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HomeMy WebLinkAbout80-492 07-22-1980RESOLUTION NO. 492 CERTIFICATE FOR RESOLUTION APPROVING RESOLUTION AUTHORIZING THE ISSUANCE OF TRINITY RIVER AUTHORITY OF TEXAS ( TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980. . THE STATE OF TEXAS COUNTY OF TARRANT CITY OF EULESS We, the undersigned officers of said City, hereby certify as mellows - __ 1. The City Council of said City duly convened in REGULAR MEETING ON THE 22ND DAY OF JULY, 1980, at the City Hall, and the roll was called of the duly consti- tuted officers and members of said City Council, to -wit: Mrs. Della Houy, City Secretary Harold Samuels, Mayor Charles Hunt Mrs. Willie Mae McCormick Robert Pippin Ron Sternfels Glenn Walker and all of said persons were present, except the following absentees: None thus constituting a quorum. Whereupon among other business, the following was transacted at said Meeting: a written RESOLUTION APPROVING RESOLUTION AUTHORIZING THE ISSUANCE OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980 was duly introduced for the consideration of said City Council and read in full. It was then duly moved and seconded that said Resolution be adopted; and, after due discussion, said motion, carrying with it the adoption of said Resolution, prevailed and carried by the following vote: AYES: All members of said City Council shown present above voted "Aye ". NAYS: None. 2. That a true, full, and correct copy of the aforesaid Resolution adopted at`the Meeting described in the above and foregoing paragraph is attached to and follows this Certificate; that said Resolution has been duly recorded in said City Coun- cil's minutes of said Meeting; that the above and foregoing para- graph is a true, full, and correct excerpt from said City Coun- cil's minutes pt said Meeting pertaining to the adoption of said Resolution; that the persons named in the above and foregoing paragraph :are the duly chosen, qualified, and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and suffi- ciently notified officially and personally, in advance, of the time, place, and purpose of the aforesaid Meeting, and that said Resolution would be introduced and considered for adoption at said Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting for such purpose; and that said Meeting was open to the public, and public notice of the time, place, and purpose of said Meeting was given, all as required by Vernon's Ann. Civ. St. Article 6252 -17. 3. That the Mayor of said City has approved, and hereby approves, the aforesaid Resolution; that the Mayor and the City Secretary of said City have duly signed said Resolution; and that the Mayor and the City Secretary of said City hereby de- clare that their signing of this Certificate shall constitute the signing of the attached and following copy of said Resolu- tion for all purposes. IGNED AND SE • D the 22nd day of July, 1980. eLlopukP4/ City Secretary / Mayor (SEAT,-) I, the undersigned, City Attorney of the City of Euless, Texas, hereby certify that I read an - pproved as to legality the attached and following Reso ut n. City to RESOLUTION APPROVING RESOLUTION AUTHORIZING THE ISSUANCE OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980 THE STATE OF TEXAS COUNTY OF TARRANT CITY OF EULESS WHEREAS, it is necessary and advisable that the City approve the Resolution Authorizing The Issuance Of Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1980, hereinafter described. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EULESS: 1. That a draft of a "RESOLUTION AUTHORIZING THE ISSU- ANCE OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980" (the "Bond Resolution ") proposed to be adopted by the Board of Directors of Trinity River Authority of Texas (the "Authority ") has been submitted to the City in the form attached hereto, and made a part here- of for all purposes. Said draft is hereby approved by the City as to form and substance, and the bonds (the "Bonds ") described therein may be issued by Trinity River Authority of Texas in accordance with the terms and provisions set forth therein. 2. That the interest rates for the Bonds, the purchaser of the Bonds, and the price to be paid for the Bonds, shall be set forth in the Bond Resolution in the manner determined by the Board of Directors of Trinity River Authority of Texas pur- suant to bids to be received by said Authority for the Bonds on August 27, 1980, at public sale in accordance with a No- tice of Sale and Official Statement prepared under the super- vision of said Authority and First Southwest Company, its Financial Advisor; and such interest rates, purchaser, and price as so determined are hereby approved by the City. 3. That it is acknowledged and agreed by the City that bonds authorized pursuant to said Bond Resolution (the "Bonds ") will be.issued in strict conformance and compliance with the water supply contract dated as of January 21, 1972,. and amend- ed as of January 22, 1975, and December 5, 1979 (the "Contract "), executed between the Authority and the City, and relating to the project as defined in said Contract and described in said Bond Resolution. 4. That a case of emergency exists which requires the City to request the Authority . to finance and construct the facilities for which the Bonds are to be issued, and the City hereby formally requests the Authority to proceed with such financing and construction. ^r.SOLUTION NO. R-390 RESOLUTION NO. 492 RESOLUTION AUTHORIZING THE ISSUANCE OF TRINITY RIVER AUTHOR- ITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980 WHEREAS, water supply contracts, each dated as of January 21, 1972, and amended as of January 22, 1975, and as of December 5, 1979, have been duly executed between the Trinity River Authority of Texas (the "Authority ") and the Cities of Bedford and Euless, Texas, respectively, and water supply con- tracts, each dated as of April 25, 1979, and amended as of December 5, 1979, and as of April 23r 1980, have been duly ex- ecuted between the Authority and the Cities of Colleyville, Grapevine, and North Richland Hills, Texas, with all of the above named cities being hereinafter collectively called the "Cities "; and WHEREAS, all of the contracts, as amended, with the Cities, respectively, described above are hereinafter collectively called the "Contracts ", and the Contracts are hereby adopted by reference for all purposes, with the same effect as if they had been set forth in their entirety in this resolution; and WHEREAS, pursuant to the Contracts the following Series of bonds are presently outstanding: Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds, Series 1975, dated February 1, 1975 (the "Series 1975 Bonds "); Trinity River Authority of. Texas (Tarrant County Water Project) Revenue Bonds, Series 1979, dated April 1, 1979 (the "Series 1979 Bonds "); and Trinity River Authority of Texas (Tarrant County Water Project) Revenue.Bonds, Series 1979 -A, dated December 1, 1979 (the "Series 1979 -A Bonds ") (the "Outstanding Bonds "); and WHEREAS, the Contracts relate to the financing of the ac- quisition and construction of the Project, as defined therein, being water supply facilities to serve the Cities and others, entitled "Report on Proposed Bedford - Euless Water System to Trinity River Authority of Texas ", dated Jully 1, 1971, and as such report may be amended or supplemented to provide expanded service (the "Report "); and the Report has been supplemented by a document entitled "Trinity River Authority of Texas Tarrant County Water Project Master Plan Modification to serve Bedford, Euless, Colleyville, Grapevine, and North Richland Hills, dated October, 1976 ", prepared by Knowlton - English - Flowers, Inc. (the "Consulting Engineers "), and has been further supplemented by a document dated August, 1978, entitled "Supplement to the En- gineering Report on Proposed Bedford - Euless Water System.which was Dated July, 1971" by the Consulting Engineers, and has been further supplemented by a document entitled "Master Plan Modifi- cation which was dated October, 1976 - Trinity River Authority of Texas Tarrant County Water Project Transmission Facilities for Serving Colleyville, Grapevine, and North Richland Hills, dated April 1, 1979 ", prepared by the Consulting Engineers; and WHEREAS, the Report as so supplemented provides for im- provements, betterments, and extensions of the Project so as to provide expanded service to the Cities and others, and the Authority has determined to issue bonds for such purpose as hereinafter provided; and -1- WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to Chapter 518, Acts of the Regular Session of the 54th