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HomeMy WebLinkAbout1981-04-20 - Special City Council1J A e SPECIAL SESSION - MONDAY APRIL 20, 1981 - 3:00 PM. CHAMBER OF THE CITY COUNCIL CITY HALL, CITY OF STEPHENVILLEq TEXAS The City Council of the City of Stephenville met in Special Session Monday, April 20, 1981 at 3:00 p.m. with Mayor Joe F. Cummings present and presiding. MEMBERS PRESENT: G. A. Swindle Charles Riggins W. 14. Irwin E. W. Ferguson William G. Brede David Clayton MEMBERS ABSENT: Raymond Anderson Larry Hammett OTHERS ATTENDING City Administrator Kurt Ackermann City Secretary Joyce Pemberton City Attorney Joseph Chandler Director of Finance Charlene Young Director of Public Works R. Y. Gann Fire Marshall Kenneth Haley " Director of Parks & Recreation Ronnie Isham Mr. Lee Solley Mr. Jack Gray Members of the press. Mayor Cummings called the meeting to order and declared a quorum present. RESOLUTION FOR CITY'S PARTICIPATION IN YOUTH CON Director of Parks & Recreation Ronnie Isham advised the Council that this is a resolution authorizing him to sign a contract, with the Department of Community Affairs for this youth program. Mr. Isham explained that TDCA will put $26,500 into this program with the city's participation being $8,000 ($4,000 cash and $4,000 in kind). He said there will be 20 enrollees, 15-18 years of age, and 2 leaders (an environmentalist and a director). Mr. Isham said this is the fourth year the city has participated and he thinks it is a very worthwhile project. He said the work will be in the Bosque River Greenbelt Concept which they have been working on since the beginning of the Parks Improvement Program. The project will be 8 weeks with the major portion of work being in the Jaycee Park. After some discussion, Councilman Irwin moved, seconded by Councilman Riggins, to pass and adopt the resolution authorizing Mr. Isham to execute, on behalf of the City of Stephenville, a contract with the Texas Department of Community Affairs to participate in the Youth Conservation Corps Project. Motion carried unanimously by those members present. I: RESOLUTION ENDORSING PASSAGE OF.SENATE BILL 951 AND HOUSE Director of Public Works R. Y. Gann advised that City Street Improvement legislation has been introduced in the Senate and House to create a new source of State financial assistance to the cities. Mr. Gann explained that this legislation is for all cities allocated by the number of miles of paved streets within a city at a rate of approximately $1225 per mile of paved streets. The money to be used for materials only. Mr. Gann advised that the City of Stephenville has 95 to 100 miles of paved streets within the corporate limits and the rate of inflation is making street repairs almost prohibitive. He said he strongly recommends that the City Council adopt this resolution endorsing the passage of said legislation. (over) 115 Councilman Swindle asked Mr. Gann when S. Lillian Street wote;,d, be repaired and who was tearing it up. Mr. Gann advised that Lone Star' Gas was replacing and repairing lines all over town. He said the city has street specifications they were suppose to adhere to, but the city has been somewhat lax in the enforcement of said specifications. Mr. Gann said they are working very hard toward full enforcement of the street specifications and thinks they will have it under control in the very near future. Mayor Cummings advised that an ordinance addressing this situation has already been passed. Councilman Irwin questioned where the State would get the money should the above mentioned legislation be passed. He said the TML Report does not mention any excess monies and, in his opinion, would be from a tax increase. The money would have to be paid by the taxpayers and he could not see that the taxpayers would benefit from said legislation. Mayor Cummings pointed out that the majority of the taxes paid on the roads were paid by people living in the cities and the money goes to the highways which are outside the cities. This legislation would enable the cities to get some of their tax monies back to apply on their own city streets. Councilman Swindle moved, seconded by Councilman Ferguson, that the City Council pass and adopt the Resolution endorsing passage of Senate Bill 951 and House Bill 1960 regarding the City Street Improvement Fund. The motion carried by the following vote: AYES: Councilmen Swindle, Brede, Riggias, Ferguson and Clayton. NOES: Councilman Irwin ABSTAINED: None ABSENT: Councilmen Anderson and Hammett ° ITEM III: APPROVAL OF REVISED FINAL PLAT FOR GOLF COUNTRY ESTATES. Director of Public Works R. Y. Gann advised that due to some minor changes a revised final plat was needed and filed for the Golf Country Estates Subdivision. The changes are as follows: a. Block 5, Lot 10 - increased from 66.67' wide to 72.67' wide Lot 11 - increased from 66.67' wide to 72.14' wide Lot 12 - (an 8'sided lot) decreasing from 69.31' to 57.31' the side facing onto Sandra Palmer; the other sides increasing from 137.35' to 140.85'; from 126.06' to 169.44'• from 185' to 220.79'; and decreasing from 132.39' to 99.82' b. Block 9, Lots 4, 5, and 6 - decreasing from 80' wide to 70' wide. After some discussion, Councilman Irwin moved, seconded by Council- man Swindle, that the revised final plat of the Golf Country Estates be approved as presented and recommended by Mr. Gann. Motion carried unani- mously by those members present. IV: PASSAGE AUTHORIZING THE IS Mr. Jack Gray advised the Council that this ordinance is identical to the one passed previously at the time the bonds were sold except for the dates of publication of the notices to the taxpayers. The reason for having to repeat the action taken was because the newspaper did not get the second notice to the taxpayers published, therefore, the notices had to be published again. Mr. Gray said he would not read the entire ordinanc but only the heading (ordinance attached to and becoming a part of these minutes). ° After some discussion regarding the city's bond rating, Councilman Irwin moved, seconded by Councilman Clayton, that the City Council pass and approve the ordinance authorizing the issuance and delivery of said $550,000 revenue bonds. Motion carried unanimously by those members present. 1J 6 DISCUSSION ¢' A. Curbside Garba e Pick-u : Mayor Cummings advised he had received a call from a Mrs. Jackson stating that she did not mind so much putting the garbage at the curb, but did mind the dogs tearing up the bags and scattering the garbage all over the street and yard. She had suggested that the city furnish or have available a special type of bag (like she had used while living in Houston) that the dogs could not tear open. The Mayor said this type bag might be worth cgnsidering. $. New Sewer Treatment Plant: Mr. Gann advised that Conrad Callicoat— had to him that the s udge drying beds at the new sewer treatme plant had been over designed and it would save the city several thousand dollars to cut them back. The Mayor told Mr. Gann to have the sludge drying beds cut back. There being no other business to come before the Council, the meeting adjourned at 4:00 p.m. T: ty ecretary I q4V.