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ORD 1983-14 - Issue Sewer BondsORDINANCE NO. 83 -14 ORDINANCE AUTHORIZING THE ISSUANCE OF $2,400,000 CITY OF HUNTSVILLE, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM REVENUE BONDS, SERIES 1983 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE: SECTION 1: FINDINGS AND DETERMINATIONS: It is hereby officially found and determined that: (a) The City of Huntsville, Texas (the "City ") has heretofore issued, sold and delivered its $350,000 Waterworks and Sanitary Sewer System Revenue Bonds, Series 1965, its $550,000 Waterworks and Sanitary Sewer System Revenue Bonds, Series 1970, its $400,000 Waterworks and Sanitary Sewer System Revenue Bonds, Series 1974, and its $325,000 Waterworks and Sanitary Sewer System Revenue Bonds, Series 1975 (the "Outstanding Bonds "). (b) The ordinances authorizing the issuance of the Outstanding Bonds provide for the issuance of additional revenue bonds on a parity with the Outstanding Bonds under certain conditions. (c) The conditions under which the City may issue additional revenue bonds on a parity with the Outstanding Bonds have been met or are being met concurrently with the issuance of the bonds authorized by this Ordinance. (d) The City is authorized by Article 1111 et seq, Vernon's Texas Civil Statutes, to issue bonds payable from the net revenues of its waterworks and sanitary sewer system, and is authorized by Article 1112 to issue such bonds without an election to provide money for acquisitions, extensions, construction, improvement or repair of such system. (e) The City Council, by Ordinance adopted February 22, 1983, authorized the giving of notice under Article 2368a, Vernon's Texas Civil Statutes, as amended, of its intention to issue the bonds authorized by this Ordinance. (f) Such notice was published on April 3, 1983, and April 10, 1983, in the Huntsville Item, a newspaper published in the City. (g) The City has not received any petitions for a referendum concerning the issuance of such bonds. SECTION 2: NAME, AMOUNT, PURPOSE AND AUTHORIZATION: The serial, coupon, revenue bonds of the City of Huntsville, Texas, to be known and designated as "CITY OF HUNTSVILLE, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM REVENUE BONDS, SERIES 1983" shall be issued in the aggregate principal amount of $2,400,000, for the purpose of providing money for acquisitions, extensions, construction, improvement or repair of the City's waterworks and sanitary sewer system, under and in strict conformity with the Constitution and laws of the State of Texas, particularly Articles 1111 to 1118, both inclusive, Vernon's Texas Civil Statutes, as amended. SECTION 3: DATE, NUMBERS, DENOMINATION AND MATURITIES: Said revenue bonds shall be dated April 1, 1983, shall be numbered consecutively from 1 to 480, both inclusive, shall be in the denomination of $5,000 each, aggregating $2,400,000, and shall become due and payable serially in their numerical order, on the first day of October in the years and in the respective amounts shown in the following schedule: 1984 50,000 1985 50,000 1986 60,000 1987 60,000 1988 70,000 1989 80,000 1990 80,000 1991 90,000 1992 100,000 1993 110,000 1994 120,000 1995 130,000 1996 150,000 1997 160,000 1998 180,000 1999 200,000 2000 210,000 2001 240,000 2002 260,000 SECTION 4: INTEREST RATES AND INTEREST PAYMENT DATES: Said bonds shall bear interest per annum at the following rates, respectively: Bonds maturing 1984 through Bonds maturing through Bonds maturing through Bonds maturing through Bonds maturing through Bonds maturing through Bonds maturing through Bonds maturingthrough Bonds maturing through interest payable April 1, 1984, and semiannually thereafter on October 1 and April 1 in each year until the principal sum is paid. SECTION 5: MEDIUM OF PAYMENT, CHARACTERISTICS AND EXECUTION OF BONDS AND INTEREST COUPONS: Said bonds, and the interest coupons appertaining thereto, shall be payable, shall have the characteristics, shall be subject to redemption prior to maturity, and shall be signed and executed (and said bonds shall be sealed), all as provided and in the manner indicated in the FORM OF BONDS set forth in this ordinance. SECTION 6: FORM OF BONDS, COMPTROLLER'S REGISTRATION CERTIFICATE AND FORM OF INTEREST COUPONS: FORM OF BONDS: No. $5,000 UNITED STATE OF AMERICA COUNTY OF WALKER CITY OF HUNTSVILLE, TEXAS, WATERWORKS AND SANITARY SEWER SYSTEM REVENUE BOND, SERIES 1983 FOR VALUE RECEIVED, the City of Huntsville, Tex—,, hereby acknowledges itself indebted to and promises to pay to bearer on the first day of October, 19 , solely from the special fund hereinafter specified, the sum of FIVE THOUSAND DOLLARS and to pay interest thereon, from the date hereof, at the rate of % per annum, evidenced by interest