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HomeMy WebLinkAbout400 04-27-1971ORDINANCE N0. 400 AN ORDINANCE by the City Council of the City of Euless, Texas, authorizing the issuance of $8005000 "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971," dated March 15, 1971, of which the sum of $500,000 is for the purpose of constructing improvements and extensions to the City's Waterworks System, and the sum of $300,000 is for the purpose of constructing improve- ments and extensions to the City's Sanitary Sewer System, as authorized by the General Laws of the State of Texas, particularly Article 1111 et seq., V.A.T.C.S.; prescrib- ing the form of the bonds and the form of the interest coupons; pledging the net revenues of the City's combined Waterworks and Sanitary Sewer System to the payment of the principal of and interest on said bonds; enacting provi- sions incident and related to the subject and purpose of this ordinance; and declaring an emergency. WHEREAS, the City of Euless, Texas, has heretofore autho- rized the issuance of certain revenue bonds payable from and secured by a first lien'on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System, and in the initial ordinance authorizing the issuance of said bonds, it was provided that a portion of the System being acquired by the City of Euless located within the corporate limits of another incorporated municipality might be sold upon terms and conditions therein set forth; and, WHEREAS, as the result of authority conferred at an elec- tion held within the City of Euless on the 14th day of day of September, 1968, a portion of the System so owned by the City of Euless and located within the corporate limits of the City of Bedford was sold to the City of Bedford upon terms and con- ditions specified in the aforesaid ordinance; and, WHEREAS, the bonds sold and delivered by the City of Euless were in the original principal amount of $5,800,000 and being now identified as Series 1965 and Series 1967 bonds, being more fully hereinafter defined as the "previously issued bonds "; and, WHEREAS, as a result of an election held on the 17th day of January, 1970, this City Council became authorized and empowered to issue additional bonds payable from the net revenues of said System in the following amounts and for the following purposes: $4,000,000 for the purpose of constructing improvements and extensions to the City's Waterworks System; and $1,000,000 for the purpose of constructing improvements and extensions to the City's Sanitary Sewer System; and it is now proper for this City Council to provide for the issuance of $800,000 of such bonds, being $500,000 for water- works purposes and $300,000 for sanitary sewer purposes; and, WHEREAS, in the ordinances authorizing the previously issued bonds, the City reserved the right to issue additional bonds on a parity with the bonds authorized therein, payable from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System, but only pursuant to and subject to the restric- tions, covenants and limitations contained in the ordinances authorizing said bonds; and, WHEREAS, the City Council finds and determines: (1) that the City is not in default as to any covenant, condition or obligation prescribed by the ordinances authorizing issuance of the outstanding bonds; (2) that the applicable laws of the State of Texas now in force which provide permission and autho- rity for the issuance of such proposed bonds have been fully complied with; (3) that each of the Funds created and reaffirmed by the ordinances authorizing the previously issued bonds con- tains the amount of money required to be on deposit therein; (4) that the net revenues of the System for the twelve -month period preceding the month of the adoption of this ordinance, as shown by a report of a Certified Public Accountant or licensed public accountant, are equal to at least one and one - fourth (1 -1/4) times the average annual principal and interest requirements of all bonds secured by a first lien on and pledge of the net revenues of the System, and which will be outstanding upon the issuance of the proposed additional parity bonds; and (5) that the ordinance authorizing the issuance of the addi- tional bonds provides that the amount to be accumulated and maintained in the Bond Reserve Fund shall be increased to an amount equal to not less than the average annual principal and interest requirements of all bonds payable from and secured by a first lien on and pledge of the net revenues of the System (after giving effect to the issuance of the proposed additional bonds), such additional amount to be accumulated in said Fund within not more than five (5) years and one (1) month from the date of the passage of the ordinance authorizing the issuance of the proposed additional bonds; and, WHEREAS, this City Council deems it advisable to issue at this time the aforesaid sum of $800,000 of such bonds, the City reserving unto itself the right and authority to issue and sell in one or more installments the balance of the bonds authorized but unissued, when in the judgment.of said City Council the amounts thereof are needed by the City for the purposes for which authorized, provided