1983-026 AUTHORIZING THE ISSUANCE OF CITY OF DENTON, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BONDS~ SERIES 1983
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the City of Denton, Texas (the "City") has duly
issued, and there are now outstanding, pursuant to Vernon's
Ann. Tex Civ. St Articles 1111 through 1118 and other appl~-
cable laws, the following series or issues of revenue bonds
which are secured solely by a f~rst lien on and pledge of the
net revenues of the City's entlre waterworks and sewer system
City of Denton Water and Sewer System Revenue
Bonds, Series 1960, dated July 15, 1960, now
outstanding in the aggregate principal amount
of ..................... $ 730,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1962, dated January 15, 1962,
now outstanding in the aggregate principal
amount of .............. 390,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1964, dated July 15, 1964, now
outstanding in the aggregate prlncipal amount
of ..................... 20,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1966, dated January 15, 1966,
now outstanding in the aggregate principal
amount of ................. 200,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1969, dated April 15, 1969,
now outstanding in the aggregate principal
amount of .................. 370,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1972, dated July 15, 1972, now
outstanding in the aggregate principal amount
of ..................... 970,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1974, dated July 15, 1974, now
outstanding in the aggregate principal amount
of ...................... 1,525,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1977, dated June 15, 1977, now
outstanding in the aggregate principal amount
of .................. 450,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1979, dated March 15, 1979, now
outstanding in the aggregate pr~ncxpal amount
of .................. 3,800,000
City of Denton Water and Sewer System Revenue
Bonds, Series 1982, dated May 15, 1982, now
outstanding in the aggregate principal amount
of ...................... 1,500,000
(collectively the "Water and Sewer System Revenue Bonds"), and
WHEREAS, the City has duly issued, and there now outstand-
ing, pursuant to Vernon's Ann Tex Civ St Articles 1111
through 1118 and other applicable laws, the following ser~es or
· ssues of revenue bonds which are secured solely by a first
lien on and pledge of the net revenues of the City's electric
light and power system
City of Denton Electric System Revenue Refund-
ing Bonds, Series 1978, dated April 1, 1978,
now outstanding in the aggregate principal
amount of ............ $19,255,000
City of Denton Electrzc System Revenue Bonds,
Series 1982, dated April 1, 1982, now out
standing in the aggregate principal amount
of ................ 3,000,000
(collectively the "Electric System Revenue Bonds"), and
WHEREAS, the above Water and Sewer System Revenue Bonds
and Electric System Revenue Bonds hereinafter collectively are
calledthe "Outstanding Bonds", and
WHEREAS, the Outstanding Bonds are the only bonds or other
obligations secured by or payable from a first lien on and
pledge of the net revenues of the City's waterworks and sewer
system and the City's electric light and power system, and
WHEREAS, the City Council of the City is the governing
body of the City, and
WHEREAS, the refunding bonds hereinafter authorized are to
be issued and delivered pursuant to Vernon's Ann Tex Civ St
Artzole 717k, as amended, and other applicable laws, for the
purpose of refunding all of the Outstanding Bonds
THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY
ORDAINS
Section 1 BONDS AUTHORIZED That the City's bonds are
hereby authorized to be issued in the principal amount of
$25,280,000, FOR THE PURPOSE OF REFUNDING ALL OF THE
OUTSTANDING CITY OF DENTON WATER AND SEWER SYSTEM REVENUE BONDS
AND ELECTRIC SYSTEM REVENUE BONDS
Section 2 BONDS DESIGNATED That said bonds shall be
designated as the "CITY OF DENTON, TEXAS UTILITY SYSTEM
REVENUE RE~J~qDING BONDS, SERIES 1983" (the "Bonds" )
Section 3 DATE AND MATURITIES That the Bonds shall be
dated March 1, 1983, shall be in the denomznation of $5,000
each, shall be numbered consecutively from one upward, and
shall mature serially on December 1 of each of the years, and
in the amounts, respectively, unless redeemed prior to maturity
as regulred or permitted in the FORM OF BOND set forth in
Section 6 of this Ordinance, as set forth in the following
schedule
YEARS AMOUNTS YEARS AMOUNTS
1983 $2,060,000 1989 $1,805,000
1984 1,735,000 1990 1,775,000
1985 1,595,000 1991 1,125,000
1988 1,570,000 1992 1,140,000
1987 1,665,000 1993 1,100,000
1988 1,800,000 2001 5,850,000
2007 2,060,000
Section 4 INTEREST That the Bonds scheduled to mature
during the years, respectively, set forth as follows shall bear
interest from the date thereof to maturity or redemption at the
following rates per annum
2
YEARS RATES YEARS RATES
1983 4.75% 1989 7 25%
1984 5 25% 1990 7 75%
1985 5 75% 1991 8.00%
1986 6 25% 1992 8 25%
1987 6 50% 1993 8 50%
1988 6.75% 2001 9 50%
2007 9.625%
Sazd interest shall be evidenced by interest coupons whlch
shall appertain to the Bonds, and which shall be payable in the
manner provided and on the dates stated an the FORM OF BOND set
forth in Section 6 of this Ordinance
Section 5 GENERAL CHARACTERISTICS That the Bonds and
interest coupons shall be issued, shall be payable, shall and
may be redeemed prior to their scheduled maturities, shall have
the characteristics, and shall be signed and executed (and the
Bonds shall be sealed}, all as provided, and in the manner
indicated, in the FORM OF BOND set forth in Section 6 of this
Ordinance.
Section 6. FORMS. That the form of the Bonds, including
the form of Registration Certificate of the Comptroller of
Public Accounts of the State of Texas to be printed and en-
dorsed on each of the Bonds, and the form of the aforesaid
· nterest coupons which shall appertain and be attached initial-
ly to each of the Bonds, shall be, respectively, substantially
as follows:
FORM OF BOND
NO $$,000
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BOND
SERIES 1983
ON DECEMBER 1 , THE CITY OF DENTON, in Denton County,
Texas, hereby promi~ to pay to bearer hereof the principal
amount of
PIVE THOUSAND DOLLARS
and to pay interest thereon from the date of this Bond, at the
rate of __% per annum, evidenced by ~nterest coupons payable
December 1~ 1983, and semiannually on each June 1 and December
1 thereafter while this Bond is outstanding.
