1978-012 ORD N CE NO
ORDINANCE AUTHORIZING THE ISSUANCE OF
CITY OF DENTON ELECTRIC SYSTEM REVENUE REFUNDING BONDS
SERIES 1978
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
WHEREAS, the City of Denton, Texas (the "City") has duly
assued, and there are now outstanding, pursuant to Vernon's
Ann Tex Cav St Articles 1111 through 1118 and other appla-
cable laws, the following seraes or assues of Electric Revenue
Bonds whlch are secured solely by a pledge of the Net Revenues
of the City's electrac light and power system (the "System")
Caty of Denton Electrac Revenue Bonds Seraes
1954, dated November 1, 1954, now outstandang
in the aggregate prlncapal amount of ..... $1,385,000
Clty of Denton Electrac Revenue Bonds Seraes
1955, dated May 1, 1955, no~ outstandang an
the aggregate prlnclpal amount of ...... $ 461,000
Caty of Denton Electrzc Revenue Bonds Ser~es
B, 1955, dated November 1, 1955, now outstand-
ang an the aggregate prlncapal amount of - - - $ 501,000
City of Denton Electrzc Revenue Bonds Seraes
1961, dated January 1, 1961, now outstanding
in the aggregate principal amount of ..... $4,060,000
City of Denton Electrac Revenue Bonds Seraes
1965, dated January 1, 1965, now outstanding
an the aggregate pranclpal amount of ..... $1,225,000
Clty of Denton Electrac Revenue Bonds Seraes
1968, dated February 1, 1968, now outstandang
an the aggregate pranclpal amount of ..... $ 550,000
City of Denton Electrac Revenue Bonds Serles
1970, dated Septeraber 1, 1970, now outstandang
In the aggregate prlncapal amount of ..... $2,520,000
Caty of Denton Electric Revenue Bonds Seraes
1972, dated May 1, 1972, now outstandang an
the aggregate pranclpal amount of - - $4,800,000
Caty of Denton Electrac Revenue Bonds Ser~es
1974, dated July 1, 1974, now outstandang in
the aggregate prancipal amount of .... $1,400,000
(collectlvely the "Outstandzng Bonds"), and
WHEREAS, the Outstandang Bonds are the only bonds or other
obllgations secured by or payable from the Net Revenues of the
System, and
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WHEREAS, the City Council of the City is the governing
body of the C~ty, and
WHEREAS, the refunding bonds hereinafter authorized are
to be ~ssued and delivered pursuant to Chapter 642, Acts of
the 65th Legislature, Regular Session, 1977 (Vernon's Ann Tex
C~v St Article 1118n-12), 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 ~ssued in the principal amount of
$I9,255,000, FOR THE PUP~OSE OF REFUNDING ALL OF THE OUTSTAND-
ING CITY OF DENTON ELECTRIC REVENUE BONDS
Section 2 BONDS DESIGNATED That sa~d bonds shall be
designated as the "CITY OF DENTON ELECTRIC SYSTEM REVENUE
REFUNDING BONDS, SERIES 1978 (the "Bonds")
Section 3 DATE AND MATURITIES That the Bonds shall
be dated MARCH 15, 1978, shall be ~n the denomination of $5,000
each, shall be numbered consecutively from one upward, and
shall mature seraally on the maturlty date, ~n each of the
years, and in the amounts, respectively, unless redeemed prior
to maturity as required or permitted an the FO~4 OF BOND set
forth in Section 6 of th~s Ordinance, as set forth an the follow-
lng schedule
MATURITY DATE DECEMBER 1
YEARS AMOUNTs YEARS AMOUNTS
1985 $ 855,000 1992 $ 600,000
1986 1,135,000 1993 600,000
1987 1,165,000 1994 600,000
1988 1,200,000 1995 600,000
1989 1,200,000 1996 500,000
1990 1,200,000 **** *******
1991 600,000 2007 9,000,000
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
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maturlt~es 1985 4.60% maturlt~es 1992, 5 15%
maturities 1986 4 70% maturlt~es 1993, 5 20%
maturities 1987 4.80% matur~tles 1994, 5 20%
maturities 1988 4 90% maturities 1995, 5 25%
maturities 1989 5.00% maturities 1996, 5 25%
maturities 1990 5 05% *********
matur~tles 1991 5 10% maturltles 2007, 5 85%
Sa~d ~nterest shall be evidenced by ~nterest coupons which
shall appertain to the Bonds, and which shall be payable ~n
the manner provided and on the dates stated ~n the FORM OF
BOND set forth ~n Section 6 of th~s Ordinance
Section 5 GENEP~%_L CHARACTERISTICS That the Bonds and
interest coupons shall be ~ssued, shall be payable, shall and
may be redeemed prior to their scheduled maturity, shall have
the characteristics, and shall be s~gned and executed (and the
Bonds shall be sealed), all as provided, and ~n the manner ~n-
d~cated, ~n the FORM OF BOND set forth ~n Section 6 of th~s
Ordinance
Section 6 FORMS That the form of the Bonds, ~nclud~ng
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 ~n-
terest coupons which shall appertain and be attached ~n~t~ally
to each of the Bonds, shall be, respectively, substantially as
follows
FORM OF BOND
NO $5,000
UNITED STATES OF A~RICA
STATE OF TEXAS
COUNTY OF DENTON
CITY OF D~NTON
ELECTRIC SYSTEM REVENUE REFUNDING BOND
SERIES 1978
ON DECEMBER 1, , THE CITY OF DENTON, IN DENTON COUNTY,
TEXAS, hereby promises to pay to bearer hereof the principal
amount of
FIVE THOUSAND DOLLARS
and to pay ~nterest thereon at the rate of % per annum
from the date of th~s Bond, evldenced by ~nterest coupons
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payable DECEMBER 1, 1978, and semiannually on each JSNE 1
and DECEMBER 1 thereafter while this Bond is outstanding
THE PRINCIPAL of th~s Bond and the ~nterest coupons ap-
pertalnlng hereto shall be payable to bearer, in lawful money
of the United States of America, without exchange or collec-
tion charges to the bearer, upon presentatlon and surrender
of this Bond or proper interest coupon, at the following,
whlch, collectively, shall constitute and be defined as the
"Paying Agent" for this Series of Bonds
THE FORT WORTH NATIONAL BANK, FORT WORTH, TEXAS,
OR, AT THE OPTION OF THE BEARER, AT
FIRST STATE BANK OF DENTON, DENTON, TEXAS
THIS BOND is one of a Series dated as of 5~RCH 15, 1978,
authorized and issued in the principal amount of $19,255,000,
FOR THE PURPOSE OF REFUNDING ALL OF THE OUTSTANDING CITY OF
DENTON ELECTRIC REVENUE BONDS
ON DECEMBER 1, 1997,
and annually on DECE}~ER 1 of each year thereafter, the out-
standing Bonds of this Series are subject to mandatory re-
demption prior to maturity with funds from the "Retirement
Fund", herelnafter described, and shall be redeemed in part
prior to maturity with funds from said "Retirement Fund", for
the principal amount thereof and accrued Interest to the date
of redemptlon, and without premium, on DECEMBER 1 of each year,
and in the principal amounts, as set forth an the following
schedule
Year Principal Amount Year Principal Amount
1997 $300,000 2002 $300,000
1998 300,000 2003 300,000
1999 250,000 2004 300,000
2000 275,000 2005 350,000
2001 275,000 2006 350,000
The particular Bonds to be redeemed on each such date shall
be chosen at random, by lot or other customary method, by the
"Escrow Agent" for the "Retirement Fund", hereinafter describ-
ed, provided however that the principal amount of the Bonds
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required to be redeemed pursuant to the operation of such
mandatory sinking fund shall be reduced, at the option of the
C~ty, by the principal amount of any Bonds which, at least 45
days prior to the mandatory s~nklng fund redemption date, (1)
shall have been acquired by the City and delivered to the
"Escrow Agent" for the "Retirement Fund" for cancellation or
(2) shall have been purchased and cancelled by sald "Escrow
Agent" with funds from the "Retirement Fund", at the request
of the City, at a price not exceeding the principal amount of
such Bonds plus accrued interest to the date of purchase there-
of
ON JUNE 1, 1993,
or on any interest payment date thereafter, the outstanding
Bonds of th~s Ser~es may be redeemed prior to their scheduled
maturity, at the option of sald C~ty, w~th funds derived from
any source, in whole, or ~n part, for the principal amount
thereof and accrued interest thereon to the date f~xed for re-
demption, and w~thout premium
AT LEAST thirty days prior to the date f~xed for any prior
redemption said C~ty (acting e~ther through ~ts own officers
or through The Fort Worth National Bank, Fort Worth, Texas,
as one of the Paying Agents, and as trustee and "Escrow Agent"
for the "Retirement Fund", hereinafter described) shall cause
a written notice of such redemptlon to be published at least
once in a financial publication publlshed in The City of New
York, New York By the date f~xed for any such redemption due
provlslon shall be made for the payment at the "Paying Agent"
of the principal amount of the Bonds which are to be so redeem-
ed and accrued Interest thereon to the date f~xed for redemption
If such written notice of £edempt~on 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