that the issuance of such additional bonds shall be governed by the provisions relating thereto here- inafter set forth; therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EULESS: SECTION 1: Authorization - Principal Amount - Designation. That in order to borrow the said sum of EIGHT HUNDRED THOUSAND DOLLARS ($800,000) of which the sum of $500,000 is for.the purpose of constructing improvements and extensions to the City's Water- works System, and the sum of $300,000 is for the purpose of con- structing improvements and extensions to the City's Sanitary Sewer System, the City Council of the City of Euless, Texas, by virtue of the authority expressly conferred at the aforesaid election and pursuant to the General Laws of the State of Texas, particu- larly Article 1111 et seq., V.A.T.C.S., has determined that there shall be issued and there is hereby ordered to be issued a series of coupon bonds, to be designated "CITY OF EULESS, TEXAS, WATER- WORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971," aggregating the sum of EIGHT HUNDRED THOUSAND DOLLARS ($800,000), which said series of bonds, together with the outstanding and unpaid previ- ously issued bonds (as herein defined) shall be payable as to both principal and interest solely from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System. SECTION 2: Date - Numbers - Maturity - Option. Said bonds shall be dated March 15, 1971; shall be numbered consecutively from One (1) through One Hundred Sixty (160); shall each be in denomination of Five Thousand Dollars ($5,000); and shall become due and payable serially on July 15 in each of.the years in accordance with the following schedule: BOND NUMBERS (All Inclusive) MATURITY AMOUNT 1 to 10 1972 $50,000 11 to 16 1973 301000 17 to 20 1974 202000 21 to 24 1975 20,000 25 to 29 1976 25,000 30 to 34 1977 252000 35 to 39 1978 25,000 40 to 44 1979 252000 45 to 50 1980 30,000 51 to 61 1981 55,000 62 to 68 1982 35,000 69 to 75 1983 35,000 76 to 82 1984 35,000 83 to 90 1985 40,000 91 to 100 1986 50,000 101 to 110 1987 50,000 111 to 120 1988 50,000 121 to 130 1989 502000 131 to 140 1990 50,000 141 to 160 _1991 100,000 PROVIDED, HOWEVER, that the City reserves the right to redeem bonds maturing in the years 1989 through 1991 of said series, in whole or in part, but in inverse numerical order if less than all, on July 15, 1988, or on any interest payment date thereafter, at the price of par and accrued interest to the date fixed for redemption; PROVIDED, FURTHER, that at least thirty (30) days prior to any interest payment date upon which any of said bonds are to be redeemed, notice of redemption, signed by the City Secretary (specifying the serial numbers and amount of bonds to be redeemed) shall have been filed with (the paying agent named in each of said bonds); and should any bond or bonds not be presented for redemption pursuant to such notice, the same shall cease.to bear interest from and after the date so fixed for redemption. SECTION 3: Interest. That said bonds shall bear interest from date.to maturity at the following rates per annum: (a) Bonds maturing in each of the years 1972 through 19 ?.2 at , 7s (b) Bonds maturing in each of the years 19 ,� 3 through 19-- at,o o %; (c) Bonds maturing in each of the years 19 *A� through 19S-6 at (d) Bonds maturing in each of the years 19''7 through 199e at - ,Rc7 %; (e) Bonds maturing in each of the years 19-S"/ through 19'�/ at 6,p o %; such interest to be evidenced by proper coupons attached to each of said bonds; and said interest shall be payable on July 15, 1971, and semiannually thereafter on January 15 and July 15 in each year. SECTION 4: Place of Payment. Both principal of and interest on this issue of bonds shall be payable in lawful money of the United States of America, without exchange or collection charges to the owner or holder, at upon presentation and surrender of bonds or proper coupons. SECTION 5: Execution of Bonds and Coupons. The seal of said City may be impressed on each of said bonds or, in the alternative, a facsimile of such seal may be printed on the said bonds. The bonds and interest coupons appurtenant thereto may be executed by the imprinted facsimile signatures of the Mayor and City Secretary of the City and execution in such manner shall have the same effect as if such bonds and coupons had been signed by the Mayor and City Secretary in person by their manual signa- tures. Inasmuch as such bonds are required to be registered by the Comptroller of Public Accounts for the State of Texas, only his signature (or that of a deputy designated in writing to act for the Comptroller) shall be required to be manually subscribed to such bonds in connection with his registration certificate to appear thereon, as hereinafter provided; all in accordance with the provisions of Article 717j -1, V.A.T.C.S. SECTION 6: Form of Bonds. That the form of said bonds shall be substantially as follows: NO. UNITED STATES OF AMERICA $5,000 STATE OF TEXAS COUNTY OF TARRANT CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1971 FOR VALUE RECEIVED, the City of Euless, a municipal corpora- tion of the State of Texas, hereby acknowledges itself indebted to and promises to pay