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HomeMy WebLinkAbout68-223 12-10-1968RESOLUTION NO. 223 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF.EULESS, TEXAS, WITH RESPECT TO THE APPLICATION OF MONEYS RECEIVED AND TO BE RECEIVED FROM THE SALE OF A PORTION OF THE WATER AND SEWER SYSTEM TO THE CITY OF BEDFORD; MAKING PROVISION FOR THE INVESTMENT OF SUCH MONEYS, AND DECLARING AN EMERGENCY. THE STATE OF TEXAS CITY OF EULESS COUNTY OF,TARRANT X 1 X X ON THIS, the 10th day of December, 1968, the City Council of the City of Euless, Texas, convened in Regular session, being open to the public, at the regular meeting place thereof in the City Hall, there being present and in attendance the following mem- bers, to -wit: MAYOR WILLIAM G. FULLER HAROLD SAMUELS BILL BYERS ) ) DAN L . SI1U LL ) FRANK DOUGLASS ) DON R. WARREN ) and C. J. GRIGGS COUNCILMEN CITY MANAGER MRS. VADA FERRIS CITY SECRETARY also being present; and with the following absent: Councilman Dan L. Shull constituting a quorum; at which time the following, among other business, was trans- acted: MAYOR FULLER introduced a resolution which was rear i. full. Councilman Byers moved its adoption. The mot.on was seconded by Councilman Warrgn and carried by the fol- lowing vote: AYES: Mayor Fuller and Councilmen Samuels, Byers, S.::'.,;11;, Douglass and Warren NOES: None The RESOLUTION is as follows: A RESOLUTION by the City Council of the City of Euless, Texas, with respect to the appli- cation of moneys received and to be received from the sale of a portion of the Water and Sewer System to the City of Bedford; making provision for the investment of such moneys, and declaring an emergency, WHEREAS, the City Council of the City of Euless, Texas, has heretofore authorized the issuance of revenue bonds payable from the net revenues of its Waterworks and Sanitary Sewer System; and, • WHEREAS, in the ordinances authorizing the issuance of such bonds it was provided that the City of Euless would have the power to dispose of portions of its Waterworks and Sanitary Sewer ISystem located within the corporate limits of other municipalities under the following terms and conditions: "(i) That the proceeds of any such sale shall be deposited in the Bond Fund and, as promptly as possible, applied to the prepayment or the redemption of the bonds (all or part of either,of the two series - Series 1965, Series 1967). II (ii That such sale shall be authorized in a manner conforming with the applicable laws of the State of Texas then existing. "(iii) That an independent Registered Professional Engineer of the State of Texas, retained and paid by the City and approved by the under- writers (the original purchasers or holders of the bonds), shall certify, in his opinion, that such sale will not impair the efficient operation of the unsold portion of the System and that the annual'net revenues of said re- maining System will not be less than one and one- fourth (1 -1/4) times the annual principal and interest requirements of all parity reve- nue bonds to be outstanding throughout the peripd during which said remaining bonds are scheduled to be outstanding after giving effect to such sale and prior bond redemption "(iv) That, as revealed by a report prepared by an independent Certified Public. , Accountant cover- ing the period of twelve (12) consecutive months ended not more than ninety (90) days prior to said sale, the net revenues of the said unsold portion of the System shall have been not less than one and one - fourth (1 -1/4) times the average annual principal and interest requirements of the amount of parity revenue bonds to be outstanding after giving effect to the application of the • sale proceeds to the retirement of bonds as pro - vided for in subparagraph (i) above. "The proceeds from the sale of such properties shall be applied as promptly as possible to the prepayment or the redemption of the bonds in accordance with their respective call provisions. Pending such application, the proceeds shall be invested as here- ;, in provided for the Bond Reserve Fund," AND WHEREAS, at an election held on the 14th day of Sep- tember, 1968, the following proposition was submitted to the qual- ified voters of the City of Euless; "SHALL the City Council of the City of Euless, Texas, be authorized to sell and convey to the City of Bedford, Texas, that portion of the Euless Water and Sewer System (located with- in the corporation limits of Bedford) which is not required in any manner for the rendition of efficient service to the inhabitants of Euless and,to apply as promptly as possible all proceeds of such sale to the prepayment or redemption of as many revenue bonds issued by Euless for the purchase and acquisition of the entire system as the amount of such proceeds will permit ?" and a majority of the qualified voters who participated in the aforesaid election voted in favor of the proposition so submitted, the returns of said election having been canvassed on the 24th day of September, 1968, it being shown by such canvass that 471 votes were cast in favor of the proposition, and 135 votes were cast against the proposition; and, WHEREAS, the Consulting Engineers employed by the Cities of Euless and Bedford have determined that the fair value of the property proposed to be sold by the City of Euless to Bedford is ONE MILLION EIGHT HUNDRED SEVENTY -FIVE THOUSAND SIX HUNDRED EIGHT AND 02 /100 DOLLARS ($1,875,608.02), which amount takes into con -. sideration the improvements made since the calling of the election by the City of Euless to authorize the sale of a part of its System to Bedford); and, WHEREAS, the City of Euless has obtained from the origi- ,nal purchasers of the revenue bonds issued by Euless, approval of the firm of Knowlton - Ratliff - English as Independent Registered Pro- 'fessional Engineers of the State of Texas, and such Engineers have 'executed a certificate to the effect that in their opinion the pro - posed sale of a part of the Euless System to Bedford will not im- pair the efficient operation of the unsold portion of the System., and that the net revenues of said remaining System will not be less than one and one - fourth (11) times the annual principal and inte:est _,`requirements of all psrity revenue bonds to be outstanding throughout the period during which rema ininv; bonds are scheduled to be outstay d- iing after giving effect to such sale and prior bond redemption; and, WHEREAS, the City of Euless has received a report prepard by Arthur Young and Company, an Independent Certified Public Accountant, which report covers the period of twelve (12) consecu- tive months ending September 30, 1968, and such report shows that the net revenges of the said unsold portion of the System is not less than one and one- fourth (1 -1/4) times the average annual prin- cipal and interest requirements of the amount of parity revenue bonds to be outstanding after giving effect to the application of the sale proceeds to the retirement of revenue bonds which are pay- able from the net revenues of the Waterworks and Sewer System of the City of Euless, Teas, (such bonds being identified as "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVEi';UE BONDS, SERIES 1965" and "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVE- NUE REFUNDING BONDS, SERIES 1967 "); and WHEREAS, it is now proper for this City Council to direct the application and investment of the money to be received from Bed- ford upon the sale of a portion of the Euless System; therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EULESS, TEXAS; SECTION 1: That all of the recitals contained in the Pre- amble of this resolution are now found as facts and are brought forth and made a part of the findings of this Council, and made a part of this resolution for all purposes. SECTION 2 :.,.It is hereby found and determined that all of the properties to be sold and conve,y,ed to Bedford by Euless are located wholly within the corporate limits of the City of Bedford. SECTION 3: That the American National Bank of Austin, Austin, Texas, is hereby designated as Agent of City of Euless for the purpose of receiving the purchase price of that part of the Euless System being sold to Bedford, i.e., $1,875,608.02, and such Bank shall receive such funds as the Agent of the City of Euless and shall forthwith transmit such amount to Bankers Trust Company, New York City, New York, with instructions that all of such money is to be deposited in the "Bond Fund" established for the payment of the revenue bonds described in the Preamble hereof (Series 1965 and Series 1967). SECTION 4: That the City of Euless specifically recog- nizes that in accordance with the provisions quoted in the Preamble hereof, the purchase price received from the :ale of the System to Bedford may be invested as provided in the ordinance authorizing the aforesaid bonds for investment in the Bond Reserve Fund, and that the ordinance provides that the Bond Reserve Fund may be in- vested as follows: . . . in direct obligations of or obligations unconditionally guaranteed by the United States of America havin maturities not in excess of ten (10) years from the making of sip h invest- ment as the City Council may direct. Such obligations shall be held by the Trustee Bank, and if at any time uninvested funds shall be insufficient to permit payment of principal and interest at maturity of the bonds as heretofore directed, the Custodian and Trustee shall sell on the open market such amount of Li1e securities as is required to pay such bonds and interest thereon when due and shall give notice thereof to the City Manager." SECTION 5: The City of Euless represents that the Cer- tified Public Accountant and the Independent Registered Profes- sional Engineer making the report and certificate required under the proceedings authorizing the revenue bond::- -such requirements being set forth in detail in the preamble hereof - -were advised that Euless proposed to place all proceeds from the sale to Bedford in the Bond Fund (as directed by Section 3 hereof), and invest such money for a period of time in securities eligible for { investment, and accordingly the Bankers Trust Company, New York, New York, is hereby directed to invest the money it receives as follows: U. S. Treasury Notes due November 15, 1974, bearing interest at 3-3/47" in the principal amount of $1,875,000, and any balance of the money to be 'invested shall be placed on time deposit. SECTION 6: All securities which are purchased as invest- ments shall be held by the Bankers Trust Company as custodian and trustee until the maturity thereof, except under the circumstances and conditions set forth in this Section: 1) The City of Euless, acting by and