�Cummirj s, Mayor V THE STATE OF TEXAS COUNTY OF ERATH CITY OF STEPHENVILLE GENERAL CERTIFICATE I WE, the undersigned, Mayor and City Secretary, respectively, of the City of Stephenville, Texas, DO HEREBY CERTIFY as follows: 1. Relative to No -Default. That the City of Stephenville, Texas, has no outstanding and. unpaid revenue bonds secured by a lien on its combined Waterworks and Sanitary Sewer System and therefore is not in default as to any covenant, condition or obligation contained in any ordinance and has no funds on hand in any interest and sinking fund, et cetera. 2. Rela of the City' Waterworks and Sanitary sewer JysLem. That the following is a schedule of the gross receipts, operating expenses and net revenues of the City's combined Water- works and Sanitary Sewer System for the years stated: Fiscal Year Gross Ending 9-30 Receipts 1976 $ 481,045 1977 596,407 1978 6622468 1979 661,501 1980 795,540 3. Relative s ana sanitary aetver oya�cm. Operating Net Expenses Revenues $ 297,629 $ 18.3,416 284,141 312,266 315,1850 3462618 375,641 285-,860 421,546 373,994 of the City's combined That the revenues of the City's combined Waterworks and Sanitary Sewer System have not been pledged or hypothecated in any manner or for any purpose; that there are no liens, encumbrances or any other indebtedness whatsoever outstanding against the City' combined Waterworks and Sanitary Sewer System, and that the pro- posed $550,000, CITY OF STEPHENVILLE, TEXAS, WATERWORKS AND SEWER. SYSTEM REVENUE BONDS, SERIES 1981, dated April 1 , 1981, will evidence the only lien, encumbrance or indebtedness of said System or against the income and revenues of such System. 4. Relative to Ownership of Source of Water Supply. That the City of Stephenville, Texas, owns as a part of its Waterworks System a complete source of water supply, being at thi! time -- 24 wells 5. Relative to Utility Properties. That said City has owned and operated its [daterworks System since the acquisition thereof by said City in the years 1$89 , and its Sanitary Sewer System since the acquisition thereo y said City in the year 1889. That to this date no question has arisen and no proceedings of any nature have beed instituted in any manner questioning the City's right and title to said utility properties or its authority to operate same, and that no question has arisen and no proceedings ofany nature have been instituted in any manner questioning the City's right and title to any of the additions, extensions or betterments to said utility properties constructed or acquired since the original acquisition thereof. 6. Relative to Water and Sewer Ra That the current monthly rates and charges for water furnished and sewer service provided by the City's Waterworks and Sanitary Sewer System are as follows: Water Rates (Monthly Billings) Inside and/or Outside City Limits First 3,000 gallons $3.30 (Min) Next 22,000 gallons .75/M Over 25,000 gallons .95/M Sewer Rates (Month y Bi ings) Industrial & Commercial Gallons First 4,000 or less Over 4,000 Apartments Gallons First Over Residential 4,000 or less 4,000 Gallons First 4,000 or less Over 4,000 7. Relative to No Petition. Rates $3.80(Min) .15 M Rates $3.00(Min) .15//M Rates $3,00(Min) .15//M That no petition of any kind or character has been filed with the City Secretary, any member of the City Council or any other officer of the City protesting the issuance of $550,000 CITY OF STEPHENVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1981, dated April 1, 1981. 8. Relative to Incumbency. That as of the 17th day of February, 1981, through and in- cluding the present time, the names of the duly qualified and acting members of the City Council and officers of said City were and are as follows: a m JOE F. CUMMINGS W. M. IRWIN ) RAYMOND ANDERSON ) G. A• Sw�N�I�L LARRY HAMMETT ) CHARLES RIGGINS ) ERMER FERGUSON ) WILLIAM G. BREDE ) DAVID CLAYTON ) and KURT J. ACKERMANN JOYCE PEMBERTON ROBERT GROVES Charlene D. Young 9. Relative to Incorporation. MAYOR COUNCILMEN CITY ADMINISTRATOR CITY SECRETARY TAX ASSESSOR -COLLECTOR DIRECTOR OF FINANCE That said City of Stephenville is incorporated under the Home Rule Amendment to the Texas Constitution, Section 5, Article XI; that the present City Charter was originally adopted at an election held on the 4th day of April, 1961 and was amended at an election held April 13, 1964, and the said Charter has not been amended or revised in any respect since the said amendment. WITNESS OUR HANDS AND THE SEAL OF THE CITY OF STEPHENVILLE, TEXAS, this the 20th day of April 1981. (City Seal) Texas l NO -ARBITRAGE CERTIFICATE THE STATE OF TEXAS COUNTY OF ERATH CITY OF STEPHENVILLE § Re: $550,000 City of Stephenville, § Texas, Waterworks and Sewer System § Revenue Bonds, Series 1981, dated § April 1, 1981 § I . THE UNDERSIGNED, being the duly chosen and qualified Mayor and Director*of Finance of the City of Stephenville, Texas, who, with other officers, are charged with the responsibility in the issuance of bonds, DO HEREBY CERTIFY that to the best of their knowledge and belief, the following facts and estimates are rea- sonable expectations as to the future events regarding the amount, and use of funds, received from the issuance and sale of the bonds, to wit: (a) The bonds were sold on the 16th day of March, 1981, at the price of par and accrued in- terest to the date of delivery plus a premium of $ 61.00 and payment occurred on the 23rd day OT---A­pr-1J1 , 1981, the City having r- eceived the oIlowi g amount from the purchasers: PRINCIPAL AMOUNT $550,000,00 ACCRUED INTEREST 3,087.62 PREMIUM �01. 