ORD 1999-11 - C.O. For Wheel Tractor Dallas Mack Sales, Inc. 04-13-1999ORDINANCE NO. 99-11
AN ORDINANCE APPROVING CLAIM AND DELIVERY OF
CERTIFICATES OF OBLIGATION FOR A NEW AND UNUSED 1999 6-
WHEEL TRACTOR COMPLETE WITH MANUAL FIFTH WHEEL AND
WET KIT; AND CONTAINING OTHER PROVISIONS RELATED HERETO.
WHEREAS the City Council of the City of Huntsville, Texas, by Ordinance No. 98-28, found
that it was advisable for the City to purchase a 1998 or newer 6-wheel tractor
complete with manual fifth wheel and wet kit and that Certificates of Obligation be
issued by the City for all or any part of the cost of same; and
WHEREAS the notice for the action to issue Certificates of Obligation was published at the times
and in the manner required by law; and
WHEREAS the City awarded a contract to Dallas Mack Sales, Inc., in the amount of $65,923.40
as the lowest and best bid for the purchase of the 1999 6-wheel tractor complete with
manual fifth wheel and wet kit; and
WHEREAS the City Council wishes to authorize payment thereof and delivery of a Certificate
of Obligation.
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS, that:
SECTION 1: There is now due and owing to Dallas Mack Sales, Inc., the sum of $65,923.40. The
certificate of obligation will be in the amount of $62,973.40. The remaining $2,950
will be funded with cash.
SECTION 2: The Certificate of Obligation herein authorized to be delivered shall bear interest at
the rate of 4.4% per annum from date of initial delivery shown on the face of such
certificate.
SECTION 3: There shall be executed and delivered to Dallas Mack Sales, Inc., a City of
Huntsville, Texas, Equipment Acquisition Certificate of Obligation, dated
November 17, 1998, and issued April 13, 1999.
SECTION 4: The Mayor, City Secretary and other appropriate City officials are hereby authorized
and directed to deliver the Certificate and to do any and all things necessary or
convenient to carry out the terms of this ordinance.
INTRODUCED, READ AND PASSED by the unanimous vote of the City Council of the City of
Huntsville, on this the 13th day of April, 1999.
CITY OF HUNTSVILLE, TEXAS
- 4 )-efA 7'
XAe--)
William B. Green, Mayor
ATTEST:
Danna Welter, City Secretary
APPROVED AS TO FORM:
Paul C. Isham, City Attorney
City of Huntsville Department of Law
Paul C. Isham, City Attorney
April 21, 1999
Curtis Wells
90 S. Camino Real
Uhland, TX 78640
RE: Certificate of Obligation issued by
the City of Huntsville in the amount
of $623973.40
Dear Mr. Wells:
Huntsville, Texas 77340
1212 Avenue M
(409) 291-5400
FAX 291-5409
This is to certify that I have examined an Equipment Acquisition Certificate of Obligation to
be issued by the City of Huntsville, Texas, in the amount of $62,973.40 bearing interest at a
rate therein specified and payable as provided in the Certificate.
This Certificate of Obligation is issued pursuant to the terms of Texas Local Government Code,
Chapter 271, and is for the purpose of financing the acquisition of a 1999 6-wheel tractor
complete with manual fifth wheel and wet kit This Certificate was authorized by ordinance
dated November 17, 1998, which ordinance provides for the levying of a continuing direct
annual ad valorem tax on all taxable property within the limits of the City of Huntsville, Texas,
to pay the interest on such Certificate of Obligation and to create a sinking fund for redemption
of the principal amount. The Ordinance also provides for the assessment and collection of such
taxes and these provisions meet the requirements of the Statute and Article X1, Sections 5 and
7 of the Constitution of the State of Texas.
At the time advertisement for bids was made concerning the equipment to be purchased, a
provision was made indicating that the successful bidder needed to elect if the successful bidder
would accept the Certificate of Obligation or endorse same over in accordance with
arrangements made by the City of Huntsville, Texas. In this connection, the successful bidder
elected to endorse these obligations to Curtis Wells.
