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1760 ORD CERTIFICATE FOR ORDINANCE AUTHORIZING BONDSCERTIFICATE FOR ORDINANCE AUTHORIZING BONDS THE STATE OF TEXAS COUNTY OF LAMAR CITY OF PARIS We, the undersigned officers of said City, hereby certify as follows: l. The City Council of said City convened in Regular Meeting on the 13th day of December, 1965, at the City Hall, and the roll was called of the duly constituted officers and members of said City Council, to-wit: V. E. Stewart, Mayor, H. C. Greene, City Clerk, W. D. King, E. L. Anderson, J. R. Moore, E. W. Booth, Richard Nafe, Dr. J. M. Brunette, and all of said persons were present, except the following ab- sentees : nl'dgE thus constituting a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written ORDINANCE AUTHORIZING ISSUANCE OF BONDS 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, said motion, carrying with it the passage of said Ordinance, prevailed and carried by the following vote: AYES: All members of said City 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 fore- going paragraph is attached to and follows this Certificate; 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 Or- dinance; that the persons named in the above and foregoing para- graph are the duly chosen, qualified, and acting officers and members of said City Council as indicated 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 each of said officers and members consented, in advance, to the holding of said Meeting for such purpose. 3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance; that the Mayor and the City Clerk of said City have duly signed said Ordinance; and that the Maybr and the City Clerk of said City hereby declare that their signing of this Certificate shall constitute the sioing of the attached and following copy of said Ordinance for a11 rpose SI ED ANI3 ~'ALED the 13th day of December, 1965 ~ ,,f~ Gf Mayor City Clerk. (SEAL) ORDINANCE AUTHORIZING THE ISSUANCE OF BONDS THE STATE OF TEXAS . COLTNTY OF LAMAR . CITY OF PARIS . DESCRIPTIVE CAPTION ORDINANCE N0. 1760 BY THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AUTHORIZING THE ISSUANCE AND DELIVERY OF: CITY OF PARIS WATERWORKS AND SEWER SYSTEM JUNIOR LIEN REVENUE BONDS, SERIES 1966, $2,300,000.00; PLEDGING THE REVENUES OF THE CITY'S WATERWORKS AND SEWER SYSTEM TO THE PAYMENT OF THE PRINCIPAL AND INTEREST OF SAID BONDS; AND ORDAINING OTHER MATTERS PERTAINING THERETO. WHEREAS, the following bonds of trle City of Paris, Texas, are presently outstanding: Waterworks and Sewer Improvement and Extension Revenue Bonds, Series 1952, in the aggregate amount of $550,000, for the purpose of improving and extend- ing the City`s Waterworks and Sewer System, now outstanding in the principal amount of $235,000; f Waterworks and Sewer Revenue Reiunding ' Bonds, Series 1957, in the aggregate amount of $1,000,000, for the purpose of refunding, cancelling and in lieu of a like amount of br~nded indebtedness of the City's Waterworks and Sewer System, now outstanding in the principal amount ' of $888,000; Waterworks and Sewer Revenue Refunding Bonds, Series 1957-A, in the aggregate amount of $1,000,000, for the purpose of refunding, cancelling and in lieu of , a like amount of bonded indebtedness of the City's Waterworks and Sewer System, now outstanding in the principal amount of -$868,000; ; Waterworks and Sewer System Revenue Bond, Series 1962, in the aggregate amount of $500,000, for the purpose of improving and extending the City's Waterworks System, now outstanding in the principal amount $490,000; and of WHEREAS, of the $2,240,000 of bonds authorized on August 14, 1956 there remains $200,000 unissued Eonds, and of the $2,500,000 of bonds authorized on September 21, 1965 there will remain $200,000 of unissued Sewer System Bonds; and WHEREAS, the bonds hereinafter authorized were duly and favorably voted, as required by the Constitution and laws of the State of Texas, at an election held in said City on the 21st day of September, 1965; and ! WHEREAS, it is deemed essential that the bonds herein-I ~ after authorized be issued payable from a lien on the net ~ i revenues of the City's Waterworks and Sewer System junior and ~ r subordinate to the lien securing the Series 1952, Series 1957, ~ i Series 1957-R, and Series 1962 first lien bonds hereinabove ~ ~ ursuant to Vernon's Articles 1111 through 1118. ~ described, p BE IT ORDAINED BY THE CITY CCUNCIL OF THE CITY OF PARIS: ' l, AUTHORIZATION OF BONDS. That to provide funds ior the purpose of improving and extending the City's Water- works System, pursuant to the Constitution and Statutes of the State of Texas, there sha11 be issued "City of Paris Waterworks and Sewer System Junior Lien Revenue Bonds, Series 1966," aggregating $2,300,000. 