coupons payable April 1, 1984, and semiannually thereafter on October 1 and April 1 of each year until the principal sum is paid. The principal of this bond and the interest coupons appertaining hereto shall be payable to bearer in any coin or currency which on the respective dates of payment of such principal and interest is legal tender for the payment of debts due the United States of America, without exchange or collection charges to the bearer, upon presentation -.Id surrender of this bond or proper coupon at The First National Bank, Huntsville, Texas, or, at the option of the holder et Texas, which ch,111 be the paying agents for this series of bonds. THE DATE OF THIS BOND, in conformity with the ordinance hereinafter mentioned, is April 1, 1983. THIS BOND IS ONE OF A SERIES OF BONDS of like tenor and effect, except as to serial number, interest rate, right of prior redemption and maturity, being numbered consecutively from 1 to 480, both inclusive, in the denomination of $5,000 each, aggregating $2,400,000 (the "Bonds") and, together with the other bonds of said series, is issued for the purpose of acquisitions, extensions, construction, improvement or repair of the City's waterworks and sanitary sewer system, under and in strict conformity with the Constitution and laws of the State of Texas, particularly Articles 1111 to 1118, both inclusive, Vernon's Texas Civil Statutes, as amended, and pursuant to an ordinance lawfully adopted by the City Council of said City and duly recorded in the official minutes of said City Council, to all the provisions of which ordinance the owner or holder of this bond by the acceptance thereof expressly assents. ON OCTOBER 1, 1993, OR ON ANY INTEREST PAYMENT DATE THEREAFTER, the outstanding Bonds of this series may be redeemed prior to their scheduled maturities, at the option of the City, in whole or in part in inverse numerical order, for the principal amount thereof and accrued interest thereon to the date fixed for any such redemption. At least thirty days prior to the date fixed for any such redemption, the City shall cause a written notice of such redemption to be mailed to the banks at which the Bonds are payable and published at least once in a financial publication published in the City of New York, New York, or in the City of Austin, Texas. By the date fixed for any such redemption, due provision shall be made with the paying agents for the payment of the required redemption price. If such written notice of redemption is published and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities; and they shall not be regarded as being outstanding except for the purpose of being paid by the paying agents with the funds so provided for such payment. THIS BOND SHALL NOT BE DEEMED TO CONSTITUTE A DEBT of the City of Huntsville or a pledge of its faith -.1d credit, but shall be payable, as to principal and interest, together with the other bonds of this series and the outstanding City of Huntsville, Texas, Waterworks and Sanitary Ser System Revenue Bonds: Series 1965, dated June 1, 1965, Series 1970, dated December 1, 1970, Series 1974, dated December 1, 1974, and Series 1975, dated March 1, 1975 (the "Outvtanding Bonds"), solely from the revenues derived from the operation of the City's waterworks and sanitary sewer system, including all additions, extensions and improvements thereto which may hereafter be made, after deduction of the reasonable expenses of maintenance and operation of said system (the Bonds and the Outstanding Bonds being in all respects on a parity with one another). 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. THE CITY EXPRESSLY RESERVES THE RIGHT TO ISSUE additional bonds payable from the net revenues of said waterwcrks and sanitary sewer system, and such additional bonds *nay be on a parity in all respects with the Bonds and the 'Aitstanding Bonds, but such additional parity bonds may be i-sued only pursuant to and subject to the restrictions, covenants and limitations contained in the ordinance authorizing this issue of Bonds, to which reference is hereby made for all parti- culars. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that the issuance of this Bond, and the series of which it is a part, is duly authorized by law; that all acts, conditions and things required to be done precedent to and in the issuance of this Bond and this series of Bonds to render the same lawful and valid have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that due provision has been made for the payment of the principal of and interest on this Bond and the other Bonds of the series of which it is a part by irrevocably pledging, as aforesaid, the net revenues of said waterworks and sanitary sewer system; and that the issuance of this series of Bonds does not exceed any constitutional or statutory limitation. IN TESTIMONY WHEREOF, this Bond and the interest coupons appertaining hereto have been signed with the facsimile signature of the Mayor of the City and countersigned with the facsimile signature of the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this Bond. Mayor COUNTERSIGNED: City of Huntsville, Texas City Secretary City of Huntsville, Texas FORM OF REGISTRATION CERTIFICATE: COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER 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 reylotered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL this Comptroller of Public Accounts of the State of Texas (SEAL) FORM OF INTEREST COUPONS: No. ON 1, 19 , (unless the bond to which this coupon appertains has been called for prior redemption and due provision has been made to redeem same), the CITY OF HUNTSVILLE, TEXAS, PROMISES TO PAY TO BEARER the amount shown on this interest coupon, in any coin or currency which on such date is legal tender for the payment of debts due the United States of America, without exchange or collection charges to the bearer, upon presentation and surrender of this coupon, at The First National Bank, Huntsville, Texas, or, at the option of the holder, at Texas, said amount being interest due that date on the bond bearing the number hereinafter designated of that issue of City of Huntsville, Texas, Waterworks and Sanitary Sewer System Revenue Bonds, Series 1983, dated April 1, 1983. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. Bond No. Mayor City Secretary SECTION 7: BOND OPINION AND CUSIP NUMBERS: The approving opinion of Vinson and Elkins, Houston, Texas, and Cusip Numbers may be printed on the backs of the Bonds, the omission of such opinion or errors in or omission of such numbers shall have no effect whatever on the validity of such Bonds. SECTION 8: DEFINITIONS: As used in this ordinance, the following terms shall mean and include, and are defined, as follows: (a) City - the City of Huntsville, Texas, and where appropriate, the City Council of the City. (b) System - the waterworks and sanitary sewer system of the City, including all present and future extensions, additions, replacements and improvements thereto. (c) Net Revenues - the gross revenues of the System less the reasonable expense of operation and maintenance of said System, including all salaries, lab,)c, materials, repairs and extensions necessary to render efficient service, provided, however, that only such repairs and extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary to keep the plant or utility in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident 'or condition which would otherwise impair the Outstanding Bonds, the Bonds and the Additional Bonds shall be deducted in determining Net Revenues. (d) Bonds - the $2,400,000 City of Huntsville, Texas, Waterworks and Sanitary Sewer System Revenue 3onds, Series 1983 authorized by this ordinance. (e) Outstanding Bonds - the outstanding bonds of the City's Waterworks and Sanitary Sewer System Revenue Bonds: (1) Series 1965, dated June 1, 1965, issued in the aggregate principal amount of $350,000, (2) Series 1970, dated December 1, 1970, issued in the aggregate principal amount of $550,000, (3) Series 1974, dated December 1, 1974, issued in the aggregate principal amount of $400,000, and (4) Series 1975, dated March 1, 1975, issued in the aggregate principal amount of $325,000. (f) Additional Bonds - the additional parity revenue bonds that the City expressly reserves the right to issue in Section 26 of this ordinance. (g) Interest and Sinking Fund - the interest and sinking fund for the Outstanding Bonds, the Bonds and Additional Bonds, which fund is established and confirmed in the ordi- nances authorizing the Outstanding Bonds and this ordinance. (h) Reserve Fund - the reserve fund for the Outstanding Bonds, the Bonds and Additional Bonds, which fund is established and confirmed in the ordinances authorizing the Outstanding Bonds and this ordinance. (i) Contingencies Fund - the special fund for contin- gencies, which fund is established and confirmed in the ordinances authorizing the Outstanding Bonds and this ordinance. SECTION 9: PLEDGE: All of the Net Revenues of the waterworks and sanitary sewer system with the exception of those in excess of the amounts required to establish and maintain the funds as hereafter provided are hereby irrevocably pledged for the payment of the Bonds, the Outstanding Bonds, and the Additional Bonds if issued under the conditions and in the manner specified in this ordinance, and the interest thereon, and it is hereby ordained that the Bonds, the Outstanding Bonds, and Additional Bonds if so issued, and the interest thereon shall constitute a first lien upon said