Legislature, as amended the "Authority Act "), Vernon's Ann. Tex. Civ. St. Article 4413(32c) (the "In- terlocal Cooperation Act "), and other applicable laws; and WHEREAS, the Series 1979 -A Bonds described above were issued on a temporary or interim basis, are now subject to re- demption prior to maturity, have been duly called for redemption, will be refunded by the bonds hereinafter authorized, and will be redeemed with a portion of the proceeds from the sale of - said bonds; and WHEREAS, part of the bonds hereinafter authorized are "Refunding Bonds" and the remainder are "Improvement Bonds" or "Completion Bonds" (all being "Additional Bonds ") as such terms are defined and as such bonds are permitted in the reso- lutions authorizing the issuance of the Series 1975 Bonds and the Series 1979 Bonds described above, and all of the Bonds hereinafter authorized are "Bonds ", as defined and permitted in the Contracts, and will be payable from net revenues derived by the Authority from the Contracts; and WHEREAS, the Series 1979 -A Bonds described above will be refunded immediately upon the delivery of the bonds hereinafter authorized and will not thereafter be outstanding. THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF TRINITY RIVER AUTHORITY OF TEXAS: Section 1. That the Authority's,negotiable bonds are hereby authorized to be issued in the aggregate principal amount of $10,300,000 FOR THE PURPOSE OF OBTAINING $625,000 OF THE FUNDS REQUIRED TO REFUND THAT ISSUE OF TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1979 -A, NOW OUTSTANDING IN THE PRINCIPAL AMOUNT OF $625,000, AND FOR THE PURPOSE'OF OBTAINING $9,675,000 TO COMPLETE THE ACQUISITION AND CONSTRUCTION OF IMPROVEMENTS, BETTERMENTS, AND EXTENSIONS TO THE AUTHORITY'S TARRANT COUNTY WATER PROJECT SO AS TO PROVIDE EXPANDED WATER SUPPLYSERVICE TO THE CITIES OF BEDFORD, EULESS, COLLEYVILLE, GRAPEVINE, AND NORTH RICHLAND HILLS, TEXAS, AND OTHERS.- Section 2. That said bonds shall be designated as the TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980 (the "Series 1980 Bonds "). Section 3. That the Series 1980 Bonds shall be dated SEPTEMBER 1, 1980, shall be in the denomination of $5,000 each, shall be numbered consecutively from one upward, and shall mature serially on the maturity date, in each of the years, and in the amounts, respectively, as set forth in the following schedule: MATURITY DATE: FEBRUARY 1 YEARS AMOUNTS YEARS AMOUNTS 1984 $100,000 1996 $ 325,000 1985 125,000 1997 325,000 1986 125,000 1998 375,000 1987 125,000 1999 400,000 1988 150,000 2000 100,000 1989 150,000 2001 800,000 1990 175,000 2002 900,000 1991 200,000 2003 1,000,000 1992 225,000 2004 1,100,000 1993 250,000 2005 1,325,000 1994 275,000 2006 1,450,000 1995 300,000 Section 4. That the Series 1980 Bonds scheduled to ma- ture during the years, respectively, set forth as follows shall bear interest at the following rates per annum: maturities 1984, maturities 1985, maturities 1986, maturities 1987, maturities 1988, maturities 1989, maturities 1990, maturities 1991, maturities 1992, maturities 1993, maturities 1994, maturities 1995, maturities 1996, maturities 1997, maturities 1998, maturities 1999, maturities 2000, maturities 2001, maturities 2002, maturities 2003, maturities 2004, maturities 2005, maturities 2006, Said interest shall be evidenced by interest coupons which shall appertain to the Series 1980 Bonds, and which shall be payable in the manner provided and on the dates stated in the FORM OF BOND set forth in this Resolution. Section 5. That the Series 1980 Bonds and the interest coupons appertaining thereto shall be issued, shall be payable, may be redeemed prior to their scheduled maturities, shall have the characteristics, and shall be signed and executed (and said Bonds shall be sealed), all as provided, and in the manner in- dicated, in the FORM OF BOND set forth in this Resolution. Section 6. That the form of the Series 1980 Bonds, in- cluding the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be printed and en- dorsed on each of the Bonds, and the form of the aforesaid interest coupons which shall appertain and be attached initial- ly to each of the Bonds, shall be, respectively, substantially as follows: FORM OF BOND: NO. $5,000 UNITED STATES OF AMERICA STATE OF TEXAS TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BOND SERIES 1980 ON FEBRUARY 1, , TRINITY RIVER AUTHORITY OF TEXAS (the "Authority ") hereby promises to pay to bearer hereof the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from date hereof, at the rate of % per annum, evidenced by interest coupons payable on FEBRUARY 1, 1981, and semiannually thereafter on each AUGUST 1 and FEBRUARY 1 while this Bond is outstanding; provided that such principal and interest are payable solely from the Net Revenues hereinafter described. THE PRINCIPAL of this Bond and the interest coupons ap- pertaining 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 coupon, at the following, which collect- ively shall constitute and be defined as the "Paying Agent" for this Series of Bonds: THE FIRST NATIONAL BANK OF FORT WORTH, FORT WORTH, TEXAS, OR, AT THE OPTION OF THE BEARER, AT REPUBLIC NATIONAL BANK OF DALLAS, DALLAS, TEXAS. THIS BOND is one of a Series dated as of SEPTEMBER 1 1980, authorized and issued in the aggregate principal amount of •$10,300,000 FOR THE PURPOSE OF OBTAINING $625,000 OF THE FUNDS REQUIRED TO REFUND THAT ISSUE OF TRINITY RIVER AUTHOR- ITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1979 -A, NOW OUTSTANDING IN THE PRINCIPAL AMOUNT OF $625,000, AND FOR THE PURPOSE OF OBTAINING $9,675,000 TO COMPLETE THE ACQUISITION AND CONSTRUCTION OF IMPROVEMENTS, BETTERMENTS, AND EXTENSIONS TO THE AUTHORITY'S TARRANT COUNTY WATER PROJECT SO AS TO PROVIDE EXPANDED WATER SUPPLY SERVICE TO THE CITIES OF BEDFORD, EULESS, COLLEYVILLE, GRAPEVINE, AND NORTH RICHLAND HILLS, TEXAS, AND OTHERS. or on any Bonds of t maturities part, for thereon to premium on deemed, as ON FEBRUARY 1, 1990, interest payment date thereafter, the outstanding his Series may be redeemed prior to their scheduled , at the option of the Authority, in whole, or in the principal amount thereof and accrued interest the date fixed for redemption, plus a redemption the principal amount of each of such Bonds so re- follows: • • 3% if redeemed on February 1, 2 -1/2% if redeemed on February 1, 2% if redeemed on February 1, 1 -1/2% if redeemed on February 1, 1% if redeemed on February 1, 1/2 of 1% if redeemed on February 0% if redeemed on February 1, 1990 or August 1, 1990; 1991 or August 1, 1991; 1992 or August 1, 1992; 1993 or August 1, 1993; 1994 or August 1, 1994; 1, 1995 or August 1, 1995; 1996, or thereafter. At least thirty days prior to the date fixed for any such redemption the Authority . shall cause a written notice of such redemption to be published at least once in a financial publi- cation published in The City of New York, New York. By the date fixed for any such redemption due provision shall be made with the "Paying Agent" for the payment of the principal amount of the Bonds which are to be so redeemed and accrued interest thereon to the date fixed for redemption, plus any required premium. 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 so designated to be redeemed there- by 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 right of the bearer to receive the redemption price from the "Paying Agent ", out of the funds provided for such payment. IT IS HEREBY certified and covenanted that this Bond has been duly and validly authorized, 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 authoriza- tion, issuance, and delivery of this Bond have been performed, existed, and been done in accordance with law; that this Bond is a special obligation of the Authority; and that the prin- cipal of and interest on this Bond, and all of the Bonds of the Series of which it is a part, together with other outstand- ing revenue bonds, are payable from, and secured by an irrev- ocable first lien on and pledge of (1) the Authority's Net Revenues from its water supply contracts, each dated as of January 21, 1972, and amended as of January 22, 1975, and as of December 5, 1979, with the Cities of Bedford and Euless, Texas, and its water supply contracts, each dated as of April 25, 1979, and amended as of December 5, 1979, and as of April 23, 1980, with the Cities of Colleyville, Grapevine, and North Richland Hills, Texas, all relating to the Authority's Tarrant County Water Project described in said contracts, all as more fully described in said contracts and in the resolution authorizing the issuance of the Bonds (the "Bond Resolution "), to each of which reference