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38-09 O - Issuance of Water System Reneal Bonds,14 r. THE STATE OF TEXAS COUNTY OF COLLIN TOWN OF PROSPER The Town Commission of the Town of Prosper, Texas, convened in Regular Meeting on the_ _day of August, 1938, with the following members present, to -wit: U. N. Clary Mayor 17. H. Field l A. E. Robison Commissioners C. W. Harper Town Clerk with the following absent: None, constituting a quorum, at which time the following among other business was transacted, to -wit: Commissioner W. H. Field introduced a proposed ordiance. The ordinance was read in full. Commissioner A. E. Robison made a motion that the rule re- quiring ordinances to be read at more than one meeting be suspended. The motion was seconded by Commissioner W. H. Field. The motion carried by the following vote: AYES: Commissioners W. H. Field and A. E. Robison and Mayor U. N. Clary, NOES: None. Commissioner W. H. Field made a motion that the ordinance be passed finally. The motion was seconded by Commissioner A. E. Robi- son. The motion carried by the following vote: AYES: Commissioners W. H. Field and A. E. Robison and Mayor U. N. Clary. NOES: None. The Mayor announced that the ordinance had been finally passed. The ordinance is as follows: a AN ORDINANCE AUTHORIZING THE ISSUANCE OF TOWN OF PROSPER, TEXAS; WATER SYSTEM REVENUE BONDS, S:3RIES 1938, $12,000,00 BEARIPJG 4,% INTEREST, TO SE- CURE FUNDS FOR PURCHASE OF A WATER SYSTEM AND FOR CONSTRUCTION OF REPAIRS, IMPROVEMENTS AND EXTENSIONS TO SUCH SYSTEM IN AND FOR SAID TOWN, PRESCRIBING THE FORM OF BOND, PLEDGING THE REVENUES OF SAID SYSTEI.". TO THE PAYMENT OF PRINCIPAL AND INTEREST OF THE BONDS AFTER PRO- VIDING FOR THE EXPENSE OF OPERATING SAID SYS- TEM, MAKING CERTAIN COVENANTS OF THE TOWN IN REFERENCE TO THE BOND FUND FROM WHICH SAID PRINCIPAL AND INTEREST ARE TO BE PAID; PRO- VIDING THAT THE HOLDER OR HOLDERS OF SAID BONDS SHALL NEVER HAVE THE RIGHT TO DEMAND PAY1,1NT OF SAID OBLIGATIONS OUT OF ANY FUNDS RAISED OR TO BE RAISED BY TAXATION, REPEALING ALL ORDINANCES IN CONFLICT HEREWITH, AND DECLARING AN L-MRGENCY, WHEREAS, the Town Commission has heretofore, on the 28th day of July, 1938, adopted a resolution and order calling an election on the question of the Issuance of Town of Prosper, Texas, water system revenue Bonds, Series, 1938, in the aggregate amount of Twelve thousand ($12,000.00) dollars, bearing 4% interest, to se- cure funds for purchase of a water system and for construction of repairs, improvements and extensions to such system in and for said Town; and WHEREAS, said election was held, pursuant to said resolution and order, on the 13th day of August, 1938, and resulted favorably to the issuance of said revenue bonds; and WHEREAS, the Town Commission has heretofore adopted a resolu- tion, declaring the results of said election and determining the specific authority of the Town to issue said revenue bonds; and WHEREAS, the Town has authority generally to pass this ordi- nance, authorizing the issuance of revenue bonds for the purpose of obtaining funds for purchase of a water system., and for the construc- tion of repairs, improvements and extensions to the same, in and for said Town, under the provisions of the Constitution and Laws of the State of Texas, including particularly: Articles 1111 - 1118, both inclusive, of the 1925 Revised Civil Statutes of Texas, as amended; and WHEREAS, it is now necessary and proper that the Town Commis- sion proceed with the issuance of such revenue bonds; 19. IL BE IT ORDAINED BY THE TOWN COILILISSION OF THE TOWN OF PROSPER, TEXAS: 1. That to provide funds for purchase of a water system and for the construction of repairs, improvements and extensions to the same, pursuant to the Constitution and Statutes of the State of Texas, in- cluding particularly Articles 1111 - 1118, both inclusive, of the 1925 Revised Civil Statutes of Texas, as amended; there shall be issued "Town of Prosper, Texas, Water System Revenue Bonds, Series 1938," aggregating Twelve Thousand ($12,000,00) Dollars, numbered from one (1) to thirty-two (32) both inclusive, of different denominations as fol- 4W lows: Bonds numbered one (1) to ten (1C) inclusive to be each of de- nomination of One Hundred ($100.00) Dollars and those numbered eleven (11) to thirty-two (32) inclusive to be each of denomination of Five Hundred ($500.0C) Dollars. Z. Said bonds shall be dated August let, 1938, and shall bear interest at the rate of four (4%) per cent per annum, payable Febru- ary let, 1939, and semi-annually thereafter on the let day of August and the let day of February in each year; principal and interest of said bonds shall be payable in such funds as are, on the respective dates of payment of the principal of and interest on the bonds, legal t tender for debts due the United States of America, upon presentation and surrender of bond or proper coupon at the office of the State Treasurer, at Austin, Texas. 