HomeMy WebLinkAboutOrdinance No. 79-21 1 . � • a '
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. ��-� 79��/
AN ORDINANCE AUTHORIZING THE ISSUANCE OF $1,750, 000
CITY OF FRIENDSWOOD, TEXAS, WATERF]ORKS AP1D SANITARY
SE[VER SYSTEM JUNIOR LIEN REVENUE REFUNDING AND
IMPROVEMENT BONDS, SERIES 1979
WHEREAS, the City of Friendswood, Texas (sometimes hereinafter
called the "City" ) owns and operates its sanitary sewer system; and
WHEREAS, the City Council of the City has , pursuant to elections
held on August 11, 1973 and April 1 , 1978 , been authorized to issue
revenue bonds in the total principal amount of $1,750 ,000 for the
purpose of constructing improvements and extensions to the City' s
said sanitary sewer system; and
WHEREAS, the City Council by resolution dated January 8 , 1979
(and confirmed, approved and readopted as an ordinance on January
29, 1979) authorized the issusance of $1,750 ,000 City of Friendswood,
Texas, ��laterworks and Sanitary Sewer System Junior Lien Revenue Bonds,
Series 1979 , dated ,7anuary 1, 1979 for the purpose of making said
improvements and extensions and confirmed the sale of said bonds to
the Texas Water Development Fund; and
WHEREAS, the Texas Water Development Board thereafter determined
to purchase only $1, 350 ,000 of the bonds so authorized; and
�aHEREAS, in order to obtain funds necessary to pay for improvements
immediately needed, bonds in the total amount of $150, 000 were sold and
delivered pursuant to ordinances dated April 16 , 1979 and June 18 , 1979
respectively; and
6VHEREAS, the City Council of the City has now determined that it
is necessary to issue revenue bonds in the total principal amount of
$1,750 ,000 of which bonds in the principal amount of $150 ,000 will be
used to refund the aforesaid $150 , 000 City of Friendswood, Texas ,
Waterworks and Sanitary Sewer System Junior Lien Revenue Bonds , Series
1979 , and the remaining $1 , 600 ,000 of bonds will be used to secure
funds for the purpose of constructing improvements and extensions to
the City' s sanitary sewer system; and
4�]HEREAS, the City Council finds that all of the aforesaid
$150, 000 principal amount of outstanding junior lien �evenue bonds,
Series 1979 are available for cancellation and refunding into a like
principal amount of revenue bonds as authorized and provided for by and
in this ordinance; Now, Therefore ,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
. FRIENDSWOOD, TEXAS :
Section l : That for the purpose of refunding and cancelling
outstanding revenue bonds in the principal amount of $150 ,000 which
are described and referred to as follows, to-wit:
$150, 000 City of Friendswood, Texas, Waterworks and Sanitary
Sewer System Junior Lien Revenue Bonds, Series 1979 , dated
� January 1, 1979 , in the denomination of $5 ,000 each, interest
payable on September 1 and rlarch 1 of each year, and being
numbered, maturing and bearing interest as follows :
� , : . .
, Int. Bonds Nos. Date of
Rate (Incl . ) Maturity Amount
5. 50� 61 - 70 March l, 1985 $50 ,000
5. 50$ 81 - 90 March 1, 1986 50 ,000
5. 50� 101 - 110 March 1, 1987 50 ,000
being the bonds authorized by resolution passed by the
City Council of said City on January 8 , 1979 (as confirmed,
approved and adopted by ordinance dated January 29 , 1979)
as amended by ordinances dated April 16, 1979 and June
18 , 1979, respectively;
and for the purpose of securing funds in the principal amount of
$1,600,000 to construct improvements and extension to the City' s
existing santiary sewer system, there shall be issued revenue bonds
of said City to be known as "CITY OF FRIENDSWOOD, TEXAS, WATERWORKS
AND SANITARY SEWER SYSTEM JUNIOR LIEP1 REVENUE REFUNDING AND IMPROVE-
MENT BONDS, SERIES 1979" in the aggregate principal sum of $1,750 , 000
under and pursuant to the constitution and laws of the State of Texas,
including particularly Articles 1111 - 1118 , both inclusive, Revised
Civil Statutes of Texas , as amended, and as authorized pursuant to
the aforesaid elections held on August 11, 1973 and April 1 , 1978 .
Section 2 : That said bonds shall be dated June 1, 1979 , shall
be numbered consecutively from One (1) to Three Hundred Fifty (350) ,
inclusive, shall be in the denomination of $5 ,000 each and shall
mature and become due and payable serially on March 1 of each of the
years and in the amounts respectively as set forth in the following
schedule:
Year Amount
1980 $ 50 ,000
1981 50,000
1982 50 , 000
1983 50 , 000
1984 50,000
1985 100 ,000
1986 100 ,000
1987 100 , 000
1988 100 ,000
1989 100 , 000
1990 100, 000
1991 100 ,000
1992 100 , 000
� 1993 100,000
1994 100 ,000
1995 100 , 000
1996 100 , 000
1997 100 , 000
1998 100 ,000
1999 100 ,000
, . � . , _ . .
Bonds Nos. 251 to 350 , inclusive, may be redeemed prior to
their stated maturity on the dates, at the price and in the manner
provided in the FORM OF THE BOND set forth in Section 5 of this
= ordinance.
Bonds Nos. 61 to 70 , 81 to 90 , 101 to 110 , 121 to 130,
141 to 150, 161 to 170, 181 to 190, and 201 to 210 may be redeemed
prior to their stated maturity on the date, at the price and in
the manner provided in the FORM OF THE BOND set forth in Section 6
of this ordinance.
Said optional or redeemable bonds may be redeemed in whole
or in part, but if in part, in their inverse numerical order.
Section 3 : That the bonds shall bear interest from their
date until maturity or prior redemption at the following rates :
Interest Bond Nos.
Rate Incl.
5. 50� 1 - 120
6 . 25$ 121 - 130
5. 50$ 131 - 140
6 . 25� 141 - 150
5. 50$ 151 - 160
6 . 50� 161 - 170
5. 50� 171 - 180
6 . 50$ 181 - 190
5. 50� 191 - 200
6 . 50� 201 - 210
5. 50$ 211 - 350
said interest shall be evidenced by interest coupons which shall
appertain to said bonds. Interest shall be payable on September l,
1979, and semi-annually thereafter on March 1 and September 1 of
each year which said bonds or any of them are outstanding.