is hereby made for all purposes, and (2) the Net Revenues the Authority may receive from other parties, if any, with whom the Authority may contract in the future for supplying treated water from the Authority's Tarrant County Water Project. THE AUTHORITY has reserved the right, subject to the re- strictions stated in the Bond Resolution, to issue additional parity revenue bonds which also may be made payable from a pledge of the aforesaid Viet Revenues. THE AUTHORITY also has reserved the right to amend the Bond Resolution with the approval of the owners of two - thirds of the outstanding bonds which are payable from a pledge of the aforesaid Net Revenues, subject to the restrictions stated in the Bond Resolution. THE BEARER HEREOF shall never have the right to demand payment of this obligation out of any funds raised or to be raised by the levy of taxes, or from any source except the aforesaid Net Revenues. IN WITNESS WHEREOF, this Bond and the interest coupons appertaining hereto have been signed with the facsimile signa- ture of the President of the Board of Directors of the Author- ity, and countersigned with the facsimile signature of the Secretary of said Board of Directors, and the official seal of said Authority has been duly impressed, or placed in facsimile, on this Bond. xxxxxxxx xxxxxxxx Secretary, Board of Directors President, Board of Directors FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this Bond has been examined, certi- fied 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 xxxxxxxx Comptroller of Public Accounts of the State of Texas FORM OF INTEREST COUPON: ON 1, TRINITY RIVER AUTHORITY OF TEXAS promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, with- out 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 FIRST NATIONAL BANK OF FORT WORTH, FORT WORTH, TEXAS, OR, AT THE OPTION OF THE BEARER, AT REPUBLIC NATIONAL BANK OF DALLAS, DALLAS, TEXAS, said amount being interest coming due that day on the Bond, bearing the number hereinafter designated, of that issue of TRINITY RIVER AUTHORITY OF TEXAS (TARRANT COUNTY WATER PROJECT) REVENUE BONDS, SERIES 1980, DATED SEPTEMBER 1, 1980. The bearer hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by the levy of taxes, or from any source other than the Net Revenues described in the Bond to which this coupon appertains. Bond No. XXXXXXX XXXXXXX Secretary, Board of Directors President, Board of Directors Section 7. DEFINITIONS. In each place throughout this Resolution wherein the following terms, or any of them, are used, the same, unless the context shall indicate another or different meaning or intent, shall be construed and are in- tended to have meanings as follows: (a) "Act" and "Authority Act" mean Chapter 518, Acts of the Fifty- Fourth Legislature of the State of Texas, as amended. (b) "Additional Bonds" means the additional parity rev- enue bonds as defined and permitted in Sections 13.01 and 13.02 of this resolution. (c) "Authority" means Trinity River Authority of Texas and any other public body or agency at any time succeeding to the property and principal rights, power and obligations of said Authority. (d) "Board of Authority" means the Board of Directors of the Authority. (e) "Bonds" means collectively the Outstanding Bonds and the Series .1980 Bonds authorized by this resolution. (f) "Certified Public Accountant" means any certified public accountant, licensed public accountant or firm of such public accountants of suitable experience and qualifications not regularly in the employ of the Authority, selected by the Authority. (g) "Cities" means the Cities of Bedford, Euless, Colleyville, Grapevine, and North Richland Hills, Texas. (h) "Contracts" means the contracts between the Authority and the Cities as described and defined in the preamble to this Resolution. (i) "Depository" means the bank or. banks which the Au- thority selects (whether one or more), in accordance with law, as its depository. (j) "Engineering Report" means the Report, the First Supplemental Report, and the Second - Supplemental Report, all with respect to the Authority's Tarrant County Water Project, and all as described and defined in the preamble to this Resolution, as such report may be amended or supplemented prior to the execution of construction contracts-and changed . by change orders entered after construction contracts have been executed, or as such report may be amended or supple - mented to provide expanded service in the future. (k) "Fiscal Year" means the twelve month period begin- ning December-1 of each year, or such other twelve month period as may in the future be designated as the Fiscal Year of Au- thority. (1) "Independent Consulting Engineer" means the Engineer or engineering firm or corporation at the time employed by the Authority under the provisions of Section 11.13 of this reso- lution. (m) "Outstanding Bonds" means the bonds described in the preamble to this resolution. (n) "Paying Agents" means collectively the banks where the principal of and interest on the Bonds are payable. (o) "Resolution" means collectively the resolutions au- thorizing the Outstanding Bonds, this resolution, and any reso- lution authorizing the issuance of "Additional Bonds ", and any amendments hereto. (p) "Series 1980 Bonds" means the bonds authorized by this resolution. (q) "System" means all of Authority's facilities con- structed pursuant to the Engineering Report, as supplemented or amended. Section 8. BONDS AND SECURITY THEREFOR. (a) That the Series 1980 Bonds are hereby designated as, and shall be "Re- funding Bonds ", "Improvement Bonds" or "Completion Bonds ", and "Additional Bonds" as described and permitted by the resolutions authorizing the Outstanding Bonds, and it is hereby determined, declared, and resolved that all of the Bonds, including the Out- standing Bonds and the Series 1980 Bonds, are and shall be se- cured and payable equally ana ratably on a parity, and that Sections 9.01 through 15.07 of this resolution are supplemental to and cumulative of Articles III through IX of the resolution authorizing the Series 1975 Bonds and Sections 9.01 through 15.07 of the resolution authorizing the Series 1979 Bonds, with Sections 9.01 through 15:07 of this resolution being equally applicable to all of the - Outstanding Bonds and the Series 1980 Bonds (herein collectively called the "Bonds "). (b) That the Bonds and any Additional Bonds, and the in- terest coupons appertaining thereto, are and shall be secured by and payable from an irrevocable first lien on and pledge of the Net Revenues as hereinafter described and provided. Section 9.01. REVENUE FUND. All revenues of the System received by the Authority, including the net proceeds to the Authority of the Contracts with the Cities shall be collected and paid over promptly upon collection to the Depository and the Authority hereby covenants and agrees to do so. Such revenues shall be held by the Depository in a special fund to be known as the "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds Revenue Fund" (hereinafter called the "Revenue Fund "), and shall be disbursed or applied for the purpose of paying Operation and Maintenance Expenses of the System, and for the making of transfers hereinafter re- quired. Section 9.02. (a) OPERATION AND MAINTENANCE EXPENSES. The term "Operation and Maintenance Expenses" shall mean all costs of operation and maintenance of the Authority's System including, but not limited to, repairs and replacements for which no special.fund is created in any bond resolution, the cost of utilities, supervision, engineering, accounting, audit- ing, legal services, and any other supplies, services, ad- ministrative costs and equipment necessary for proper operation and maintenance of the Authority's System, and payments made by Authority in satisfaction of judgments resulting from claims not covered by Authority's insurance or not paid by one of the Cities arising in connection with the operation and maintenance of the System. The term also includes the fees of the bank or banks where the Bonds are payable. Depreciation shall not be considered an item of Operation and Maintenance Expense. (b) Except for other transfers herein required, the moneys in the Revenue Fund shall be subject to withdrawal by the Author- ity for the payment of Operation and Maintenance Expenses only upon checks and vouchers, stating the purpose of the payment (which shall be in accordance with the current Annual Budget of the Authority) signed by the President of the Authority and countersigned by its Treasurer, or signed and countersigned by such officers or employees of the Authority as may from time to time be designated