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HomeMy WebLinkAboutORD 78-341 , ORDINANCE NO. 78 - ORDINANCE AUTHORIZING THE ISSUANCE OF $1,000,000 CITY OF BEAUMONT, TEXAS, WATERWORKS SYSTEM REVENUE BONDS, SERIES 1978-A THE STATE OF TEXAS § COUNTY OF JEFFERSON § CITY OF BEAUMONT § BE IT ORDAINED BY THE CITY COUNCIL OF.THE CITY OF BEAUMTONT, TEXAS: ARTICLE I. STATUTORY AUTHORITY Recitals and Findings. Section 1.01 - Creation of City. The City of Beaumont, Texas (the "City") is duly incorporated as a municipal corpora- tion under the laws of the State of Texas, and on December 6, 1947, said 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 Artidles 1111 through 1118, Vernon's Texas Civil Statutes, as amended, to improve, enlarge, extend and repair its waterworks system and to issue bonds for such purposes. Section 1.03 - Special Findings. It is hereby found, deter- mined and declared that: (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 $4,000,000 bonds have been issued; (b) Such election was called and notice therof was given, and such election was held in accordance with and in conformity with the Constitution and laws of the State of Texas, the Con- stitution of the United.States of -America and the Home -Rule Charter of said City, and the City Council of the City has here- tofore officially convassed the returns of such election and has deteremined 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 Outstanding 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 the remaining $1,000,000 in principal amount of said revenue bonds voted at such election, and the City Council desires to proceed with the authorization, issuance, sale and delivery of such issue of such revenue bonds to be 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 reve- nues to the payment of said Outstanding Bonds. ARTICLE II. Definitions and Interpretations Section 2.01 - Definitions. Unless otherwise expressly pro- 3 vided, 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 -2- 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. 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 1978-A, authorized and issued pursuant to this ordinance. The term "Bond Fund" shall mean the Bond.Fund created by the ordinance adopted November 13, 1956, authorizing the issuance of the City's Waterworks System Revenue Bonds, Series 1956. 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. IS11 0 r3-1 V--10/72 Net Revenues The term "Net Revenues" shall mean the Gross Revenues de- rived from the operation of the System -less the reasonable ex- penses of operation and maintenance of said System, including all salaries, labor, materials, interest and such repairs and ex- tensions 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. n -A4 - The term "Ordinance" shall mean the ordinance adopted by the City Council authorizing the issuance of the Bonds. Outstanding Bonds The term "Outstanding Bonds" shall mean the City's out - standing Waterworks System: (a) Revenue Bonds., Series 1958, (b) Revenue Refunding Bonds, Series 1959, (c) Revenue Bonds, Series 1961, (d) Revenue Bonds; Series 1971-A and (e) Revenue Bonds, Series 1972-A; payable fromthe net revenues of the City's water- works system. Paying Agent The term "Paying Agent" shall mean The American National Bank of Beaumont, Texas, Beaumont, Texas, which is authorized to pay the principal of and interest on the Bonds on behalf of the City. Reserve Fund The term "Reserve Fund" shall mean the Reserve Fund created by said ordinance adopted November 13, 1956. Series 1958. 1959. 1961, 1971 and 1972 Ordinances The term "Series 1958 Ordinance", "Series 1959 Ordinance", -4- _ 3- "Series 1961 Ordinance", Series.1971 Ordinance" or "Series 1972. Ordinance" shall mean the ordinance or ordinances adopted by the .City respectively authorizing the issuance of the Outstanding Bonds,.as the case may be. System The.term "System" shall mean the waterworks system of the City, including all present and future extensions, replacements and improvements to.said waterworks system. Section 2.02 - Interpretations. The titles and headings of; the Articles and Sections of this Ordinance have been inserted 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 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 des- ignated as."CITY OF BEAUMONT, TEXAS., WATERWORKS SYSTEM REVENUE. BONDS, SERIES.1978-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 -5- 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,,_Maturities and Option of Prior Redemption. - The Bonds shall be dated March 1, 1978, 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..l, in_each of the years, and in the amounts, respec- tively, as set forth in the following schedule: $70,000 60,000 1979/1988 1989/1993 Said Bonds may be redeemed prior to their scheduled maturities at the option of the City, on the dates stated, at theprice and in the manner prescribed in the FORM OF BONDS hereafter set forth in this Ordinance.