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Ordinance 1971-16 ~\-\Lo ORDINANCE AUTHORIZING ISSUANCE OF $300,000 "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971," DATED MARCH 1, 1971 CITY OF WYLIE 1 1 l l 1 THE STATE OF TEXAS COUNTY OF COLLIN ON THIS, the 23rd day of February, 1971, the City Council of the City of Wylie, Texas, convened in regular session at the regu- lar meeting place thereof in the City Hall, the meeting being open to the public and notice of said meeting, giving the date, place and subject thereof, having been posted as prescribed by Article 6252-17, Section 3A, V.A.T.C.S., with the following members present and in attendance, to wit: C. W. HACKLER MAYOR R. C. DODD JOHN T. ADDICKS DON R. TIlOHA 8 WILLIAM E. MARTIN KENNETH A. MAUK ) ) ) ) ) ALDERMEN and with the following absent: Don R. Thomas constituting a quorum; at which time the following among other business was transacted: The Mayor introduced a proposed ordinance which was read in full. Alderman Mauk made a motion that any rule requiring ordinnn<..:es LO be read more than ont: ti IIIC or ;) L mor<:..; Lhan one meeting be suspended. The motion was seconded by Alderman Dodd and carried by the following vote: AYES: A ldermen Dodd, Addicks, '1'1.. .1,,-", ~, Martin and Mauk. NOES: None. Alderman Addicks made a motion that the ordi- nance be passed finally. The motion was seconded by Alderman Martin and carried by the following vote: AYES: Aldermen Dodd, Addicks, '1'1...I,,~Il:, Martin and Mauk. NOES: None. The Mayor announced that the ordinance had been finally passed. The ORDINANCE is as follows: AN ORDINANCE by the City Council of the City of Wylie, Texas, authorizing the issuance of $300,000 "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971," dated March 1, 1971, for the purpose of improving and extending 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.; prescribing the form of the bonds and the form of the interest coupons; pledging the net revenues of the City's combined Water- works and Sanitary Sewer System to the payment of the principal of and interest on said bonds; and enacting provisions incident and relating to the subject and purpose of this ordinance; and declaring an emergency. WHEREAS, at an election held in the City of Wylie, Texas, . on the 29th day of December, 1955, the governing body of the City of Wylie became authorized and empowered to issue $187,000 special obligation bonds for the purpose of constructing improve- ments and extensions to the City's Waterworks System, and $159,000 special obligation bonds for the purpose of constructing improve- ments and extensions to the City's Sanitary Sewer System, said bonds to mature in not to exceed thirty-five (35) years from their date, to be payable solely from and secured by a first lien on and pledge of the revenues of the City's combined Water- works and Sanitary Sewer System, after deduction of reasonable operation and maintenance expenses, as said expenses are defined by statute (hereinafter referred to as "net revenues"); and, WHEREAS, at an election held in the City of Wylie, Texas, on the 26th day of September, 1970, the governing body of the City of Wylie became authorized and empowered to issue $400,000 special obligation bonds for the purpose of improving and extend- ing the City's Sanitary Sewer System, said bonds to mature in not to exceed forty (40) years from their date, to be payable solely from and equally secured by a lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System; and, WHEREAS, under the prov~s~ons of Article 7l7k-2, V.A.T.C.S., this City Council is now empowered to issue and sell such bonds at any price or prices and to bear interest at any rate or rates that shall be determined within the discretion of this governing body, and this City Council now considers it necessary and ad- visable to proceed with the issuance of $300,000 bonds 2utho- rized for sewer purposes as shown below, a tabulation of the amount of bonds authorized for the various purposes at the aforesaid elections, the amount previously issued, the amo~nc being issued pursuant to this ordinance, and the balance remain- ing is as follows: ELECTION DATE PURPOSE TOTAL AMOUNT VOTED AMOUNT PREVIOUSLY ISSUED AMOUNT BEING IS SUED BALANCE REMAINING 12-29-55 WW Imp. & Exten. $187,000 $ 35,000 -0- $152,000 12-29-55 SS Imp. & Exten. 159,000 95,000 $ 64,000 -0- 9-26-70 SS Imp. & Exten. 400,000 -0- 236,000 164,000 the City Council reserving unto itself the right and authority to issue and sell in one or more installments the balance of the bonds authorized but unissued as indicated above, 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 provi- sions relating thereto hereinafter set forth; and, WHEREAS, the aforesaid bonds in the amount of $300,000 are to be issued on a parity with the previously issued bonds (hereinafter defined) so as to be equally and ratably secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System; and, WHEREAS, this City Council finds and determines that the conditions for the issuance of additional bonds as set forth in the ordinances authorizing the previously issued bonds have been met in that: (a) the City is not in default as to any covenant, condition