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HomeMy WebLinkAboutORD 81-37 - Issue Revenue Bonds00 co qq 0 Q Q g 1-37 ORDINANCE AUTHORIZING THE ISSUANCE OF REVENUE BONDS THE STATE OF TEXAS COUNTY OF WILLIAMSON CITY OF GEORGETOWN WHEREAS, the City Council of said City has heretofore on August 11, 1981, passed an ordinance directing notice of intention to issue revenue bonds in the amount of $550,000; and WHEREAS, said notice has been duly published in the Williamson County Sun, which is a newspaper of general circulation in said City, on August 14,, 1981 and Augustf-3, 1981; and WHEREAS, the City received no petition from the qualified electors of said City protesting the issuance of such revenue bonds; and WHEREAS, the bonds hereinafter authorized and designated are to be issued and delivered pursuant to Art. 1111 through 1118, V.A.T.C.S. THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS: Section 1. That said City's bonds are hereby authorized to be issued in the aggregate principal amount of $550,000, for the purpose of improving and extending the City's Utility System. Section 2. That said bonds shall be designated as the CITY OF GEORGETOWN, TEXAS, UTILITY SYSTEM REVENUE BONDS, SERIES 1981. Section 3..That said bonds shall be dated August 15, 1981, shall be in the denomination of $5,000 each, shall be numbered consecutively from one upward, and shall mature serially on the maturity date, in each of the years, and in the amounts, respectively, as set forth in the following schedule: MATURITY DATE; APRIL 15 YEARS AMOUNTS 1982 $25,000 1983 25,000 1984 50,000 1985 50,000 1986 75,000 1987 75,000 1988 75,000 1989 75,000 1990 100,000 Section 4. That the bonds shall bear interest at the rate of 5.60°%, per annum. Said interest shall be evidenced by interest coupons which shall appertain to said bonds, and which shall be payable in the manner provided and on the dates stated in the FORM OF BOND set forth in the Ordinance. Section 5. That said bonds and interest coupons shall be issued, shall be payable, shall have the characteristics, and shall be signed and executed (and said bonds shall be sealed), all as provided, and in the manner indicated, in the FORM OF BOND set forth in this Ordinance. 225 226 Section 6. That the form of said bonds, including the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be imprinted and endorsed on each of said bonds, and the form of the aforesaid interest coupons which shall appertain and be attached initially to each of said bonds, shall be, respectively, substantially as follows: NO. FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF WILLIAMSON CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM REVENUE BOND SERIES 1981 $5,000 ON APRIL 15, , the CITY OF GEORGETOWN, COUNTY OF WILLIAMSON, STATE OF TEXAS, hereby promises to pay to bearer hereof the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from'date hereof, at the rate of % per annum, evidenced by interest coupons payable April 15, 1982, and semi-annually thereafter while this bond is outstanding. THE PRINCIPAL of this bond and the interest coupons appertaining hereto shall be payable to bearer, in lawful maney of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this bond or proper interest coupon, at the following, which shall 'constitute and be defined as the "Paying Agent" for this Series of Bonds: MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS THIS BOND is one of a Series dated as of 'August 15, 1981, authorized and issued in the principal amount of $550,000, for the purpose of for improving and extending the City's Utility System. 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, issuance, and delivery of this bond have been performed, existed, and been done in accordance 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 City, are payable from, and secured by a first lien on and pledge of, the Net Revenues of said City's Utility System, being the City's combined Waterworks, Sewer and Electric Light System, includ- ing all additions, extensions and improvements thereto which may hereafter be made. SAID CITY has reserved the right, subject to the restric- tions 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 said City's Utility System in the same manner and to the same extent as this series of bonds. 00 co qq 0 a a 227 THE HOLDER HEREOF shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. IN WITNESS WHEREOF, this bond and the interest coupons appertaining hereto have been signed with the facsimile signature of the Mayor of said City and countersigned with the facsimile signature of the City Secretary of said City, and the official seal of said City has been duly impressed, or placed in facsimile, on this bond. xxxxx City Secretary xxxxx Mayor FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO. I hereby certify that this bond has been examined, certified as to validity, and approved by the Atcorney 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 xxxxxx Comptroller of Public Accounts of the State of Texas FORM OF INTEREST COUPON: NO. ON , THE CITY OF GEORGETOWN, COUNTY OF WILLIAMSON, STATE OF TEXAS, promises to pay to bearer the amount shown on this interest coupon, in lawful money of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this interest coupon, at the MERCANTILE NATIONAL BANK AT DALLAS, DALLAS, TEXAS, said amount being interest coming due that day on the bond, bearing the number hereinafter designated, of that issue of CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 1981, dated August 15, 1981. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxa- tion. Bond No. xxxxx xxxxx City Secretary Mayor Section 7. DEFINITIONS. The following words, terms and expressions used in this Ordinance shall have the follow- ing meanings unless the context indicates or implies a different meaning: (a) "City" means the City of Georgetown. (b) "City Council" or "Council" means the governing body of the City of Georgetown. (c) "Bonds" shall mean the $550,000 of revenue bonds authorized by this Ordinance. 228 (d) "Outstanding Bonds" or "Outstanding Revenue Bonds" shall mean the "City of Georgetown Utility System Revenue Bonds, Series 1966", dated June 1, 1966, "City of Georgetown Utility System Revenue Bonds, Series 1970", dated April 1, 1970 "City of Georgetown, Texas, Utility System Revenue Bonds, Series 1971", dated March 1, 1971, and "City of Georgetown Utility System Revenue Bonds, Series 1974", dated October 15, 1974. (e) "Parity Bonds" shall mean collectively the Bonds and the Outstanding Bonds. (f) "Additional Bonds" shall mean the addition parity revenue bonds permitted to be issued under the provisions of the ordinances authorizing the Parity Bonds. (g) "Utility System" shall mean the System created and established for and on behalf of the City under the provisions of the ordinances authorizing the Outstanding Bonds. (h) "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 9 of this Ordinance. (i) "Utility System Revenue Fund", "Utility System Revenue Bonds Interest and Sinking Fund", "Utility System Revenue Bonds Reserve Fund", and "Utility System 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 costs of certain repairs or replacements to said System and for the payment of princi- pal of and interest on bonds outstanding against the Utility System, as hereinafter more specifically stated. Section 8. UTILITY SYSTEM. That the Utility System (hereinafter sometimes called the "System"), as created and established by the City Council, is comprised of the entire waterworks system, the entire sewer system, and the entire electric light system now owned and operated by the City of Georgetown, Texas, 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 Utility System shall be operated on the basis of a fiscal year commencing on September 1st of each year and ending on August 31st of the following year. Section 9. PLEDGE OF REVENUES. (a) The Bonds herein authorized and the Outstanding Revenue 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 deduction therefrom of the amount necessary to pay all operating, maintenance, replacement and betterment charges of the System, as is 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 Revenue Bonds. (b) The Bonds are being issued as additional parity revenue bonds as defined as "Additional Bonds" in the ordi- nance passed by the City on March 9, 1964 authorizing the issuance, sale and delivery of the City's Utility System Revenue Bonds, Series 1964, and as defined as "Additional Bonds" in the ordinance passed by the City on October 31, 1974 authorizing the issuance, sale and delivery of the City's Utility System Revenue Bonds, Series 1974. co co Iq C9 Q Q 229 Section 10. MAINTENANCE OF RATES. The City 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 Utility 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 outstand- ing indebtness of said System, as is required by applicable Statutes of Texas. For the benefit of the original purchasers and for the benefit of any and all subsequent holders of the Parity Bonds, Additional Bonds, coupons, 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 City shall fix and maintain rates and collect charges for the facilities and services afforded by the System to the City 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; (c) To pay in addition all outstanding indebtness 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 11. UTILITY SYSTEM REVENUE FUND. There shall be deposited in the Utility System Revenue Fund (already established) as collected all revenues derived from the operation of the Utility System, which fund shall be main- tained separate and apart from all other funds of the City. Such Utility System Revenue Fund shall be maintained so long as any Parity Bonds, or any Additional Bonds, remain outstand- ing, in the City's official Depository, and shall be adminis- tered as follows: (a) OPERATION AND MAINTENANCE EXPENSES: The money in the Utility System 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 "exten- sions" 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 City, are necessary to keep the System in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to 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 Utility j System Revenue Bonds 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 per centum of the amount required to meet the interest and principal payments falling due on or before the next maturity i 230 date of the Parity Bonds or any Additional Bonds then out- standing. On or before the 10th day of each month, after payments have been made as required by subsection (a) of this Section 11, the City shall withdraw from the Utility System Revenue Fund and deposit in 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 1/6th of the next semi-annual installment of interest on the Parity Bonds then outstanding and on