Net Revenues. SECTION 10: RATES: The City covenants and agrees with the original purchasers of the Bonds and the Additional Bonds if and when issued: (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 betterment expense and other costs deducible in determining "Net Revenues" as herein defined, and to produce Net Revenues equal to at least one and one-half times the average annual requirement for the payment of principal of and interest on the Bonds, and the Additional Bonds if issued. (b) If the Additional Bonds are issued, or if the System should become legally liable for any other indebted- ness, the City will fix and maintain rates and collect charges for the services of the System sufficient to discharge such indebtedness. SECTION 11: FUNDS: All revenue derived from the operation of the System shall be kept separate from othel funds of the City. To that end, the creation of the following special Funds is hereby confirmed: (a) City of Huntsville Waterworks and Sanitary Sewer System Revenue Fund, hereinafter called "Revenue Fund." This Fund shall be kept in the City's Depository Bank. (b) City of Huntsville Waterworks and Sanitary Sewer System Revenue BondInterest and Sinking Fund, hereinafter called "Interest and Sinking Fund." This Fund shall be deposited with The First National Bank, Huntsville, Texas, as Trustees of the pledged revenues. (c) City of Huntsville Waterworks and Sanitary Sewer System Revenue Bonds Reserve Fund, hereinafter called "Reserve Fund." This Fund shall be deposited with The First National Bank, Huntsville, Texas, Trustee. (d) City of Huntsville Contingencies Fund, hereinafter called "Contingencies Fund." This Fund shall be kept in the City's Depository Bank. SECTION 12: REVENUE FUND: All revenues of every nature received through the operation of the System shall be deposited from day to day as collected, into the Revenue Fund, and the reasonable and proper expenses of operating and maintaining the System, including salaries, labor and materials shall be paid therefrom upon approval of the City Council. The City Treasurer shall not make any disbursement from said Fund for repairs in excess of $1,000.00 or for extensions, except pursuant to a resolution adopted by the City Council declaring that it is the judgment of the City Council that such repairs or extensions are necessary to keep the plant or system in operation and render adequate service to the City and the inhabitants thereof, or that such repairs or extensions are necessary to meet some physical accident or condition which would otherwise impair the Bonds, and such resolution, in either case, shall recite the facts and reasons for such judgment. Certified copies of such resolution shall be furnished without cost to Bondholders requesting the same. Such resolution shall not be binding or conclusive upon any Bondholder. All revenues of the System not actually required to pay expenses and costs incurre-' as permitted by this Section shall be deposited in the other Funds set forth in this ordinance, each of which shall have priority thereto in the order in which they are tre.,ted in the following sections. SECTION 13- ADDITIONAL PAYMENTS INTO THE INTEREST AND SINKING FUND: After the payment of all maintenance and operation expenses of the System, as provided in Section 12, and in addition to and at the same time as the payments into the Interest and Sinking Fund required by the ordinances authorizing the Outstanding Bonds, on or before the 1st day of each month, from moneys in the Revenue Fund, the City shall make the following deposits into the Interest and Sinking Fund: Beginning in April 1983, to pay the interest maturing April 1, 1984, and the principal maturing on October 1, 1984, there shall be deposited in substantially equal monthly installments an amount sufficient to pay, in additior to other amounts therein and available for such purposes, such principal and interest as it matures. Beginning in April 1984, with respect to interest payments, and in October 1984, with respect to principal payments, and continuing until all of the Bonds have been paid, there shall be deposited an amount which, in addition to other amounts therein and available for such purpose, is not less than one-sixth (1/6) of the next maturing interest on the Bonds and one-twelfth (1/12) of the next maturing principal of the Bonds. If in any month the City shall, for any reason, fail to pay into said Interest and Sinking Fund the full amounts above stipulated, the amounts equivalent to such deficiencies shall be set apart and paid into said Interest and Sinking Fund from the first available and unallocated revenues of the following month or months and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said Interest and Sinking Fund each month. At least