more than three years from the date such investment is made and in no event later than 15 days prior to the maturity date of the last maturing Bonds or Additional Bonds , i� any , and such obligations shall be kept and held in trust for the bene�it of the holders of the Bonds and any additional Bonds , and shall be promptly sold and the proceeds of sale applied to the making of all payments required to be made from the Fund from which the investment was madem Al1 such investments shall be valued in terms of current market value as of June 30 and December 31 of each yeare Section 13 : (a) That immediately after the delivery of the Bonds all accrued interest and any premium received from the sale of the Bonds shall be deposited to the credit of the Bond Fund, (b ) That on or before the 20th day of August , 1969 , and semi-annually thereafter on or before the 20th day of each February and August , the City shall transfer from the Net Revenues in the System Fund and deposit to the credit of the Bond Fund an amount of money which, when added to any then-current balance in the Bond Fund, will be equal to not less than the interest scheduled to become due on the Bonds on the next succeeding interest payment da�eo In calculating the current balance for the purposes of this paragraph, any -13- balances in the Bond Fund which are the results of deposits made under paragraph i3 (c ) he�eof, sha11 be excludedo (c � That on or before the 20th day of August , 1970, and semi-annually thereafter on or before the 20th day of each February and August , the City shall transfer from the Net Revenues in the System Fund and deposit to the credit of the Bond Fund an amount equal to one half of all principal scheduled to mature and come due on �he Bonds on the next succeeding March le Section 14 : That on or before January 10 , 1970 , and on or before the lOth day o� each calendar month thereafter the City shall �ransfer from the Net Revenues in the System Fund and deposit to the credit of the Reserve Fund not less than the sum of $500000, and such monthly deposits shall be continued until the money and investments in the Reserve Fund are at least equal to the aggregate amount of $50,000 in market valueo No deposits shall be required �o be made into the Reserve Fund as long as the money and investments in the Reserve Fund are at least equal to the agg�egate amount of $50,000 in market value; but if and whene�er the Reserve Fund is reduced below said aggregate amount , and subject to the then-required deposits having been made into the Bond Fund, deposits shall be made into the Reserve Fund from the first available Net Revenues in the System Fund and continued until such time as the Reserve Fund has been restored to said aggre- gate amount � Section 15 : (a) That if on any occasion there shall not bP suffi- cient p.ledged Net Revenues ava�la�le �o make the �equired -14- , _ . , ��.. ..w.. deposits into the Bond Fund or the Reserve Fund, then such deficiency shall be made up as soon as possible from the next available pledged Net Revenues , or from any other sources law- fully available for such purposee (b) Subject to making all deposits to the credit of the Bond Fund and the Reserve Fund, as required by this ordinance or by any ordinance authorizing the issuance of Additional Bonds, any surplus Net Revenues in the System Fund shall be used by the City to pay premiums on insurance required to be carried by this ordinance, to the extent that such premiums are not actually paid from some other source, and any other surplus Net Revenues may be used by the City for any lawful purpose . Section 16 : (a) That the City shall have the right and power at any time and from time to time, and in one or more Series or issues , to authorize, issue, and deliver additional parity revenue bonds (herein called "Additional Bonds" ) in any amounts, for any lawful purpose � Such Additional Bonds , if and when authorized, issued, and delivered in accordance with this ordinance , shall be secured and payable equally and ratably on a parity with the Bonds, and all other outstanding Additional Bonds, by a first lien on and pledge of the Net Revenues , sub- ject only to the prior lien and pledge presently existing there- on in connection with the Outstanding Senior Lien Bonds . (b) Each ordinance under which Additional Bonds are issued shall provide that, in addition to the amounts required by this ordinance and any ordinance or ordinances authorizing Additional Bonds to be deposited to the credit of the Bond Fund and the Reserve Fund, the City shall deposit to the credit of the Bond Fund at least such amounts as are required for -15- the payment of all principal of and interest on said Addi- tional Bonds then being issued, as the same come due, and shall also deposit to the credit of the Reserve Fund at least such amounts , in not less than approximately equal semi-annual installments , as wi11, together with any other amounts already required to be deposited in the R�serve Fund in connection with the Bonds and any