- Section rdinance:Section 3.03 Interest Rate and Interest Payment Dates. Said Bonds shall bear interest evidenced by interest coupons at the following rates.per annum, to -wit: Bonds maturing 1979 through 1982, 4AG Bonds maturing 198.3 through 19 5 Bonds maturing 19_ through 1990, 4_ Bonds maturing 1941, through 190, 4.4)0 %, Bonds maturing 19 ):- through 1983, S, ac. %, Bonds maturing 19� through 1.9_, %, interest payable September 1, 1978, and semiannually thereafter on March 1 and September 1 in each year until the principal sum is paid. Section 3.04 - Payment of Principal.of, Interest on, Charac- teristics and Execution of Bonds. That the Bonds, and the in- terest coupons appertaining thereto, shall be payable, shall have Sr� ,n � 29' the characteristics, and shall be. signed and executed (and said Bonds shall:be-sealed), all as; provided,,and im the manner indi- cated, -.in the.FORM'.OF BONDS set forth in. -this Ordinance. Section .,3:,05- -Ownership of .Bonds and Interest ._Coupons.. That the ,City and the Paying, Agent .and. any other. persons may treat the -bearer of .any Bond. or,_ the -bearer of any, interest coupon as.-the.absolute owner -of -such Bond.or.interest coupon, as the, case may b.e; for .the purpose .of, making..payments­thereof and for allother 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. nota All - payments -of oron 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.shala be,a-discharge of the City and .the. Paying Agent, irrespective, of the..'_iability upon the Bonds or.interes.t.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 paymentor 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. Or- dinance,. Section 3.,07 -.Mutilated, Lost, Destroyed.or Wrongfully Taken Bonds or Coupons. If the.bearer of any Bond or any in- terest 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 -7- 61�d , 7r 3 3 interest coupon of like tenor and date in exchange and substi- tution for.the mutilated.bond'or interest coupon or in,lieu of and substitution, for the bond or interest coupon so -lost, de- ...stroyed or. wrongfully; taken. ARTICLE. IV . Form'of Bonds, Registration. - 'Certificate and Interest.Coupons The form of said Bonds including .ahe.form of registration 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 apper- tain and be.attached initially to each of.said..Bonds,-. shall.be substantially�as follows, with such additions.,..deletions and variations as may be necessary,or.desirable-and permitted by -this Ordinance - FORM OF BONDS: No. $5,000 UNITED.STATES OF AMERICA STATE OF'TEXAS: COUNTY OF.JEFFERSON CITY OF BEAUMONT., TEXAS, WATERWORKS SYSTEM REVENUE `BOND SERIES 1978-A ON SEPTEMBER 1, 19—, the...CITY OF'BEAUMONT, TEXAS, for value received, hereby acknowledges itself indebted to and. PROMISES TO PAY TO BEARER 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 September 1, 1978, and semiannually thereafter on March 1 -and September 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 -8- • 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, Beaumont, Texas. The principal hereof shall be, payable only upon presentation and surrender of .,this bond, -and the.interest hereon falling due on and prior to the maturity of thi-s 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.MARCH 1, 1978. 0 THIS BOND IS ONE OF A SERIES OF 200 BONDS of like tenor and effect, except as to serial number, interest rate, maturity and option of prior redemption, being numbered cons.ecutive.ly from 1 to 200, both inclusive, in the denomination 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, ex- tending.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 1118,. V.T.C.S., as amended, and the Home -Rule Charter of said City, and by authority of a. vote of the duly qualified resident electors of said City at an election held within said City on the 4th day of May, 1971. ON MARCH 1, 1993, AND ON ANY INTEREST PAYMENT DATE THERE- AFTER, the outstanding bonds of this series may be redeemed prior to their scheduled maturities, at the option of said City, as a whole (or if in part,,in inverse numerical order), for the prin- cipal amount thereof and unpaid accrued interest thereon to the date fixed for redemption. If said City elects to redeem all or any part of..said bonds..on .any such .redemption date , notice of the exercise of the,'option to -redeem shall be.given in writing to the paying agent, and..said notice..shall be published one '(1).time in -a financial journal .or_;;publication published-..in.the English language in the City of -New -York -,-New York, or .in the City ..of Austin, Texas; which. notice shall be.mailed to.-saidpaying agent -.and published in said journal or publication at least ._thirty (30) days prior to the.date.fixed_f,or:redemption. When said bonds, in whole or in part, have been called for -redemption in.the.manner pre.scrib.ed and due provision has.:_been made to -pay the redemption price on the -:bonds called for redemption to the -date -fixed for redemption, the right of the owners or holders to collect inter- est.which.would otherwise accrue after the .redemption date on the. bonds..called for redemption shall terminate on the date fixed for. redemption. THIS BOND SHALL NOT BE DEEMED TO CONSTITUTE.A DEBT of the City of Beaumont.or a pledge of its faith and.credit, ba.t shall be payable as to principal -and interest, together with the City's outstanding Waterworks System: (a) Revenue Bonds.,. Series 1955, (b) Revenue Refunding Bonds, Series 1959, (c) Revenue Bonds, Series 1961, (d) Revenue Bonds, Series 1971-A.and (e) Revenue Bonds, Series 1972-A (the "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 ofthis 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'or- dinance above mentioned, and said bonds may be payable from the same source, secured in the same -manner and placed.on a parity -10- with the Outstanding Bonds, this bond and the series of which it 1S a part. IT IS FURTHER CERTIFIED AND RECITED that all acts, con- ditions 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. 