Section 4 : That the bonds shall be payable, shall have the
characteristics and shall be signed and executed all as provided,
and in the manner indicated in the FORNI OF THE BOND set forth in
Sections 5 and 6 of this ordinance.
Section 5 : That the form of the following bonds, to-wit:
Bond Nos.
1 - 60
71 - 80
� 91 - 100
111 - 120
131 - 140
151 - 160
171 - 180
191 - 200
211 - 350 �
shall be substantially as follows :
` �
NO. $5,000
,
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF GALVESTON
CITY OF FRIENDSWOOD
WATERWORKS AND SANITARY SE4JER SYSTEM JUNIOR LIEN
REVENUE REFUNDING AND IMPROVEMENT BOND, SERIES 1979
ON MARCH 1, , THE CITY OF FRIENDSWOOD, IN GALVESTON
COUNTY, TEXAS, promises to pay to bearer the principal amount of
FIVE THOUSAND DOLLARS
and to pay interest thereon, from the date hereof, at the rate of
5. 50$ per annum, evidenced by interest coupons payable SEPTEMBER 1,
1979 , and semi-annually thereafter on each PIARCH 1 and SEPTEMBER 1
while this bond is outstanding. 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 charges to the bearer, upon presentation and surrender
of this bond or proper interest coupons at the FROST NATIONAL BANK,
San Antonio, Texas, which shall be the paying agent for this Series
of bonds.
THIS BOND is one of a series of three hundred fifty (350)
bonds of like tenor and effect (except as to number, interest rate,
maturity and right of prior redemption) numbered consecutively
from One (1) to Three Hundred Fifty (350) , both inclusive , being
in the denomination of $5 , 000 each, aggregating the principal sum
of One Million Seven Hundred Fifty Thousand ($1,750 ,000) of which
amount $150 , 000 is for the purpose of refundinr and cancelling a
like principal amount of outstanding bonded indebtedness seGUred by
net revenues of the City' s combined waterworks and sewer system
evidenced by $150 ,000 principal amount of City of Friendswood, Texas,
Waterworks and Sanitary Sewer System ,7unior Lien Revenue Bonds,
Series 1979 , dated January 1, 1979 and $1 ,600 , 000 is for the purpose
of constructing improvements and extensions to the existing sanitary
sewer system of the City, all in accordance with the Constitution and
laws of the State of Texas, including particularly Articles 1111 to
1118 , inclusive, Revised Civil Statutes of Texas, as amended, and
as authorized by elections held in said City on August 11, 1973 and
April 1, 1978 and pursuant to an ordinance passed by the City Council
of said City which ordinance is duly recorded in the Minutes of said
City Council
(NOTE TO PRINTER: The following two (2) paragraphs, being
the redemption provisions, will he inserted only in Bonds
Nos. 251 to 360 , inclusive. )
�
.
AS SPECIFIED in the ordinance hereinabove mentioned, the
City hereby expressly reserves the right to redeem this bond
before maturity on any interest payment date on and after March
. 1, 1993. Such redemption shall be at the applicable redemption
� price (expressed as a percentage of principal amount) set forth
in the following table plus accrued interest to the redemption
date :
REDE2�IPTION PERIOD REDEMPTION PRICE
March 1, 1994 - September 1, 1994 102 1/2$
March 1, 1995 - September 1, 1995 102 �
March 1, 1996 - September 1, 1996 101 1/2�
March l, 1997 - September l, 1997 101$
March l, 1998 - September 1, 1998 100 1/2�
March 1, 1999 and thereafter 100$
AT LEAST thirty (30) 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 publication published
and of general circulation in the State of 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 performed, 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 and principal of this bond and the series
of which it is a part, are secured by and payable from an irrevocable
lien on and pledge of the Net Revenues to be derived from the operation
of the waterworks and sanitary sewer system of said City, such lien
and pledge, however, being junior and inferior to the prior lien and
pledge presently existing thereon in connection with the outstanding
City of Friendswood, Texas, [Vaterworks and �anitary Sewer System
Revenue Honds, Series 1969 , dated May 1, 1969 (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 restrictions
� 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 a 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 on a parity with the lien on and
pledge securing these bonds and subject only to the prior lien and
pledge presently existing thereon in connection with said Outstanding
Senior Lien Bonds.
,
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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 signature of the i•iayor and
countersigned with the facsimile signature of the City Secretary, and
the official seal of said City has been duly impressed or placed in
facsimile on this bond.
l
Mayor, City of Friendswood, Texas
COUNTERSIGNED:
City Secretary, City of Friendswood, Texas
(SEAL OF CITY)
Section 6 : That the form of the following bonds, to-wit:
Bond Nos.
61 - 70
81 - 90
101 - 110
121 - 130
141 - 150
161 - 170
181 - 190
201 - 210
shall be substantially as follows :
NO. $5,000
, UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF GALVESTON
CITY OF FRIENDSWOOD
WATERV70RKS AND SANITARY 5EWER SYSTEM JUNIOR LIEP7
REVENUE REFUNDING AND IMPROVEMENT BOND, SERIES 1979
ON MARCH 1, , 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
5. 50� per annum, evidenced by interest coupons payable SEPTEMBER l,
1979, and semi-annually thereafter on each MARCH 1 and SEPTEMBER 1
while this bond is outstanding. 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 charges to the bearer, upon presentation and surrender
of this bond or proper interest coupons at the FRIENDSWOOD BANK,
Friendswood, Texas, which shall be the paying agent for this series
of bonds.
