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Ordinance 1980-03 ORDINANCE #80-( go'03 AN ORDINANCE by the City Council of the City of Wylie, Texas, authorizing the issuance of $400,000 "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1980", dated March 1, 1980, for constructing improvements and extensions to the City's Waterworks 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 Waterworks and Sanitary Sewer System to the payment of the principal of and interest on said bonds; enacting provisions incident and related to the subject and purpose of this ordinance; and declaring an emergency. WHEREAS, pursuant to elections held on December 29, 1955, September 26, 1970 and July 7, 1979, revenue bonds payable from and secured by a pledge of the net revenues of the City's \hterwor~s and Sanitary Se"Ter System 'l;vere approved and autho- rized to be issued by the City Council of the City of Wylie, Texas; a summary of the amounts voted and the respective autho- rized purposes, amounts heretofore issued and amounts remaining to be issued being as follows: PMOUNTS ELECTION TOTAL HEREI'OFORE UNISSUED DATE . AMCXJNT VOTED AUTHORIZED PURPOSE ISSUED BAL\i\'CE 12-29-55 $187,000 Water Imp & Ext $ 35,000 $152,000 9-26-70 400,000 Sewer Imp & Ext 236,000 164,000. 7-7-79 400,000 Water Imp & Ext -0- 400,000 AND WHEREAS, this Council hereby finds and determines that $400,000 in principal amount of revenue bonds (being the unissued balance of bonds voted at the December 29, 1955 election and $248,000 in principal amount of bonds voted at the July 7, 1979 election) should be issued and sold at this time for making improvements and extensions to the City's Waterworks System; the Council reserving the right to issue the remaining amounts of unissued revenue bonds authorized at said elections in one or more installments at such time and in such manner as the Council shall determine; and WHEREAS, the City Council further finds and determines that said revenue bonds in the aggregate principal amount of $400,000 can and should be issued on a parity with the outstanding and unpaid revenue bonds of the City payable from and secured by a first lien on and pledge of the net revenues of the City's Waterworks and Sanitary Sewer System (hereinafter called and defined as "previously issued bonds") in that (i) the City is not now in default as to any covenant, condition or obligation prescribed in the ordinances authorizing the issuance of the previously issued bonds, (ii) the bonds herein authorized have been voted at elections duly called and held for that purpose, as provided by law, (iii) the City can secure 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 completed fiscal year immediately preceding the issuance and sale of the bonds herein authorized, are 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 bonds herein authorized; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WYLIE, TEXAS: SECTION 1: That, in order to borrow the sum of FOUR HUNDRED THOUSAND DOLLARS ($400,000), for the purpose of constructing improvements and extensions to the City's Waterworks 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 llll 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 coupons revenue bonds in the total principal amount of FOUR HUNDRED THOUSAND DOLLARS ($400,000) to be designated "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1980", which bonds, together with the outstanding and unpaid previously issued bonds (hereinafter defined and identi- fied in Section 9), 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 Waterworks and Sanitary Sewer System. SECTION 2: That said bonds shall be dated March 1, 1980; shall be numbered consecutively from One (1) through Eighty (80); shall each be in the denomination of Five Thousand Dollars ($5,000); and shall become due and payable on June 1 in each of the years and bear interest at the per annum rates in accordance with the following schedule: BOND NUMBERS INTEREST (All Inclusive) MATURITY AMOUNT RATE 1 1981 $ 5,000 io 2 1982 5,000 % 3 1983 5,000 ':/ 10 4 1985 5,000 a; ,0 5 1986 5,000 -<:j ,'0 6 1987 5,000 at. .0 7 1988 5,000 % 8 1989 5,000 % 9 1990 5,000 % lO and 11 1991 10,000' % 12 and 13 1992 10,000 aj 10 14 1993 5,000 % 15 and 16 1994 10,000 % l7 and 18 1995 10,000 % 19 and 20 1996 10,000 % 21 to 27 1997 35,000 % 28 to 34 1998 35,000 % 35 to 42 1999 40,000 % 43 to 50 2000 40,000 % 51 to 60 2001 50,000 % 61 to 70 2002 50,000 % 71 to 80 2003 50,000 % PROVIDED, HOWEVER, the bonds of this series maturing June 1, 1996, and subsequent, may be redeemed prior to maturity at the option of the City, in whole or any part thereof, on June 1, 1995, or any interest payment date thereafter at the price of par and accrued interest thereon to the date of redemption; PROVIDED, FURTHER, that at least thirty (30) days prior to a date an~ of said bonds are to be redeemed, a 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 if the City shall have made available by the redemption date sufficient funds to pay the bonds called for redemption, any bond or bonds not presented for redemption pursuant to such notice shall cease to bear interest from and after the date so fixed for redemption. SECTION 3: That said bonds shall bear interest from date until paid, or the redemption thereof in accordnace with the terms prescribed therefor, at the per annum rate(s) shown above, such interest to be evidenced by proper coupons attached to each of said bonds, and said interest shall be payable on June l, 1980, and semiannually thereafter on December 1 and June 1 