to bearer, as hereinafter stated, on the FIFTEENTH DAY OF JULY, 19 , the sum of FIVE THOUSAND DOLLARS ($5,000), in lawful money of the United States of America, with interest thereon from the date hereof to maturity at the rate of PER CENTUM ( %) per annum, payable on July 15, 1971, and semiannually thereafter on January 15 and July 15 in each year, and interest falling due on or prior to maturity hereof is payable only upon presentation and surrender of the interest coupons hereto attached as they severally become due. BOTH PRINCIPAL OF and interest on this bond are hereby made payable at without exchange or collection charges to the owner or holder, and the said City of Euless, Texas, is hereby held and firmly bound to apply the pledged appropriated net revenues of its combined Waterworks and Sanitary Sewer System to the prompt payment of principal of and interest on this bond at maturity, and to pay said principal and interest as they mature. THIS BOND is one of a series of bonds of like tenor and effect, except as to number, interest rate, right of prior re- demption and maturity, aggregating in amount EIGHT HUNDRED THOUSAND DOLLARS ($800,000), numbered consecutively from One (1) through One Hundred Sixty (160), each in denomination of Five Thousand Dollars ($5,000), of which the sum of $500,000 is for the purpose of constructing improvements and extensions to the City's Waterworks System; and $300,000 is for the purpose of constructing improvements and extensions to the City's Sani- tary Sewer System, issued in accordance with the Constitution and laws of the State of Texas, particularly Article 1111 et seq., V.A.T.C.S., and by authority expressly conferred at an election held for that purpose within said City, and pursuant to an ordinance passed by the City Council of the City of Euless, Texas, and duly recorded in the Minutes of said City Council. AS SPECIFIED in the ordinance hereinabove mentioned, the City reserves the right to redeem bonds maturing in the years 1989 through 1991 of this series, in whole or in part, but in inverse numerical order if less than all, on July 15, 1988, or on any interest payment date thereafter, at the price of par and accrued interest to the date fixed for redemption; PROVIDED, HOWEVER, that at least thirty (30) days prior to any interest payment date upon which any of said bonds are to be redeemed, notice of redemption, signed by the City Secretary (specifying the serial numbers and amount of bonds to be redeemed) shall have been filed with and should any bond or bonds not be presented for redemption pursuant to such notice, the same shall cease to bear interest from and after the date so,fixed for redemption. THE DATE of this bond in conformity with the ordinance above mentioned is MARCH 15, 1971. THIS BOND and the series of which it is a part constitute special obligations of the City of Euless, Texas, and, together with the outstanding and unpaid previously issued bonds (as defined in the ordinance authorizing the series of bonds of which this is one) are payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System. THE CITY, HOWEVER, expressly reserves the right to issue further and additional revenue bond obligations in all things on a parity with the outstanding previously issued bonds and the bonds of this series and payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System; PRO- VIDED, HOWEVER, that any and all such additional bonds may be so issued only in accordance with and subject to the covenants, conditions, limitations and restrictions relating thereto which are set out and contained in the ordinance authorizing this series and to which said ordinance reference is hereby made for more complete and full particulars. THE HOLDER hereof shall never have the right to demand pay- ment of this obligation out of any funds raised or to be raised by taxation. AND IT IS HEREBY CERTIFIED AND RECITED that the issuance of this bond, and the series of which it is a part, is duly authorized by law; that all acts, conditions and things required to exist and to be done precedent to and in the issuance of this bond to render the same lawful and valid have been properly done, have happened and have been performed in regular and due time, form and manner as required by the Constitution and laws of the State of Texas and the ordinance hereinabove mentioned; that this series of revenue bonds does not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on this bond and the series of which it is a part by irrevocably pledging the net revenues of the combined Waterworks and Sanitary Sewer System of the City of Euless, Texas. IN TESTIMONY WHEREOF, the City Council of the City of Euless, Texas, in accordance with the provisions of Article 717j -1, V.A.T.C.S., has caused the seal of said City to be impressed or a facsimile thereof to be printed hereon, and this bond and its appurtenant coupons to be executed with the imprinted facsimile signatures of the Mayor and City Secretary of said City, as of the FIFTEENTH DAY OF MARCH, 1971. Mayor, City of Euless, Texas COUNTERSIGNED: City Secretary, City of Euless, Texas SECTION 7: Coupon Form. The form of said interest coupons shall be substantially as