THIS BOND is one of a series of three hundred fifty (350)
bonds of like tenor and effect (except as to number, interest rate,
maturity and right of prior redemption) numbered consecutively from
One (1) to Three Hundred Fifty (350) , both inclusive, being in the
denomination of $5 ,000 each, aggregating the principal sum of One
Million Seven Hundred Fifty Thousand ($1,750 ,000) of which amount
$150 , 000 is £or the purpose of refunding and cancelling a like
principal amount of outstanding bonded indebtedness secured by net
revenues of the City' s combined waterworks and sewer system evidenced
by $150,000 principal amount of City of Friendswood, Texas, Waterworks
and Sanitary Sewer System Junior Lien Revenue Bonds, Series 1979 ,
dated January l, 1979 and $1 ,600 ,000 is for the purpose of constructing
improvements and extensions to the existing sanitary sewer system
of the City, all in accordance with the Constitution and laws of the
State of Texas, including particularly Articles 1111 to 1118 , inclusive,
Revised Civil Statutes of Texas, as amended, and as authorized by
elections held in said City on August 11, 1973 and Apri1 l, 1978 and
pursuant to an ordinance passed by the City Council of said City
which ordinance is duly recorded in the Minutes of said City Council.
(NOTE TO PRINTER: The following two (2) paragraphs, being
- the redemption provisions, will be inserted only in Bonds
Nos. 61 ta,70 , 81 to 90 , 101 to 110 , 121 to 130 , 141 tp 150 ,
161 to 170, 181 to 190 , and 201 to 210 , inclusive. )
� �
AS SPECIFIED in the ordinance hereinabove mentioned, the City
hereby expressly reserves the right to redeem this bond before maturity
on any interest payment date on and after Septemaer 1, 1981 by paying
the principal and accrued interest to the interest payment date fixed
'for redemption plus a redemptian premium of three percent (3$) of the
principal amount hereof.
AT LEAST thirty (30) 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 publication published
and of general circulation in the State of 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 performed, 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 and principal of this bond and the series
of which it is a part, are secured by and payable from an irrevocable
lien on and pledge of the Net. Revenues to be derived from the operation
of the waterworks and sanitary sewer system of said City, such lien
and pledge, however, being junior and inferior to the prior lien and
pledge presently existing thereon in connection with the outstanding
City of Friendswood, Texas, Waterworks and Sanitary Sewer System
Revenue Bonds, Series 1969 , dated May 1, 1969 (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 restrictions
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 a 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 on a parity with the lien on and
pledge securing these bonds and subject only to the prior lien and
pledge presently existing thereon in connection with aaid 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 �aith the facsimile signature
of the Mayor and countersigned with the facsimile signature of the
City Secretary, and the official seal of said City has been duly
impressed or placed in facsimile on this bond.
Mayor, City of Friendswood, Texas
COUNTERSIGNED:
City Secretary, City of Friendswood, Texas
(SEAL OF CITY)
. --� ..._ .
Section 7 : That the form of the interest coupons appertaining
to said bonds shall be substantially as follo4�s:
' A. The form of the interest coupons appertaining to the following
numbered bonds shall be substantially as follows :
Bonds Nos.
1 - 60
71 - 80
91 - 100
111 - 120
131 - 140
151 - 160
171 - 180
191 - 200
211 - 350
NO. $
ON 1, 19 , THE CITY OF FRIENDSWOOD
IN GALVESTON COUNTY, TEXAS, promises to pay to bearer the amount shown
on this interest coupon, in law£ul 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 FROST NATIONAL BANK,
San Antonio, Texas, �aid amount being interest due that day on the
bond, bearing the number hereinafter designated, of that issue of
CITY OF FRIENDS�900D, TEXAS, I�IATERWORKS AND SANITARY SEWER SYSTEP�I
JUNIOR LIEN REVENUE REFUNDING AND IMPROVEMENT BONDS, SERIES 1979 ,
dated January 1, 1979. 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. BOND NO.
City Secretary Mayor
B. The form of the interest coupons appertaining to the following
numbered bonds shall be substantially as follows :
; Bonds Nos.
61 - 70
81 - 90
101 - 110
121 - 130
141 - 150
161 - 170
181 - 190
201 - 210
N0. $
ON , 19 , 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 FRIENDSWOOD BANK,
Friendswood, Texas , said amount being interest due that day on the
bond, bearing the number hereinafter designated, of that issue of
CITY OF FRIEtdDS6a00D, TEXAS, I+IATERWORKS AND SANITARY SE�dER SYSTEM
JUNIOR LIEN REVENUE REFUNDING AND IMPROVENIENT BOND, SERIES 1979 ,
dated January l, 1979 . 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. BOND N0.
City Secretary Mayor
Section 8 : That each of said bonds shall be registered by the
Comptroller of Public Accounts of the State of Texas, as provided by
law, and as to the registration of such bonds, there shall be printed
on the back of each of said bonds substantially the following certificate
� which shall be manually signed by said Comptroller (or by a Deputy
designated in writing to act for said Comptroller. )
OFFICE OF THE COMPTROLLER X
REGISTER NO.
STATE OF TEXAS X
I hereby certify that this bond has been examined, certified
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 day of ,
19
Comptroller of Public Accounts,
State of Texas
Section 9 : Definitions. That the following words and terms ,
as used hereinafter in this ordinance, shall mean and include, and
are hereby declared, as follows, to-wit:
a) City shall mean and refer to the City of Friendswood, Texas,
and where appropriate, the City Council of said City.
b) System or S�stems shall mean and refer to the combined
"Waterworks and Sanitary Sewer System" now owned by the City
and shall also be construed to mean and include all properties,
real and personal, mixed or otherwise, now owned or as
hereafter may be acquired, by the City through purchase,
construction, improvements , replacements, additions and
extensions, or otherwise, and used in connection with said
System of said City, and in anywise appertaining thereto,
and whether situated within or without the limits of the
City.
c) Gross Revenues shall mean all of the revenues and income of
any nature derived from the operation and/or ownership
of the System. �
d) Current Expenses shall mean 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 thereof, or such as might be necessary to meet
some physical accident or condition which would otherwise
impair the original security.
e) System Fund shall mean and refer to the separate fund or
account created, named, and designated in the ordinance
of the City, authorizing the issuance of the Series 1969
Bonds ; which fund or account shall be continued under this
ordinance authorizing these Series 1979 bonds.
f) First Lien Bond Fund shall mean and refer to the separate
fund or account created, named and designated in the ordinance
authorizing the issuance of the Series 1969 Bonds; which
fund or account shall be continued under this ordinance
authorizing these Series 1979 bonds.
