HomeMy WebLinkAboutORD 72-29ORDINANCE NO. 72- C,
AUTHORIZING THE ISSUANCE OF
$1,000,000 CITY OF BEAUMONT, TEXAS,
WATERWORKS SYSTEM REVENUE BONDS, SERIES,1972-A
THE STATE OF TEXAS §
COUNTY OF -JEFFERSON §
CITY OF BEAUMONT §
i8E .IT ORDAINED BY THE CITY OFBEAUMONT:
ARTICLE I.
STATUTORY AUTHORITY
Recitals and Findings
Section 1.01 - Creation of City. The City of Beaumont,
Texas (the "City") was duly incorporated as a municipal corporation
under the laws of the State of Texas, and on December 6, 1947, said
9'2 2,
City, pursuant to the Home Rule Amendment -to the Constitution of the
State of Texas, duly adopted a Charter and has since that date operated
as a Home -Rule City under the laws of the State of Texas, and said
Charter has in no way been altered, changed or amended since its
adoption, except as amended at elections held April 8, 1952, and
January 25, 1972.
Section 1.02 - Authority for this Ordinance. The City is
authorized by the Constitution and laws of the State of Texas,
particularly Articles 1111 through 1118, Vernon's Texas Civil Statutes,
as amended, and its Charter, to improve, enlarge, extend and repair
its waterworks system and to issue bonds for such purpose.
Section -1.03'- Special Findings. It is hereby found, determined
and declared that:
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(a) At an election held within.the City of Beaumont,
Texas, on the 4th day of May, 1971, more than a majority of
the'duly qualified resident electors of said City., voting at
said election, voted in favor of the proposition to authorize
the issuance of $5,000,000 revenue bonds for the purpose of
improving, enlarging, extending and repairing the City's
waterworks system, of which $3,000,000 -bonds have been issued;
(b) Such election was called and notice thereof was
given, and such election was held in accordance with and in
conformity with the Constitution and laws of the State of
Texas, the Constitution of the United States of America and
the Home -Rule Charter of said City, and the City Council of
the City has, heretofore officially canvassed the returns of
such election and has.determined and declared the specific
authority of the City to issue such bonds;
(c) In the proceedings authorizing the.issuance of
the Outstanding Bonds hereafter defined, and in the Outstand-
ing Bonds, the City reserved the right to issue additional.
bonds on a parity with said Outstanding Bonds; and
(d) In the judgment. of the City Council it would be
for the best interests of the City to issue and sell at this
time $1,000,.000_in principal amount of said revenue bonds
voted at such election, leaving the remaining. $1,00.0,000_bonds
to be issued, sold and delivered at a later date, and the City
Council desires to proceed with the authorization, issuance,
sale and delivery of such issue of such revenue bonds to be
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secured by a pledge of and lien on said net revenues of said
waterworks system, said Bonds to be.on a parity in all respects
to the pledge of and lien on said revenues to the payment of
said Outstanding Bonds.
ARTICLE II,
Definitions and Interpretations
Section 2.01 - Definitions. Unless otherwise expressly
provided, or unless the context otherwise requires, the terms
defined in this Section shall have the respective meanings
specified for all purposes of this ordinance except in the form
of the bonds and of the interest coupons:
Additional Bonds
The term "Additional Bonds" shall mean the additional
parity revenue bonds which the City expressly reserves the
right to issue in the Bonds and in this ordinance.
The term "Bond Fund" shall mean the Bond Fund created
by the ordinance adopted November 13, 1956, authorizing the issu-
ance of the City's Waterworks System Revenue Bonds, Series 1956.
Reserve Fund
The term "Reserve Fund" shall mean the Reserve Fund cre-
ated by said ordinance adopted November 13, 1956.
Bond or Bonds
The term "Bond" or ".Bonds" shall mean any bond or all
bonds, as appropriate, of the issue of $1'000$000_City of
Beaumont, Texas, Waterworks System Revenue Bonds, Series 1972-_A,____
authorized and issued pursuant to this ordinance.
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Outstanding Bonds
The term "Outstanding Bonds" shall mean the City's outstanding
Waterworks System; (a) Revenue Bonds, Serie( 1958, (b) Revenue
Refunding Bonds,, Series 1959, (c) Revenue Bonds, Series 1961, and (d)
Revenue Bonds, Series 197-A3payable from the net revenues of the City's
waterworks system.
Series 1958, Series. 1959, Series. -1961 and -Series 1971 .Ordinances
l
The term "Series 1958 Ordinance", "Series 1959 Ordinance", "Series
1961 Ordinance" or "Series 1971 Ordinance shall mean the ordinance or
ordinances adopted by the City respectively authorizing the issuance.
of the Outstanding Bonds, as the case may be.
City
The term "City" shall mean the City of Beaumont, Texas, and
its successors and,where appropriate, the City Council or governing
body thereof.
City.
City Council
The term "City Council" shall mean the governing body of the
Fiscal Year
The term "Fiscal Year" shall mean the.twelve-month period
ending June 30; but which may be changed from time to time after the
Series 1958, 1959 and 1961 portion of the Outstanding Bonds is
retired.
Gross Revenues -
The term "Gross Revenues" shall mean the gross revenues
derived from the ownership and operation of the System..
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Net Revenues
The term "Net Revenues" shall mean the Gross Revenues
derived from the operation of the System less the reasonable
expenses of operation and maintenanceof said System, including
all salaries, labor, materials, interest and such repairs and
extensions as in the judgment of the governing body of the
City are necessary to keep the plant or utility in operation
and render adequate service to such City and the inhabitants
thereof, or such as might be necessary to meet some physical
accident or condition which would otherwise impair the original
security.