ten days prior to each interest payment date, the Trustee Bank shall make available at the banks of payment an amount sufficient to pay the principal of and interest to be payable on such interest payment date on the Bonds, the Outstanding Bonds and any Additional Bonds. SECTION 14: ADDITIONAL PAYMENTS INTO RESERVE FUND: In addition to and at the same time as the payments into the Reserve Fund required by the ordinances authorizing the Outstanding Bonds, the City, on or before the 1st day of each month, beginning with the month of October 1983, shall pay into the Reserve Fund each month an amount which is not less than $4,000 and such monthly payments shall be continued until such time as there is in the Reserve Fund (in addition to the balance required to be in said Reserve Fund by the ordinances authorizing the Outstanding Bonds) a balance of not less than $240,000. When said balance of not less than $240,000 is reached in the Reserve Fund, as above provided, then insofar as these Bonds are concerned, no further payment need be made into said Reserve Fund; however, in the event that the balance required to be in the Reserve Fund by this ordinance is ever reduced to an amount less than $240,000, the monthly payments as above provided, shall be resumed and continued until said balance of $240,000 is again reached and maintained. If in any month the City shall, for any reason, fail to pay into said Reserve Fund the full amount above stipulated, amounts equivalent to such deficienGI,s shall be set apart and paid into said Reserve Fund from tne first available and unallo- cated revenues of the following month or months and shall be in addition to the amount hereinabove provided to be otherwise paid into said Reserve Fund each month. Money in the Reserve Fund shall be used to pay the principal of and interest on the Bonds, Outstanding Bonds, and any Additional Bonds at any time that the balance in the Interest and Sinking Fund is insufficient for such purposes. SECrr_ON 15: NO ADDITIONAL PAYMENTS RE(YTIRED FOR CONTINGENCIES FUND: Insofar as the Bonds of this issue are concerned, no addi- tional payments need be made into the Contingencies Fund (other than the payments into said Contingencies Fund required by the ordinances authorizing the Outstanding Bonds). SECTION 16: DEFICIENCIES IN FUNDS: If in any fiscal year the City shall, for any reason, fail to pay into the Interest and Sinking Fund, Reserve Fund and Contingencies Fund the full amounts above stipulated, amounts equivalent to such defi- ciencies shall be set apart and paid into said Funds from the first available and unallocated revenues of the following fiscal year or years, and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said Funds during such fiscal year or years. SECTION 17: EXCESS REVENUES: Any revenues in excess of those required to establish and maintain the Funds as above required may be used for the redemption of Bonds or Addi- tional Bonds, or for any lawful purpose. SECTION 18: SECURITY OF FUNDS: All funds created by this ordinance shall be secured in the manner and to the fullest extent permitted by the laws of Texas for the security of public funds, and such funds shall be used only for the purposes permitted in this ordinance. SECTION 19: MAINTENANCE AND OPERATION - INSURANCE: The City shall maintain the System in good condition and operate the same in an efficient manner and at a reasonable cost. So long as any of the Bonds are outstanding, the City agrees to maintain insurance for the benefit of the holder or holders of the Bonds, on the System of a kind and 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 operation of the System, but nothing herein shall be construed as preventing the City from doing so. SECTION 20: 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 entries shall be made of all transactions relating to the System. The City will operate the System and will keep its books of 1.,?.cords and accounts on the basis of a fiscal year ending March 31st, unless otherwise ordained by the City Council. SECTION 21: ACCOUNTING REPORTS:. Within ninety days after the close of each fiscal year hereafter, the City will furnish (without cost) to any bondholder who may so request, a signed or certified copy of a report by an independent accountant covering the next pr. ceding fiscal year showing the following information relating to the System: (a) Income and Expense Statement; (b) Balance S.10et; (c) Accountant's comment regarding the manner in which the City has complied with the requirements of this ordinance, and his recommendation for any changes or improvements in the operation of the System; (d) List of insurance policies in force at the end of the fiscal year, showing as to each policy, the risk covered, the name of the insurer, and