by resolution of the Board of Authority. At the end of each Authority Fiscal Year any surplus funds remain- ing in the Revenue Fund shall be transferred to the Interest and Sinking Fund. Section 9.03. INTEREST AND SINKING FUND. (a) That for the sole purpose of paying the principal of and interest on the Bonds, and any Additional Bonds, as the same come due, there has been created and established, and there shall be maintained at The First National Bank of Fort Worth, Fort Worth, Texas, a separate fund entitled the "Trinity River Authority.of Texas (Tarrant County Water Project) Revenue Bonds Interest and Sink- ing Fund" (hereinafter called the "Interest and Sinking Fund "). It shall be the duty of the,Authority to transfer from Net Rev- enues in the Revenue Fund to the credit of the Interest and Sinking Fund the amounts and at times as follows: (1) such amounts, in equal monthly installments, made on or before the 15th day' of each month hereafter, as will be sufficient, together with any other amounts on deposit therein and available for such purpose, to pay the interest scheduled to come due on the Bonds on the next interest payment date; (2) such amounts, in equal monthly installments, made on or before the 15th day of each month hereafter, as will be sufficient, together with any other amounts on deposit therein and available for such purpose, to pay the next maturing principal on the Outstanding Bonds; and (3) such amounts, in equal monthly installments, made on or before February 15, 1983, and on or before the 15th day of each month thereafter, as will be suffi- cient, together with any other amounts on deposit therein and available for such purpose, to pay the next maturing principal of the Series 1980 Bonds. (b) There shall be deposited into the Interest and Sink- ing Fund, immediately after the delivery of the Series 1980 Bonds, the accrued,interest and any premium, plus an addition- al amount from the proceeds from the sale and delivery of the Series 1980 Bonds, sufficient, together with said accrued in- terest and premium, if any, to pay the interest on the Series 1980 Bonds through December 1, 1981, which is the. estimated period of acquisition and construction of the project -for which said bonds are issued, and the amounts which otherwise would be deposited into the Interest and Sinking Fund from Net Rev- enues shall be reduced to that extent. (c) The First National Bank of Fort Worth shall make such arrangements as are necessary to insure that sufficient funds from the etinterest and Sinking Fund are available at the Paying Agent to pay all interest coupons and Bonds presented for payment on the respective payment dates. Section 9.04. RESERVE FUND. (a) That there has been created and established, and there shall be maintained, at The First National Bank of Fort Worth, Fort Worth, Texas, a separate fund entitled the "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds Reserve Fund" (hereinafter called the "Reserve Fund "). The Reserve Fund shall be used solely for the purpose of finally retiring the last of the Bonds and Additional Bonds, or for paying princi- pal of and interest on any Bonds and Additional Bonds, when and to the extent the amount in the Interest and Sinking Fund is insufficient for such purpose. (b) There is now on deposit in the Reserve Fund money and investments in an amount equal in market value to not less than $575,000. There shall be deposited in the Reserve Fund, from the proceeds from the sale and delivery of the Series 1980 Bonds, immediately after the receipt of such proceeds, such sum as will cause the Reserve Fund to contain money and invest- ments equal in market value to the average annual principal and interest requirements of all Bonds to be outstanding after the delivery of the Series 1980 Bonds. So long as the Reserve Fund contains an amount of money and investments equal to the average annual principal and interest requirements of all outstanding Bonds and Additional Bonds calculated as of the date of the Series 1980 Bonds (the "Reserve Required Amount "), no further deposits shall be made to the Reserve Fund. If the Reserve Fund should be depleted below the Reserve Required Amount, then the amount of such depletion shall be restored and the Authority shall transfer into the Reserve Fund from Net Revenues in the Revenue Fund ( subject to making the required deposits into the Interest and Sinking Fund), on or before the 15th day of each month,-an amount equal to 1 /60th of the Re- serve Required Amount, until the Reserve Fund contains the Required Reserve Amount. (c) It is specifically provided, however, that after the Series 1975 Bonds described in the preamble of this resolution shall have been paid or retired, or after due legal provision for their payment or retirement shall have been made, the Re- serve Required Amount to be kept and maintained in the Reserve Fund may, at the option of the Authority, be reduced to an amount of money and investments in market value equal to the average annual principal and interest requirements of the Series 1979 Bonds, the Series 1980 Bonds, and any then out- standing Additional Bonds, calculated as of the date of such reduction, and any excess in the Reserve Fund after such re- duction shall be deposited into the Interest and Sinking Fund. Section 9.05. CONSTRUCTION AND ACQUISITION FUND. There has been created and there shall be established and maintained at the Depository a separate fund to be entitled the "Trinity River Authority of Texas (Tarrant County Water Project) Revenue Bonds Construction and Acquisition Fund" (hereinafter called the "Construction and Acquisition Fund "). The Construction and Ac- quisition Fund shall be subject to and charged with a lien in favor of the holders of the Bonds until the money in said Fund has been paid out as herein provided. The Depository shall be required to secure the Construction and Acquisition Fund in•its possession by pledging obligations of or obligations uncondition- ally guaranteed by the United States; such obligations at all times shall be at least equal in market value to the amount in the Construction and Acquisition Fund in its possession. Section 9.06. DISBURSEMENTS FROM CONSTRUCTION AND ACQUI- SITION FUND. (a) Money in the Construction and Acquisition Fund shall be subject to disbursement by the Authority for pay- ment of Project Costs to be incurred in the acquisition and con- struction of the project for which the Series 1980 Bonds are issued. Such disbusements shall be made only upon checks stat- ing the purpose of the payment signed and countersigned by such officers of the Authority as may from time to time be designated by the Authority by resolution, and duly certified to the Deposi- tory. Disbursements for payments to construction contractors and disbursements for construction material, supplies, and equipment shall be approved by a registered professional engineer. (b) "Project Costs" as used herein includes all acquisi- tion costs and construction costs as those terms are generally understood in standard accounting practice as applied to projects of this nature, and without limiting the generality of the forego- ing, it shall include purchase of equipment, property, rights in property, capitalized interest, costs of land, easements, and rights of way, including damages to land and property, engineering, fi- nancing, financial consultants, administrative, auditing, and legal expenses incurred in connection with the performance of the Contracts. The costs for engineering, financial consultants, administrative, and legal expense paid from bond proceeds in- curred by the Authority shall be reasonable and at usual and customary rates. Damages to land and property, whenever accru- ing, adjusted under Article I, Section 17 of the Constitution of Texas shall constitute apart of Project Costs. After com- pletion of the Project, any residue remaining in the Construc- tion and Acquisition Fund shall be deposited in the Interest and Sinking Fund. Section 9.07. TRUST FUNDS. The Interest and Sinking Fund. and the Reserve Fund shall constitute trust funds and shall be held in trust by The First National Bank of Fort Worth for the benefit of the holders of the Bonds and Additional Bonds per- mitted hereunder. Section 9.08. SECURITY OF FUNDS. The Authority shall cause the Depository to secure and keep secured, in the manner required by law, all funds on deposit with it, and will cause the Paying Agent to secure all funds deposited with it as other trust funds are secured. The Authority covenants and agrees that no money will be allowed to be or remain deposited with the Depository unless secured as above