through its duly appointed City Manager, may, in writi.ng, direct the Custodian Bank to liquidate such securities - -or a part of such securities for the prepayment of any of the Bonds of Series 1965 or Series 1967, and 2) If the bond or bonds.to be retired or purchased are presented to the Custodian Bank prior to the 15th day of July, 1973, then the income from the invested funds must be the same or less than the interest cost of the bonds retired and such bonds to be retired or purchased must be retired at not more than par plus accrued interest, provided, however, if any bonds are retired at less than par, the amount of the discount may be taken into con - sideration as an offset against any premium or bonds to be re- tired or purchased simultaneously or at a later time, but in no event shall the bonds (in the aggregate) retired under the pro- visions of this subparagraph (3) be retired at a price in excess of par and accrued interest; or - If the bonds to be retired or purchased are presented to the Custodian Bank after the 15th day of July, 1973, then the same may be retired upon such terms and conditions, (including any applicable redemption premium, whether specified in the bond or bonds or by the City through negotiation with the holders thereof) as may be prescribed by the City. of Euless, acting ,, .. through its City Manager. The limitations prescribed in sub- paragraph preceding do not apply to the bonds retired or to be retired under.this subparagraph. For the purpose of this Section, the following terms shall have the meanings assigned to them: (a) Interest cost of bonds to be retired shall mean the interest cost (coupon rate of the bond or bonds -- 4- 1/270 simple interest) from December 16, 1963, (the date of the proposed sale of the system to Bedford) to the scheduled final maturity date of the bond or bonds to be retired. (b) Income from invested funds used to retire bonds shall mean the amount of interest (calculated at 5.3/4% simple interest) to be payable on invested money in the Bond Fund calculated from the date of the making of such initial investment (December 1968) to the 15th day of July, 1973. Pending application of the $1,875,608.02, interest earned thereon, and any increment by reason of the investment (subject to Sec. 7) such funds may be invested and reinvested in such eligible securitee or held on time deposit (or other cash equivalent) as may be directed by the City of Euless acting by and through its City Manager, but in no event shall any of the securities described in Section 5 hereof be sold or liquidated prior to the 15th day of July, 1973, except for (1) the prepayment or retirement of bonds as authorized by Section 6 of this resolution, or (2) for the purchase of other securities which are eligible investments which have a higher rate of return on the amount invested, and (3) the securities have a maturity date later than July 15, 1973. The Custodian Bank may require that a notice of the City's intention to receive tenders of bonds be published in a financial journal published in New York City, New York one time at least 15 days prior to the time money is applied to redeem and retire bonds j under this section or the bank may accept evidence that such notice has been mailed by the City to each bondholder at least 15 days prior to such date (as such holders are shown on the records of the paying agent on the then preceeding interest payment date). Any such notice shall be sufficient if it advises the City wishes to receive tenders so as to retire bonds up to a certain amount and that the City reserves the right to reject any or all such tenders. SECTION 7: All interest received and all increment received by reas)n of the investment of said money shall remain a part of the Bond Fund and, together with the sum of $1,875,603.02 deposited in the Fund, shall be used only for the purpose of paying principal of and interest on the bonds hereinabove described (the Series 1965 and Series 1967 bonds), either by prepaym;;nt or rede,::p- ti,on of bonds prior to Chair s'chedulgd rnatuFity as this Caunczl may ' direct; PROVIDED, HMI VER, interest received on the investment of funds shall be applied semi - annually to reduce the amount which would otherwise be required to be paid in the Bond Fund for the payment of the interest on the outstanding bonds of the two series, but the maximum amount which may be so utilized on any interest payment date shall be an amount equal to 32.3370 of the interest due on such interest payment date (32.33% being the proportion of principal amount of indebtedness for which provisions is being made hereunder) SECTION 8: Any fees due the Custodian Bank for the serv- ices prescribed hereunder shall be paid by the City of Euless out of its revenues of the Water and Sewer System, and shall not be paid out of tte money deppsited or provided to he kept or retained in' the Bond Fund by reason of this resolution. SECTION 9: A certified copy of this resolution shall ba transmitted to the American National Bank of Austin, Austin, Texas, and to Bankers Trust Company, New York City, New York, as the Au thority of the said Banks to do and perform the acts herein pre- scribed. PASSED AND APPROVED this the loth day of December w, 1968. ATTEST: 2'T 0411 t/ 5L,4,4;/,1 City Secretary City of Euless, Texas (City Seal) Mayor, Cktty o Euless, Texas •