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be redeemed prior to their scheduled maturat~es, and they shall
not bear ~nterest after the date faxed for redemptaon, and they
shall not be regarded as being outstanding except for the raght
of the bearer to receive the redemption price from the "Payang
Agent" out of the funds provided for such payment
IT IS HEREBY certified, reclted, and covenanted that th~s
Bond has been duly and validly authorized, ~ssued, and del~ver-
ed pursuant to the applicable laws of the State of Texas, ln-
clud~ng particularly Vernon's Ann Cav St of Texas, Article
1118n-12, that all acts, conditions, and th~ngs required or
proper to be performed, ex~st, and be done precedent to or ~n
the authorization, ~ssuance, and delivery of thas Bond and the
Seraes of whach ~t as a part have been performed, existed, and
been done ~n accordance w~th law, that th~s Bond and the Ser~es
of which ~t ~s a part constitute special obligations of sa~d
C~ty, secured by and payable from an arrevocable farst llen on
and pledge of the "Pledged Revenues", as deflned ~n the Ordi-
nance authorizing th~s Seraes of Bonds (the "Ordlnance"), which
anclude ~n~t~ally the "Net Revenues of the C~ty's Electrac
Llght and Power System", as such term ls defined an the Orda-
nance, and which "Pledged Revenues" may, an the future, at the
option of the C~ty, ~nclude other resources
THE BONDS also are secured by and payable from the "C~ty
of Denton Electric System Revenue Refunding Bonds, Seraes 1978
Retirement Fund" (the "Retirement Fund") created for the sole
benefit and security of the Bonds pursuant to the Ordanance and
established as a special trust fund and s~nk~ng fund for the
Bonds at The Fort Worth National Bank, Fort Worth, Texas, as
trustee and "Escrow Agent" under a "Series 1978 Retirement Trust
Agreement" (the "Agreement") The Ordinance and the Agreement
provade for semiannual deposits anto the Retirement Fund from
Pledged Revenues, and for the anvestment of money an the Re-
tirement Fund ~n Government Obl~gataons, as defaned an the
Ordinance, so that such deposats, Government Obi!garcons, and
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the lnterest ~ncome therefrom w~ll be sufflclent to provide
for the payment and redemption of the Bonds at maturlty or
upon redemption prior to maturlty, and the payment of the ln-
terest on the Bonds as ~t comes due
THE CITY has reserved the r~ght, subject to the restric-
tions stated in the Ordinance, to ~ssue additional parity
revenue bonds which also may be secured by and payable from
an ~rrevocable f~rst llen on and pledge of the aforesaid Pledg-
ed Revenues, ~n the same manner and to the same extent as th~s
Bond and the Serles of which at ~s a part Although the Bonds
and any Additional Bonds wlll be equally and ratably secured
by and payable from a f~rst l~en on and pledge of the Pledged
Revenues, the Retirement Fund has been created for the ex-
clusive benefit of the Bonds, but the Bonds wall be entitled
to such exclusive benefat only after Pledged Revenues actually
have been deposited an the Retarement Fund as required by the
Ordinance Separate special ~nvested retirement funds (slm~lar
to the Retirement Fund) may, or may not, at the optlon of the
C~ty, be established for the exclusive benefit of any Add~t~on-
al Bonds
THE HOLDER HEREOF shall never have the rlght to demand
payment of th~s obligation out of any funds raised or to be
raised by taxation, or from any source whatsoever other than
the Pledged Revenues and other sources described ~n the Ordinance
IN WITNESS WHEREOF, th~s Bond and the lnterest coupons
appertaining hereto have been s~gned wath the facs~male sagna-
ture of the Mayor of sa~d Clty and countersigned wath the fac-
s~m~le sagnature of the C~ty Secretary of sa~d Caty, and the
offac~al seal of saad Clty has been duly ~mpressed, or placed
an facsimile, on th~s Bond
XXXXXXXX XXXXXXXX
City Secretary, City of Denton Mayor, City Of Denton
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FORM OF R~GISTRATION CERTIFICATE
COMPTROLLER'S REGISTRATION CERTIFICATE P~EGISTER NO
I hereby certify that this Bond has been examined, cer-
tified as to validity, and approved by the Attorney General
of the State of Texas, and that this bond has been registered
by the Comptroller of Public Accounts of the State of Texas
Witness my signature and seal this
xxxx~x~
Comptroller of Public Accounts of
the State of Texas
FORM,,OF INTEREST COUPON
NO $
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 th~s interest coupon appertains, upon presentatIon and
surrender of this interest coupon, at the
THE FORT WORTH NATIONAL BANK, FORT WORTH, TEXAS,
OR, AT TF~ OPTION OF THE BEARER, AT
FIRST STATE BANK OF DENTON, DENTON, TEXAS,
said amount being interest due that day on the Bond, bearing
the number hereinafter designated, of that issue of CITY OF
DENTON ELECTRIC SYSTE~ REVENUE REFUNDING BONDS, SERIES 1978,
DATED MARCH 15, 1978 The holder hereof shall never have the
right to demand payment of this obligation out of any funds
raised or to be raised by taxation, or from any source what-
soever other than the Pledged Revenues and other sources de-
scribed in the Bond to which this coupon appertains Bond
No
xxxxxxxx xxxxxxx
City Secretary Mayor
Section 7 DEFINITIONS That as used in this Ordinance
the following terms shall have the meanings set forth below,
unless the text hereof speclflcally indicates otherwise
(a) the term "City" shall mean the City of Denton,
Denton County, Texas
(b) The term "Outstanding Bonds" shall mean the present-
ly outstanding Electric Revenue Bonds of the City described
in the preamble to this OrdInance
(c) The term "Bonds" shall mean the City of Denton Electric
System Revenu~ Refunding Bonds, Series 1978, authorized by this
Ordinance
(d) The term "Additional Bonds" shall mean the addition-
al parity revenue bonds which the City reserves the r~ght to
issue in the future, as provided in this Ordinance
(e) The terms "Electric Light and Power System" and
"System" shall mean the City's existing electric light and
power system, together with all future extensions, Improve
ments, enlargements, and additions thereto, and all replace-
ments thereof, provided that, notwithstanding the foregoing,
and to the extent now or hereafter authorized or permitted by
law, the term System shall not mean any electric llght and
power facilities of any kind (including any electric power gen-
erating and transmission facIlities) 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 C~ty which are not Bonds or Addition-
al Bonds secured by and payable from a first l~en on and Pledge
of the Pledged Revenues, as hereinafter defined, but which are
secured by and payable from any other liens on and pledges of
any revenues, sources, or payments, including, but not limited
to, (1) special contract revenues or payments received from any
other legal entity in connection with such facilities and/or (il)
a lien on and pledge of the Pledged Revenues ]un~or and subor-
dinate in all respects to the lien and pledge in favor of the
Bonds and Additional Bonds, and such revenues, sources, or pay-
ments shall not be considered as or constitute Gross Revenues
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of the System, unless and to the extent otherwase provaded an
the ordinance or ordinances authorizing the assuance of such
"Special Facilities Bonds"
(f) The terms "Gross Revenues of the Clty's Electrac
L~ght and Power System" and "Gross Revenues" shall mean all
revenues, ~ncome, and receipts of every nature derived or re-
ceived by the C~ty from the operatlon and ownership of the
System, ~nclud~ng the ~nterest ~ncome from the ~nvestment or
deposit of money ~n any Fund created by th~s Ordlnance, ex-
cepting only the Retirement Fund
(g) The terms "Net Revenues of the C~ty's Electrlc L~ght
and Power System", and "Net Revenues" shall mean all Gross
Revenues after deducting and paying the current expenses of
operation and maintenance of the System out of the Revenue
Fund, hereinafter created, including all salaries, labor,
materials, repairs, and extensions necessary to render efficient
servace, provided, however, that only such repairs and exten-
sions, as ~n the ~udgment of the C~ty Council, reasonably and
fairly exercised by the adoption of appropriate resolutions,
are necessary to keep the System an operation and render ade-
quate service to sa~d C~ty and the ~nhab~tants thereof, or such
as m~ght be necessary to meet some physical accident or con-
d~t~on which would otherwise ampaar the Bonds or Addat~onal
Bonds, shall be deducted ~n determln~ng "Net Revenues" De-
preciation shall never be considered as an expense of operataon
and maantenance Gross Revenues attrabutable to anvestment