follows: NO. ON THE FIFTEENTH DAY OF $ 19 , *(unless the bond to which this coupon pertains has been properly called for redemption in accordance with its terms,) the CITY OF EULESS, a municipal corporation of the State of Texas, hereby promises to pay to bearer, out of funds specified in the bond to which this coupon is attached (without right to demand payment out of any funds raised or to be raised by taxation), and in lawful money of the United States of America, without exchange or collec- tion charges to the owner or holder, at the sum of DOLLARS ($ ), said sum being months' interest due that day on "CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1971," dated March 15, 1971. Bond No. City Secretary Mayor SECTION 8: Form of Comptroller's Certificate. Substantially the following shall be printed on the back of each bond: OFFICE OF COMPTROLLER I I REGISTER NO. STATE OF TEXAS I I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this bond has been examined by him as required by law, and that he finds that it has been issued in conformity *NOTE TO PRINTER: The expression in parentheses to be included only in coupons maturing January 15, 1989 and subsequent pertaining to bonds maturing in the years 1989 through 1991. with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Euless, Texas, payable from the revenues pledged to its payment by and in the ordinance authorizing same, and said bond has this day been registered by me. WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas, Comptroller of Public Accounts of the State of Texas SECTION 9: Definitions. For all purposes of this ordi- nance and in particular for clarity with respect to the issuance of the bonds herein authorized, and the pledge and appropriation of revenues therefor, the following definitions are provided: (a) The term "System" shall mean the City's combined Waterworks and Sanitary Sewer System, includ- ing all present and future additions, extensions, replacements and improvements in any wise pertaining thereto, whether situated within or without the limits of the City. (b) The term "net revenues" shall mean the gross revenues of the System, less the expenses of operation and maintenance,-including all salaries, labor, materials, repairs and extensions necessary to render efficient service; provided, however, that in determining net revenues, only such repairs and extensions as in the judgment of the City Council, reasonable and fairly exercised, are necessary to keep the System in operation and render adequate service to the areas served thereby and the inhabi- tants thereof, or such as might be necessary to remedy some physical defect which would otherwise impair the security of any bonds payable from and secured by a first lien on the net revenues of the System shall be deducted. (c) The term "bonds similarly secured" shall mean the bonds, the previously issued bonds, and the addi- tional parity bonds. (d) The term "bonds" shall mean the $800,000 revenue bonds authorized by this ordinance. (e) The term "previously issued bonds" shall mean the outstanding and unpaid bonds identified as follows: (1) CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1965, dated July 15, 1965, in the original principal amount of $3,600,000; and (2) CITY OF EULESS, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1967, dated January 15, 1967, in the original principal amount of $2,200,000. (f) The terms "additional parity bonds" and "additional bonds" shall mean the additional parity revenue bonds which the City reserves the right to issue under Section 17 hereof. (g) The term "fiscal year" shall mean the twelve- month period beginning October 1 and ending September 30 of the succeeding year. (h) The term "Bond Fund" shall mean the interest and sinking fund established for the payment of the bonds similarly secured. SECTION 10: Pledge. The City covenants that all of the net revenues of the System are irrevocably pledged equally for the payment of principal of and interest on the bonds, previously issued bonds and additional bonds, if issued under the conditions and in the manner specified in this ordinance, and it is hereby ordained that the bonds, previously issued bonds, and the addi- tional bonds, if so issued, and the interest thereon shall con- stitute a first lien upon said net revenues. SECTION 11: System Fund. All revenues of every nature received through the ownership and operation of the System shall be kept separate and apart from all other funds or accounts and shall be deposited from time to time as collected into the System Fund, heretofore established and hereby reaffirmed. This Fund shall not be diverted or drawn upon for any purpose other than that relating to the System and its indebtedness so long as the bonds similarly secured, or any interest thereon, are outstanding and unpaid, except as permitted under subparagraph 4 of Section 12 hereof relating to surplus revenues. SECTION 12: Flow of System Fund - Special Funds. The moneys deposited in the System Fund under the provisions of the preceding section shall be used first for the payment of those necessary and reasonable expenses of operating and maintaining the System as set forth in subparagraph (b) of Section 9 hereof. All revenues of the System not actually required to pay such expenses are hereby pledged and appropriated, in the order of their listed precedence, for the purposes and to the Funds heretofore created and hereby reaffirmed, as follows: 1. Bond Fund. Deposits into the Bond Fund shall continue to be made for the payment of principal of and interest on the previously issued bonds in accordance with the ordinances autho- rizing their issuance. All sums received from the purchasers of the bonds as accrued interest thereon to the date of delivery shall be placed into this Fund, which shall reduce by such amount the sum which would otherwise be required to be placed therein from the revenues of the System. Beginning on or before the 10th day of May, 1971, and on or before the 10th day of each and every month, to and including July 10, 1971, the City shall transfer from the System Fund into the Bond Fund an amount of money equal to not less than one -third (1/3) of the installment of interest to become due on the bonds on July 15, 1971. Beginning on or before the 10th day of August, 1971, and on or before the 10th day of each month thereafter, until the bonds are paid and retired, the City shall transfer from the System Fund into the Bond Fund an amount of money equal to not less than one -sixth (1/6) of the amount required to meet the next semi - annual installment of interest and not less than one - twelfth (1/12) of the next annual principal maturity to become due on the bonds. It is specifically recognized that as the result of the sale of a portion of its System to the City of Bedford (as mentioned in the preamble hereof), this City received the sum of $1,875,608.02 which was deposited in the Bond Fund for the purpose of retiring previously issued bonds prior to their regularly scheduled ma- turity; that $1,595,000.00 in principal amount of said bonds have been so retired, and the City now has remaining in said Fund the sum of $468,562.35 to be utilized for the same purpose, and the owner or holder of the bonds herein authorized recognize, agree, and assent to the policy of the City of Euless in the application of such money for the retirement of the previously issued bonds prior to their regularly scheduled maturity as well as the utilization of interest income, if any, by reason of the investment of such amount to the reduction of monthly deposits into said fund, or to the retirement of any bonds similarly secured as the City may direct. 2. Emergency Fund. As stated in the ordinances authorizing issuance of the previously issued bonds, this Fund is to be used, upon proper order of the City Council, to pay for any special or extraordinary repairs or replacements to the System neces- sitated by the occurrence of an emergency and for the payment of which no other funds are available. As required by the pro- visions of said ordinances, deposits shall be made into the Emergency Fund at the rate of $1,000 per month, on or before the 10th day of each and every month, until such Fund shall equal the sum of at least $100,000.00. Should the Bond Fund and /or the Bond Reserve Fund for any reason prove deficient, then the Emergency Fund shall be used for the purpose of meeting principal and /or interest requirements of the bonds similarly secured in order to prevent default in the payment thereof, and in such event, the City covenants and agrees that it will promptly make the necessary transfers from said Emergency Fund into the Bond Fund. When any amounts are paid out of the Emergency Fund, repayments into said Fund shall be resumed and continued from the first revenues of the System thereafter available and not required for maintenance and operation or for the Bond Fund until such time as said Emergency Fund has been restored to the total amount herein provided. 3. Bond Reserve Fund. This Fund is to be used to pay the principal of and interest on bonds similarly secured, falling due at any time when there is not sufficient money available in the Bond Fund for such purpose. No payments need to be made into the Bond Reserve Fund after there has been accumulated therein an amount equal to the average annual principal and interest requirements of the bonds similarly secured which are then outstanding, except that whenever the Bond Reserve Fund is reduced below such amount, payments into said Fund shall be re- sumed and continued until it has been restored to an amount not less than the said average annual debt service requirements of the outstanding bonds similarly secured. In accordance with the provisions of the ordinances autho- rizing the previously issued bonds, there is now on hand in the Bond Reserve Fund the sum of not less than $232,281.04, and on or before the 10th day of each month, beginning on the 10th day of June, 1971, there shall be deposited into the Bond Reserve Fund the sum of not less than $ 7c)o.00 , and such monthly deposits shall continue to be made until the Bond Reserve Fund shall contain the required amount. It is the City's purpose and intent to continuously maintain said Bond Reserve Fund in the amounts herein provided until all of the bonds similarly secured and all interest pertaining