provided. Section 9.09. PLEDGE. The Contracts provide for the pay- ment by the Cities to the Authority (a) an amount equal to all Operation and Maintenance Expenses, (b) the amount necessary to pay all the principal of and the interest coming due on the Au- thority's Bonds on each principal and /or interest payment date, (c) during each Fiscal Year, the proportionate part of any special or reserve funds required to be established and /or main- tained by the provisions of the Bond Resolution, and (d) an amount in addition thereto sufficient to restore any deficiency in any of such funds or accounts required to be accumulated and maintained by the provisions of the Bond Resolution. The term "Net Revenues" as used in this resolution shall mean and be de- fined as all of the gross revenues or payments received by the Authority (i) from the Cities,under the Contracts and (ii) from the parties, if any, with whom the Authority may contract in the future for supplying treated water from the System, after de- ducting therefrom the amounts paid to the Authority for the pur- pose of paying Operation and Maintenance Expenses, with the re- sult that the Net Revenues shall consist of the amounts necessary to pay all principal and /or interest coming due on the Bonds on each principal and /or interest payment date, and any amounts pay- able under (c) and (d) above. The Bonds and the interest coupons appertaining thereto are and shall be payable from and secured by an irrevocable first lien on and pledge of said Net Revenues, and said Net Revenues are hereby pledged irrevocably for such purpose and to the establishment and maintenance of the Interest and Sinking Fund and the Reserve Fund. Section 9.10. INVESTMENT OF FUNDS. _The money in all Funds created herein shall be invested and reinvested in securities permitted by Section 8 -B of the Authority Act. which mature in not more than fifteen (15) years from the date of their purchase. All income and profits from the investment of all funds hereunder shall be deposited in the Interest and Sinking Fund not later than the January 15 or July 15 next following the receipt thereof. Section 10.01. PREPARATION OF BUDGET. Not less than forty (40) days before the commencement of each Fiscal Year while any of the Bonds or interest coupons appertaining thereto are out- standing and unpaid, the Authority will prepare and file with the Cities the annual budget (herein called "Annual Budget ") of Operation and Maintenance Expenses for the ensuing Fiscal Year, and, except as otherwise provided, the total expenditures in any division thereof will not exceed the total expenditures in the corresponding division in the Annual Budget. The Authority cove- nants that the current Operation and Maintenance Expenses in- curred in any Fiscal Year will not exceed the reasonable and necessary amount of such expenses, and that it will not expend any amount or incur any obligation for maintenance, repair, and operation in excess of the amounts provided for current Operation and Maintenance Expenses in the Annual Budget; provided, however, that if at any time the -Board of Authority shall determine that the amount of the appropriation for any item in the Annual Budget is in excess of the amount which will be required for such term, the Board of Authority may reduce such appropriation and make appropriation for any item or items not covered by the Annual Budget or increase the appropriation for any other item or items by an amount not exceeding the amount of such reduction; and pro- vided further, that the Board of Authority may at any time adopt an amended or supplemental budget for the remainder of the then current Fiscal Year "in case of an emergency caused by some extra- ordinary occurrence which shall be clearly defined in such resolu- tion. Any such supplemental budget shall be filed immediately with the Cities. Section 10.02. ACCOUNTING AND REPORTING. The Authority covenants that proper books of record and account will be kept in which true, full, and correct entries will be made of all income, expense, and transactions of and in relation to the Sys- tem, and each and every part thereof. Within three months after each full Fiscal Year, a statement certified as correct by a Certified Public Accountant showing the Gross Revenues and the Operation and Maintenance Expenses for such Fiscal Year, shall be furnished to the Cities, and to the original purchasers of the Bonds. Each such audit will be available during regular office hours at the administration offices of the Authority for inspection by any holder of any of the Bonds. Section 10.03. PUBLIC INSPECTION. The Authority further covenants and agrees that the System, and each and every part thereof, and all books, records, accounts, documents, and vouchers relating to the construction, operation, maintenance, repair, improvement, and extension thereof, will at all times be open to inspection by the Cities. Section 11.01. PAYMENT OF BONDS AND INTEREST COUPONS. The Authority covenants and agrees that, out of the pledged Net Revenues, it will duly and punctually pay, or cause to be paid, the principal of every Bond and the interest thereon, on the date and at the place and in the manner specified in the Bonds and in the coupons thereto appertaining, and that it will faith- fully do and perform and at all times fully observe any and all covenants, undertakings, and provisions contained herein or in any Bond. Section 11.02. LEGAL ABILITY. The Authority represents that it is a conservation and reclamation district, a political subdivision of the State of Texas, and a governmental agency and body politic and corporate, duly created, organized, and existing under the Constitution and laws of the State of Texas and has proper authority from all other public bodies and au- thorities, if any, having jurisdiction thereof to construct, acquire, operate, maintain, improve, extend, better, repair, renew, and replace the System as herein described, and to levy and collect rates, tolls, rents, fees, and other charges, and to pledge its revenues in the manner and form as herein done or intended, and that all corporate action on its part to that end has been duly and validly taken. The Authority covenants and agrees that it will at all times maintain its corporate exist- ence and maintain a lawful Board of Directors, and at all times function and act in the best interest of the System and the Bondholders. Section 11.03. CONSTRUCTION AND OPERATION. The Authority further covenants that it will forthwith proceed to acquire and construct the improvements, betterments, and extensions to the System as described in the Supplemental Report as soon as practi- cable in accordance with -plans and specifications which have been prepared by its Independent Consulting Engineer, and thereafter each and every part of the System will be continuously operated by the Authority in an efficient and economical manner and will be kept in thorough repair and maintained in a high state of operating efficiency and in such manner that the interest of the Cities, the people of the State of Texas, the bondholders, and the Authority will be promoted. Section 11.04. OPERATION OF THE SYSTEM. The Authority shall use its best efforts to see that the System is properly and efficiently operated. Section 11.05. CONTRACTORS. Authority shall require each person, firm, or corporation with whom (or which) it may contract for construction in connection with the System to furnish a per- formance bond in the full amount of any contract and a payment bond as required by law, and to carry such workmen's compensation or employers' liability insurance as May be required by law and such public liability, property damage, and builders' risk in- surance, if any, as may be appropriate and necessary. The Au- thority further covenants and agrees that the proceeds of any such performance bond will forthwith, upon receipt of such pro- ceeds, be applied toward the completion of the contract in connec- tion with which such performance bond shall have been furnished. Section 11.06. COVENANT TO MAINT °IN SUFFICIENT INCOME. To the end that Authority income will be ufficient to pay the Bonds and the interest coupons appertaining hereto as they become due, the Authority will keep in effect and - nforce the Contracts, and will cause the System to be operated a d maintained at an annual cost that will be within its income o er than the income requir- ed to pay the Bonds and the interest c•upons appertaining thereto and the fees of the Paying Agents. Th- Authority will not volun- tarily consent to any amendment theret• which would reduce the amounts payable thereunder or extend tie time