or obligation prescribed by the ordinances authorizing the previously issued bonds; (b) the proposed additional bonds have been voted at an election duly called and held for that purpose, as provided by law; (c) the laws of the State of Texas in forcc at such timc provide permission for the issuance of such bonds; and (d) the City has secured [rom an independent Certified Public Accountant a certificate showing that the net income and revenues of the System, after full provisions have been made for adequate maintenance and operation charges for the next completed fiscal year immediately preceding the issuance and sale of such additional parity bonds, is equal to at least one and one-half (1-1/2) times the maximum annual requirements for the payment of principal and interest on all outstanding bonds secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System, after giving effect to the issuance of the proposed additional bonds; and, WHEREAS, it is now found and determined that the aforesaid $300,000 in bonds should be issued at the interest rate or rates and be sold for the price or prices hereinafter set forth; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: ~ SECTION 1: Authorization - Principal Amount - Designation. That in order to borrow the said sum of THREE HUNDRED THOUSAND DOLLARS ($300,000) for the purpose of improving and extending the City's Sanitary Sewer System, the City Council of the City of Wylie, Texas, by virtue of the authority expressly conferred at the aforesaid elections and pursuant to the General Laws of the State of Texas, particularly 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 WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1971," aggregating the sum of THREE HUNDRED THOUSAND DOLLARS ($300,000), which said series of bonds, together with the outstanding and unpaid previously issued bonds (as herein defined) sh~ll 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 Sani- tary Sewer System. SECTION 2: Date - Numbers - Maturity - Denomination - Option. Said bonds shall be dated March 1, 1971; shall be numbered con- secutively from One (1) through Sixty-Eight (68); shall be in the denominations as shown below; and shall become due and pay- able serially on June 1 in each of the years in accordance with the following schedule: BOND NUMBERS (All Inclusive) DENOMINATION MATURITY AMOUNT 1 to 3 $1,000 1972 $3,000 4 to 6 1,000 1973 3,000 7 to 10 1,000 1974 4,000 11 5,000 1975 5,000 12 5,000 1976 5,000 13 5,000 1977 5,000 14 5,000 1978 5,000 15 5,000 1979 5,000 16 5,000 1980 5,000 17 5,000 1981 5,000 18 5,000 1982 5,000 19 5,000 1983 5,000 20 and 21 5,000 1984 10,000 22 and 23 5,000 1985 10,000 24 and 25 5,000 1986 10,000 26 to 28 5,000 1987 15,000 29 to 31 5,000 1988 15,000 32 to 35 5,000 1989 20,000 36 to 39 5,000 1990 2.C ,'100 40 to 43 5,000 1991 2 1"', ,~""" r.. U,,_\)U 44 to 47 5,000 1992 20}Oi)I.~1 48 to 52 5,000 1993 2 5 , :,=~:J\_ 53 57 5,000 1994 ') 5 ,""', to .... ) ') '",It.,.... 58 to 62 5,000 1995 25)COG 63 to 68 5,000 1996 30,COO v PROVIDED, HOWEVER, that the City reserves the right to redeem bonds maturing in the years 1991 through 1996 of said series, in whole or any part thereof, on June 1, 1990, 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 MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas (the paying agent named in each of said bonds); and should any bond or bonds not be pre- sented for redemption pursuant to such notice, the same shall cease to bear interest from and after the date so fixed for re- demption. 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~ at 4 1/2 %; (b) Bonds maturing in each of the years 19~ through 19-.aL at 5 %; (c) Bonds maturing in each of the years 1982 through 19.-llli at 5 3/4 %; (d) Bonds maturing in each of the years 1986 through 19 90 at 6 1/2 %; (e) Bonds maturing in each of the years 1991 through 19~ at 6 5/8 %; and (f) Bonds maturing in each of the years 19 through 19_ at %; such interest to be evidenced by proper coupons attached to each of said bonds; and said interest shall be payable on December 1, v 1971, and semiannually thereafter on June 1 and December 1 in each year. ,,1 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 the MERCANTILE NATIONAL BANK AT DALIAS, Dallas, Texas, upon presentation and surrender of bonds or proper coupons. SECTION 5: Execution of Bonds and Coupons. The seal ,)1. :::,,:lid City may be impressed on each of said bonds or, in the altern:.t'_ive, a facsimile of such seal may be printed on the said bonds. The bonds and interest coupons appurtenant thereto may be executec by the imprinted facsimile signatures of the Mayor and City SeC~L- tary of the City and execution in such manner shall have the same effect as if such bonds and coupons had been signed by the 1-~ayor and City Secretary in person by their manual signatures. 