anterest ancome from the Reserve Fund and the Contingency Fund
shall be used only to pay current expenses of operatlon and
maintenance of the System and shall never constltute any part
of Net Revenues
(h) The term "Pledged Revenues" shall mean
(1) the Net Revenues, plus
(2) any additional revenues, income, re-
ceipts, or other resources, ~nclud~ng, without
l~m~tat~on, any grants, donations, or income re-
ceived or to be received from the Un~ted States
Government, or any other public or private
source, whether pursuant to an agreement or
otherwise, whlch ~n the future may, at the
option of the C~ty, be pledged to the payment
of the Bonds or Additional Bonds
(~) The term "year" shall mean the regular f~scal year
used by the C~ty ~n connection wlth the operation of the
System, which may be any twelva consecutive months per~od
established Dy the C~ty
(]) The term "Government Obligations" shall mean d~rect
obligations of the Un.ted States of America, lnclud~ng obli-
gations the principal of and ~nterest on which are uncondltlon-
ally guaranteed by the Un.ted States of America, which may be
Un~ted States Treasury obligations such as its State and Local
Government Ser~es, which may be in book-entry form
Section 8 PLEDGE That the Bonds and any Additional
Bonds, and the ~nterest coupons appertaining thereto, are
and shall be secured by and payable from an ~rrevocable f~rst
lien on and pledge of the Pledged Revenues, and the Pledged
Revenues are further pledged ~rrevocably to the establishment
and maintenance of the Pledged Revenues Fund, the Retirement
Fund, any other special invested retlrement fund (similar to
the Retirement Fund) hereafter created for the payment of any
Additional Bonds, the Reserve Fund, the Contingency Fund, and
the Improvement Fund, all as hereinafter defined and provided
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The Bonds and any Additional Bonds are and w~ll be secured by
and payable from the Pledged Revenues, and are not secured by
or payable from a mortgage or deed of trust on any real, per-
sonal, or m~xed properties constltutlng the System
Section 9 REVENUE FUND That there Ks hereby created
and there shall be established and maintained on the books of
the C~ty, and accounted for separate and apart from all other
funds of the C~ty, a special fund to be entltled the "C~ty of
Denton Electric System Revenue Bonds Revenue Fund" (the "Rev-
enue Fund") Ail Gross Revenues shall be credited to the Rev-
enue Fund lmmed~ately upon receipt, unless otherwlse provided
· n th~s Ordinance Ail current expenses of operation and main-
tenance of the System shall be pa~d from such Gross Revenues
credited to the Revenue Fund, as a f~rst charge against same
Ail ~nvestment ~nterest ~ncome credited to the Revenue Fund
shall be expended f~rst for current operation and maintenance
expenses of the System, and ~n all events w~th~n f~ve months
from the date of any such deposit
Section 10 PLEDGED REVENUES FUND That for the purpose
of paying the principal of and ~nterest on all Bonds and any
Additional Bonds, as the same mature and come due, and prov~d-
lng a source of payment for other deposits required by th~s
Ordinance, there Ks hereby created and there shall be establish-
ed and maintained on the books of the C~ty, and accounted for
separate and apart from all other funds of the City, a separate
fund to be entltled the "C~ty of Denton Electrlc System Rev-
enue Bonds Pledged Revenues Fund" (the "Pledged Revenues Fund")
Section 11 RESERVE FUND That there Ks hereby created
and there shall be established and ma~ntalned ~n~t~ally at
The Fort Worth National Bank, Fort Worth, Texas, and there-
after, at the option of the C~ty, established and maintained at
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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 Electric System Revenue Bonds Reserve Bund" (the
"Reserve Fund") The Reserve Fund shall be used solely for
the purpose of finally retiring the last of any Bonds or Addi-
tional Bonds, or for paying principal of and ~nterest on any
Bonds or Additional Bonds when and to the extent the amounts
· n the Pledged Revenues Fund, the Retirement Fund, any other
special fund created for the payment of principal of and in-
terest on any Additional Bonds, the Improvement Fund, and the
Contingency Fund are insufficient for such purpose
Section 12 CONTINGENCY FUND That there is hereby
created and there shall be established and maintained initial-
ly at The Fort Worth National Bank, Fort Worth, Texas, and
thereafter, at the option of the City, established and main-
tained at any time at any official depository bank of the City,
and accounted for separate and apart from all other funds of
the City, a separate fund to be entitled the "Clty of Denton
Electric System Revenue Bonds Contingency Fund" (the Contin-
gency Fund") The Contingency Fund shall be used solely for the
purpose of paying the costs of unexpected or extraordinary re-
pairs or replacements of the System for which System funds are
not otherwise available, or for paying principal of and inter-
est on any Bonds or Addltlonal Bonds, when and to the extent
the amount in the Pledged Revenues Fund, the Retirement Fund,
any other special fund created for the payment of principal of
and lnterest on any Additional Bonds, and the Improvement Fund
are Insufficient for such purpose
Section 13 IMPROVEMENT FUND That there ~s 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
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the "C~ty of Denton Electrac System Revenue Bonds Improvement
Fund" (the "Improvement Fund") The Improvement Fund shall be
used solely for the purpose of paying the costs of lmprovements,
enlargements, extensions, addataons, or other capital expendi-
tures related to the System, or for payang unexpected or ex-
traordinary expenses of operataon and maintenance of the System
for which System funds are not otherwise avaalable, or for pay-
lng principal of and ~nterest on any Bonds or Add~tlonal Bonds,
when and to the extent the amount in the Pledged Revenues Fund,
the Retirement Fund, and any other special fund created for the
payment of principal of and ~nterest on any Addltaonal Bonds,
are ~nsuff~clent for such purpose
Section 14 SERIES 1978 RETIREMENT FUND That there as
hereby created and there shall be establashed and maintained
at The Fort Worth National Bank, Fort Worth, Texa~, as
trustee and escrow agent, and as a paying agent for the Bonds,
and accounted for separate and apart from all other funds of
the City, a separate trust and escrow fund to be entltled the
"C~ty of Denton Electric System Revenue Refunding Bonds Series
1978 Retirement Fund" (the "Retirement Fund") The Retirement
Fund shall be used solely for the purpose of payang the pran-
clpal of and ~nterest on the Bonds as the same mature and come
due, or on redemption prior to maturity, and shall constitute
a special s~nk~ng fund for the Bonds Concurrently w~th, or
as soon as practicable after delivery of the Bonds the Caty
shall enter into a trust and escrow agreement with The
Fort Worth National Bank (herelnafter called the "Series
1978 Retirement Trust Agreement") whlch shall provide for the
payment of the principal of and interest on the Bonds as the
same come due, and the investment an Government Obligations
of money deposited to the credit of the Retarement Fund by the
Caty The C~ty shall make deposits to the credit of the Re-
tirement Fund as hereinafter provaded in thas Ordinance If
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Additional Bonds are hereafter issued, separate special in-
vested retirement funds (similar to the Retirement Fund) may
or may not be established, at the option of the City, for the
special beneflt of such Additional Bonds at a paying agent
therefor, but the Retirement Fund is created solely for the
benefit and security of the Bonds It is provided, however,
that all Bonds and Additional Bonds shall be equally and ratably
secured by and payable from the Pledged Revenues deposited to
the credit of the Pledged Revenues Fund, without preference or
priority, and the Bonds are entitled to an exclusive claim on
the Retirement Fund only after the deposits have been made
therein as provided in this Ordinance
Section 15 DEPOSITS OF PLEDGED REVENUES, INVESTMENTS,
FUNDS SECURED (a) That Pledged Revenues shall be credited to
or deposited in the Pledged Revenues Fund, the Retirement Fund,
the Reserve Fund, the Contingency Fund, the Improvement Fund,
and other funds when and as required by this Ordinance and any
ordinance authorizing the issuance of Additional Bonds
(b) That money in any Fund established pursuant to this
Ordinance (excepting the Retirement Fund, which shall be