2, DATE DENOMINATION PLACE OF PAYMENT. That said bonds sha11 be dated January 10,1966, shall be of the denomina- tion of $5,000 each; shall be numbered consecutively from 1 through 460, and the principal thereof and interest thereon sha ~ e payable ~ n lawful money oi he United Si.ates of i i i i i America, at ' "the First N ~ ational Bank in Dal las, Dallas, Texas, without ~ i ;exchange or collection charges to the owner or hol ~ der thereof. I , 3. MATURITIES. Said Bonds shall mature i serially on i IJuly 10 in each of the years, and in the amounts, respectively, i i ;~as set fort h in the following schedule: ' ~ , ;;YEARS AMOUNTS YEARS AMOUNTS 3i 1971 $ 25,000 1982 $ 65,000 ! ~e1972 25,000 1983 ~ 705000 ; 111973 25,000 1984 70,000 ~ '11974 25,000 1985 753000 ;!1975 30,000 1986 190,000 ; a+1976 30,000 1987 2005000 ; , 1977 35,000 1988 2753000 ; 1978 353000 1989 285,000 ; + 1979 60,000 1990 295,000 ~ 1980 60,000 1991 3001,000 ( 1981 655000 1992 60,000 { i ; 4. OPTIONo The City shall have the right and option ~to redeem such bonds prior to their scheduled maturities, in 'whole, or in part, at any time, upon thirty days notice, for 'the principal amount thereof plus accrued interest to the date fixed for redemption. At least thirty days before the date fixed for any such redemption, the City shall cause a written notice of such redemption to be published at least once in a financial publica- tion published in the City oi New York, New York. By the ~ date fixed for any such redemption, due provision shall be ~ made with the paying agent for the payment of the principal amount of the bonds to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If the written notice of redemption is puUlished, and if due provision for payment is made, all as provided above, the borzds, which are to be so redeemed, thereby automatically shall be redeemed prior to maturity, and they shall not bear interest af:ter the date fixed for redemption, and shall nat be regarded as being outstanding i; except for the purpose of receiving funds so provided for such payment. Provided, if the bonds called for prior redemption are owned by the Texas Water Development Board, thirty days' notice in writing of such redemption shall be given to said Board in lieu of such publication. 5. INTEREST. That said bonds shall bear interest at the following rates: all bonds scheduled to mature during the years 1971 through 1977.------------ 3.70% per annum; ~ all bonds scheduled to mature during the years 1978 through 1992 3.65% per annum; evidenced by coupons payable July 10, 1966, and semi-annually thereafter on January 10 and July 10 of each year. 6. EXECUTION OF BONDS AND COUPONS. That each of said bonds and interest coupons shall be signed by the imprintec or lithographed facsimile signature of the Mayor of said City and countersigned by the imprinted or lithographed facsimile signature of the City Clerk of said City, and the official ~ ; seal of said City shall be impressed, or printed, or lithographed ; on each of said bonds. ' i 7. BOND FORM. The form of said bonds sha11 be ~ substantially as follows: N0~ $ 5,000 UNITED STATES OF AMERICA I~ STATE OF 'FEXAS , COUNTY OF LAMAR CITY OF PARIS , WATERWORKS AND SEWER SYSTEM JUNIOR LIEN i. REVENUE BOND SERIES 1966 On July 10, 19 , the City of Paris, in the County of Lamar, State.of Texas, promises to pay to bearer the principal amount of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the rate of % per annum, evidenced by interest coupons payable July 10, 1966, and semi-annually thereafter on each January 10 and July 10 while this bond is outsLanding. The principal of thi; bond and the interest coupons attached hereto shall be payable to bearer, in lawful money of the United States of America, without excnange or collection charges to the bearer, upon pre- sentation and surrender of this bond or proper interest coupon, at the First National Bank in Dallas, Dallas, Texas, which place shall be the paying agent for this Series of bonds. This bond is one of a Series of coupon bonds dated January 10, 1966; issued in the principal amount of $2,300,000 for the purpose of improving and extending the City`s Waterworks System. The City shall have the riglit and option to redeem such bonds prior to their scheduled maturities, in whole, or in part, at any time, upon thirty days notice, for the principal amount thereof plus accrued interest to the date fixed for redemption. At least thirty days before the date fixed for any such redemption the City shall cause a written notice of such i redemption to be published at least once in a financial publica- tion published in the City of New