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 counter- signed 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. xxxxxxxxxxxxxxx. 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, certified as to validity, and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller sive of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this xxxxxxxxxxxxxxx Comptroller of Public Accounts (SEAL) of the State of Texas 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, 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 tender for the 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 1978-A, dated March 1, 1978.. 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. Bond No. xxxxxxxxxxxxxxx Mayor, City of Beaumont, Texas xxxxxxxxxx City Clerk, City of Beaumont, Texas *(Coupons maturing after.March 1,. 1993, shall contain the following additional clause: unless the bond to which this coupon appertains shall have been previously called for redemption and due pro- vision made to redeem same,) ARTICLE V. Legal Opinion and Cusip Numbers The approving opinion of Vinson & Elkins, Houston, Texas, -12- )r 3 and Cusip Numbers may be.printed on the backs of the bonds, but errors or omissions in such opinion or errors or omissions of such numbers shall have no effect whatever on the.validity of such bonds. ARTICLE VI. Security of Bonds Section 6.01 - Pledge 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 ir- revocably pledged to the payment of the principal of and interest on the Bonds. The lien on -the Net Revenues.hereby pledged shall immediately be subject to the lien on 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 6.02 - Security of Bonds. The Bonds, the Outstanding 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, the 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 another. The holders of the Bonds and the.interest coupons appertaining thereto shall never have the right to demand payment out of any funds raised or to be raised by -taxation. Section 6.03 - Maintenance of Income. In order that the Net Revenues 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 -13- System which will provide Net Revenues sufficient at all times: (a) to pay all operation, maintenance,. depreciation, re- placement 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) t,o 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 become due. ARTICLE VII. Revenues and Application Thereof Section 7.01 - System Fund; 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 issuance of the City's Waterworks System Revenue Bonds, Series 1956. From the moneys in the System Fund, the City shall pay the expenses of operation and maintenance of the 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. Section 7.0.2 —Additional Payments Into Bond Fund and Re- serve.Fund. After payment of the expenses of operation and maintenance of the System as provided in Section 7.01, and simul- taneously with the making of the payments into the Bond Fund required under the Series 1958, Series 1959, Series 1961, Series -14- 1971 and Series 1972 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, Series 1971 and Series 1972 Ordinances): During each year,beginning in March, 1978, 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- works 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 defi- ciencies 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 hereinafter pro- vided to be otherwise paid into said Bond Fund each month. Not later than August 15, 1978, 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 payments falling due on the following March 1 and September 1. Section 7.03 Additional.Payments Into Reserve Fund. In addition to the payments into the Reserve Fund required under the Series 1958, Series 1959, Series 1961, Series 1971 and Series 1972 Ordinances, the City shall pay from moneys in the System Fund into said Reserve Fund each month. (in approximately equal -15- monthly payments or deposits), beginning with March, 1978, 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 1.959, Seires 1961., Series 1971 .and Series 1972 Ordinances) of not less than said average annual principal.and interest re- quirements 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 prin- cipal and interest requirements of the Bonds is reached in the Reserve Fund, no further payments (insofar as the Bonds are con- cerned) need be made into said Fund; however, in the event 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 