the expiration date; (e) The number of properties connected with the System and the total income from the System for the year; (f) The number of unmetered customers of the System at the end of the year. SECTION 22: INSPECTION: Any holder or holders of Bonds or Additional Bonds have the right at all reasonable times to inspect the System and all records, accounts and data of the City relating thereto. SECTION 23: SPECIAL COVENANTS: The City hereby further covenants as follows: (a) That it has the lawful power to pledge the revenues supporting this issue of Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas; that the Bonds issued hereunder, the Outstanding Bonds, and the Additional Bonds, when issued, shall be ratably secured under said pledge of income, in such manner that no bond shall have preference over any other bond. (b) That 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 thereof shall be made by the City out of funds from sources other than the revenues and income of the System. SECTION 24: BONDS ARE SPECIAL OBLIGATIONS: The Bonds are special obligations of the City payable from the pledged revenues, and the holder thereof shall never haN7f7 the right to demand payment thereof out of funds raised or to be raised by taxation. SECTION 25: PARITY OF BONDS AND OUTSTANDING BONDS: The Bonds and the Outstanding Bonds are, and shall be, in all respects on a parity and of equal dignity with one another. ' SECTION 26: ADDITIONAL BONDS: In addition to inferior lien bonds, the City reserves the right to issue ',dditional Bonds, in one or more installments, and said Additional Bonds, when issued, may be secured by and payable from a firJt lien on and pledge of the net revenues of the System in he same manner and to the same extent as are the Outstanding Bonds and the Bonds, and such Additional Bonds may in all respects be of equal dignity with the Outstanding Bonds and the Bonds. No Additional Bonds may be issued unless: (a) Each of the Funds set forth above contains the amount of money then required to be on deposit therein, (b) The Net Revenues of the System for either of the following periods: the 12-month period ending on the last day of the month preceding the month in which the bond ordinance is adopted authorizing such Additional Bonds, or the then last preceding fiscal year (being the last completed fiscal year preceding the month in which the bond ordinance is adopted authorizing such Additional Bonds), were equal to at least 1-1/2 times the average annual principal and interest requirements on all bonds payable from the revenues of the System which will be outstanding after the Additional Bonds then proposed to be issued are issued and sold and delivered. (c) An independent professional engineer registered under the laws of the State of Texas makes a projection of the income of the System during the life of all bonds payable from the revenues of the System then outstanding and the Additional Bonds then proposed to be issued and such projec- tion shows that, in the engineer's opinion, the average annual Net Revenues of the System will equal at least 1-1/2 times the average annual principal and interest requirements of all bonds payable from the revenues of the System which will be outstanding after the Additional Bonds then proposed to be issued are issued, sold and delivered. The term "Net Revenues" as used in this Section shall mean all of the net revenues of the System (excluding income received specifically for capital items) after deduction of the reasonable expenses of operation and maintenance of the System (,—.cluding expenditures for capital items). SECTION 27: SYSTEM AND REVENUES NOT ENCUMBERED: The City covenants that neither the properties comprising the System nor the revenues 1,17 the System are in any way pledged or hypothecated except as the Net Revenues of the System are pledged to the payment of the Outstanding Bonds, the Bonds and the City's outstanding Waterworks and Sanitary Sewer System Junior Lien Revenue Bonds, Series 1973, dated April 1, 1973 ("Junior Lien Bonds"); however, the lien on and pledge of the Net Revenues to said Junior Lien Bonds are in all respects junior and subordinate to the lien' and pledge of said Net Revenues to the Outstanding Bonds and the Bonds. SECTION 28: ARBITRI.GE: The City certifies that based upon all facts, estimates aid circumstances now known or reasonably expected to be ia'existence on the date the Bonds are delivered and paid fo., the City reasonably expects that the proceeds of the Bonds will not be used in a manner that would cause the Bonds or any portion of the Bonds to be an "arbitrage bond" under Section 103(c) of the Internal Revenue Code of 1954, as amended, and regulations prescribed thereunder. Furthermore, all officers, employees and agents