York, New York. By the date fixed for any such redemption, due provision shall be made with the paying agent for the payment of the principal amount of the bonds to be redeemed, plus accrued interest thereon to the date fixed for redemption. If the 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 maturity, and they shall not bear interest after the date fixed for redemption, and shall not be regarded as bein,g outstanding except for the purpose of receiving the funds so provided for such payment. Provided, if the bonds called for prior redemption are owned by the Texas Water Development Board, thirty days' notice in writing of such redemption shall be given to said Board in lieu of such publication. It is hereby certified and recited that the issuance of this bond and the series of which it is a part, is duly authorized by law and by a majority of the resident, qualified electors owning taxable property in said City, and who have duly rendered the same for taxation, voting at an electian held for that purpose within said City; that all acts, conditions and things required to exist precedent to and in the issuance of this bond to render the same lawful and valid have been properly done, have happened and been performed in regular a nd due time, form and manner as required by the Constitution and laws of the State of Texas and Charter of said Clty, and the ordinance hereinabove mentioned and that this series of revenue bonds does not exceed any constitutional or statutory limitations; and that provision has been made for the payment of the principal of and interest on this bond and the series of which it is a part by irrevocably pledging to the payment thereof the net revenues of the City's Waterworks and Sewer System. Such . pledge, however, is junior and subordinate to the pledge made for the security of the outstanding City of Paris Waterworks and Sewer Improvement and Extension Revenue Bonds, Series 1952; City of Paris Waterworks and Sewer Revenue Refunding Bonds, Series 1957; City of Paris Waterworks and Sewer Revenue Refundin, Bonds, Series 1957-A; and City of Paris Waterworks and Sewer System Revenue Bonds, Series 1962, or any bonds issued to refund them, and to the provisions of the ordinance authorizing the respective Series oi band,s with reference to the accumulation and maintenance of the Revenue Fund and Reserve Fund for said bonds. The City reserves the right to issue additional first lien revenue bonds and additional junior lien revenue bonds for waterworks and sewer improvements and extensions, under the conditions stated in the Ordinance authorizing this series of bonds, said bonds being payable from the Net Revenues of the System. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. In witness whereof, this bond and the interest coupon; attached hereto have been signed by the imprinted or lithographec facsimile signature of the Mayor of said City and countersigned by the imprinted or lithographed facsimile signature of the City Clerk of said City, and the officia seal of said City has t been duly impressed, or printed, or l~ttho raphed n this bond. City Clerk, City of Paris 8. FORM OF COUPON. substantialJ.y as follows: N0. $ i I On , 19 , the City of Paris, in the County of Lamar, State of Texas,, promises to pay to bearer, unless due provision has been made for the redemption prior to maturity of the bond to which this interest coupon is attached, the amount of Dollars, in lawful money of the United States of America, without exchange or collection charges to the bearer, upon presentation and surrenclea of this interest coupon, at the First National Bank in Dallas, Dallas, Texas, said amount being interest due that day on ~ the bond bearin the number hereinafter desi nated of tha ~ ~ g g ' t ~ issue of City of Paris Waterworks and Sewer System Junior Lien a P Revenue Bonds, Series 1966, dated January 10,1966o 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-. ~ i Bond No, Mayor, City of Paris The form of coupon shall be ~z City C1erk ` .ayor 9, COMPTROLLER'S CERTIFICATE. The form of Comp- troller's certificate, which shall be printed on the back of Pj each bond, shall be substantially as follows: sE~ COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER N0. i i~ I hereby certify that this bond has been examined, certified as to validity, and approved by the Attorney General of the State of Texas; and that this bond has been registered i; ii by the Comptroller of Public Accounts of the State of Texas. 