of the payment of such amounts or which would in any manger impair-or adversely affect the rights of the holders of th- Bonds from time to time. If any of the Cities fails to make pa ents as required by the Contracts and if it shall appear that enforcement of the Contracts has become ineffective or will be ineffective to the extent that a default in payment of principal of or interest on the Bonds occurs or is threatened, the Authority will take all necessary action to preserve and protect the ri•hts of the holders of the Bonds and to assure payment of the principal thereof and the in- terest thereon. Section 11.07. NO OTHER LIENS. The Authority further covenants that there is not now outstanding, except as regards the Bonds, and that the Authority will not at any time after the Bonds are outstanding, create or allow to accrue or to exist any lien upon the System, or any rights owned, or the revenues pledged herein to the payment of the principal of and interest on the Bonds, at any time derived from the operation thereof, or any of its Funds, except as authorized by Sections 7.01 and-7.02 of this resolution; that the security of the Bonds will not be impaired in any way as a result of any action or any non - action on the part of the Authority, its Board. of Directors, or offi- cers, or any thereof, and that the Authority has, and will, sub- ject to the provisions hereof, continuously preserve good and indefeasible title to the System and each and every part thereof. Section 11.08. KEEP.FRANCHISES AND PERMITS IN EFFECT. The Authority further covenants that no,.'franchises, permits, privi- leges, or easements will be allowed to lapse or be forfeited so long as the same shall be necessary for the proper operation of the System. Section 11.09. GOVERNMENTAL REQUIREMENTS; LIENS; CLAIMS. The Authority covenants that it will duly observe and comply with all valid requirements of any governmental authority relative to the System or any part thereof, and that it will pay or cause to be discharged, or will make adequate provision to satisfy and discharge, all lawful claims and demands for labor, materials, supplies, or other objects which if unpaid, might by law become a lien upon such System or any part thereof or the revenue there- from; provided, however, that nothing in this Section contained shall require the Authority to pay or cause to be discharged, or make provision for, any such lien or charge, so long as the val- idity thereof shall be contested in good faith and by appropriate legal proceedings. Section 11.10. FURTHER ASSURANCE. The Authority covenants that it will take such further action as may be required to carry out the purposes of this resolution and to assure its validity. Section 11.11. SALE AND LEASE OF PROPERTY. (a) The Au- thority covenants that so long as any of the Bonds or interest coupons appertaining thereto shall be outstanding, and except as in this Section otherwise permitted, it will not sell, lease, or otherwise dispose of or encumber any part of the System except as provided herein. • -13- (b) The Authority may from time to time dispose of any rights, machinery, fixtures, apparatus, tolls, instruments, or other movable property and any materials used in connection there- with, if the Authority shall determine that such are no longer needed or are no longer useful in connection with the operation and maintenance of the System. The Authority may from time to time sell such real estate that is not needed or serves no use- ful purposes in connection with the maintenance and operation of the System. The proceeds of any sale of real or personal proper- ty acquired from the proceeds of the Bonds shall be deposited in the Revenue Fund. (c) The Authority may lease any of its lands for any pur- pose, if such lease or the use of such lands will not be detri- mental to the operation and maintenance of the System. It may also lease any of its real property for oil, gas, and mineral purposes. No lease shall be made which will result in any damage to or substantial diminution of the value of other property of the Authority. The rental to be charged under all such leases shall be not less than the fair and reasonable rental in relation to the character and value of the property leased. All rentals, revenues, receipts, and royalties derived by the Authority from any and all leases so made, shall be deposited in the Revenue Fund. (d) It is covenanted and agreed by Authority that no such property of any nature shall be sold or leased by Authority un- less, prior to any action taken by Authority concerning such sale or leasing, Authority shall procure the advice and recommenda- tion in writing of a registered professional engineer concerning such proposed sale or leasing. Section 11.12. SUCCESSOR PAYING AGENTS. If any of the Pay- ing Agents or their successors, become unable for any reason to act as a Paying Agent for the Bonds, the Authority covenants that it will appoint a bank in the same city as such Paying Agent initially appointed, where the Bonds and interest coupons apper- taining thereto may be presented and paid. Section 11.13. INDEPENDENT ENGINEER. (a) The Authority covenants that, until the-Bonds and the interest coupons apper- taining thereto shall have been paid or provision for such pay- ment shall have been made, it will, for the purpose of performing and carrying out the duties imposed on the Independent Consulting Engineer by this Resolution, employ an independent engineer or engineering firm or corporation having a favorable repute for skill and experience in such work. (b) The Authority covenants that it will at all appropri- ate times cause the Independent Consulting Engineer to submit and give all necessary or desirable advice and recommendations concerning renewals, replacements, extensions, betterments, and improvements for the System, to the end that the System shall be operated and maintained in the most efficient and satisfactory manner. Further, Authority.shall cause the Independent Consulting Engineer to make in writing a full survey, review and report on the physical condition of the System once every three years.. (c) Authority further covenants that it will cause the In- dependent Consulting Engineer to make an annual report to it which shall set forth such Engineer's recommendations and advice as to (1) the proper maintenance, repair and operation of the System, including their findings as to whether or not the proper- ties of the System have been maintained in good repair and sound operating condition; (2) the extensions, improvements, renewals, and replacements which should be made during the ensuing Fiscal Year; (3) the amounts and types of insurance which should be carried by the Authority on the properties; and (4) any revisions or changes of rates, fees, and charges. (d) The expense incurred under this Section 11.13 shall constitute Operation and Maintenance Expenses. Section 11.14. BONDS AND INTEREST NOT PAYABLE FROM TAXES. The holders of the Bonds and the interest coupons appertaining thereto shall never have the right to demand payment thereof out of funds raised or to be raised by taxation, or from any source other than the Net Revenues as defined and described herein. Section 12.01. INSURANCE COVERAGE. The Authority cove- nants that it will at all times keep insured such of the System's plants, structures, buildings, stations, machinery, equipment, apparatus, pipelines, and equipment as are usually insured by corporations operating like properties, with a responsible in- surance company or companies, against risks, accidents, or casualties against which and to the extent insurance is usually carried by corporations operating like properties, and will also at all times maintain workmen's compensation insurance and in- surance against public liability and property damages, in a reasonable amount with responsible insurance companies; pro - vided, however, that at any time while any contractor engaged construction work shall be fully responsible therefor, the Authority shall not be required to carry such insurance. All such policies shall be open to the inspection of the bondholders and their representatives at all reasonable times. Section 12.02. INSURANCE PROCEEDS. In the event of any loss of or damage to the System the Authority covenants that it will reconstruct'or repair the destroyed or damaged portion of the property and will apply the proceeds of the insurance poli- cies covering such loss or damage solely for that purpose. The Authority covenants that it will begin such work of reconstruc- tion or repair promptly after such loss or damage shall occur and will continue and properly complete the same as