THE PRINCIPAL of this Bond and the ~nterest coupons ap-
pertaining hereto shall be payable to bearer, in lawful money
of the United States of America, without exchange or collection
charges to the bearer, upon presentation and surrender of this
Bond or proper interest coupon, at the following, which shall
constitute and be defined as the "Paying Agent" for this Series
of Bonds
Texas American Bank/Fort Worth, N A ,
Fort Worth, Texas
THIS BOND is one of a Series dated as of March 1, 1983,
authorized and zssued in the principal amount of $25,280,000,
FOR THE PURPOSE OF REFUNDING ALL OF THE OUTSTANDING CITY OF
DENTON WATER AND SEWER SYSTEM AND ELECTRIC SYSTEM REVENUE
BONDS
ON DECEMBER 1, 1993,
3
or on any interest payment date thereafter, the outstanding
Bonds of this Series may be redeemed prior to their scheduled
maturities, at the option of said City, with funds derived from
any source, in whole, or in part (and if in part, the City
shall select the maturity or maturities to be redeemed and
within a maturity the particular Bonds to be redeemed shall be
chosen at random, by lot, or other customary method by the
City) at the Redemption Price equal to the principal amount of
the Bonds to be so redeemed, plus accrued interest to the date
of redemption
THE BONDS maturing in the year 2001 are subject to
mandatory redemption prior to maturity with funds from the
"Interest and Sinking Fund" established in the Ordinance
authorizing the Series of Bonds of which this is one, and shall
be redeemed in part prior to maturity with funds from the
"Interest and Sinking Fund", for the principal amount thereof
and accrued interest thereon to the date of redemption, and
without premium, on the dates and in the amounts set forth
below, with such Bonds being subject to mandatory redemption on
December 1, 1994, and annually thereafter on each December t
through December 1, 2000
Redemption Date Principal Amount
December 1, 1994 $ 1,065,000
December 1, 1995 1,080,000
December 1, 1996 1,005,000
December 1, 1997 840,000
December 1, 1998 840,000
December 1, 1999 550,000
December 1, 2000 250,000
and the Bonds maturing in the year 2007 are subject to
mandatory redemption prior to maturity with funds from the
"Interest and Sinking Fund", and shall be redeemed in part
prior to maturity with funds from the "Interest end Sinking
Fund", for the principal amount thereof and accrued interest
thereon to the date of redemption, and without premium, on the
dates and in the amounts set forth below, with such Bonds being
subject to mandatory redemption on December 1, 2002, and
annually thereafter on each December I through December 1,
2006
Redemption Date Principal Amount
December 1, 2002 $ 250,000
December 1, 2003 260,000
December 1, 2004 270,000
December 1, 2005 325,000
December 1, 2006 335,000
The particular Bonds to be redeemed on each such date shall be
chosen at random, by lot, or other customary method, by the
City provided, however, that the principal amount of the Bonds
required to be redeemed pursuant to the operation of such
mandatory redemption provisions shall be reduced at the optzon
of the City, by the principal amount of any Bonds which, at
least 45 days prior to the mandatory redemption date, (1) shall
have been acquired by the City at a price not exceeding the
principal amount of such Bonds plus accrued interest to the
date of purchase thereof and delivered to the Paying Agent for
cancellation, or (2) have been redeemed pursuant to the
opt=onal redemption provisions set forth above and not
theretofore credited against a mandatory redemption
requirement
AT LEAST thirty days prior to th~ ~ate fixed for any prior
redemption a wrztten notice of such redemption shall be pub-
llshed at least once in a financial publication of general
circulation in The City of New York, New York and in a
newspaper of general circulation in the City of Denton, Texas
By the date fixed for any such redemption due provision shall
be made with the Paying Agent for the payment of the pr~ncipal
amount of the Bonds which are to be so redeemed and accrued
lnte=est thereon to the date fixed for redemption If such
written notice of redemption is published and if due provision
for such payment is made, all as provided above, the Bonds
which are to be so redeemed thereby automatically shall be
redeemed prior to their scheduled maturities, and they shall
not bear interest after the date fixed for redemption, and they
shall not be regarded as being outstanding except for the right
of the bearer to receive the redemption price from the Paying
Agent out ofthe funds provided for such payment
IT IS HEREBY certified, recited, and covenanted that this
Bond has been duly and validly authorized, issued, and de-
livened pursuant to the applicable laws of the State of Texas,
including particularly Vernon's Ann Tex Clv St Article
717k, as amended, that all acts, conditions, and things re-
quired or proper to be performed, exist, and be done precedent
to or in the authorization, issuance, and delivery of this Bond
and the Series of which it is a part have been performed,
existed, and been done in accordance with law, that thzs Bond
and the Series of which it is a part constitute special obliga-
tions of said City, secured by and payable from a first lien on
and pledge of the "Pledged Revenues", as defined in the
ordinance authorizing the Bonds (the "Bond Ordinance"), which
Pledged Revenues include initially the "Net Revenues" of the
"System", as such terms are defzned in the Bond Ordinance, with
the "System" initially consisting of the City's entire existing
waterworks and sanitary sewer system and the City's entire
existing electric light and power system
THE CITY has reserved the right, sub]eot to the restric-
tions stated in the Bond Ordinance, and without obtaining the
consent of the holder of this Bond, to issue "Additional Bonds"
also to be secured by and payable from a first lien on and
pledge of the Pledged Revenues in the same manner and to the
same extent as this Bond and the Series of which it xs a part
THE CITY has reserved the right, sub3ect to the restric-
tions stated in the Bond Ordxnance, to amend the Bond Ordinance
with the approval of the holders of 51% of the outstanding
principal amount of all Bonds and Addit~onal Bonds
BY ACCEPTING THIS BOND the holder hereof acknowledges the
terms and provisions of the Bond Ordinance, agrees to be bound
by such terms and provisions, and acknowledges that the Bond
Ordinance is duly recorded in the official minutes and records
of tl%e City
THE HOLDER HEREOF shall never have the right to demand
payment of this obligation out of any funds raised or to be
raised by taxatLon, or from any source whatsoever other than
the Pledged Revenues and other sources described in the Bond
Ordinance
IN WITNESS WHEREOF, t_his Bond and the znterest coupons
appertaining hereto have been signed with the facsimile signa-
ture of the Mayor of said City and countersigned with the
facsimile signature of the City Secretary of said City, and the
official seal of said City has been duly impressed, or placed
in facsimile, on thxs Bond
City Secretary, City of Denton Mayor, City of Denton
FORM OF REGISTRATION CERTIFICATE
COMPTROLLER'S REGISTRATION CERTIFICATE REGISTER NO
I hereby certify that thzs Bond has been examined, certi-
fied as to validity, and approved by the Attorney General of
the State of Texas, and that this Bond has been registered by
the Comptroller of Public Accounts of the State of Texas
Wztness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
FORM OF INTEREST COUPON
NO $
ON 1, ,
THE CITY OF DENTON, in Denton County, Texas, promises to pay to
bearer the amount shown on this interest coupon, in lawful
money of the United States of America, without exchange or
collection charges to the bearer, unless due provision has been
made for the redemption prior to maturity of the Bond to which
this interest coupon appertains, upon presentation and surren-
der of this interest coupon, at the
Texas Amerioan Bank/Fort Worth, N A ,
Fort Worth, Texas
said amount being interest due that day on the Bond, bearing
the number hereinafter designated, of that issue of CITY OF
DENTON, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES
1983, dated March 1, 1983 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, or from any source whatso-
ever other than the Pledged Revenues and other sources de-
scribed in the Bond to which this coupon appertains Bond No
City Secretary Mayor
8ectzon 7 DEFINITIONS That as used in this Ordinance
the following terms shall have the meanings set forth below,
unless the text hereof specifically indicates otherwise
(a) The term "City" shall mean the City of Denton, in
Denton County, Texas
(b) The term "City Council" or "Council" shall mean the
governing body ofthe City
(c) The term "Outstanding Bonds" shall mean collectively
the presently outstanding Water and Sewer System Revenue Bonds
and Electric System Revenue Bonds of the City described in the
preamble tothis Ordinance
(d) The term "Bonds" shall mean the City of Denton
Utility System Revenue Refunding Bonds, Series 1983, authorized
by this Ordinance
(e) The term "Additional Bonds" shall mean the additional