'i Witness my signature and seal this Comptro ller of Public Accounts of the j State of Texas ~ 10. DEFINITIONS. (a) The term "System" as used ~ ~ y in this Ordinance, means the Cit 's entire Waterworks and Sewer System, together with all future improvements, extensions, ~ enlargements and additions thereto, and replacements thereof. , ~ (b) The term "Net Revenues," as used in this ~ Ordinance, means all gross revenues of the System, after ; , deducting the expenses of operation and maintenance of the ; I j System, including; all salaries, labor, materials, repairs and ~ ~ extensions necessary to render efficient service, provided, y ; however, that only such repairs and extensions, as in the a !4 i judgment of the City Council of said City, reasonably and ` I, I~ fairly exercised by the passage of appropriate ordinances, are ~ c; necessary to keep the System in operation and render adequate I service to said City and the inhabitants thereof, or suc as ome h sical accident or condition i' might be necessary to meet s p which would otherwise impair the Bonds and any Additional Bonds, sha11 be deducted in determining "Net Revenues." Depreciation, Si 1'! ii li and payments into and out of the Junior Lien Interest and Sinking Fund and Junior Lien Reserve Fund, hereinafter created, shall never be considered as expenses of operation and maintenance. (c) The term "Bonds" means the Bonds authorized to be issued and delivered by this Ordinance. (d) The term "Additional Bonds" means Bonds which ; ~ ; the City reserves the right to issue and deliver in the future i as provided in Sections 20 and 21 of this Ordinance. i (e) The term "Authorized But Unissued Bonds means the $200,000 of bonds voted at an election held on August 14,1956 which have not been issued, and the $200,000 of bonds voted at the September 21, 1965 election which will remain unissued after the Bonds are outstanding. (f) The term "First L'ien Bonds" means the City of Paris Waterworks and Sewer Improvernent and Extension Revenue Bonds, Series 1952; City of Paris Waterworks and Sewer Revenue Refunding Bonds, Series 1957; City of Paris Waterworks and Sewer Revenue Refunding Bonds, Series 1957-A; and City of Paris Water- works and Sewer System Revenue Bonds, Series 1962, or bonds issued to refund the same. 11. PLEDGE. Sufficient Net Revenues of the System in excess of the amounts required to accumulate and maintain the Fund for the payment of the First Lien Bonds and the Reserve Fund for that purpose, as required by the ordinances authorizing the First Lien Bonds are hereby irrevocably pledged for the pay- ment of the Bonds, and the interest thereon, and it is hereby ordained that the Bonds, and the interest thereon shall consti- tute a lien upon said Net Revenues junior and subordinate to that of the First Lien Bonds. 12. R.ATES. The City covenants and agrees with the y holders of the Bonds and all Additional Bonds, as follows: (a) That it will at all times charge and collect for ! services rendered by the System rates sufficient to pay all ; operating, maintenance, depreciation, replacement and better- ment expenses, and other costs deductible in determining "Net ~ Revenues" as herein defined and to produce each month Net Revenues in an amount not less than the amounts required to accumulate and maintain the Funds as established and required by the ordinances authorizing the First Lien Bonds, and the funds as hereinafter provided; (b) If the System should become legally liable for any other indebtedness, the City shall fix, maintain, charge and collect additional rates for services rendered by the System sufficient to establish and maintain funds for the payment thereoj 13. FUNDS. Al1 revenues-of the System shall be kept separate and apart from all other funds of the City, and the following special Funds are hereby created and shall be estab- lished and maintained so long as any of the Bonds or Additional ; i Junior Lien Bonds, or interest thereon, are outstanding and unpaid: (a) City of Paris Waterworks and Sewer System Junior Lien Revenue Bonds Interest and Sinking Fund, hereinafter called the "Junior Lien Interest and Sinking Fund." This fund shall be maintained in the First National Bank in Dallas, Dallas, Texas. .(b) City of Paris Waterworks and Sewer System Junior Lien Revenue Bonds Reserve Fund, hereinafter called the "Junior Lien Reserve Fund." This fund shall be maintained in the ' First National Bank in Dallas, Dallas, Texas. ; 14. JUNIOR LIEN INTEREST AND SINKING FUND. There shall be deposited into the Junior Lien Interest and Sinking Fund the following: i (a) such amounts, in equal monthly installments, commencing on or before the lOth day of each month hereafter, as will be sufficient to pay the interest scheduled to come due on the Bonds on the next interest payment date; and (b) such amounts, in equal monthly installments, made on or before the lOth day of each month, commer.cing July 10; 1970, as will be sufficient to pay the next maturing principal of the Bonds. 