vested only in Government Obligations and as provided in the
Series 1978 Retirement Trust Agreement) may, at the option of
the City, be placed in time deposits or certificates of de-
poSit secured by obligations of the type hereinafter described,
or be invested in direct obligations of the United States of
America, 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 its full faith and credit or
represent its general obligations, or invested in indirect
obligations of the United States of America, Including, but
not limited to, evidences of indebtedness issued, insured, or
guaranteed by such governmental agencies as the Federal Land
Banks, Federal Intermediate Credit Banks, Banks for Cooperatives,
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Federal Home Loan Banks, Government National Mortgage Asso-
ciation, Un, ted States Postal Service, Farmers Home Adminis-
tration, Federal Home Loan Mortgage Association, Small Busi-
ness Administration, Federal Housing Association, or Par-
tl¢~pat~on Certificates ~n the Federal Assets F~nanc~ng Trust,
provided that all such deposits and ~nvestments shall be made
· n such manner that the money required to be expended from any
Fund w~ll be available at the proper time or t~mes Such ~n-
vestments shall be valued ~n terms of current market value as
of the 20th day of November of each year Ail ~nterest and
lncome derived from such deposits and ~nvestments ~mmed~ately
shall be credited to, and any losses deb~ted to, the Fund
from which the deposit or ~nvestment was made, and surpluses
· n any Fund shall or may be d~sposed of as herelnafter provld-
ed Such lnvestments shall be sold promptly when necessary
to prevent any default in connection w~th the Bonds or Addi-
tional Bonds
(c) That money ~n all Funds created by thls Ordinance,
to the extent not ~nvested, shall be secured ~n the manner
prescribed by law for securing funds of the C~ty
Section 16 DEBT SERVICE REQUIREMENTS (a) That prompt-
ly after the delivery of the Bonds the C~ty shall cause to be
credited to the Pledged Revenues Fund any accrued interest re-
ceived from the sale and delivery of the Bonds
(b) That on or before May 25, 1978, and semiannually
on or before the 25th day of each November and of each May
thereafter, the C~ty shall credit to the Pledged Revenues
Fund all available Pledged Revenues
(c) On or before June 1, 1978, and semiannually on or
before the 1st day of each December and of each June there-
after, the C~ty shall deposit to the credit of the Retirement
Fund, from Pledged Revenues ~n the Pledged Revenues Fund, such
-16-
amounts as then will cause to be on deposit to the credit of
the Retirement Fund
(~) money and/or
par or principal amount of Government Obli-
gations owned by the City,
aggregating the amount, respectlvely, on each date, respect-
lvely, shown on the following schedule
Aggregate Aggregate Aggregate
Amount Date Amount Date Amount Date
$ 443,000 6/1/78 $8,355,775 6/1/88 $8,166,475 6/1/98
1,877,814 12/1/78 9,555,775 12/1/88 8,466,475 12/1/98
1,705,072 6/1/79 8,326,375 6/1/89 8,157,700 6/1/99
2,617,072 12/1/79 9,526,375 12/1/89 8,407,700 12/1/99
2,701,072 6/1/80 8,296,375 6/1/90 8,150,387 6/1/00
3,618,072 12/1/80 9,496,375 12/1/90 8,425,387 12/1/00
3,742,072 6/1/81 8,266,075 6/1/91 8,142,343 6/1/01
4,665,072 12/1/81 8,866,075 12/1/91 8,417,343 12/1/01
4,830,072 6/1/82 8,250,775 6/1/92 8,134,300 6/1/02
5,761,072 12/1/82 8,850,775 12/1/92 8,434,300 12/1/02
5,970,072 6/1/83 8,235,325 6/1/93 8,125,525 6/1/03
6,911,072 12/1/83 8,835,325 12/1/93 8,425,525 12/1/03
7,165,072 6/1/84 8,219,725 6/1/94 8,116,750 6/1/04
8,128,072 12/1/84 8,819,725 12/1/94 8,416,750 12/1/04
8,430,072 6/1/85 8,204,125 6/1/95 8,107,975 6/1/05
9,285,072 12/1/85 8,804,125 12/1/95 8,457,975 12/1/05
8,410,407 6/1/86 8,188,375 6/1/96 8,097,737 6/1/06
9,545,407 12/1/86 8,688,375 12/1/96 8,447,737 12/1/06
8,383,735 6/1/87 8,175,250 6/1/97 8,087,500 6/1/07
9,548,735 12/1/87 8,475,250 12/1/97 6,175,500 12/1/07
Said schedule is lntended to set forth the full aggregate
amounts which are required to provide for the payment and re-
demption of the principal of and ~nterest on the Bonds as the
same mature and come due However, it is anticipated that
the ~nterest ~ncome from the investment of money in the Re-
tirement Fund ~n Government Obligations will reduce the amounts
which otherwise would be required to be deposited from the
Pledged Revenues Fund in order to cause the Retirement Fund
to contain the required aggregate amount on each required date
as shown in said schedule The Ser~es 1978 Retirement Trust
Agreement provides for the ~nvestment of money deposited to
the credit of the Retirement Fund ~n Government Obligations
and other matters relating to the payment of the Bonds
-17-
(d) On or before each June 1 and each December 1, the
City shall make such deposits from the Pledged Revenues Fund
as are required by this Ordinance, and by each ordinance au-
thorizing the issuance of any Additional Bonds for the payment
of the principal of, interest on, and redemption premiums, if
any, on such Additional Bonds, either to one or more special
invested retirement funds (similar to the Retirement Fund) for
any Additional Bonds, or directly to any paying agent for any
such Additional Bonds for which no special retirement fund is
established
(e) Ail investment interest income from the Pledged
Revenues Fund shall be retained in and remain a part of such
Fund
Section 17 RESERVE FUND REQUIREMENTS That promptly
after the delivery of the Bonds the City shall cause to be
deposited in the Reserve Fund, from proceeds from the sale and
delivery of the Bonds, the amount of $2,250,000 When and so
long as the money and investments in the Reserve Fund are not
less in market value than $2,250,000 (the "Reserve Required
Amount") no deposits need be made to the credit of the Reserve
Fund, but when and if the Reserve Fund at any time contains
less than the Reserve Required Amount, then, subject and sub~
ordinate to making the required deposits to the credit of the
Retirement Fund, and any deposits or payments hereafter requir-
ed by any ordinance authorizing the Issuance of Additional
Bonds for the retirement or payment thereof and the interest
thereon, the City shall transfer from Pledged Revenues in the
Pledged Revenues Fund, and deposit to the credit of the Reserve
Fund, semiannually on or before the 25th day of each May and
of each November, a sum equal to 1/10th of the Reserve Required
Amount, until the Reserve Fund is restored to the Reserve Re-
quired Amount The City specifically covenants that it will,
between the 20th and 25th days of each May and of each
-18 -
November of each year, deposit to the credit of the Revenue
Fund all surplus ~n the Reserve Fund over the Reserve Requir-
ed Amount, to be used w~than fave months after each such de-
posat solely for the payment of current operation and maante-
nance expenses of the System
Sectaon 18 CONTINGENCY FUND REQUIREmeNTS That prompt-
ly after the delavery of the Bonds the Caty shall cause to be
deposated to the credat of the Contangency Fund, from proceeds
from the sale and delavery of the Bonds, the sum of $250,000
No deposats are requared to be made to the credat of the Con-
tangency Fund so long as the amount of money and anvestments
therean are at least equal an market value to $250,000 (the
"Contangency Requared Amount") If and when the amount an the
Contingency Fund as reduced or depleted to less than the Con-
tangency Requared Amount, then, subject and subordana~e to
makang the required deposats to the credit of the Retarement
Fund, any other deposats or payments hereafter requared by any
ordanance author~zang the assuance of Addataonal Bonds for the
retarement or payment thereof and the anterest thereon, and t~e
Reserve Fund, such reduction or depletion shall be restored
from Pledged Revenues an the Pledged Revenues Fund whach shall
be budgeted for such purpose an the C~ty's Annual Budget for
the System for the next ensuing fascal year or years, provided
that the Caty as not required to budget more than an amount
equal to $50,000 for such purpose durang any one fascal year
The C~ty specafacally covenants that at wall, between the 20th
and 25th days of each May and of each November of each year,
deposat to the credit of the Revenue Fund all surplus an the
Contangency Fund over the Contangency Required Amount, to be
used wath~n f~ve months after each such deposit solely for the
payment of current operation and maintenance expenses of the
System
-19-
Section 19 IMPROVEMENT FUND REQUIREMENTS That during
each year, subject and subordinate to making the required de-
posits to the credit of the Retirement Fund, any other deposits