Paying Agent
The term "Paying Agent" shall mean the bank or banks
which are authorized to pay the principal of and interest on
the Bonds on behalf of the City.
System
The term "System" shall mean the waterworks system of
the City, including all present and future extensions, replace-
ments and improvements to said waterworks system.
Section 2.02 - Interpretations. The titles and headings
of the Articles and Sections of this Ordinance have been in-
serted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or
restrict any of the terms and provisions hereof. This
Ordinance and all the terms and provisions hereof shall be
liberally construed to effectuate the purposes set forth
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herein and to sustain the validity of the Bonds herein authorized
and the validity of the lien on and pledge of the revenues from
which said Bonds are payable.
ARTICLE III.
Authorization, Description
and Execution of Bonds
Section 3.:01 - Name, Amount, Purpose and Authorization.
The serial, coupon, revenue bonds of.the City, to be.known and
designated as "CITY OF BEAUMONT, TEXAS, WATERWORKS SYSTEM REVENUE
BONDS, SERIES 1972-A", shall�be issued in the aggregate principal
amount of $1,000,000 for the purpose of improving, enlarging,
extending and repairing the City's waterworks system under and in
strict conformity with the Constitution and laws of the State of
Texas, including particularly Articles 1111 to 1118, Vernon's Texas
Civil Statutes, as amended, and the Home -Rule Charter of said.City,
and,as authorized by a majority vote of the duly qualified resident
electors of the City, voting at an election held within said City on
May 4, 1971.
Section.3.02: Date;-:Denomination:_and-_Maturities. The
Bonds shall be -dated June -1, 1972, shall be numbered consecutively
from 1 to 200,.both inclusive, shall be in the.denomination of
$5,000 each, and shall mature serially on.September 1 in each of
the years, and in the amounts, respectively, as set forth in the
following schedule:
$40,000
- 1976
45,000
- 1977
50,000
- 1978
55,000
- 1979
55,000
- 1980
55,000
- 1981
603000
- 1982
60,000 -
1983
$65,000 -
1984
65,000 -
1985
70,000 -
1986
75,000 -
1987
75,000 -
1988
75,000 -
1989
75,000 -
1990
80,000 -
1991
Section 3.03--i-Interest-Rates and Interest Payment Dates.
Said Bonds shall bear interest evidenced by interest coupons at
the following rates per annum:
Bonds maturing 1976 through 19
0.0 % ,
Bonds maturing 19 %% through 19 01-7, 41 `' %
Bonds maturing
19 FY
through
19
%,
Bonds maturing
19_-7
through
19 (Fe ,
J;
'7
for the purpose of making payments thereof and for all other
purposes, and neither the City nor the Paying Agent shall be bound
by any notice or knowledge to the contrary, whether such Bond shall
be overdue or not. All payments of or on account of the interest to
any bearer of any interest coupons and all payments of or on,account
of principal to any bearer of any Bonds shall be valid and effectual
and shall be a discharge of the City and the Paying Agent, irrespective
of the liability upon. the Bonds or interest coupons or claims for
interest, as the case may be, to the extent of the sums paid.
Section. 3..06,. -... Cancellation of - Bonds or Coupons. All
Bonds and all interest coupons surrendered to the City or to the
Paying Agent for the purpose of payment or redemption shall be canceled,
and no Bonds or interest coupons shall be issued in lieu thereof
except as expressly permitted by any other provisions of this ordinance.
Section 3.07.—Mutilated, Lost, Destroyed or Wrongfully
Taken Bonds or;:Coupons:. If the bearer of any Bond or any interest
coupon claims that such Bond or interest coupon has been mutilated,
lost, destroyed, or wrongfully taken, the City may, under the applicable
provisions of Section 8.405, Texas Business and Commercial Code, and
Article 715a, V.T.C.S.; as presently existing or as may hereafter be
amended, execute a new bond or interest coupon of like tenor and date
in exchange and substitution for the mutilated bond or interest coupon
or in lieu of and.substitution for the bond or interest coupon so lost,
destroyed or wrongfully taken.
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ARTICLE IV.
Form of Bonds, Registration
Certificate and Interest Coupons
That.the form of said Bonds, including the form of registra-
tion certificate of the,Comptroller of Public Accounts of the State
of Texas to be printed and endorsed on each of.said Bonds, and the
form of.each of the aforesaid interest coupons which shall appertain
and be attached initially to each of said Bonds, shall be, respectively,
in substantially the following form:
No.
FORM OF BONDS:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
CITY OF BEAUMONT, TEXAS,
WATERWORKS SY.STEM 13EVENUE
BONDS,'SERIES .-1972=A
$5,000
THE CITY,OF BEAUMONT, TEXAS, for value received, hereby acknowledges
itself indebted to and PROMISES TO PAY TO BEARER ON SEPTEMBER 1, 19 ,
the principal amount'of
FIVE THOUSAND DOLLARS
and to pay interest thereon, from the date hereof, at the rate of
% per annum, evidenced by interest coupons payable
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March 1, 1973, and semiannually thereafter on September 1 and March 1
of each year while this bond.is outstanding. Both principal of and
interest on this bond shall be payable in any coin or currency of the
United States of America, which, on the respective dates of payment
of such principal and interest, is legal tender for the payment of
debts due the United States of America, at The American National Bank
of -Beaumont, Texas. The principal,here.of shall be payable only upon:
presentation and surrender of this bond, and the interest hereon
falling due on and prior to the maturity of this bond.shall be payable
only upon presentation and surrender of the interest coupons hereto
attached as such coupons severally become due.