0- TOTAL AMOUNT RECEIVED $ 553,14.8.62 (b) The amount received from the purchasers of,. the bonds representing accrued interest and premium, if any, was deposited in the fund to be used to pay the first interest payment to become due on the bonds and will be expended within a few months of the date of payment for the bonds. (a) The Principal Amount received, as noted above, has been deposited in one or more construction accounts and allocated for the projects which are planned to be undertaken accomplished and completed as listed in Schedule "A?' attached hereto. (d) Within six months from the date of this certificate, the City will have incurred substantial binding obligations or commitments for each project to be financed by the bonds, either by entering into contracts for some part of the cost of each of the projects for construction; or architectural services, or engineering services; or site development, or con- struction materials; or the purchase of equipment; each contract or commitment involving an expenditure of the lesser of (i) 2-1/2% of that portion of the estimated total project cost of each project to be financed by the bonds or (ii) $100,000.00. (e) After entering into said contract, work on the project will proceed with due diligence to com- pletion. (f) All of the spendable proceeds of the bonds will be expended for project costs by the end of the three-year period from the date hereof. (g) None of the projects will be sold or otherwise disposed of, in whole or in part, prior to the last ma- turity of the bonds. (h) The facts and estimates upon which the City's expectations are based are set forth in (i) the Issuer's official statement containing information relatin� to the sale of the bonds; (ii) the engineer's (architect s) re- port containing cost and time estimates; and (iii) the contracts to be let for which the proceeds of these bonds are to be spent, each of which is incorporated herein by this reference, and to our best knowledge and belief the expectations are reasonable. The foregoing certificatiogs are based on facts, estimates and circumstances in existence on the date of this certificate, and on such basis it is reasonably expected that the above -listed event will occur. Furthermore, on the basis of the foregoing the proceed of the bonds will not be used in any manner that would cause them. to be or become arbitrage bonds under. Section 103(c) of the Interna Revenue Code of 1954, as amended, or the Regulations there under applicable thereto. To the best of our knowledge and belief, there are no other facts, estimates or circumstances that would materiall change the above -recited conclusions. We further certify that to the best of our knowledge and be- lief no Notice has been published in the Internal Revenue Bulletin with regard to the City under the provisions of paragraph (a)(2)(iv' of Section 1.103-13 of the. Regulations and the City -has not been advised that any such Notice is contemplated. EXECUTED THIS a 3 day of A ,g, / 1981, the date of delivery of the o�nds hereinabove mentioned, being the date of issue as provided in the Regulations. CITY OF STEPHENVILLE TEXAS B D Y May r By sa Director o nance (City Seal) 11 NO -ARBITRAGE CERTIFICATE SCHEDULE "A" IRe: $550,000 City of Stephenville, Texas, Waterworks and Sewer System Revenue Bonds, Series 1981, dated April 1, 1981 1. Allocated to seer .5s7o, o o o Estimated date to let contract /15P P/ Estimated completion.date G,�700 d7- 2. Allocated to $ Estimate ate to et contract Estimated completion date 3. Allocated to Estimated date to let contract Estimated completion date k. Allocated to Estimated date to let contract Estimated completion date 5. Allocated to Estimated date to let contract Estimated completion date 6. Allocated to Estimated date to let contract Estimated completion date 7. Allocated to Estimated date to let contract Estimated completion date 8. Allocated to Estimated date to et contract Estimated completion date 9. Allocated to $ Estimated date to let contract Estimated completion date 0. Allocated to cost of issuing bonds, equipment, site development and contingency for which no over- all contract will be let $ Estimated date by which all funds will be expended I AN ORDINANCE by the City Council of the City of Stephenville, Texas, authorizing the issuance o_ $550,000 "CITY �)F STEPHENVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1981," dated April 1, 1981, for the purpose of improving and extending the City's Waterworks and Sanitary Sewer System, to wit: improvements to the sewer system and treatment facilities, as authorized by the general laws of the State of Texas, particularly Articles 1111 et seq. and 2368a, V.A.T.C.S.; pre- scribing the form of the bonds and the form of the interest coupons; pledging the net revenues of the City's combined Waterworks and Sanitary Sewer System to the payment of the principal of and interest on said bonds, and enacting provisions incident and relating to the subject and purpose of this ordi- nance; and providing an effective date. WHEREAS, the City Council of the City of Stephenville, Texas, has determined that revenue bonds in the aggregate principal amount of $550,000 should be issued for the purpose of making improvements and extensions to the City's Waterworks and Sanitary Sewer System, to wit: improvements to the sewer system and treatment facilities, which bonds are to be payable from and secured by a first lien on and pledge of the net revenues of the City's Waterworks and Sani- tary Sewer System; and WHEREAS, notice of this Council's intention to issue said 1 revenue bonds (stating the date, time and place the'Council pro- posed to pass the ordinance authorizing the issuance of such bonds, the purpose for issuing the same, the maximum amount proposed to be issued, the maximum interest rate the bonds are to bear and the maximum maturity date thereof) has been published in the Stephen- 1: ville Empire -Tribune a newspaper of g�nerai circula- tion }n the City, the dates o publication of the notice being 1981, and Apell lVi 1981; and. WHEREAS, no petition requesting a referendum election be held on the question of the issuance of such revenue bonds has been filed with the City Secretary or any other official of the City; now, therefore: BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF STEPHENVILLEi TEXAS: SECTION 1: That, in order to borrow the sum of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000) for the purpose of improving and extending the City's Waterworks and Sanitary Sewer System, to wit: improvements to the sewer system and treatment facilities, the City Council of the City of Stephenville, Texas, by virtue of the authority expressly conferred by the General Laws of the State of Texas, particularly Articles 1111 et seq. and 2368a, V.A.T.C.S., has determined there shall be issued and there is hereby ordered i to be issued a series of coupon revenue bonds in the aggregate principal. amount of FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000),i to be designated "CITY OF STEPHENVILLE, TEXAS, WATERWORKS AND SEWER, SYSTEM REVENUE BONDS, SERIES 1981," which bonds shall be payable as to both principal and interest solely from and equally secured by a first lien on and pledge of the net revenues of the City's' Waterworks and Sanitary Sewer System. SECTION 2.: That said bonds shall be dated April 1, 1981, shall be numbered consecutively from One (1) through One Hundred Ten (110), shall each be in the denomination of Five Thousand Dollars ($5,000), and shall bear interest at the per annum rates and become due and payable serially, withoutlright of prior re- demption, on April 1 in each of the years in accordance with the following schedule: BOND NUMBERS INTEREST (All Inclusive) MATURITY AMOUNT RATE 1 to 10 1982 $50,000 10.25 '/ 11 to 20 1983 50,000 10.25 % 21 to 30 1984 50,000 10.25 '/ '/ 31 to 40 1985 501000 9.75 41 to 50 1986 50,000 8.25 51 to 60 61 70 1987 1988 50,000 50,000 8.40 -/o 8 . 