any Additional Bonds then outstanding. The monies in the Bond Fund shall be used solely for the purpose of paying the interest on the principal of the Parity Bonds, and any Additional Bonds, until all such bonds have been retired. In the event the income and revenues 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. That 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 in the Bond Fund. (c) RESERVE FUND: Commencing September 10, 1981, and on or before the 10th day of each month thereafter, after payments have been made as required by subsections (a) and (b) of this Section 11, the City shall withdraw from the Utility System Revenue Fund and deposit in the Utility System Revenue Bond Reserve Fund (already established and hereinafter called the "Reserve Fund"), in addition to the payments and deposits otherwise required to be made therein, the sum of $ until an additional debt service reserve of $ on the outstanding Bonds has been established, and thereafter, such sums monthly as may be necessary to maintain the required reserve of $ on the Parity Bonds. The City 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 the Additional Bonds then outstanding. The Reserve Fund shall be used to pay principal of or interest on the Parity Bonds and such Addi- tional Bonds falling due at any time for the payment of which there is no 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, or it is otherwise depleted, payments into the Reserve Fund sbn].l be resumed and continued until such time as such Fund contains the amount of money then required to be on deposit therein. The City'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 (5) 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 maturities of the Parity Bonds or any Additional Bonds then outstanding as heretofore directed, 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 co co Iq 0 Q Q 231 the interest thereon when due, and shall give due notice thereof to the City of Georgetown. 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, Series 1966, Series 1970 and Series 1971, have been paid off, cancelled and retired, the Reserve Fund for these Series 1981 Bonds may be commin- gled 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 City further convenants that when 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 thaii five years and one month from the date of the Additional Bonds. Money in the Reserve Fund may be invested in direct obligations of or obligations uncondi- tionally guaranteed by the United States Government having maturities not in excess of five years from the date of the making of such investment. (d) CONTINGENCY FUND: Based on an annual review of the experience as to the cost of repairs and replacements -to the Utility System necessitated by the occurring of emergen- cies and the recommendation of the City's Consulting Engineer, the. City Council has determined that the Utility System Contingency Fund (hereinafter referred to as the "Contingency Fund"), heretofore created and ordered to be established and maintained in the amount of $15,000 is sufficient for the time being. The Contingency Fund shall be used to pay the (1) 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 City are insuffi- cient for such purpose. The City covenants and agrees that in the event Addi- tional 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 as annual review of the experience as to the cost of repairs and replacements to the Utility System necessitated by the occurring of emergencies and the recommendation of a Consul- ting 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, payments into the Fund shall be resumed and continued until such time as the Fund has been restored to the required sum. The City's official Depository is hereby authorized to invest the money in the Contingency Fund in direct obligations of or obligations unconditionally guaranteed by the United States Government, having maturities not in excess of five (5) 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 payment: required to be made from the Contin- gency Fund, whenever such payments are required to ee made under the foregoing provisions of this Ordinance. \'z 232 (e) SURPLUS FUNDS: All monies remaining in the Utility System Revenue Fund after the requirements of subsections (a), (b), (c), and (d) of this Section 11 have been met (including any increased 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 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 City be used for any other proper city 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 exceed- ing the market value thereof. All bonds so paid, redeemed or purchased shall be cancelled and shall not be re -issued. Nothing herein shall be construed, however, as impairing the right of the City to pay in accordance with the provisions thereof any junior lien bonds hereafter legally issued by it. Section 12. SECURITY FOR FUNDS. All monies 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 laws of the State of Texas applicable thereto, and the City 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 inter- est, at all times at least equal to the total amount of money on deposit in the several Funds in the Depository. Section 13. ADDITIONAL BONDS. In addition to the right to issue bonds of inferior lien as authorized by the laws of this State, the City of Georgetown reserves the right 'to issue further and 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 