15. JUNIOR LIEN RESERVE FUND. On the lOth day of each month hereafter, there shall be deposited into the Junior Lien Reserve Fund an amount equal to 1/60th of the average annual interest and principal requirements of the Bonds. This Junior Lien Reserve Fund shall be used to pay the principal of or interest on the Bonds falling due at any time when there is not sufficient money available in the Interest and Sinking Fund created for their payment. No payments need be made into the Junior Lien Reserve Fund after there shall have been accumulated in said Fund the amount of one year's average annual requirements for the payment of the principal of and interest on the Bonds, except that whenever said Junior Lien Reserve Fund is reduced below that amount, payments into said Fund shall be resumed and continued until such time as the Fund has been restored to contain the amount of one year's average annual requirements for the payment of the principal of and interest on the Bonds. Money in the Reserve Fund may at the option of the City be invested in direct obligations of the United States of America having maturities not in excess of ten years from the date of the making of such investment. Any obligation in which money is so invested shall be kept in escrow in the First National Bank in Dallas, Dallas, Texas in escrow and in trust for the benefit of the holders of the Bonds and all Additional Bonds, and shall be promptly sold and the proceed; of sale applied to the making of all payments required to be made from the Junior Lien Reserve Fund. 16. DEPOSITS TO JUNIOR LIEN FUNDS SUBORDINATE. The deposits to be made into the Junior Lien Interest and Sinking Fund and the Junior Lien Reserve Fund as required by the two preceding sections shall be made by transfers of money from the Revenue Fund created by the ordinances authorizing the issuance of the First Lien Bonds. It is provided, however, that such transfers shall be made only after the making of the deposits into the Funds as established and required by the ordinances authorizing the issuance of the First Lien Bonds. It is further provided that if, at any time, money in the Interest and Sink- ing Fund and Reserve Fund created for the payment of the First Lien Bonds is insufficient to pay principal or interest coming due on any of the First Lien Bonds an amount of money sufficient for the purpose shall be transferred from the Junior Lien ReservE Fund created by this Ordinance to the Interest and Sinking Fund of the First Lien Bonds. 17. DEFICIENCIES IN FUNDS. If in any month the City shall fail to deposit into any Fund created by this Ordinance the tull amounts required, amounts equivalent to such deficien- cies shall be set apart and paid into said Funds from the first, available and unallocated Net Revenues of the System for the j I following month or months, and such payments shall be in additio~ i to the amounts otherwise required to be paid into said Funds ~ b during such month or months. To the extent necessary, the Cityi , ~ shall increase the rates and charges for services of the System to make up for any such deficiencies. 18. EXCESS REVENUES. The Net Revenues of the System, in excess of those necessary to establish and maintain the Funds ~ as req`uired in this Ordinance, or as hereafter may be required in connection with the issuance of Additional Bonds may be used for any lawful purpose. 19. SECURITY FOR FUNDS. Al1 Funds created by this Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for the security of public funds, and such Funds shall be used only for the purposes and in the manner permitted or required by this Ordinance. 20. ADDITIONAL JUNIOR LIEN BONDS. The City reserves the right to issue additional parity revenue bonds, to be known as Additional Juniar Lien Bonds, which when issued and delivered shall be payable from and secured by a lien on and pledge of the Net Revenues of the System, in the same manner and to the same exte-at as the Bonds or any bonds issued to refund the Bonds; and the Bonds and all Additional Junior Lien Bonds shall in a11 respects be on a parity and of equal dignity. The Additional Junior Lien Bonds may be issued in one or more installments or series, provided, however, that no installment or series of Additional Junior Lien Bonds shall be issued unless: (a) A certificate is executed by the Mayor and City Clerk of said City to the effect that no default exists in connection with any of the covenants or requirements of the ordinance or ordinances authorizing the issuance of all then outstanding Bonds and Additional Junior Lien Bonds; (b) A certificate is executed by the Mayor and City