55-03 O - Issuance of Water and Sewer Bonds h
I �_
l(4
t WINANCE AUTHORIZING ISSUANCE OF $25,000
"CITY OF PROSPER, TEXAS, WATERW CKS AND
SEWER SYSTEM REVENUE BONDS", DATED
JA NUAR Y 1, 1955
THE STATE OF TEXAS
CITY OF PROSPER
COUNTY OF COLLIN
ON THIS, the , day of January, 1955, the City
Commission of the City of Prosper, Texas, convened in special
session, at the regular ::meeting place thereof in the City Hall,
there being present and in attendance, the following members,
to-wit:
U. N. CLARY, MAYOR
ROY SKELTON, COMMISSIONER
D. C. REESE, C OMMISSI OVER
and with the following absent :
constituting a quorum; at which time the following among other
business was transacted, to-wit:
n �
Conmissioner /A ,., ..�! ► ' .' 44. ntroduced a proposed
ordinance. The ordinance w=.s read in full.
Commissioner D .C. . e9(,L_made a motion that any
rule requiring ordinances to be read at more than one meeting be
suspended. The motion was seconded by Commissioner /f .1,A _•&
and carried by the following vote:
AYES : Mayor Clary and Commissioners Skelton
and Reese.
NOES : None.
Commissioner 1' made a motion that the
ordinance be passed finally. The motion was seconded by
Commissioner1.2.1_11b4, and carried by the following vote:
AYES : Mayor Clary and Commissioners Skelton
and Reese.
N OES : None.
The Mayor announced that the ordinance had been
finally passed .
The ORDINANCE is as follows:
"AN ORDINANCE by the City Commission of the City
of Prosper, Texas, authorizing the issuance of
bonds in the principal sum of $25,000 for
the purpose of constructing a Sanitary Sewer
System in and for said City, as authorized by
the general laws of the State of Texas, parti-
cularly Articles 1111 et seq. , Revised Civil
Statutes of Texas, 1925, as amended; prescribing
the form of the bonds and the form of the interest
coupons; pledging the revenues of the City's
combined Waterworks and Sanitary Sewer System
to the payment of the principal and interest of
said bonds, after deduction of reasonable ex-
penses of operating and maintaining said system;
enacting provisions incident and relating to the
subject and purpose of this ordinance; and de-
claring an emergency.
WHEREAS , the City Commission of the City of Prosper,
Texas, on the 27th day of November, 1954, adopted a resolution
and order calling an election on the question of the issuance
of $25,000 revenue bonds to mature serially over a period of
years not to exceed thirty-five ( 35) years from their date, and
to bear interest at a rate not to exceed 4-1/2% per annum,
payable annually or semi-annually, for the purpose of construct-
ing a Sanitary Sewer System in and for said City; and
WHEREAS , the said election was held pursuant to said
resolution and order on the 17th day of December, 1954; and
WHEREAS, this City Commission has examined into and
investigated the regularity of the proceedings for said election,
and finds that the same was duly and legally held; that the
notice required by law to be given has been duly and legally
given; that said election was conducted in strict conformity
with the law; and that due returns of said election have been
made by the proper officers; and
WHEREAS , at said election, a majority of the qualified
voters who are property taxpayers of the City of Prosper,
voting at said election, sustained the proposition to issue
the aforesaid bonds in the principal sum of TWENTY FIVE THOUSAND
DOLLARS ($25,000) ; and
WHEREAS, this City Commission has heretofore adopted
a resolution canvassing the returns and declaring the results
of said election, and determining the specific authority of
the City to issue said revenue bonds; therefore
BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF
PR OS PER, TEXAS :
SECTION 1 : Authorization - Principal Amount and
Designation. That in order to borrow the said sum of TWENTY
FIVE THOUSAND DOLLARS ($25,000) , for the purpose of construct-
ing a Sanitary :ewer System in and for said City, the City
Commission of the City of Prosper, Texas, by virtue of the
authority expressly conferred upon it by the qualified voters
of said City voting at the aforesaid election, and pursuant to
the general laws of the State of Texas, particularly Articles
1111 et seq. , Texas Revised Civil statutes of 1925, as amended,
has determined that there shall be issued, and there is hereby
issued a series of coupon bonds in the total principal sum of
TWENTY FIVE THOUSAND DOLLARS (*25,000) , to be designated
"CITY OP PR 'PER, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
BONDS" , payable as to both principal and interest solely from
and secured by a first lien on and pledge of the revenues of
the City's combined Waterworks and Sanitary Sewer System,
after deduction of reasonable expenses of operation and main-
tenance, as said expenses are defined by statute.
