ORD 217 02/20/1975 •. • • f
ORDINANCE NO. 217
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AN ORDINANCE by the City Council of the City of Cibolo,
Texas , authorizing the issuance of $60, 000 "CITY
OF CIBOLO, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS , SERIES 1975" , dated January 10,
1975 , as authorized by the General Laws of the
State of Texas , particularly Article 1111 et.
seq . , V.A.T. C. S . ; prescribing the form of the
bonds and the form of the interest coupons ;
providing for a pledge of revenues to the payment
of principal of and interest on said bonds ;
enacting provisions incident and relating to the
subject and purpose of this ordinance; and
declaring an emergency.
it WHEREAS, pursuant to an election held within the City of
Cibolo, Texas on the 10th day of August;; 1974, the City Council of
P said City became authorized and empowered to issue revenue bonds ,
secured by a pledge of the net revenues from the operation of
1 the City' s combined Waterworks and Sanitary Sewer System as
follows :
$250, 000 for the purpose of constructing improvements
and extensions to the City' s Waterworks System;
and
$125, 000 for the purpose of constructing improvements
and extensions to the City' s Sanitary Sewer
System;
AND WHEREAS , it is hereby found and determined that $60 , 000
in principal amount of the revenue bonds authorized at the afore-
said election for the purpose of constructing improvements and
extensions to the City ' s Sanitary Sewer System should now be
issued; and
WHEREAS, this City Council hereby reserves the right to issue
the remainder of the revenue bonds authorized at the aforesaid
election in one or more installments at a future date or dates
1 as funds are needed to accomplish the purposes for which the same
were authorized; now, therefore, /
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CIBOLO,
TEXAS :
SECTION 1: Authorization - Principal Amount - Designation.
That in order to borrow the sum of SIXTY THOUSAND DOLLARS
($60, 000) for the purpose of constructing improvements and
extensions to the City Sanitary Sewer. System, the City Council of
the City of Cibolo, Texas , by virtue of the authority expressly
ii conferred at an election held for the purpose, and pursuant to
1 the General Laws of the State of Texas , particularly Article 1111
,` et seq. , V.A. T. C. S. , has determined that there shall be issued
and there is hereby ordered to be issued a series of coupon bonds
in the total principal amount of SIXTY THOUSAND DOLLARS ($60 , 000) ,
to he designated "CITY OF CIBOLO, TEXAS , WATERWORKS AND SEWER
SYSTEM REVENUE BONDS , SERIES 1975" , payable as to both principal
j3 and. interest solely from and secured by a first lien on and pledge
ii of the net revenues of the City ' s combined Waterworks and Sanitary
Sewer System.
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SECTION 2 : Date - Numbers - Maturity - Option. That said
bonds shall be dated January 10, 1975 ; shall be numbered
'i consecutively from One (1) through Twelve (12) ; shall be in
denomination of Five Thousand Dollars ($5 , 000) each; and shall
become due and payable serially on January 10 in each of the
ii years in accordance with the following schedule:
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BOND NUMBERS
11 (All Inclusive) - MATURITY AMOUNT
fi 1 1985 $ 5 , 000
2 1986 5 , 000
3 1987 5 , 000
4 1988 5 , 000
5 1989 5, 000
1 6 1990 5 , 000
j; 7 and 8 1991 10, 000
II 9 and 10 1992 10, 000
i� 11 and 12 1993 10, 000
PROVIDED, HOWEVER, the City reserves the right to redeem the bonds
d maturing in each of the years 1986 through 1993 of said series , in
whole or any part thereof, on January 10, 1985 or on any interest
11paymentdate thereafter, at the price of par and accrued interest
to the date fixed for redemption, and PROVIDED, FURTHER, that at
least thirty (30) days prior to a date any of said bonds are to
., be redeemed, a notice of redemption signed by the City Secretary
(specifying the serial numbers and amount of bonds to be redeemed)
I shall have been filed with the FROST NATIONAL BANK, San Antonio,
! Texas (the paying agent named in each of said bonds) ; and if by
the date so fixed for redemption the City shall have made available
1; funds in amounts sufficient to pay the bonds and accrued interest
; thereon to the date of redemption, any bond or bonds not be
I presented for redemption pursuant to such notice shall cease to
I bear interest from and after the date so fixed for redemption.