con- tinued until said balance of not less than the average annual principal and interest requirements of the Bonds is again reached. Section 7.04 - Date of Payments Into Bond. Fund And Reserve Fund. The monthly payments into the Bond Fund and into the Re- serve Fund shall be made on or before the 15th day of each month. Section 7.05 - 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 -16- • Bonds have been retired. Mien there are moneys. in. the Bond Fund and -the Reserve Fund sufficient to make all'intere.st 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 7..06 - Surplus. Any funds remaining in the Systeme. ,Fund .,after.. provision. .bass, 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.Ci:ty for the redemption of the Outstanding Bonds, the Bonds.or Additional Bonds; or may be transfer-red.to the City's general fund for use for any lawful general or special City pur- pose, as authorized by Article 1113a, V.T:C.S:, as amended; or may be used for any other purpose permitted by law. Section 7:07..- Maintenance and Operation. The.CitT shall maintain.the System ingood condition and-operate.the same in an efficient manner and, at a reasonable cost. Section.7.08 - Accounts, Fiscal Year 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 19.6,1 portion of the Outstanding Bonds is retired said fiscal year may be -changed from time to time by the City. -17- - FF ��. (/,_r[ 1� ?_.Y 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 percent (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 require- ments of this Ordinance, and his recommenda- mom tion for any changes or improvements 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. mom Section 7.08 - Inspections. Any original purchaser of twenty-five percent (25%) or more in principal amount of the Bonds, and any holder of twenty-five percent (25%) or more in principal amount of the Bonds 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.7.09 - 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 ordinance adopted November 13, 1956, autho- rizing the issuance of the City's Waterworks System Revenue Bonds, Series 1956. Thereafter 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 7.09 and 7.10 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 respon- sible for any loss arising out of the sale of any investment. Section 7.10-- Earnings from Investments. 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. -19- ARTICLE VIII. Application of Bond Proceeds 3 ir Section 8.01 - Bond Proceeds. Proceeds from the sale of the Bonds will be disbursed in accordance with this Article. Section 8.02.- 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 de- posited into the Bond Fund. Section 8.03 - Use of Proceeds of Sale of Bonds. The proceeds from the sale of the Bonds, after making the deposit hereinbefore provided, shall be used solely for the purpose of improving, enlarging, extending and repairing the. City's water- works system and for the payment of all incidental. expenses in connection therewith, including fiscal, legal and engineering fees and expenses. Section 8.04 - 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 IX. Additional Bonds; Refunding Bonds; Bonds and Additional Bonds Payable From Waterworks and Sanitary Sewer System Revenues; and Defeasance Section 9.01 Additional 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 -20= 192& 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, Series 1971 and Series 1972 Ordinances, by this Ordinance, and by the. proceedings autho- rizing 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 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 autho- rizing 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 aver- age annual principal and interest requirements of said Additional Bonds then proposed to be issuedand 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. -21- The term "Net Revenues". as used in this Section 9.01 shall mean all..of the Net Revenues of the System .(excluding -income received.spec:ifically 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 Ad- ditional.Bonds are outstanding and unpaid, the City shall not, issue further Additional Bonds, except as hereinabove provided, payble from revenues of the System unless the lien of such Bonds payable from the revenues of the System is junior. and subordinate in all respects to the lien of the Outstanding Bonds, -the Bonds then outstanding and Additional Bonds then -outstanding. Section 9.: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 holder of which have consented to have refunded, as now'or hereafter authorized 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 re- funded. 