or payments hereafter required by any ordinance authorizing the
issuance of Additional Bonds for the retirement or payment
thereof and the interest thereon, the Reserve Fund, and the
Contingency Fund, the City shall be required to deposit to the
credit of the Improvement Fund from Pledged Revenues in the
Pledged Revenues 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 (1) 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 20 (b) hereof, but no such addi-
tional deposit is required Ail investment Interest income
from the Improvement Fund shall be retained in and remain a
part of such Fund
Section 20 DEFICIENCIES, EXCESS PLEDGED REVENUES
(a) That if on any occasion there shall not be sufficient
Pledged Revenues to make the required deposits into the Retire-
ment Fund, any other special fund hereafter created for the
retirement and payment of principal of and interest on any
Additional Bonds, the Reserve Fund, and the Contingency Fund,
then such deficiency shall be made up as soon as possible from
the next available Pledged Revenues, or from any other sources
available for such purpose
-20-
(b) That, subject to making the required deposlts to
the credit of the Retirement Fund, any other special fund
hereafter created for the retirement and payment of principal
of and ~nterest on any Additional Bonds, the Reserve Fund,
the Contingency Fund, and the Improvement Fund, when and as
required by th~s Ordinance, or any ordinance authorizing the
· ssuance of Additional Bonds, the excess Pledged Revenues ~n
the Pledged Revenues Fund may be used by the C~ty for any law-
ful purpose
Section 21 PAYMENT OF BONDS AND ADDITIONAL BONDS On
or before December 1, 1978, and semiannually on or before each
June l and December 1 thereafter wh~le any of the Bonds or kdd~-
t~onal Bonds are outstanding and unpaid, the C~ty shall make
available to the paying agents therefor, out of the Retirement
Fund, any other fund hereafter created for the retirement and
payment of principal of and ~nterest on any Additional Bonds,
or Pledged Revenues ~n the Pledged Revenues Fund, or out of
the Improvement Fund, the Contlngency Fund, or the Reserve Fund,
· n that order, ~f necessary, money sufficient to pay, on each of
such dates, the principal of and ~nterest on the Bonds and Addi-
tional Bonds as the same matures and comes due, or to redeem the
Bonds or Additional Bonds prior to maturity, e~ther upon mandatory
redemption or at the option of the Clty as set forth here~n The
paying agents shall destroy all pa~d Bonds and Additional Bonds,
and the coupons appertaining thereto, and furnish the City w~th
an appropriate certifzcate of cancellation or destruction
Section 22 FINAL DEPOSITS (a) That any Bond or Addi-
tional Bond shall be deemed to be pa~d, retired, and no longer
outstanding w~th~n the meaning of th~s Ordlnance when payment
of the principal of, redemption premium, if any, on such Bond
or Additional Bond, plus ~nterest thereon to the due date
thereof (whether such due date be by reason of maturity, upon
redemption, or otherwise) e~ther (~) shall have been made or
caused to made ~n accordance w~th the terms thereof (~ncludlng
-21-
the giving of any required notice of redemption), or
shall have been provided by irrevocably depositing with or
making available to a paying agent therefor, in trust and
irrevocably set aside exclusively for such payment, (1) money
sufficient to make such payment or (2) Government Obligations
which mature as to principal and interest in such amounts
and at such times as w~ll insure the availability, w~thout
relnvestment, of sufficient money to make such payment, and
all necessary and proper fees, compensation, and expenses
of such paying agent pertaining to the Bonds and Additional
Bonds with respect to which such deposit is made shall have
been paid or the payment thereof provided for to the satis-
faction of such paying agent At such time as a Bond or Addi-
tional 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 Rev-
enues, and shall be entitled to payment solely from such money
or Government Obligations
(b) That any moneys so deposited w~th a paying agent may
at the d~rectlon of the City also be Invested in Government
Obligations, maturing ~n the amounts and times as hereinbefore
set forth, and all income from all Government Obligations in
the hands of the paying agent pursuant to this Section which
is not required for the payment of the Bonds and Additional
Bonds, the redemption premium, if any, and ~nterest thereon,
w~th respect to which such money has been so deposited, shall
be turned over to the City or deposited as directed by the
City
Section 23 ADDITIONAL BONDS (a) That the C~ty shall
have the r~ght and power at any t~me and from tame to time,
and in one or more Ser~es or issues, to authorize, Issue, and
deliver additional parity revenue bonds (herein called "Addi-
tional Bonds"), in accordance with law, in any amounts, for
any lawful purpose, Including the refunding of any Bonds or
Additional Bonds Such Additional Bonds, if and when author-
· zed, ~ssued, and delivered in accordance with this Ordinance,
-22-
shall be secured by and made payable equally and ratably on
a parity w~th the Bonds, and all other outstanding Addlt~onal
Bonds, from an ~rrevocable f~rst l~en on and pledge of the
Pledged Revenues
(b) That the Pledged Revenues Fund, the Improvement
Fund, the Contingency Fund, and the Reserve Fund establ~sh-
ed by th~s Ordinance shall secure and be used to pay all Addi-
tional Bonds as well as the Bonds Each ordinance under which
Additional Bonds are ~ssued shall provide for the payment of
such Additional Bonds and the ~nterest thereon Each such or-
dinance may provide for the creation of a special ~nvested re-
tirement fund (s~m~lar to the Retirement Fund) for such Addi-
tional Bonds or for payments d~rectly to the paying agents
therefor, as provided ~n Section 16(d) of th~s Ordinance
Each such ordinance also shall provide and requlre that the
aggregate amount to be accumulated and maintained in the Re-
serve Fund shall be ~ncreased (lf and to the extent necessary)
to an amount not less than the aggregate of the following
(~) the maximum amount, as then estimated by the
sen~or f~nanc~al officer of the C~ty, which
w~ll be required by th~s Ordinance to be de-
posited to the credit of the Retirement Fund
· n any future year from Pledged Revenues ~n
the Pledged Revenues Fund, taking lnto con-
s~derat~on the then estimated amounts of Govern-
ment Obllgat~ons and ~nterest income therefrom
to be available ~n the Retirement Fund in the
future, plus
(~) the maximum amount, if any, as then estimated
by the sen~or flnanclal officer of the C~ty,
which w~ll be required by any ordinance or or-
dinances authorizing the ~ssuance of any Add~-
tlonal Bonds to be deposited to the credit of
any special ~nvested retirement fund or funds
(similar to the Retirement Fund) for any out-
stand~n~ Additional Bonds ~n any future year
-23-
from Pledged Revenues in the Pledged Revenues
Fund, taking znto conslderatzon the then estz-
mated amounts of Government Oblzgat~ons and
znterest zncome therefrom to be available zn
the future, plus
the average annual prlnczpal and znterest re-
quirements of all Addztzonal Bonds, zf any, to
be outstanding followlng the delivery of the
then proposed Addzt~onal Bonds, whzch are pay-
able dlrectly from the Pledged Revenues Fund
and for which no speczal ~nvested retzrement
fund (szmzlar to the Retirement Fund) has been
created and establzshed by an ordinance authorzz-
lng the zssuance of Add~tlonal Bonds
Such required addztzonal amount shall be so accumulated by the
deposzt zn the Reserve Fund of all or any part of said requir-
ed additional amount ~n cash ~mmedzately after the delzvery of
the then proposed Addztlonal Bonds, or, at the optzon of the
City, by the deposzt of sazd required additional amount (or
any balance of sald required addztlonal amount not deposited
zn cash as permitted above) from Pledged Revenues ~n the Pledg-
ed Revenues Fund, ~n semiannual znstallments, made on or be-
fore the 25th day of each May and of each November followzng
the delivery of the then proposed Addztzonal Bonds, of not
less than 1/10th of sa~d requzred additional amount (or 1/10th
of the balance of said requzred add~tzonal amount not deposzt-
ed in cash as permitted above)
(c) That all calculatzons of average annual prznclpal
and znterest requzrements made pursuant to thzs Section shall
be made as of and from the date of the Addltzonal Bonds then
proposed to be issued
-24-
(d) That the principal of all Additional Bonds must be
scheduled to be paid or mature on December 1 of the years in
whlch such principal is scheduled to be paid or mature, and