parity revenue bonds which the City reserves the right to issue
in the future, in accordance wlthSectlon 24 of this Ordinance
(f) The term "System" shall mean (1) the Czty's entire
existing waterworks and sewer system and the City's entire
exzs=zng electric light and power system, together with all
future extensions, improvements, enlargements, and add~tzons
thereto, and all replacements thereof, and (2) any other
related facilities, all or any part of the revenues or income
from which do, in the future, at the option of the C~ty, and ~n
accordance with law, become "Pledged Revenues" as hereinafter
6
defined, provided that, notwithstanding the foregoing, and to
the extent now or hereafter authorized or permitted by law, the
term System shall not mean any water, sewer, electric, or other
facilities of any kind which are declared not to be a part of
the System, and which are acquired or constructed by the City
with the proceeds from the issuance of "Special Facilities
Bonds", which are hereby defined as being special revenue
obligations of the City which are not payable from or secured
by any Pledged Revenues, but which are secured by and payable
from liens on and pledges of any other revenues, sources, or
payments, including, but not limited to, special contract
revenues or payments received from any other legal entity in
connection with such facilities, and such revenues, sources, or
payments shall not be considered as or constitute Gross Rev-
enues of the System, unless and to the exten~ otherwise pro-
vided in the ordinance or ordinances authorizing the issuance
of such "Special Facilities Bonds"
(g) The terms "Gross Revenues of the System" and "Gross
Revenues" shall mean all revenues and income of every nature
derived or received by the City from the operation and- owner-
ship of the System, including the interest income from the
investment or deposit of money in any Fund created by this
Ordinance
(h) The terms "Net Revenues of the System", and "Net
Revenues" shall mean all Gross Revenues after deducting
therefrom an amount equal to the current expenses of operation
and maintenance of the System, including all salaries, labor,
materials, repairs, and extensions necessary to render effi-
cient service, provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably
and fairly exercised by the adoption of appropriate resolu-
tions, are necessary to keep the System in operation and render
adequate service to said City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or
condition which would otherwise impair the Bonds or Additional
Bonds, shall be deducted in determining "Net Revenues"
Payments required to be made by the City for water supply or
water facilities, sewer services or sewer facilities, fuel
supply, and for the purchase of electric power, which payments
under law constitute operation and maintenance expenses of any
part of the System, shall constitute and be regarded as
expenses of operation and maintenance of the System under this
Ordinance Depreciation and amortization shall not constitute
or be regarded as expenses of operation and maintenance of the
System
(l) The term"Pledged Revenues" shall mean
(1) the Net Revenues, plus
(2) any additional revenues, income, or other
resources which are expected to be available to the
City on a regular periodic basis, including, without
limitation, any grants, donations, or income received
or to be received from the United States Government, or
any other public or private source, whether pursuant
to an agreement or otherwise, which in the future may, at
the option of the City, be pledged to the payment of the
Bonds or Additional Bonds
(J) The term "year" or "fiscal year" shall mean the
fiscal year used by the City in connection with the operation
oft_he System
(k) The term "Government Obligations" shall mean direct
obligations of the United States of America, including obliga-
tions the principal of and interest on which are uncondition-
ally guaranteed by the United States of America, which may be
United States Treasury obligations such as its State and Local
Government Series, and which may be in book-entry form
7
defined, provided that, notwithstanding the foregoing, and to
the extent now or hereafter authorized or permitted by law, the
term System shall not mean any water, sewer, electric, or other
facilities of any kind which are declared not to be a part of
the System, and which are acquired or constructed by the City
with the proceeds from the issuance of "Special Facilities
Bonds", which are hereby defined as being special revenue
obligations of the City which are not payable from or secured
by any Pledged Revenues, but which are secured by and payable
from liens on and pledges of any other revenues, sources, or
payments, including, but not limited to, special contract
revenues or payments received from any other legal entity in
connection with such facilities, and such revenues, sources, or
payments shall not be considered as or constitute Gross Rev-
enues of the System, unless and to the extent otherwise pro-
vlded in the ordinance or ordinances authorizing the issuance
of such "Special Facilities Bonds"
(g) The terms "Gross Revenues of the System" and "Gross
Revenues" shall mean all revenues and Income of every nature
derived or received by the City from the operation and owner-
ship of the System, including the interest income from the
investment or deposit of money in any Fund created by this
Ordinance
(h) The terms "Net Revenues of the System", and "Net
Revenues" shall mean all Gross Revenues after deducting
therefrom an amount equal to the current expenses of operation
and maintenance of the System, including all salaries, labor,
materials, repairs, and extensions necessary to render effi-
cient service, provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably
and fairly exercised by the adoption of appropriate resolu-
tions, are necessary to keep the System in operation and render
adequate service to said City and the inhabitants thereof, or
suchl as might be necessary to meet some physical accident or
condition which would otherwise impair the Bonds or Additional
Bonds, shall be deducted in determining "Net Revenues"
Payments required to be made by the C~ty for water supply or
water facilities, sewer services or sewer facilities, fuel
supply, and for the purchase of electric power, which payments
under law constitute operation and maintenance expenses of any
part of the System, shall constitute and be regarded as
expenses of operation and maintenance of the System under this
Ordinance Depreciation and amortization shall not constitute
or be regarded as expenses of operation and maintenance of the
System
(i) The term"Pledged Revenues" shall mean
(1) the Net Revenues, plus
(2) any additional revenues, income, or other
resources which are expected to be available to the
City on a reqular periodic basis, including, without
limitation, any grants, donations, or Income received
or to be received from the United States Government, or
any other public or private source, whether pursuant
to an agreement or otherwise, which in t_he future may, at
the option of the City, be pledged to the payment of the
Bonds or Additional Bonds
(j) The term "year" or "fiscal year" shall mean the
fiscal year used by the City in connection with the operation
of the System
(k) The term "Government Obligations" shall mean direct
obligations of the United States of America, including obliga-
tions the principal of and interest on which are uncondition-
ally guaranteed by the United States of America, which may be
United States Treasury obl~gatzons such as 1ts State and Local
Government Serzes, and which may be in book-entry form
7
Section 8 PLEDGE That the Bonds and any Additional
Bondsl, and the interest thereon, including interest coupons
appertaining thereto, are and shall be secured by and payable
from a first lien on and pledge of the Pledged Revenues, and
the Pledged Revenues are further pledged to the establishment
and maintenance of the Funds created by this Ordinance, and any
Funds created by any ordinance authorizing the issuance of any
Additional Bonds The Bonds and any Additional Bonds are not
and will not be secured by or payable from a mortgage or deed
of trust on any real, personal, or mixed properties
constituting the System
Section 9 SYSTEM E~JND That there is hereby created and
there shall be established and maintained on the books of the
City, and accounted for separate and apart from all other funds
of the City, a special fund to be entitled the "City of Denton
Utility System Fund" (the "System Fund") Ail Gross Revenues
shall be credited to the System Fund ~mmediately upon receipt,
unless otherwise provided in this Ordinance Ail current
expenses of operation and maintenance of the System shall be
paid from such Gross Revenues credited to the System Fund as a
firs~ charge against same Before makxng any deposits herein-
after required to be made from the System Fund, the City shall
retain in the System Fund at all times an amount at least equal
to one-sixth of the amount budgeted for the then current fiscal
year for the current operation and maintenance expenses of the
System