SECTION 3: Interest. That said bonds shall bear interest
d from date to maturity at the rate of FIVE AND THIRTY-FIVE
HUNDREDTHS PER CENTUM (5 . 35%) per annum; such interest to be
evidenced by proper coupons attached to each of said bonds , and
1 said interest shall be payable on January 10, 1976 , and semi-
jannually thereafter on July 10 and January 10 in each year.
SECTION 4: Place of Payment: That both principal of and
interest on this issue of bonds shall be payable in lawful money
of the United States of America, without exchange and collection
charges to the owner or holder, at the Frost National Bank, San
Antonio, Texas upon presentation and surrender of bonds or
1 coupons .
SECTION 5 : Execution of Bonds and Coupons . That the seal
'! of said City may be impressed on each of said bonds or, in the
alternative, a facsimile of such seal may be printed on the said
bonds . The bonds and interest coupons appurtenant thereto may
be executed by the imprinted facsimile signatures of the Mayor
and City Secretary of the City, and execution in such manner shall
ij have the same effect as if such bonds and coupons had been signed
by the Mayor and City Secretary in person by their manual I'
signatures . Inasmuch as such bonds are required to be registered
{ by the Comptroller of Public Accounts for the State of Texas ,
10 only his signature (or that of a deputy designated in writing
to act for the Comptroller) shall be required to be manually
subscribed to such bonds in connection with his registration
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certificate to appear thereon, as hereinafter provided, all in
accordance with the provisions of Article 717j -1, V.A.T. C. S .
SECTION 6: Form of Bonds . That the form of said bonds
shall be substantially as follows :
NO. UNITED STATES OF AMERICA $5 , 000
STATE OF TEXAS
COUNTY OF GUADALUPE
CITY OF CIBOLO, TEXAS , WATERWORKS
AND SEWER SYSTEM REVENUE BOND
SERIES 1975
E THE CITY OF CIBOLO, a municipal corporation for the State of
Texas , acknowledges itself indebted to and, FOR VALUE RECEIVED,
hereby promises to pay to bearer, as hereinafter stated, the sum
of:
FIVE THOUSAND DOLLARS
{ ($5 , 000) , in lawful money of the United States of America, on the
TENTH DAY OF JANUARY, 19 , with interest thereon from the date
hereof to maturity at the rate of FIVE AND THIRTY-FIVE HUNDREDTHS
PER CENTUM ( 5 . 35 70) per annum, payable on January 10, 1976,
and semi-annually thereafter on July 10 and January 10 in each
year, and interest falling due on or prior to maturity hereof is
payable only upon presentation and surrender of the interest
coupons hereto attached as they severally become due .
BOTH PRINCIPAL of and interest on this bond shall be payable
at the Frost National Bank, San Antonio, Texas , without exchange
or collection charges to the owner or holder, and the said City
{ of Cibolo, Texas, is hereby held and firmly bound to apply the
pledged appropriated net revenues of its combined Waterworks and
') Sanitary Sewer System to the prompt payment of principal of and
interest on this bond at maturity and to pay said principal and
Id interest as they mature .
THIS BOND is one of a series of bonds aggregating in amount
SIXTY THOUSAND DOLLARS ($60, 000) , numbered consecutively from
1 One (1) through Twelve (12) , each in denomination of Five
Thousand Dollars ($5 , 000) , issued for the purpose of constructing
improvements and extensions to the City Sanitary Sewer System,
in accordance with the Constitution and laws of the State of
Texas , particularly Article 1111 et seq. , V.A. T. C. S . , and by
authority of an election held for that purpose within said City
; and pursuant to an ordinance passed by the City Council of the
1 City of Cibolo, Texas, and duly recorded in the Minutes of said
City Council.
AS SPECIFIED in the ordinance hereinabove mentioned, the
City reserves the right to redeem bonds maturing in each of the
years 1986 through 1993 of this series , in whole or any part
thereof, on January 10 , 1985 , or on any interest payment date
thereafter, at the price of par and accrued interest to the date
fixed for redemption ; PROVIDED, HOWEVER, that at least thirty (30) ,
days prior to a date any of said bonds are to be redeemed, a
notice of redemption, signed by the City Secretary (specifying
the serial numbers and amount of bonds to be redeemed) shall have
been filed with the Frost National Bank, San Antonio, Texas ; and
if by the date so fixed for redemption the City shall have made
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available funds in amounts sufficient to pay the bonds and
accrued interest thereon to the date of redemption, any bond
or bonds not be presented for redemption pursuant to such notice
shall cease to bear interest from and after the date so fixed for
redemption.