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 herein- after provided; all in accordance with the provisions of Article 7l7j-l, 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 $_,000 STATE OF TEXAS COUNTY OF COLLIN CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1971 , FOR VALUE RECEIVED, the City of Wylie, a municipal corpora- tion of the State of Texas, hereby acknowledges itself indebted to and promises to pay to bearer, as hereinafter stated, on the FIRST DAY OF JUNE, 19 , the sum of THOUSAND DOLLARS ($_,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 December 1, 1971, and semiannually thereafter on June 1 and December 1 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 the MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, without exchange or collection charges to the owner or holder, and the said City of Wylie, Texas, is hereby held and firmly bound to apply the pledged appropriated net revenues of its combined Water- works and Sanitary Sewer System to the prompt payment of principal of and interest on this bond at maturity, and to pay said prin- cipal and interest as they mature. TllIS BOND is one of a sed(~s of bonds of like tcnor :md cffect, except as to number, intercst rotc, right of prior r"~li'':,l2- tion, denomination and maturity, aggregating in amount THr~EE HUNDRED THOUSAND DOLLARS ($300,000), numbered consecutively rro.';l One (1) through Sixty-Eight (68), in denominations of One ~housanc Dollars ($1,000) and Five Thousand Dollars ($5,000), issued for the purpose of improving and extending the City's Sanitary S2~2r System, in accordance with the Constitution and laws of the St<:~'ce of Texas, particularly Article 1111 et seq., V.A.T.C.S., and by authority expressly conferred at elections held for that p~rpose within said City, and pursuant to an ordinance passed by the Ci~y Council of the City of Wylie, 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 1991 through 1996' of this series, in whole or any part thereof, on June 1, 1990, or on any interest payment date thereafter, at the price of par and accrued interest to the date fixed for re- demption; 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 the MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas; 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 1, 1971. THIS BOND and the series of which it is a part constitute special obligations of the City of Wylie, Texas, and, together with the outstanding and unpaid previously issued bonds (as de- fined 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 com- bined 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; PROVIDED, HOWEVER, that any and all such additional bonds may be so issued only in accordance with and subject to the covenants, conditions, limita- tions 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 prcccdent to and in the issuancc 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 Wylie, Texas. IN TESTIMONY WHEREOF, the City Council of the City of Wylie, Texas, in accordance with the provisions of Article 717j-l, 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 ~.ts appurtenant coupons to be executed with the imprinted facsimile signatures of the Mayor and City Secretary of said City, as of the FIRST DAY OF MARCH, 1971. Mayor, City of Wylie, Texas COUNTERSIGNED: City Secretary, City of Wylie, Texas SECTION 7: Coupon Form. The form of said interest coupons shall be substantially as follows: NO. ON THE FIRST 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 WYLIE, 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 MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, the sum of DOLLARS ($ ), said sum being months' interest due that day on "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1971," dated March 1, 1971. Bond No. Mayor City Secretary SECTION 8: Form of Comptroller's Certificate. Substantially the following shall be printed on the back of each bond: STATE OF TEXAS 1 I 1 REGISTER NO. OFFICE OF COMPTROLLER I HEREBY CERTIFY that there is on file and of recoro lU 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 incl~d2d only in coupons maturing December 1, 1990 and subsequent pertai~- ing to optional bonds maturing in the years 1991 through 1996. with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Wylie, 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 ordinance 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 com- bined Waterworks and Sanitary Sewer System, including all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City of Wylie through purchase, construction or otherwise, and used in connec- tion with said System and in anywise appertaining thereto, wheth~r situated within or without the limits of the City. (b) The term "net revenues" shall mean the gross revenues of the System less the expense of operation and maintenance, including salaries, labor, materials, interest, repairs and extensions necessary to render efficient ser- vice; provided, however, that only such repairs and exten- sions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair any bonds payuble [rom and secured by a first lien on the net revenues of the System shall be deducted in determining "net revenues". (c) The term "bonds" shall mean the $300,000 revenue bonds authorized by this ordinance. (d) The term "previously issued bonds" shall mean the outstanding and unpaid bonds designated "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS," further identified as follows: (1) Dated June 1, 1956, in the original principal amount of $100,000; and (2) Dated February 1, 1959, in the original prin- cipal