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g) First Lien Reserve Fund shall mean and refer to the separate
fund or account created, named and designated in the ordinance
authorizing the issuance of the Series 1969 bonds; which
; fund or account shall be continued under this ordinance
authorizing these Series 1979 bonds.
h) Net Revenues shall mean and include the gross revenues
derived from the operation of the System less the reasonable
and proper expense of operating and maintaining the System,
including salaries, labor, materials, interest, repairs,
and extensions necessary to render efficient service.
i) First Lien Bond Ordinance shall mean and refer to the ordinance
passed and adopted by the City of r^riendswood, Texas, on
June 23 , 1969 , authorizing the issuance of $700,000 principal
amount of City of Friendswood, Texas, Waterworks and Sanitary
Sewer System Revenue Bonds, Series 1969 , dated May l, 1969 .
j) First Lien Bonds or Prior Lien Bonds shall mean and refer
to the outstanding City of Friendswood, Texas, Waterworks
and Sanitary Sewer System Revenue Bonds, Series 1969 ,
dated May 1, 1969 .
k) Additional First Lien/Parity Bonds shall mean and include
the additional parity bonds which the City reserves the
right to issue under the provisions of the First Lien Bond
Ordinance, being Section 16 of the Series 1969 Ordinance.
1) Junior Lien Bonds or Series 1979 Bonds or These Bonds shall
mean and refer to the 1,750,000 City of Friendswood, Texas,
Waterworks and Sanitary Sewer System Junior Lien Revenue
Refunding and Improvement Bonds, Series 1979 , authorized
by this ordinance.
m) Additional Junior Lien Bonds shall mean and refer to the
additional parity �unior lien bonds which the City expressly
reserves the right to issue in Section 13 of this ordinance.
n) Junior Lien Bond Fund shall mean and refer to a special
fund and account hereby created and required to be separately
maintained in the city depository into which there shall
be deposited monies from Net Revenues of the System (in
accordance with the provisions and requirements of this
ordinance) for the purpose of paying the principal of and
interest on the Junior Lien Bonds (including any Additional
Junior Lien Bonds which may be hereafter issued) as the
same shall became due, which monies in said fund shall
continually be secured by a valid pledge to the City of
direct obligations of the United States of America having
- an aggregate market value, exclusive of accrued interest,
at all times at least equal to such Junior Lien Bond Fund.
o) Junior Lien Reserve Fund shall mean and refer to a separate
fund and account hereby created and required to be maintained
in the City depository which shall be used solely for the
purpose of paying the principal and interest falling due
on said Junior Lien Bonds (including any Additional Junior
Lien Bonds which may be hereafter issued) as to which there
would at any time otherwise be a default.
p) Fiscal Year shall mean and refer to the established fiscal
year of the City of Friendswood, Texas, as presently established
. as that period of time from October 1 of each year to and
� including September 30 of the following year.
Section 10 : Application of Revenues. That until the First
Lien Bonds (including the Additional First Lien Parity Bonds) are
paid off, both as to principal and interest, and that so long as any
of the Junior Lien Bonds (including any Additional Junior Lien Bonds)
or any interest thereon are outstanding and unpaid, the City covenants
and agrees that all revenues and income of every nature derived from
the operation of the System shall be deposited from day to day in
the System Fund, heretofore created, which fund shall be continously
maintained and continued to be kept separate and apart £rom all
other funds and accounts of the City; and said System Fund shall be
pledged, appropriated, and used for the following purposes and the
flow of funds therefrom each month shall continue in the manner
provided for by and in the First Lien Bond Ordinance and this ordinance
and the order or precedence of use thereof shall be as follows, to-wit:
FIRST: To the payment of the reasonable and proper expense of
operating and maintaining the System, including salaries, labor,
materials, interest, repairs, and extensions necessary to render
efficient service.
SECOND: That after payment of all expenses has been made or duly
pr vo ided for, which are set out in the "FIRST" paragraph in this
Section 10, there shall be paid into the First Lien Bond Fund
and First Lien Reserve Fund such sums of money as shall be
required to fully maintain said funds, all as provided for in,
and required by, the First Lien Bond Ordinance.
THIRD: That after the requirements set forth in the "FIRST" and
"SECOND" paragraphs of this Section 10 have been satisfied or
duly provided for, and all deficiencies in such requirements
have been remedied, from the monies then remaining in the
System Fund, commencing on the tenth (lOth) day of the next month
following the passage and adoption of this ordinance and on
or before the lOth day of each month thereafter (unless the lOth
day of any month shall be a Sunday or legal holiday, in which
event such payment shall be made on or before the next succeeding
i secular day) , there shall be paid into the Junior Lien Bond Fund
an amount (which shall be accumulated in this fund) that
shall be fully sufficient to punctually pay all principal and
interest as the same becomes due on the Junior Lien Bonds
(including principal of and interest on any Additional Junior
Lien Bonds that may hereafter be issued) . The amount of such
" monthly payments shall be proportioned into approximately equal
payments which will produce and be fully sufficient to meet and
pay the next maturing interest on said Junior Lien Bonds when
` due and the next maturing principal of said Junior Lien Bonds
when due (including and in addition thereto principal and interest
requirements on any Additional Junior Lien Bonds as the same
shall become due. ) If in any month the City shall, for any
reason, fail to pay into said Junior Lien Bond Fund the full
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amounts above stipulated, then the amounts equivalent to such
deficiency or deficiencies shall be set apart and paid into
, said Junior Lien Bond Fund from the first available and
unallocated revenues of the follov�ing month or months and shall
be in addition to the amounts hereinabove provided to be otherwise
paid into said Junior Lien Bond Fund each month.