THE DATE of this bond in conformity with the ordinance above
mentioned is January 10, 1975.
ii THIS BOND and the series of which it is a part constitute
special obligations of the City of Cibolo, Texas , payable from
and equally secured by a first lien on and pledge of the net
revenues of the City' s combined Waterworks and Sanitary Sewer
System.
THE CITY expressly reserves the right to issue further and
additional revenue bond obligations in all things on a parity
with the bonds of this series and payable solely from and equally
secured by a first lien on and pledge of the net revenues of the
City' s combined Waterworks and Sanitary System;
Sewer S stem; PROVIDED,
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HOWEVER, that any and all such additional bonds may be so issued
only in accordance with and subject to the covenants , conditions,
limitations and restrictions relating thereto which are set out
and contained in the ordinance authorizing this series of bonds
andto which ordinance reference is hereby made for more complete
and full particulars .
THE HOLDER hereof shall never have the right to demand payment
of this obligation out of any funds raised or to be raised by
it taxation.
AND IT IS HEREBY CERTIFIED AND RECITED that the issuance of
this bond and the series of which it is a part is duly authorized
by law; that all acts , conditions and things required to exist
and to be done precedent to and in the issuance of this bond to
render the same lawful and valid have been properly done, have
happened and have been performed in regular and due time, form
and manner as required by the Constitution and laws of the State
of Texas and the ordinance hereinabove mentioned; that this
series of revenue bonds does not exceed any Constitutional or
statutory limitation; and that provision has been made for the
payment of the principal of and interest on this bond and the series
of which it is a part by irrevocably pledging the net revenues of
the City' s combined Waterworks and Sanitary Sewer System.
IN TESTIMONY WHEREOF, the City Council of the City of Cibolo,
Texas , in accordance with the provisions of Article 717j-1,
V.A.T. C. S . , has caused the seal of said City to be impressed or
jI a facsimile thereof to be printed hereon, and this bond and its
appurtenant coupons to be executed with the imprinted facsimile
signatures of the Mayor and City Secretary of said City as of
the 10th day of January, 19 75 .
Mayor, Cityo Ci.olo Texas
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City Secretary, City of Cibolo, Texas
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SECTION 7 : Coupon Form. That the form of interest coupons
attached to each of said bonds shall be substantially as follows :
{ NO. _ ON THE TENTH DAY OF
19
*(unless the bond to which this coupon pertains has been pro-
perly called for redemption in accordance with its terms) the
i1 CITY OF CIBOLO, a municipalcorporation of the State of Texas ,
hereby promises to pay to bearer out of funds specified in the
bond to which this coupon is attached (without right to demand
payment out of any funds raised or to be raised by taxation) , and
in lawful money of the United States of America, without exchange
or collection charges to the owner or holder, at the Frost National
Bank, San Antonio, Texas , the sum of
DOLLARS
1 ($ ) , said sum being months ' interest due that
day on "CITY OF CIBOLO, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
I BOND, SERIES 1975" , dated January 10, 1975 . Bond No.
City Secretary Mayor
SECTION 8: Form of Comptroller' s Certificate. Substantially
the following shall be printed on the back of each bond:
j1 OFFICE OF COMPTROLLER §
§ REGISTER NO.
STATE OF TEXAS §
I HEREBY CERTIFY that there is on file and of record in my
office a certificate of the Attorney General of the State of Texas
to the effect that this bond has been examined by him as required
Iby law, and that he finds that it has been issued in conformity
I with the Constitution and laws of the State of Texas , and that
it is a valid and binding special obligation of the City of
Cibolo, Texas , payable from the revenues pledged to its payment
by and in the ordinance authorizing same, and said bond has this
day been registered by me .
WITNESS MY HAND AND SEAL OF OFFICE at Austin, Texas ,
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Comptroller of Public Accounts
of the State of Texas
h *NOTE TO PRINTER: The expression in parentheses to be included
only in coupons maturing July 10 , 1985, and subsequent, pertaining
to optional bonds maturing in the years 1986 through 1993.