THE DATE OF -THIS BOND,.in conformity with the ordinance
hereinafter mentioned, IS JUNE 1, 1972.
THIS BOND IS ONE OF A SERIES OF.200 BONDS -of like tenor and
effect, except as, to serial number, interest rate and maturity, being
numbered consecutively from 1 to 200, both inclusive, in the denomina-
tion of $5,000 each, AGGREGATING $1,000,000, issued pursuant to an
ordinance lawfully.adopted by the City Council of said City and duly
recorded in its official minutes, for the purpose of improving,
enlarging, extending and repairing the City's waterworks system,
under and.in strict.conformity with the Constitution and laws of
the State of Texas, particularly Articles 1111 to lil8, V.T.C.S.,
as amended, and the Home -Rule Charter of said City, and by"authori'ty
of a vote of the duly qualified resident electors.of said Cit,y.at
an election held within said City on the 4th day of May, 1971.
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THIS BOND SHALL. NOT BE DEEMED TO CONSTITUTE A DEBT of
the City .of Beaumont or a pledge of its faith and credit, but
shall be payable as to principal and interest, together with
the City's outstanding Waterworks System (a) Revenue Bonds.,
Series 1958, (b) Revenue Refunding Bonds; Series 1959, (c) Revenue
Bonds, Series 1961, and (d) Revenue Bonds, Series 1971-A ("Outstanding
Bonds"), solely from the revenues derived from the operation of the
City's waterworks system. 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.
THE CITY EXPRESSLY RESERVES THE RIGHT TO ISSUE ADDITIONAL
PARITY BONDS under the terms and conditions stated in said
ordinance above mentioned, and said bonds may be payable from
the same source, secured in the same manner and placed on a
parity with the Outstanding Bonds,-this.bond and the series of
which it is a part.
.IT IS FURTHER CERTIFIED AND RECITED that all acts, condi-
tions and things required to be done precedent to and in the
issuance of this bond and this series of -bonds have happened
and have been performed in regular and' due time, form and manner
as required by law; that this series of 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 specified herein and that the issuance
of this series.of bonds does not exceed -any Constitutional or
statutory limitation.
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IN TESTIMONY WHEREOF, the City Council of the City.of
Beaumont, Texas, has caused the official seal of said City to
be duly impressed, or placed in facsimile, hereon, and has
caused this bond to be signed by the Mayor of said City and
countersigned by the City Clerk, by their facsimile signatures,
and the interest coupons hereto annexed also to.be executed by
the .facsimile signatures of said Mayor and City Clerk, all as
of the date of this bond.
Mayor, City of Beaumont, Texas
COUNTERSIGNED:
City Clerk, City of
Beaumont, Texas
(SEAL)
FORM OF REGISTRATION CERTIFICATE:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I HEREBY CERTIFY that this bond has been examined, certi-
fied 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
(SEAL)
Comptroller of Public Accounts
of the State of Texas
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FORM OF INTEREST COUPONS:
No. $
ON 1, 19 ,
the CITY OF BEAUMONT, in the County of Jefferson, State of Texas,
PROMISES TO PAY TO BEARER, without exchange or collection.charges.,
at -The American National Bank of Beaumont, Texas, the amount shown
on this interest coupon, in any coin or currency of the United States.
of America which on such date is legal tenderforthe payment of debts
due the United States of America, solely from the revenues specified
in the bond to which this coupon appertains, being interest due
that date on the bond, bearing the number hereinafter designated,
of that -issue of City of Beaumont, Texas, Waterworks System Revenue
Bonds, Series 19.72 -A, -dated June 1, 1972. The holder hereof shall
newer have the right to'demand payment of this obligation out of any
funds raised or to be raised by taxation. Bond No.
City Clerk, City of
Beaumont, Texas
Mayor, City of Beaumont, Texas
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'L'EGAL 'OPI'NION
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The approving opinion of Vinson, Elkins, Searls & Smith,
Houston, -Texas, may be printed on the backs of the Bonds.
ARTICLE V.
SECURITY 'OF 'BONDS
Section 5 .0'l 'Fledge 'of 'Net' Revenues. All of the Net
Revenues from the operation of the System, with the exception of
those Net Revenues in excess of the amounts required to establish
and maintain the funds as hereinafter provided, are hereby
irrevocably pledged to the payment of the principal of and inter-
est on the Bonds. The lien on the Net Revenues hereby pledged
shall immediately be subject to the lien of this pledge without
any physical delivery thereof or further act, and the lien of this
pledge shall be valid and binding against all parties of any
kind having a claim of.any kind in tort, contract or otherwise,
against the City irrespective of whether such parties have notice
thereof.
Section 5.02 -Securi't'y' f 'Bonds. The Bonds, the Out-
standing Bonds, and any Additional Bonds shall be payable solely
from and shall be equally and ratably secured by a first lien
on and pledge of the Net Revenues, and the Bonds, Outstanding
Bonds and any Additional Bonds, when and if issued, will be in
all respects on a parity with and of equal dignity with one an-
other. The holders of the Bonds and the interest coupons apper-
taining thereto shall never have the right to demand payment out
of any funds raised or to be raised by taxation.