thereto have been fully paid and discharged, or until such time as the amount in said Bond Reserve Fund when added to the amount in the Bond Fund shall be fully sufficient to pay and discharge all of the bonds similarly secured (including interest thereon) at maturity. In the event of an early redemption of any portion of the bonds similarly secured prior to the time the full Bond Reserve Fund require- ments have been accumulated in accordance herewith, the monthly deposits into said Fund as above provided may be reduced in the same ratio that the amount of bonds so redeemed and discharged shall bear to the total amount of the outstanding bonds similarly secured, and the Bond Reserve Fund requirements may also be re- duced to an amount equal to the average annual principal and interest requirements of such bonds then outstanding; provided no such reduction shall be permitted in the amount of the monthly deposits as would prevent the accumulation of the average annual debt-service requirements on outstanding bonds similarly secured on or before the 10th day of April, 1976. If in any month the City shall for any reason fail to pay into the Bond Fund, the Emergency Fund and /or the Bond Reserve Fund the full amounts herein stipulated, amounts equivalent to such deficiencies shall be set aside and apart and paid into said Funds from the first available revenues of the following month or months, and such payments shall be in addition to the amounts hereinabove otherwise provided to be paid into such Funds during such month or months. 4. Surplus Revenues. Any surplus revenues of the System remaining after all payments have been made into the Bond Fund, Emergency Fund and Bond Reserve Fund, and after all deficien- cies in making deposits to said Funds have been remedied, may be transferred and used for any lawful general or special pur- pose, as permitted by the terms of Article 1113a, V.A.T.C.S.; including the use thereof either for the retirement in advance of maturity of the bonds similarly secured, according to the provisions made for their prior redemption, or for the purchase of any of such bonds on the open market at not exceeding the market value thereof. Nothing herein, however, shall be con- strued as impairing the right of the City to pay, in accordance with the provisions thereof, any junior lien bonds legally issued by it and payable out of the net revenues of the System. SECTION 13: Adjustment of Bond Reserve Fund - Transfers of Excess into Bond Fund. The City shall have the privilege of recomputing and adjusting the Bond Reserve Fund requirements to the amount of the average annual principal and interest require- ments of the bonds similarly secured at any time outstanding, and such adjustment is particularly anticipated at such time as bonds may be redeemed and retired prior to their stated maturity. Any amounts in the Bond Reserve Fund which shall exceed those then required may be transferred to the Bond Fund. All moneys of the Bond Reserve Fund and the Emergency Fund which may be realized from the investment thereof as hereinafter provided which exceed the amounts required to be maintained in such respective Funds may likewise be transferred into the Bond Fund. In the event of any such transfer, the amount thereof may be credited against the current monthly deposits hereinabove provided to be made into the Bond Fund. SECTION 14: Custodian of Funds. The Custodians of the Funds heretofore established and herein reaffirmed shall be as follows: (a) The City's official depository bank shall be the Custodian of the System Fund and the Emergency Fund. (b) The Custodian and Trustee of the Bond Fund and the Bond Reserve Fund shall be BANKERS TRUST COMPANY, New York, New York, and all deposits herein provided shall be placed in the Bond Fund and Bond Reserve Fund with said Custodian and Trustee. SECTION 15: Investments. The Bond Reserve Fund and the Emergency Fund may be invested as follows: (a) The Bond Reserve Fund in direct obligations of or obligations unconditionally guaranteed by the United States of America having maturities not in "excess of ten (10) years from the making of such investment 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 prin- cipal and interest at maturity of the bonds as hereto- fore directed, the Custodian and Trustee shall sell on the open market such amount of the securities as is required to pay such bonds and interest thereon when due and shall give notice thereof to the City Manager. (b) The Emergency Fund in direct obligations of or obligations unconditionally guaranteed by the United States of America having maturities not in excess of five (5) years from the making of such investment as the City Council may direct. Such investment securities shall be held by the Custodian Bank and if at any time it becomes necessary to liquidate same to provide sums for any purpose for which such Fund was created, the City shall notify the Custodian who shall promptly sell on the open market such amount thereof as may be required, making the proceeds immediately available. Should the purpose be for meeting bond requirements, the City agrees promptly to accomplish the required transfers to the paying