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SECTION 9 : Definitions . For all purposes of this ordinance
and in particular for clarity with respect to the issuance of
the bonds herein authorized and the pledge and appropriation of
revenues therefor, the following definitions are provided:
(a) The term "System" shall mean the City' s combined
Waterworks and Sanitary Sewer System, including all present
ii and future extensions , additions , replacements and improve-
ments
in anywise appertaining thereto, whether situated
within or without the limits of said City;
(b) The term "net revenues" shall mean the gross
revenues of the System less the expense of operation and
maintenance, including all salaries , labor, materials ,
interest, repairs and extensions necessary to render effi-
cient service ; provided, however, that only such repairs
and extensions as in the judgment of the City Council,
ji reasonably and fairly exercised, are necessary to keep
the System in operation and render adequate service to the
City and the inhabitants thereof, or such as might be
necessary tomeet some physicalaccidentor condition which
would otherwise impair the security of any bonds payable
from and secured by a lien on the net revenues of the
System shall be deducted in determining "net revenues";
(c) The term "bonds" shall mean the $60, 000 revenue
bonds authorized by this ordinance;
(d) The term "additional bonds" shall mean the
additional parity revenue bonds which the City reserves
the right to issue under Section 20 of this ordinance;
(e) The term "fiscal year" shall mean the twelve month
period ending September 30th of each year; and
(f) The term "bonds similarly secured" shall mean all
f� bonds issued by the City which are secured by and payable
from a first lien on and pledge of the net revenues of the
System.
SECTION 10: Pled e . All the net revenues of the System,
with the exception of those in excess of the amounts required to
establish and maintain the Funds as hereinafter provided, are
{ hereby irrevocably pledged for the payment of the bonds similarly
secured and the interest thereon, and it is hereby ordained that
such bonds and the interest thereo shall constitute a first lien
upon said net revenues .
SECTION 11: Rates and charges . The City covenants and
} agrees with the holders of the bonds similarly secured:
(a) That it will at all times charge and collect for
services rendered by the System rates sufficient to pay all
operating, maintenance , depreciation, replacement and
betterment expenses , and other costs deductible in determin-
ing "net revenues" as herein defined and to pay the interest
on and principal of the bonds similarly secured and to
establish and maintain the Funds as hereinafter provided; and
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(b) If additional bonds are issued, or if the System
should become legally liable for any other indebtedness , the
City will fix and maintain rates and collect charges for
the services of the System sufficient to discharge such
indebtedness .
SECTION 12: Fund Designations . All revenues derived from
the operation of the System shall be kept separate from the other
funds of the City. To that end the following special Funds are
hereby created:
(a) City of Cibolo Waterworks and Sewer. System
Fund, hereinafter called "System Fund" . This Fund
shall be kept in the City ' s depository bank.
(b) City of Cibolo Waterworks and Sewer System
Revenue Bond Interest and Sinking Fund, hereinafter
called "Interest and Sinking Fund" . This Fund shall be
deposited with the Frost National Bank, San Antonio,
Texas , as Trustee of the pledged revenues , and shall
be used to pay the principal of and interest on the
bonds similarly secured when and as the same shall
become due and payable .
(c) City of Cibolo Waterworks and Sewer System
Revenue Bond Reserve Fund, hereinafter called "Reserve
Fund". This Fund shall be deposited with the Frost
National Bank, San Antonio, Texas , as Trustee of the
pledged revenues , and shall be used to pay the principal
of or interest on the bonds similarly secured falling
due at any time when there is not sufficient money
available in the Interest and Sinking Fund.
SECTION 13: System Fund. All revenues of every nature
received through the operation of the System shall be deposited
from day to day as collected into the System Fund, and the reason-
able and proper expenses of operating and maintaining the System
as set forth in Section 9 (b) hereof shall be paid therefrom upon
approval of the City Council. All net revenues of the System
shall be appropriated and used for the purposes and in the order
of precedence hereinafter set forth in this ordinance.