SECTION 2: Date - Numbers - Maturity and Option
That said bonds shall be dated January 1, 1955; shall be num-
bered consecutively from One (1) to Thirty-three (33) , both
inclusive, shall be in the denominations shown below; and shall
become due and payable serially in accordance with the following
schedule:
BOND NUMBERS
(All Inclusive) DENOMINATIONS MATURITY DATES AMOUNTS
1 $500 January 1, 1957 $ 500
2 500 January 1, 1958 500
3 500 January 1, 1959 500
# 500 January 1, 1960 500
5 5C0 January 1, 1961 500
6 500 January 1, 1962 500
7 500 January 1, 1963 500
8 500 January 1, 1964 500
9 1,000 January 1, 1965 1,000
10 500 January 1, 1966 500
11 500 January 1, 1967 500
12 1,000 January 1, 1958 1,000
13 500 January 1, 1969 500
14 1,000 January 1, 1970 1,000
15 500 January 1, 1971 500
15 1,000 January 1, 1972 1,000
BOND NUMBERS
(All Inclu ive DENOM;NATIONq MATURITY DATE., AMOUN' S
17 $1,000 January 1, 1973 $1,000
18 500 January 1, 1974 500
19 1,000 January 1, 1975 1,000
20 1,000 January 1, 1976 1,000
21 1,000 January 1, 1977 1,000
22 1,000 January 1, 1978 1,000
23 1,000 January 1, 1979 1,000
24 1,000 January 1, 1980 1,000
25 1,000
26 500 January 1, 1981 1,500
27 1,000 January 1, 1982 1,000
28 1,000
29 500 January 1, 1983 1,500
30 1,000 January 1, 1984 1,000
31 1,000
32 500 January 1, 1985 1,500
33 1,000 January 1, 1985 1,000
PROVIDED, HOWEVER, that the City reserves the right to redeem
B unds Numbered 5 to 33, both inclusive, of said series (maturing
on January 1st in each of the years 1961 to 1986, both inclusive)
in whole or in part, on January 1, 1960, or on any interest pay-
- ment date thereafter at par and accrued interest; provided,
FURTHER, that if less than all of said bonds are redeemed on any
such redemption dates, same shall be redeemed in inverse numerical
order; and PROVIDED, FURTHER , that at least thirty (30) days
prior to any interest payment date upon which any of said bonds
are to be redeemed, notice of redemption signed by the City
Clerk, (specifying the serial numbers and amount of bonds to be
redeemed) shall have been filed with the FIRST NATI0L L BANK IN
DALLAS, Dallas, Texas, (the paying agent named in each of said
bonds) , and should any bond or bonds not be presented for re-
demption pursuant to such notice, the same shall cease to bear
interest from and after the date so fixed for redemption.
SECTION 3: Interest . That said bonds shall bear
interest from date until paid at the following rates per annum;
that is to say --
(a) Bonds Numbered 1 to 9, both inclusive, ma-
turing on January 1st in each of the years 1957 to
1965, both inclusive, shall bear interest at the rate of
THREE AND ONE-HALF PER CENTUM (3-1/2%) per annum; and
(b) Bonds Numbered 10 to 33, both inclusive, ma-
turing on January 1st in each of the years 1966 to
1986, both inclusive, shall bear interest at the rate
of FOUR AND ONE-HALF PER CENTUM (4-1/2 ) par annum
such interest to be evidenced by proper coupons attached to each
of said bonds, and said interest shall be payable on January 1,
1956, and semi-annually thereafter on July let and January 1st
in each year.
SECTION 4: Place of Payment. That both principal
and iratc:rest of this issue of bonds shall be payable in lawful
money of the United Staten of :america, without exchange or col-
lection charges to the owner or holders at the FIRST NATIONAL
BANK IN DALLAS , Dallas, Texas, upon presentation and surrender of
bonds or proper coupons .
SECTION 5: Execution of Bonds . That each of said
bonds shall be signed by the Mayor and countersigned by the City
Clerk, and the corpc.'r a seal of the "CITY OF PROSPER, TEXAS" shall
be impressed upon each of them.
SECTION 6: Execution of Coupons . That the fac-
simile signatures of the Mayor and City Clerk may be lithographed
or printed on the interest coupons attached to said bonds, and
shall have the same effect as if they had been signed by them.
