HomeMy WebLinkAboutORD 91-02 - Wastewater TreatmentTHE OF
COUNTYOF •
C�MV OF • •
We, the undersigned officers of said City, hereby certify as follows.
1. The City Council of said City convened in REGULAR MEETING ON THE
8TH DAY OF JANUARY, 1991, at the City Hall, and the roll was called of the duly
constituted officers and members of said City Council, to -wit:
W. H. Connor, Mayor
Mike McMaster, Mayor Pro Tem
Bob Schrawger
Fred Tonn
Barbara Pearce
Lorenzo Valdez, Jr.
Joe Saegert
Winfred Bonner
Sandra Lee, Deputy City Secretary
and all of said persons were present,
except the following absentees: None
thus constituting a quorum. Whereupon, among other business, the following was trans-
acted at said Meeting: a written
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was duly introduced for the consideration of said City Council and read in full. It was
then duly moved and seconded that said Ordinance be passed; and, after due discussion,
said motion carrying with it the passage of said Ordinance, prevailed and carried by the
following vote.
NOES: None.
2. That a true, full and correct copy of the aforesaid Ordinance passed at the
Meeting described 'in the above and foregoing paragraph is attached to and follows this
Certificate; that said Ordinance has been duly recorded in said City Council's minutes of
r.aid Meeting; that the above and foregoing paragraph is a true, full and correct excerpt
ftom said City Council's minutes of said Meeting pertaining to the passage of said
*rdinance; that the persons named in the above and foregoing paragraph are the duly
chosen,,nualified and actiI officers and members of said City il as indicaled�
,.�unc�ndicated therein*
ihat each of officers a • members of • City Councilduly and sufficiently
notified officially and personally, in advance, of the time, place and purpose of the
2foresaid Meeting, a • that said Ordinance would be •• • and considered for
reiassage at said Meeting, and each of said officers and members consented, in advance,
to the holding of • • Meeting for purpose, a • that said Meeting was open to the
ryublic and public notice of the time, place and purpose of said meeting was given, all as
required by Vernon'Ann. Civ. St.
Article
3. That the Mayor of said City has approved and hereby approves the aforesaid
Ordiance; that the Mayor and the Deputy City Secretary of said City have duly signed
• I'd Ordinance; • • that the Mayor and the
Deputy
.• Secretary
• of said City hereby
declare that their sigm*ng of this Certificate shall constitute the signing of the attached and
following i• of iOrdinancet purposes.
SEAL
City Secretary
Mayor
ORDINANCE
AUTHORIZING THE ISSUANCEOF OF O• •;
TEXASREVENUE BONDS,..
AMOUNTOF 11 iii AND OTHER PROVISIONSRELATED
THERETO INCLUDING DECLARING AN EMERGENCY
•
16 IN
• • •
WHEREAS, the following Utility System Revenue Bonds of the City of Georgetown
are presently outstanding:
Utility System Revenue Bonds, Series 1974, dated October 15, 1974,
maturities April 15, 1991 through April 15, 1995, now outstanding in the
principal amount of $305,000 (the "Series 1974 Bonds"); and
Utility System Revenue Bonds, Series 1984, dated July 15, 1984, maturities
August 15, 1991 through August 15, 2003, now outstanding in the principal
amount of $1,795,000 (the "Series 1984 Bonds"); and
Utility System Revenue Bonds, Series 1985, dated July 15, 1985, maturities
August 15, 1991 through August 15, 2005, now outstanding in the principal
amount of $8,275,000 (the "Series 1985 Bonds"); and
WHEREAS, the City Council has heretofore, on the 11th day of December, 1990,
adopted a resolution authorizing and directing the city secretary to give notice of intention
to issue revenue bonds; and
WHEREAS, said notice has been duly published in Williamson County Sun, which
is a newspaper of general circulation in said City, in its issues of December 23, 1990 and
December 30, 1990; and
WHEREAS, the City received no petition from the qualified electors of the City
protesting the issuance of such revenue bonds; and
WHEREAS, the meeting was open to the public and public notice of the time,
place and purpose of said meeting was given pursuant to Article 6252-17, V.A.T.C.S.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF !• •
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Section 1. AMOUNT AND PURPOSE OF THE BONDS. The findings contained
in the preambles hereto are incorporated herein by reference and are made a part hereof
for all purposes. The bond or bonds of the City of Georgetown (the "Issuer") are hereby
authorized to be issued and delivered in the aggregate principal amount of $2,300,000 for
the purpose of providing money for improvements and extensions to the Utility System,
Section 2. DESIGNATION OF THE BONDS. Each bond issued pursuant to this
Ordinance shall be designated: "CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM
REVENUE BOND, SERIES 1991,°' and initially there shall be issued, sold, and delivered
hereunder a single fully registered bond, without interest coupons, payable in installments
of principal (the "Initial Bond"), but the Initial Bond may be assigned and transferred
and/or converted into and exchanged for a like aggregate principal amount of fully
registered bonds, without interest coupons, having serial maturities, and in the denomi-
nation or denominations of $5,000 or any integral multiple of $5,000, all in the manner
hereinafter provided. The term 'Bonds" as used in this Ordinance shall mean and include
collectively the Initial Bond and all substitute bonds exchanged therefor, as well as all
other substitute bonds and replacement bonds issued pursuant hereto, and the term
"Bond" shall mean any of the Bonds.
Section 3. INITIAL, DATE, DENOMINATION, NUMBER, MATURITIES,
INITIAL REGISTERED OWNER, AND CHARACTERISTICS OF THE INITIAL
BOND. (a) The Initial Bond is hereby authorized to be issued, sold, and delivered
hereunder as a single fully registered Bond, without interest coupons, dated January 1,
1991, in the denomination and aggregate principal amount of $2,300,000, numbered R-
1, payable in annual installments of principal to the initial registered owner thereof, to -
wit: Smith, Barney, Harris Upham, or to the registered assignee or assignees of said Bond
or any portion or portions thereof (in each case, the "registered owner"), with the annual
installments of principal of the Initial Bond to be payable on the dates, respectively, and
in the principal amounts, respectively, stated in the FORM OF INITIAL BOND set forth
in this Ordinance.
(b) The Initial Bond (i) may be prepaid or redeemed prior to the respective
scheduled due dates of installments of principal thereof, (ii) may be assigned and
transferred, (iii) may be converted and exchanged for other Bonds, (iv) shall have the
characteristics, and (v) shall be signed and sealed, and the principal of and interest on the
Initial Bond shall be payable, all as provided, and in the manner required or indicated, in
the FORM OF INITIAL BOND set forth in this Ordinance.
Section 4. INTEREST. The unpaid principal balance of the Initial Bond shall
bear interest from the date of the Initial Bond, and will be calculated on the basis of a
360 -day year of twelve 30 -day months to the respective scheduled due dates, or to the
respective dates of prepayment or redemption, of the installments of principal of the
Initial Bond, and said interest shall be payable, all in the manner provided and at the
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rates and on the dates stated in the FORM OF INITIAL BOND set forth in this
Ordinance.
Section 5. FORM OF INITIAL BOND. The form of the Initial Bond, including
the form of Registration Certificate of the Comptroller of Public Accounts of the State of
Texas to be endorsed on the Initial Bond, shall be substantially as follows:
NO. R-1
UNITED STATES OF •
COUNTYSTATE OF TEXAS
OF !
CITY OF !. t
UTILITY SYSTEM REVENUE T
SERIES • A,...
The CITY OF GEORGETOWN (the "Issuer"), in Williamson County, being a
political subdivision of the State of Texas, hereby promises to pay to
or to the registered assignee or assignees of this Bond or any portion or portions hereof
(in each case, the "registered owner") the aggregate principal amount of
in annual installments of principal due and payable on August 15 in each of the years, and
in the respective principal amounts, as set forth in the following schedule.
rd : : u ! IARFAot�=B kyj col
1993
$ 60,000
2000
$1501000
1994
809000
2001
150,000
1995
1009000
2002
1759000
1996
1105000
2003
2009000
1997
120,000
2004
2751000
1998
1309000
2005
3009000
1999
1509000
2006
300,000
and to pay interest, from the date of this Bond hereinafter stated, on the balance of each
such installment of principal, respectively, from time to time remaining unpaid, at the
following rates per annum:
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maturity 1993,9.50% maturity 2000, 6.60%
maturity 1994,9.50% maturity 2001, 6.70%
maturity 1995, 9.50% maturity 2002, 6.75%
maturity 1996, 9.50% maturity 2003, 6.75%
maturity 1997, 9.50% maturity 2004, 6.75%
maturity 1995, 7.90% maturity 2005, 6.50%
maturity 1999,6.50% maturity 2006, 6.50%
with said interest being payable on February 15, 1992, and semiannually on each August
15 and February 15 thereafter while this Bond or any portion hereof is outstanding and
unpaid.