6-0-7. to 71 to 80 1989 50,000 ./0 7 81 to 90 1990 50,000 8.80 "/ 91 to 100 1991 50,000 8.90 7. 101 to 110 1992 50,000 8.90 SECTION 3: That said bonds shall bear interest from date to maturity at the per annum rates shown above; such interest to be evidenced by proper coupons attached to each of said bonds, and said interest shall be payable on April 1, 1982, and semiannually thereafter on October I and April 1 in each year. SECTION 4: That both principal of and interest on this issue of bonds shalT-be payable in lawful money of the United States of America, without exchange or collection charges to the owner or holder, at the REPUBLIC NATIONAL BANK OF DALLAS, Dallas, Texas, or,' at the option of the. holder, at the STEPHENVILLE BANK & TRUST CO., Stephenville, Texas, upon presentation and surrender of bonds or proper coupons. . SECTION 5: That the seal of said City may be impressed on each o' sai onds, or in the alternative, a facsimile of such seal may be printed on the said bonds. The bonds and interest coupons appurtenant thereto may be executed by the imprinted facsimile signatures of the Mayor and City Secretary of the City and execution in such manner shall have the same effect as if suct bonds and coupons had been signed manually by the Mayor and City Secretary, Inasmuch as such bonds are required to be registered by the Comptroller of Public Accounts for the State of Texas, only his signature (or that of a deputy designated in writing to act for the Comptroller) shall be required to be manually subscribed to such bonds in connection with his registration certificate to appear thereon, as hereinafter provided, all in accordance with the provisions of Article 717j-1, V.A.T.C.S. SECTION 6: That the form of said bonds shall be substantially' as follows: NO. UNITED STATES OF AMERICA $5,000 STATE OF TEXAS COUNTY OF ERATH CITY OF STEPHENVILLE, TEXAS, [,WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1981 The CITY OF STEPHENVILLE, a municipal corporation of the State, of Texas, acknowledges itself indebted to and FOR VALUE RECEIVED hereby promises to pay to bearer, as hereinafter stated, without right of prior redemption, the sum of FIVE THOUSAND DOLLARS ($5,000), in lawful money of the United States of America, on the 1st day of April, 19_, with interest thereon from the date hereof to maturity at the rate of PER CENTUM ( %) per annum, payable on Apri , 198 an semiannually thereafter on October 1 and April I in each year, and interest falling due on or prior to maturity hereof is payable only upon presentation and surrender of the interest coupons hereto attached as they severally become due. BOTH PRINCIPAL of and interest on this bond are hereby made payable at the REPUBLIC NATIONAL BANK OF DALLAS, Dallas, Texas, or, at the option of the holder, at the STEPHENVILLE BANK & TRUST CO., Stephenville, Texas, without exchange or collection charges to the owner or holder, and the said City of Stephenville, Texas, is hereby held and firmly bound to apply the pledged appropriated net revenues of its combined Waterworks and Sanitary Sewer System to the prompt payment of principal of and interest on this bond at maturity and I to pay said principal and interest as they mature. THIS BOND is one of a series of One Hundred Ten (110) bonds, numbered consecutively from One (1) through One Hundred Ten (110), each in denomination of Five Thousand Dollars ($5,000), aggre- gating in principal amount FIVE HUNDRED FIFTY THOUSAND DOLLARS ($550,000), issued for the purpose of improving and extending the City's Waterworks and Sanitary Sewer System, to wit: improvements to the sewer system and treatment facilities, in accordance with the Constitution and laws of the State of Texas, particularly Articles 1111 et seq. and 2368a, V.A.T.C.S., and pursuant to an ordinance passed by the City Council of the City of Stephenville, Texas, and duly recorded in the Minutes of said City Council, 1 THE DATE OF this bond in conformity with the ordinance above mentioned is April 1, 1981. THIS BOND and the series of which it is a part; constitute special obligations of the City of Stephenville, Texas, and are payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's combined Waterworks and Sanitary Sewer System. THE CITY expressly reserves the right to issue further and additional bond obligations in all things on a parity with the I bonds of this series, payable solely from and equally secured by a first lien on and pledge of the net revenues of the City's Waterworks and Sanitary Sewer System; PROVIDED, HOWEVER, that any and all such additional bonds may be so issued only in accordance i with and subject to the covenants, limitations, conditions and restrictions relating thereto which are set out and contained in 1 the ordinance authorizing this series of bonds and to which ordi- nance reference is hereby made for more complete and full particu- lars. I THE HOLDER hereof shall never have the right to demand pay- ment of this obligation out of any funds raised or to be raised by taxation. AND IT IS HEREBY CERTIFIED AND RECITED that the issuance of this bond and the series of which it is a part is duly authorized by law, that all acts, conditions and things required to exist and to be done precedent to and in the issuance of this bond to render the same lawful and valid have been properly done, have happened and have been performed in regular and due time, form and manner, as required by the Constitution and laws of the State of Texas, and the ordinance hereinabove mentioned; that this series of revenue bonds does not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the principal of and interest on this bond and the series of which it is a part by irrevocably pledging the net revenues of the combined Waterworks and Sanitary Sewer System of the City of Stephenville, Texas, as hereinabove recited. IN TESTIMONY WHEREOF, the City Council of the City of Stephenville, Texas, in accordance with the provisions of Article 717j-1, V.A.T.C.S., has caused the seal of said City to be im- pressed or a facsimile thereof to be printed hereon, and this bond and its appurtenant coupons to be executed with the imprinted facsimile signatures of the Mayor and City Secretary of said City, as of the 1st day of April, 1981. Mayor, City of Stephenville, Texas