Clerk of said City to the effect that the Junior Lien Interest and Sinking Fund and the Junior Lien Reserve Fund each contains the amount then required to be on deposit therein; (c) A certificate is executed by a Certified Public Accountant to the effect that, in his opinion, the Net Earnings i ; 1 of the System either for the last complete fiscal year of the ~ i City, or for any twelve consecutive calendar month period ending j ~ not more than ninety days prior to the passage of the ordinance ~ i > authorizing the issuance of such Additional Junior Lien Bonds, ' ( were at least 1-1/2 times the average annual principal and ~ I interest requirements for all then outstanding Bonds, Additional ~ d Bonds, First Lien Bonds, and for the installment or series of f i Additional Junior Lien Bonds then proposed to be issued. The ~ i term "Net Earnings" as used in this sub-section (c) shall mean ~ ~ the gross revenues after deducting the expenses of operation ~ i and maintenance but not deducting depreciation, bond interest ~ or expenditures which under standard accounting practice should . ~ be charged to capital expenditures; ~ (d) The Additional Junior Lien Bonds are scheduled to mature on July 10 in each of the years in which they are scheduled to mature; (e) The ordinance authorizing the issuance of such I installment or series of Additional Junior Lien Bonds provides that the aggregate amount to be accumulated and maintained in the appropriate Reserve Fund shall be increased by an additional amount not less than the average annual principal and interest requirements for said Additional Junior Lien Bonds, and that such additional amount shall be so accumulated within sixty-one ~ months from the date of the Additional Junior Lien Bonds, by the deposit in said Reserve Fund of the necessary amount in equal monthly installments; provided, however, that the aggre- gate amount to be accumulated in said Reserve Fund shall never be required to exceed the average annual principal and interest requirements for all then outstanding Bonds and Additional Junior Lien Bonds; (f) Al1 calculations of average annual principal and interest requirements made pursuant to this Section are to be made as of and from the date of the Additional Junior Lien Bonds then proposed to be issued. 21. ADDITIONAL FIRST LIEN BONDS. (a) The City reserves the right to issue the Auth- orized but Unissued Bonds, in one or more series or issues, which when issued and delivered, shall be payable from and secured by a lien on and pledge of the Net Revenues of the System in the same manner and to the same extent as the First Lien Bonds, in accordance with the requirements for the issuance of Additional Bonds contained in the Ordinance dated December 13, 1951, which authorized the City of Paris Waterworks and Sewer Improvement and Extension Revenue Bonds, Series 1952; and such bonds and the First Lien Bonds shall in all respects be on a parity and of equal dignity. Provided, so long as the Texas Water Development Board is the holder of any of the Bonds, the City shall not issue and deliver any of the Authorized but Unissued Bonds until the maturity schedule of the series or issue of the Authorized but Unissued Bonds then proposed to be issued has been approved by the Texas Water Development Board. (b) The City reserves the right to issue additional parity revenue bonds to be voted hereafter, which when issued and ddlivered shall be payable from and secured by a lien on and pledge of the Net Revenues of the System in the same manner and to the same extent as the First Lien Bonds; and such bonds and the First Lien Bonds shall in all respects be on a parity and of equal dignity. Provided, no bonds permitted by this sub- section to be issued shall be issued until the following conditions have been met: (1) The City has complied with the require- ments for the issuance of Additional Bonds contained in the Ordinance dated December 13, 1951, authorizing the City of Paris Waterworks and Sewer Improvement and Extension Revenue Bonds, Series 1952; and (2) The Nlayor and City Clerk have executed a certificate that the City is not in default of any covenant contained in any Ordinance authorizing any outstanding bonds of the City payable from the Net Revenues; and (3) A Certified Public Accountant executes a certificate that the Net Revenues of the System for the last completed fiscal year, or for any twelve month period ending not more than ninety days before the date of the ordinance authorizing such bonds permitted by this sub-section, were equal to at least 1-1/2 times the average annual principal and interest requirements for all then outstanding bonds of the City which are payable from the Net Revenues