Section 10 INTEREST AND SINKING FUND That for the sole
purpose of paying the principal of and interest on all Bonds
and Additional Bonds, there is hereby created and there shall
be established and maintained on the books of the Clty, and
accounted for separate and apart from all other funds of the
City, a separate fund to be entitled the "City of Denton
Utility System Revenue Bonds Interest and Sinking Fund" (the
"Interest and Sinking Fund")
Section 11 RESERVE FUND That there is hereby created
and there shall be established and maintained initially at
Texas American Bank/Fort Worth, N A , Fort Worth, Texas, and
thereafter, at the option of the City, established and
maintained at any time at any national bank having a capital
and surplus in excess of $25,000,000, a separate fund to be
entitled the "City of Denton Utility System Bonds and
Additional Bonds Reserve Fund" (the "Reserve Fund") The
Reserve Fund shall be used to pay the principal of and interest
on any Bonds or Additional Bonds when and to the extent the
amounts in the Interest and Sinkxng Pund available for such
payment are insufficient for such purpose, and may be used for
the purpose of finally retiring the last of any Bonds or
Additional Bonds
Section 12 EXTENSION AND IMPROVEMENT FUND That there
is hereby created and there shall be established and maintained
on the books of the City, and accounted for separate and apart
from all other funds of the Cxty, a separate fund to be en-
titled the "City of Denton Utility System Extension and
ImprOvement Fund" (the "Extension and Improvement Fund") The
Extension and Improvement Fund shall be used for the purpose of
paying the costs of improvements, enlargements, extensions,
additions, replacements, or other capxtal expenditures related
to the System, or for paying the costs of unexpected or
extraordinary repairs or replacements of the System for which
System funds are not available, or for payxng unexpected or
extraordinary expenses of operation and maintenance of the
Syst~ for which System funds are not otherwise available, or
for any other lawful purpose l I'
Section 15 EMERGENCY FUI~D That there is hereby created
and there shall be established and maintained on the books of
the City, and accounted for separate and apart from all other
funds of the City, a separate fund to be entitled the "City of
Denton Utllity System Emergency Pund" (the "Emergency Fund")
S
The Emergency Fund shall be used for the purpose of paying
unexpected or extraordinary expenses of repair, replacement,
operation, and maintenance of the System for which neither
System funds nor the moneys in the Extension and Improvement
Fund are available There shall be deposited in the Emergency
Fund simultaneously with the delivery of the Bonds to the
Initial purchasers thereof from lawfully available funds of the
City the amount of $250,000 Ail investment interest income
from the Emergency Fund shall be transferred to the System Fund
as received
Section 14 DEPOSITS OF PLEDGED REVENUES That Pledged
Revenues shall be credited to or deposited in the Interest and
Sinking Fund, the Reserve Fund, the Extension and Improvement
Fund, and other funds when and as required by this Ordinance
and any ordinance authorizing the issuance of Addit~onal Bonds
Section 15 INVESTMENTS That money in any Fund estab-
lished pursuant to this Ordinance or any ordinance authorizing
the issuance of Additional Bonds, may, at the option of the
Czty, be placed in time deposits or certificates of deposit
secured by obligations of the type hereinafter described, or be
invested in Government Obligations (as defined in Section 7
hereof) or obligations guaranteed or insured by the United
States of America, which, in the opinion of the Attorney
General of the United States, are backed by 1ts full faith and
credit or represent its general obligations, or invested in
obligations of instrumentalities of the United States of
America, xncluding, but not limited to, evidences of indebted-
ness issued, insured, or guaranteed by such governmental
agencies as the Federal Land Banks, Federal Intermediate Credit
Banks, Banks for Cooperatives, Federal Home Loan Banks, Govern-
ment National Mortgage Association, United States Postal
Service, Farmers Home Administration, Federal Home Loan Mort-
gage Association, Small Business Administration, Federal
Housing Association, or Participation Certificates in the
Federal Assets Financing Trust, provided that all such deposits
and investments shall be made in such manner as will, in the
opinion of the City, permit the money required to be expended
from any Fund to be available at the proper time or times as
expected to be needed Such investments (except United States
Treasury Obligations--State and Local Government Series
investJaents held in book entry form, which shall at all times
be valued at cost) shall be valued in terms of current market
value as of the last day of each fiscal year Unless otherwise
set forth herein, all interest and income derived from such
depoSitS and investments immediately shall be credited to, and
any losses debited to, the Fund from which the deposit or
investment wes made, and surpluses in any Fund shall or may be
disposed of as hereinafter provided Such Investments shall be
sold promptly when necessary to prevent any default in
connection with the Bonds or Additional Bonds consistent with
the ordinances, respectively, authorizingtheir issuance
Section 16 ~JNDS SECURED That money in all Funds
created by this Ordinance, to the extent not invested, shall be
secured in the manner prescribed by law
Section 17 PRIORITY OF DEPOSITS AND PAYMENTS FROM SYSTEM
FUND That the City shell make the deposits and payments from
Pledged Revenues in the System Fund when and as required by
this Ordinance and any ordinance authorizing any Additional
Bonds, and such deposits shall be made in the following manner
and with the following irrevocable priorities, respectively
First, to the Interest and Sinking F~nd, when and in
the amounts required by this Ordinance and
any ordinance authorzzlng any Additional Bonds,
Second, tot-he Reserve Fund, when and intheamounts
required by this Ordinance and any ordinance
authorizing any Additional Bonds, and
Third, to the Extension and Improvement Fund, when
and as required by Section 20 of this Ordinance
Section 18 INTEREST AND SINKING FUND REQUIREMENTS The
City shall cause to be deposited to the credit of the Interest
and Sinkzng Fund any accrued interest received from the sale of
the Bonds, and on or before April 25, 1983 and on or before the
25th day of each month thereafter the City shall cause to be
deposited to the credit of the Interest and Sinking Fund, in
approximately equal monthly payments, amounts sufficient,
together with any other funds on hand therein, to pay all of
the interest or principal and interest coming due, including
the principal amount of any Bonds required to be redeemed prior
to maturity pursuant to any mandatory redemption requirements,
on the Bonds and any Additional Bonds on the next succeeding
~ntersst payment date Any moneys so deposited ~n the Interest
and Sinking Fund with respect to a mandatory redemption
requirement, together with other lawfully available funds of
the City, may be used by the City, to purchase, in advance of a
mandatory redemption date and at a price not exceeding the
principal amount thereof plus accrued interest thereon to the
date of purchase, Bonds which would be subject to being chosen
for mandatory redemption on such mandatory redemption date
The Paying Agent shall cancel any Bonds so purchased
Section 19 RESERVE FUND REQUIREMENTS That promptly
after the delivery of the Bonds the City shall cause to be
deposited in the Reserve Fund, from funds on hand and lawfully
available for such purpose, and from the proceeds from the sale
and delivery of the Bonds, an amount of money and Government
Obligations equal to $3,000,000 The C~ty shall maintain in
the Reserve Fund an amount of money and investments equal to
the lesser of $3,000,000 or the maximum annual princzpal and
interest requirements of the Bonds (the "Required Reserve
Amount") Following the issuance of Additional Bonds, the
Required Reserve Amount shall be equal to the average annual
principal and interest requirements of all Bonds and Additional
Bonds then outstanding, provided, however, the Required Reserve
Amount shall not be less than $3,000,000, if the maximum annual
principal and interest requirements on all Bonds and Additional
Bonds outstanding exceeds $3,000,000 After the delzvery of
any Additional Bonds the City shall cause the Reserve Fund to
be increased, if and to the extent necessary, so that such fund
will contain an amount of money and ~nvestments equal to the
Required Reserve Amount Any increase in the Required Reserve
Amount may be funded from Pledged Revenues, or from proceeds
from the sale of any Additional Bonds, or any other available
source or combination of sources Ail or any part of the
Required Reserve Amount not funded initially and immediately
after the delivery of any installment or issue of Additional
Bonds shall be funded, within not more than five years from the