other outstand�ng Addi- tional Bonds , be sufficient to cause the Reserve Fund to accumulate and contain within a period of not to exceed five years from the date of the Additional Bonds then being issued, a total amount o� money and investments at least equal in market value to the average annual principal and interest requirements of such proposed Additional Bonds and the then- outstanding Bonds , and any then-outstanding Additional Bonds , and that therea�ter such deposits shall be made to the credit of the Reserve Fund as will cause the Reserve Fund at all times to contain a total amount of money and inves�ments at least equal in market value to the average annual principal and interest requirements o� such proposed Additional Bonds , the then-outstanding Bonds , and any then-outstanding Addi- tional Bondso (c ) The City shall also have the right and power to issue junior lien revenue bonds in any amounts , for any lawful purpose, payable from and secured by a lien on and pledge of �he Net Revenues , provided such lien and pledge are made wholly junior and subordinate to the lien on and pledge of the Net Revenues to the payment of the Bonds and any Additional Bondsm -16- Section 17 : Additional Bonds shall be issued only in accordance with this ordinance, and no installment , Series , or issue of Additional Bonds shall be issued or delivered unless : (a) The senior financial officer of the City signs a written certificate to the effect that the City is not in default as to any covenant, �ondition, or obligation in con- nection with all outstanding Bonds and Additional Bonds, and the ordinances authorizing same, and that the Bond Fund and the Reserve Fund each contains the amount then required to be therein. (b) A certified public accountant signs a written certificate to the effect that , during either the City 's then-preceding fiscal year, or during any twelve calendar- month period ending within ninety days of the first day of the calendar month during which an ordinance is adopted by the City authorizing issuance of such Additional Bonds , the Net Revenues , together with any other amounts pledged to the payment of Bonds and Additional Bonds , were at least equal to one and one half times the average annual principal and interest requirements of al1 then-outstanding Bonds and Addi- tional Bonds , and the then-proposed Additional Bondsa Section 18 : On or before the 25th day of August, 1969 , and on or before the 25th day of each February and of each August thereafter while any of the bonds and Additional Bonds , if any, are outstanding and unpaid, there shall be made available to the paying agents therefor, out of the Bond Fund, money suf- ficient to pay such interest on and such principal of the Bonds _�7_ and Additional Bonds , if any, as will accrue or mature on the September 1 or March 1 3mmediately following. Section 19 : (a) That all money in all Funds and accounts created by this order, to the extent not �nvested, shall be secured in the manner prescribed by law �or se�uring funds of cities of the State of Texas , in principa� amounts at all times not less than the amounts of money credited to such Funds or accounts , respectivelyo (b ) That wheneve� the to�a� amount in the Bond Fund and the Reserve Fund shall be equivalent to (1) the aggregate principal amount o� Bonds and Additional Bonds , if any, out- standing, plus (2 ) the aggregate amount of all unpaid coupons thereto appertaining unmatured and matured, no further payments need be made �nto �he Bond �und or the Reserve Fundo Tn determining the amount of Bonds o� Additional Bonds out- standing, there shall be subtracted the amount of any Bonds or Additional Bonds which �ha11 have been duly called fo� redemption and for which funds shall have been deposited with the paying agent su�fieient �or such redemptione Section 20 : The City covenants and agrees that : (a) It will faithfully per�orm at a11 times any and all covenants , undertakings , stipulations , and provisinns contained in this ordinance and in each and eve�y Bond and Additional Bond; that it wil� promptly pay o� cause to be paid the principal of and interes� on every Bond and Addi- tional Bond, on the dates and at the places and in the manner -18- prescribed in such Bond or Additional Bond; and that it will, at the times and in the manner prescribed herein, deposit or cause to be deposited the amounts of money speci- fied herein. (b) It is duly authorized under the laws of the State of Texas to create and issue the Bonds; that all action on its part for the creation and issuance of the Bonds has been duly and effectively taken, and that the Bonds in the hands of the holders and owners thereof are and will be valid and enforceable special obligations of the City in accordance with their terms , (c ) It lawfully owns and is lawfully possessed of the System, and has a good and indefeasible estate therein, that it warrants that it has, and will defend, the title and owner- ship to all the aforesaid System, and every part thereof, for M the benefit of the holders and owners of the Bonds and Additional Bonds against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the Net Revenues pledged hereunder to the payment of the Bonds and Additional Bonds in the manner prescribed herein, and has lawfully exercised such rights � (d) It will from time to time and before the same become delinquent pay and discharge all taxes, assessments, and govern- mental charges, if any, which shall be lawfully imposed upon it , or the System, that it will pay all lawful claims for rents, royalties , labor, materials, and supplies which, if unpaid, might by law become a lien or charge upon the System -lg- - � . , .