Based upon the above, it is my opinion that this Certificate of Obligation is a legal, valid and
binding obligation of the City of Huntsville, Texas, and the interest and principal due thereon
is payable in accordance with the Certificate of Obligation from the budgeted funds of the City
of Huntsville. The City's issuance, execution and delivery of the Certificate is not subject to any
authorization, consent or review of any government body, public officers or regulatory
authority not heretofore obtained. The interest on the Certificate of Obligation is (1)
excludable from gross income for federal income tax purposes under Section 103(a) of the
Internal Revenue Code of 1986, as amended, and existing regulations, rulings, and court
decisions, and (2) does not constitute an individual or corporate alternative minimum tax
preference item. See also 22 U.S.C. § 55. Interest paid on tax-exempt obligations may,
however, affect the alternative minimum taxable income of certain corporations. The accrual
or receipt of such interest could therefore affect the federal income tax liability of the recipient)
depending upon the recipient's particular tax status and other factors.
Respectfully submitted,
q <e�e_
Paul C. 1s ;a
City Attorney
SCl/dlw
Dated: November 17,1998
Amount: $62,973.40
Issued: April 13, 1999 Register No. 99 -02
UNITED STATES OF AMERICA
COUNTY OF WALKER
STATE OF TEXAS
CITY OF HUNTSVILLE, TEXAS, EQUIPMENT ACQUISITION
CERTIFICATE OF OBLIGATION
The City of Huntsville, a Municipal Corporation of the State of Texas, acknowledges itself
indebted to and FOR VALUE RECEIVED hereby promises to pay to the registered owner hereof
in installments and on the dates as below indicated the total sum of
Sixty Two Thousand Nine Hundred Seventy -Three and 40/100 Dollars
($62,973.40) in lawful money of the United States of America, with interest thereon from date of
issue until paid at the rate of 4.4% per cent per annum, payable on April 13, 2000, and annually
thereafter on the 13th day of April of each and every year as hereinafter provided until such sum is
fully paid.
BOTH PRINCIPAL AND INTEREST on this Certificate of Obligation are hereby made payable
in Huntsville, Walker County, Texas, without exchange or collection charges to the registered owner
hereof, with such payments to be due on the dates and in the amounts as follows:
DATE
PRINCIPAL
INTEREST
TOTAL
2000
$ 15,743.35
$ 2,770.83
$ 18,514.18
2001
15,743.35
2,078.12
17,821.47
2002
15,743.35
1,385.41
17,128.76
2003
15,743.35
692.71
16,436.06
TOTAL
$ 62,973.40
$ 6,927.07
$ 69,900.47
The City reserves the right to prepay all or any part of this Certificate at any time prior to the due
date or maturity thereof without premium or penalty of any kind.
It is hereby certified and recited that all acts, conditions and things required to be done precedent
to and in the issuance of this Certificate of Obligation, to render the same lawful and valid have been
properly done, have happened and have been performed in regular and due time, form and manner
as required by law; that due and proper provision has been made for the levy of a direct and
continuing annual ad valorem tax against all taxable property within the said City sufficient to pay
the interest on this Certificate of Obligation as due and to provide for the payment of each
installment of principal as same matures; that the City has received full value and consideration for
this Certificate of Obligation and that the total indebtedness of the City of Huntsville, including this
Certificate of Obligation, does not exceed any constitutional or statutory limitation.
This Certificate shall be registered as to principal and interest in the owner's name upon books
of the City to be kept for that purpose at the office of the Finance Director of the City, the registrar,
such registration to be noted hereon. After such registration, no transfer of this Certificate shall be
valid unless made on the City's books at the request of the registered owner hereof, or his duly
authorized agent, and similarly noted hereon.
IN TESTIMONY WHEREOF the City Council has caused the seal of said City to be impressed
hereon and this Certificate of Obligation to be signed by the Mayor and attested to by the City
Secretary, the date of this Certificate of Obligation being the 13th day of April, 1999.
DATE OF INITIAL DELIVERY OF THIS CERTIFICATE:
ATTEST:
0& �
Danna Welter, City Secretary
4 -r3 -qq
William B. Green, Mayor
ASSIGNMENT AND TRANSFER
Full consideration therefor being hereby acknowledged, this Certificate of Obligation was
delivered to Dallas Mack Sales, Inc., the original holder, on this the o1q day of
yk� , 1999, and by it hereby assigned and transferred to
DALLAS MACK SALES, INC.
1
CERTIFICATE OF REGISTRATION
IT IS HEREBY CERTIFIED that I have this day registered this Certificate as to principal in the
name of the holder as indicated in the registration blank below, on the books kept by me for such
purpose. The principal of and interest on this Certificate shall be payable only to the registered
holder named in the below registration blanks.
Signature
Name of Date of Finance Director
Registered Holder Registration (Registrar)
Curtis Wells