SECTION 14: Interest and Sinking Fund. Immediately upon the
issuance and delivery of the bonds , the amount received from the
purchasers of the bonds as interest accrued to the date of
delivery shall be deposited in the Interest and Sinking Fund,
and such amount shall be deducted from and applied against the
monthly amount required to be deposited to this Fund (as
provided in the following sentence) to meet the initial interest
payment on the. bonds . To provide funds to pay the principal of
and interest on the bonds , the City hereby covenants to make
monthly deposits in the Interest and Sinking Fund on or before
the 1st day of each month as follows :
(a) Beginning April 1, 1975 and each succeeding month
to and including January 1, 1976 , said monthly deposits
shall equal not less than one-tenrh...4,1/10) of the installment
of interest to become due on the bonds on January 10, 19 ;
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40(b) On February 1, 1976 and each following month to
and including January 1, 1984, the monthly deposits shall
equal not less than one-sixth (1/6) of the next semi-
annual installment of interest to become due on the bonds ;
and
(c) Thereafter, on February 1, 1984 and each following
month, said monthly deposits shall equal not less than
(i) one-sixth of the next semiannual installment of interest
and (ii) one-twelfth (1/12) of the next annual principal
maturity to become due on the bonds .
Said monthly deposits shall continue to be made until
such time as the amounts on deposit in the Interest and
Sinking Fund and in the Reserve Fund are equal to the amount
of the outstanding indebtedness which said funds were
established to pay as provided in Sections 12(b) and 12(c)
hereof. Any bond proceeds that are not required to complete
the Waterworks and Sewer System improvements and extensions
shall be used to retire bonds in accordance with Section
30 of this ordinance or deposited in the Interest and
Sinking Fund, which shall reduce by such amount the sums
otherwise required to be deposited in said Fund from the
net revenues of the System.
SECTION 15 : Reserve Fund. It is the City' s purpose and
intent and the City hereby covenants that it will accumulate and,
when accumulated, continuously maintain in the Reserve Fund an
amount not less than the average annual principal and interest
requirements of all bonds secured by a first lien on and pledge
of the net revenues of the System. When the requisite amount has
been accumulated in the Reserve Fund, monthly payments to said
Fund may be discontinued; provided, however, that said monthly
payments shall be resumed whenever the amount in the Reserve Fund
is less' than the amount required to be deposited in said Fund.
The amount required to be accumulated and maintained in the
Reserve Fundupon the issuance of this series of bonds is hereby
determined to be $ 9,086.90 . Commencing on the 1st day of
March, 1975 , the City shall deposit the sum of $. 151.43 in the
Reserve Fund and said sum shall be deposited in said Fund each
month thereafter at the same time monthly deposits are made or
should be made to the' Interest and Sinking Fund until such time
as said Fund shall total not less than $ 9, 0E16.90 . In the" event
the amount in said Fund is ever reduced below $9, 0$6.00 ,
monthly deposits shall be resumed in the same manner and at the
same rate as hereinablve specified until said Reserve Fund has
been restored to the amount required to be on deposit therein.
The deposits into this Fund shall be subordinate to those required
to be made into the Interest and Sinking Fund.
SECTION 16: Investments . Money in the Reserve Fund and
the Interest and Sinking Fund may be, at the option of the City,
invested or reinvested from time to time in direct obligations
of or obligations the principal and interest of which are
guaranteed by Lhe-United---S-t-a:tes- -of- America or invested -in direct- -
obligations of or participation certificates guaranteed by the
Federal Intermediate Credit Banks , Federal Land Banks , Federal
National Mortgage Association, Federal Home Loan Banks , Banks for
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Cooperatives , and in certificates of deposit of any bank or
trust company, the deposits of which are fully secured by a pledge
of securities of any of the kinds hereinablve specified, such
obligations or securities to mature in not more than ten years
from the date of such investment or not later than the final
maturity of the bonds outstanding for which the Reserve Fund is
established, whichever is shorter . Any obligations in which
money is so invested shall be kept in escrow with the depository
of said Fund, and shall be promptly sold and the proceeds of sale
applied to the making of payments required to be made from the
respective Funds , whenever such payments are necessary to be
made under the provisions of Sections 12 (b) or 12 (c) . Income and
profits realized from the investment of moneys in the Interest and
Sinking Fund shall be retained in said Fund for purposes of paying
principal of and interest on bonds similarly secured. Income and
profits realized from the investment of moneys in the Reserve
Fund shall be retained and become a part of said Fund during the
period of time the amount on deposit therein is less than the
amount required to be on deposit; and after said Fund has been
fully accumulated and during theperiod of time said Fund contains
the amount then required to bedeposited, such income and profits
from investments of the Reserve Fund may be transferred to the
System Fund.