agent bank. SECTION 16: Security of Funds. All Funds hereinabove re- affirmed shall be secured in the manner and to the fullest extent permitted by the laws of the State of Texas for the security of public funds, and such Funds shall be used for and only for the purposes designated in the ordinances authorizing issuance of the bonds similarly secured. All deposits in the special Funds under subparagraphs 1 and 3 of Section 12 shall be held as a Trust Fund for the holders of the bonds, the beneficial interest of which shall be regarded as existing in such holders. To the extent that the moneys in the Bond Reserve Fund and Emergency Fund are invested under the provisions of Section 15 hereof, such security is not required. SECTION 17: Issuance of Additional Parity Bonds. In addi- tion to the right to issue bonds of inferior lien as authorized by the laws of the State of Texas, the City reserves the right to hereafter issue additional parity bonds. The additional bonds when issued shall be payable from and secured by a first lien on and pledge of the net revenues of the System in the same manner and to the same extent as are the bonds and previously issued bonds, and the bonds, previously issued bonds and additional bonds shall be in all respects of equal dignity. The additional bonds may be issued in one or more installments; provided, how- ever, that none shall be issued unless and until the following conditions have been met: (a) The City is not then in default as to any covenant, condition or obligation prescribed by the ordinances authorizing the issuance of the bonds and previously issued bonds; (b) The applicable laws of the State of Texas in force at such time and which provide permission and authority for the issuance of such bonds have been full complied with; (c) That each of the Funds heretofore created and herein reaffirmed contains the amount of money then required to be on deposit therein; (d) The net revenues of the System for the twelve- month period preceding the month of the adoption of such ordinance, as shown by a report of a certified public accountant or licensed public accountant, are equal to at least one and one - fourth (1 -1/4) times the average annual principal and interest requirements of all bonds which will be secured by a first lien on and pledge of the net revenues of the System, and which will be out- standing upon the issuance of the additional parity bonds. The term "net revenues" as-used in this Section 17 shall mean the gross revenues after deducting the expenses of operation and maintenance but not deducting expenditures which, under standard accounting procedures, should be charged to capital expenditures; (e) The additional bonds are made to mature on July 15 of each of the years in which they are scheduled to mature; and (f) The ordinance authorizing the issuance of such -additional bonds provides that the amount to be accumu- lated and maintained in the Bond Reserve Fund shall be increased to an amount equal to not less than the average annual principal and interest requirements of all bonds payable from and secured by a first lien on and pledge of the net revenues of the System (after giving effect to the issuance of the proposed additional bonds). The additional amount to be accumulated in said Fund shall be deposited therein in not more than five (5) years and one (1) month from the date of the passage of the ordi- nance authorizing the issuance of the proposed additional bonds. At such time as the Series 1965 and Series 1967 bonds, described in Section 9(e) of this ordinance have been paid off, refunded or cancelled and are no longer outstanding, the City may issue additional bonds secured by a first lien on and pledge of the net revenues of the City's combined System on a parity with the bonds then outstanding which are secured by such revenues, pro- vided all conditions above set forth in this Section have been met, except that the test for subparagraph (d) of this Section shall then be as follows: (d) The net revenues of the System for the twelve- month period or for the fiscal year next preceding the month of the adoption of such ordinance, as shown by a report of a certified public accountant or licensed public accountant, are equal to at least one and one - forth (1 -1/4) times the average annual principal and interest requirements of all bonds which will be secured by a first lien on and pledge of the net revenues of the System, and which will be outstanding upon the issuance of the additional parity bonds. The term "net revenues" as used in this Section shall mean the gross revenues after deducting the expenses of operation and maintenance but not deducting expenditures which, under standard accounting procedures, should be charged to capital expenditures. SECTION 18: Special Covenants. The City hereby further covenants and reaffirms as follows: (a) That it has the lawful power to pledge the revenues supporting this issue of bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 through 1118, V.A.T.C.S.; that the bonds, previously issued bonds and the additional bonds, if and when issued, shall be ratably secured under said pledge of income in such manner that one bond shall have