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. -22- Section 9.0.3 - 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 (the "Combined Revenues") of the City's waterworks 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 9.01 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 9.01. The revenues of such sanitary sewer system shal.l.thereafter be subject to and be governed by the provisions of this Ordinance relating to the City's waterworks system. Section 9.04 - Defeasance. When all of the Bonds and cou- pons shall have been paid and discharged, the pledge of the Net Revenues and the obligations of the City hereunder shall ter- minate. The Bonds and coupons shall be deemed to be paid and discharged within the meaning of this Section: (a) if the Paying Agent; shall hold in trust a sum or sums sufficient to pay the principal of and -23- accrued interest to maturity on all Bonds then out- standing, plus the fees of the Paying. Agent; or (b) if there shall have been deposited, with the Treasurer of the State of Texas or otherwise as permitted by law, amounts sufficient to discharge the payment obligations of the City hereunder; or (c) to the extent permitted by law, if the Paying Agent shall hold in trust direct obligations of, or obligations the payment of principal and in- terest of which are guaranteed by, the United States of America and which meet the requirements of this subsection (c). Such obligations shall be certified by a firm of public accountants of national reputa- tion to bear such interest and to have.principal and interest payment dates such that, without further investment, the amounts to be realized from such ob ligations will be sufficient, when added to any money then held in cash by the Paying Agent, to pay the principal of and interest and Paying Agent's fees on the Bonds as and when the same become due and payable. Such certification shall be conclusive for all pur- poses. If any Bonds are to be redeemed.prior to maturity, notice of such redemption shall have been given, or irrevocable instructions to give such notice shall have been given by the City to the Paying Agent. .ARTICLE X. Special Covenants of the City Section. 10.01 - Covenants. The City, by and through this Ordinance, expressly covenants as hereinafter provided in this Article. -24- �11 3-) Section 10.02 - Punctual Payment of 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. Section 10.03 - Maintenance of 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 business principles. In operating and maintaining the System, the City will comply with all contractual provisions and agreements en- tered into by it and with all valid rules,.regulations, directions or orders of any governmental, administrative or judicial body promulgating the same. Section 10.04 - Power to Pledge 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 and the City Charter. Section 10.05 - System and Revenues not Encumbered. Neither the System nor the Revenues thereof will be in any way encumbered except as provided in this Ordinance. Section 10.06 - 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 -25- shall not prevent the City from disposing of any portion of the System mhich:has been declared surplus or is no longer needed for the proper operation of the System. Any-moneys.received from the sale of surplus property.may.be used for the replacement of the. property sold. .Any'agreement..pursuant to which:the City-con- tracts, itycon- tracts, 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 considered as an encumbrance of.the System. Section 10.07 - 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 prop- erties in similar locations under the same circumstances with a responsible insurance company or companies against risks, acci- dents or casualties against which and to the extent insurance is usually carried by such municipal corporations;. 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 representa- tives at all reasonable times. Section 10.08 --Insurance Proceeds. In the event,of any loss or damage, the.City covenants that it willreconstruct or 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 -26 cause to be paid, all costs and expenses in connection therewith out of the insurance proceeds so that the same shall be completed and the property be free and clear of all mechanic's and.other .. liens or claims. Section 10.09 - Excess Insurance Proceeds. 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.10.10 - No Free Service. 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 10.11 - No Competing System. To the extent that the City legally may do so, the City further covenants that so long as any of the Bonds or interest thereon are outstanding, no franchise shall be granted 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 City. ARTICLE XI. Default Provision Section 11.01 - Remedies in Event of Default. In addition 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 obser- vance or performance of any other of the covenants, conditions or -27- 0 obligations set forth in this Ordinance, the following 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 com- pelling and requiring the.City and the officials thereof to observe and perform any covenant, obligation orcondition pre- scribed in this Ordinance; and (b) No delay or omission to exercise any right or power ac- cruing upon any delay shallimpair any such right or power or shall be construed to be a waiver of any such default or ac- quiescence therein, and every such right and power may be exer- cised from time to time and as often as may be.deemed expedient. Section 11.02 - Ordinance is Contract. 