THE INSTALLMENTS OF PRINCIPAL OF AND THE INTEREST ON this
Bond are payable in lawful money of the United States of America, without exchange or
collection charges. The installments of principal and the interest on this Bond are payable
to the registered owner hereof through the services of Ameritrust Texas National
Association, Austin, Texas, which is the "Paying Agent/Registrar" for this Bond. Payment
of all principal of and interest on this Bond shall be made by the Paying Agent/Registrar
to the registered owner hereof on each principal and/or interest payment date by check,
wire or draft, dated as of such date, drawn by the Paying Agent/Registrar on, and payable
solely from, funds of the Issuer required by the ordinance authorizing the issuance of this
Bond (the 'Bond Ordinance") to be on deposit with the Paying Agent/Registrar for such
purpose as hereinafter provided; and such check or draft shall be sent by the Paying
Agent/Registrar by United States mail, first class postage prepaid, on each such princi-
pal and/or interest payment date, to the registered owner hereof, at the address of the
registered owner, as it appeared on the last business day of the month next preceding
each such date (the "Record Date") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described, or by such other method acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of the registered owner.
The Issuer covenants with the registered owner of this Bond that, on or before each
principal and/or interest payment date for this Bond, it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" created by the Bond Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all
principal of and interest on this Bond, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall
be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city
where the Paying Agent/Registrar is located are authorized by law or executive order to
close, then the date for such payment shall be the next succeeding day which is not such
a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the
original date payment was due.
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THIS BOND has been authorized in accordance with the Constitution and laws of
the State of Texas in the principal amount of $2,300,000, for the purpose of providing
money for improvements and extensions to the Sewer System.
ON AUGUST 15, 2001, or any date thereafter, the unpaid installments of principal
of this Bond may be prepaid or redeemed prior to their scheduled due dates, at the
option of the Issuer, with funds derived from any available source, as a whole, or in part,
and, if in part, the Issuer shall select and designate the maturity or maturities and the
amount that is to be redeemed, and if less than a whole maturity is to be redeemed, the
Issuer shall direct the Paying Agent/Registrar to call by lot (provided that a portion of this
Bond may be redeemed only in an integral multiple of $5,000), at a price equal to the
principal amount to be so prepaid or redeemed, plus accrued interest to the date fixed
for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any such prepayment or redemption,
a written notice of such prepayment or redemption shall be mailed by the Paying
Agent/Registrar to the registered owner hereof. By the date fixed for any such
prepayment or redemption, due provision shall be made by the Issuer with the Paying
Agent/Registrar for the payment of the required prepayment or redemption price for this
Bond or the portion hereof which is to be so prepaid or redeemed, plus accrued interest
thereon to the date fixed for prepayment or redemption. If such written notice of
prepayment or redemption is given, and if due provision for such payment is made, all as
provided above, this Bond, or the portion thereof which is to be so prepaid or redeemed,
thereby automatically shall be treated as prepaid or redeemed prior to its scheduled due
date, and shall not bear interest after the date fixed for its prepayment or redemption,
and shall not be regarded as being outstanding except for the right of the registered owner
to receive the prepayment or redemption price plus accrued interest to the date fixed for
prepayment or redemption from the Paying Agent/Registrar out of the funds provided for
such payment. The Paying Agent/Registrar shall record in the Registration Books all such
prepayments or redemptions of principal of this Bond or any portion hereof.
THIS BOND, to the extent of the unpaid or unredeemed principal balance hereof,
or any unpaid and unredeemed portion hereof in any integral multiple of $5,000, may be
assigned by the initial registered owner hereof and shall be transferred only in the
Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity
of registraf for the Bonds, upon the terms and conditions set forth in the Bond Ordinance.
Among other requirements for such transfer, this Bond must be presented and
surrendered to the Paying Agent/Registrar for cancellation, together with proper instru-
ments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment by the initial registered owner of this Bond, or any
portion or portions hereof in any integral multiple of $5,000, to the assignee or assignees
in whose name or names this Bond or any such portion or portions hereof is or are to be
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transferred and registered. Any instrument or instruments of assignment satisfactory to
the Paying Agent/Registrar may be used to evidence the assignment of this Bond or any
such portion or portions hereof by the initial registered owner hereof. A new bond or
bonds payable to such assignee or assignees (which then will be the new registered owner
or owners of such new Bond or Bonds) or to the initial registered owner as to any portion
of this Bond which is not being assigned and transferred by the initial registered owner,
shall be delivered by the Paying Agent/Registrar in conversion of and exchange for this
Bond or any portion or portions hereof, but solely in the form and manner as provided
in the next paragraph hereof for the conversion and exchange of this Bond or any portion
hereof. The registered owner of this Bond shall be deemed and treated by the Issuer and
the Paying Agent/Registrar as the absolute owner hereof for all purposes, including
payment and discharge of liability upon this Bond to the extent of such payment, and the
Issuer and the Paying Agent/Registrar shall not be affected by any notice to the contrary.
AS PROVIDED above and in the Bond Ordinance, this Bond, to the extent of the
unpaid or unredeemed principal balance hereof, may be converted into and exchanged for
a like aggregate principal amount of fully registered bonds, without interest coupons,
payable to the assignee or assignees duly designated in writing by the initial registered
owner hereof, or to the initial registered owner as to any portion of this Bond which is
not being assigned and transferred by the initial registered owner, in any denomination or
denominations in any integral multiple of $5,000 (subject to the requirement hereinafter
stated that each substitute bond issued in exchange for any portion of this Bond shall have
a single stated principal maturity date), upon surrender of this Bond to the Paying
Agent/Registrar for cancellation, all in accordance with the form and procedures set forth
in the Bond Ordinance. If this Bond or any portion hereof is assigned and transferred or
converted, each bond issued in exchange for any portion hereof shall have a single stated
principal maturity date corresponding to the due date of the installment of principal of
this Bond or portion hereof for which the substitute bond is being exchanged, and shall
bear interest at the rate applicable to and borne by such installment of principal or
portion thereof. Such bonds, respectively, shall be subject to redemption prior to maturity
on the same dates and for the same prices as the corresponding installment of principal
of this Bond or portion hereof for which they are being exchanged. No such bond shall
be payable in installments, but shall have only one stated principal maturity date. AS
PROVIDED IN THE BOND ORDINANCE, THIS BOND IN ITS PRESENT FORM
MAY BE ASSIGNED AND TRANSFERRED OR CONVERTED ONCE ONLY, and
to one or more assignees, but the bonds issued and delivered in exchange for this Bond
or any portion hereof may be assigned and transferred, and converted, subsequently, as
provided in the Bond Ordinance. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for transferring, converting, and exchanging this
Bond or any portion thereof, but the one requesting such transfer, conversion, and
exchange shall pay any taxes or governmental charges required to be paid with respect
thereto. The Paying Agent/Registrar shall not be required to make any such assignment,
conversion, or exchange (i) during the period commencing with the close of business on
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any Record Date and ending with the opening of business on the next following principal
or interest payment date, or, (ii) with respect to any Bond or portion thereof called for
prepayment or redemption prior to maturity, within 45 days prior to its prepayment or
redemption date.
IN THE EVENT any Paying Agent/Registrar for this Bond is changed by the
Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond
Ordinance that it promptly will appoint a competent and legally qualified substitute
therefor, and promptly will cause written notice thereof to be mailed to the registered
owner of this Bond.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in the authorization, issu-
ance, and delivery of this Bond have been performed, existed, and been done in accor-
dance with law, that this Bond is a special obligation; and that the principal of and
interest on this Bond, together with other outstanding revenue bonds of said Issuer, are
payable from, and secured by a first lien on and pledge of the Net Revenues of the
Issuer's Utility System, being the combined Waterworks, Sewer and Electric Light System,
including all additions, extensions and improvements thereto which may hereafter be made.
THE ISSUER has reserved the right, subject to the restrictions stated in the
Ordinance authorizing this Series of Bonds, to issue additional parity revenue bonds which
also may be made payable from, and secured by a lien on and pledge of the Net
Revenues of the Issuer's Utility System in the same manner and to the same extent as this
Series of Bonds.
THE OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound
by such terms and provisions, acknowledges that the Bond Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance
constitute a contract between the registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the
manual signature of the Mayor of the Issuer, countersigned with the manual signature of
the Deputy City Secretary of the Issuer, and has caused the official seal of the Issuer to
be duly impressed on this Bond to be dated January 1, 1991.