amount of $30,000. (e) The term "additional bonds" shall mean the additional parity revenue bonds which the City reserves the right to issue under Section 20 hereof. (f) The term "bonds payable from the same source" means the bonds, previously issued bonds and additional bonds which are payable from a first lien on and pledge of the net revenues of the System. (g) The term "fiscal year" shall mean the twelve months' period beginning January 1st of each year and ending on December 31st of the following year. SECTION 10: Pledge. All of the net revenues of the com- bined Waterworks and Sanitary Sewer System, with the exception of those in excess of the amounts required to establish and main- tain the funds as hereinafter provided, are hereby irrevocably pledged for the payment of the bonds payable from the same source if issued under the conditions and in the manner specified in this ordinance, and the interest thereon, and it is hereby ordained that the bonds payable from the same source, and the interest thereon, shall constitute a first lien upon said net revenues. SECTION 11: Rates and Charges. The City of Wylie further covenants, reaffirms and agrees that so long as any of the bonds payable from the same source remain outstanding and unpaid, it shall fix and maintain rates and collect charges for the facili- ties and services afforded by its Waterworks and Sanitary Sewer System which will produce income and revenues sufficient at all times to: (1) Pay all operation, maintenance, deprecia- tion and betterment charges and expenses of said System; and j (2) Establish and fully maintain the "SPECIAL WA TERWORKS AND SEWER SYSTEM REVENUE BOND RETIREMENT AND RESERVE FUND". , , SECTION 12: Fund Designations. The System shall continue to be operated on the basis of a fiscal year, and all revenues derived from the operation of the System shall be kept separate from other funds of the City. To that end, the following Special Funds heretofore created are hereby reaffirmed: (a) Waterworks and Sewer System Fund, herein- after called "System Fund". This Fund shall be kept in the City's depository bank. (b) Special Waterworks and Sewer System Revenue Bond Retirement and Reserve Fund, hereinafter called "Special Bond Fund". This Fund shall be kept in the City's Custodian bank, as Trustee. This fund shall be used to pay the principal of and interest on the bonds ~ payable from the same source, as same falls due, and shall be used for no other purpose. SECTION 13: System Fund. All income and revenues o~ every nature derived from the operation of the System shall be deposi- ted from day to day as collected into the System Fund, and the necessary and reasonable expenses of operating and maintaining the System as set forth in Section 9(b) hereof shall be paid therefrom upon approval of the City Council. All revenues of the System not actually required to pay expenses and costs in- curred as permitted by this Section shall be appropriated and used for the purposes and in the order of precedence hereinafter set forth. J SECTION 14: Special Bond Fund. In addition to the deposits required to be made into the Special Bond Fund by the ordinances authorizing issuance of the previously issued bonds for the pay- ment of the annual principal and interest requirements of all of such bonds, beginning on or before the 15th day of June, 1971, and on or before the 15th day of each month thereafter, until the bonds are paid and retired, the City shall deposit in said Special Bond Fund an amount of money not less than one-sixth (1/6) of the next semi-annual installment of interest due on the bonds, and not less than one-twelfth (1/12) of the next annual principal maturity to become due on the bonds. All sums of money deposited in this Fund shall be held as a trust fund for the benefit of the holders of the bonds and the previously issued bonds, the beneficial interest in which shall be regarded as existing in such holders. LIhe amount received from the pur- chasers of the bonds as accrued interest thereon to date of delivery and the proceeds of the bonds found not to be required for the completion of the sewer system improvements and exten- sions shall also be placed in said Fund, which shall reduce by such amount the sums which would otherwise be required to be placed into said Fund from the revenues of the System:] There is now on hand in the reserve portion of the Special Bond Fund the sum of not less than $ 9~000.00 (which includes all'amounts required to be deposited in said Fund by the provi- sions of the ordinances authorizing the issuance of the previously issued bonds). Commencing on or before the 15th day of March, 1971 and on or before the 15th day of each month thereafter, there shall be deposited il} said reserve portion of the Sp,:(~.i.al Bond Fund the sum of $ 400.00 per month until such time as there shall have been accumulated therein the sum of $ 33,000.00 (which includes the amounts required to be deposited in said reserve portion by the provisions of the ordinancffiauthorizing the previously issued bonds). No payments need be made into the reserve portion after there shall have been accumulated therein the said sum of $ 33,000.00, except that whenever said Fund