SECTION 17: Deficiencies in Funds . If in any month the City
shall, for any reason, fail to pay into the Interest and Sinking
Fund and Reserve Fund the full amount above stipulated, amounts
equivalent to such deficiencies shall be set apart and paid into
said Funds from the first available and unallocated net revenues
of the following month or months and such payments shall be in
addition to the amounts hereinabove provided to be paid into
said Funds during each month or months .
SECTION 18: Excess Revenues . Any net revenues in excess of
those required to establish and maintain the Funds as above
required may be transferred to the general fund of the City and
used for any lawful purpose.
SECTION 19 : Security of Funds . All Funds for which this
ordinance makes provision (except any portion thereof as may
be at any time properly invested) shall be secured in the manner
i; and to the fullest extent required by the laws of Texas for the
security of public funds, and such Funds shall be used for the
purposes permitted by this ordinance .
fj SECTION 20 : Issuance of Additional Parity Bonds . In
addition to the right to issue obligations of inferior lien as
!` authorized by the laws of this State, the City reserves the right
hereafter to issue additional bonds which, when issued, shall be
payable from and secured by a first lien on and pledge of the net
revenues of the System in the same manner and to the same extent
as are the bonds authorized by this ordinance , and the bonds
similarly secured shall in all respects be of equal dignity. The
additional bonds may be issued in one or more installments ;
provided, however, that none shall be issued unless and until the
following conditions have been met:
(a) The City is not then in defalut as to
any covenant, condition or obligation prescribed
by an ordinance authorizing bonds similarly secured.
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! (b) Each of the Funds created and established
for the payment and security of bonds similarly secured
contains the amount of money then required to be on
deposit therein.
Ii (c) The net earnings of the System for (i) the
City' s completed fiscal year next preceding the adop-
�� tion of an ordinance authorizing the issuance of the
I proposed additional bonds or (ii) the twelve (12)
months next preceding the month the ordinance authorizing
f the additional parity bonds is adopted, are equal
j to at least 1. 20 times the average annual principal
! and interest requirements of all the bonds similarly
9 secured after giving effect to the issuance of the
I proposed additional bonds , as such net earnings are
shown by a report by a Certified Public Accountant
or a Licensed Public Accountant. The term "net
1 earnings" as used in this Section 20 shall mean the
gross revenues after deducting the expense of operation
and maintenance, but not deducting depreciation or
expenditures which, under standardaccounting practice,
If should be charged to capital expenditure.
(d) The additional bonds are made to mature
January 10 in each of the years in which they are
11 scheduled to mature and interest on such bonds is
payable on January 10 and July 10 in each year,
either or both.
(e) The ordinance authorizing issuance of the
! additional bonds provides for the accumulation in the
- !� Interest and Sinking Fund of amounts sufficient to
l� pay the principal of and interest on such additional
1� bonds as same mature .
(f) The ordinance authorizing issuance of the
fl additional bonds provides that the amount to be
ii accumulated and maintained in the Reserve Fund shall
;1 be not less than the average annual requirement for
the payment of principal of and interest on all bonds
11 similarly secured after giving effect to the issuance
of the proposed additional bonds , and provides that
I • any additional Reserve Fund amount which may thus be
required shall be accumulated not more than ten calendar
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years from the date of the passage of the ordinance
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authorizing the issuance of the proposed additional
bonds .
PROVIDED HOWEVER, any or all of the conditions hereinabove
{j set forth for the issuance of additional bonds may be waived by
fl an instrument or instruments in writing executed by the holders
I,1 of all bonds similarly secured which are outstanding, which
written instrument(s) shall be filed with the City Secretary of
the City and approved by the governing body of the City prior to
,I the issuance of the additional bonds .
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1l� Bonds similarly secured may be refunded (pursuant to any
law then available) upon such terms and conditions as the govern-
ing body of the City may deem to be in the best interests of the
City and its inhabitants , and, if less than all such outstanding
revenue bonds are refunded, the proposed refunding bonds shall
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be considered as "additional bonds" under the provisions of this
section and the report required in subdivision (d) shall give
effect to the issuance of the proposed refunding bonds (and
shall not give effect to the bonds being refunded following their
cancellation or provision being made for their payment) .