in each year. SECTION 4; That both principal of and interest on said 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 DALLAS, Dallas, Texas, upon presentation and surrender of bonds or proper coupons. SECTION 5: That 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 appurtenent 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 s&~e effect as if such bonds and coupons had been signed by the Mayor 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-1, V.A.T.C.S. SECTION 6: That the form of said bonds shall be substantially as follows: NO. $5,000 UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF COLLIN CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BO~TJ), SERIES 1980 FOR VALUE RECEIVED, the City of Wylie, a municipal corporation 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, ., the sum of FIVE THOUSAND DOLLARS ($5,000l, in lawful money of the United States of America, with interest thereon from the date hereof until paid, or the redemption hereof in accordance with the terms prescribed therefor, at the rate of PER CENTUM ( %), per annum, such interest being payable on June 1, 1980, and semiannually thereafter on December 1 and June 1 in each year and evidenced by interest coupons attached hereto. BOTH PRINCIPAL AND INTEREST are payable only upon presentation and surrender of this bond and the interest coupons hereto attached as the same severally become due at the MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, without exchange or collection charges to the owner or holder, and the bearer of this bond and the appurtenant interest coupons shall be deemed the absolute owner thereof for purposes of receiving payment and all other purposes, and neither the City nor the aforementioned place of payment shall be affected by any notice to the contrary. THIS BOND is one of a series of bonds aggregating in principal amount FOUR HUNDRED THOUSAND DOLLARS ($400,000), numbered con- secutively from One (1) through Eighty (80), each in the denomination of Five Thousand Dollars ($5,000), issued for the purpose of constructing improvements and extensions to the City's Waterworks System, 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 elections held for that purpose within said City, and pursuant to an ordinance passed by the City Council of the City of Wylie, Texas, and duly recorded in the Minutes of said City Council. THE BONDS of said series maturing June 1, 1996, and subsequent, may be redeemed prior to maturity at the option of the City, in whole or any part thereof, on June 1, 1995, or 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 a date any of said bonds are to be redeemed, a 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 if the City shall have made available by the redemption date sufficient funds to pay the bonds called for redemption, any bond or bonds not presented for redemption pursuant to such notice 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, 1980. 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 (identified and defined in the ordinance authorizing the series of bonds of which this bond is one), are payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's Waterworks and Sanitary Sewer System. THE CJTY expressly reserves the right to issue further and additional special obligations in all things on a parity with the outstanding previously issued bonds and the bonds of this series, payable from and equally secured by a first lien on and pledge of the net revenues of the City's Water1;Vorks and Sanitary Sewer System; PROVIDED, H01iEVER, that any and all such additional bonds may be so issued only in accordance with and subject to the covenan.ts, conditions, limitations and restrictions relating thereto which, are set out and contained in the ordinance autho- rizing this series of bonds 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 payment 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 thie 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 Waterworks and Sanitary Sewer System of the City of Wylie, Texas, as hereinabove recited. 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 its 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, 1980. Mayor, City of Wylie, Texas COUNTERSIGNED; City Secretary, City of Wylie, Texas SECTION 7: That the form of said interest coupons shall be substantially as follows: NO. ON THE FIRST DAY OF $ ..'r (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 in the County of Collin, 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), the amount shown hereon in lawful money of the United States of America, upon presentation and surrender of this coupon, at the MERCANTILE NATIONAL BANK AT DALLAS, Dallas, Texas, without exchange or collection charges, such amount being interest due on such date on "CITY OF WYLIE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1980", dated March 1, 1980. City Secretary Mayor SECTION 8: That substantially the following shall be printed on the back of each bond: OFFICE OF COMPTROLLER STATE OJ TEXAS s s s REGISTER NO. I HEREBY CERTIFY that there is on file and of record in my off~ce 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 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 . *NOTE TO PRINTER: The expression in parenthesis to be included only in coupons maturing December 1, 1995, and subsequent, per- taining to optional bonds maturing in the years 1996 through 2003. SECTION 9: 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 combined 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, construct~on