expeditious- ly as possible and will-pay or cause to be paid all costs and expenses in connection therewith so that the same shall be so completed and the property be free and clear of all mechanics' and other liens and claims. The Authority agrees that it will procure the advice and recommendation in writing of a registered professional engineer concerning such reconstruction before it is undertaken. Section 12.03.. UNUSED INSURANCE PROCEEDS. Any insurance proceeds remaining after the completion of and payment for any such reconstruction or repair shall be deposited in the Revenue Fund. Section 13.01. ADDITIONAL BONDS. As used in this resolu- tion, the following additional definitions shall apply: (a) "Completion Bonds" means any bonds issued to complete construction of the System to enable the Authority to provide water supply services to the Cities and to others, as the System is described in.the Engineering Report defined in the Contracts. (b) "Improvement Bonds" means bonds issued for improvements, betterments, extensions, and replacements of the System. (c) "Special Project Bonds" means any bonds issued to fi- nance construction and /or acquisition of facilities which will not constitute a part of the System and which will not be paid out of revenues from the Contracts. (d) "Refunding Bonds" means any bonds issued for the pur- pose of refunding all or a part of the Bonds. (e) "Additional Bonds" means and includes Completion Bonds, Improvement Bonds, and Refunding Bonds. Section 13.02. COMPLETION BONDS AND IMPROVEMENT BONDS. The Authority reserves the right to issue Completion Bonds and Improvement Bonds payable from and secured by a pledge of the Net Revenues, on a parity of lien with the Bonds, or junior to the Bonds, or a portion of them may be such first lien bonds and a portion may be such junior lien bonds. The Completion Bonds and Improvement Bonds may be issued in one or more series or in- stallments, and from time to time as authorized by the Board of Authority, provided, however, that no installment or series of Completion Bonds or Improvement Bonds, if it is on a parity with the lien of the Bonds, shall be issued unless: (a) A certificate is executed by the President and Secretary of the Board of Authority to the effect that no default exists in connection with any of the covenants or requirements of the resolutions authoriz- ing the issuance of all then outstanding bonds which are secured by and payable from the Net Revenues; (b) A certificate is executed by the President and the Secretary of the Board of Authority to the effect that the Interest and Sinking Fund and the Reserve Fund contain the amounts then required to be on deposit therein; (c) The then proposed Completion Bonds or Im- provement Bonds are made to mature on August 1 and /or February_1 of each of the year in which they are scheduled to mature: Section 13.03. SPECIAL PROJECT BONDS. Special Project Bonds payable from and secured by revenues may be issued by the Authority for the purpose of providing additional facilities to enable the Authority to render service to other users, provided that such Special Project Bonds are not payable from or secured by a pledge of Net Revenues. Special Project Bonds may be addi- tionally secured by a mortgage or deed of trust lien upon only the physical properties of the project purchased or constructed with the proceeds of such bonds. Section 13.04. INCREASE IN RESERVE FUND. If Completion Bonds or Improvement Bonds are issued, the maximum amount re- quired to be deposited and maintained in the Reserve Fund shall be increased so that the aggregate amount to be accumulated in the Reserve Fund shall be no less than the average annual princi- pal and interest requirements for all then outstanding Bonds, Completion Bonds or Improvement Bonds, and for the installment or series of bonds then proposed to be issued. Such average annual requirement shall be calculated as of the date of any such Additional Bonds. Provided, as of the date of any such Additional Bonds, it shall be sufficient if the aggregate amount in the Reserve Fund is equal to the average annual requirement on the Bonds and Additional Bonds outstanding and to be outstand- ing, and if the amount exceeds such average annual requirement, any surplus in the Reserve Fund may be transferred to the In- terest and Sinking Fund, unless otherwise required by any bond resolution. Section 13.05. TAX BONDS. No provisions in this Resolu- tion shall in any way affect the statutory right of the Author- ity to issue bonds supported wholly by ad valorem taxes. Section 13.06. REFUNDING BONDS. The Authority reserves the right to issue Refunding Bonds to refund any outstanding bonds secured by a pledge of the Net Revenues from the Contracts and any amendments thereof. Provided, that if less than all of such bonds at any time outstanding are refunded the principal and interest requirements shall not be increased in any year in which any of the bonds not being refunded are scheduled to mature. It is further specifically provided, however,..that• the second sen- tence of this Section 13.06 shall not be applicable, shall have no force or effect, and need not be, complied with after the Ser- ies 1975 Bonds described in the preamble to this resolution shall have been paid or retired, or after due legal provision for such payment or retirement shall have been made. Section 14.01. DEFAULT PROVISIONS AND REMEDIES. In the event of a default or a.threatened default in the payment of principal of or interest on the Bonds, any court of "competent jurisdiction may, upon petition of holders of twenty -five per cent of the outstanding Bonds, appoint a receiver with authority to collect and receive all income from the System, employ and discharge agents, employees, and consultants of the Authority, take charge of pledged funds on hand and manage the proprietary affairs of the Authority without consent or hindrance by the Board of Authority. Such receiver may also be authorized to make contracts for providing water treatment services or renew such contracts with*the approval of the court appointing him. The Court may vest the receiver with such other powers and duties as the court may find necessary for the protection of the holders of the Bonds. Section 14.02. OTHER REMEDIES; REMEDIES NOT WAIVED. No remedy herein specified is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy available to the holders of the said Bonds, or now or hereafter existing at law or in equity, or by statute. No delay or omission to exercise any right or power 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 and so often as may be deemed expedient. Section.15.01. AMENDMENTS OF RESOLUTION BY AUTHORITY. Without any prior action by or notice to the holders of the Bonds, Authority may, from time to time, and at any time, amend the Resolution: (a) to add to the covenants and undertakings of the Authority contained in the Resolution such addi- tional covenants and undertakings as may be authoriz- ed or permitted by law; and (b) to cure any ambiguous, defective, or in- consistent provisions of the Resolution'and to accom- plish any other purposes not inconsistent with the provisions of the Resolution and which shall not im- pair the security afforded hereby. Section 15.02. AMENDMENTS BY CONSENT. The holders of Bonds aggregating in principal amount two - thirds of the aggre- gate principal amount of the Bonds at the time outstanding (but not including in any case any Bonds which may then be held or owned by or for the account of the Authority) shall have the right from time to time to approve an amendment of the Resolution which may be deemed necessary or desirable by the Authority; provided, however, that no amendment, without the consent of the holders of all of the dutstanding Bonds, shall: (a) Make any change in the maturity of the Bonds; (b) Reduce the rate of interest borne by any of the Bonds; (c) Reduce the amount of the principal payable on the Bonds; (d) Modify the terms of payment of principal of or interest on the Bonds, or any of them, or impose any conditions with respect to such payment; (e) Affect the rights of the holders of less than all of the Bonds then outstanding; (f) Change the minimum percentage of the princi- pal. amount of bonds necessary for consent to such amendment. Section 15.03.. NOTICE REQUIRED. If at any time the Au- thority shall desire to amend the Resolution under Section 15.02, the Authority shall cause'notice of the proposed amendment to be published in a financial newspaper or journal published in the City of New .York, New York, once during each calendar week for at least four successive calendar weeks. Such