is reduced below that amount, monthly payments in the sum of $400.00 shall be resumed and continued until such time as the Fund has been restored to such an amount. It is hereby declared to be t:w C~t:y's purpose and intent and the City so covenants and agrees ch<l t L~'.,e said reserve portion shall continuously be in excess of all. 3:t:)Unts required to fully meet and discharge the principal and interes.: installments falling due on or before the next succeeding prin- cipal maturity date with respect to all outstanding bonds payable from the same source, and that this arrangement shall continue and said reserve portion 'shall be continuously supplemented as necessary to maintain said reserve until all of said bonds with all interest thereon have been fully paid and discharged, or until such time as the Special Bond Fund, including said reserve, shall contain amounts equal to the total principal and interest: requirements of all bonds payable from the same source then out- standing at their final maturity. SECTION 15: Custodian of Special Fund. The MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, has been heretofore desig- nated and is hereby reaffirmed as the Custodian of said Special Fund, and the monthly deposits above prescribed shall be placed in said Fund with said bank. SECTION 16: Investment of Reserve Portion of Special Bond Fund. The Custodian Bank is authorized to invest the reserve portion of said Special Bond Fund in short term direct obliga- tions of the United States of America, having maturities not in excess of five years from the date of the making of such invest- ment, as the City Council may direct. Said obligations shall be held by the aforesaid Custodian Bank and if at any time unin- vested funds shall be insufficient to permit payment of principal and interest maturities of the bonds payable from the same source as heretofore directed, said Bank shall sellon the open market such amount of the securities as is required to pay said prin- cipal and interest when due, and shall give notice thereof to the City of Wylie. All money resulting from the maturity of principal of and interest on the securities in which the reserve funds are invested may be reinvested or accumulated in the re- serve portion of said Special Bond Fund and considered a part thereof and used for and only for the purposes hereinabove pro- vided with respect to said reserve. SECTION 17: Deficiencies in Funds. If in any month the City shall, for any reason, fail to pay into the Special Bond Fund the full amounts above stipulated, amounts equivalent to such deficiencies shall be set apart and paid into said Fund from the first available and unallocated revenues of the follow- ing month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said Fund during such month or months. SECTION 18: Excess Revenues. Any revenues of the System remaining after the above requirements have been satisfied (in- cluding any increased payments into the Special Bond Fund which may be necessary by reason of the issuance of additional parity bonds under the provisions of this ordinance), and after all deficiencies existing in such requirements have been remedied, may be used for any other proper City purpose, now or hereafter permitted by law, including the use thereof either for retiring in advance of maturity bonds payable from the same source according to the provisions made for their prior redemption, or may be used to purchase bonds on the open market at not ex- ceeding the market value thereof. All bonds so paid, redeemed or purchascd shall be cancelled and shall not be reissued. Nothing hcrein shall be construed, however, as impairing the right of the City to pay, in accordance with the provisions thereof, any junior lien bonds hereafter legally issued by it. SECTION 19: Security of Funds. The Funds heretofore created and herein reaffirmed shall be secured in the manner and to the fullest extent permitted by the laws of Texas for the security of public funds, and such Funds shall be used only for the purposes permitted by this ordinance and the ordinances authorizing the previously issued bonds. SECTION 20: Issuance of Additional Parity Bonds. In addi- tion to the right to issue bonds of inferior lien as authorized by the laws of this State, the City reserves the right to issue additional bonds payable from the net revenues of the System. When issued in compliance with law and the terms and conditions hereinafter appearing, the additional bonds shall occupy aposi- tion of parity with and shall be equally secured by a first lien on and pledge of the net revenues as are the bonds and previously issued bonds. The City hereby covenants, reaffirms and agrees that no such additional bonds shall be issued unless and until the following conditions have been met: (a) That the City is not then in default as to any covenant, condition or obligation prescribed by the ordinances authorizing the outstanding bonds; (b) That the proposed additional bonds shall have been voted at an election duly called and held for that purpose as provided by law; (c) That the laws of the State of Texas in force at such time provide permission for the issuance of such bonds; (d) That the City has