Section 5.03 Maintenance 'of 'Income . In order that the
;l..l{ �:
Net Revenu s of the City will be sufficient to pay the Bonds
and the interest thereon, the City shall fix and:'maintain rates
and collect charges for the facilities and services afforded
by the System which will provide Net Revenues sufficient at
all times:
(a) to pay all operation, maintenance, depreciation,
replacement and betterment charges of the System;
(b) to produce Net Revenues each year in an amount not
less than one and one-half (1-1/2) times the average annual
principal and interest requirements of all bonds then outstanding
payable from the revenues of,the System;
(c) to maintain the Bond Fund and the Reserve Fund; and
(d) to pay all outstanding indebtedness against the System
other than the Bonds as and when the same becomes due.
ARTICLE VI.
'REVENUES AND 'APPLI-CATION -THEREOF
Section 6.01 - System'Furid; Maintenance and Operation..
The City will deposit, as collected, all revenues derived
from the operation of the System into the System Fund created by
the ordinance adopted November 13, 1956, authorizing the issu-
ance of the City's Waterworks System Revenue Bonds, Series 1956•
From the moneys in the System Fund, the City shall pay the ex-
penses of operation and maintenance of the System, including all
salaries, labor, materials, interest, and such repairs and exten-
sions as, in the judgment of the governing body of the City, are
necessary to keep the plant or utility in operation and render
adequate service to such City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or
condition which would.otherwise impair the original security.
Section 6.02 --Additional Payments Into Bond,Fund and
Reserve Fundi.!., )After payment of the expenses of operation and
maintenance of the System as provided in Section 6.01, and simul-
taneously with the -making -of the payments into the Boni. Fund re-
quired under the Series 1958, Series 1959, Series 1961 and Series
1971 Ordinances, the City shall pay into said -Bond Fund the following
(in addition to the payments required under said Series 1958,
Series 1959, Series 1961 and Series 1971 Ordinances):
During each year, beginning in June, 1972,..an
amount equal to not less than one hundred percent
(100%) of the amount required to meet the interest
and principal payments falling due on and before
the next maturity of the Bonds.
The amount required to be paid into the Bond Fund in each
year hereunder shall be in"substantially equal monthly payments
from moneys in the System Fund created by the ordinance adopted
November 13, 1956,.authorizing the issuance of the City's Water
System Revenue Bonds, Series 1956. If in any month the City
shall, for any reason, fail to pay into said Bond Fund the full
amount above stipulated, amounts equivalent to such deficiencies
shall be set apart and paid into said Bond Fund from the first
available unallocated revenues of the following month or months
and shall be in addition to the amounts hereinabove provided to
be otherwise paid into said Bond Fund each month.
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Not later than August- 15, 1972; -and not later than
February 15 and August 15 of each year thereafter, the City
Treasurer shall cause to be transferred to the Paying Agent an
amount which is not less than the interest and principal pay-
ments falling due on the following March l and'September 1.
Section 6.03 - Additional Payments---Into--Reserve-Fund. In
addition to.the payments into the Reserve Fund required under
the Series 1958, Series 1959; Series 1961 and Series 1971 Ordinances,
the City shall pay from moneys in the System Fund into said Reserve
Fund each month.(in approximately equal monthly payments or deposits),
beginning with June, 1972, not less than.one=sixtieth (1/60) of the
average annual principal and interest requirements of the Bonds,
and such payments shall be continued until such time as a balance
is reached (in addition to the balance in said Reserve. Fund required
by said Series 1958, Series 1959, Series 1961 and Series 1971
Ordinances) of'not less than said average annual principal and
interest requirements of the Bonds, If in any month the City shall,
for any reason, fail to pay into the Reserve Fund the full.amount
above stipulated; amounts equivalent to such deficiencies shall be
set apart and paid into said Reserve Fund from the first available
and unallocated revenues of the following month or months-and.shall
be in -addition to the monthly deposits hereinabove provided to be
otherwise paid into said Reserve Fund.
When said balance of not less than the average annual principal
and interest requirements of.the Bonds is reached in the Reserve
Fund, no further payments (insofar as the Bonds are concerned)
need be made into said Fund; however, in the event.
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that said balance is ever reduced to an amount less than the
average annual principal and interest requirements of the Bonds,
the monthly payments, as above provided, shall be resumed and
continued until said balance of not less than the average annual
principal and interest requirements of the Bonds is again
reached.
Section .6...0.4. Dat -e' -of 'Paaymerit's 'Trit'o 'Bond Fund and Reserve
Fund. The monthly payments into the Bond Fund and into the
Reserve Fund shall be made on or before the'15th day of each
month.
Section 6.05 - Trust' Funds: Moneys in the Bond Fund and
in the Reserve Fund shall constitute trust funds, and shall be
used solely to pay interest on and principal of the Outstanding
Bonds, the Bonds and Additional Bonds if and when issued until
all said Bonds have been retired. When there are moneys in the
Bond Fund and the Reserve Fund sufficient to make all interest
payments and principal payments due and to become due until the
final maturity of the Outstanding Bonds, the Bonds and such
Additional Bonds, no further payments need be made into said Bond
Fund and Reserve Fund.
Section 6.06 - Surplus. Any funds remaining in the System
Fund after provision has been made for the reasonable cost of
operating and maintaining the System, and after paying the amounts
required to be paid into the Bond Fund and into the Reserve Fund,
as above provided, and after all payments that may be required
by ordinances pertaining to Additional•Bonds have been made, may
be used by the City for the redemption of the Outstanding Bonds,
the Bonds or Additional Bonds; or may be transferred to the
City's general fund for use for any lawful general or special
City purpose, as authorized by Article -1113a, V.T.C.S., as amended;
or may be used for any other purpose permitted by law.
Section 6.07-- Maintenance and. -Operation. The City shall
maintain the -System in good condition and operate the same.in an
efficient manner and at a reasonable. cost.