COUNTERSIGNED: City Secretary, City o Stephenville, Texas SECTION 7: That the form of said interest coupons shall be subs tantia ry as follows: NO. ON THE 1ST DAY OF , 19_, the City of Stephenville, in the County of Erath, State of Texas, hereby promises to pay to bearer, out of funds specified in the bond to which this coupon is attached (without right to demand pay- ment out of any funds raised or to be raised by taxation), the amount shown hereon in lawful money of the United States of America, upon presentation and surrender of this coupon, at the REPUBLIC NATIONAL BANK OF DALLAS, Dallas, Texas, or, at the option of the holder, at the STEPHENVILLE BANK & TRUST CO., Stephenville, Texas, without exchange or collection charges, such amount being interest due on such date on "CITY OF STEPHENVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BOND, SERIES 1981," dated April-1, 1981. Bond No. City Secretary Mayor c II SECTION 8: That substantially the following shall be printed ,I on the back of each bond: OFFICE OF COMPTROLLER § § REGISTER NO. STATE OF TEXAS § I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney. General of the State of Texas to the effect that this bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of the City of Stephenville, Texas, payable from the revenues pledged to its pay- ment by and in the ordinance authorizing same, and said bond has this day been registered by me. WITNESS MY HAND AND SEAL OF OFFICE, at Austin, Texas, I i Comptroller of Public Accounts for the State of Texas SECTION 9: That for all purposes of this ordinance and in particu ar- o clarity with respect to the issuance of the bonis herein authorized and the pledge and appropriation of revenues therefor, the following definitions are provided: City's (a) The tern "System" shall mean the combined Waterworks and Sanitary Sewer System, including all properties, real, personal, mixed or otherwise, now owned or hereafter acquired by the City of Stephenville through purchase, construction or otherwise, and used in connection with said System and in anywise appertain- ing thereto, whether situated within or without the limits of the City. (b) The term net revenues shall mean the gross revenues of the System less the expense of operation and maintenance, including salaries, labor, materials, interest, repairs and extensions necessary to render efficient service; provided, however, that only such repairs and extensions as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the System in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which' would otherwise impair any obligations payable from and secured by a lien on and pledge of the net revenues of the System shall be deducted in determining "net revenues." (c) The term "bonds" shall mean the $550,000 revenue bonds authorized.by this ordinance. (d) The term "additional bonds" shall mean the additional parity revenue bonds issued in accordance with the terms and conditions prescribed in Section 21 hereof. (e) The term bonds similarly secured" shall mean the bonds and additional bonds. (f) The term "fiscal year" shall mean the twelve- month period ending September 30 of each year. SECTION 10: The City hereby covenants and agrees that. all the net revenues of the System, with the exception of those in excess of the amounts required to be deposited in the special Funds created and established for the payment, security and benefit of the bonds similarly secured shall be and are hereby irrevocably pledged to the payment of the bonds and additional bonds, if issued, and the interest thereon, and it is hereby ordained that the bonds similarly secured, and the interest thereon, shall constitute a first lien on the net revenues of the System. SECTION 11: The City hereby covenants and agrees with the holders o t e onds similarly secured that rates and charges for water and sewer services afforded by the City will be established, revised and maintained to produce revenues; in amounts sufficient at all times to pay: (a) All maintenance, operating, depreciation, repairs, betterments and other costs and expenses incurred in the maintenance and operation of the System; (b) The interest on and principal of the bonds similarly secured and the. amounts required to be deposited and maintained in the special Funds created for the payment, security and benefit of the bonds similarly secured, and (c) Any other indebtedness legally incurred which is payable from the revenues of the System and/or secured by a lien on the System or the revenues derived from the operation thereof. SECTION 12: The bonds t at, to provid e (a) "City of Stephenville Waterworks and Sanitary Sewer System Revenue Bond Interest and Sinking Fund" (here- inafter called "Interest and Sinking Fund"), shall be kept and maintained at the STEPHENVILLE BANK & TRUST CO., Stephenville, Texas, as Trustee of the pledged revenues, and moneys deposited in this Fund shall be used to pay the debt service requirements of the bonds similarly secured as the same become due and payable. (b) "City of Stephenville Waterworks and Sanitary Sewer System Revenue Bond Reserve Fund" (hereinafter called 'Reserve Fund") shall be kept and maintained at the STEPHENVILLE BANK & TRUST CO.`, Stephenville, Texas, as Trustee, and moneys deposited therein shall be used to pay the debt service requirements of the bonds simi- larly secured falling due at any time when there is in- sufficient money -available in the Interest and Sinking Fund, SECTION 13: The City hereby covenants with the holders of the bonds and agrees with said holders of the bonds that all revenues derived from the operation of the System shall be kept separate and apart from other funds of the City aad deposited from day to day as collected into the "City of Stephenville Waterworks and Sanitary Sewer System Fund" (hereinafter called "System Fund"), which Fund shall be kept separate and apart from all other funds and accounts of the City and maintained at the City's depository bank. Moneys deposited in the System Fund shall be used first to the payment of the reasonable and 'proper main- tenance and operating expenses of the System, as set forth in Section 9(b) hereof, and then to the payment of amounts required to be deposited in the special Funds created and established for the payment, security and benefit of the bonds similarly secured in accordance with the ordinance authorizing the issuance of the bonds and in the order of priority prescribed in the following Sections. SECTION 14: That the City hereby covenants and agrees to deposit to the Interest and Sinking Fund from the net revenues of the System, the following amounts to pay, the principal of and interest on the bonds as the same becomes due, to wit: (a) Beginning on or before the 15th