secured from an independent Certified Public Accountant a certificate showing that the net income and revenues of the System, after full provisions have been made for adequate maintenance and operation charges for the next completed fiscal year immediately preceding the issuance and sale of such additional parity bonds, is equal to at least one and one-half (1-1/2) times the maximum annual requirements for the payment of principal and interest on all bonds secured by a first lien on and pledge of the net reve- nues of the City's combined Waterworks and Sanitary Sewer System, after giving effect to the issuance of the proposed additional bonds. SECTION 21: Special Covenants. The City hereby further covenants, reaffirms and agrees by and through this ordinance, as follows: (a) That the revenue bonds authorized hereunder shall be special obligations of the City, and the holders thereof shall never have the right to demand payment out of any funds raised or to be raised by taxation. (b) 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., and by authority of an election held in said City for that purpose; that the bonds issued hereunder, the previously issued bonds and the additional bonds, when issued, shall be ratably secured under said pledge of income in such manner that no one bond shall have preference over any other bond of said issues. (c) That other than for the payment of the bonds herein authorized and the previously issued bonds, the rents, revenues and income of said Waterworks and Sani- tary Sewer System have not been in any manner pledged to the payment of any debt or obligation of the City and/or said System, and that said System is free and clear of all encumbrances whatsoever. (d) That so far as it legally may, the City further covenants and agrees, for the protection and security of the bonds payable from the same source and the holders thereof from time to time, that it will not grant a franchise for the operation of any competing Waterworks and Sanitary Sewer System in the City until all bonds payable from the same source shall have been retired. SECTION 22: Maintenance and Operation - Insurance. The City of Wylie hereby covenants, reaffirms and agrees to ~aintain the Waterworks and Sanitary Sewer System in good condition and operate the same in an efficient manner and at reasonable cost. So long as any of the bonds payable from the same source are out- standing, the City agrees to maintain insurance for the benefit of the holder or holders of the bonds of the kinds and in the amounts which are usually carried by private companies operating similar properties, and that during such time all policies of insurance shall be maintained in force and kept current as to premium payments. All moneys received from losses under such insurance policies other than public liability policies, are hereby pledged as security for the bonds until and unless the proceeds are paid out in making good the loss or damage in re- spect of which such proceeds are received, either by replacing the property destroyed or repairing the property damaged, and adequate provision for making good such loss or damage made within ninety days from the date of the loss. The payment of premiums for all insurance policies required under the provisions hereof shall be considered as maintenance and operation expenses. SECTION 23: Records and Accounts - Accounting Reports. The City of Wylie hereby covenants, reaffirms and agrees that so long as any of the bonds payable from the same source or any interest thereon remain outstanding and unpaid, it will keep and maintain a proper and complete system of records and accounts pertaining to the operation of its Waterworks and Sanitary Sewer System, separate and apart from all other records and accounts in which complete and correct entries have been and shall continue to be made of all transactions relating to said System as provided by Article 1113, V.A.T.C.S., and that the holders of any of t~e bonds or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect d'.,,; System and all properties comprising same, and to inspect: all records, accounts and data relating thereto. The City further reaffirms and agrees that within sixty (60) days following the close of each fiscal year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants, showing the receipts and disbursements for accoun~ of the System for the fiscal year. Each such audit, in addition to whatever other matters may be thought proper by the Accountant shall particularly include the following: (a) A detailed statement of the income and expen- ditures of the System for such fiscal year. (b) A balance sheet as of the end of such fiscal year. (c) The Accountant's comments regarding the manner in which the City has carried out the requirements of this ordinance, and his recommendations for any changes or improvements in the operation, records and accounts of the System. (d) A list of the insurance policies in force at the end of the fiscal year on the System properties, setting out as to each policy the amount thereof, the risk covered, the name of the insurer, and the policy's expiration date. (e) A list of the securities which have been on deposit as security for the money