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(CITE' SEAL)
Mayor
1• i • •i
i •! iM to VATO L4 •
I hereby certify that this Bond has been examined, certified as to validity, and
approved by the Attorney General of the State of Texas, and that this Bond has been
registered by the Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
Section 6. ADDITIONAL CHARACTERISTICS OF THE BONDS.
(a) Registration and Transfer. The Issuer shall keep or cause to be kept at the principal
corporate trust office of Ameritrust Texas National Association, Austin, Texas, (the "Paying
Agent/Registrar") books or records of the registration and transfer of the Bonds (the
"Registration Books"), and the Issuer hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such transfers and
registrations under such reasonable regulations as the Issuer and Paying Agent/Registrar
may prescribe; and the Paying Agent/Registrar shall make such transfers and registrations
as herein provided. The Paying Agent/ Registrar shall obtain and record in the Regis-
tration Books the address of the registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each
registered owner to notify the Paying Agent/Registrar in writing of the address to which
payments shall be mailed, and such interest payments shall not be mailed unless such
notice has been given. The Issuer shall have the right to inspect the Registration Books
during regular business hours of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other entity. Registration of each
Bond may be transferred in the Registration Books only upon presentation and surrender
of such Bond to the Paying Agent/Registrar for transfer of registration and cancellation,
together with proper written instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, (i) evidencing the assignment of the
Bond, or any portion thereof in any integral multiple of $5,000, to the assignee or assign-
POO
ees thereof, and (ii) the right of such assignee or assignees to have the Bond or any such
portion thereof registered in the name of such assignee or assignees. Upon the assign-
ment and transfer of any Bond or any portion thereof, a new substitute Bond or Bonds
shall be issued in conversion and exchange therefor in the manner herein provided. The
Initial Bond, to the extent of the unpaid or unredeemed principal balance thereof, may
be assigned and transferred by the initial registered owner thereof once only, and to one
or more assignees designated in writing by the initial registered owner thereof. All Bonds
issued and delivered in conversion of and exchange for the Initial Bond shall be in any
denomination or denominations of any integral multiple of $5,000 (subject to the
requirement hereinafter stated that each substitute Bond shall have a single stated princi-
pal maturity date), shall be in the form prescribed in the FORINT OF SUBSTITUTE
BOND set forth in this Ordinance, and shall have the characteristics, and may be assigned,
transferred, and converted as hereinafter provided. If the Initial Bond or any portion
thereof is assigned and transferred or converted, the Initial Bond must be surrendered to
the Paying Agent/Registrar for cancellation, and each Bond issued in exchange for any
portion of the Initial Bond shall have a single stated principal maturity date, and shall not
be payable in installments; and each such Bond shall have a principal maturity date
corresponding to the due date of the installment of principal or portion thereof for which
the substitute Bond is being exchanged; and each such Bond shall bear interest at the
single rate applicable to and borne by such installment of principal or portion thereof for
which it is being exchanged. If only a portion of the Initial Bond is assigned and trans-
ferred, there shall be delivered to and registered in the name of the initial registered
owner substitute Bonds in exchange for the unassigned balance of the Initial Bond in the
same manner as if the initial registered owner were the assignee thereof. If any Bond or
portion thereof other than the Initial Bond is assigned and transferred or converted, each
Bond issued in exchange shall have the same principal maturity date and bear interest at
the same rate as the Bond for which it is exchanged. A form of assignment shall be
printed or endorsed on each Bond, excepting the Initial Bond, which shall be executed by
the registered owner or its duly authorized attorney or representative to evidence an
assignment thereof. Upon surrender of any Bonds or any portion or portions thereof for
transfer of registration, an authorized representative of the Paying Agent/Registrar shall
make such transfer in the Registration Books, and shall deliver a new fully registered
substitute Bond or Bonds, having the characteristics herein described, payable to such
assignee or assignees (which then will be the registered owner or owners of such new
Bond or Bonds), or to the previous registered owner in case only a portion of a Bond is
being assigned and transferred, all in conversion of and exchange for said assigned Bond
or Bonds or any portion or portions thereof, in the same form and manner, and with the
same effect, as provided in Section 6(d), below, for the conversion and exchange of Bonds
by any registered owner of a Bond. The Issuer shall pay the Paying Agent/Registrar's
standard or customary fees and charges for making such transfer and delivery of a
substitute Bond or Bonds, but the one requesting such transfer shall pay any taxes or
other governmental charges required to be paid with respect thereto. The Paying
Agent/Registrar shall not be required to make transfers of registration of any Bond or any
9
portion thereof (i) during the period commencing with the close of business on any
Record Date and ending with the opening of business on the next following principal or
interest payment date, or, (ii) with respect to any Bond or any portion thereof called for
redemption prior to maturity, within 45 days prior to its prepayment or redemption date.
(b) Ownership of Bonds. The entity in whose name any Bond shall be registered
in the Registration Books at any time shall be deemed and treated as the absolute owner
thereof for all purposes of this Ordinance, whether or not such Bond shall be overdue,
and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the
contrary; and payment of, or on account of, the principal of, premium, if any, and interest
on any such Bond shall be made only to such registered owner. All such payments shall
be valid and effectual to satisfy and discharge the liability upon such Bond to the extent
of the sum or sums so paid.
(c) Payment of Bonds and Interest. The Issuer hereby appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the
Bonds, and to act as its agent to convert and exchange or replace Bonds, all as provided
in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments
made by the Issuer and the Paying Agent/Registrar with respect to the Bonds, and of all
conversions and exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment
date, and for thirty (30) days thereafter, a new record date for such interest payment (a
"Special Record Date") will be established by the Paying Agent/Registrar, if and when
funds for the payment of such interest have been received from the Issuer. Notice of the
Special Record Date and of the scheduled payment date of the past due interest (which
shall be 15 days after the Special Record Date) shall be sent at least five (5) business
days prior to the Special Record Date by United States mail, first class postage prepaid,
to the address of each Bondholder appearing on the Security Register at the close of
business on the last business day next preceding the date of mailing of such notice.
(d) Conversion and Exchange or Replacements Authentication. Each Bond issued
and delivered pursuant to this Ordinance, to the extent of the unpaid or unredeemed
principal balance or principal amount thereof, may, upon surrender of such Bond at the
principal corporate trust office of the Paying Agent/Registrar, together with a written
request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of
signatures satisfactory to the Paying Agent/Registrar, may, at the option of the registered
owner or such assignee or assignees, as appropriate, be converted into and exchanged for
fully registered bonds, without interest coupons, in the form prescribed in the FORM OF
SUBSTITUTE BOND set forth in this Ordinance, in the denomination of $5,000, or any
integral multiple of $5,000 (subject to the requirement hereinafter stated that each
substitute Bond shall have a single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate principal amount equal to
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the unpaid or unredeemed principal balance or principal amount of any Bond or Bonds
so surrendered, and payable to the appropriate registered owner, assignee, or assignees,
as the case may be. If the Initial Bond is assigned and transferred or converted each
substitute Bond issued in exchange for any portion of the Initial Bond shall have a single
stated principal maturity date, and shall not be payable in installments; and each such
Bond shall have a principal maturity date corresponding to the due date of the installment
of principal or portion thereof for which the substitute Bond is being exchanged; and each
such Bond shall bear interest at the single rate applicable to and borne by such install-
ment of principal or portion thereof for which it is being exchanged. If a portion of any
Bond (other than the Initial Bond) shall be redeemed prior to its scheduled maturity as
provided herein, a substitute Bond or Bonds having the same maturity date, bearing
interest at the same rate, in the denomination or denominations of any integral multiple
of $5,000 at the request of the registered owner, and in aggregate principal amount equal
to the unredeemed portion thereof, will be issued to the registered owner upon surrender
thereof for cancellation. If any Bond or portion thereof (other than the Initial Bond) is
assigned and transferred or converted, each Bond issued in exchange therefor shall have
the same principal maturity date and bear interest at the same rate as the Bond for which
it is being exchanged. Each substitute Bond shall bear a letter and/or number to distin-
guish it from each other Bond. The Paying Agent/Registrar shall convert and exchange
or replace Bonds as provided herein, and each fully registered bond delivered in conver-
sion of and exchange for or replacement of any Bond or portion thereof as permitted or
required by any provision of this Ordinance shall constitute one of the Bonds for all
purposes of this Ordinance, and may again be converted and exchanged or replaced. It
is specifically provided that any Bond authenticated in conversion of and exchange for or
replacement of another Bond on or prior to the first scheduled Record Date for the
Initial Bond shall bear interest from the date of the Initial Bond, but each substitute Bond
so authenticated after such first scheduled Record Date shall bear interest from the
interest payment date next preceding the date on which such substitute Bond was so
authenticated, unless such Bond is authenticated after any Record Date but on or before
the next following interest payment date, in which case it shall bear interest from such
next following interest payment date; provided, however, that if at the time of delivery of
any substitute Bond the interest on the Bond for which it is being exchanged is due but
has not been paid, then such Bond shall bear interest from the date to which such interest
has been paid in full. THE INITIAL BOND issued and delivered pursuant to this
Ordinance is not required to be, and shall not be, authenticated by the Paying
Agent/Registrar, but on each substitute Bond issued in conversion of and exchange for or
replacement of any Bond or Bonds issued under this Ordinance there shall be printed a
certificate, in the form substantially as follows.