Section.6.07 Accounts., Fiscal Years and Accounting Reports.
The City shall keep -:proper records and accounts .(separate from all
other records and accounts of the City) in which complete and correct
entries shall be made of all transactions relating to the System.
So long as the Series 1958; 1959 and 1961 portion of the Outstanding
Bonds is outstanding, -the City will operate the System and.will keep
its books of -records and accounts on the basis of a fiscal year
ending June 30, but after said Series 1958, 1959 and 1961 portion of
the Outstanding Bonds is retired said fiscal year may be changed
from time to time by the City. Not later than one hundred twenty (120)
days after the.close of each fiscal year, the City will furnish (without
cost) to the Municipal Advisory Council of Texas, Austin, Texas, and
to the original purchasers of the Bonds and to any holder of ten
per cent (10%) of the Bonds who may so request in writing, a signed -
or certified copy of a report by an independent firm of certified
Public accountants covering the next preceding fiscal year, showing
the following information relating to the System:
(a) Income and Expense Statement;
(b) Balance sheet;
(c) Accountant's comments regarding.the manner
in which the City has complied with the
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requirements of..this ordinance, and his
recommendation for any changes or improve-
ments in the operation of the System;
(d) List of insurance policies in.force at .the
end of the fiscal year, showing, as to each
policy., the risk covered, the name of the
insurer, and the expiration date;
(e) The number of.properties connected with.
the System.and the total income from.the
System for the year;
(f) The .number of unmetered customers of the
System at the end of the said fiscal year, if
any; and
(g) The number of gallons -of water pumped into or
taken by the System and the number of gallons
of water sold by the System during said fiscal
year.
Section -6.08.- Inspections. Any original purchaser of
twenty-five percent (25%) or more in principal amount of the
Bonds, andany holder of.twenty-,five percent (25%) or more in
principal amount of the -Bo nds then outstanding shall have. -'the right
at any reasonable time to inspect the System and all records,
accounts.and'data of the City relating thereto.
Section 6.09— Investments. So.long as the Series 1958,1959.
and 1961 portion of the Outstanding Bonds is outstanding, moneys in the
Bond.Fund and Reserve Fund shall be invested only as provided in the ordi-
nance adopted November 13, 1956, authorizing the issuance of the City's
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Waterworks System Revenue Bonds, Series 1956'. Thereafter,
I
moneys deposited into the Bond Fund and.the Reserve Fund may be
invested and reinvested in the manner authorized by law and
shall be'governed by the provisions of Sections 6.09 and 6.10
hereof. All investments shall belong to the fund from which
the moneys for said investments were taken. If any moneys are
so invested, the City shall have the right to have sold in the
open market a sufficient amount of such investments to meet
its obligations in the event any fund does not have sufficient
then -invested funds on hand to meet the obligations payable
out of such fund. The moneys resulting therefrom shall belong
to the fund from which the moneys for such investment were
initially taken. The City shall not be responsible for any loss•
arising out of the sale of any investment.
Section $ .10 Earnin�s" 'from 'Divestments. The interest
accruing on and any proceeds realized from invested moneys in
the Bond Fund and the Reserve Fund shall be credited to such
funds, respectively, and shall reduce by such amounts the sums
otherwise required to be paid into said funds.
A"MT/1'T TT' 'CTTT
APPLICATION 'O'F 'B'O'ND' PROCEEDS
Section 7.01 - Bond Proc'ee'ds. Proceeds from the sale of
the Bonds will be disbursed in accordance with this Article.
Section 7,02 - Accrued Interest and Premium, if.Any.
Moneys received from the purchasers of the Bonds representing
accrued interest on the Bonds from their date to the date of
actual delivery, plus any premium on the Bonds, shall be deposited
into the Bond Fund.
Section, .7...0.3. Use 'of 'Proceeds' 'of 'S'ale 'of Bonds . The
i
proceeds from the sale of the Bonds, after making the deposit
I
hereinbefore provided, shall be used solely for the purpose
of improving, enlarging, extending and repairing the City's
waterworks system and for the payment of all incidental expenses
in connection therewith, including fiscal, legal and engineering
fees and expenses.
Section 7.04 - Surplus' Bond'Proceeds. After completion
of such improvements, enlargements, extensions and -repairs, any
moneys remaining of the Bond Proceeds shall be deposited into
the Bond Fund.
ARTICLE VIII.
ADDITIONAL RnNnS; REFUNDING BONDS;
BONDS AND ADDITIONAL BONDS PAYABLE
FROM WATERWORKS AND SANITARY SEWER
SYSTEM REVENUES
Section 8.01 - Addit'orial' Bonds. In addition to inferior
lien bonds, the City reserves the right to issue from time to
time additional parity bonds in one or more installments. and in
one or more issues, and such Additional Bonds, when issued, may
be secured by and payable from 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 Outstanding Bonds and the Bonds. No
Additional Bonds, however, shall be issued unless:
(a) each of the funds created by the ordinance adopted
November 13, 1956, authorizing the issuance of the City's Water-
works System Revenue Bonds, Series 1956, contains the amount
of money then required to be on deposit therein (as required by
the Series 1958, Series 1959, Series 1961 and Series 1971 Ordinances,
by this ordinance, and by the proceedings authorizing any Additional
Bonds then outstanding);.