of the City are authorized and directed to provide certifications of facts, estimates and circumstances which are material to the reasonable expec- tations of the City as of the date the Bonds are delivered and paid for, and any such certifications may be relied upon by counsel, by the owners or holders of the Bonds, or by any person interested in the exemption of interest on the Bonds from Federal income taxation. Moreover, the City covenants that it shall make such use of the proceeds of the Bonds, regulate investments of proceeds of the Bonds, and take such other and further action as may be required so that the Bonds shall not be "arbitrage bonds" under Section 103(c) of the Internal Revenue Code of 1954, as amended, and regulations prescribed from time to time thereunder. SECTION 29: SALE OF BONDS: Said Bonds having been advertised for sale in accordance with the provisions of the Charter of the City, and bids having been received this date pursuant to said advertising, the sale of the Bonds to at a price of $ subject to the unqualified approving opinions of the Attorney General of the State of Texas and Messrs. Vinson & Elkins, Houston, Texas, as to the legality of said Bonds is hereby authorized, ratified, approved and confirmed. When said Bonds have been approved by said Attorney General and registered by the Comptroller of Public Accounts of the State of Texas, they shall be delivered to the purchaser upon receipt of the full purchase price. SECTION 30: APPROVAL REGISTRATION, AND DELIVERY: The Mayor is hereby authorized to have control and custody of the Bonds and all necessary records and proceedings pertaining thereto pending their delivery, and the Mayor and other officers and employees of the City are hereby authorized and instructed to make such certifications and to execute such instruments as may be necessary to accomplish the delivery of the Bonds and tc assure the investigation, examination, and approval thereof by the Attorney General of the State of Texas and their registration by the State Comptroller of Public Acc-;unts. Upon registration of the Bonds, the Comptroller of Public Accounts (or a deputy designated in writing to act for him) shall be requested to sign manually the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on each Bond and the seal of the Comptroller shall be impressed or printed or lithographed thereon. The Mayor shall be further authorized to make such agreements with the purchasers of the Bonds as may be necessary to assure that the same will be delivered to such purchasers in accordance with the terms of sale at the earliest practicable date after the adoption of this ordinance. SECTION 31: OFFERING DOCUMENTS. The City Council hereby ratifies, authorizes and approves, in connection with the sale of the Bonds, the preparation and distribution of the Preliminary Official Statement dated March 30, 1983, and a final Official ScLi_ement substantially in the same form containing such additional information as is contained in or authorized by this ordinance. SECTION 32: FURTHER PROCEEDINGS. The Mayor, the City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or con- venient to carry out the terms and purposes of this ordinance. SECTION 33: SEVERABILITY. If any Section, paragraph, clause or provision of this ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforce- ability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this ordinance. SECTION 34: OPEN MEETING. It is hereby found, determined and declared that a sufficient written notice of the date, hour, place and subject of the meeting of the City Council at which this Ordinance was adopted was posted at a place convenient and readily accessible at all times to the general public at the City Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Law, Article 6252-17, Vernon's Texas Civil Statutes, as amended, and that this meeting has been open to the public as required by law at all times during which this ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. SECTION 35: DECLARATION OF EMERGENCY. It is hereby officially found and determined that a case of emergency and urgent public necessity exists which requires the holding of the meeting at which this ordinance is passed and further requires that this ordinance be passed finally and take effect immediately on the date of its introduction, such emergency and urgent public necessity being that the proceeds from the sale of the Bonds are required as soon as possible and without delay for the purposes set forth herein. SECTION 36: REPEALER. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED THIS 19th day of April, 1983. Mayor City of Huntsville, Texas ATTEST: City Secretary City of Huntsville, Texas APPROVED: lot doekyvi City Attorney City of Huntsville, Texas [SEAL]