It is hereby certified that this Bond has been issued under the provisions of the
Bond Ordinance described on the face of this Bond; and that this Bond has been issued
11
in conversion of and exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Mr
Authorized Representative
An authorized representative of the Paying Agent/Registrar shall, before the delivery of
any such Bond, date and manually sign the above Certificate, and no such Bond shall be
deemed to be issued or outstanding unless such Certificate is so executed. The Paying
Agent/Registrar promptly shall cancel all Bonds surrendered for conversion and exchange
or replacement. No additional ordinances, orders, or resolutions need be passed or
adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange or replacement of any Bond or portion
thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Bonds in the manner prescribed herein, and said Bonds shall be
of type composition printed on paper with lithographed or steel engraved borders of
customary weight and strength. Pursuant to Article 717k-6, V.A.T.C.S., as amended, and
particularly Section 6 thereof, the duty of conversion and exchange or replacement of
Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of the above Paying Agent/Registrar's Authentication Certificate, the converted
and exchanged or replaced Bond shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Initial Bond which originally was issued pursuant
to this Ordinance, approved by the Attorney General, and registered by the Comptroller
of Public Accounts. The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for transferring, converting, and exchanging any Bond or any
portion thereof, but the one requesting any such transfer, conversion, and exchange shall
pay any taxes or governmental charges required to be paid with respect thereto as a
condition precedent to the exercise of such privilege of conversion and exchange. The
Paying Agent/Registrar shall not be required to make any such conversion and exchange
or replacement of Bonds or any portion thereof (i) during the period commencing with
the close of business on any Record Date and ending with the opening of business on the
next following principal or interest payment date, or, (ii) with respect to any Bond or
portion thereof called for redemption prior to maturity, within 45 days prior to its
prepayment or redemption date.
(e) In General. All Bonds issued in conversion and exchange or replacement of
any other Bond or portion thereof, (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Bonds to be payable only to
the registered owners thereof, (ii) may be redeemed prior to their scheduled maturities,
(iii) may be transferred and assigned, (iv) may be converted and exchanged for other
M
Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the
principal of and interest on the Bonds shall be payable, all as provided, and in the manner
required or indicated, in the FORM OF SUBSTITUTE BOND set forth in this
Ordinance.
(f) Payment of Fees and Charges. The Issuer hereby covenants with the registered
owners of the Bonds that it will (i) pay the standard or customary fees and charges of the
Paying Agent/Registrar for its services with respect to the payment of the principal of and
interest on the Bonds, when due, and (ii) pay the fees and charges of the Paying
Agent/Registrar for services with respect to the transfer of registration of Bonds, and with
respect to the conversion and exchange of Bonds solely to the extent above provided in
this Ordinance.
(g) Substitute Paying Agent/Registrar. The Issuer covenants with the registered
owners of the Bonds that at all times while the Bonds are outstanding the Issuer will
provide a competent and legally qualified bank, trust company, financial institution, or
other agency to act as and perform the services of Paying Agent/Registrar for the Bonds
under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer
reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not
less than 120 days written notice to the Paying Agent/Registrar, to be effective not later
than 60 days prior to the next principal or interest payment date after such notice. In the
event that the entity at any time acting as Paying Agent/Registrar (or its successor by
merger, acquisition, or other method) should resign or otherwise cease to act as such, the
Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust
company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying
Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy
thereof), along with all other pertinent books and records relating to the Bonds, to the
new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change
in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to
be sent by the new Paying Agent/Registrar to each registered owner of the Bonds, by
United States mail, first-class postage prepaid, which notice also shall give the address of
the new Paying Agent/Registrar. By accepting the position and performing as such, each
Paying Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar.
Section 7. FORM OF SUBSTITUTE BONDS. The form of all Bonds issued in
conversion and exchange or replacement of any other Bond or portion thereof, including
the form of Paying Agent/Registrar's Certificate to be printed on each of such Bonds, and
the Form of Assignment to be printed on each of the Bonds, shall be, respectively,
substantially as follows, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance.
IN
M
AMERICAUNITED STATES OF
STATE OF
COUNTYOF
CITY OF O' f
UTILITY SYSTEM REVENUE O*r.
SERIES -1991
..
KAZUO$
DATE O
.ORIGINAL ISSUE CUSIP NO.
January 1, ••
ON THE 1ViATURITY DATE specified above, the CITY OF GEORGETOWN
(the "Issuer"), in Williamson County, being a political subdivision of the State of Texas,
hereby promises to pay to
or to the registered assignee hereof (either being hereinafter called the "registered owner")
the principal amount of
and to pay interest thereon from January 1, 1991, to the maturity date specified above,
or the date of redemption prior to maturity, at the interest rate per annum specified
above with interest being payable on February 15, 1992 and semiannually on each August
15 and February 15 thereafter; except that if the date of authentication of this Bond is
later than January 31, 1992, such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentica-
tion is after any Record Date (hereinafter defined) but on or before the next following
interest payment date, in which case such principal amount shall bear interest from such
next following interest payment date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful
money of the United States of America, without exchange or collection charges. The
principal of this Bond shall be paid to the registered owner hereof upon presentation and
surrender of this Bond at maturity or upon the date fixed for its redemption prior to
maturity, at the principal corporate trust office of Ameritrust Texas National Association,
Austin, Texas, which is the "Paying Agent/Registrar" for this Bond. The payment of
interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner
hereof on each interest payment date by check or draft, dated as of such interest payment
date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer
C!
required by the ordinance authorizing the issuance of the Bonds (the "Bond Ordinance")
to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided;
and such check or draft shall be sent by the Paying Agent/Registrar by United States Mail,
first-class postage prepaid, on each such interest payment date, to the registered owner
hereof, at the address of the registered owner, as it appeared on the last business day of
the month next preceding each such date (the "Record Date") on the Registration Books
kept by the Paying Agent/Registrar, as hereinafter described, or by such other method
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of the
registered owner. Any accrued interest due upon the redemption of this Bond prior to
maturity as provided herein shall be paid to the registered owner at the principal corpo-
rate trust office of the Paying Agent/Registrar upon presentation and surrender of this
Bond for redemption and payment at the principal corporate trust office of the Paying
Agent/Registrar. The Issuer covenants with the registered owner of this Bond that, on or
before each principal payment date, interest payment date, and accrued interest payment
date for this Bond, it will make available to the Paying Agent/Registrar, from the "Interest
and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for
the payment, in immediately available funds, of all principal of and interest on the Bonds,
when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall
be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city
where the Paying Agent/Registrar is located are authorized by law or executive order to
close, then the date for such payment shall be the next succeeding day which is not such
a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the
original date payment was due.
THIS BOND is one of an issue of Bonds initially dated January 1, 1991, author-
ized in accordance with the Constitution and laws of the State of Texas, in the original
principal amount of $2,300,000, for the purpose of providing money for improvements and
extensions to the Sewer System.