all interest thereon must be payable on May 1 and December 1
Section 24 FURTHAR REQUIREMENTS FOR ADDITIONAL BONDS
That Additional Bonds shall be Issued only in accordance with
this Ordinance, but notwlthstandlng any provisions of this
Ordinance to the contrary, no installment, Series, or issue
of Addltional Bonds shall be lssued or delivered unless
(a) The Mayor and the Clty Secretary of the City sign
a wrltten certificate to the effect that the City is not ~n
default as to any covenant, condition, or obligation in con-
nectlon w~th all outstanding Bonds and Additional Bonds, and
the ordinances authorizing same, and that the Retirement Fund,
any other special invested retirement fund (similar to the
Retirement Fund) hereafter created for the retirement and
payment of the principal of and interest on any Addlt~onal
Bonds, and the Reserve Fund each contains the amount then re-
quired to be thereln
(b) An independent certlfled public accountant, or in-
dependent f~rm of certified public accountants, signs a
written certificate to the effect that, during either the
next precedlng year, or any twelve consecutlve calendar month
per~od ending not more than ninety days prior to the passage
of the ordinance authorizing the issuance of the then propos-
ed Additional Bonds, the Pledged Revenues were, ~n h~s or Its
opinion
(1) at least $4,500,000, if the ordinance author-
lzlng the issuance of any Additional Bonds is
passed before September 30, 1979, whlch is the
end of the next complete fiscal year of the City,
o__r, if the ordinance authorizing the issuance of
any Additional Bonds ~s passed after September
30, 1979,
(2) at least equal to 1 4 times the aggregate of the
following araounts
(1) the amount actually deposited, as re-
quired by this Ordinance, to the credit of
the Retirement Fund from Pledged Revenues in
the Pledged Revenues Fund during such year or
twelve month period, plus
(il) the a~ount, if any, actually deposit-
ed, as required by any ordinance or ordinances
authorizing the Issuance of Additional Bonds,
to the credit of any other special invested
retirement fund or funds (similar to the Re-
tirement Fund) for any outstanding Additional
Bonds from Pledged Revenues in the Pledged
Revenues Fund during such year or twelve
month period, plus
(ill) the average annual principal and in-
terest requirements of all Additional Bonds,
if any, to be outstanding after the delivery
of the then proposed Additional Bonds, which
are payable directly from the Pledged Revenues
Fund and for which no special invested retire-
ment fund (similar to the Retirement Fund)
has been created and established by an ordi-
nance authorizing the issuance of Additional
Bonds
Section 25 GENERAL COVENANTS The City further cove-
nants and agrees that in accordance with and to the extent re-
quired or permitted by law
(a) PERFORMANCE It will faithfully perform at all
times any and all covenants, undertakings, stipulations, and
provIsions contained in this Ordinance, and each ordinance
authorizing the issuance of Additional Bonds, and in each
-26-
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 Additional Bond, on the dates and in the
places and manner prescribed 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 Pledged Revenues Fund, the
Retirement Fund, any other fund or account established for
any Additional Bonds, the Reserve Fund, and the Contingency
Fund, and any holder of the Bonds or Additional Bonds may re-
quire the City, its officials, and employees, to carry out,
respect, or enforce the covenants and obligations of th~s Or-
dinance, or any ordinance authorizing the issuance of Addi-
tional Bonds, by all legal and equitable means, including
specifically, but without limitation, the use and filing of
mandamus proceedings, in any court of competent 3urlsd~ct~on,
agalnst the City, its officials, and employees
(b) CITY'S LEGAL AUTHORITY It ls a duly created and
existing home rule city of the State of Texas, and is duly au-
thorlzed under the laws of the State of Texas to create and
Issue the Bonds, that all action on its part for the creation
and issuance of the Bonds has been duly and effectively taken,
and that the Bonds in the hands of the holders and owners there-
of are and will be valid and enforceable special obligations of
the City in accordance with their terms
(c) TITLE It has or will obtain lawful title to the
lands, buildings, structures, and facilities constituting the
System, that ~t 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 de-
mands of all persons whomsoever, that it ~s lawfully qualified
to pledge the Pledged Revenues to the payment of the Bonds and
-27 -
Additional Bonds in the manner prescribed herein, and has law-
fully exercised such rights
(d) LIENS It will from time to time and before the same
become delinquent pay and discharge all taxes, assessments, and
governmental charges, if any, which shall be lawfully imposed
upon lt, or the System, that it will pay all lawful claims for
rents, royalties, labor, materials, and supplies which if un-
paid might by law become a lien or charge thereon, the lien of
which would be prlor to or interfere with the liens hereof, so
that the priority of the liens granted hereunder shall be fully
preserved in the manner provided herein, and that it will not
create or suffer to be created any mechanic's, laborer's, ma-
terlalman's, or other lien or charge which might or could be
prlor to the l~ens hereof, or do or suffer any matter or th~ng
whereby the liens hereof might or could be ~mpalred, provided,
however, that no such tax, assessment, or charge, and that no
such claims which might 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 City
(e) OPERATION OF SYSTEM, NO FREE SERVICE Wh~le the
Bonds or any Additional Bonds are outstanding and unpaid the
City shall continuously and efficiently 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
its agencies or instrumentalities make use of the services
and facilities of the System, payment of the reasonable value
shall be made by the City out of funds from sources other than
the revenues of the System, unless made from surplus or excess
Pledged Revenues as permitted ~n Section 20(b) hereof
28-
(f) FURTHER ENCUMBRANCE Wh~le the Bonds or any Addi-
tional Bonds are outstanding and unpaid, the City shall not
additionally encumber the Pledged Revenues ~n any manner, ex-
cept as permitted ~n th~s Ordinance in connection w~th Addl-
t~onal Bonds, unless sa~d encumbrance is made ]un~or and sub-
ordinate ~n all respects to the l~ens, pledges, covenants, and
agreements of th~s Ordinance and any ordinance authorizing the
· ssuance of Additional Bonds, but the right of the C~ty to
· ssue revenue bonds payable from a subordinate l~en on the
Pledged Revenues ~s spec~f~ally recognlzed and retained
(g) SA~E OR DISPOSAL OF PROPERTY Wh~le the Bonds or
any Additional Bonds are outstanding and unpaid, the Clty
shall not sell, convey, mortgage, encumber, lease, or in any
manner transfer t~tle to, or otherwise dispose of the System,
or any s~gn~f~cant or substantial part thereof, provided that
whenever the C~ty deems it necessary to d~spose of any property,
machinery, f~xtures, or equipment, it may sell or otherwise
d~spose of such property, machinery, f~xtures, or equipment
when ~t has made arrangements to replace the same or provide
substitutes therefor, unless ~t ~s determined by resolution of
the C~ty Council that no such replacement or substltute is
necessary
(h) INSURANCE (1) The C~ty shall cause to be lnsured such
parts of the System as would usually be lnsured by corporations
operating l~ke properties, with a responsible insurance company
or companies, against risks, accidents, or casualties against
which and to the extent insurance is usually carried by corpora-
t~ons operatlng l~ke properties, ~ncludlng, to the extent
reasonably obtainable, f~re and extended coverage ~nsurance,
lnsurance against damage by floods, and use and occupancy ~n-
surance Public l~ablllty and property damage insurance shall
-29-
also be carried unless the City Attorney of the City gives a
written opinion to the effect that the City is not liable for
claims which would be protected by such insurance At any time
while any contractor engaged in construction work shall be fully
responsible therefor, the City shall not be required to carry
· nsurance on the work being constructed if the contractor is
required to carry appropriate ~nsurance All such policies
shall be open to the inspection 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 m~ke due proof of loss and shall
do all things necessary or desirable 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
daraaged or replacing the property destroyed, provided, how-