date of such delivery, by deposits of Pledged Revenues xn
approximately equal monthly installments on or before the 2Sth
day of each month Principal amounts of the Bonds and any
Additional Bonds which must be redeemed pursuant to any
applicable mandatory redemption requirements shall be deemed to
be maturing amounts of principal for the purpose of calculating
principal and interest requirements on such bonds When and so
long as the amount in the Reserve Fund is not less than the
Required Reserve Amount no deposits shall be made to the credit
of the Reserve Fund, but when and if the Reserve Fund at any
time contains less than the Required Reserve Amount, then the
City shall transfer from Pledged Revenues in the System Fund,
and deposit to the credit of the Reserve Fund, monthly on or
before the 25th day of each month, a sum equal to 1/60th of the
Required Reserve Amount, until the Reserve Fund is restored to
the Required Reserve Amount The City specifically covenants
that when and so long as the Reserve Fund contaLns the Required
Reserve Amount, the City shall cause all interest and income
derived from the deposLt or investment of the Reserve Fund to
be deposited to the credit of the Interest and Sinking Fund
10
Section 20 EXTENSION AND IMPROVEMENT FUND REQUIREMENTS
That during each year, s~b3ect and subordinate to making the
required deposits to the credit of the Interest and Sinking
Fund and the Reserve Fund, the City shall be required to
deposit to the credit of the Extension and Improvement Fund,
from Pledged Revenues in the System Fund, an amount equal to 8%
of the "Adjusted Gross Revenues of the System", which term is
hereby defined to mean the following
the Gross Revenues of the System for such year after
deducting from such Gross Revenues an amount equal to
the current expenses of operation and maintenance of
the System for such year which are directly attribut-
able to (i) all fuel costs related to the production
of electric energy by the City and/or (il) the pur-
chase of electric energy by the City
Additional excess Pledged Revenues may, at the option of the
City Council, be deposited to the credit of the Improvement
Fund as permitted by Section 21 (b) hereof, but no such addi-
tional deposit is required Ail lnvestment interest income
from the Extension and Improvement Fund shall be retained in
and remain a part of such Fund
Section 21 DEFICIENCIES, EXCESS PLEDGED REVENUES (a)
That if on any occasion there shall not be sufficient Pledged
Revenues to make the required deposits ~nto the Interest and
Sinking Fund or the Reserve Fund, such deficiency shall be made
up aS soon as possible from the next available Pledged Rev-
enues
(b) That, subject to making the required deposits to the
credit of the various Funds when and as required by this
Ordinance or any ordinance authorizing the issuance of Addi-
tional Bonds, any surplus Pledged Revenues may be used by the
City for any lawful purpose
Section 22 PAYMENT OF BONDS AND ADDITIONAL BONDS On or
before December 1, 1985, and semiannually on or before each
June 1 and December 1 thereafter while any of the Bonds or
Addi~ional Bonds are outstanding and unpaid the City shall make
available to the Paying Agents therefor, out of the Interest
and Sinking Fund, or if necessary, out of the Reserve Fund,
money sufficient to pay, on each of such dates, the principal
of and interest on the Bonds and Additional Bonds as the same
matures and comes due, or to redeem the Bonds or Additional
Bonds prior to maturity, either upon mandatory redemption or at
the option of the City At the direction of the City the
Paying Agents shall either deliver paid Bonds and Additional
BondS, and the coupons appertaining thereto, to the City or
destroy all paid Bonds and Additional Bonds, and the coupons
appertaining thereto, and furnish the City with an appropriate
certificate of cancellation or destruction
Section 23 FINAL DEPOSITS (a) That any Bond or
Additional Bond shall be deemed to be paid, retired, and no
longer outstanding within the meaning of this Ordinance when
payment of the principal of, redemption premium, zf any, on
such Bond or Additional Bond, plus interest thereon to the due
date thereof (whether such due date be by reason of maturity,
upon redemption, or otherwise) either (i) shall have been made
or caused to be made in accordance with the terms thereof
(including the giving of any required notice of redemption or
provision for the proper giving of such notlce having been
made), or (ii) shall have been provided by irrevocably
depositing with or making av&~lable to a Paying Agent therefor,
in trust and ~rrevocably set aside exclusively for such
payment, (1) money sufficient to make such payment or (2)
Government Obligations which mature as to principal and
1nterest in such amounts and at such times as will insure the
availability, w~thout reinvestment, of suff~clent money to make
such payment, and all necessary and proper fees, compensation,
and expenses of such Paying Agent perta~nlng to the Bonds and
11
Additional Bonds with respect to which such deposit is made
shall have been paid or the payment thereof provided for to the
satisfaction of such paying agent At such time as a Bond or
Additional Bond shall be deemed to be paid hereunder, as
aforesaid, it shall no longer be secured by or entitled to the
benefits of this Ordinance or a lien on and pledge of the
Pledged Revenues, and shall be entitled to payment solely from
such money or Government Obligations
(b) That any moneys so deposited with a paying agent may
at the direction of the City also be invested in Government
Obligations, maturing in the amounts and times as hereinbefore
set forth, and all income from all Government Obllgatlons in
the hands of the paying agent pursuant to this Section which is
not required for the payment of the Bonds and Addltlonal Bonds,
the redemption premlum, if any, and ~nterest thereon, with
respect to which such money has been so deposited, shall be
turned over to the City or deposited as directed by the City
Section 24 ADDITIONAL BONDS (a) That the City shall
have the right and power at any time and from time to time, and
in one or more series or issues, to authorize, issue, and
deliver additional parity revenue bonds (herein called "Add~-
tional Bonds"), in accordance with law, in any amounts, for any
lawful purpose, including the refunding of any Bonds or Addi-
tional Bonds, or other obligations Such Additional Bonds, if
and when authorized, issued, and delivered in accordance with
this Ordinance, shall be payable from and secured by an irrev-
ocable first lien on and pledge of the Pledged Revenues,
equally and ratably on a parity in all respects with the Bonds
and any other outstanding Additional Bonds
(b) That the principal of all Additional Bonds must be
scheduled to be paid or mature on December 1 of the years in
which such principal is scheduled to be paid or mature
Section 25 FURTHER REQUIREMENTS FOR ADDITIONAL BONDS
That Additional Bonds shall be issued only in accordance with
this Ordinance, and no installment, Series, or issue of Addi-
tional Bonds shall be issued or delivered unless
(a) The Mayor of the City and the City Secretary sign a
written certificate to the effect that the City is not in
default as to any covenant, condition, or obligation in connec-
tzon with all then outstanding Bonds and Additional Bonds, and
the ordinances authorizing same, and that the Interest and
Sinking Fund and the Reserve Fund each contains the amount then
required to be there~n
(b) An independent certified public accountant, or
dependent firm of certified public accountants, acting by and
through a certified public accountant, signs a written certifi-
cate to the effect that, in his or its opinion, during either
the next preceding fiscal year, or any twelve consecutive
calendar month period out of the 18-month period immediately
preceding the month in which the ordinance authorizing the
issuance of the then proposed Additional Bonds is passed, the
Pledged Revenues were at least (1) 1 25 times an amount equal
to the average annual principal and interest requirements, and
(ii) i 10 timee an amount equal to the principal and interest
requirements during the fiscal year during which such require-
ments are scheduled to be the greatest, of all Bonds and
Additional Bonds which are scheduled to be outstanding after
the delxvery of the then proposed Additional Bonds It
specifically provided, however, that in calculating the amount
of Pledged Revenues for the purposes of this subsection (b),
there has been any increase in the rates or charges for ser-
vices of the System which is then ~n effect, but which was not
in effect during all or any part of the entire period for which
the Pledged Revenues are being calculated (hereinafter referred
to as the "entire period") then the certified public account-
ant, or in lieu of the certified public accountant a firm of
consulting engineers, shall determine and certify the amount of
12
Pledged Revenues as being the total of (1) the actual Pledged
Revenues for the entire period, plus (11) a sum equal to the
aggregate amount by which the actual billings to customers of
the System during the entire period would have been increased