ON AUGUST 15, 2001, or any date thereafter, the Bonds of this Series may be
redeemed prior to their scheduled maturities, at the option of the Issuer, with funds
derived from any available and lawful source, as a whole, or in part, and, if in part, the
maturity or maturities of Bonds and the amounts thereof, to be redeemed shall be
selected and designated by the Issuer, and the Issuer shall direct the Paying
Agent/Registrar to call by lot Bonds, or portions thereof within such maturities and in such
principal amounts, for redemption (provided that a portion of a Bond may be redeemed
only in an integral multiple of $5,000), at the redemption price of the principal amount
thereof, plus accrued interest to the date fixed for prepayment or redemption.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or
portions thereof prior to maturity, a written notice of such redemption shall be published
once in a financial publication, journal, or reporter of general circulation among securities
dealers in The City of New York, New York (including, but not limited to, The Bond
Buyer and The Wall Street Journal), or in the State of Texas (including, but not limited
to, The Texas Bond Reporter). Such notice also shall be sent by the Paying
Agent/Registrar by United States Mail, first-class postage prepaid, not less than 30 days
prior to the date fixed for any such redemption, to the registered owner of each Bond to
be redeemed at its address as it appeared on the 45th day prior to such redemption date;
provided, however, that the failure to send, mail, or receive such notice, or any defect
therein or in the sending or mailing thereof, shall not affect the validity or effectiveness
of the proceedings for the redemption of any Bond, and it is hereby specifically provided
that the publication of such notice as required above shall be the only notice actually
required in connection with or as a prerequisite to the redemption of any Bonds or
portions thereof. By the date fixed for any such redemption, due provision shall be made
with the Paying Agent/Registrar for the payment of the required redemption price for the
Bonds or portions thereof which are to be so redeemed, plus accrued interest thereon to
the date fixed for redemption. If such written notice of redemption is published and if
due provision for such payment is made, all as provided above, the Bonds or portions
thereof which are to be so redeemed thereby automatically shall be treated as redeemed
prior to their scheduled maturities, and they shall not bear interest after the date fixed for
redemption, and they shall not be regarded as being outstanding except for the right of
the registered owner to receive the redemption price plus accrued interest from the Paying
Agent/Registrar out of the funds provided for such payment. If a portion of any Bond
shall be redeemed, a substitute Bond or Bonds having the same maturity date, bearing
interest at the same rate, in any denomination or denominations in any integral multiple
of $5,000, at the written request of the registered owner, and in aggregate principal
amount equal to the unredeemed portion thereof, will be issued to the registered owner
upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided
in the Bond Ordinance.
THIS BOND OR ANY PORTION OR PORTIONS HEREOF IN ANY INTE-
GRAL MULTIPLE OF $5,000 may be assigned and shall be transferred only in the
Registration Books of the Issuer kept by the Paying Agent/Registrar acting in the capacity
of registrar for the Bonds, upon the terms and conditions set forth in the Bond Ordinance.
Among other requirements for such assignment and transfer, this Bond must be presented
and surrendered to the Paying Agent/Registrar, together with proper instruments of assign-
ment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing assignment of this Bond or any portion or portions hereof in any integral
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any
such portion or portions hereof is or ate to be transferred and registered. The form of
Assignment printed or endorsed on this Bond shall be executed by the registered owner
or its duly authorized attorney or representative,to evidence the assignment hereof. A new
170
Bond or Bonds payable to such assignee or assignees (which then will be the new
registered owner or owners of such new Bond or Bonds), or to the previous registered
owner in the case of the assignment and transfer of only a portion of this Bond, may be
delivered by the Paying Agent/Registrar in conversion of and exchange for this Bond, all
in the form and manner as provided in the next paragraph hereof for the conversion and
exchange of other Bonds. The Issuer shall pay the Paying Agent/Registrar's standard or
customary fees and charges for making such transfer, but the one requesting such transfer
shall pay any taxes or other governmental charges required to be paid with respect
thereto. The Paying Agent/Registrar shall not be required to make transfers of regis-
tration of this Bond or any portion hereof (i) during the period commencing with the close
of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date, or, (ii) with respect to any Bond or any
portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date. The registered owner of this Bond shall be deemed and treated by the
Issuer and the Paying Agent/Registrar as the absolute owner hereof for all purposes,
including payment and discharge of liability upon this Bond to the extent of such payment,
and the Issuer and the Paying Agent/Registrar shall not be affected by any notice to the
contrary.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds,
without interest coupons, in the denomination of any integral multiple of $5,000. As
provided in the Bond Ordinance, this Bond, or any unredeemed portion hereof, may, at
the request of the registered owner or the assignee or assignees hereof, be converted into
and exchanged for a like aggregate principal amount of fully registered bonds, without
interest coupons, payable to the appropriate registered owner, assignee, or assignees, as
the case may be, having the same maturity date, and bearing interest at the same rate, in
any denomination or denominations in any integral multiple of $5,000 as requested in
writing by the appropriate registered owner, assignee, or assignees, as the case may be,
upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in
accordance with the form and procedures set forth in the Bond Ordinance. The Issuer
shall pay the Paying Agent/Registrar's standard or customary fees and charges for
transferring, converting, and exchanging any Bond or any portion thereof, but the one
requesting such transfer, conversion, and exchange shall pay any taxes or governmental
charges required to be paid with respect thereto as a condition precedent to the exercise
of such privilege of conversion and exchange. The Paying Agent/Registrar shall not be
required to make any such conversion and exchange (i) during the period commencing
with the close of business on any Record Date and ending with the opening of business
on the next following principal or interest payment date, or, (ii) with respect to any Bond
or portion thereof called for redemption prior to maturity, within 45 days prior to its
prepayment or redemption date.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the
Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Bond
17
Ordinance that it promptly will appoint a competent and legally qualified substitute
therefor, and promptly will cause written notice thereof to be mailed to the registered
owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in the authorization, issu-
ance, and delivery of this Bond have been performed, existed, and been done in accor-
dance with law, that this Bond is a special obligation; and that the principal of and
interest on this Bond, together with other outstanding revenue bonds of said Issuer, are
payable from, and secured by a first lien on and pledge of, the Net Revenues of the
Issuer's Utility System, being the combined Waterworks, Sewer and Electric Light System,
including all additions, extensions and improvements thereto which may hereafter be made.
THE ISSUER has reserved the right, subject to the restrictions stated in the
Ordinance authorizing this Series of Bonds, to issue additional parity revenue bonds which
also may be made payable from, and secured by a lien on and pledge of the Net
Revenues of the Issuer's Utility System in the same manner and to the same extent as this
Series of Bonds.
THE OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound
by such terms and provisions, acknowledges that the Bond Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the
Issuer, and agrees that the terms and provisions of this Bond and the Bond Ordinance
constitute a contract between each registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the
facsimile signature of the Mayor of the Issuer and countersigned with the facsimile
signature of the Deputy City Secretary of the Issuer, and has caused the official seal of
the Issuer to be duly impressed, or placed in facsimile, on this Bond.
Deputy City Secretary
W
Mayor
•' UV • a•.12116 nAl
• • r' aMans r • a - • -
It is hereby certified that this Bond has been issued under the provisions of the
Bond Ordinance described on the face of this Bond; and that this Bond has been issued
in conversion of and exchange for or replacement of a bond, bonds, or a portion of a
bond or bonds of an issue which originally was approved by the Attorney General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated:
AMERITRUST TEXAS* Os
Austin, Texas
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Authorized Representative
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
authorized representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social Security
or Taxpayer Identification Number)
and hereby irrevocably constitutes and appoints
(print or type Assignee's name
and address, including zip code)
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's
Registration Books with full power of substitution in the premises.
Dated
Signature Guaranteed.
NOTICE: This signature must be guaranteed by a member of the New Fork Stock
Exchange or a commercial bank or trust company.
Registered Owner
NOTICE: This signature must correspond with the name of the Registered Owner
appearing on the face of this Bond in every particular without alteration or enlargement
or any change whatsoever.
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Section 8. DEFINITIONS. As used in this Ordinance, the following terms shall
have the meanings set forth below, unless the teat hereof specifically indicates otherwise:
(a) The term "City" or "Issuer" shall mean the City of Georgetown, in Williamson
County, Texas.
(b) The term "City Council" shall mean the governing body of the City of
Georgetown.
(c) The term "Bonds" shall mean the City of Georgetown, Texas Utility System
Revenue Bonds, Series 1991, authorized by this Ordinance.
(d) The term "Outstanding Bonds" shall mean the Issuer's Utility System Revenue
Bonds, Series 1974; Utility System Revenue Bonds, Series 1984 and Utility System
Revenue Bonds, Series 1985.
(e) The term 'Parity Bonds" shall mean, collectively, the Bonds and the
Outstanding Bonds.
(f) The term "Additional Bonds" shall mean the additional parity revenue bonds
permitted to be issued under the provisions of the ordinances authorizing the Parity
Bonds.
(g) The terms "Utility System" and "System" shall mean the System created and
established for and on behalf of the Issuer under the provisions of the ordinances
authorizing the Outstanding Bonds.
(h) The term "Net Revenues" and 'Pledged Revenues" shall mean the revenues
derived from the operation of the Utility System as such revenues are defined and pledged
in Section 10 of the ordinance authorizing the Issuer's Utility System Revenue Bonds,
Series 1964.