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 con- stitute contracts between the City and the holders from time to time of the Bonds and interest coupons;..and the cover -ants and agreements herein set forth to be performed on behalf of the City shall be for the equal benefit, protection and security 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 XII. Sale, Approval, Registration and Delivery of Bonds Section 13.01 - Sale of Bonds. That said Bonds, having been advertised for public sale in accordance with the terms and MWE provisions 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 ; r k'R 5 134 ' %-�a,SAC-X,' 77—Ef.lr,q S at a price equal to the principal amount thereof, plus accrued interest thereon from the date thereof to the date of actual delivery, plus the cash premium of $ `- ` , is the best bid received, and the sale of said Bonds to the named bidder at the stated priceis hereby authorized, approved, ratified and confirmed, subject to the approving op- inions as to the legality of the Bonds by the Attorney General of the State of Texas and Vinson & Elkins, Houston, Texas, market attorneys, is hereby authorized, approved, ratified and confirmed. Section 12.02 - Approval, Registration and Delivery of Bonds. The Mayor and City Clerk are hereby authorized and directed to take and have charge of the records and proceedings of the Bonds, and the Bonds, pending their approval by the Attor- ney 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 fac- simile, 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 XIII. Arbitrage The City Council certifies that based upon all facts, -29- estimates and circumstances, now known or reasonably expected to be in existence on the date the Bonds are delivered and paid for, the City Council reasonably expects that the proceeds of the Bonds will not be used in a manner that would cause the Bonds or any portion of the Bonds to be an "arbitrage bond" under Section 103(c)(2) of the Internal Revenue Code of 1954, as amended, and the temporary and proposed regulations heretofore prescribed thereunder. Furthermore, all officers, employees and agents of the City are authorized and directed to provide certifications of facts, estimates and circumstances which are material to the reasonable expectations of the City Council as of the date the Bonds are delivered and paid for, and any such certifications may be relied upon by counsel, by the owners or holders of the Bonds, or by any person interested in the exemption of interest on the Bonds from Federal income taxation. Moreover, the City Council covenants that it shall make such use of the proceeds of the Bonds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds shall not be "arbitrage bonds" under Section 103(c) of the Internal Revenue Code of 1954, as amended, and regulations pre- scribed from time to time thereunder. ARTICLE XIV. Miscellaneous Provisions Section 14.01 - City's Successors and 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 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 14.02 - No Recourse Against City Officers. No -30- 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 14.03 - Paying Agent May .Own Bonds., -.The Paying Agent, jn,its, individ Al.or.any other capacity, may become the owner or pledgee.of the Bonds with the same rights it would have if it were, -not -the Paying Agent. Section 14.04 - 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.autho- rized 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. Section 14.05 - Benefits of Ordinance Provision. 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 Or- dinance or in the Bonds or interest coupons being for the sole benefit of the City, the Paying Agent and the holders of the Bonds. or interest coupons. -31- Section 14.0-6 - Unavailability of Authorized Publication. If, because of the temporary or permanent suspension of any newspaper, journal or other publication, or for any reason, publication of notice cannot be made meeting any requirements herein established, 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.a.s 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 require- ments for publication thereof. Section 14.07 - Severability Clause. If any word, -phrase, clause, sentence, paragraph, section, or other part of this Ordinance, or the application thereof to any person or circum- stance, shall ever be held to be invalid or unconstitutional by any court of competent jurisdiction, the remainder of this Or- dinance and the application of such word, phrase, clause, sen- tence, paragraph, section or other part of this Ordinance to any other persons or circumstances shall not be affected thereby. Section 14.08 - 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 14.09 - Effective Date of Ordinance. This Ordinance shall take effect from and after its passage. Section 14.10 - Approval of Official Statement. The Of- ficial Statement relating to the Bonds and submitted to the City Council at this meeting is hereby authorized and approved. PASSED AND APPROVED this 14th day of March, 1978. -32- ATTEST: City of. City Cll�ok I Beaumont, Texas c�Q cl-7 Mayes, Cit? of Beaumont, Texas -33-