if such increased rates or charges had been in effect during
the entire period
(c) Proviszon shall be made in the ordinance authorizing
their issuance for increasing the Reserve Fund to the Required
Reserve Amount as required by Section 19 hereof
(e) That all calculations of average annual principal and
interest requirements of any bonds made in connection with the
issuance of any then proposed Additional Bonds shall be made as
of the date of such Additional Bonds, and also in making
calculations for such purpose, and for any other purpose under
this Ordinance, principal amounts of any bonds whzch must be
redeemed prior to maturity pursuant to any applicable mandatory
reden~tion requirements shall be deemed to be maturing amounts
of principal of such bonds
Section 26 GENERAL COVENANTS The City further cove-
nants and agrees that in accordance with and to the extent
required or permitted by law
(a) Performance It will faithfully perform at all times
any and all covenants, undertakings, stipulations, and provi-
sions contained in this Ordinance, and each ordinance authoriz-
ing the issuance of Additional Bonds, and in each and every
Bond and Additional Bond, that it will promptly pay or cause to
be paid the principal of and interest on every Bond and Addi-
tional Bond, on the dates and in the places and manner pre-
scribed in such ordinances and Bonds or Additional Bonds, and
that it will, at the times and in the manner prescribed,
deposit or cause to be deposited the amounts required to be
deposited into the Interest and Sinking Fund and the Reserve
Fund, and any holder of the Bonds or Additional Bonds may
require the City, its officials, and employees, to carry out,
respect, or enforce the covenants and obligations of this
Ordinance, or any ordinance authorizeing the issuance of Addi-
tion&l Bonds, by all legal and equitable means, including
specifically, but wxthout limitation, the use and filing of
mandamus proceedings, in any court of competent jurisdiction,
against the City, its officials, and employees
(b) City's Legal Authority The City is a duly created
and existing home rule city of the State of Texas, and is duly
authorized under the laws of the State of Texas to create and
issue the Bonds and Additional Bonds, that all action on its
part for the creation and issuance of the said oblxgations has
been or will be duly and effectively taken, and that said
obligations in the hands of the holders and owners thereof are
and will be valid and enforceable special obligations of the
City in accordance with their terms
(¢) Title The City has or will obtain lawful title to
the lands, buildings, structures, and facilities constituting
the System, that it warrants that it will defend the title to
all the aforesaid lands, buildings, structures, and facilities,
and every part thereof, for the benefit of the holders and
owners of the Bonds and Additional Bonds, against the claims
and demands of all persons whomsoever, that it is lawfully
qualified to pledge the Pledged Revenues to the payment of the
Bonds and Additional Bonds in the manner prescribed herein, and
has lawfully exercised such rights
(d) Liens The City wxll from time to time and before
the same become delinquent pay and discharge all taxes, assess-
ments, and governmental charges, if any, which shall be law-
fully imposed upon it, or the System, that it will pay all
lawful claims for rents, royalties, labor, materials, and
supplies which if unpaxd might by law become a lien or charge
thereon, the lien of which would be prmor to or interfere with
13
the liens hereof, so that the priority of the liens granted
hereunder shall be fully preserved mn the manner provided
herein, and that it will not create or suffer to be created any
mechanic's, laborer's, materialman's, or other lien or charge
which might or could be prior to the liens hereof, or do or
suffer any matter or ~%ing whereby the liens hereof might or
could be impaired, provided, however, that no such tax, assess-
ment, or charge, and that no such claims which m~ght be used as
the basis of a mechanic's, laborer's, materialman's, or other
lien or charge, shall be required to be paid so long as the
validity of the same shall be contested in good faith by the
(e) Operation of System, No Free Service While the
Bonds or any Additional Bonds are outstandmng and unpaid the
City shall continuously and efficmently operate the System, and
shall maintain the System in good condition, repair, and
working order, all at reasonable cost No free service of the
System shall be allowed, and should the City or any of 1ts
agencies, instrumentalities, lessors, or concessionaires make
use of the services and facilities of the System, payment
monthly of the standard retail price of the services provided
shall be made by the City or any of its agencmes, instrumen-
talities, lessors, or ooncessionamres out of funds from sources
other than the revenues of the System, unless made from surplus
Pledged Revenues as permitted by Section 21(b) hereof
(f) Further Encumbrance Whmle the Bonds or any Addm-
tional Bonds are outstanding and unpaid, the City shall not
additionally encumber the Pledged Revenues In any manner,
except as permitted in this Ordmnance mn connectmon wmth
Additional Bonds, unless said encumbrance is made Junior and
subord/nate in all respects to the lmens, pledges, covenants,
and agreements of this Ordinance and any ordinance authorizing
the issuance of Additional Bonds, but the right of the City to
issue revenue bonds payable from a subordinate lmen on surplus
Pledged Revenues is specifically recognized and retained, as
permitted under Section 21(b) hereof)
(g) Sale or Disposal of Property While the Bonds or any
Additional Bonds are outstanding and unpaid, the City shall not
sell, convey, mortgage, encumber, lease, or in any manner
transfer title to, or dedicate to other use, or otherwise
dispose of, the System, or any significant or substantmal part
thereof; provided that whenever the C~ty deems it necessary to
dispose of any property, machmnery, fixtures, or equipment, or
dedicate such property to other use, it may do so either when
it has made arrangements to replace the same or provmde
substitutes therefor, or it is determmned by resolution of the
City Council that no such replacement or substmtute is
necessary
(h) Insurance (1) The Cmty shall cause to be mnsured
such parts of the System as would usually be insured by corpor-
ations operating like properties, with a responsible insurance
company or companies, against risks, accidents, or casualties
against which and to the extent insurance is usually carried by
corporations operating like properties, mncluding, to the
extent reasonably obtainable, fire and extended coverage
mnsu=ance, mnsurance against damage by floods, and use and
occupancy insurance Public lmabmlity and property damage
insurance also shall be carried unless the Cmty Attorney gives
a written opinion to the effect that the Cmty is not liable for
claims which would be protected by such insurance Ail insur-
ance premiums shall be paid as an expense of operation of the
System At any time whzle any contractor engaged in construc-
tion work shall be fully responsible therefor, the City shall
not be required to carry insurance on the work bemng con-
structed if the contractor is required to carry appropriate
znsurance Ail such policies shall be open to the lnspectmon
of the Bondholders and their representatives at all reasonable
times Upon the happening of any loss or damage covered by
Insurance from one or more of said causes, the City shall make
14
due proof of loss and shall do all things necessary or desir-
able to cause the insuring companies to make payment in full
directly to the City The proceeds of insurance covering such
property, together with any other funds necessary and available
for such purpose, shall be used forthwith by the City for
repairing the property damaged or replacing the property
destroyed, provided, however, that if said insurance proceeds
and Other funds are insufficient for such purpose, then said
insurance proceeds pertaining to the System shall be deposited
in a special and separate trust fund, at an official depository
of the City, to be designated the Insurance Account The
Insurance Account shall be held until such time as other funds
become available which, together with the Insurance Account,
will be sufficient to make the repairs or replacements origin-
ally required
(2) The annual audit hereinafter required may contain a
section commenting on whether or not the City has complied with
the requirements of this Section with respect to the mainte-
nance of insurance, and shall state whether or not all insur-
ance premiums upon the insurance policies to which reference is
made have been paid
(i) Annual Budget and Rate Covenant The City shall
prepare, prior to the beginning of each fiscal year, an annual
budget, zn accordance with law, reflecting an estimate of cash
receipts and disbursements for the ensuing fiscal year
sufficient detail to indicate the probable Gross Revenues and
Pledged Revenues for such fiscal year The City shall fix,
establish, maintain, and collect, such rates, charges, and fees