3. Said bonds shall mature, as follows: BOND NUA.'BERS MATURITY DATES AMOUNT EACH BOND 1 and 2 August let, 1942 $100.00 3 and 4 August 1st, 1943 100.00 5, 6 and 7 August let, 1944 100.00 6, 9 and 10 August let, 1945 100,00 11 August let, 1946 '$500.00 12 August 1st, 1947 'j500.00 13- August 1st, 1948=500,00 14 August let, 1949 S500.00 15 August let, 1950 *1500.00 16 August let, 1951 =500.00 17 August let, 1952 '500,00 18 August let, 1953 1500.00 19 August 1st, 1954 500.00 20 August let, 1955 500.00 1500.00 21 August let, 1956 500.00 22 August let, 1957 23 August let, 1958 500.00 24 August 1st, 1959 500.00 20 v BOND NUISERS MATURITY DATES AYO'_TNT EACH BOND 25 and 26 August 1st, 1960 500.00 27 and 28 August 1st, 1961 500.00 29 and 30 August 1st, 1962 500.00 31 and 32 August 1st, 1963 500.00 4. Each of said bonds shall be signed by the Mayor, counter- signed by the Town Clerk and registered by the Town Treasurer, and the corporate seal of the Town of Prosper, Texas, shall be Impressed upon each of them. The facsimile signatures of the Mayor and Town Clerk may be lithographed, engraved or printed upon the coupons at- tached to said bonds and shall have the same effect as if they had been signed by said officers. 5. The Form of said bonds shall be substantially as follows; NO. UNITED STATES OF ALSEERICA STATE OF TEXAS COUNTY OF COLLIN TOWN OF PROSPER PATER SYSTEd: REVENUE BOND SERIES 1938. The Town of Prosper, in the County of Collin, in the State of Texas, for value received, hereby acknowledges itself indebted to and promises to pay to the bearer, as hereinafter stated, on the day of , 19_ , the sum of ` Dollars (� ), in such funds as are, on said date, legal tender for debts due the United States of America, with interest thereon from date at the rate of four (4p) per cent per annum, payable February let, 19�, and semi-annually thereafter on August 1st, and February let, of each year until the principal sum shall be paid, which inter- est is payable in such funds as are, on the respective dates of pay - Tent, legal tender fcr debts due the United States of America, upon the presentation and surrender of proper coupons as they severally become due; both principal and interest being payable at the office Gof the State Treasurer, in City of Austin, Texas. This bond is subject to the condition and every holder hereof by accepting the same agrees with the obligor and every subsequent 21. kw holder hereof that (a) the delivery of this bond to any transferee shall vest title in this bond and the interest represented thereby in such transferee to the same extent for all purposes as would the delivery under like circumstances of any negotiable instrument pay- able to bearer; (b) the obligor and any agent of the obligor may treat the bearer of this bond, as the absolute owner hereof for all purposes and shall not be affected by any notice to the contrary; (c) the principal of and the interest on this bond will be paid, and this bond and each of the coupons appertaining thereto are transfer- able, free from and without regard to equities between the obligor 4 and the original or any intermediate holder hereof or any set -offs or cross -claims; and (d) the surrender to the obligor or any agent of the obligor of this bond and of each of the coupons shall be a good discharge to the obligor for the same. This bond is one of a series of bonds of like tenor and effect except as to denomination and maturity, numbered one (1) to thirty- two (32) both inclusive, in denominations, as follows: Numbered one (1) to ten (10) inclusive One Hundred ($100.00) Dollars, each; num- bered eleven (11) to thirty-two (32) inclusive Five Hundred ($500,00) ` Dollars, each; aggregating the sum of Twelve Thousand ($12,000,00) Dollars, issued by the Town of Prosper, Texas, for the purpose of securing funds to purchase a water system and to construct repairs, improvements and extensions to such system in and for said Town, in