SECTION 7: Form of Bonds . The bonds shall be in
substantially the following form:
NO. UNITED STATES OF AMERICA w
STATE OF TEXAS
COUNTY OF COLLIN
CITY OF PROSPER, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE BOND
FOP VALUE RECEIVED, the City of Prosper, a municipal
corporation of the State of Texas, hereby acknowledges itself
indebted to and promises to pay to bearer as hereinafter stated
on the FIRST DAY OP JANUARY, 19 , the sum of
DOLLARS
(: _j in lawful money of the United States of America,
with Interest thereon from the date hereof until paid at the
rate of PER CENTUM ( %) , per
annum, payable on January 1, 195%, and semi-annually thereafter
on July 1st and January 1st in each year, and interest falling
due on or prior to maturity hereof is payable only upon presenta-
tion and surrender of the interest coupons hereto attached as
they severally become due .
BOTH PRINCIPAL and interest of this bond are hereby
made payable at the FIRST NATIONAL BANK IN DALLAS, Dallas , Texas,
without exchange or collection charges to the owner or holder, and
the said City of Prosper, Texas , is hereby held and firmly bound
to apply the pledged appropriated revenues of its combined
Waterworks and Sanitary Sewer System to the prompt payment
of principal of and interest on this bond at maturity, and to
pay said principal and interest as they mature.
THIS BOND is one of a series of bonds of like tenor
and effect, except as to denomination, number, interest rate,
right of prior redemption and maturity, aggregating in amount
TWENTY FIVE THOUSAND DOLLARS ($25,000) , numbered consecutively
from One (1) to Thirty-three (33) , both inclusive, in denomina-
tion of One Thousand Dollars ($1,000) and Five Hundred Dollars
(0,500) , issued for the purpose of construcsing a sanitary Sewer
1ystem in and for said City, in accordance with the Constitution
and laws of the State of Texas, particularly Articles 1111 et
seq. , Revised Civil Statutes of 1925, as amended, and by
authority of a vote of the qualified property taxpaying voters
of said City, who had duly rendered their property for taxation,
voting at an election held for that purpose within said City on
the 17th day of December, 1954, and pursuant to an ordinance
passed by the City Commission of the City of Prosper, Texas, and
duly recorded in the Minutes of said City Commission.
AS SPECIFIED in the ordinance hereinabove mentioned,
the City reserves the right to redeem Bonds Numbered 5 to 33
both inclusive, of this series, (maturing on January 1st in each
of the years 1961 to 1986, both inclusive) , in whole or in part,
on January 1, 1960, or on any interest payment date thereafter,
at par and accrued interest ; PROVIDED, H( EVER, that if less than
all of said bonds are redeemed on any such redemption dates , same
shall be redeemed in inverse numerical order; and PROVIDED,
FURTHER, that at least thirty (30) days prior to any interest
payment date upon which any of said bonds are to be redeemed,
notice of redemption signed by the City Clerk (specifying the
serial numbers and amount of bonds to be redeemed) shall have
been filed with the FIRST NATIONAL BANK IN DALLAS, Dallas,
Texas, and should any bond or bonds not be
presented for re-
demption pursuant to such notice the same shall cease to bear
Interest from and after the date so fixed for redemption.
The date of this bond In conformity with the ordinance
above mentioned, is January 1, 1955.
THI3 BOND and all bonds of the series of which it is
a part constitute special obligations of the City of Prosper,
Texas, each payable as to both principal and interest and
equally secured by a first lien on and pledge of the revenues
of the City's combined Waterworks and Snnitary Sewer System,
after deduction of reasonable expenses of operation and main-
tenance .
Ti CITY, however, expressly reserves the right to
issue additional bond obligations, in all things on a parity
with the bonds of this series, and payable from and equally se-
cured by a first lien on and pledge of the net revenues of the
City's combined :;aterworks and Sanitary Sewer System; pro-
vided, however, that any and all such further bonds may be so
issued only in accordance with and subject to the covenants,
limitations, conditions and restrictions relating thereto which
are set forth and contained in the ordinance authorizing; this
series and to which said ordinance reference is hereby made for
more complete and full particulars .
THE HOLDER hereof shall never have the right to demand
payment of this obligation out of funds raised or to be raised
by taxation.
EACH HOLDER of this bond, payable to bearer, or of the
interest coupons, hereto attached, is conclusively .presumed to
forego and renounce his equities in favor of subsequent holders
for value without notice and to agree that, being payable to
bearer, this bond and each of the interest coupons attached,
may be negotiated by delivery however possession may have been
acquired, and that any subsequent holders who may receive this
bond or any of the interest coupons attached for value without
notice, has thereby acquired absolute title free from all equi-
ties and claims of ownership of any prior holder. The City of
Prosper, its officers and the paying agent shall not be affec-
ted by any notice to the contrary.
AND IT IS HEREBY CERTIFIED AND RECITED that the issu-
ance 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 regular and due time,
form and manner as required by the Constitution and laws of the
State of Texas, and the ordinance hereinabove mentioned; 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 the
revenues of said combined Waterworks and Sanitary Sewer System
of the City of Prosper, Texas .