or otherwise, and used in connection with said System and in anywise appertaining 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 expense of operation and maintenance, including salaries, labor, materials, interest, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions 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 obligations payable from and secured by a lien on the net revenues of the System shall be deducted in determining "net revenues". (c) The term "bonds" shall mean the $400,000 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; (2) Dated February 1, 1959, in the original principal amount of $30,000; and (3) Series 1971, dated March l, 1971, in the original principal amount of $300,000, (el The term uadditiona1 bonds" shall mean the additional parity revenue bonds the City reserves the right to issue in accordance with the terms and conditions prescribed in Section 19 hereof. (f} The term "bonds similarly secured" shall mean 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, (gl The term "fiscal year" shall mean the twelve months' period beginning January lst of each year and ending on December 3lst of the following year. SECTION 10: All of the net revenues of the System, with the exception of those in excess of the amounts required to establish and maintain the special Fund created and established for the payment and security of the bonds similarly secured, are hereby irrevocably pledged for the payment of the previously issued bonds, the bonds and additional bonds, if issued, and the interest thereon, and it is hereby ordained that the previously issued bonds, the bonds and additional bonds, if issued, and the interest thereon, shall constitute a first lien upon said net revenues. SECTION 11: The City further covenants, reaffirms and agrees that so long as any of the bonds remain outstanding and unpaid, it shall fix and maintain rates and collect charges for the facilities and services afforded by the System which will produce income and revenues sufficient at all times to pay (c) all operating, maintenance, depreciation, replacement, betterment and interest charges and other costs incurred in the maintenance and operation of the System; the interest on and principal of the bonds similarly secured and the amounts required to be deposited inLo the special Fund created and established for the payment and security of the bonds similarly secured; and any other legally incurred indebtedess payable from the revenues of the System and/or secured by a lien on the System or the revenues thereof. (a) (b) SECTION 12: The System shall continue to be operated on the basis of a fiscal year, and all revenue~ derived from the operation of the System shall be kept separate and apart from other funds of the City. To that end, the following Funds hereto- fore created in connection with the issuance of the previously issued bonds are hereby reaffirmed, to wit: (a) Waterworks and Sewer System Fund, hereinafter called "System Fund". This Fund shall continue to be kept and maintained at 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 continue to be kept and main- tained at the Mercantile National Bank at Dallas, Dallas, Texas, and moneys deposited in this Fund shall be used to pay the principal of and interest on the bonds similarly secured as the same becomes due and payable. SECTION 13: The City hereby covenants and, agrees that all revenues and income of every nature derived from the operation of the System shall be deposited from day to day as collected into the System Fund, and the reasonable and proper expenses of maintaining and operating the System as set forth in Section 9 (b) hereof shall be paid therefrom upon approval of the City Council. All moneys deposited therein which are not required for the payment of maintenance and operating expenses of the System shall be appropriated and used, in the order of priority prescribed, for the purposes specified in ordinances authorizing the issuance of bonds similarly secured and obligations payable from and secured by an inferior lien on and pledge of the net revenues of the System. SECTION 14: That, in addition to the required deposits to the Special Bond Fund for the payment of the principal of and interest on the previously issued bonds, the City hereby covenants and agrees to cause to be deposited to said Fund for the payment of principal and interest on the bonds herein authorized as the same becomes due and payable, the following amounts on or before the 15th day of each month from the net revenues of the System, to wit: On or before April 15, 1980 and May 15, 1980, an amount equal to not less than one-half (1/2) of the installment of interest to become due on the bonds on June l, 1980; and on or before June l5, 1980 and each month thereafter an amount equal to not less than the sum of (i) one-sixth (1/6) of the next semiannual install- ment of interest and (ii) one-twelfth (1/12) of the next annual principal payment to become due on the bonds. The above described monthly deposits to the Special Bond Fund for the payment of principal of and interest on the bonds shall continue to be made as hereinabove provided until such time as the total amount on deposit in the said Fund is equal to the amount required to pay all outstanding bonds similarly secured (principal and interest) or the bonds are no longer outstanding, i.e., fully paid as to principal and interest or the bonds are refunded. Also, accrued intere~and premium, if any, received from the purchaser of the bonds, as well as any proceeds of the bonds