(i) The term "Utility System Revenue Fund", "Utility System Revenue Bonds
Interest and Sinking Fund" or "Interest and Sinking Fund", "Utility System Revenue Bonds
Reserve Fund" or "Reserve Fund" and "Utility System Contingency Fund" or "Contingency
Fund" shall mean the special funds which the City Council has heretofore created and
ordered to be established and maintained for the payment of expenses of operating and
maintaining the Utility System and the costs of certain repairs or replacements to said
System, and for the payment of principal of and interest on the bonds outstanding against
the Utility System, as hereinafter more specifically stated.
9C
Section 9. UTILITY SYSTEM. The Utility System or System, as created and
established by the City Council, is comprised of the entire Waterworks System, Sewer
System, and Electric Light System, now owned and operated by the Issuer, together with
all improvements, extensions and additions thereto which may be made while any Parity
Bonds or Additional Bonds remain outstanding against the System. Such System shall
be operated on the basis of a fiscal year commencing on September 1 of each year and
ending on August 31 of the following year.
Section 10. PLEDGE OF REVENUES. (a) The Bonds herein authorized and
the Outstanding Bonds shall be equally and ratably secured by and payable from an
irrevocable first lien on and pledge of the income and revenues derived and to be derived
from the operation of the System, after deducting therefrom the amounts necessary to pay
all operating, maintenance, replacement and betterment charges of the System, as required
by Article 1113 of the Revised Civil Statutes of Texas, 1925, as amended, and by other
applicable statutes of the State of Texas, and the following sections of this Ordinance are
cumulative of, and supplemental to, the pertinent provisions of the ordinances authorizing
the Outstanding Bonds.
(b) The Bonds are being issued as additional parity revenue bonds, defined as
Additional Bonds in the ordinance that authorized the Utility System Revenue Bonds,
1964, and as defined as Additional Bonds in the ordinances that authorized the issuance,
sale and delivery of the Issuer's Outstanding Bonds.
Section 11. MAINTENANCE OF RATES. The Issuer hereby covenants and
agrees that it will at all times, while any of the Parity Bonds or any Additional Bonds or
any interest thereon, are outstanding and unpaid, charge and collect for services rendered
by said System rates sufficient to pay all maintenance, depreciation, replacement,
betterment, and interest charges, and to provide an Interest and Sinking Fund sufficient
to pay the interest and principal of such Bonds as such interest and principal mature, and
any outstanding indebtedness of said System, as is required by applicable statutes of Texas.
For the benefit of the original purchasers and all subsequent holders of the Parity Bonds,
Additional Bonds, or any part thereof, and in addition to all other provisions and
covenants in the laws of the State of Texas, and in this Ordinance, it is expressly
covenanted that the Issuer shall fix and maintain rates and collect charges for the facilities
and services afforded by the System to the Issuer, and to all other customers, which will
provide revenues sufficient at all times:
(a) to pay all operating, maintenance and replacement charges of the Utility
System, as is required by Article 1113 of the Civil Statutes, as amended, and by other
applicable statutes of the State of Texas;
(b) to establish and maintain the Interest and Sinking Fund and the Reserve Fund
for the Parity Bonds and for any Additional Bonds;
041
(c) to pay, in addition, all outstanding indebtedness against the Utility System other
than the Parity Bonds, or any Additional Bonds, as and when the same becomes due;
and
(d) to provide for the payments into the Contingency Fund as required under the
provisions of the ordinances authorizing the issuance of the Parity Bonds.
Section 12. UTILITY SYSTEM REVENUE FUNIS - FLOW OF FUNDS. There
shall be deposited into the Revenue Fund (already established), as collected, all revenues
derived from the operation of the Utility System, which fund shall be maintained separate
and apart from all other funds of the Issuer. Such Revenue Fund shall be maintained in
the Issuer's official depository, so long as any Parity Bonds, or any Additional Bonds
remain outstanding, and shall be administered as follows.
(a) Operation and Maintenance Expenses. The money in the Revenue Fund shall
be used first for the payment of the reasonable and proper expenses of operating and
maintaining the Utility System, including salaries, labor, materials, interest, repairs and
extensions necessary to render efficient service. The words "repairs" and "extensions" as
used in this paragraph shall be construed to refer only to such repairs and extensions, as
in the judgment of the governing body of the Issuer, are necessary to keep the System in
operation and render adequate service to the Issuer and the inhabitants thereof, or such
as might be necessary to remedy some physical accident or condition which would
otherwise impair the security of the Parity Bonds or any Additional Bonds.
(b) Bond Fund. The amounts to be paid into the Interest and Sinking Fund
(already established and hereinafter called the "Bond Fund" during each year in which any
of the Parity Bonds or any Additional Bonds are outstanding, shall be an amount equal
to 100% of the amount required to meet the interest and principal payments falling due
on or before the next maturity date of the Parity Bonds or any Additional Bonds then
outstanding. On or before the 10th day of each month, after payments have been made
as required by subsection (a) of this Section, the Issuer shall withdraw from the Revenue
Fund and deposit into the Bond Fund an amount not less than the total of 1/12th of the
next maturing installment of principal of the Parity Bonds then outstanding, and of any
Additional Bonds then outstanding, and 115th of the next semiannual installment of
interest on the Parity Bonds then outstanding, and any Additional Bonds then outstanding.
The moneys in the Bond Fund shall be used solely for the purposes of paying the interest
and principal of the Parity Bonds and Additional Bonds, until all such bonds have been
retired. In the event the income and revenue of the Utility System are insufficient in any
month to permit the required deposits into the Bond Fund in full accord with the
provisions hereof, then the amount of any deficiency shall be added to the amount
otherwise required to be deposited in said Bond Fund in the next month, until all
deficiencies are rectified.
W
Concurrently with the delivery of the Bonds to the purchasers thereof, all sums of
money received from the purchasers as accrued interest paid on the Bonds shall be placed
into the Bond Fund.
(c) Reserve Fund. The Issuer currently has on deposit in the Reserve Fund
$1,321,673, and has covenanted in the most recently adopted ordinance authorizing the
issuance of its Utility System Revenue Bonds, Series 1985, to maintain a required reserve
of $1,321,673. The Reserve Fund shall be increased to $1,415,923 by monthly deposits of
$1,570.83 beginning the 10th day of each month hereafter with the amount in the Reserve
Fund equal to $1,415,923. The Issuer covenants and agrees that in the event Additional
Bonds are issued as hereinafter provided, the ordinance authorizing such Additional Bonds
shall provide for the payment into the Reserve Fund of such additional sums as shall be
necessary to permit an accumulation in the Reserve Fund, within five years and one
month from the date of the Additional Bonds, as an additional reserve, of an amount of
money at least equal to one year's average annual principal and interest requirements on
such Additional Bonds then outstanding. The Reserve Fund shall be used to pay principal
of or interest on the Parity Bonds and such Additional Bonds falling due at any time for
the payment of which there is not money available in the Bond Fund. No payments need
be made into the Reserve Fund after there shall have been accumulated and shall exist
in said Fund the amount of money herein stipulated; but, if at any time it becomes
necessary to use temporarily any part of such Reserve Fund for the payment of principal
or interest of the Parity Bonds, or it is otherwise depleted, payments into the Reserve
Fund in the amount of $1,570.83 monthly shall be resumed and continued until such time
as such Fund contains the amount of money then required to be on deposit therein. The
Issuer's official depository is hereby authorized to invest the money in the Reserve Fund
in direct obligations of, or obligations unconditionally guaranteed by the United States
Government, 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 deposited in
escrow with said depository under an escrow agreement, and if at any time uninvested
funds shall be insufficient to permit payment of principal and interest of the Parity Bonds
or any Additional Bonds then outstanding, said depository shall sell on the open market
such amount of the securities as is required to pay said Parity Bonds or Additional Bonds
and the interest thereon when due, and shall give due notice thereof to the Issuer. All
money resulting from the maturity of principal and interest of the securities in which the
Reserve Fund is invested may be reinvested and accumulated in said Reserve Fund and
considered a part thereof and used for and only for the purposes hereinabove provided
with respect to said Fund.
When the Outstanding Bonds have been paid off, cancelled and retired, the
Reserve Fund for the Bonds may be commingled with reserve funds established for series
of bonds hereafter issued which are similarly secured and payable from the same source
without impairment of the obligation of contract. The Issuer further covenants that when
23
Additional Bonds are issued, the aggregate amount to be accumulated and maintained in
the Reserve Fund shall be not less than ' the average annual principal and interest
requirements of all bonds similarly secured, and any additional amount required to be
accumulated in the Reserve Fund shall be accumulated therein in not less than five years
and one month from the date of the Additional Bonds.