SECTION 21: Maintenance and Operation - Insurance. The
City shall maintain the System in good condition and operate the
same in an efficient manner and at reasonable cost. So long as
ii any of the bonds similarly secured are outstanding, the City agrees !
to maintain insurance on the System for the benefit of the holder
or holders of bonds similarly secured of a kind and in an amount
which usually would be carried by private companies engaged in a
similar type of business. Nothing in this section shall be
construed as requiring the City to expend any funds which are
derived from sources other than the operation of the System but
nothing herein shall be construed as preventing the City from doing
so.
ff SECTION 22: Records - Accounts - Accounting Reports . The
;i City of Cibolo hereby covenants and agrees that so long as any of
it the bonds similarly secured or any interest thereon remain out-
, standing and unpaid, it will keep and maintain a proper and
complete system of records and accounts pertaining to the operation
of the System (separate and apart from all other records and
accounts) in which complete and correct entries shall be made of
all transactions relating to said System, as provided by Article
1113, V.A.T.C. S. , and that the holder or holders of any of such
bonds or any duly authorized agent or agents of such holders shall
have the right at all reasonable times to inspect all such records,
accounts and data relating thereto, and to inspect the System and
all properties comprising same . The City further agrees that
{i 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 or Licensed
4 Public Accountants . Each such audit, in addition to whatever
other matters may be thought proper by the Accountant, shall
particularly include the following:
(a) A detailed statement of the income and
expenditures of the System for such fiscal year;
(b) A balance sheet as of the end of such
fiscal year;
(c) The Accountant' s comments regarding the
j1 manner in which the City has carried out the require-
ments of this ordinance and his recommendations for
any changes or improvements in the operation, records
and accounts of the System.
(d) A list of the insurance policies in force
at the end of the fiscal year on the System proper-
ties , 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 Interest and
ii Sinking Fund throughout the fiscal year, a list of
the securities , if any, in which the Reserve Fund
and Interest and Sinking Fund has been invested, and a
itstatement of the manner in which money in the System
Fund has been secured in such fiscal year;
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(f) The number of properties connected with
theSystem.
Expenses incurred in making the audits above referred to are
to be regarded as maintenance and operating expenses and paid as
such. Copies of the aforesaid annual audit shall be immediately
furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas , and to the
original purchasers of the bonds and any subsequent holder at his
request . At the close of the first six monthsperiod of each
fiscal year, the City Secretary is hereby directed to furnish a
copy of an operating and income statement in reasonable detail
covering such period to any bondholder upon his request therefor
(' received not more than thirty (30) days after the close of said
six months ' period. Any bondholder shall have the right to discuss
with the Accountant making the annual audit the contents thereof
and to ask for such additional information as he may reasonably
require .
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SECTION 23: 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 payments to be made to the Interest
and Sinking Fund and Reseve Fund, or (b) defaults in the
observance or performance of any other of the covenants, conditions
or obligations set forth in any ordinance authorizing the issuance
of bonds similarly secured, the following remedies shall be
available:
(1) The holder or holders of any of the bonds
similarly secured shall be entitled to a writ of
mandamus issued by a court of proper jurisdiction com-
pelling and requiring the City Council and other off i-
cess of the City to observe and perform any covenant,
condition or obligation prescribed in the bond ordi-
nance.
rdi-
nance.
(2 ) No delay or omission to exercise any right
or power accruing upon any default shall impair any
such right or power , or shall be construed to be a
waiver of any such default or acquiescence therein,
and every such right and power may be exercised from
time to time and as often as may be deemed expedient.
The specific remedies herein provided shall be cumulative of
all other existing remedies and the specification of such remedies
shall nto be deemed to be exclusive .
{ SECTION 24: Special Covenants . The City hereby further
covenants as follows :
(a) That it has the lawful power to pledge
the revenues supporting this issue of bonds and has
lawfully exercised said power under the constitu-
tion and laws of the State of Texas , including said
power existing under Articles 1111 through 1118,
V.A. T. C. S . ; that the bonds similarly secured shall
be ratably secured under said pledge of income in
such manner that one bond shall have no preference
over any other bond of said issues ;
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(b) That other than for the payment of the
bonds , the rents , revenues and income of the System
have not in any manner been pledged to the payment
of any debt or obligation of the City or of the
{ System;
(c) That, so long as any bonds similarly
secured or any interest thereon remain outstanding,
the City will not sell, lease or encumber the System
or any substantial part thereof, provided that this
shall not be construed to prohibit the sale of such
machinery, or other properties or equipment which
has become obsolete or otherwise unsuited to the
efficient operation of the system; also, with the
exception of the additional bonds expressly permitted
by this ordinance to be issued, it will not encumber
the revenues thereof unless such encumbrance is
made junior and subordinate to all of the provisions
of this ordinance.