IN TESTIMONY WHEREOF, the City Commission of the City
of Prosper, Texas, has caused the seal of said City to be im-
pressed hereon, and this bond to be signed by the Mayor of said
City and countersigned by the City Clerk, and has caused the
annexed coupons to be signed by the lithographed or printed
facsimile signatures of the Mayor and City Clerk, as of the
FIRST DAY OF JANUARY, 1955.
Mayor, ervra Prosper, !Texas
C OUNTER.S IG NED:
City Clerk, City of Prosper,
Texas .
SECTION 8: Form of Coupon. The form of said interest
coupons shall be substantially as follows:
No. ON THE FIRST DAY O
19
*(unless the bond to which this coupon pertains has been proper-
ly called for redemption in accordance with its terms) the City
of Prosper, a municipal corporation of the State of Texas, here-
by promises to pay to bearer, in lawful money of the United
States of America, at the FIRST NATIONAL BANK IN DALLAS, Dallas,
Texas, without exchange or collection charges to the owner or
holder, the sum of
DOLLARS
($ ) . This coupon is payable only from funds specified
in the bond to which it pertains, the holder possessing no right
to demand payment from any funds raised or to be raised by taxa-
tion. The amount hereof represents months ' interest
due the aforesaid date on "CITY OF PROSPER, TEXAS, WATERVCRK.s
AND SEWER SYSTEM REVENUE BOND", dated January 1, 1955.
Bond No.
City Clerk Mayor
*NOTE TO PRINTER : The expression in parenthesis to be included
only in coupons maturing July 1, 1960 and subsequent, pertaining
to optional bonds, being Numbers 5 to 33, both inclusive.
SECTION 9: Form of C omptroller 's Certificate. Substantially
the following shall be printed on the back of each bond:
OFFICE OF C OMPTR OLLER
REGISTER NO.
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 the City of Prosper, Texas , payable from the revenues pledged
to its payment by and in the ordinance authorizing same, and
said bond has this day been registered by me.
WITNESS MY HAND AND SEAL OF OFFICE, at Austin,Texas,
Comptroller of Public Accounts of the
State of Texas .
SECTION 10: Requirement Schedules The following
is a schedule of the principal and interest requirements, show-
ing also the total annual requirements of said "CITY OF PROSPER,
TEXAS, WATERWC tKS AND SEWER SYSTEM REVENUE BONDS" ; that is to
say --
YEAR ENDING TCYTAL ANNUAL
jANUARY 1Bt PRINCIPAk INTEREST REQUIREMENTS
1956 $1,075 $1,075
1957 $ 50o 1,075 1,625
1958 500 1,057.50 1,557.50
1959 500 1,040.00 1,540.00
196o 500 1,022.50 1,522.50
1961 500 1,005.00 1,505.00
1962 500 987.5o 1,487.5o
1963 500 970.00 1,470.00
1964 500 952.50 1,452.50
1965 1,000 935.0o 1,935.0o
1966 500 900.00 1,400.0o
1967 50o 877.50 1,377.50
1968 1,000 855.00 1,855.00
1969 50o 810.00 1,310.00
1970 1,00o 787.5o 1,787.5o
1971 50o 742.50 1,242.5o
1972 1,00o 72o .00 1,720.00
1973 1,000 675.0o 1,675.00
1974 50o 630.0o 1,130.00
1975 1,000 607.50 1,607.50
1976 1,000 562.50 1,562.50
1977 1,000 517.50 1,517.50
1978 1,000 472.50 1,472.50
1979 1,00o 427.50 1,427.5o
1980 1,000 382.50 1,382.50
1981 1,50o 337.50 1,837.50
1982 1,00o 270.00 1,270.00
1983 1,500 225.00 1,725.00
1984 1,000 157.50 1,157.50
1985 1,500 112.50 1,612.50
1986 1,000 45.00 1,045.00
No mistake in the foregoing calculations shall in any manner
operate to diminish the payment of the amounts to become due
on said bonds, but an amount is hereby ordered to be set aside
for each of the years specified, sufficient to meet the require-
ments hereof in all respects .
SECTIOj 11: Designating Fiscal Year - Creati ng
Special Funds - Use of Surplus Funds , The System shall be
operated on the basis of a fiscal year commencing on 21.42AMtee4.