(d) Contingena Fund. Based on an annual review of the Issuer's experience as
to the cost of repairs and replacement to the Utility System necessitated by the occurring
of emergencies, and the recommendation of the Issuer's consulting engineer, the City
Council has determined that the Contingency Fund heretofore created and ordered to be
established and maintained in the amount of $15,400 is sufficient for the time being. The
Contingency Fund shall be used to pay (1) the cost of any repairs or replacements to the
Utility System necessitated by the occurring of an emergency and (2) interest on and/or
principal of the Parity Bonds or any Additional Bonds, when other funds of the Issuer are
insufficient for such purposes.
The Issuer covenants and agrees that in the event Additional Bonds are issued,
the ordinance authorizing such Additional Bonds shall provide for such appropriate
additional or larger amounts to be accumulated in the Contingency Fund as deemed
advisable by the City Council, based on an annual review of the Issuer's experience as to
the cost of repairs and replacements to the Utility System necessitated by the occurring
of emergencies and the recommendation of a consulting engineer.
No payments need be made into the Contingency Fund after there shall have been
accumulated in said Fund the amount of money then required to be on deposit therein,
except that whenever any money is paid out of said Fund, monthly payments into the
Fund shall be resumed and continued so that the Fund may be, restored to the required
sum.
The Issuer's official depository is hereby authorized to invest the money in the
Contingency Fund in direct obligations of or obligations unconditionally guaranteed by the
Untied States Government, having maturities not in excess of five years from the date of
the making of such investment, as the City Council may direct. Any obligations in which
money is so invested shall be kept in escrow in said depository and shall be promptly
sold and the proceeds of sale applied to the making of payments required to be made
from the Contingency Fund, whenever such payments are required to be made under the
foregoing provisions of this Ordinance.
(e) Surplus Funds. All monies remaining in the Revenue Fund after the
requirements of the foregoing subsections of this Section have been met (including any
I
ncreased payments into the aforesaid Bond Fund, Reserve Fund, and Contingency Fund
as may be necessary by reason of the issuance of Additional Bonds in the future under
the provisions of the ordinances authorizing the Parity Bonds), and after all deficiencies
0
shall have been made up and all replacements made, shall be either used or accumulated
for the making of improvements, extensions and additions to the Utility System, or may,
in the discretion of the Issuer be used for any other proper purpose now or hereafter
permitted by law, including the use thereof in retiring in advance of maturity any
Additional Bonds then outstanding, in accordance with provisions made for their prior
redemption or may be used to purchase the Parity Bonds and Additional Bonds on the
open market at not exceeding the market value thereof. All Bonds so paid, redeemed or
purchased shall be cancelled and shall not be reissued. Nothing herein shall be construed,
however, as impairing the right of the Issuer to pay in accordance with the provisions
thereof any junior lien bonds hereafter legally issued by it.
Section 13. SECURITY FOR FUNDS. All moneys which are to be paid into the
depository under the provisions of the ordinances authorizing the Parity Bonds shall be
secured in accordance with the law of the State of Texas applicable thereto, and the
Issuer covenants especially that such money shall be continuously secured by a valid
pledge of direct obligations of, or obligations unconditionally guaranteed by, the United
States of America, having a par value, or market value when less than par, exclusive of
accrued interest, at all times at least equal to the total amount of money on deposit in the
several funds of the depository.
Section 14. ADDITIONAL BONDS. In addition to the right to issue bonds of
inferior lien as authorized by the laws of this State, the Issuer reserves the right to issue
Additional Bonds from time to time payable from the net income and revenues of the
Utility System; and, when issued in compliance with law and the terms and conditions
hereinafter appearing, such Additional Bonds shall be equally secured by a first lien on
and pledge of the Pledged Revenues; and the Additional Bonds, when issued, shall be
payable from the Interest and Sinking Fund and shall be in all respects of equal dignity
and on a parity with the Parity Bonds, provided, that in each instance, since the City of
Georgetown, Texas Utility System Revenue Bonds, Series 1966 and City of Georgetown,
Texas Utility System Revenue Bonds, Series 1977 have been duly paid off and retired, the
Issuer may issue Additional Bonds on a parity in all respects with the Bonds and Parity
Bonds (without impairing the obligation of contract with the holder of the Bonds or
obligations hereafter issued on a parity therewith) if the following terms and conditions
have been met.
(1) the applicable laws of the State of Texas in force at such time provide
permission for the issuance of such Bonds,
(2) each of the funds, being the Bond Fund, Reserve Fund and Contingency Fund
contains the amount of money then required to be on deposit therein;
(3) the Net Revenues of the Utility System for either the fiscal year or twelve
month period next preceding the date of the ordinance authorizing the issuance of the
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Additional Bonds are certified by a certified public accountant to have been at least equal
to one and one-half times the average annual principal and interest requirement on all
Parity Bonds to be outstanding after the issuance of the Additional Bonds;
(4) the aggregate amount to be accumulated and maintained in the Reserve Fund
shall be not less than the average annual principal and interest requirements of all bonds
similarly secured, and any additional amount required to be accumulated in the Reserve
Fund shall be accumulated therein in not less than five years and one month from the
date of the Additional Bonds;
(5) the ordinance authorizing the issuance of Additional Bonds shall provide for
an identical Flow of Funds as prescribed by previous ordinances.
Section 15. MAINTENANCE AND OPERATION. The Issuer hereby covenants
and agrees to maintain the facilities of the Utility System in good condition and operate
the same in an efficient manner and at a reasonable cost. So long as any Parity Bonds
are outstanding, the Issuer covenants and agrees to maintain insurance for the benefit of
the holder or holders of such Bonds of the kinds and in the amounts which usually are
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 money received from losses under such insurance policies, other than public
liability policies, are hereby pledged as security for such 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 made within
ninety days after the date of loss. The payment of premiums for all insurance policies
required under the provisions hereof shall be considered as a maintenance and operation
expense.
Section lb. RECORDS AND ACCOUNTS. The Issuer hereby covenants and
agrees that so long as any Parity 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 Utility System, separate and apart from all other
records and accounts, in which complete and correct entries shall be made of all
transactions relating to said System as provided in Article 1113, Revised Civil Statutes of
Texas, 1925, as amended, and that the holder or holders of any of the Parity 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. The Issuer further agrees
that within sixty 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 receipt and disbursements for account of the Utility System for the fiscal year,
and each such audit, in addition to whatever other matters may be thought proper by the
certified public accountant, shall particularly include the following:
Fo
(a) a detailed statement of the income and expenditures of the Utility System for
such fiscal year;
(b) a balance sheet as of the end of such fiscal year,
(c) the certified public accountant's comments regarding the manner in which the
Issuer has carried out the requirements of this Ordinance and his recommendations for
any changes or improvements in the operation, records and accounts of the Utility System;
(d) a list of the insurance policies in force at the end of the fiscal year on the
Utility 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 Bond Fund, the Reserve Fund and the Contingency Fund throughout the fiscal
year; a list of the securities, if any, in which the Reserve Fund and the Contingency Fund
have been invested, and a statement of the manner in which money in the Utility System
Revenue Fund has been secured in such fiscal year;
(f) the number of metered and unmetered customers connected with the various
departments of the Utility System, showing totals as of the end of the year.
Expenses incurred in making the audits above required are to be paid as a
maintenance and operation expense.
The Issuer further agrees to promptly furnish a copy of each such audit to First
Southwest Company, Dallas, Texas, or its successor, if any, and to any holder of any of
the Bonds who shall request same in writing, and that the holder of any of the Bonds
shall have the right to discuss with the certified public accountant making the audit the
contents of the audit and to ask for such additional information as he may reasonably
request.
Section 17. SALE, LEASE OR OTHER ENCUMBRANCE OF UTILITY
SYSTEM. The Issuer hereby covenants, finds and obligates itself not to sell, lease, or in
any manner dispose of the Utility System, or any part thereof, including any and all
extensions and additions that may be made thereto, until all 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 Issuer of property which in its judgment has become
inexpedient to use in connection with the Utility System when other property of equal
value has been substituted therefor).
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Section 18. NO COMPETING SYSTEM. So far as it legally may, the Issuer
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, sewer and/or electric light system in the Issuer, until all Bonds
issued hereunder shall have been retired.
Section 19. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights
and remedies provided by the laws of the State of Texas, the Issuer covenants and agrees
particularly that in the event the Issuer (a) defaults in the payment of principal of or
interest on any Bonds when due, (b) fails to make the payments required by Section 12
of this Ordinance to be made into the Bond Fund, Reserve Fund and Contingency Fund
for the Parity Bonds or any Additional Bonds, or (c) defaults in the observance or
performance of any other of the covenants, conditions or obligations set forth in this
Ordinance, the holder or holders of any of the Bonds issued hereunder 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 issuer to observe and perform any covenant,
obligation or condition prescribed in this 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 specification of such remedies shall not be deemed to be exclusive.