accordance with the Constitution and Laws of the State of Texas, the authority of a vote of the qualified electors of said Town voting at an election held on the 13th day of August, 1938, and pursuant to an ordinance passed by the Town Commission, duly re- corded in the Minutes of the Town Commission. The date of this bond in conformity with the ordinance above v mentioned is August let, 1938, 22. -/9- (W This bond and the aeries of which it is a part constitute special obligations of the Town of Prosper, Texas, payable from and secured by an exclusive first lien on and pledge of the revenues of the Town's water system, after deduction of reasonable operation and maintenance expenses. 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. And it is hereby certified 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 exist and to be done precedent to and in the issuance of this bond to render the same lawful and valid, have been properly done, have happened and have been performed in regu- lar and due time, form and manner required by the Constitution and the laws of the State of Texas, and the ordinance hereinabove mentioned, and that this series of revenue bonds does not exceed any constitu- tional or statutory limitations; and that provision has been made for the payment of the principal and interest of this bond and the series of which it is a part by irrevocably pledging the revenues of said water system of said Town of Prosper, Texas. IN TESTIMONY WHEREOF, the Town Commission of the Town of Prosper, Texas, has caused the seal of said Town to be hereon im- pressed and this bond to be signed by the Mayor of said Town, Coun- tersigned by the Town Clerk and registered by the Town Treasurer and has caused the annexedcoupons to be aigned by the facsimile signa- turea of the Mayor and the Town Clerk. Mayor, Town of Prosper, Texas. Coun`ersined: Town Cierit. REGISTERED: Town Treasurer. 23, 20. tw 6. The form of said coupon shall be substantially as follows; NO. $ ON THE 15T DAY OF 19_ , the Town of Prosper, Texas, will pay to the bearer, from the revenues of the Town's water system, after deduction of reasonable operation and maintenance expenses, at the office of the State Treasurer in the City of Austin, Texas, in the sum of DOLLARS in such funds as are on said date, legal tender for debts due the United States of America, said sum being six months' interest due that day on "Town of Prosper, Texas, Water System Revenue Bond, Series 1938", bearing the number hereon specified, dated August 1st, 1938. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxa- tion, Bond No. Town Clerk. Mayor, 7, Substantially the following shall be printed on the back of each bond; OFFICE OF COMPTROLLER STATE OF TEXAS I HEREBY CERTIFY that there is on file and of record in my office a certificate of the Attorney General of the State of Texas to the effect that this bond has been examined by him as required by law, and that he finds that it has been issued in conformity with the Constitution and laws of the State of Texas, and that it is a valid and binding special obligation of said Town of Prosper, Texas, pay- able from the revenue pledged to its payment by and in the ordinance authorizing same, and said bond has this day been registered by me. WITNESS l,,Y HAND and seal of office at Austin, Texas, this the day of , 1938. 24. uompt el��at ci ofuoiic accounts of �/ 8, In this ordinance `he term "system" shall include and mean the water works system of said Town, together with the completed project and any additions thereto and improvements and replacements thereof, 9, The Town Commission shall at all times while any of said bonds, or any interest thereon, are outstanding and unpaid, charge and collect for services rendered by said system rates sufficient to pay all maintenance, depreciation, replacement, betterment and in- terest charges, and for interest and Sinking Fund sufficient to pay the interest and principal of said bonds as such principal and in- terest matures and accrues and any outstanding indebtedness against the system, as is required by Article 1113, 1925 Revised Civil Stat- utes of Texas and amendments thereto. For the benefit of the original purchaser, and for the benefit of any and all subsequent holders of said bonds, coupons, or any part thereof, and in addition to all other provisions and covenants in the laws of the State of Texas and in this ordinance, it is expressly stipulated; A. Rates: The Town shall fix and maintain rates and collect charges for the facilities and services afforded by the System, which will provide revenues sufficient at all times: (1) To pay for all operations, maintenance, depreciation, G replacements and betterment charges of the System. (2) To establish and maintain the Bond Fund. (3) To pay all outstanding indebtedness against the System, other than the bonds, as and when the same becomes due. Provided also that no free service of the System shall be allowed and should the Toxin or any of its agencies or in- strumentalities make use of the services and facilities of the system, payment of the reasonable value thereof shall be made by the Town out of funds derived from sources other than the revenues and income of the System. B. USE CF REVENUES, The Town will deposit as collected all ` revenues derived from the operation of the System into a separate account (herein called the "System Fund") which shall be kept sepa- 25 L rate and apart from all other funds of the Town. The System Fund shall be administered as follows: (1) BOND FUND. From the funds in the System Fund, the Town shall pay into the Bond Fund during each year beginning with the date of completion of the project, an amount equal to 100 per centum of the amount required to meet the interest and principal payments falling due on or before the next maturity date of the bonds. In addition to such payment, the Town shall pay into the Bond Fund from the System Fund in each year 20 per centum of the above required amount until such time as there is in the Bond Fund an amount sufficient to meet the interest and principal payments falling due on or before the next maturity date of the bonds and the interest and principal payments on the bonds for 2 years thereafter. The amount required to be paid into the Bond Fund in each year shall be paid in substantially equal monthly payments from the monies in the System Fund after deductions have been made for paying the reasonable cost of the operating and maintaining of the System for such month. If the revs- nues of the System in any month, after deductions for opera- tion and maintenance, are insufficient to make the required payment into the Bond Fund, then the amount of any deficiency in the payment shall be added to the amount otherwise required to be paid into the Bond Fund in the next month. It is the intent of this provision that the sums paid into the Bond Fund shall be in excess of the immediate requirements for payment of interest on the principal of the bonds, until there has been accumulated in the Bond Fund, as a reserve for contin- gencies, an amount sufficient to service the bonds for two years. The monies in the Bond Fund shall be used solely for r the purpose of paying interest on and principal of the bonds ` until all bonds have been retired; provided, that, when the total in the Bond Fund is equal to the aggregate principal amount of the bonds outstanding plus accrued interest thereon, 26. I 3 A the monies in the Bond Fund may be used to purchase bonds at a price, exclusive of accrued interest, not exceeding the principal amount thereof. The monies paid into the Bond Fund shall be deposited in a bank or banks and shall be con- tinuously secured by a valid pledge to the Town of direct obligations of the United States of America having an aggre- gate market value exclusive of accrued interest, at all times at least equal to such Bond Fund. The Bond Fund, at the op- tion of the Town, may be invested in such direct obligations G of the United States of America and deposited in escrow un- der an escrow agreement. if such funds are so invested and deposited in escrow, the Town shall have the right to have sold through the escrow agent on the open market a sufficient amount of said securities in order to meet its obligations of princi- pal and interest in event it does not have sufficient funds, uninvested, on hand for such purpose. Under such circumstances, the Mayor is hereby authorized, ordered and directed to give fifteen days written notice to such escrow agent of the neces- sity to sell said securities on the open market. After such sale, the monies resulting therefrom shall belong to the Bond Fund and shall be available to pay such obligations of princi- pal and interest. 