1
'� of each year and ending on / J�'
of the year, and the City covenants a d agrees that
as recervevenues and income of every nature derived
from the operation of its Waterworks and Sanitary Sewer System
shall be deposited from day to day into an account designated
the "Waterworks and Sewer System Fund" kept separate and apart
from all other funds or accounts, and said System Fund shall be
pledged, appropriated and used for the following purposes, and
in the order of precedence shown, as follows:
First: To the payment of the necessary and
reasonable expense of operating and maintaining the
System, including salaries, labor, materials, interest ,
repairs and extensions necessary to render efficient
service. Repairs and extensions above referred to shall
include only such as are found by the City Commission to
be necessary to keep the system in operation and render
efficient service, or necessary to remedy some physical
defect which would othe -. 3e impair the security of
the bonds herein authorized.
liecond: To th,• SPECIAL WATERWORKS AND SEWER SYSTEM
REVENUE BOND RETIREMENT AND RESERVE FUND" hereby created
for the payment of principal and interest of the bonds
herein authorized, as same fall due, and to be used for no
other purpose. All sums received from the purchasers of
the bonds as accrued interest thereon to date of delivery,
shall be placed in said Special Bond Fund.
Third: Al]. revenues of the System remaining after
the above requirements have been satisfied (including any
increased payments into the aforesaid Special Fund as may
be necessary by reason of the issuance of additional parity
bonds in the future under the provisions of Section 16
hereof) and after all deficiences existing in such require-
ments have been remedied, may be used for any other proper
city purpose now or hereafter permitted by law, including
the use thereof either for retiring in advance of maturity
bonds issued hereunder or bonds issued on a parity therewith
according to the provisions made for their prior redemption,
or may be used to purchase bonds on the open market at not
exceeding the market value thereof. All bonds so paid,
redeemed or purchased shall be cancelled and shall not be
reissued. Nothing herein shall be construed, however, as
impairing the right of the City to pay, in accordance with
the provisions thereof, any junior lien bonds hereafter
legally issued by it.
All funds herein provided for the bonds herein author-
ized shall be kept separate and apart from all other city funds
and shall be secured in the manner required by the laws of
Texas for the security of city funds. All sums of money deposited
in the Special Bond Fund shall be held as a trust fund for the
benefit of the holders of the bonds herein authorized, the bene-
ficial interest in which shall be regarded as existing in such
holder.
SECTION 12: Special Waterworks and Sewer System
Revenue Bond Retirement and Reserve Fund: The following pro-
vivione shall govern the creation and maintenance of the afore-
said "SPECIAL WATERWFIKS AND SEWER SYSTEM REVENUE BOND RETIRE-
MENT AND RESERVE FUND" :
The entire net income and revenues of the City's
combined Waterworks and Sanitary Sewer System remainin.g after
operation and maintenance expenses are deducted, are hereby
irrevocably pledged to said Special Fund, in amounts sufficient
to produce the total annual principal and interest requirements
of the revenue bonds herein authorized, as such total require-
ments are shown in the schedule relating thereto as set out in
Section 10 of this ordinance; AND, ITS ADDITION, said Special
Fund shall contain a reserve, and to establish such reserve
shall be supplemented each year by the amount of$300.00, until
such time as said reserve portion of said Special Fund totals
$1,500.00 in excess of all amounts required to fully meet and
discharge the principal and interest installments falling due
on or before the next succeeding principal maturity date with
respect to the bonds herein authorized. It is hereby declared
to be the City's purpose, and said City so covenants and affirms
that the amounts to be maintained in said Special Fund shall
continuously be in excess of any particular years ' principal
and interest requirements of the bonds herein authorized by
the sum of $1,500.00, as a reserve for use in meeting the re-
quirements of said bonds, if need be, and that this arrange-
ment shall continue and said Special Fund shall be continuously
supplemented as necessary to maintain said reserve until all of
said bonds with all interest thereon have been fully paid and
discharged, or until such time as the Special Fund including
said reserve shall contain amounts equal to the total principal
and interest requirements of said bonds then outstanding at
their final maturity. The City Treasurer is authorized and
directed to calculate the amounts required annually as afore-
said and to withdraw said amounts thus determined from the
aforementioned "Waterworks and Sewer System Fund" , and shall
deposit them in equal monthly installments in said "SPECIAL
WATERWORKS AND SEWER SYSTEM REVENUE BOND RETIREMENT AND RESERVE
FUND" on or before the 15th day of each month. .Thc FIR; v
17:2,"t104Y
'R
)/dr4teAl;t*
as_the-austta i R n nf said S pev is l Fund, and the monthly deposits
above prescribed shall be placed in said fund with said bank.
In the event the income and revenues of the City's Waterworks
and Sanitary Sewer System are insufficient in any month to per-
mit the required deposits into the Special Fund in full accord
with the provisions hereof, then the amount of any deficiency
shall be added to the amount otherwise to be deposited in said
fund in the next month, until all deficiencies are rectified.