FOURTH: That after the requirements set forth in the "FIRST" ,
"SECOND" , and "THIRD" paragraphs so designated in this Section
10 have been satisfied or duly provided for, and all deficiencies
in such requirements have been remedied, there shall be paid
into the Junior Lien Reserve Fund commencing on the lOth day
of the next month following the passage and adoption of this
ordinance, and on or before the lOth day of each month thereafter
(unless the lOth day of any month shall be Sunday or a legal
holiday, in which event such payment shall be made on or before
the next succeeding secular day) , the sum of Two Thousand Dollars
($2 ,000) per month until there shall have been accumulated in
the Junior Lien Reserve Fund the sum of One Hundred Forty �ive
Thousand Dollars ($145 , 000) . In the event Additional Junior Lien
Bonds are hereafter issued, such monthly payment into said Junior
Lien Reserve Fund may be increased by an amount which may be
stated by and in the ordinance or resolution authorizing the
issuance of such Additional Junior Lien Bonds. Monies in the
Junior Lien Reserve Fund shall be used to pay principal of or
interest on the Junior Lien Bonds (including any Additional
Junior Lien Bonds) falling due at any time for the payment of
which there is no money available in the Junior Lien Bond Fund.
PAonies in the Junior Lien 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 (10) years
from the date of making such investment, which securities shall
be deposited and held by said City depository, and if at any
time uninvested funds in the Junior Lien Reserve Fund shall be
insufficient to permit payment of principal of or interest on
the Junior Lien Bonds (inc�uding any Additional Junior Lien Bonds
which may hereafter be issued) when needed for the purpose, said
bank shall promptly and timely sell on 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 resulting from the maturity of principal and interest
of the securities in which the Junior Lien Reserve Funds are
invested may be reinvested or accumulated in said Junior Lien
Reserve Fund. All monies used from the Junior Lien Reserve Fund
shall be promptly restored from the first revenues received and
available for the purpose. It is hereby declared to he the City' s
purpose and intent, and the City so covenants and agrees, that
the monthly amount required to be deposited in this fund shall be
� accumulated and when accumulated shall be continously maintained
in the said Junior Lien Reserve Fund and that said amount is in
addition to principal and interest requirements for the then
current year on the then outstanding Junior Lien Bonds (also
including any Additional Junior Lien Bonds hereafter issued) ,
and Bonds (also including any Additional Junior Lien Bonds
hereafter issued) , and that if said amount is reduced or depleted
in whole or in part, it shall then be continously supplemented
as necessary and be fully maintained until all interest thereon,
have been fully paid and discharged , or until such time as the
Junior Lien Reserve Fund and the Junior Lien Bond Fund shall
contain an amount equal to the total principal and interest
� requirements to their final maturity of all of the then out-
standing Junior Lien Bonds (including any then outstanding
Additional Junior Lien Bonds hereafter issued) .
FIFTH: That after the requirements set forth in the "FIRST" ,
S CE OtID" , "THIRD" , and "FOURTH" paragraphs of this Section 10
have been satisfied or duly provided for, and all deficiencies
in such requirements have been remedied, any funds remaining
in the System Fund may be used by the City for any other purpose
now or hereafter permitted by law.
All funds herein provided for shall be kept separate and apart
from all other City funds and except as otherwise specially provided
for by and in the First Lien Bond Ordinance and in this resolution,
said funds shall be secured in the manner required by the laws of the
State of Texas for security of city funds. All sums of maney in the
Junior Lien Bond Fund and all sums of money in the Junior Lien Reserve
Fund shall be held as trust funds for the benefit of teh holders of
the Junior Lien Bonds (including any Additional Junior Lien Bonds
hereafter issued) , the beneficial interest in which shall be regarded
as existing in such bondholders.
Section 11 : Application of Revenues After Discharge of Prior
Lien Bonds. It is however, expressly provided that after full and
final payment of all Prior Lien Bonds (including Additional First
Lien Parity Bonds) , both as to principal and interest, that is, those
bonds having a lien on the revenues of the System prior and superior
to the lien enjoyed by the Junior Lien Bonds, the order or precedence
of the flow of funds from the System Fund shall be to the use and
requirements as provided for in the "FIRST" paragraph so designated
in Section 10 of this ordinance, and then to the use and requirements
as set forth in the "THIFD" paragraph so designated a.n Section 10 of
this ordinance, and then to the use and requirements as set forth in
the "FOURTH" paragraph so designated in Section 10 of this ordinance.
At such time, the monies then remaining and to the credit of the
First Lien Bond Fund shall be transferred to and become a part of the
Junior Lien Reserve Fund, and shall be used and administered for the
purposes for which said Junior Lien Reserve Fund is hereby created.
If, by the transfer of such remaining monies at that time into the
Junior Lien Reserve Fund, a surplus is created which is not needed
to fully maintain said fund, then, in that event, such surplus, or any
surpluses existing thereafter, may be used by the City for any other
purpose now or hereafter permitted by law.
Section 12 : Pledge of Net Revenues. That so long as the Prior
Lien Bonds, or any interest thereon, remain outstanding and unpaid, the
� City hereby irrevocably pledges all of the Net Revenues from the
operation of the System:
FIRST: To meeting the requirements of and to ful.ly maintain
the First Lien Bond Fund, and First Lien Reserve Fund, all. as
provided for by and in the First Lien Bond Ordinance, and
SECOND: To meeting the requirements of and to fully maintain
the Junior Lien Bond Fund as set forth in the "THIRD" paragraph
. � �
of Section 10 of this ordinance so as to punctually pay the
principal of and interest on the Junior Lien Bonds as such
, principal and interest becomes due as provided for in this
ordinance, and
THIRD: To meeting the requirements of and to fully maintain
the Junior Lien Reserve Fund as set forth in the "FOURTH"
paragraph of Section 10 of this ordinance,
and after the full and final payment of all Prior Lien Bonds, both as
to principal and interest, and so long as the Junior Lien Bonds, or
any interest thereon, remain outstanding and unpaid, the City hereby
irrevocably pledges all of the Net Revenues from the operation of
the System:
FIRST: To meeting the requirements of and to fully maintain
the Junior Lien Bond Fund as set forth in the "THIRD" paragraph
of Section 10 of this ordinance so as to punctually pay the
principal of and interest on the Junior Lien Bonds as such
principal and interest becomes due as provided for in this
ordinance, adn
SECOND: To meeting the requirements of and to fully maintain
the Junior Lien Reserve Fund as set forth in the "FOURTH"
paragraph of Section 10 of this ordinance.