2. Surplus. Any funds remaining in the System Fund, after pro- vision for the reasonable cost of operating and maintaining the System and after paying the amounts required to be paid into the Bond Fund as above provided, may be used by the Town for the purchase of bonds at not exceeding the principal amount thereof (exclusive of accrued interest) or for any other pur- pose permitted by law. C. Additional Bonds: Encumbrance and Sale. While any of the bonds are outstanding, the Town shall not issue any additional bonds payable from the revenues of the System unless the lien of such bonds on the revenues of the System, 1s made Junior and subordinate in all 27. ' ,24 - Eli respects to the lien of the bonds authorized in this ordinance. In no event, while any of said bonds are outstanding, will the Town mortgage or otherwise encumber the System or any part thereof, or sell, lease or otherwise dispose of any substantial portion of such System. These provisions shall inure to the benefit of and be en- forceable by any holder of any of the bonds. D. Maintenance and Operation. The Town shall maintain the Sys- tem 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 Town 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 sim- ilar type of business. Nothing In this ordinance shall be construed as requiring the Town 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 Town from doing so. E. Accounts and Periodic Statements. The Town shall keep proper books of records and accounts (separate from all other records and accounts) in which complete and correct entries shall be made of all transactions relating to the System. The town shall furnish to any holder of any of the bonds, at the written request of such holder, not more than thirty days after the close of each six months fiscal period, complete operating and income statements of the System in reasonable detail covering such six months period, and, not more than sixty days after the close of each fiscal year, complete fi- nancial statements of the System in reasonable detail covering such fiscal year, certified by the Town's auditors. F. Inspection. Any purchaser of 25 per centum in aggregate principal amount of the bonds at the time then outstanding or any holder or holders of 25 per centum of said amount of outstanding bonds shall have the right at all reasonable times to inspect the System and all records, accounts and data of the Town relating thereto. 28. G. Information. During the construction of the Project the Town will furnish to any purchaser of 25 per centum of the bonds, such financial statements and other information and data relating to the Town, the Project and the System as any such purchaser from time to time may reasonably require. H. Sale of Bonds. Upon request, the Town will furnish to any purchaser of 25 per centum of the Bonds, information for the prepara- tion of a bond circular in customary form, signed by the proper of- ficial of the Town, containing such data as such purchaser may reason- ably request concerning the Town, the Project and the System. 10. The Mayor, Town Clerk and Town Treasurer are hereby instructed and directed to do any and all things necessary and/or convenient in re- ference to the installing and maintaining of a complete system of records and accounts pertaining to said system and to make the monies available for the payment of said revenue bonds in the manner provided by Chapter 122, Acts of the Regular Session of the Forty -Third Texas Legislature, effective May 12, 1933. In accordance with the provisions of Article 1113, 1925 Revised Civil Statutes of Texas, as amended, the fiscal year for the operation of such System shall be January let, to December 31st of each year. The remaining part of 1938, shall constitute a fractional part of a fiscal year. to 11. The town further covenants by and through this ordinance as follows: (a) That the revenue bonds authorized hereunder shall be special obligations of the Town, and the holder thereof shall never have the right to demand payment thereof out of funds raised or to be raised by taxation. (b) That it has the lawful power to pledge the revenue support- ing this issue of bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas, including power ex- isting under Articles 1111 to 1118, both inclusive, 1925 Revised Civil `, Statutes of the State of Texas, with amendments thereto, and by auth- ority of a vote of the qualified electors of said Town voting at an election held on the 13th day of August, 1938; that the bonds issued 29. hereunder shall be ratably secured under said pledge of income, in such manner that one