no preference over any other bond of said issues. (b) That other than for the pledges made for the bonds and the previously issued bonds, the rents, reve- nues and income of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. (c) That, so long as any of said bonds or any interest thereon remain outstanding, the City will not sell or encumber the System or any substantial portion thereof, and that, with the exception of the additional parity bonds expressly permitted by this ordinance to be issued, it will not encumber the revenues thereof unless such encumbrance is made junior and subordinate to all of the provisions of this ordinance. (d) That no free service of the System shall be allowed, and should the City or any of its agents or instrumentalities make use of the services and facili- ties of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. (e) To the extent that it legally may, the City covenants and agrees, for the protection and security of the bonds similarly secured and the holders thereof, that it will not grant a franchise for the operation of any competing waterworks or sewer system within the City until the bonds similarly secured shall have been retired. (f) All extensions and improvements to the System shall be constructed to standards established by the City, and shall be subject to the approval of a qualified Registered Professional Engineer of the State of Texas, retained or employed by the City, who shall approve and supervise the installation thereof. SECTION 19: Adoption of Provisions of Ordinance Authorizing Series 1965 and Series 1965 -A Bonds. The provisions, conditions and recitals thereof being equally applicable to this ordinance and the Series 1971 bonds herein authorized, certain sections of the ordinance authorizing the Series 1965 bonds and the Series 1965 -A bonds which are refunded by the Series 1967 bonds, as enacted on the 29th day of July, 1965, are hereby adopted as a part hereof by this reference and to the full extent and with like effect as if set forth herein at length. Such sections are listed and identified as follows: Section 21: Rates and Charges. Section 23: Maintenance and Operation - Insurance. Section 24: Records - Accounts - Accounting Reports. Section 25: Remedies in Event of Default. Section 27: Bonds are Special Obligations. In order that any holder of the bonds authorized by this ordinance may be fully apprised of the contents of the aforementioned sec- tions, the City agrees to furnish, without charge, a certified copy of the ordinance of July 29, 1965, aforementioned and in which the aforesaid sections are contained, upon request of the holder of any of the bonds herein authorized. 11-1 ...t SECTION 20: Bonds as Negotiable Instruments. Each of the bonds herein authorized shall be deemed and construed to be a "Security ", and as such a negotiable instrument, within the meaning of Article 8 of the Uniform Commercial Code. SECTION 21: Mayor to Have Charge of Records and Bonds. That the Mayor of the City of Euless shall be and he is hereby authorized to take and have charge of all necessary orders and records pending investigation by the Attorney General of the State of Texas, and shall take and have charge and control of the bonds herein authorized pending their approval by the Attorney General and their registration by the Comptroller of Public Accounts. SECTION 22: Confirmation of Sale. The sale of the bonds herein authorized to rl �2 ST S (:) a T{4 WEST C o Al � ,4 /V/�/ r> c C C (f A-Tl at the price of par and.accrued interest to date of delivery, plus a premium of $ is hereby confirmed. Delivery of the bonds shall be made.to said purchaser as soon as may be after the adoption of this ordinance, upon payment therefor in accordance with the terms of sale. SECTION 23: Printed Legal Opinion on Bonds. The purchasers' obligation to accept delivery of the bonds herein authorized is subject to their being furnished a final opinion of Messrs. Dumas, Huguenin and Boothman, Attorneys, Dallas, Texas, approving such bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such bonds. Printing of a true and correct copy of said opinion on the reverse side of each of such bonds with appropriate certificate pertaining thereto executed by facsimile signature of the City Secretary is hereby approved and authorized. SECTION 24: Emergency. The fact that it is to the best interest of the City to provide funds for constructing improve- ments and extensions to the City's Waterworks and Sanitary Sewer System as hereinabove set out at the earliest possible date for the immediate prsservation of the public peace, health and safety constitutes and creates an emergency and an urgent public neces- sity, requiring that the Charter provision that all ordinances shall be read at two regular Council meetings be suspended and requiring that this ordinance be passed and take effect as an emergency measure, and such rule is accordingly suspended and this ordinance is passed as an emergency measure and shall take effect and be in full force from and after its passage. PASSED AND APPROVED, this e 27th day of April, 1971. ATTEST:" M or, City of Euless, Vxas City Secretary, City of Euless, Texas (City Seal)