(b) the Net Revenues of the System for the last preceding fiscal
year, as certified by an independent certified public accountant or
firm of certified public accountants, were equal to at least one and
one-half,(1-1/2) times the average annual principal and interest
requirements on all Bonds that will be outstanding payable.from the
revenues of the System after the Additional Bonds then proposed to
be issued are issued,.sold and delivered;
(c)" provision is made in the ordinance or ordinances
authorizing the Additional Bonds then proposed to be issued for
approximately equal monthly payments or deposits into the Reserve
Fund until a balance is reached (in addition to deposits into said
Fund required by other ordinances or proceedings relating thereto
and in .addition to any balance or balances required by said other
ordinances,or proceedings) of.not less than the average annual
principal and interest requirements of'said Additional Bonds then
proposed to be issued and which balance shall -be reached within
five'(5) years from the -date of such Additional Bonds; and
(d) the Additional -Bonds then proposed to be issued are
made to mature on September 1 in each of the years.in which they
are scheduled to mature.
The term "Net Revenues" as used in this Section 8.01 shall
mean all of the Net.Revenues of the System (excluding income
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received specifically for capital items) after deduction of
the reasonable expenses of operation and maintenance of the
System (excluding expenditures for capital items).
While any of the Outstanding Bonds, the Bonds or any
Additional Bonds are outstanding and unpaid, the City shall not
issue further Additional Bonds, except as provided in this
Article VIII, payable from the revenues of the System unless the
lien of such Bonds payable from the revenues of the System is
made junior and subordinate in all respects to the lien of the
Outstanding Bonds, the Bonds then outstanding, and.Additional
Bonds then outstanding.
Section 8.'02' - Refunding Bonds. The City further reserves.
the right to refund any Bonds subject to redemption if they
have been called for redemption, or any Bonds, the holders of
which have.consented to have refunded, as now or hereafter autho-
rized -by law, including but not limited to Article 717k-3, V.T.C.S.
Any refunding bonds so issued shall enjoy complete equality of
lien with the portion of the Bonds which are not refunded, if
any there be, and the refunding bonds shall continue to enjoy
the priority of lien that may have been enjoyed by the Bonds
refunded. Any refunding bonds may either be delivered to the
holder of a like principal amount of the Bonds refunded upon
simultaneous cancellation and surrender of such Bonds refunded or
may be sold and delivered to a purchaser and the proceeds of
sale be deposited as allowed by law for application to the full
payment of the Bonds authorized to be refunded. Any refunding
bonds so issued shall be deemed to be "Bonds" as the term is
defined in Article II hereof for all.purposes,of-this ordinance.
Section 8.03—Bonds and Additional Bonds Payable From City.'s
Combined Waterworks;and Sanitary Sewer System Net Revenues. The City
expressly reserves the right also to pledge the Net Revenues of the
City's sanitary sewer system to the payment.of,the Bonds when and
after the Series 1958, 1959 and 1961 portion of the Outstanding Bonds,
is retired. If the City exercises such right and is thereafter also
authorized to issue, sell and deliver.Additional Bonds which are payable
from the combined.revenues ("Combined Revenues") of the City's water-
works. and sanitary sewer system, such Additional Bonds may, as to the
Combined Revenues; be issued on a parity in.all respects with the,Bonds.
No such.Additional Bonds shall be issued, however, until and unless
all the terms. and conditions specified in Section 8.O1 of this ordinance
have been met, and said.terms and -conditions shall apply with equal force
with respect to the issuance_of such Additional Bonds payable from the
Combined Revenues; provided, however, in such case the definition of
"System" shall include the City's sanitary sewer system, and the net,
revenues therefrom shall be included in the Net Revenues mentioned
in Section 8.01. The revenues of -''ch sanitary sewer system shall
thereafter be subject to and be governed by the provisions of this
ordinance relating to the City's waterworks system.
ARTICLE IX.
SPECIAL COVENANTS OF THE CITY
Section 9:01 —Covenants. The`City, by and through this
ordinance, expressly.covenants as hereinafter provided in this Article.
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Section 9'.02- 'Pun'ctual' 'P'ay'ment' 'off the' Bonds. The City
will punctually pay or cause to be paid the interest on and
principal of the Bonds according to the terms thereof and will
faithfully do and perform, and at all times fully observe, any
and all covenants, undertakings, stipulations and provisions
contained herein or in any Bond executed and delivered hereunder.
Sectiori 9.'0'3 Mainte arice' 'o'f 'System. So long as any of
the Bonds remain outstanding, the City covenants that it will at
all times maintain the System, or cause the same to be maintained,
in good condition and working order and will operate the same,
or cause the same to be operated, in an efficient and economical
manner, at a reasonable cost and in accordance with sound busi-
ness principles. In operating and maintaining the System, the
City will comply with all contractual provisions and agreements
entered into by it and with all valid rules, regulations, direc-
tions or orders of any governmental, administrative or judicial
body promulgating the same.
Section 9.04 - Power 'to P'l'edge' 'Revenues . The City has
the power to pledge the Net Revenues to the payment of the Bonds
and has lawfully exercised such power under the Constitution and
laws of the State of Texas, the Constitution of the United States
of America and the City Charter.
Section 9.05' - Sys -tem and Revenues Not Encumbered.
Neither the System nor the Revenues thereof will be in any way
encumbered except as provided in this ordinance.