*.. -,, or any part thereof, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner prov�.ded herein, and that it will not create or suffer to be created any mechanic ' s , laborer' s , materialman' s or other lien or char�ge which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided, however, that no such tax, assessment , or charge , and that no such claims which might be used as the basis of a mechanic ' s , laborer' s , material- man' s or other° lien or charge, shall be required to be paid so long as the validity of' the same shall be contested in good faith by the Cityo (e) It will not do or suf'f°er^ any act or thing wher�eby the System might or could be impaired, and that it wi11 at 1� a11 times maintain, preser�ve, and keep the r°eal and tang�ble property of the System and every part thereof in good �ondi- tion, repair, and working order, and operate, maintain, pre- serve, and keep all properties , buildings , structures , and equipment pertaining thereto and every part and parcel thereof in good condition, repair, and working ordero (f) Whi1e the Bonds or Additional Bonds , if any, are outstanding and unpaid, the City shall not additiox�ally encumber the pledged Net Revenues in any manner, except as per�mitted in this ordinance in connect�on with Additional Bonds , unless said en�umbrance is made juni.or and subordinate in all respects to the liens , pledges , covenants , and agreements of this ordinanceo -20- (g) While the Bonds or any Additional Bonds are out- standing the City will not encumber, sell, lease, abandon, or otherwise dispose of any real or personal property of the System, unless the City provides for the replacement thereof with substantially equal or superior facilities , o� unless the City determines that such real or personal property is no lon�er needed or is no longer useful, and that the disposition thereof will not adversely affect the City or the operation and maintenance of the Systemo (h) It will, as required by the Constitution and laws of the State of Texas , prescribe , maintain, and collect fees and eharges which shall be uniform and equal as to all users of services of the same class , for the use of the services and facilities o� the System, which will provide revenues �ully sufficient at all times to : 1 (1) Pay all Current Expenseso (2) Establish and mainta�n all Funds and accounts created and provided for in this ordinancee (3) Pay all outstanding lawful debts and liabili�ies of and claims aga�nst the System, �n addition to the Bonds and any Additional Bonds , as p�ovided in this ordinanceo (i) While the Bonds or any Additional Bonds are out- standing �he C2ty will maintain insurance with a reliable insurance company, or companies , for the bene�it of the �olders and owners of such outstanding obligations , on the Sys�em of a kind and in an amount or amounts which would usually and reasonably be carried by private companies engaged in a similar -21- . . type of business , Upon the happening of any loss or damage covered by such insurance, the City shall make due proof of loss and sha11 do all things necessary or desirable to cause the insure�s to make payment in �ull directly to the CityA The proceeds of insurance cover�ng the System, together with any other funds necessary and ava�lable for such purpose, shall be used forthwith by the City f°a� repai�ing the pro- perty damaged or replacing the p�operty destroyed; provided, that if such insu�ance proceeds and other funds so available are in�ufficient for such pu�pose, then said insurance pro- ceeds shall be deposited promptly in the Bond Fund. (j ) As soon as possible a�ter delivery of the Bonds , and on or before February 1 of each year thereafter while the Bonds or any Additional Bonds are outstanding, the City will file with the original purchasers of such obligations a ` certificate signed by the senior financial officer of the City stating that the City has complied with the requi�ement of this Section with respect �o �he maintenance of insurance,, and lis�ing all poli�ie� carried, and that all insurance premiums upon the insurance policies to which referen�e is hereinbefore made have been paid, (k) Proper books of �ecord and aecount wi11 be kept in which �u11, �rue, and correct entries wi11 be made of all dealings , act�vities , and t�ansa�tions relating to the pledged Net Revenues and to the System, and all books , docum�nts , and vouchers relating thereto shaly at all reasonable times be made available for lnspection upon request by any o�iginal -2�- purchaser or by the holders of not less than 25% of the then- outstanding Bonds and Additional Bonds � Such books o� record and account shall be kept on the basis of a fiscal year ending each �c��xx�� September 30. (1) Any official depository of the City shall be a member of the Federal Deposit Insurance Corporatione (m) Each year while the Bonds or Additional Bonds , or any of them, are outstanding, an audit will be made of its books and accoun�s relating to the pledged Net Revenues and to the System '�y a firm of certified public accountants, each such audit to be based on the fiscal year of the City � As soon as practicable after the close of each such fiscal year, and when said audit has been completed and made available to the City, a copy of such audit for the preceding fiscal year M shall be mailed to the original purchasers of the Bonds and any Additional Bonds , and to any bondholder who shall so request � Such annual audit reports shall be open to the inspection of the bondholders and their agents and repre- sentatives at all reasonable times and the cost of such reports shall be a part of the Current Expenses of the System� Each of such reports shall contain statements showing in reasonable detail, as to such fiscal year, the followinge (1) Operating income and operating expense of the System and the revenues available for payment into the Funds and Accounts created in this order; —23— � � ' ,' - • --. ' � � _ � (2) The amount of money on deposit �n the �ysterri �u:rYd, the Bond Fund, and the Reserve Fund, r°espect��ely , at the beginning and end of such fis�al year and alY depos�t� , receipts and disbursements affecting said ��nds ; (3 ) Al1 bonds of every kind outstand�ng at the beg�n- ning of such fiscal year, bonds r�etired during and bonds remaining outstanding at the end of° such fiscal year; (4 ) Whether or not the C�ty has �°ailed to meet any of its covenants and obligations with respect to the Bond� or Additiona"1 Bonds , if any , during such �°�scal ye�.r�, a list of any deficiencies existing a� the end of �uch fi�ca:l �r�ar with respect thereto, comments regardzng the manner� �r. which the City has complied with it� co�renants and �bligatic�n� wi�h respect to all of' said bonds during such f"i�cal year, and recommendations , if any , for changes or improvem�:nts in the accounting procedur°es or in the opera��on of' the Sys�em; (5) A Iist of° a.11 insurance policie� �n for��e a� the end of' such fiscal year� showing as to ea�� p�licy �he r�i�k covered, the name o2' the �nsurer, the exg�.ra,tian d�.�e and the name �f° the benef i�iar�y o (n) It has lawful power� to pledge the Net F��v�n�;es s�ap- porting the Bonds and has lawf°�a11y exercised such powe� under the Constitution and laws of the S�ate af Texa� � a�d �hat �he Bonds issued hereunder� sha11 be ratably secured ande� �a�.d pledge of income in such manner that ane bond s�all have no preference over the other bonds of this issue:o (o) The System is free and clear of all encumbr�.nces whatsoever and the returns , revenues and zncome of° the System have not in any way been pledged to the payment of° a.ny debt -24- . � . . ' � � ._ . ' or obligation of the City or of the System except as herein provided for payment of the Bonds and Outstanding Senior Lien Bonds , (p ) No service involving the System or any part thereof shall be rendered without charge to any person, firm, corpora- tiqn or organization whatsoever . Section 21: That the City has caused competent examina- tion of pertinent accounting records to be made and, based on such examination, hereby finds that the actual net cost to the City for the proper treatment and effluent disposal of sewage collected, and to be collected, within the separate waterworks and sanitary sewer system of District No. 21 amounts to an aggregate sum equal to not less than $3 . 00 per month for each sanitary sewer customer connection within the said District No . 21 system and that, insofar as the City may and to the extent permitted by law, and unless required to do otherwise by a final decree or judg- ment of a court of competent jurisdiction, the City hereby covenants and agrees that so long as any of the Galveston County Water Control and Improvement District No . 