and the series of bonds permitted by this sub-section then proposed to be issued. (4) The issuance has been approved by the Texas Water Development Board. Provided, this requirement shall not apply unless said Board is the holder of ; 3 f { 1 I all or a part of the Bonds outstanding when such J 1 ;F additiona1 bonds are proposed to be issued. ~ ~ 22, MAINTENANCE AND OPERATION• INSURANCE. While I ~I any bonds payable from-the Net Revenues of the ystem a i t ng the City covenants and agrees to maintain the System i outstandi I` # i in good condition and operate the same in an efficient manner 1 f~ E and at reasonable expense, and to maintain insurance on the ~ ,i ; System, for the benefit of the holder or holders of the First I i Lien Bonds, the Bonds and the Additional Bonds of a kind and ~I in an amount which usually would be carried by private companies , engaged in a similar type of business. Nothing in this Ordinance shall be construed as requiring the City to expend any funds which are derived from sources other than the System, ~ but nothing herein shall be construed as preventing the City from doing so. 23, ACCOUNTS AND FISCAL YEAR. The City shall keep proper books of records and accounts, separate from all other records and accounts of the City, in which complete and correct 4 i i ! entries shall be made of all transactions relating to the Systerr, !and shall have said books audited once each fiscal year by a ~ Certified Public Accountant. The City agrees to operate the ; System and keep its books of records and accounts pertaining ! , thereto on the basis of its current fiscal year; provided, however, that the City Council may change such fiscal year by 3 i~ ordinance duly passed, if such change is deemed necessary by the City Council. ;i ji 24, ACCOUNTING REPORTS. Within ninety days a ter ~k ~ the close of each fiscal year hereafter, the City will furnis , without cost, to the Texas Water Development Board, so long as i~ ~i ;i i~ ; said Board is the owner of any of the Bonds, and The Municipa cil of Texas, a signed or certified copy of a Advisory Coun i~ report by a Certified Public Accountant, covering the next ij i; preceding fiscal year, showing the following information: (a) A detailed statement of all gross revenues of the System and al1 expenses of operation and main- tenance thereof for said fiscal year; (b) Balance sheet as of the end of said fiscal year; (c) Accountant's comment regarding the manner in which the City has complied with the requirements of this Ordinance and his recommendations, if any, for any changes or improvements in the operation of the System; (d) List of insurance policies in force at the end of said fiscal year, showing, as to each policy, the name of the insurer, and the expiration date; (e) The number of properties connected with the Water and Sewer System, and the gross revenues from said system for said fiscal year. 25, SPECIAL COVENANTS. The City further covenants as follows: (a) That other than for the payment of the Bonds here• in authorized and the First Lien Bonds, the revenues and income of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. , (b) That while any of the Bonds or Additional Bonds are outstanding, the City will not sell or encumber the System or any substantial part thereof, and that, with the exception of the Additional Bonds expressly permitted by this Ordinance to be issued, it will not encumber the revenues and income of the System, unless such encumbrance is made junior and subordinate in all respects to the Bonds and Additional Bonds and all liens and pledges in connection therewith. (c) That no free service of the System shall be allowed, and should the City or any of its agencies or instru- mentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of funds from sources other than the revenues and income of the System. (d) That to the ex.tent it legally may, the City further covenants and agrees that while any of the Bonds, the First Lien Bonds or Additional Bonds are outstanding, no franchis shall be granted for the installation or operation of any ~I ~ competing water and sewer system; that the City will prohibit ; ~ i' , the operation of any such competing system; and the operation ; of any such competing system is hereby prohibited. (e) The City further covenants that so long as the Texas Water Development Board is the holder of any of the Bonds, it will not refund less than all of the borids payable from net revenues of the System, unless such refunding is approved by the Texas Water Development Board. 26. BOND PROCEEDS. Upon delivery of and payment for the Bonds, the amount received as accrued interest shall be deposited in the Junior Lien Interest and Sinking Fund hereto- fore created and the remainder of the proceeds shall be placed in the Construction Fund hereinafter established. 