in the Special Bond Fund throughout the fiscal year; a list of the securi- ties, if any, in which the reserve portion has been invested, and a statement of the manner in which the money in the System Fund has been secured in such fiscal year. (f) The number of metered and unmetered customers connected with the System at the end of the fiscal year, showing the number of water connections and sewer connec- tions separately. Expenses incurred in making the audits above required are to be regarded as maintenance and operation expenses and paid as such. Copies of the aforesaid annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory Council of Texas, at his office in Austin, Texas, and to the original purchasers of the bonds and any subsequent holder at his reques t . SECTION 24: Remedies in Event of Default. In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants, reaffirms and agrees that in the event the City (a) defaults in the payment of principal or interest on any of the bonds payable from the same source when due, (b) fails to make the payments required by Section 14 of this ordinance ~o be made into the "SPECIAL WATERWORKS AND SEWER SYSTEM REVE~TlJE BOND RETIREMENT AND RESERVE FUND," or (c) defaults in the observance or performance of any of the covenants, conditions or obligations set forth in this ordinance, the following remedies shall be available: (1) The holder or holders of any of the bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction, compelling and requiring the City Council and other officers of the City to ob- serve and perform any covenant, obligation or condition prescribed in the bond ordinance. (2) No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein, and every such right and power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specifications of such reme- dies shall not be deemed to be exclusive. SECTION 25: Making Rates and Collecting Charges - No Free Service. The City of Wylie further covenants, reaffirms and agrees that it will faithfully and punctually perform all duties with reference to the System required by the Constitution and laws of the State of Texas, including the making and collecting of reasonable and sufficient rates for water and sewer services supplied by the System, and the segregation and application of the revenues of the System as required by the provisions of this ordinance. The City covenants, reaffirms and agrees that no free services shall be rendered by the System to any customers, including the City and its various departments, and that all water and sewer services used by the City and its various departments will be paid for at the same rates charged other customers. SECTION 26: Sale, Lease or other Encumbrance of System. The City of Wylie hereby irrevocably covenants, reaffirms, binds and obligates itself not to sell, lease or in any manner dispose of the Waterworks and Sanitary Sewer System or any part thereof, including any and all extensions and additions that may be made thereto, until the bonds payable from the same source shall have been paid in full as to both principal and interest (provided that this covenant shall not be construed to prevent the disposal by the City of property which in its judgment has become inex- pedient to use in connection with the System when other property of equal value has been substituted therefor). SECTION 27: Ordinance to Constitute Contract. That the provisions of this ordinance shall constitute a contract between the City of Wylie and the holder or holders from time to time of the bonds herein authorized to be issued, and after the issuance of any of said bonds, no change, variation or alteration of any kind of the provisions of this ordinance may be made, unless as herein otherwise provided, until all of the bonds issued hereunder shall have been paid as to both principal and interest. SECTION 28: 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 29: Mayor to Have Charge of Records and Bonds. r.:,:..: Mayor of the City of Wylie shall be and he is hereby autho~ized to take and have charge of all necessary orders and records pend- ing 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 anc their registration by the Comptroller of Public Accounts. SECTION 30: Confirmation of Sale. That the sale of the bonds herein authorized to FIRST SOUTHWEST COMPANY, DALLAS, TEXAS at the price of par and accrued interest to date of delivery, plus a premium of $ -0- 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 31: 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 32: Emergency. The public importance of this measure and the fact that it is to the best interest of the City to provide funds for the purpose of improving and extending the City's Sanitary Sewer System, at the earliest possible date, con- stitute and create an emergency and an urgent public necessity, requiring that this ordinance be passed and take effect as an emergency measure, and this ordinance is accordingly passed as an emergency measure and shall take effect and be in force from and after its passage. PASSED AND APPROVED, this the 23rd day of February, 1971. cl [ ( '-j/ tC" / ('j, '-/ Mayor, City of Wylie, Texas ATTEST: { , City Secretary, Texas (City Seal)