day of April, 1981 and on or before the 15th day of each month there- after to and including March 15, 1982, an amount equal to the sum of one -twelfth (1/12) of the installment of prin- cipal and interest to become due on the bonds on April 1, 1982, and (b) On or before April 15, 1982 and on or before the 15th day of each month thereafter, an amount equal to the sum of (i) one -sixth (1/6) of the next semi- annual installment of interest and (ii) one -twelfth (1/12) of the next annual principal payment to become due on the bonds. The monthly deposits to the Interest anti Sinking Fund for the payment of principal of and interest on the bonds shall con- tinue to be made as hereinabove provided until such time as (i) the total amount on deposit therein is equal to the amount re- quired to pa all outstanding bonds similarly secured (principal and interest or (ii) such bonds are no longer outstanding, i.e.,i fully paid as to principal and interest or al.1 the bonds similarly secured have been refunded, Accrued interest and premium, if any, received from the purchaser of the bonds, as well as any proceeds of the bonds not required to complete the improvements and extensions to the System, shall be deposited in the Interest and Sinking Fund, and may be taken into consideration and reduce the amount of the monthly de- posits hereinabove provided which would otherwise be required to be deposited in the Interest and Sinking Fund from the net revenues of the System for the bonds. SECTION 15: That the City hereby covenants to the holders of the onds an agrees with the holders thereof that it will pro- vide for the accumulation of, and when accumulated, will thereafter continuously maintain in -the Reserve Fund an amount equal to not less than the average annual principal and interest requirements of all bonds similarly secured. In accordance with this ordinance authorizing the issuance of the bonds, the amount to be accumulated and maintained in the Reserve Fund is the sum of $. 76,730.00 (which amount equals to not less than the average annua principal and interest require- ments of the bonds), and the City hereby covenants and agrees that, beginning April 15, 1981, there shall be deposited in the Reserve Fund an amount equal to not less than $1,278.84 until the amount of cash and investments (valued at market price as of the first day of each fiscal year) in said Fund totals not less than $761730.00. When the total amount required to be deposited in the Reserve Fund has been fully accumulated, said monthly payments to said Fund may be terminated; provided, however, shpuld the amount on deposit in said Fund be reduced below $-762730.00 , after the sal has been accumulated, such monthly deposits shall be resumed as herein specified and continued to be made on or before the 15th -da, of each month until the amount required to be deposited. therein has been fully restored. The deposits to the Reserve Fund, as hereinabove required, shall be subordinate to those required to be made to the Interest and Sinking Fund. SECTION 16: Moneys in the Reserve Fund may, at the option of the City, be invested or reinvested from time to time in direct obligations of or obligations, the principal and interest of which are guaranteed by the United States of America, or invested in direct obligations of or participation certificates guaranteed by the Federal Intermediate Credit Banks, Federal Land Bank, Federal National Mortgage Association, Federal Home Loan Banks, Banks for Cooperatives, and in certificates of deposit of any bank or trust company the deposits of which are fully secured by a pledge of securities of any of the kinds hereinabove specified, such obli- gations or securities to mature in not more than ten years from the date of such investments or not later than the final maturity of the outstanding bonds similarly secured, whichever is shorter. Any obligations in which money is so invested shall be held in escrow by the custodian bank for such Fund and such obligations or investments shall be promptly sold and the proceeds of sale ap- plied to the making of payments required to be made from the respective Funds whenever such payments are necessary to be made under the provisions of Section 12 of this ordinance. During the time that the Reserve Fund contains the full amount required to be deposited in said Fund any interest income or increment received by virtue of the investments of such Fund may be transferred to the System Fund but in no event may any such transfer be made unless the Fund which is so invested contains the full amount required to be on deposit therein as hereinabove provided. SECTION 17: If in any month the City shall for any reason fail to, pay into the Interest and Sinking Fund and Reserve Fund a required monthly deposit, amounts equivalent to such deficiencies shall be set apart and paid into said Funds from the first available( and unallocated net revenues of the System in the following month or months and such payments shall be in addition to the amounts herer inabove provided to be otherwise paid into said Funds during such month or months. SECTION 18: Any net revenues remaining in the System Fund in excess of those required to fully establish and maintain the special Funds herein provided may be used for the redemption of bonds or additional bonds, or may be transferred to the general fund of the City and used for general or special purposes. I SECTION 19: All moneys on deposit in the special Funds for I which this orb finance makes provision (except any portions thereof as may be at any time properly invested) shall be secured in the manner and to the fullest extent required by the laws of Texas for the security of public funds, and the moneys on deposit in such] special Funds shall be used only for the purposes permitted by i this ordinance. SECTION 20: In addition to the right to issue bonds of inferior lien as authorized by laws of this State, the City re- serves the right hereafter to issue additional parity bonds. The additional bonds, when issued.: in compliance with the terms and conditions hereinafter prescribed, shall be payable from and equally secured by a first lien on and pledge of the net revenues i of the System in the same manner and to the same extent as the bonds similarly secured. The additional bonds may be issued in . one or more installments, provided, however, that none shall be issued unless and until the following conditions have been met: (a) The City is not then in default as to any covenant, condition or obligation prescribed in an ordinance authorizing the issuance of the then out- standing bonds similarly secured. (b) That each of the special Funds created for the payment, security and benefit of the bonds similarly secured