bond shall have no preference over any other bond of said issue. (c) That other than for the payment of the bonds herein pro- vided for, the rents, revenues and income of said water system have not in any manner been pledged to the payment of any debt or obliga- tion of the Town, nor of said system. (d) In Addition to monies to be paid into the Bond Fund from revenues produced by said system, the Town will pay Into said fund the following: The balance remaining unexpended from the proceeds of the sale of the bonds, after the completion of the project, and the money represented by interest accruing on said bonds from their date to the date of delivery to the purchaser or purchasers thereof. Said funds shall be used for the purpose of purchasing outstanding bonds and/or interest coupons; provided that bonds thus purchased shall be cancelled and shall not be reissued. 12. It shall be the duty of the Mayor to submit the record of said bonds and the bonds to the Attorney General of the State of Texas for approval and thereafter to have them registered by the Comptroller of the State of Texas. 13. The revenue bonds, when properly executed by the Town of- ficials shall be held by the Mayor of the Town to be delivered by the Mayor to the purchaser or purchasers thereof. The Mayor, Town Clerk and Town Treasurer are authorized and directed to do any and all things necessary and/or convenient to carry out the terms of said purchase. 14. The bonds thus authorized shall pass by delivery. 15. All ordinances and resolutions, and parts thereof, in con- flict herewith are hereby expressly repealed insofar as they conflict herewith. 16. By reason of the fact that the Town Commission considers the passage of this ordinance necessary for the preservation of the public health and safety of the Town and of its citizens, it is hereby declared to be an emergency measure demanding that the rule requiring ordinances to be read at more than one meeting of the Town Commission 30. be suspended and that this ordinance take effect immediately from and after its passage, and it is so ordained. PASSED AND APPROVED This the /s^ day of August, 1938. Maycr, ''own/VLoT oo Texas. ATTEST: �� Town Clerk. 31 4w) THE STATE OF TEXAS COUNTY OF COLLIN TOWN OF PROSPER We, the undersigned, Town Clerk and Town Treasurer of the Town of Prosper, Texas, do hereby certify that other than for the payment of the water system Revenue Bonds dated August let, 1938, numbered from 1 to 32, of the aggregate amount of $12,000.00, the water system, the rents, revenues and income of the said water COW system have not in any manner been pledged to the payment of any debt or obligation of the Town nor of said system. Witness our hands and the seal of the Town of Prosper, Texas, this the1�S74 day of August, 1938. L' (SEAL) Cr � own Clerk. Town Treasurer. 33. \r THE STATE OF TEXAS : COUNTY OF COLLIN : TOWN OF PROSPER : I, C. W. Harper, the Town Clerk of the Town of Prosper, Texas, do hereby certify that the above and foregoing copies of: I. (a) Resolutions of Town Commission calling the bond election; (b) Notice of election; (c) Affidavit of posting election notice; (d) Election returns; (e) Ballot used at election; (f) Resolution canvassing returns and declaring result; (g) Ordinance authorizing the issuance of the bonds. L are true and correct copies of the originals now on file and of record �I in my office. II. I further certify that the resolution of the Town Commission ordering the bond election is of record on pagef Vol. /_ of the Minutes of the Town Commission, which minutes h ve been duly signed and approved by the Mayor. III. I further certify that the resolution canvassing the returns and declaring the results of the election appears of record on page O J 9 f Vol. I of the Minutes of the Town Commission, which minutes have been duly approved and signed by the Mayor. _ IV. I further certify that the ordinance authorizing the issuance of the bonds was passed at a regular meeting of the Town Commission all members thereof being present, and appears of record in Vol. / at pages f�l of the records of such Town, and said ordinance has been duly app oved and signed by the Mayor. V. I further certify that all proceedings of any character which In any way affect the bond issue authorized herein are shown herein. WITNESS my hand and the seal of said Town of Prosper, Texas, on this /.S71-L day of August, 1938. Tow 07r4, Ipwn of Prosper, Texas. (SEAL) 34.