SECTION 13: Definition of System. For all purposes
of this ordinance and in particular with respect to the pledge
and appropriation of revenues herein prescribed, the "WATERWORKS
AND SANITARY SEWER SYSTEM" of the City of Prosper, Texas, shall
be construed to mean all properties, real, personal, mixed or
otherwise now owned or hereafter acquired by the City of Prosper,
through purchase, construction or otherwise, and used in con-
nection with said Waterworks and Sanitary Sewer System, and in
any wise appertaining thereto and whether situated within or
without the limits of said City.
fECTION 14: Rates and Charges : The City of Erosper,
further covenants and agrees that, so long as any of the revenue
bonds and coupons herein authorized remain outstanding and un-
paid, it shall fix and maintain rates and collect charges for
the facilities and services afforded by its Waterworks and
Sanitary Sewer System which will produce income and revenues
sufficient at all times to:
(1) Pay all operation, maintenance, depreciation
and betterment charges and expenses of said
System; and
(a) Establish and fully maintain the above
prescribed "SPECIAL WATERWORKS AND SEWER
SYSTEMY REVENUE BOND RETIREMENT AND RESERVE
FUND" .
SECTION 15: Further Covenants , The City further
covenants and agrees by and through this ordinance, as follows :
(a) That the revenue bonds authorized hereunder
shall be special obligations of the City, and the holder
thereof shall never have the right to demand payment out of
any funds raised, or to be raised, by taxation;
(b) That it has the lawful power to pledge the
revenues supporting this issue of bonds, and has lawfully
exercised said power under the Ccnstitution and laws of
the State of Texas, including power existing under
Articles 1111 to 1118, both inclusive, 1925 Revised
Civil Statutes of Texas, with amendments thereto, and
by authority of a vote of the qualified electors of
said City, voting at an election held on the 17th day
of December, 1954; that the bonds issued hereunder shall
be ratably secured in such manner that one bond shall
have no preference over any other bond of said issue; and
(c) That, other than for the payment of the
bonds hereby issued, the rents, revenues and income of
the said Waterworks and unitary Sewer System have not
been in any manner pledged to the payment of any debt
or obligation of the City and/or said System, and that
said Waterworks System is free and clear of all encum-
brances whatsoever.
SECTION 16: Issuance of Additional Parity 4onds .
In addition to the right to issue bonds of inferior lien as
authorized by the laws of this State, the City of Prosper,
reserves the right to issue additional revenue bonds payable
from the net income and revenues of its gaterworks and Sanitary
Sewer System. When issued in compliance with law and the terms
and conditions hereinafter appearing, such additional bonds shall
occupy a position of parity with the series of bonds authorized
by this ordinance, and such additional bonds shall be equally
secured by a first lien on and pledge of said revenues . The
City hereby covenants and agrees that no other revenue bonds or
other obligations payable from the revenues of its Waterworks
and Sanitary Sewer System shall be issued on a parity with the
series of bonds authorized to be issued by this ordinance unless
and until the following conditions have been met :
(a) That the City is not then in default as to
any covenant, condition or obligation prescribed by this ordi-
nance;
(b) That the proposed additional bonds shall have
been voted at an electicn duly called and held for the purpose
as provided by law;
(c) That the laws of the State of Texas in force
at such time provide permission for the issuance of such bonds;
and
(d) That the City has secured a certificate from
a Certified Publics Accountant showing that the net income and
revenues of the waterworks and Sanitary sewer System (after
full provision for adequate maintenance and operation charges)
for each of the last 1-WO w ompleted fiscal years next
preceding the issuance and sale of the proposed additional
bonds, is equal to at least one and one-half (1-1/2) times the
average annual principal, and interest requirements of the
then outstanding bonds of the series hereby authorized, plus
the average annual principal and interest requirements of the
proposed additional bonds .
Such additional bonds, when thu.a issued, may be se-
cured by a pledge of the revenues of the Waterworks and Sanitary
Sewer System on a parity in all things with the pledge securing
the issuance of the bonds herein authorized.
S.NCT CN 17: Maintenance and Operation. The City of
Prosper hereby covenants and agrees to maintain the Waterworks
and Sanitary Sewer . ystem in good condition and operate the
same in an efficient manner and at reasonable cost. So long as
any of the bonds herein authorized are outstanding the City
agrees to maintain insurance for the benefit of the holder or
holders of the bonds of the kinds and in the amounts which are
usually carried by private companies operating similar pro-
perties, and that during such time all policies of insurance
shall be maintained in force and kept current as to premium pay-
ments . Al]. moneys received from losses under such insurance
policies other than public liability policies, are hereby pledged
as security for the bonds until and unless the proceeds are
paid out in making good the loss or damage in respect of which
such proceeds are received, either by replacing the property
destroyed or repairing the property damaged, and adequate pro-
vision for making good such loss or damage made within ninety
(90) days after the date of the loss . The payment of premium
for all insurance policies required under the provisions hereof
shall be considered as maintenance and operation expenses.