Section 13 : (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 junior lien revenue
bonds (herein called "Additional Junior Lien Bonds") , in any amounts,
for any lawful purpose. Such Additional Junior Lien 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 Junior Lien Bonds by a lien
on and pledge of the Net Revenues, subject only to the prior lien and
pledge presently existing thereon in connection with the First Lien
Bonds.
(b) Each ordinance or resolution under which Additional Junior
Lien Bonds are issued shall provide that, in addition to the amounts
required by this ordinance, and any ordinance authorizing Additional
Junior Lien Bonds to be deposited to the credit of the Junior Lien
Bond Fund and the Junior Lien Reserve Fund, the City shall deposit to
the credit of the Junior Lien Bond Fund at least such amounts as are
required for the payment of all principal of and interest on said
Additional Junior Lien Bonds then being issued, as the same come due,
and shall also deposit to the credit of the Junior Lien Reserve Fund
• at least such amounts, in not less than approximately equal monthly
installments, as will, together with any other amounts already required
to be deposited in the Junior Lien Reserve Fund in connection with
the Junior Lien Bonds and any other outstanding Additional Junior
Lien bonds, be sufficient to cause the Junior Lien Reserve Fund to
accumulate and contain within a period not to exceed five (5) years
from the date of the Additional Junior Lien Bonds then beinq issued,
a total amount of money and investments at least equal in market value
to the average annual principal and interest requirements of such
proposed Additional Junior Lien Bonds and the then outstanding Junior
Lien Bonds and any then outstanding Additional Junior Lien Bonds and that
thereafter such deposits shall be made to the credit of the Junior Lien
, Reserve Fund as will cause the Junior Lien Reserve Fund at all times
to contain a total amount of money and investments at least equal
in market value to the average annual principal and interest requirements
of such p�oposed Additional Junior Lien Bonds, the then outstanding
Junior Lien Bonds, and any then outstanding Additional Junior Lien
Bonds.
Section 14 : Additional Junior Lien Bonds shall be issued only
in accordance with this ordinance and no installments, series, or issue
of Additional Junior Lien 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 default as to any
covenant, condition or obligation contained in this ordinance or in
connection with ordinances authorizing the issuance of all outstanding
Prior Lien Bonds and Additional Prior Lien bonds.
(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 (12) 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
Junior Lien Bonds, the Net Revenues, together with any other amounts
pledged to the payment of the Prior Lien Bonds and Additional Prior
Lien Bonds and to the payment of these Bonds and Additional Junior
Lien Bonds, were at least equal to one and one-half (1 1/2) times
the average annual principal and interest requirements for all then
outstanding Prior Lien Bonds and Additional Prior Lien Bonds the
outstanding Junior Lien Bonds and the then proposed Additional Junior
Lien Bonds.
Section 15 : On or before the 25th day of August, 1979 , and on
or before the 25th day of each February and of each August thereafter
while any of the bonds and Additional Junior Lien Bonds, if any, are
outstanding and unpaid, there shall be made available to the paying
agents therefor, out of the Junior Lien Bond Fund, money sufficient
to pay such interest on and such principal of the Bonds and Additional
Junior Lien Bonds, if any, as will accrue or mature on the September 1
or March 1 immediately following.
Section 16 : (a) That all money in all Funds and accounts created
by this ordinance, to the extent not invested, shall be secured in
the manner prescribed by law for securing funds of cities of the State
of Texas, in principal amounts at all times not less than the amounts
of money credited to such Funds or accounts, respectively:
(b) That whenever the total amount in the Junior Lien Bond
Fund and the Junior Lien Reserve Fund shall be equivalent to (1)
. the aggregate principal amount of the Bonds and Additional Junior
Lien Bonds, if any, outstanding, plus (2) the aggregate amount
of all unpaid coupons thereto appertaining unmatured and matured,
no further payments need be made into the Junior Lien Bond Fund or the
Junior Lien Reserve Fund. In determining the amount of Junior Lien
Bonds or Additional Junior Lien Bonds outstanding, there shall be
subtracted the amount of any Junior Lien Bonds or Additional Junior
Lien Bonds which shall have been duly called for redemption and for
'which funds shall have been deposited with the paying agent sufficient
for such redemption.
Section 17 : The City covenants and agrees that:
(a) It will faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in this ordinance
and in each and every Junior Lien Bond and Additional Junior Lien Bond;
that it will promptly pay or cause to be paid the principal of and
interest on every Junior Lien Bond and Additional Junior Lien Bond,
on the dates and at the places and in the manner prescribed in such
Junior Lien Bond or Additional Junior Lien Bond; and that it will, at
the times and in the manner prescribed herein, deposit or cause to
be deposited the amounts of money specified herein.
(b) It is duly authorized under the laws of the State of Texas
to create and issue the Junior Lien Bonds; that a11 action on its
part for the creation and issuance of the Junior Lien Bonds has been
duly and efficiently taken, and that the Junior Lien 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 ownership to all the aforesaid
5ystem, and every part thereof, for the benefit of the holders and
owners of the Junior Lien Bonds and Additional Junior Lien 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 Junior Lien Bonds and Additional Junior Lien 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 gavernmental
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 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
provided herein, and that it will not create or suffer to be created
any mechanic' s, laborer ' s, materialman' s, or other lien or charge
which might or could be prior to the liens hereof, or do ro 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, materialman' s , or other lien or charge , shall be required
to be paid so long as the validity of the same sha11 be contested in
good faith by the City.
(e) It will not do or suffer any act or thing whereby the System
might or could be impaired, and that it will at all times maintain,
preserve, and keep the real and tangible property of the System and
,... - .,., � ,
every part thereof in good condition, repair, and working order, and
operate, maintain, preserve, and keep all properties, buildings,
structures, and equipment pertaining thereto and every part and
parcel thereof in good condition, repair, and working order.
' (f) While the Junior Lien Bonds or Additional Junior Lien
Bonds, if any, are oustanding and unpaid, the City shall not additionally
encumber the pledged Net Revenues in any manner, except as permitted
in the Ordinance Authorizing Issuance of the Prior Lien Bonds, any
ordinances authorizing the sisuance of Additional Prior Lien Bonds,
and this ordinance in connection with Additional Junior Lien Bonds,
unless said encumbrance is made junior and subordinate in all respects
to the liens, pledges, covenants, and agreements of this ordinance.