Section 20. SPECIAL COVENANTS AND CONDITIONS. (a) The Issuer will
punctually keep, observe and perform each and every term, covenant and condition on its
part to be kept, observed and performed, contained in this Ordinance, and will punctually
perform all duties with reference to the Utility System required by the Constitution and
laws of the State of Texas, including particularly the making and collecting of such
reasonable and sufficient rates and charges for services supplied by the Utility System to
the Issuer and to all other customers, adjusting such rates and charges, from time to time,
in such manner as will be fully sufficient to meet all the requirements of the ordinances
authorizing the Parity Bonds, and the proper segregation and application of the revenues
of such System;
(b) The Issuer is duly authorized under the laws of the State of Texas to issue
the Bonds and to pledge the revenues pledged hereunder, and all necessary action on the
part of the Issuer and its City Council for the issuance of the Bonds have been duly and
effectively taken, and that the Bonds in the hands of the holders thereof are and will be
valid and enforceable obligations of the Issuer in accordance with their terms;
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(c) The Bonds authorized hereunder shall be special obligations of the Issuer and
the holder thereof shall never have the right to demand payment out of funds raised or
to be raised by taxations
(d) Other than for the payment of the Bonds and the Outstanding Bonds, the
rents, revenues and income of the Utility System have not been pledged in any manner
to the payment of any debt or obligation of the Issuer nor of said System.
Section 21. ORDINANCE TO CONSTITUTE CONTRACT. The provisions of
this Ordinance shall constitute a contract between the Issuer and the holder or holders of
the Bonds, from time to time, and after the issuance of any of the 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 shall have been paid as to both
principal and interest.
Section 22. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged,
mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be print-
ed, executed, and delivered, a new bond of the same principal amount, maturity, and
interest rate, as the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement
for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner thereof
to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the
registered owner applying for a replacement bond shall furnish to the Issuer and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save
each of them harmless from any loss or damage with respect thereto. Also, in every case
of loss, theft, or destruction of a Bond, the registered owner shall furnish to the Issuer and
to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction
of such Bond, as the case may be. In every case of damage or mutilation of a Bond, the
registered owner shall surrender to the Paying Agent/Registrar for cancellation the Bond
so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section,
in the event any such Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on
the Bond, the Issuer may authorize the payment of the same (without surrender thereof
except in the case of a damaged or mutilated Bond) instead of issuing a replacement
Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any
replacement bond, the Paying Agent/Registrar shall charge the registered owner of such
Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact
that any Bond is lost, stolen, or destroyed shall constitute a contractual obligation of the
Issuer whether or not the lost, stolen, or destroyed Bond shall be found at any time, or
be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance
equally and proportionately with any and all other Bonds duly issued under this Ordin-
ance.
(e) Authority for Issuing Replacement Bonds. In accordance with Article 717k-
6, V.A.T.C.S., as amended, and particularly, this Section of this Ordinance shall consti-
tute authority for the issuance of any such replacement bond without necessity of further
action by the governing body of the Issuer or any other body or person, and the duty of
the replacement of such bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such Bonds
in the form and manner and with the effect, as provided in Section 6(d) of this Ordinance
for Bonds issued in conversion and exchange for other Bonds.
Section 23. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS;
BOND COUNSEL'S OPINION; AND CUSIP NUMBERS. The Mayor of the Issuer is
hereby authorized to have control of the Bonds issued hereunder and all necessary records
and proceedings pertaining to the Bonds pending their delivery and their investigation,
examination, and approval by the Attorney General of the State of Texas, and their regis-
tration by the Comptroller of Public Accounts of the State of Texas. Upon registration
of the Bonds said Comptroller of Public Accounts (or a deputy designated in writing to
act for said Comptroller) shall manually sign the Comptroller's Registration Certificate
attached to such Bonds, and the seal of said Comptroller shall be impressed, or placed
in facsimile, on such Bond. The approving legal opinion of the Issuer's Bond Counsel and
the assigned CUSIP numbers may, at the option of the Issuer, be printed on the Bonds
or on any Bonds issued and delivered in conversion of and exchange or replacement of
any Bond, but neither shall have any legal effect, and shall be solely for the convenience
and information of the registered owners of the Bonds.
Section 24. COVENANTS REGARDING TAX EXEMPTION. The Issuer cove-
nants to refrain from taking any action which would adversely affect, and to take any
required action to ensure, the treatment of the Bonds as obligations described in Sec-
tion 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the interest on
which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows.
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Bonds (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in Section 141(b)(6) of the Code or, if more than 10 percent of
the proceeds are so used, that amounts, whether or not received by the Issuer, with
Q7
respect to such private business use, do not, under the terms of this Ordinance, or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more
than 10 percent of the debt service on the Bonds, in contravention of Section 141(b)(2)
of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is
used for a "private business use" which is "related" and not "disproportionate," within the
meaning of Section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of Section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of Section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of Section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in Section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Bonds, other than investment property ac-
quired with --
(1) proceeds of the Bonds invested for a reasonable temporary period of 3 years
or less or, in the case of a refunding bond, for a period of 30 days or less until such
proceeds are needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
Section 1.10343(b)(12) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of Section 148 of the Code (relating to arbitrage) and, to the
extent applicable, Section 149(d) of the Code (relating to advance refundings);
01
(h) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal
to 90 percent of the "Excess Earnings," within the meaning of Section 148(f) of the Code
and to pay to the United States of America, not later than 60 days after the Bonds have
been paid in full, 100 percent of the amount then required to be paid as a result of
Excess Earnings under Section 148(f) of the Code; and
(i) to maintain such records as will enable the Issuer to fulfill its responsibilities
under this Section and Section 148 of the Code and to retain such records for at least six
years following the final payment of principal and interest on the Bonds.
In order to facilitate compliance with the above covenants (g), (h), and (i), a
"Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States
of America, and such Fund shall not be subject to the claim of any other person, including
without limitation the bondholders. The Rebate Fund is established for the additional
purpose of compliance with Section 148 of the Code.
It is the understanding of the Issuer that the covenants contained herein are
intended to assure compliance with the Code and any regulations or rulings promulgated
by the U.S. Department of the Treasury pursuant thereto. In the event that regulations
or rulings are hereafter promulgated which modify, or expand provisions of the Code, as
applicable to the Bonds, the Issuer will not be required to comply with any covenant
contained herein to the extent that such failure to comply, in the opinion of nationally.
recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under Section 103 of the Code. In the event that
regulations or rulings are hereafter promulgated which impose additional requirements
which are applicable to the Bonds, the Issuer agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally -recognized bond counsel,
to preserve the exemption from federal income taxation of interest on the Bonds under
Section 103 of the Code.
Section 25. SALE OF INITIAL BOND. The Initial Bond is hereby sold and shall
be delivered to Smith Barney, Harris Upham & Co. for cash for the price of $2,300,000
thereof and accrued interest thereon to date of delivery, plus a premium of $94.20. It is
hereby officially found, determined, and declared that the Initial Bond has been sold at
public sale to the bidder offering the lowest interest cost, after receiving sealed bids
pursuant to an Official Notice of Sale and Bidding Instructions and Official Statement
dated December 11, 1990, prepared and distributed in connection with the sale of the
Initial Bond. Said Official Notice of Sale and Bidding Instructions and Official State-
ment, and any addenda, supplement, or amendment thereto have been and are hereby
approved by the governing body of the Issuer, and their use in the offer and sale of the
Bonds is hereby approved. It is further officially found, determined, and declared that the
statements and representations contained in said Official Notice of Sale and Official State -
32
ment are true and correct in all material respects, to the best knowledge and belief of the
governing body of the Issuer.
Section 26. ENffiRGENCY. The fact that the City Council considers the passage
of this Ordinance and the issuance of the Bonds necessary for the immediate preservation
of the public peace, health, safety and welfare, creates an emergency and an imperative
public necessity due to the urgent needs to increase the waste water treatment capacity
of the Issuer's existing wastewater treatment plant together with its lines and other
improvements, that the rule requiring ordinances to be read at more than one meeting of
the City Council before final passage be suspended, and said rule is hereby suspended,
and that this Ordinance takes effect and be in force and effect immediately from and after
its passage at this meeting, and it is so ordained.
11 1 -V.. gill 1, 11''Ifilli 10•
City Secretary
LA ' :Zell/21 1
City Attorney