SECTION 18: Records and Accounts. The City of
Prosper hereby covenants and agrees that so long as any of the
bonds herein authorized or any interest thereon remain outstand-
ing and unpaid, it will keep and maintain a proper and complete
system of records and accounts pertaining to the operation of
its Waterworks and Sanitary Sewer System, separate and apart
from all other records and accounts in which complete and cor-
rect entries shall be made and maintained of all transactions
relating to said system as provided by Article 1113, Revised
Civil Statutes of Texas, 1925, as amended, and that the holders
of any of the bonds or any duly authorized agent or agents of
such holders , shall have the right at all reasonable times to
inspect all such records , accounts and data relating thereto,
and to inspect the system and all properties comprising same.
The City further agrees that within sixty (60) days following
the close of each fiscal year, it will cause an audit of such
books and accounts to be made by an independent firm of Certi-
fied Public Accountants, showing the receipts and disbursements
for account of the system for the fiscal year. Each such audit,
in addition to whatever other matters may be thought proper by
the accountant, shall particularly include the following:
(a) A detailed statement of the income and
expenditures of the system for such fiscal year.
(b) A balance sheet as of the end of such
fiscal year.
(c) The accountant 's comments regarding the
manner in which the City has carried out the requirements
of this ordinance, and his recommendations for any
changes or improvements in the operation of the system.
(d) A list of the insurance policies in force at
the end of the fiscal year on the system properties, setting
out as to each•policy the amount thereof, the risk covered,
the name of the insurer, and the policy's expiration date.
(e) A list of the securities which have been on
deposit as security for the money in the Special Bond
Retirement and Reserve Fund, throughout the fiscal
year, a list of the securities, if any, in which the
reserve portion has been invested, and a statement of
the manner in which money in the System Fund has been
secured in such fiscal year.
(f) The number of metered and unmetered customers
connected with the system at the end of the fiscal year,
showing the number of water connections and sewer connec-
tions separately.
Fexpenses incurred in making the audits above required
are to be regarded as maintenance and operation expense and
paid as such. Copies of the aforesaid annual audit shall be
promptly furnished the original purchasers of the bonds and
any subsequent holder at his request.
s4stement- frig-- heAvre e
t- revenues-- -eaccparately, togethe ear►
.xwetions t6 eac�i t- G-endr of e- osai.}�
SECTION 19: Issuance or refunding Bonds. If prior
to the payment and discharge of all outstandtag bonds of the
series herein authorized to be issued, it shall be found desir-
able to refu nd said bonds under the provisions of any law then
available, said bonds, or any part thereof, may be refunded with
the consent of the holders thereof(except as to bonds which
are redeemable, in which case such consent shall not be necessary)
and the refunding bonds so issued shall enjoy complete equality
of lien with the portion of said bonds which is not refunded,
if any there be, and such refunding bonds shall continue to
enjoy the same prio'ity of lien over any other bonds or obli-
gations of the System as were enjoyed by the bonds refunded;
PROVIDED, HOWEVER, that if only a portion of the bonds outstand-
ing is refunded and if such bonds are refunded in such manner
that the interest of the refunding bonds is increased or that
any of the refunding bonds mature at a date earlier than the
maturity dates of the bonds refunded, and earlier than the
maturity date of any of the bonds not refunded, then such bonds
may not be refunded without the consent of the holders of the
unrefunded portion of the bonds then outstanding.
SECTION 20:, Remedies in Event of Default. In Addi-
tion to all the rights and remedies provided by the laws of the
State of Texas, the City covenants and agrees that in the
event the City (a) defaults in the payment of principal or
interest on any of the bonds when due, (b) fails to make the
payments required by Section 12 of this ordinance to be made
into the "SPECIAL WATERWORKS AND SEWER SYSTEM REVENUE BOND
RETIREMENT AND RESERVE FUND", or (c) defaults in the observ-
ance or performance of any other of the covenants, conditions
or obligations set forth in this ordinance, the following reme-
dies shall be available:
(1) The holder or holders of any of the bonds
shall be entitled to a writ of mandamus issued by a Court
of proper jurisdiction compelling and requiring the
City Commission and other officers of the City to observe
and perform any covenant, obligation or condition prescribed
in the bond ordinance.