(g) While the Junior Lien Bonds or any Additional Junior Lien
Bonds are outstanding, 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, or unless the City determines that
such real or personal property is no longer needed or is no longer
useful, and that the disposition thereof will not adversely affect
the City or the operation and maintenance of the System.
(h) It will, as required by the Constitution and laws of the
State of Texas, prescribe , maintain, and collect fees and charges which
shall be uniform and equal as to all users of services of the same
class, for the use of the services and facilities of the System, which
will provide revenues fully. sufficient at all times to:
(1) Pay all current expenses.
(2) Establish and maintain all Funds and accounts created
and provided for in this ordinance.
(3) Pay all outstanding lawful debts and liabilities of
and claims against the System, in addition to the
Junior Lien Bonds and any Additional Junior Lien Bonds,
as provided in this ordinance.
(4) Produce Net Revenues sufficient to provide at least
one and one-half (1 1/2) times the average annual total
debt service requirements of all revenue bonds payable
from a lien on or pledge of the Net Revenues of the
System.
(i) While the Junior Lien Bonds or any Additional Junior Lien
Bonds are outstanding, the City will maintain insurance with a reliable
insurance company, or companies , for the benefit of the holders and
owners of such outstanding obligations, on the System of a kind and in
an amount or amounts which would usually and reasonably be carried by
� private companies engaged in a similar type of business. Upon the
happening of any loss or damage covered by such insurance , the City
shall make due proof of loss and shall do all things necessary or
desirable to cause the insurers to make payments in full directly
to the City. The proceeds of insurance covering the System, together
with any other funds necessary and available for such purpose, shall
be used forthwith by the City for repairing the property damaged
or replacing the property destroyed; provided, that if such insurance
proceeds and other funds so available are insufficient for such purpose,
then said insurance proceeds shall be deposited promptly in the Junior
Lien Bond Fund.
p (j ) As soon as possible after delivery of the Junior Lien Bonds,
and on or before February 1 of each year thereafter while the Junior
Lien Bonds or any Additional Junior Lien 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 requirements of this Section with
respect to the maintenance of insurance, and listing all policies
carried, and that all insurance premiums upon the insurance policies
to which reference is hereinbefore made have been paid.
(k) Proper books of record and account will be kept in which
full, true, and correct entries will be made of all dealings, activities,
and transactions relating to the pledged tlet Revenues and to the System,
and all books, documents, and vouchers relating thereto shall at all
reasonable times be made available for inspection upon request by any
original purchaser or by the holders of not less than twenty-five
percent (25$) of the then outstanding Junior Lien Bonds and Additional
Junior Lien Bonds. Such books of record and account shall be kept on
the basis of a fiscal year ending each September 30.
(1) Any official depository of the City shall be a member of
the Federal Deposit Insurance Corporation. �
(m) Each year while the Junior Lien Bonds or Additional Junior
Lien Bonds or any of them, are outstanding, an audit will be made of
its books and accounts relating to the pledged Net Revenues and to
the System by 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 £or
the preceding fiscal year shall be mailed to the original purchasers
of the Junior Lien Bonds and any Additional Junior Lien Bonds, and
to any bond holder who shall so request. Such annual audit reports
shall be open to the inspection of the bond holders and their agents
and representatives at all reasonable times and the cost of such
reports shall be a part of the Current Expense of the System. Each
of such reports shall contain statements showing in reasonable detail,
as to such fiscal year, the following:
(1) Operating income and operating exPense of the System
and the revenues available for payment into the Funds and Accounts
created in this ordinance.
(2) The amount of money on deposit in the System Fund,
the Junior Lien Bond Fund, and the Junior Lien Reserve Fund, respectively,
- at the beginning and end of such fiscal year and all deposits, receipts,
and disbursements affecting said Funds.
(3) All bonds of every kind outstanding at the beginning
of such fiscal year, bonds retired during and bonds remaining outstanding
at the end of such fiscal year.
(n) It has lawful power to pledge the Net Revenues supporting
the Junior Lien Bonds and has lawfully exercised such power under the
Constitution and laws of the State of Texas, and that the Junior
Lien Bonds issued hereunder shall be ratably secured under said pledge
i
, .
of income in such manner that one bond shall have no preference over
the other bonds of this issue.
� (o) No service involving the System or any part thereof shall
be rendered without charge to any person, firm, corporation or
organization whatsoever.
(p) The City further agrees and covenants that it will refund
the Junior Lien Bonds into First Lien Bonds on a parity with the
outstanding Prior Lien Bonds under the following circumstances and
conditions:
(1) That the bonds are in the hands of the original
purchaser at the time of such refunding.
(2) That a request for such refunding is made by the
original holders of the bonds.
(3) That all conditions for the issuance of Additional
Prior Lien Bonds as contained in the Ordinance Authorizing th..e Issuance
of the Series 1969 Bonds have been met.
(4) That the applicable laws of the State of Texas then in
force shall authorize such refunding.
(5) That said refunding bonds shall bear the same rate
of interest and shall have the same maturities as the bonds so refunded.
5ection 18 : The City further covenants that, so long as any
of the Junior Lien Bonds are in the hands of the original purchasers
thereof, it will notissue any bonds secured by a lien on or pledge
of the Net Revenues of the System superior to the lien securing
payment of the Junior Lien Bonds unless :
(a) The Junior Lien Bonds have been first refunded into
First Lien Bonds on a parity with the outstanding Prior Lien Bonds; or
(b) The original holder of the bonds gives written consent
to the issuance thereof.
Section 19 : 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 Junior Lien Bonds when due or failure to make
the payMents required into the Junior Lien Bond Fund or Junior Lien
Reserve Fund, or defaults in the observance or performance of any
, of the covenants or obligations set forth in this ordinance, the holder
' or holders of any of the Bonds shall 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 obligations. 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 exercised 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 remedies shall not
be deemed to be excl.usive.