then outstanding contains the amount of money then required to be on deposit therein, (c) The net earnings of the System for the com- pleted fiscal year next preceding the adoption of the ordinance authorizing the issuance of the proposed additional bonds,are equal to at least one and one- fourth (1-1/4) times the average annual principal and interest requirements of all the bonds to be secured by a first lien on and pledge of the net revenues of the System after giving effect to the issuance of the proposed additional bonds, as such net earnings are shown by a report by a Certified Public Accountant. The term "net earnings" as used in this Section 20 shall mean the gross revenues after deducting the expense of operation and maintenance, but not deducting depreciation or any expenditures which, under standard accounting practice, should be charged to capital expenditures. (d) The additional bonds are made to mature on April 1 or October 1 in each of the years in which they are scheduled to mature. (e) The ordinance authorizing the issuance of the additional bonds provides for (i) the accumulation in the Interest and Sinking Fund of amounts sufficient to pay the principal of and interest on such additional I�I bonds as same mature and (ii) the amount to be accumulated I and maintained in the Reserve Fund shall be an amount equal I to not less than the average annual requirement for the pay- ment of principal of and interest on all bonds similarly secured after giving effect to the issuance of the proposed I additional bonds, and any additional amount required to be I� maintained in the Reserve Fund shall be accumulated within not more than five years and one month from the date of the passage of ordinance authorizing the issuance of the proposed additional bonds. Bonds similarly secured may be refunded (pursuant to any law then available) upon such terms and conditions as the governing body of the City may deem to the best interest of the City and its inhabitants, and, if less than all such outstanding revenue bonds are refunded, the �roposed refunding bonds shall be considered as "additional bonds,' under the provisions of this section and the report required in paragraph (c) shall give effect to the issuance of the proposed refunding bonds (and shall not give effect to the bonds being refunded following their cancellation or provision being made for their payment). SECTION 21: That the City hereby covenants and agrees that the System shall be operated on a fiscal year basis and shall be maintained in good condition and operated in an efficient manner and at reasonable cost. So long as any of the bonds are out- standing, the City agrees to maintain insurance on the System of a kind and in an amount customarily carried by municipal corpora- tions in the State of Texas engaged in a similar type of business. Nothing in this ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the operation of the System but nothing herein shall be construed as preventing the City from doing so. SECTION 22: That the City hereby covenants and agrees that so long as any of the bonds or any interest thereon remain out- standing and unpaid, it will keep and maintain a proper and com- plete system of records and accounts pertaining to the operation of the System separate and apart from all other records and accounts of the City in accordance with accepted accounting practices prescribed for municipal corporations,and complete and correct entries shall be made of all transactions relating to said System, as provided by Article 1113, V.A.T.C.S. The holder or holders of any bonds or any duly authorized agent or agents of such holders, shall have the right at all reasonable times to inspect all such records, accounts' and data relating thereto and to inspect the System and all properties comprising same. The City further agrees that as soon as possible following the close of each fiscal year, it will cause an audit of such books and accounts to be made by an independent firm of Certified Public Accountants or Licensed Public Accountants. Each such audit, in addition to whatever other matters may be thought proper by the Accountant, shall particularly include the following: (a) A detailed statement of the income and expenditures of the System for such fiscal year. (b) A balance sheet as of the end of such fiscal year. (c) A detailed statement of the sources and disbursement of all funds derived from the operation of the System during such fiscal year. (d) The Accountant's comments regarding the manner in which the City has complied with the covenants and requirements of this ordinance and his recommendations for any changes or improvements in the operation, records and accounts of the System. (e) A list of the insurance policies in force at the end c' the fiscal year on the System properties, setting out as to each policy the amount thereof, the risk covered, the name of the insurer and the policy's expiration date. (f) A list of the securities which have been on deposit as security for the money in the Interest and Sinking Fund throughout the fiscal year, a list of the securities, if any, in which the Reserve Fund has been invested, and a statement of the manner in which money in the System Fund has been secured in such fiscal year. (g) The number of customers connected with the components of the System. Expenses incurred in making the audits above referred to are to be regarded as maintenance and operating expenses of the System and paid as such. Copies of the aforesaid annual audit shall be immediately furnished to the Executive Director of the Municipal Advisory Council of Texas at his -office in Austin, Texas, and, upon written request, to the original purchasers and any subsequent holder of the bonds. SECTION 23: That in addition to all the rights and remedies provided y the laws of the State of Texas, the City covenants and agrees particularly that in the event the City (a) defaults in payments to be made to the Interest and Sinking Fund or Reserve Fund as required by this ordinance, or (b) defaults in the observance or performance of any other of the covenants, conditions or obligations set forth in this ordinance, the holder or holders of any of the bonds shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City Council and other officers of the City to ob- serve and perform any covenant, condition or obligation prescribeC in this bond ordinance. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right or power may be exercised from time to time and as often as may be deemed expedient. The specific remedies herein provided shall be cumulative of all other existing remedies and the specification of such remedies shall not be deemed to be exclusive. SECTION 24: That the City hereby further covenants as follows: (a) That it has the lawful power to pledge the revenues supporting this issue of bonds.and has lawfully exercised said power under the Constitution and laws 'of the State of Texas, including Articles 1111 et seq. and 2368a. V.A.T.C.S.; that the previously issued bonds, the bonds issued hereunder and the additional bonds, when issued, shall be ratably secured under said pledge of income in such manner that one bond shall have no preference over any other bond of said issues. (b) That, other than for the payment of the bonds herein authorized, the net revenues of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. 4 (r_) That, so long•as any of the bonds or any interest thereon remain outstanding, the City will not sell or encumber the System or any substantial part thereof; provided, however, this covenant shall not be construed to prohibit the sale of such machinery, or other prop- erties or equipment which has become obsolete or other- wise unsuited to the efficient operation of the System, and, also with the exception of the additional bonds expressly permitted by this ordinance to be issued, it will not encumber the net revenues of the System unless such encumbrance is made junior and subordinate to all of the provisions of this ordinance.. (d) That no free service of the System shall be allowed, and should the City or any of its agents or instrumen- talities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. (e) That, to the extent that it legally may, the City further covenants and agrees that, so long as any of the bonds or any interest thereon are outstanding, no franchise shall be granted for the installation or operation of any competing waterworks and sanitary sewer system other than those owned by the City, and the operation of any such system by anyone other than the City is hereby prohibited. SECTION 25: That the bonds are special obligations of the City payable from the pledged net revenues and the holders thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. SECTION 26: That each of the bonds authorized herein shall be deemed and construed to be a "security" and as such a negoti- able instrument, within the meaning of Article 8 of the Uniform Commercial Code, SECTION 27: That the Mayor of the City of Stephenville shall be and is hereby authorized to take and have charge of all necessax orders and records pending investigation by the Attorney General of the State of Texas and shall take aid have charge and control of the bonds herein authorized pending their approval by the Attorney General and their registration by the Comptroller of Publi Accounts. SECTION 28: That the sale of the bonds authorized herein to RAUSCHER PIERCE REFSNES, INC. - Dallas, Texas at the price of par and accrued interest to the date of delivery, plus a premium of $ 61.00 is hereby confirmed. Delivery of said bonds shall be made —to purchaser as soon as may be after the adoption of this ordinance, upon payment therefor in accordance with the terms of sale. SECTION 29: That the purchasers' obligation to accept delivery o time bonds is subject to their being furnished a final opinion of Messrs. Dumas, Huguenin, Boothman and Morrow, Attorneys, Dallas, Texas, approving such bonds as to their validity, said opinion to be dated and delivered as of the date of delivery and payment for such bonds. Printing of a true and correct copy of said opinion on the reverse side of each of said bonds with appropriate certificate pertaining thereto executed by facsimile signature of the City Secretary is hereby approved and authorized. 4 SECTION 30: That the City hereby certifies and covenants that t e procee s of the bonds are needed at this time to finance the costs of capital improvements planned by the City; based on current facts, estimates and circumstances, it is reasonably expected final disbursement of the bond proceeds will occur within three years from the date of the receipt thereof by the City; it is not reasonably expected the proceeds of the bonds or moneys deposited in the interest and sinking fund created for the payment of the bonds. will be used or invested in a manner that would cause the bonds to be "arbitrage bonds" within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, or any regulations or published rulings pertaining thereto; and save and except for the interest and sinking fund created herein, no other funds or accounts have been established or pledged for the payment of the bonds. Proper officers of the City charged with the re- sponsibility in the issuance of the bonds are hereby authorized and directed to make, execute and deliver certifications as to facts, estimates and circumstances in existence as of the date of the issue of the bonds and stating whether there are any facts, estimates. and circumstances which would materially change the City'e current expectations, and the covenants herein made and certifica- tions herein authorized are for the benefit of the holders of the bonds and coupons appertaining thereto and may be relied upon by the bondholders and bond counsel for the City. SECTION 31: That CUSIP numbers may be printed on the bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the bonds shall be of no significance or effect as regards the legality thereof and neither -the City nor attorneys approving said bonds as to legality are to be held re- sponsible for CUSIP numbers incorrectly printed on the bonds. SECTION 32: This Council hereby ratifies and confirms their prior approval on February 28, 1981, of the form and content of the Official Statement relating to the Bonds herein 'authorized, together with any addenda,supplement or amendment thereto and hereby approves the Notice'.of Sale and Official Statement and authorized the further use of such documents by the purchasers in the sale of the bonds. SECTION 33: This Council hereby ratifies and confirms the issuance of the"Notice of intention to Issue City of Stephenville, Texas, Revenue Bonds" by the;City Secretary and the action publish- ing such notice in a newspaper in the manner recited in the pre- amble hereof is hereby approved in all respects and adopted as the action of this City Council. SECTION 34: The ordinance authorizing the issuance of the City o Step enviIle, Texas Waterworks and Sewer System Revenue Bonds, Series 1981, heretofore adopted on the 16th day of March, 1981, is hereby repealed. SECTION 35: This. ordinance shall take effect imediately and be in ful3 force and effect from and after the date of its pass- age and it is so ordained. PASSED AND APPROVED, thi ATTEST: it Secreatry, City o Stephenville, Texas s the 20th day of April, 1981. Lr, Uity otf 5tephenvillfa, Texi M a m (City -Seal) .a A s4 Dire for ot FLnancefity o. tepoenville (ftexas