for the use and availability of the System at all times as are
necessary (1) to produce Gross Revenues sufficient, together
with any other Pledged Revenues, to pay all current operation
and maintenance expenses of the System, and (2) to produce an
amount of Pledged Revenues during each fiscal year at least
equal to the greater of i 25 times the average annual principal
and interest requirements of all then outstanding Bonds and
Additional Bonds or I 25 times the succeeding fiscal year's
principal and interest requirements of all then outstanding
Bonds and Additional Bonds
(J) Records The City shall keep proper books of record
and account in which full, true, proper, and correct entries
will be made of all dealings, activities, and transactmons
relating to the System, the Pledged Revenues, and the Funds
created pursuant to this Ordxnance, and all books, documents,
and vouchers relating thereto shall at all reasonable times be
made available for inspection upon request of any Bondholder or
citizen of the City To the extent consistent with the provi-
sions of this Ordinance, the City shall keep its books and
records in a manner conforming to standard accounting practices
as usually would be followed by private corporations owning and
operating a similar System, with appropriate recognition being
given to essential differences between municipal and corporate
accounting practices
(k) Audits After the close of each fiscal year while
any of the Bonds or any Additional Bonds are outstanding, an
audit will be made of the books and accounts relating to the
System and the Pledged Revenues by an Independent certified
public accountant or an independent firm of certified public
accountants As soon as practicable after the close of each
such year, and when said audit has been completed and made
available to the City, a copy of such audit for the preceding
year shall be mailed to the Municipal Advmsory Council of
TexaS, to each paying agent for any bonds payable from Pledged
Revenues, and to any Bondholders who shall so request mn
writing The annual audit reports shall be open to the inspec-
tion of the Bondholders and their agents and representatives at
all reasonable times
(1) Governmental Agencies It will comply with all of
the terms and condxtlons of any and all franchises, permits,
15
and authorizations applicable to or necessary with respect to
the System, and which have been obtained from any governmental
agency, and the City has or will obtain and keep in full force
and effect all franchises, permits, authorization, and other
requirements applicable to or necessary with respect to the
acquisition, construction, equipment, operation, and mainte-
nance of the System
(m) No Competition It will not operate, or grant any
franchise or, to the extent it legally may, permit the
acquisition, construction, or operation of, any, facilities
which would be in competition with the System, and to the
extent that it legally may, the City will prohibit any such
competing facilities
(n) No Arbitrage That the City covenants to and with
the purchasers of the Bonds and any Additional Bonds that no
use wlll be made of the proceeds of any of such bonds at any
time throughout the term of any of such bonds which, if such
use had been reasonably expected on the date of delivery of any
of such bonds to and payment therefor by the purchasers, would
have caused any of such bonds to be arbitrage bonds within the
meaning of Section 103(c) of the Internal Revenue Code of 1954,
as amended, or any regulations or rulings pertaining thereto,
and by this covenant the City is obligated to comply with the
requirements of the aforesaid Section 103(c) and all applicable
and pertinent Department of the Treasury regulations relating
to arbitrage bonds The City further covenants that the
proceeds of all such bonds will not otherwise be used directly
or indirectly so as to cause all or any part of such bonds to
be or become arbitrage bonds within the meaning of the afore-
said Section 103(c), or any regulations pertaining thereto
Section 2? AMENDMENT OF ORDINANCE (a) The holders of
Bonds and Additaonal Bonds aggregating in principal amount $1%
of the aggregate principal amount of then outstanding Bonds and
Additional Bonds shall have the right from time to time to
approve any an~endment to this Ordanance whach may be deemed
necessary or desirable by the City, provided, however, that
nothing herean contaaned shall 9ermat or be construed to permat
the amendment of the terms and conditions in this Ordinance or
in the Bonds or Additional Bonds so as to
1) Make any change in the maturaty of the out-
standing Bonds or Additional Bonds,
2) Reduce the rate of interest borne by any of
the outstanding Bonds or Addatlonal Bonds,
3) Reduce the amount of the principal payable
on the outstanding Bonds or Additional Bonds,
4) Modify the terms of payment of principal
of or interest onthe outstanding Bonds or Additional
Bonds, or impose any conditions with
respect to such payment,
(5) Affect the rights of the holders of less
than all of the Bonds and Additional Bonds then out-
standing,
(6) Change the minim~mpercentage of the prin-
cipal amount of Bonds and Additional Bonds necessary
for consent to such amendment
(b) If at any time the City shall desire to amend the
Ordinance under this Section, the City shall cause notice of
the proposed amendment to be publashed an a financial
publication of general circulation an The City of New York, New
York, once during each calendar week for at least two succe-
ssave calendar weeks Such notice shall braefly set forth the
nature of the proposed amendment and shall sta~e that a copy
thereof is on file at t-he principal offace of the Paying Agents
16
for inspection by all holders of Bonds and Additional Bonds
Such publication is not required, however, if notice in writing
is given to each holder of Bonds and Additional Bonds
(c) Whenever at any time not less than thlrty days, and
within one year, from the date of the first publication of said
notice or other service of written not~ce the City shall
receive an instrument or instruments executed by the holders of
at least 51~ in aggregate principal amount of all Bonds and
Additional Bonds then outstanding, which Instrument or instru-
ments shall refer to the proposed amendment described in sa~d
notice and which specifically consent to and approve such
amendment in substantially the form of the copy thereof on file
with the Paying Agents, the City Council may pass the amenda-
tory ordinance in substantially the same form
(d) Upon the passage of any amendatory ordinance pursuant
to the provisions of this Section, this Ordinance shall be
deemed to be amended in accordance with such amendatory ordi-
nance, and the respective rights, duties, and obligations under
this Ordinance of the City, and all the holders of then out-
standing Bonds and Additional Bonds and all future Bonds and
Additional Bonds shall thereafter be determined, exercised, and
enforced hereunder, subject in all respects to such amendments
(e) Any consent given by the holder of a Bond or Addi-
tional Bond pursuant to the provisions of this Section shall be
irrevocable for a period of six months from the date of the
first publication of the not~ce provided for in this Section,
and Shall be conclusive and banding upon all future holders of
the Same Bond or Additional Bond during such period Such
consent may be revoked at any time after slx months from the
date of the first publication of such notice by the holder who
gave such consent, or by e successor in title, by filing notice
thereof with the paying agents and the City, but such revoca-
tion ~shall not be effective if the holders of 51~ in aggregate
prinOipal amount of the then outstanding Bonds and Additional
Bonds as in this Section defined have, prior to the attempted
revocation, consented to, and approved the amendment
(f) For the purpose of this Section, the fact of the
holding of Bonds or Additional Bonds by any bondholder and the
amount and numbers of such Bonds or Addltlonal Bonds and the
date of their holding same, may be proved by the affidavit of
the person claiming to be such holder, or by a certificate
executed by any trust company, bank, banker, or any other
depository wherever situated showing that at the date therein
mentioned such person had on deposit with such trust company,
bank, banker, or other depository, the Bonds and Additional
Bonds described in such certificate The City may conclusively
assun~e that such ownership continues until written notice to
the contrary is served upon the City
Section 28 APPROVAL AND REGISTRATION OF BONDS That the
Mayor of the City is hereby authorized to have control of the
Bonds and all necessary records and proceedings pertaining to
the ~onds pending their delivery and their 1nvestigation,
exam~nation, and approval by the Attorney General of the State
of Texas, and their registration by the Comptroller of Public
Accounts of the State of Texas Upon registration of the
Bonda, said Comptroller of Public Accounts (or a deputy desig-
nated in wrzting to act for said Comptroller) shall manually
sign the Comptroller's Registration Certificate printed and