ever, that if said insurance proceeds and other funds are in-
sufficient for such purpose, then said ~nsurance proceeds
pertaining to the System shall be used promptly as follows
(1) for the redemption prior to maturity of the Bonds
and Additional Bonds, ratably in the proportion that the
outstanding principal of each Series or Issue of Bonds
or Additional Bonds bears to the total outstanding prin-
cipal of all Bonds and Additional Bonds, provided that
if on any such occasion the principal of any such Series
or issue is not sub3ect to redemption, it shall not be
regarded as outstanding in making the foregoing compu-
tation, or
(il) if none of the outstanding Bonds or Additional
Bonds is subject to redemption, then for the purchase
on the open market and retirement of sa~d Bonds and
-30-
Additional Bonds in the same proportion as prescribed
in the foregoing clause (1), to the extent practicable,
provided that the purchase price for any Bond or Addi-
tional Bond shall not exceed the redemption price of
such Bond or Additional Bond on the f~rst date upon
which it becomes subject to redemption, or
(ill) to the extent that the foregoing clauses (1)
and (11) cannot be complied with at the time, the in-
surance proceeds, or the remainder thereof, shall be de-
posited 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 the foregoing clauses (1) and/or (il)
can be compiled with, or until other funds become avail-
able which, together with the Insurance Account, will be
sufficient to make the repairs or replacements originally
required, whichever of said events occurs first
(2) The annual audit hereinafter required shall contain
a section commenting on whether or not the City has complied
with the requirements of this Section with respect to the main-
tenance of insurance, which comments shall be based upon a certi-
ficate of the City Manager or other official designated by the
City Councll, and listlng all policies carried, and whether or
not all insurance premiums upon the insurance policies to which
reference is hereinbefore made have been paid
(1) RATE COVENANT The City Council of the City will fix,
establish, maintain, and collect such rates, charges, and fees
for the use and availability of the System at all times as are
necessary to produce Gross Revenues sufficient, =ogether with
any other Pledged Revenues, (1) to pay all current operation
and maintenance expenses of the System, and (2) produce an
amount of Pledged Revenues each year at least equal to (1) 1 4
times the aggregate of the following amounts
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(1) the amount required to be deposited by th~s
Ordinance to the credit of the Retirement
Fund during such year ~fter giving effect to
the anticipated interest income from the
investment of the moneys and investments
in the Retirement Fund), plus
(2) the amount, if any, required to be deposited
by any ordlnance or ordinances authorizing
the issuance of Additional Bonds to the credit
of any other special invested retirement fund
or funds (similar to the Retirement Fund) for
any outstanding Additional Bonds from Pledged
Revenues in the Pledged Revenues Fund during
such year, plus
(3) the average annual principal and Interest re-
quirements of all then outstanding Additional
Bonds, if any, which are payable directly from
the Pledged Revenues Fund and for which no
special invested retirement fund (similar to
the Retirement Fund) has been created and es-
tablished by an ordinance authorizing the issu-
ance of Additional Bonds,
o__r Il) amounts sufficient to provide for the deposits required
by Sections 18 and 19 hereof to be made to the credit of the
Contingency Fund and the Improvement Fund, whichever of (1)
or (il) is the greater
(]) RECORDS It will keep proper books of record and
account in which full, true, and correct entries will be made
of all dealings, actlvltles, and transactions relating to the
System, the Pledged Revenues, and the Funds created pursuant
to this Ordinance, and all books, documents, and vouchers re-
lating thereto shall at all reasonable times be made avail-
able for Inspection upon request of any Bondholder
(k) AUDITS After the close of each year wh~le any of
the Bonds or any Additional Bonds are outstanding, an audit
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will be made of the books and accounts relating to the System
and the Pledged Revenues by an independent certified public
accountant or an ~ndependent f~rm of certified publlc account-
ants As soon as practicable after the close of each such year,
and when sa~d audit has been completed and made available to
the C~ty, a copy of such audit for the preceding yea~ ~hall be
mai]ed to the Municipal Advisory Council of Texas and to any
bondholders who shall so request ~n wrltlng Such annual audlt
reports shall be open to the ~nspectlon of the bondholders and
their agents and representatives at all reasonable times
(1) GOVERNMENTAL AGENCIES It w~ll comply w~th ali cf
the terms and conditions of any and all franchlses, permits,
and author~zatlons applicable to or necessary w~th respect to
the System, and which have been obtained from any governmental
agency, and the C~ty has or w~ll obtain and keep ~n full force
and effect all franchises, permits, authorization, and other
requirements applicable to or necessary w~th respect to the
acquisition, construction, equipment, operation, and mainten-
ance of the System
(m) NO COMPETITION It will not operate, or grant any
franchise or permit for the acquisition, construction, or
operation of, any local electric energy distribution facili-
ties which would be ~n competition w~th the System, and, to
the extent that it legally may, the City w~ll prohlb~t any
such competing facilities
(n) NO ARBITRAGE That the C~ty covenants to and w~th
the purchasers of the Bonds that ~t w~ll make no use of the
proceeds of the Bonds at any time throughout the term of th~s
lssue of Bonds which, ~f such use had been reasonably expect-
ed on the date of delivery of the Bonds to and payment for the
Bonds by the purchasers, would have caused the Bonds to be
arbitrage bonds w~thln the meaning of Section 103(c) of the
Internal Revenue Code of 1954, as amended, or any regulations
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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 the Bonds will
not otherwise be used directly or indirectly so as to cause
all or any part of the Bonds to be or become arbitrage bonds
within the meaning of the aforesaid Section 103(c), or any
regulations pertaining thereto
Section 26 AMENDMENT OF ORDINANCE (a) The holders of
Bonds and Additional Bonds aggregating in principal amount 51%
of the aggregate principal amount of then outstanding Bonds
and Additional Bonds shall have the right from time to time to
approve any amendment to this Ordinance which may be deemed
necessary or desirable by the City, provided, however, that
nothing herein contained shall permit or be construed to per-
mlt 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 maturity of the outstand-
ing Bonds or Additional Bonds,
(2) Reduce the rate of interest borne by any of the
outstanding Bonds or AddItional 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 on the 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 minimum percentage of the princi-
pal amount of Bonds and Additional Bonds
necessary for consent to such amendment
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(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 published in a financial news-
paper or journal published in the City of New York, New York,
once during each calendar week for at least two successive
calendar weeks Such Notice shall briefly set forth the na-
ture of the proposed amendment and shall state that a copy
thereof is on file at the principal office of the Paying Agents
for inspection by all holders of Bonds and Additional Bonds
Such publication is not required, however, if notice in writ-
lng is given to each holder of Bonds and Additional Bonds
(c) Whenever at any time not less than thirty days, and
within one year, from the date of the first publication of said
notice or other service of written notice the City shall re-
ceive 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 said
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
amsndatory ordinance in substantlallf the same form
(d) Upon the passage of any amendatory ordinance pur-
suant to the provisions of this Section, this Ordinance shall
be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties, and obligations
under this Ordinance of the City and all the holders of then
outstanding 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 amend-