Section 9.06 Sale 'or Encumbrance *of System. So long as
any of the Bonds remain outstanding, either as to principal or
interest, the City will not sell, dispose of or encumber any
of the improvements, facilities or.properties constituting the System;
provided, however, that after. the Series 1958, 1959 and. 1961 portion
of the Outstanding Bonds is retired this provision shall not prevent
the City,from.disposing of any portion of the.System.which has been
declared surplus or is no longer needed for the proper operation of
the System. -Any moneys received from the sale of such surplus property
may be used for the replacement of the property sold. Any agreement
pursuant to which the City contracts with a person, corporation;
municipal corporation or political subdivision to operate the System
or.to lease and operate all or part of -the System shall not be con-
sidered as an encumbrance of the Systema
Section 9.-07,- Insurance. So long as any of the Bonds or
interest coupons remain outstanding, the City covenants that it
will at all times keep insured such parts of the System as are
usually insured by municipal corporations operating like properties
in similar locations under the same circumstances with,a responsible
insurance company or companies against risks,,accidents or casualties
against which and to the extent.insurance is usually carried by such
municipalcorporations; provided, however, that at any time while any
contractor engaged in construction work shall be fully responsible.
therefor, the City shall not be required to carry such insurance.
All such policies shall be open to the inspection of the Bondholders
or their representatives at all reasonable times.
Section 9.08,- insurance Proceeds. In the.event.of any
loss or damage, the City covenants that it will reconstruct or
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repair.the destroyed or damaged portion of the System and will
apply the proceeds of the insurance policies covering such loss
or damage solely for that purpose. The City covenants that it
will begin such work or reconstruction or repair promptly after
such Loss or damage shall occur and will continue.and properly
complete the same as expeditiously as possible and will pay,
Or,cause to be paid, all costs and expenses in connection there-
with out of the insurance proceeds so that the same shall be com-
pleted and the property be free and clear of all mechanic's and
ether liens or claims.
Section 'g.'0'9' Excess' 'Trisfur'arice' 'Proc'eeds. Any insurance
proceeds remaining after the completion of and payment for any
such reconstruction or repairs shall be deposited to the credit
of the Bond Fund.
Section 9.10'- No Free S'e)rvi'ce . No free . service or ser-
vices 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 a reasonable value thereof
shall be made by the City out of funds derived from .sources
other than the revenues and income of the System.
Section 9.11 - No Competirig'System. To the extent.that
the City legally may do so, the City further covenants that so
"ong as any of the Bonds or interest thereon are outstanding, no
f'r'anchise shall be grant6d for the construction and operation of
any competing system; and the City will prohibit the construction
and operation of any system other than the System owned by the
ARTICLE X.
DEFAULT' 'P'R'OVI'S'ION.
•
Section 10.01' - R'e'medies' 'iri 'Eve'nt' 'of Default. In 'addi-
tion to all of the rights and remedies provided by the laws of
the State of Texas, the City further covenants and agrees that
in the event of default in payment of principal of or interest
on any of the Bonds when due, or, in the event it fails to make
payments required to be made into the Bond Fund or defaults in
the observance or performance.of any other of the covenants,
conditions.or obligations set forth in this ordinance, the fol-
lowing remedies shall be available:
(a) The bearers of any of the Bonds shall be entitled to
a writ of mandamus issued by a court of competent jurisdiction
compelling and requiring the City and the officials thereof to
observe and perform any covenant, obligation or condition pre-
scribed in this ordinance;
(b) No delay or omission to exercise any right or power
accruing upon any delay shall impair any such right or power or
shall be construed to be a waiver of any such default or acqui-
escence therein, and every such right and power may be exercised
from time to time and as often as may be deemed expedient.
Section 10 .02 O'rd'inance 'is' 'Cont'ract . In consideration
of the purchase and acceptance of the Bonds authorized to be
issued hereunder by those who shall hold the same from time to
time, the provisions of the ordinance shall be deemed to be and
shall constitute contracts between the City and the holders from
time to time of the Bonds and interest coupons; and the cove-
nants and agreements herein set forth to be performed on behalf
of the City shall be for the equal benefit, protection and secu-
rity of the holders of any and all of the Bonds and interest
coupons, all of which, regardless of the time or times of their
issue or maturity, shall be of equal rank without preference,
priority or distinction of any of the Bonds or interest coupons
over any other thereof, except as expressly provided herein.
ARTICLE XI.
SALE, APPROVAL, REGISTRATION
AND DELIVERY 'OF BONDS
Section 11.01 - Sale of Bonds. That said Bonds, having been
advertised for public sale in accordance with the terms and pro-
visions of Section 4, Article IX of the City's Charter, and bids
having been received pursuant thereto, it is hereby found and
determined that .the bid of (J%✓,bE20DO'D Alrd111Y0,5 cb, -Z—Ve.
at a price equal to the principal amount
thereof, plus accrued interest thereon from the date thereof to
the date of actual delivery plus a cash premium of $ /1/9 Ale- ,
is the best bid received, and the sale of said Bonds to the
named bidder at the stated price is hereby authorized, approved,
ratified and confirmed, subject to the unqualified approving
opinions as to the legality of the Bonds by the Attorney General
of the State of Texas and Vinson, Elkins, Searls & Smith, Houston,
Texas, market attorneys, is hereby authorized, approved, ratified
and confirmed.
Section 11'.'02 Appro'val'; Re'gi*s't'rat1o'ff and Delivery of
Bonds. The Mayor and City Secretary are hereby authorized and
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•
•
directed to take and have charge of the records and proceedings
of the Bonds, and the Bonds, pending their 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, the Comptroller 'of Public
Accounts (or a deputy designated in writing to act for the
Comptroller) shall manually sign the Comptroller's certificate
of registration described herein to be printed on the back of each
Bond, and.the seal of the Comptroller shall be impressed, or
placed in facsimile, on each of said Bonds. When the Bonds have
, been approved by the Attorney General and registered by the
Comptroller of Public Accounts, they shall be delivered to the
purchaser named above upon receipt of the full purchase price,
ARTICLE XII.
