ORD 1998-09 - C.O. - Claim - Delivery - Chip Spreader 03-31-1998ORDINANCE NO. 98-09
AN ORDINANCE APPROVING CLAIM AND DELIVERY OF
CERTIFICATES OF OBLIGATION FOR ONE DIESEL POWERED
CHIPSPREADER; AND CONTAINING OTHER PROVISIONS RELATED
HERETO.
WHEREAS the City Council of the City of Huntsville, Texas, by Ordinance No. 97 -31, found
that it was advisable for the City to purchase a diesel powered chipspreader 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 R. B. Everett in the amount of $118,950 as the lowest
and best bid for the purchase of the chipspreader; and
WHEREAS the City Council wishes to authorize payment thereof and delivery of a Certificate
of Obligation; and
WHEREAS the Certificate of Obligation issued by this ordinance is tax exempt and is designated
as a qualified tax exempt obligation (bank qualified).
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
HUNTSVILLE, TEXAS, that:
SECTION 1: There is now due and owing to R. B. Everett the sum of $118,950.
SECTION 2: The Certificate of Obligation herein authorized to be delivered shall bear interest at
the rate of 5.08% per annum from date of initial delivery shown on the face of such
certificate.
SECTION 3: There shall be executed and delivered to R. B. Everett, a City of Huntsville, Texas,
Equipment Acquisition Certificate of Obligation, dated April 1, 1998.
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 31 st day of March, 1998.
CITY OF HUNTSVILLE, TEXAS
William B. Green, Mayor
ATTEST:
Danna Welter, City Secretary
City of Huntsville Department of Law
Scott Bounds, Attorney
April 1, 1998
American Bank
Houston, Texas
RE: Certificate of Obligation issued by
the City of Huntsville in the amount
of $118,950
Dear Sirs:
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 $118,950 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 diesel powered
chipspreader. This Certificate was authorized by ordinance dated December 9, 1997, 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 XI, 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 American Bank.
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
offluntsville. 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. 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.
R eaftilly si
C
Cott Bo d s
City Attorney
SB/dlw
Dated: December 9, 1997
Amount: $118,950
Issued: April 1, 1998 Register No. 98 -01
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
One Hundred Eighteen Thousand Nine Hundred Fifty And No/ 100 Dollars
($118,950) in lawful money of the United States of America, with interest thereon from date of issue
until paid at the rate of 5.08% per cent per annum, payable on April 1, 1999, and annually thereafter
on the 1 st 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
1999
$ 29,737.50
$ 6,042.66
$ 35,780.16
2000
29,737.50
4,531.99
34,269.49
2001
29,737.50
3,021.33
32,758.83
2002
29,737.50
1,510.66
31,248.16
TOTAL
$118,950.00
$15,106.64
$134,056.64
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 1 st day of April, 1998.
DATE OF INITIAL DELIVERY OF THIS CERTIFICATE:
ATTEST:
William B. Green, Mayor
1
Danna Welter, City Secretary
ASSIGNMENT AND TRANSFER
Full consideration therefor being hereby acknowledged, this Certificate of Obligation was
deliver pd to R. B. Everett, the original holder, on this the 1% day of
1998, and by it hereby assigned and transferred to
R. B. EVERETT
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)
STATE OF TEXAS
COUNTY OF WALKER
This instrument was acknowledged before me, the undersigned Notary Public, on the 1 s` day
of April, 1998, by J. Quentin Henry.
�LJ
Notary Public, State of Texas
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