ments
(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 slx months from the date of
the first publication of the notice provided for in this
Section, and shall be conclusive and binding 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 a successor in title, by filing
notice thereof with the paying agents and the City, but such
revocation shall not be effective if the holders of 51% in
aggregate principal 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 o~ such Bonds or Additional 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 de-
pository 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
assume that such ownership continues until written notice to
the contrary is served upon the City
Section 27 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 pertain-
lng to the Bonds pending their delivery and their investigation,
examination, 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 Bonds,
said Comptroller of Public Accounts (or a deputy designated in
writing to act for said Comptroller) shall manually sign the
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Comptroller's Regastrat~on Certafacate printed and endorsed
on the Bonds, and the seal of said Comptroller shall be im-
pressed, or placed an facsam~le, on each of the Bonds
Section 28 SALE OF BONDS That the Bonds are hereby
sold and shall be delivered to an underwrltang syndicate head-
ed or managed by Goldman, Sachs & Co , Dillon, Read & Co Inc ,
and Stephens, Inc , in accordance with the Underwrat~ng Agree-
ment an form and substance approved by resolutaon of
the Caty Councal of even date herewith, and at as hereby found
and determaned by the Caty Councal that the price and terms
spec~faed an such Underwriting Agreement are the most advan-
tageous reasonably obtainable by the City
Section 29 APPROVAL OF OFFICIAL STATEMENT That an
Off~caal Statement dated March 21, 1978, relating to the
Bonds, an substantially the form as submatted to thas meetang,
is hereby approved and authorazed to be dlstrabuted to pros-
pect~ve anvestors and other anterested partaes an connection
wath the underwriting and sale of the Bonds, with such changes
there~n as shall be approved by the Mayor or the City Manager
of the Caty It ~s further offaclally found, determined, ana
declared that the statements and representataons contained in
saad Off~caal Statement are true and correct in all materaal
respects, to the best knowledge and belaef of the City Councal
Section 30 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 First National
Bank an Dallas, Dallas, Texas, whlch as a place of payment
(paying agent) for the Outstandang Bonds, and such proceeds,
less accrued ~nterest on the Bonds, which shall ultamately be
deposated to the credit of the Pledged Revenues Fund, shall be
used for the purpose of refunding, d~scharg~ng and retiring
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all of the Outstanding Bonds, initially funding the Reserve
Fund and the Contingency Fund as herein required, and paylng
the costs and expenses of issuance of the bonds By a reso-
lution of the Clty Council of even date herewith the City Council
has authorlzed the executlon of a "Speclal Escrow Fund Agree-
ment'' between the Clty and Flrst National Bank in Dallas,
Dallas, Texas, whlch provides for the deposit of all of the fore-
golng proceeds with said bank, which will use a part of said
proceeds to provide for the refunding, dlscharglng and retiring
of the Outstanding Bonds The balance of said proceeds will
be Immediately transferred by the Flrst National Bank in Dallas
to the Fort Worth National Bank, Fort Worth, Texas, as trustee
under that certain Trustee Agreement between the City and The
Fort Worth National Bank, the execution of which was authorized
by resolution of the C~ty Council of even date herewith The
Trustee Agreement provides for the proper dlsposltlon of accrued
interest, the ~nvestment of part of sa~d proceeds ~n "Reserve
Fund Securltles" and "Contingency Fund Securities", as defined
therein, the payment of all costs and expenses of ~ssuance of
the Bonds, and other matters relating to the transaction
Section 31 REASONS FOR REFUNDING That it ~s specifi-
cally found and determined by the City that the underlylng
ordinances authorizing the Outstanding Bonds contaln restrlc-
tlve covenants which require the C~ty to provide excess revenues
which results in the necessity of charging and collecting
rates conslderably higher than necessary, thus ~ncreas~ng
the cost of electrzclty to the inhabitants of the C~ty and
prevent, because of excessively restrictive covenants, the
adequate and economical financing of projects which are ex-
pected to be required for the System in the near future, and
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require unnecessary, cumbersome, and onerous procedures w~th
respect to the operataon and maantenance of the System and
the ~ssuance of bonds thereunder It as also found that the
refundang of the Outstanding Bonds an the manner here~n pro-
vaded as expected to reduce s~gn~facantly the amount of Net
Revenues of the System which wall be requared for the amorta-
zataon of the Bonds, thus permattang lower electrac rates to
the customers of the System Therefore, for the reasons stat-
ed an this Sectaon 31, the Caty and the Caty Councal have found
at to be necessary and essential an the best ~nterest of the
C~ty that such refunding be accomplashed, and the Outstandang
Bonds be refunded, d~scharged, and retared thereby
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CERTIFICATE FOR
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF DENTON
ELECTRIC SYSTEM REVEN%lU REFUNDING BONDS, SER2ES 197~
THE STATE OF TEXAS
COUNTY OF DENTON
CITY OF DENTON
~ We, the undersigned officers of said City, hereby certify
as follows
1 The City Council of said City convened
REGULAR MEETING ON THE 21ST DAY OF MARCH, 1978,
at the Municipal Building (City Hall), and the roll was called
of the duly constituted officers and members of said City
Council, to-wit
Brooks Holt, City Secretaly Ellnor Hughes, Mayor
Bill Nash Dick Stewart
Joe Mitchell Mary Claude Gay
and all of said persons were present, except the following
absentees
thus constlt%ting a quorum Whereupon, among other business,
the following was transacted at said Meeting a written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF DENTON
ELECTRIC SYSTEM REVENUE REFUNDING BONDS, SERIES 1978
was duly introduced for the consideration of said City Council
and read in full It was then duly moved and seconded that
said Ordinance be passed, and, after due discussion, sa~d mo-
tion, carrying with it the passage of said Ordinance, prevail-
ed and carried by the following vote
AYESAil members of sa~d City Council
shown present above voted "Aye"
NOESNone
2 That a true, full, and correct copy of the aforesaid
Ordinance passed at the Meeting described in the above and fore-
going paragraph is attached to and follows this Certificate,
that said Ordinance has been duly recordea in said City Council's
minutes of said Meeting, that the above and foregoing paragraph
is a true, full, and correct excerpt from sa~d City Courcll's
minutes of said Meeting pertaining to the passage of said Ordi-
nance, that the persons named in the above and foregoing para-
graph are the duly chosen, qualified, and acting officers and
me~ubers of said City Council as ~ndlcated therein, that each of
the officers and members of said City Council was duly and suffi-
ciently notified officially and personally, in advance, of the
t~me, place, and purpose of the aforesaid Meeting, and that said
Ordinance would be introduced and considered for passage at said
Meeting, and each of said officers and members consented, in ad-
vance, to the holding of said Meeting for such purpose, and that
said Meeting was open to the public, and public notice of the
time, place, and purpose of said meeting was given, all as re-
quired by Vernon's Ann Clv St Article 6252-17
3 That the Mayor of said City has approved, and hereby
approves, the aforesaid Ordinance, that the Mayor and the City
Secretary of sald City have duly signed said Ordinance, and
that the Mayor and the City Secretary of sa~d City hereby de-
clare that their signing of this Certificate shall constl=ute
the slgnlng of the attached and following copy of sa~d Ordinance
for all purposes
/~i~y Secretary Mayor
(SEAL) .......................
We, the undersigned, being respectively the City Attorney
and the Bond Attorneys of the City of Denton, Texas, hereby cer-
tify that we prepared and approved as to legal~ty the attached
and following Ordinance prior to ~_~_~assage as aforesaid
- Cit~ Attorney
Bond Attorneys