ARBITRAGE AND DEBT'SERVICE GRANTS
The City hereby specially covenants and agrees with the
original purchasers of said Bonds and with the owners or holders
from time to time of said Bonds as follows:
(1) That the City will promptly proceed to utilize the
proceeds of the sale of said Bonds (other than accrued interest
to date of delivery and any premium) for the purposes set forth
in Section 3001 of this ordinance; and
(2) That no portion of said Bonds is issued as a part
of an issue, all or a major portion of the proceeds of which are
reasonably expected to be used directly or indirectly
(a) to acquire securities (within the meaning of
Section 165 (g)(2)(A) or (B) of the Internal Revenue
Code) or obligations (other than obligations described
I
in Section 103(a)(1) of the Internal Revenue Code)
except for a temporary period to the extent permitted
by Section 103 (d)(4)(A) of the Internal Revenue Code,)
which may be reasonably expected at the time of the
issuance of such issue to produce a yield over the
term of the issue of Bonds which is materially higher
(taking into account any discount or premium) than
the yield on the issue of Bonds, or
(b) to replace funds which were used directly
or indirectly to acquire securities or obligations
described in subparagraph (a) above,
The City further specially covenants and agrees with the original
purchasers of said Bonds and with the owners or holders from time
to time of said Bonds that it will take such action in accordance
with regulations.prescribed from time to time by the Secretary of
the Treasury or his delegate to carry out the purposes of Section
103 (d) of the Internal Revenue Code so that no,portion of said
Bonds shall be classified as an "arbitrage bond" within the
meaning of Section 103 (d) of the Internal Revenue Code.
(3) The City covenants that it will not permit to be
deposited to the credit of any of the Funds herein mentioned
or applied to the payment of the principal of or interest on the
Outstanding Bonds, the Bonds, and Additional Bonds, any proceeds
from any grant, donation or income received from the United States
Government, whether pursuant to agreement or otherwise, if such
deposit or application would result in interest payable on the
Outstanding Bonds, the Bonds or Additional Bonds being includable
in whole or in part in Gross Income for Federal income taxes:
•
ARTICLE XIII.
MISCE'LLANEGUS' PROVISIONS
I
Section 13.01 'City''s' Successors *arid 'Assigns. Whenever
in the ordinance the City is named and referred to, it shall be
deemed to include its successors and assigns, and all covenants
X, 2� I-)-1'
a -(o -1.e1') -a'
and agreements in'the ordinance contained by and on behalf of the
City shall bind and inure to the benefit of its.successors and
assigns whether or not so expressed.
Section 13.02 - No Recourse Against City Officers. No
recourse shall be had for the payment of the principal or the
interest on the Bonds or for any claim based thereon or in the
ordinance against any officer of the City or any person executing
the Bonds.
Section '13.03- Paying Age'rit May Own Bonds. The Paying
Agent, in its individual or any other capacity, may become the
owner or pledgee of the Bonds with the same rights it would have
if it were not Paying Agent.
Section 13.04 - Legal Holidays. In any case where the
date of maturity of interest and principal of the Bonds or the
date fixed for redemption of any Bonds shall be in the City of
Beaumont a legal holiday or a day on which banking institutions
are authorized by law to close, then payment of interest or
principal need not be made on such date but may be made on the
next succeeding day not a legal holiday or a day on which banking
institutions are authorized by law to close in the City of
Beaumont with the same force and effect as if made on the date
of maturity or the date fixed for redemption and no interest
shall accrue for the period from and after such date.
Sect'i ori '13.'0'5' `= 'Bene'fi't's' 'of '0'rdiriarice Fro -vision. Nothing
in this ordinance or in the Bonds or interest coupons, expressed
or implied, shall give or be construed to give any person, firm.
or corporation, other than the City, the Paying Agent, and the
holders of the Bonds or interest coupons, any legal or equitable
right, remedy or claim under or in respect of this ordinance, or
under any covenant, condition.or provision herein contained, all
the covenants, conditions and provisions contained in this ordi-
nance or in the Bonds or interest coupons being for the sole bene-
fit of the City, the Paying.Agent and the holders of the Bonds
or interest coupons.
Section 13006 Unavailab'il'i't'y of 'Authorized Publication.
If, because'of the temporary or permanent suspension of any news-
paper, journal or other publication, or for any reason, publication
of notice cannot be made meeting any requirements herein estab-
lished, any notice required to be published by the provisions of
this ordinance shall be given in such other manner and at such
time or times as in the judgment of the City shall most effectively
approximate such required publication and the giving of such notice
in such manner shall for all purposes of this ordinance be deemed
to be in compliance with the requirements for publication thereof.
Section 13.07 - Seyerab'ilit'y 'Clause. If any word, phrase,
clause., sentence, paragraph, section, or other part of this ordi-
nance, or the application thereof to any person or circumstance,
shall ever be held to be invalid or unconstitutional by any court
_3.4_ -
of competent ,jurisdiction, the remainder of this ordinance and
the application of such word, phrase, clause, sentence, paragraph,
section, or other part of this ordinance to any other persons or
circumstances shall not beaffected thereby.
Section 13.08 — Further Procedures. The Mayor.and City
Clerk of.,,the City and other appropriate officials of the City are
hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms of this ordinance.
Section 13.09— Effective Date of Ordinance. This ordinance
shall take effect from and after its passage.
PASSED AND APPROVED this 6th day of June, 1972.
ATTEST:
y Clerk, City of Beafimont,,
Texas
(SEAL)
C?� 4kL-- -
May)k, Cit of Beaumont, Texas
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