Utility System Revenue Bonds 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: (a) The Addtional Bonds are authorized and issued in conformith with the Constitution and applicable Statutes of the State of Texas; (b) The Bond Fund, the Reserve Fund, and the Contingency Fund contain the amount of money then required to be on deposit therein and the City is in compliance with all other covenants and undertakings in connection with all bonds then outstanding and payable from the net revenues of the Utility System; (c) The Net Revenues of the Utility System for either the fiscal year or twelve-month period next preceding the date of the passage of an Ordinance authorizing the issuance of the 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 requirements on all bonds then outstanding against the Utility System and the bonds then to be issued; co co Q Q 233 (d) A competent independent engineer certifies in writing that in his opinion the average annual net earnings throughout the life of the bonds then outstanding against the Utility System and the bonds then to be issued shall be equal to at least one and one-half times the average annual principal and interest requirements on all bonds then out- standing against the Utility System and the bonds then to be issued; (e) The Ordinance authorizing the issuance of the Additional Bonds shall provide (i) for an identical FLOW OF FUNDS as prescribed by Section 11 of the Ordinances author- izing the Parity Bonds; (ii) that all revenues deposited in the special funds and accounts created and established by such Ordinances shall be commingled; and (iii) for appropriate additional or larger payments to be made into said special funds and accounts and for appropriate additional or larger amounts to be accumulated in said special funds and accounts for all bonds then outstanding against the Utility System and the proposed Additional Bonds, in full accord with the provisions of this Ordinance. (f) PROVIDED, FURTHER, that at any time after the "City of Georgetown, Texas Utility System Revenue Bonds, Series 1966, Series 1970 and Series 1971" have been refunded, paid off, cancelled'and retired, the City may issue additional bonds on a parity in all respects with the 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 above Funds 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 12 month period next preceding the date of the Ordinance authorizing the issuance of the 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 requirements on all 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 then five years and one month from the date of the Additional Bonds; (5) The Ordinance authorizing "he issuance of the Additional Bonds shall provide for an identical Flow of Funds as prescribed by previous Ordinances. Section 14. MAINTENANCE AND OPERATION. The City 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 City 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 monies 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 (90) days after the date of loss. The payment of premiums for all insurance policies required under the provisions hereof shall be considered as maintenance and operation expenses. \Z1.r 234 Section 15. RECORDS AND ACCOUNTS. The City 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 City further agrees that within sixty (60) days following the close of each fiscal year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants, showing the receipts and disbursements for 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 Accountant, shall particularly include the following: (a) A detailed statement of the income and expenditures for account of the Utility System for such fiscal year. (b) A balance sheet as of the end of such fiscal year. (c) The Accountant's comments regarding the manner in which the City has carried out the requirements of this Ordinance and his recommendations for any changes or improve- ments in the operation, records and accounts of the Utility System. (d) A list of the insurance policies in force at the 1 and 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 maintenance and operation expenses. The City further agrees to promptly furnish a copy of each such audit to First Southwest Company, Dallas, Texas, 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 accountant making the audit the contents of the audit and to ask for such additional information as he may reasonably request. Section 16. SALE, LEASE OR OTHER ENCUMBRANCE OF SYSTEM. The City hereby covenants, binds 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 City 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). 00 co Q Q Section 17. NO COMPETING SYSTEM. That so far as it 235 legally may, the City 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 City of Georgetown, until all Bonds issued hereunder shall have been retired. Section 18. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and remedies provided by the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in the payment of principal of or interest on any Bonds when due, (b) fails to make the payments required by Section 11 of the Ordinances authorizing the Parity Bonds to be made into the Bond Fund, Reserve Fund and Contingency Fund, or (c) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this Ordinance, the following remedies shall be available: (a) 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 City to observe and perform any covenant, obligation or condition prescribed in the Bond Ordinance. (b) 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 19. SPECIAL COVENANTS AND CONDITIONS. (a) The City will duty and punctually keep, observe and perform each and every term, covenant and condition on its part to be kept, observed and performed, contained in this Ordiance, 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 collect- ing of such reasonable and sufficient rates and charges for services supplied by the Utility System to the City 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 City 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 City 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 City in accordance with their terms; (c) That the Bonds authorized hereunder shall be special obligations of the City and the holder thereof shall never have the right to demand payment out of funds raised or to be raised by taxation. Nan 236 (d) That other than for the payment of the Bonds and the outstanding City of Georgetown Utility System Revenue Bonds, Series 1966, dated June 1, 1966, City of Georgetown Utility System Revenue Bonds, Series 1970, dated April 1, 1970, City of Georgetown, Texas, Utility System Revenue Bonds, Series 1971, dated March 1, 1971, and City of George- town, Texas, Utility System Revenue Bonds, Series 1974, dated October 15, 1974, the rents, revenues and income of the Utility System have not been pledged in any manner to the payment of any debts or obligations of the City nor of said System. (e) That the Utility System of the City is free and clear of all encumbrances. Section 20. ORDINANCE TO CONSTITUTE CONTRACT. That the provisions of this Ordinance shall constitute a contract between the City and the holder or holders from time to time of the Bonds, and after the issuance of any of said Bonds, no change, variation or alteration of any kind of the provi- sion 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 21. SPECIAL OBLIGATIONS. That the bonds authorized by this Ordinance are and shall be special obliga- tions of said City, and the holder or holders thereof shall never have the right to demand payment of said obligations out of any funds raised or to be raised by taxation. Section 22. REGISTRATION OF BONDS. That the Mayor of said City is hereby authorized to have control of said bonds and all necessary records and proceedings pertaining to said bonds pending their delivery and their investigation, exami- nation and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration of said 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 prescribed herein to be printed and endorsed on each bond, and the seal of said Comptroller shall be impressed, or printed, or lithographed on each of said bonds. Section 23. ARBITRAGE. That the City covenants to and with the purchasers of the bonds that it will make no use of the proceeds of the bonds at any time throughout the term of this issue of bonds which, if such use had been reasonably expected on the date of delivery of the bonds to and payment for the bonds by the purchasers, would have caused the bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, or any regulations or rulings pertaining thereto; and by this covenant the City is obligated to comply with the requirements of the aforesaid Section 103(c) and all applicable and pertinent Department of the Treasury regulations relating to arbitrage bonds. The City further covenants that the proceeds of the bonds will not otherwise be used directly or indirectly so as to cause all or any part of the bonds to be or become arbitrage bonds within the meaning of the aforesaid Section 103(c), or any regulations or rulings pertaining thereto. Section 24. SALE OF BONDS. That the bonds are hereby sold to the Texas Water Development Board for cash, at a price equivalent to the Texas Water Development Board's statutory lending rate plus accrued interest to date of delivery. Section 25. FINAL ACCOUNTING. That the City shall render a final accounting to the Texas Water Development Board, in reference to the total cost incurred by the City, for the improvements and extensions to the City's Utility System. 00 co a a Section 26. SURPLUS FUNDS. That the City shall use 2 3 7 any surplus proceeds from the bonds remaining after completion of the improvements and extensions to the City's Utility System, for the purchase of the bonds owned by the Texas Water Development Board. Section 27. ANNUAL AUDIT. That a copy of the City's annual audit report shall be delivered to the Texas Water Development Board as long as the State of Texas owns any of the bonds. Section 28. EMERGENCY. 'That it is hereby officially found and determined: that a case of emergency or urgent public necessity exists which requires the holding of the meeting at which this Ordinance is passed, such emergency or urgent public necessity being that the proceeds from the sale of said bonds are required as soon as possible and without delay for necessary and urgently needed public improvements; and that said meeting was open to the public, and public notice of the time, place, and purpose of said meeting was given, all as required by Vernon's Ann. Civ. St. Article 6252-17. Section 29. That this Ordinance shall become effective immediately upon its passage because of the emergency for the preservation of the public peace, property, health and safety of said City and its inhabitants.