.
(2) No delay or omission to exercise any right
or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver of
any such default or acquiescence therein, and every such
right and power may be exercised from time to time and as
often as may be deemed expedient.
The specific remedies herein provided shall be cumu-
lative of ell other existing remedies and the specifications of
such remedies shall not be deemed to be exclusive.
SECTION 21: Making Rates and Collecting Charges -
No Free Service. The City of Prosper further covenants and
agrees that it will faithfully and punctually perform all
duties with reference to the System required by the Constitution
and laws of the State of Texas, including the making and collect-
ing of reasonable and sufficient rates for water and sewer
services supplied by the System, and the segregation and appli-
cation of the revenues of the System as required by the
provisions of this ordinance. The City covenants and agrees
that no free service shall be rendered by the system to any
customers, including the City and its various departments,
and that all water and sewer services used by the City and
its various departments will be paid for at the same rates
charged other consumers .
SBCTIQN 22; Salle, Lease or Other ncumbranoe 9f
System. The City of Prosper hereby irrevocably covenants,
binds and obligates itself not to sell, lease or in any manner
dispose of the ;itaterwor'ke and Sanitary Sewer System or any part
thereof, including any and all extensions and additions that
may be made thereto, until the bonds heroin authorized to be
issued shall have been paid in full as to both principal and
interest (provided that this covenant shall not be construed
to prevent the disposal by the City of property which in its
judgment has become inexpedient to use in connection with the
System when other property of equal value has been substituted
therefor) .
,gCTION 23: Competition. That so far ss it legally
may, the City of Prosper covenants and agrees, for the protect-
ion and security of the bonds heroin authorized and the holders
thereof from time to time, that it will not grant a franchise
for the operation of any competing Waterworks and Sanitary
Sewer System in the City of Prosper until all bonds issued pur-
suant to this ordinance stria ll have been 'e i.red.
SECTION 4: Ordinance to Constitute Contract. The
provisions of this ordinance shall constitute a contract between
the City of F roeper and the holder or holders from time to time
of the bonds herein authorized to be issued, and after. the
issuance of any of said bonds, no change, variation or altera-
tion of any kind of the provisions of this ordinance may be
made, unless as herein otherwise provided, until all of the
bonds issued hereunder shall have been paid as to both princi-
pal and interest.
;:'. :;CyiON 25: r&aror to have Charge of Records and Bonds.
The Mayor of said City shall be, and he is hereby authorized
to take and have charge of all necessary orders and records
pending investigation by the Attorney General of the State of
Texas, and shall take and have charge and control of the bonds
herein authorized, pending their approval by the Attorney General
and their registration by the Comptroller of Public Accounts .
SECTION 26: Confirmation of Sale, That the sale of
the bonds herein authorized to RAUSCRER, PIERCE & COMPANY,
Dallas, Texas at the price of par and accrued interest to date
of delivery, is hereby confirmed. Delivery of the bonds shall
be made to said purchasers as soon as may be after the adoption
of this ordinance, upon payment therefor in accordance with
the terms of sale.
SECTION 27: ErergencY, The public importance of
this measure that the fact that it is to the best interest of
the City to provide funds for the purpose of constructing a
Sanitary sewer System in and for said City at the earliest
possible date, constitute and create an emergency and an urgent
public necessity, requiring that any rule providing for or-
dinances to be read and voted upon at more than one meeting
of the City Commission be suspended, and requiring that this
t
ordinance be passed and take effect as anemergency measure,
and such rules and provisions are accordingly suspended, and
this ordinance is passed as an emergency measure, and shall
take effect and be in full force from and after its passage.
PASSED AND APPROVED, this the 7 day of January,
1955.
Mayor, City of Prosspe1, Texas
ATTEST:
City Clerk, C ty of rosper,
Texas .
(City Seal)
CERTIFICATE OF CITY CLR1
THE STATE CW TEXAS
CITY C1 PROSPER
C OUIY OF COLLIN
I, the undersigned, City Clerk of the City of Prosper,
Texas, DO HEREBY CERTIFY that the above and foregoing is a true
and correct copy of an ordinance authorizing the issuance of
825,000 "CITY OF PROSPER, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS", dated January 1, 1955, (and Minutes pertaining
to its adoption) , passed by the City Commission of said City
on the day of January, 1955, and which ordinance i"s of
record in Book , page et seq. , cf the
Minutes of said City Commission.
IN WITNESS WHEREOF, I have hereunto signed my name
officially and affixed the seal of said City, this the 7
day of January, 195a.
City Clerk, C ty of Prosper, Texas
(City Seal)