endorsed on the Bonds, and the seal of said Comptroller shall
be impressed, or placed in facsimile, on each of the Bonds
Section 29 SALE 07 BONDS That the Bonds are hereby
sold and shall be delivered to an underwriting syndicate
managed by Goldman, Sachs & Co , Dillon, Read & Co Inc , and
Kidder, Peabody & Co , Incorporated, on the terms and
cond=tions set forth in the Bond Purchase Contract, dated the
date of this meeting, in form and substance presented to the
City Council at this meeting Said Bond Purchase Contract is
17
hereby approved, and the Mayor of the City is hereby authorized
and directed, for and on behalf of the City, to sign, execute,
and deliver said Bond Purchase Contract
Section 30 APPROVAL OF OFFERING MEMORANDUM That an
Offering Memorandum relating to the Bonds, dated the date of
this meeting, in form and substance presented to the C~ty
Council at this meeting, is hereby approved, lts distribution
is hereby authorized to prospective lnvestors, ~ncludlng all
ultimate purchasers, and other interested parties in connection
with the sale and resale of the Bonds, with such changes
therein as shall be approved by the Mayor of the City, and the
Mayor and Clty Secretary are hereby authorized to execute it in
substantially such form It is further officially found,
determined, and declared that the statements and
representatzons contained in said Offering Memorandum are true
and correct in all material respects to the best knowledge and
belief of the City Council
Section 31. PROCEEDS OF SALE That promptly after the
delivery of the Bonds all of the proceeds from the sale and
delivery of the Bonds shall be deposited with Texas American
Bank/Fort Worth, N.A., Fort Worth, Texas, (the "Escrow Agent"),
which is a place of payment (paying agent) for the Electric
System Revenue Bonds and is the agent for InterFirst Bank
Dallas, N.A., Dallas, Texas ("InterFirst") a place of payment
(paying agent) for the Water and Sewer System Revenue Bonds,
pursuant to the terms of the below-mentioned Escrow Agreement,
and such proceeds shall be used for the purpose of refunding,
discharging, and retiring all of the Outstanding Bonds, for the
deposit of accrued interest to the credit of the Interest and
Sinking Fund, for the deposit of the amount of $2,100,000 to
the credit of the Reserve Fund, and for paying all costs and
expenses of xssuing the Bonds and discharging and retiring the
Outstanding Bonds. By a resolution of the City Council of even
dat~ herewith the City Council has authorized the execution of
a "Utility System Special Escrow Agreement" among the City, the
Escrow Agent, and InterFirst (the "Escrow Agreement"), which
provides for the disposition of said Bond proceeds as afore-
said. Simultaneously with the delivery of the Bonds to the
initial purchasers, the Mayor shall direct that $900,000
currently held in the City's Water and Sewer System Revenue
Bond Reserve Fund shall be transferred to the Reserve Fund and
invested pursuant to the recommendations of F~rst Southwest
Company. The balance in said Water and Sewer System Revenue
Bond Reserve Fund and the amounts in each of the interest and
sinking funds for the Outstanding Bonds shall be deposited w~th
the Escrow Agent pursuant to the terms of the Escrow Agreement
Section 32. REASONS FOR REFUNDING That it ~s specif~c-
ally found and determined by the City that the underlying
ordinances authorizing the Outstanding Bonds contain restric-
tive covenants which prevent the adequate and economical
financing of projects which are expected to be required for
various parts of the System in the near future, and require the
maintenance of unnecessarily high utility rates Such restric-
tive, covenants also require unnecessary, cumbersome, and
onerous procedures wlth respect to operation and maintenance of
various parts of the System and the issuance of bonds there-
under The refunding will permit the combination, for financ-
ing purposes, of the presently separated (1) City waterworks
and sewer system and (2) City electric light and power system,
giving an improved cash flow between the systems and enabling
the City to finance needed projects which otherwise could not
be undertaken Therefore, for the reasons stated in th~s
Section, the City and the City Council have found it to be
necessary and essential in the best ~nterest of the City that
such refunding be accomplLshed, and the Outstanding Bonds be
refunded, discharged, and retired thereby
Section 33 FURTHER PROCEDURES That the Mayor, City
Secretary, and all other officers, employees, and agents of the
City, and each of them, shall be and they are hereby expressly
18
authorized, empowered, and directed from time to time and at
any time to do and perform all such acts and things and to
execute, acknowledge and deliver in the name and under the
corporate seal and on behalf of the City all such instruments,
whether or not herein mentioned, as may be necessary or desir-
able in order to carry out the terms and provisions of this
Ordinance and the Bonds, and the Bond Purchase Contract and
Offering Memorandum pertaining thereto In case any officer
whose facsimile signature shall appear on any Bond or ~nterest
coupon appertaining thereto shall cease to be such officer
before the delivery of the Bonds, such facsimile szgnature
shall nevertheless be valid and sufficient for all purposes the
same as if he or she had remained in off~ce until such de-
livery.
Section 34 SEVERABILITY. That the provisions of th~s
Ordinance are severable, and ~n case any one or more of the
provisions of this Ordinance or the application thereof to any
person or circumstance should be held to be lnvalld, unconsti-
tutional, or ineffective as to any person or c~rcumstance, the
remainder of this Ordinance nevertheless shall be valid, and
the application of any such invalid provision to persons or
circumstances other than those as to which it is held invalid
shall not be affected thereby.
19
CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE OF
CITY OF DENTON, TEXAS UTILITY SYSTEM SYSTEM REVENUE
REFUNDING BONDS~ SERIES 1983
THE STATE OF TEXAS ·
COUNTY OF DENTON
CITY. OF DENTON
We, the undersigned officers of said City, hereby certify
as follows
I The City Council of said City convened in
SPECIAL MEETING ON THE 10TH DAY OF MARCH, 1983,
at the Municipal Building (City Ball), and the roll was called
of the duly constituted officers and members of said City
Council, to-wit
Charlotte Allen, City Secretary R1chard O Stewart, Mayor
Mark Chew Jack Barton
Charles Hopkins Dr A Ray Stephens
Jim Riddlesperger Joe Alford
and all of said ~persons were present, except the following
absentees '
thus constitutih~'-a ~uor~/n. Whereupon, among other business,
the following was transacted at said Meeting a written
ORDINANCE AUTHORIZING THE ISSUANCE OF
CITY OF DENTON, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS,
SERIES 1983
was duly introduced for the consideration of sa~d City Council
and duly read It was then duly moved and seconded that said
Ordinance be passed; and, after due discussion, sa~d motion,
carrying with it the passage of said Ordinance, prevailed and
carried by the following vote
AYES Ail members of sald C~ty Council
shown present above voted "Aye"
NOES None.
2 That a true, full, and correct copy of the aforesaid
Ordinance passed at the Meeting described in the above and
foregoing paragraph is attached to and follows this Certlf1-
cate, that said Ordinance has been duly recorded in said City
Council's minutes of said Meeting, that the above and foregoing
paragraph is a true, full, and correct excerpt from said City
Council's minutes of said Meeting pertaining to the passage of
said Ordinance; that the persons named ~n the above and fore-
going paragraph are the duly chosen, qualified, and acting
officers and members of said City Council as ~ndicated therein,
and that each of the officers and members of said City Council
was duly and sufficiently notified officially and personally,
in advance, of the time, place, and purpose of the aforesaid
Meeting, and that said Ordinance would be introduced and
considered for passage at said Meeting, and that sa~d Meeting
was open to the public, and public not~ce of the time, place,
and purpose of said meeting was given, all as required by
Vernon's Ann. Tex. Civ. St. Article 6252-17
3. That the Mayor of said Clty has approved, and hereby
approves, the aforesaid Ordinance, that the Mayor and the City
Secretary of said City have duly s~gned said Ordinance, and
that the Mayor and the City Secretary of said City hereby
declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of said Ordi-
nance for all purposes.
4. That the Ordinance has not been modified, amended or
repealed and is in full force and effect on and as of the date
hereof. .~
SIGNED AND SEALED the /~ day of MArch, 19~3 ~
City Secretary / ~ - ~ayor
(SEAL) ............................... · ..... ~ ..................
We, the undersigned, being respectively the City Attorney
and the Bond Attorneys of the City of Denton, Texas, hereby
certify that we prepared and approved as to legality the
attached and following Ordinance prior to its passage as
aforesaid ~.~. ~7~ ~