not required to complete the improvements and extensions to the System, shall be deposited to the Special Bond Fund, and may be taken into consideration and reduce the amount of the monthly deposits hereinabove required which would otherwise be required to be deposited in the Special Bond Fund from the net revenues of the System. In accordance with the provlslons of the ordinances autho- rizing the issuance of the previously issued bonds, the City further covenants and agrees that there shall be accumulated and maintained in the Special Bond Fund a reserve for the payment of principal and interest on bonds similarly securec when other moneys on deposit therein are insufficient on a principal or interest payment date for such purpose, and the amount currently on deposit in said Fund representing the reserve portion thereof totals not less than $33,000. By reason of the issuance of the bonds, the total amount required to be accumulated and maintained in the Special Bond Fund as a reserve shall be 'increased to$ . . (hereinafter called the "Required Reserve"), and beginning on or before April 15, 1980 and on or before the 15th day of each month thereafter, there shall be deposited to the Special Bond Fund an amount equal to not less than $ , until the amount of cash and investments repre- senting the reserve portion of said Fund total not less than the Required Reserve. When the Required Reserve has been fully accumulated, the aforementioned monthly deposits may be terminated; provided, however, should the total amount on deposit in said Fund representing the reserve portion thereof be reduced below the Required Reserve, after the same has been acccumulated, such month~y deposits shall be resumed as herein specified and ,continued to be made on or before the l5th day of each month until the Required Reserve has been fully restored. It i.s hereby declared to be the City's purpose and intent and the City so covenants and agrees that the Required Reserve in the Special Bond Fund shall be in addition to the other amounts required to be deposited in said Fund to pay the current principal and interest on the bonds similarly secured, and shall be used only to pay the principal and interest on bonds similarly secured when other moneys on deposit in said Fund are insufficient for such purpose. SECTION 15: The Custodian Bank of the Special Bond Fund is authorized to invest the reserve portion of said Fund in short term direct obligations of the United States of America, having maturities not in excess of five years from the date of the making of such investments, as the City Council may direct. Said obligations shall be held by the aforesaid Custodian Bank and if at any time uninvested funds shall be insufficient to permit payment of principal and interest maturities of the bonds similarly secured as heretofore directed, said Bank shall sellon the open market such amount of the securities as is required to pay said principal and interest when due, and shall give notice thereof to the City. 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 accumluated in the reserve portion of said Special Bond Fund and considered a part thereof and used for and only for the purposes hereinabove provided with respect to said reserve. ~- SECTION 16: 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 una110cated net revenues of the System in the following 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 17: Any net revenues of the System remaining after the above requirements have been satisfied (including 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 similarly secured according to the provisions made for their prior redemption, or may be used to purchase bonds on the open market at not exceeding the market value thereof. All bonds 30 paid, redeemed or purchased shall be cancelled and shall not be reissued. Nothing herein shall be construed, however, as impairing the right of the City to pay, in accordance with the provisions thereof, any junior lien obligations hereafter legally issued by it. SECTION 18: That all moneys on deposit in Funds for which this ordinance makes provision shall be secured in the manner and to the fullest extent permitted by the laws of Texas for . the security of public funds, and moneys on deposit in such Funds shall be used only for the purposes permitted by this ordinance and the ordinances authorizing the previously issued bonds. . SECTION 19: 'l'hat in addition 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 a position 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 similarly secured; (PI 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 City has secured from an independent Cert~fied 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 (J-l/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 revenues of the City's combined Waterworks and Sanitary Sewer System, after giving effect to the issuance of the proposed additional bonds. SECTIO~ 20: The City hereby furtL..;r 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 und:r Articles 1111 through 1118, V.A.T.C.S., and by authorlty of elections 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, the previously issued bonds and the outstanding and unpaid "City of \.Jylie, Texas, Combination Tax and Revenue Certificates of Obligation, Series 1974" (secured in part by a junior lien on and pledge of the net reveues of the City's sanitary sewer system), the net revenues of the 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 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 shall have