21 Waterworks and Sewer System Combination Tax and Revenue Bonds, Series 1964, dated November l, 1g64, or the appurte- nant interest coupons, or any of them, are outstanding and unpaid the City shall charge and collect each calendar month from the separate waterworks and sanitary sewer system of District Noe 21 a sum equal to not less than such aggre- gate sum and shall deposit same monthly into the System Fund as a part of the Gross Revenues of the Systeme -25- - . � r . � � '� - - • ' .. . , .. � � Section 22 : That, in addition to all the rights and remedies provided by the laws of the State of Texas, the City further covenants and agrees that in the event of default in the payment of principal of or interest on any of the Bonds when due, or failure to make the paymen�s rec�uired into the Bond Fund or Reserve Fund, or defaults in the observance or performance of any of the covenants or obligations set forth in thzs order, the holder or holders of any of the Bonds sha11 be entitled to apply for a writ of mandamus to a court of proper jurisdiction for the purpose of compelling and requiring the City and the officials thereof to observe and perform any such covenants or obligationso No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exerci�ed from time to time as often as may be deemed expedient > The specific remedies provided herein shall be cumulative of all other existing remedies, and the specification of such reme- dies shall not be deemed to be exclusive , Section 23 : That the Mayor of the City is hereby author- ized to have control of° said Bonds and all necessary records and proceedings pertaining to said Bonds pending their deliv- ery and their investigation, examination, and approval by the Attorney General of the State of Texas, and their registra- tion by the Comptroller of Public Accounts of the State of Texas . Upon registration of said Bonds, said Comptroller, or a deputy designated in writing to act for him, shall -26- . ' . • . , .� , , � � . � manually sign the Comptroller ' s Registration Certificate printed and endorsed on each of said Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on each of said Bonds . Section 24 : That the sale of the Bonds to Underwood, Neuhaus & Co� , Incorporated, at a price equal to the principal amount of the Bonds, plus accrued interest thereon from the date of the Bonds to the date of actual delivery, subject to the unqualified approving opinion, as to the legality of the Bonds , of the Attorney General of the State of Texas and Vinson, Elkins , Searls & Connally, Houston, Texas, market attorneys , is hereby authorized, approved, ra�ified and confirmed. When the Bonds have been approved by the Attorney General and registered by the Comptroller of Public Accounts of the State of Texas, they shall be deliv- ered to the named purchaser upon receipt of the full purchase price . ------------------ -27- ' • �' , ' ' � ' _ �� .. � � CERTIFICATE FOR ORD�NANCE AUTHORIZING ISSUANCE OF CITY OF FRIENDSWOOD, TEXAS, WA�'ERWORKS AND SANITARY SEWER SYSTEM REVENUE BONDS, SERIES 1g69; $700,000 THE STATE OF TEXAS § COUNTY OF GALVESTON § THE CI`�Y OF FRIENDSWOOD § We, the undex�s�.gned of`f°icers of' the City Council of° the City of F�iendswood, Texas, her^eby certif� as follows ; c � lo '�he City Coun�il of the City of Friendswood, Texas, convened in 13-��T�AR MEETING ON THE 23RD DAY OF JUNE, 1g69, in the City Hall w�thin said Ci�y, and �he roll was called of the duly eonstituted offi- cer°s and members of° said Coun�il and the City Secretary, to-wit : Ralph W� Somers Mayor Edwax�d F � Sf..ua�t Alderman and Mayor Pro Tem �Tames E� Mage� Alderman Geq�ge Fo Prude Alderman Ro�ald G � Hamil Alderman Tk��mas F� Woods Alderman L� B� Cline City Secretary and all of° said persons were pres�nt , except the following absenteese ��..,L� , thus constituting a quorum� Whereupon, among other business , the following was transacted at said meeting� a written ORD.INANCE AUTHORIZING ISSUANCE OF CITY OF FRIENDSWOOD, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM REVENUE BONDS, SERIES 196g; $700,000 was duly ia�tx�oduced f°or the consideration of said Council, and read in full� It was then du.ly moved and seeonded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of said ox�din.an�e, pr�evailed and carried by the following votee AYES � A11 members of' said Council shown present above Uoted "Aye � " NOES ; Noneo 2o That a true, full, and cor°rect copy of the aforesaid ordinance a.dopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said ordinance has been duly reco�ded in s�id Council' s minutes of said meeting; that the abo�re and foreg�ing paragraph is a true, full, and correct excerpt from sazd Council' s zninutes of' said meeting pertaining to the adoption of said ordinanc;e; that the persons named in the above and foregoing para- graph are the duly ehosen, qualified, az�d acting officers and members of said Cour��il as indi�ated therein; that each of° the officers and members of' sa�.d Co�.���il was duly and sufficiently notified officially and personally, in aduan;e, of° the time, place, and purpose of the afore- said meeting, a�d �hat said ordi�ance would be introduced and consid- ered for� adop��oz� at said meetiz�g, and each of said off icers and mem- bers �onsenteda in adva�ce, to �he holding of said meeting for such purpose; and that sa�d zneeting was open to the public as required by law� ,.�'°'� ~�°�SIGNED "AND �SEALED the 2��d day of June, 196g � `�,,,`,,��a.N���,��.,* / � �., � � '�� d� F "''�. � G� � .-�,`-1� • .O '-, �.,: :�. j ;� •�,v���t� Sevretary Mayor � � • vF�. „ �, . ' � 's + = : � � : '• :t �9-"r �" , � ''� �l�'•••....►••' ,�'` .,��,,F�i tE��tir� �•, '�••.a..a4�*``•:.