Section 20 : That the P�ayor of the City is hereby authorized
to have control of said bonds and all necessary records and proceedings
pertaining to said Bonds pending their delivery and their investigation,
examination, and approval by the Attorney General of the State of
Texas, and their registration 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
E manually sign the Comptroller ' s Registration Certificate printed and
!
�
�
4
�
,
;
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 21 : That the City Council of said City hereby specially
covenants and agrees with the owners and holders of the bonds authorized
hereby and with all subsequent owners and holders from time to time of
said bonds that:
(1) The City Council of said City will promPtly proceed
to utilize the proceeds from the sale of said bonds (other
than accrued interest to date of delivery) for the purposes
set forth in Section 1 of this ordinance; and
�2� No portion of the bonds hereby authorized is issued
as a part of an issue, a11 or a major portion of the proceeds
of which are reasonably expected to be used directly or
indirectly
(a) to acquire securities (within the meaning of Section
165 (g) (2) (A) or (B) of the Internal Revenue Code) or
obligations other than obligations described in Section
103 (a) (1) of the Internal Revenue Code (except for a
temporary period of time to the extent permitted by
103 (c) (4) (A) of the Internal Revenue Code) which may
be reasonably expected at the time of the issuance of
such issue to produce a yield over the term of the issue
which is materially higher (taking into account any
discount or premium) than the yield on obligations of
such issue, or
(b) to replace funds which were issued directly or
indirectly to acquire securities or obligations described
in subparagraph (a)
(3) The City Council of said City will take such action in
accordance with and as required by regulations prescribed from time
to time by the Secretary of the Treasury or his delegate to carry
out the purposes of Section 103 (c) of the Internal Revenue Code so
that no portion of the bonds authorized hereby shall be classified
as an "arbitrage bond" within the meaning of Section 103 (c) of the
Internal Revenue Code . Specifically, but not by way of limitation,
said City Council covenants that it will make no use of the proceeds
of such bonds so as to cause said bonds to be arbitrage bonds within
the meaning of Section 103 (c) of the Code as interpreted by Sections
1.103-13 and 1. 103-14 of the regulations promulgated for such purposes
by the United States Treasury Department interpreting such Code section;
(4) Said City Council covenants that it will not permit
to be deposited to the credit of the INTEREST AND SIPdKING FU2dD ("JUNIOR
LIEN BOND FUND") or applied to the payment of the principal of or
� interest on the bonds authorized hereby, any proceeds from any grant,
donation, or income received :Erom the United States Government, whether
pursuant to agreement or otherwise, if such deposit or application
would result in interest payable on said bonds being includable in
whole or in part in Gross Income, under Section 103 of the Internal
Revenue Code, for federal income taxes.
Section 22 : That after these bonds have been approved by
the Attorney General of the State of Texas, the Comptroller of Public
Accounts of the State of Texas is authorized and requested to register
none of these bonds until there shall have been presented to him by
the City National Bank, Austin, Texas ,
(acting for and in behalf of the holders of the underlying bonds
refunded into these bonds) for cancellation, the $150,000 principal
` amount of underlying bonds described in Section 1 of this ordinance,
together with all coupons attached to said bonds, and after cancellation
thereof by said Comptroller, said Comptroller is thereupon authorized
to register in lieu thereof Bonds Nos. 61 to 70, inclusive, 81 to 90 ,
inclusive, and 101 to 110 , inclusive, and also then to register under
the same registration number, all of the remaining bonds of this Series
1979 Bonds, and thereupon said Comptroller is authorized to deliver
all of these bonds to the aforesaid bank, where the remaining $1,G00 ,000
principal amount of these bonds shall be promptly taken up and paid
for by the purchasers thereof.
That the following numbered bonds, to-wit:
Bonds Nos.
1 - 60
71 - 80
91 - 100
111 - 120
131 - 140
151 - 160
171 - 180
191 - 200
211 - 350
are hereby sold and shall be delivered to the Texas Water Development
Fund for the price of par and accrued interest from date thereof
to date of delivery of and payment for the bonds , plus the premium
necessary to adjust the statutory lending rate of the Texas Water
Development Board then prevailing.
In compliance with the published rules and regulations of the
Texas Water Development Board, purchaser of the bonds herein authorized,
the City �grees and covenants that upon completion of the project to
be financed with the proceeds of the bonds, the proper officials of
the City will submit a copy of the "as-built" plans of the project
and will render due and final accounting to the Board on the total
cost of the project and on the total resources available or represented
to be available in the original application to the Board. This final
accounting shall include all funds utilized or represented to be
i available in the City's application, from whatever source derived,
! and shall include as project cost only those items as contained and
� approved in the City' s application to the Board, or approved in
subsequent change orders. If the total cost of the project is less
than the amount of project funds available, then the City shall return
to the Board the amount of such excess to the nearest multiple of the
� denomination of the bonds herein sold to the Board and the Board shall
return a like amount of the bonds in inverse numerical order. Any
! further amounts remaining shall be deposited into the Reserve Fund.
a
That the following numbered bonds, to-wit:
� � Bonds Nos.
t
r
' 121 - 130
� 141 - 150
� 161 - 170
� 181 - 190
` 201 - 210
�
1
are hereby sold and shall be delivered to Rauscher, Pierce Refsnes,
Inc. , for the price of par and accrued interest from date thereof
to date of delivery of and payment for the bonds.
6
Section 23 : That if any section, paragraph, clause , or
provision of this ordinance shall 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 24 : That the public importanc� of this measure and
the pressing need of the City to obtain funds for the purpose
described 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 emergency 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.
PASS D, ADOPTED, AND APPROVED on this, the _�%'�._ day of
�. , 1979 .
, %
j��"� <� ���� ,��-�
Mayor, C y of Friendswood, Texas
ATTEST:
r
City ecretary, City of riendswood, Texas
(SEAL OF CITY)
�
, �.
The form of the foregoing ordinance AUTHORIZING THE ISSUANCE OF
� $1,750 ,000 CITY OF FRIEND5WOOD, TEXAS, 4VATERWORKS AND SANITARY
5EWER SYSTEM JUNIOR LIEN REVENUE REFUNDING AND IMPROVEMENT BONDS,
SERIES 1979 is hereby approved.
City Attorney
City of Friendswood, Texas
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