been retired. SECTION 2l: The City hereby covenants, reaffirms and agrees to maintain the System in good condition and operate the same in an efficient manner and at reasonable cost. So long as any of the bonds are outstanding, 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 lossess 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 respect 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 .is 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 22: The City hereby covenants, reaffirms and agrees that so long as any of the bonds 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 the 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 the bonds or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect the System and all properties comprising same, and to inspect all records, accounts and data relating thereto. The City further covenants and agrees that as soon as possible 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 disburse- ments for account 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 expenditures 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 securities, if any, in 'l;vhich 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 connections 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 request, SECTION 23: 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 when due, (b) fails to make the payments required by Section 14 of this ordinance to be made into the "SPECIAL WATERWORKS AND SEWER SYSTEM REVENUE 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 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 observe and perform any covenant, obligation or condition prescribed in the bond ordinance. 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 remedies shall not be deemed to be exclusive. SECTION 24: The City 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 25: That the City hereby irrevocably covenants, reaffirms, binds and obligates itself not to sell, lease or in any manner dispose of the System or any part thereof, including any and all extensions and additions that may be made thereto, until the bonds '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 inexpedient to use in connection with the System when other property of equal value has been substituted therefor). SECTION 26: That the prOVlSlons of this ordinance shall constitute a contract between the City 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 27: 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 Cormnercial Code. SECTION 28: The Mayor of the City of, Wylie shall be and 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 author'ized pending their approval by the Attorney General and their registration by the Comptroller of Public Accounts. SECTION 29: That the sale of the bonds herein authorized to at the price of par and accrued interest to the 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 30: The purchasers' obligation to accept delivery of the bonds herein authorized is subject to their being furnished a final op~nion of Messrs. Dumas, Huguenin, Bootrnnan and Morrow, 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 ",ith appropriate certificate pertaining thereto, executed by facsimile signature of the City Secretary, is hereby approved and authorized. SECTION3l: The City hereby certifies and covenants that the proceeds of the bonds are needed at this time to finance costs of capital improvements planned by the City; based on current facts, estimates and circumstances, it is reasonably expect~d final disbursement of the bond proceeds will occur within three years from the date of the receipt thereof by the City; it is not reasonably expected that the proceeds of the bonds or moneys deposited in an interest and sinking fund created for the payment of the bonds will be used or invested in a manner that would cause the bonds to be "arbitrage bonds" within the meaning of Section l03 (c} of the Internal Revenue Code of 1954, as amended, or any regulations or published rulings pertaining thereto; and save and except for the interest and sinking fund referred to herein, no other funds or accounts have been established or pledged for the payment of the bonds, Proper officers of the City charged with the responsibility in the issuance of the bonds are hereby authorized and directed to make, execute and deliver certifications as to facts, estimates and circumstances in existence as of the date of the issue of the bonds and stating whether there are any facts, estimates or circumstances which would materially change the City's current expectations, and the covenants herein made and certifications herein authorized are for the benefit of the holders of the bonds and coupons appertaining thereto and may be relied upon by the bondholders and bond counsel for the City. SECTION 32: CUSIP numbers may be printed on the bonds herein authorized. It is expressly provided, however 1 that the presence or absence of CUSIP numbers on the bonds shall be of no significance or effect as regards the legality thereof and neither the City nor attorneys approving such bonds as to legality are to be held responsible for CUSIP numbers incorrectly printed on the bonds. SECTION 33: 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 Waterworks System, at the earliest possible date, constitute 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 26th day of February, 1980. r~ t:l~) Ma ,City of Wylie, 'Texas ATT~' . // /1 />/ z// ?:/ ,/ I ---14 '/ 1/ i( _[,>z.,/~/_~~c~/' - /,;-----~}:!-.k. A:/ ",/ c_ 1ty Secretary, Wylie, Texas (/ I / , ' (City S~al)