27. CONSTRUCTION FUND. There is hereby created and established in the City's official depository bank a fund to be called "City of Paris Waterworks Construction Fund." The Construction Fund shall be subject to and charged with a lien in favor of the holders of the Bonds until the money in said fund is paid out or transferred as herein provided. The deposi- tory bank shall secure the Construction Fund in its possession by pledging obligations of, or obligations unconditionally guaranteed by, the United States of America, such obligations at all times to be at least equal in value to the amount in the Construction Fund. 28. INVESTMENT OF CONSTRUCTION FUND. Money in the j Construction Fund shall be kept invested in the same manner as is herein provided for the investment of the Junior Lien Reserve Fund; provided, that any obligations in which money in the Construction Fund is so invested must mature or be subject to redemption at the option of the holder or dates which coincide as nearly as practicable to the dates when money will be needed to pay construction costs as such dates are estimated by a Consulting Engineer. Al1 interest and profits from such invest- ments shall be deposited into the Construction Fund. 29. DISBURSEMENTS FROM CONSTRUCTION FUNDo (a) In the making of construction contracts and the disbursement of money in the Construction Fund the City shall comply with Section 18 of Article 8280-9, of Vernon's Annotated Texas Statutes, as amended. (b) Money in the Construction Fund shall be subject to withdrawal by the City ior payment of costs incurred and to be incurred in the construction of the System, in accordance with plans and specificatioris therefor prepared by the Consult- ing Engineers. Such withdrawals shall be made only upon checks and vouchers stating the purpose of the payment signed by the Mayor and City Clerk, and (except for expenses in connection with the issuance of the Bonds) countersigned by the Consulting Engineers, or such checks and vouchers may be signed by such t. ;;officers of the City and representative oi the Consulting Engi- i; ,~neers, as may from time to t:ime be designated by the City and Consulting Engineers by appropriate means and duly certified to the depository, (c) A final accounting of the total cost of the System upon its completion shall be made by the City to the Texas Water Development Board. In the event the total cost of the System is less than the cost estimated by the Engineers, the City shall, if required by Texas Water Development Board, place such excess in the Junior Lien Reserve Fund or return to said Board the amount of such excess, to the nearest multiple of $5,000, and in return therefor said Board will cancel and ~ deliver to the City a like principal amount of the Bonds of the City held by said Board. The fact of such completion shall be evidenced to the Texas Water Development Board by a certificate of the Consulting Engineers to the effect and by a resolution of the City Council of the City approving and accepting such facilities as thus constructed. The Texas Water Development Board may also require proof of completion from the Texas Water Commission. 30. BONDS ARE SPECIAL OBLIGATIONS. The Bonds and y' Additional Bonds shall be special obligations of the City payable ; solely from the pledged Net Revenues, and the holder or holders i' thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. 31. APPROVAL ANU REGISTRATION OF BONDS. That the n" Mayor of said City is hereby authorized to have control of said `.Bonds and all necessary records and proceedings pertaining to said Bonds pen,ding their del:ivery 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 said Bonds, said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on each Bond, and the seal of said Comp- 'troller shall be impressed, or printed, or lithographed on each of said Bonds. 32. SALE OF BOND'So That Texas Water Development Board has submitted a bid to purchase said bonds for cash for the principal amount or par value thereof and accrued interest thereon to the date of delivery, plus a premium of such amount that the Bonds wi11 yield to said purchaser an actual interest !rate of 3.65158%. It is hereby officially found, determined ;and declared that said bidder is the highest bidder for said ;bonds; and said bonds are he:reby sold to said highest bidder, and shall be delivered as soon as practicable in accordance with the terms of sale. Passed and adopted this 13th day/,,df December, A. D. , 1965. , / Mayor `!ATTEST• / ~ IdK i' City Clerk ' APPROVED AS TQ\FQ_ M: a 1 G l Z2 ' City Attorney. f