notice shall briefly set forth the nature.of the proposed amendment and shall state that a copy thereof is on file with the Paying Agents and with the Secretary of the Board of Authority for in- spection by all holders of Bonds. Such publication is not re- quired, however, if notice in writing is given to each holder of Bonds. Section 15.04. _ADOPTION OF AMENDMENT. Whenever at any time not less than thirty (30) days and within one year from the date of the first publication of said notice or other ser- vice of written notice the Authority shall receive an instrument or instruments executed by the holders of at least two - thirds in aggregate principal amount of Bonds then outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with the Paying Agents and Authority, the Au- thority may adopt the amendatory resolution in substantially the same form. . Section 15.05. EFFECTIVE UPON ADOPTION. Upon the adoption of any amendatory resolution pursuant to the provisions hereof, the Resolution shall be deemed to be amended in accordance with such amendatory resolution, and the respective rights, duties, and obligations under the Resolution of the Authority and all the holders of outstanding Bonds shall thereafter be determin- ed, exercised, and enforced hereunder, subject in all respects to such amendments. Section 15.06. REVOCATION OF CONSENT. Any consent given by the holder of a Bond pursuant to the provisions hereof shall be irrevocable for a period of six months from the date of the first publication of the notice provided for herein, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after six months from the date of the first publication of such notice by the holder who gave such consent, or by a successor in title, by filing notice thereof with the Paying Agents and the Authority, but such revocation shall not be effective if the hol- ders of two - thirds aggregate principal amount of the Bonds out- standing as herein defined have, prior to the attempted revoca- tion, consented to and approved the amendment. Section 15.07. PROOF OF OWNERSHIP. The fact of the hold- ing of Bonds by any Bondholder and the amount and numbers of such Bonds, and the date of his holding same may be proved by the affidavit of the person claiming to be such holder, or by a certificate executed by any trust company, bank, banker, or any other depository, wherever situated showing that on the date therein mentioned such person had on deposit with such trust company, bank, banker, or other depository, the Bonds described in such certificate. The Authority may conclusively assume that such ownership continues until written notice to the con- trary is served upon the Authority. Section 16.01. REFUNDING BONDS. (a) The $625,000 in principal amount of the Series 1980 Bonds maturing on February 1, 1984, through February 1, 1988, are hereby designated as the bonds being issued to refund the Series 1979 -A Bonds be- ing refunded hereby. (b) The required amount (being $634,887.15, which is par and accrued interest to date of redemption on October 8, 1980), shall be deposited with Republic National Bank of Dallas, Dallas, Texas, to be used to redeem the Series 1979 -A Bonds which are being refunded hereby. $625,000 of said amount shall be deposited-from proceeds from the sale of the Series 1980 Bonds as further provided in Section 16.02 (a) hereof; and $9,887.15 of said amount shall be deposited from funds of the Authority now on hand and available for such purpose, immediately after or prior to the delivery of the Series 1980 Bonds. Section 16.02. APPLICATION OF SERIES 1980 BOND PROCEEDS. Upon delivery of and payment for the Series 1980 Bonds, the proceeds from the sale of the Series 1980 Bonds shall be ap- plied as follows: • (a) $625,000 of the amount required to refund and pay the full redemption price of the Series 1979 -A Bonds being refunded shall be deposited immediately after delivery of the Series 1980 Bonds, with Republic National Bank of Dallas, Dallas, Texas. (b) the amount required by Section 9.03(b) hereof shall be deposited into the Interest and Sinking Fund. (c) the amount required by Section 9.04(b) hereof shall be deposited into the Reserve Fund. (d) the balance shall be deposited into the Construction and Acquisition Fund. Section 16.03. ARBITRAGE. The Authority covenants to and with the purchasers of the Series 1980 Bonds that it will make no use of the proceeds of the Series 1980 Bonds at any time throughout the term of this issue of Series 1980 Bonds which, if such use had been reasonably expected on the date of delivery of the Series 1980 Bonds to and payment for the Series 1980 Bonds by the-purchasers,-would have caused the Series 1980 Bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, or any regulations or rulings pertaining thereto; and by this covenant the Authority is obligated to comply with the require- ments of the aforesaid Section 103(c) and all applicable and pertinent Department of the Treasury regulations relating to arbitrage bonds. The Authority further covenants that the pro- ceeds of the Series 1980 Bonds will not otherwise be used di- rectly or indirectly so as to cause all or any part of the Series 1980 Bonds to be or become arbitrage bonds within the meaning of the aforesaid Section 103(c), or any regulations or rulings pertaining thereto. Section 17.01. APPROVAL AND REGISTRATION OF SERIES 1980 BONDS. That the proper officers of the Authority shall prepare a transcript of proceedings pertaining to the Series 1980 Bonds, and such transcript shall be submitted to the Attorney General of the State of Texas for his examination with a request that he examine the same and approve the Series 1980 Bonds, and none of the Series 1980 Bonds shall be issued under the terms of this resolution unless and until the same shall have been ap- proved by the Attorney General of the State of Texas and regis- tered by the Comptroller of Public Accounts of the State of Texas as required by law. Upon registration of the Series 1980 Bonds, the Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manu- ally sign the Comptroller's certificate of registration pre- scribed herein to be printed on the back of each Series 1980 Bond, and the seal of said Comptroller shall be affixed to each of the Series 1980 Bonds. Section 17.02. SALE OF THE SERIES 1980 BONDS. That said Series 1980 Bonds are hereby sold and shall be delivered to for cash for the par value thereof and accrued interest to date of delivery, plus a premium of $ . It is hereby deter- mined by the Board of the Authority that said price and terms are the most advantageous reasonably obtainable. Section 17.03. APPROVAL OF OFFICIAL STATEMENT. That it is hereby officially-found, determined, and declared that said Series 1980 Bonds have been sold at public sale to the bidder offering the lowest interest cost, after receiving sealed bids pursuant to an Official Notice of Sale and Official Statement dated August 27, 1980, prepared and distributed in connection with the sale of said Series 1980 Bonds. Said Official Notice of Sale and Official Statement have been and are hereby approv- ed by the Board of the Authority. It is further officially found, determined, and declared that the statements and repre- sentations contained in said Official Notice of Sale and Offi- cial Statement are true and correct in all material respects, to the best knowledge and belief of the Board of the Authority. Section 17.04. FURTHER PROCEDURES. That the officers, employees, and agents of the Authority, and each of them, shall be and they are hereby expressly authorized, empowered, and directed from time to time and at any time to do and perform -20- all such acts and things and to execute, acknowledge and de- liver in the name and under the corporate seal and on behalf of the Authority all such instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this resolution and of the Series 1980 Bonds. In case any officer whose facsimile signa- ture shall appear on any Series 1980 Bond or interest coupons appertaining thereto shall cease to be such officer before the delivery of the Series 1980 Bonds, such facsimile signature shall = -never -heless =.be=- valid - -and -= sufficient -for- all -purposes the same as if he or she had remained in office until such delivery. Section 17.05. SEVERABILITY. In case any one or more of the provisions of this resolution shall be held to be in- valid or ineffective by any court of competent jurisdiction as to any person or circumstance, the remainder hereof and the application of such provision or provisions to persons or cir- cumstances other than those as to which it is held invalid shall not be affected thereby.