(d) That no free service of the System shall
be allowed, and should the City or any of its agencies
or instrumentalities make use of the services and
facilities of the System, payment of the reasonable
value thereof shall be made by the City out of funds
from sources other than the revenues and income of
fj the System;
{ (e) To the extent that it legally can, the City
further covenants and agrees that, so long as any of
the bonds similarly secured or any interest thereon are
outstanding, no franchise shall be granted for the
installation or operation of any competing waterworks
or sewer system, that the City will prohibit the
operation of any water system or sewer system other
than those owned by the City and the operation of any
such system by anyone other than the City is hereby
prohibited.
SECTION 25 : Bonds are Special Obligations. The bonds are
special obligations of the City payable from the pledged net
revenues , and the holders thereof shall never have the right to
demand payment thereof out of funds raised or to be raised by
taxation.
SECTION 26 : Bonds as Negotiable Instruments . Each of the
bonds herein authorized shall be deemed and construed to be a
"Security" , and as such a negotiable instrument , within the
meaning of Article 8 of the Uniform Commercial Code .
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SECTION 27 : Ma or to Have Char.e of Records and Bonds . The
Mayor off' the City o Ci.o o s a •e an. e is ere•y aut orized
to take and have charge of all necessary orders and records
pending investigation by the Attorney General of the State of
Texas , and shall take and have charge and control of the bonds
ii herein authorized pending their approval by the Attorney General,
registration by the Comptroller of Public Accounts , and delivery
to the purchasers thereof.
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SECTION 28: No Arbitrage . That the City hereby covenants
that the proceeds from the sale of said bonds will be used as
soon as practicable for the purpose for which said bonds are
issued; that such proceeds will not be invested in any securities
or obligations except for the temporary period pending such use;
and that such proceeds will not be used directly or indirectly
1 so as to cause all or any part of said bonds to be or become
"arbitrage bonds" within the meaning of Section 103(d) of the
1 Internal Revenue Code of 1954, as amended, or any regulations or
rulings prescribed or made pursuant thereto.
SECTION 29: Confirmation of Sale . That the sale of the bonds
' herein authorized to the TEXAS WATER DEVELOPMENT BOARD, at the
price of par and accrued interest to date of delivery plus a
premium to provide an effective interest rate of 5 . 340187 is
I hereby confirmed. Delivery of said bonds shall be made to such
+ purchasers as soon as may be after the adoption of this ordinance,
! upon payment therefor in accordance with the terms of sale.
SECTION 30 : City Report to Texas Water Development Board. In
1 compliance with the rules and regulations of the Texas Water
Development Board, the purchaser of these bonds , the City agrees
Iand covenants that upon completion of the project to be financed
1 with the proceeds of the bonds , the proper officials of the City
Ishall render due and final accounting to the Texas Water Develop-
!; ment Board of the total cost of said project. If the total cost
of the project is less than originally estimated so that the
jj appropriate share of the Texas Water Development Board' s
participation is reduced, the City shall return to the Development
Board the amount of such excess to the nearest multiple of the
denomination of the bonds herein sold to the Texas Water Develop-
) ment Board, and the Development Board shall cancel and return a
like amount of the bonds held by said Board.
SECTION 31: Emergency. That the public importance of this
measure and the fact that it is to the best interest of the City
( to provide funds to improve and extend a Sanitary Sewer System in
1 and for said City at the earliest possible date, for the immediate
preservation of the public peace , health, safety and public
welfare of its inhabitants, constitutes an emergency measure, and
that any rule requiring ordinances to be read more than one time
j or at more than one meeting be suspended, and any such rule is
' hereby suspended and this ordinance is accordingly passed as an
emergency measure and shall take effect and be in force immediately
from and after its passage .
PASSED AND APPROVED, this the 20th day of February, 1975 .
Mayor, City o Ciao o, Texas
ATTEST:
Ae ' / e
City ecretar , City of/'ibolo, Texas
1 (City Seal)
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