HomeMy WebLinkAboutOrdinance - 7043-1975 - Auth. Issuance Of $6,400,000 "City Of Lubbock, TX< Electric Light And Power Sys. - 02/28/1972---~ . ·--1·· .. .•• •·~ I • I • ' ' .,
>
\ \;
ORDINANCE NO. 70"4'3.
AN ORDINANCE by the City Council of the City of
Lubbock, Texas, authorizing the issuance of
$6,400,000 "CITY OF LUBBOCK, TEXAS, ELECTRIC
LIGHT AND POWER SYSTEM REVENUE BONDS, SERIES
1975 1
11 dated March 15, 1975, for the purpose
of extending or improving, or both, the City's
Electric Light and Power System, as authorized
by the General Laws of the State of Texas, parti-
cularly Article 1111 et seq., V.A.T.C.S.; pre-
scribing the form of the bonds and the form
of the interest coupons; pledging the net revenues
of the City's Electric Light and Power System to
the payment of the principal of and interest on
said bonds; and enacting provisions incident and
relating to the subject and purpose of this ordi-
nance; and providing an effective date.
-;
WHEREAS, at an election held in the City of Lubbock, Texas,
on the 12th day of May, 1973, the governing body of the City of
Lubbock became authorized and empowered to issue $18,800,000
special obligation bonds for the purpose of extending or improving,
or both, the City's Electric Light and Power System, said bonds
to mature in not to exceed forty .(40) years from their date, to be
payable solely from and secured by a lien on and pledge of the
net revenues of the City's Electric Light and Power System, aud to
bear interest at any rate or rates as shall be determined within
the discretion of the City Council; and,
WHEREAS, this City Council now considers it necessary and
advisable to proceed with the issuance of $6,400,000 in principal
amount of bonds authorized at the election of May 12, 1973 (as a
second installment, $6,000,000 having previously been delivered),
the City Council reserving unto itself the right and authority to
issue and sell in one or more installments the balance of the
bonds authorized but unissued, when in the judgment of said City
Council the amounts thereof are needed by the City for the purpose
for which authorized, provided that the issuance of such additional
bonds shall be governed by the provisions relating thereto herein-
after set forth; and,
WHEREAS, the bonds herein authorized are to be issued on a
parity with the previously issued bonds (hereinafter defined)
so as to be equally and ratably secured by a first lien on and
pledge of the net revenues of the City's Electric Light and Power
System; and,
WHEREAS, this City Council finds and determines: (1) that
the Mayor and City Treasurer have certified that ·the City is not
in default as to any covenant, condition or obligation prescribed
by the ordinances authorizing the issuance of the outstanding
bonds, including showings that all interest, sinkin~ and reserve
funds provided for have been fully maintained in accordance with
the provisions of said ordinances; (2) that the City has secured fro
an independent Certified Public Accountant his written report
demonstrating that the net revenues of the System were. durin~
the last completed fiscal year, or during any consecutive twelve
(12) month period of the last fifteen (15) consecutive months
r
prior to the month of adoption of the ordinance authorizing the
additional parity bonds, equal to at least one and one-half (1-1/2)
times the average annual prinaipal and interest requirements of
all the bonds which will be secured by a first lien on and pledge
of the net revenues of the System and which will be outstanding
upon the issuance of the additional parity bonds; and further
demonstrating that for the same period as is employed in arriving
at the aforementioned test said net revenues were equal to at
least one and one-fifth (1-1/5) times the maximum annual prin-
cipal and interest requirements of all such bonds as will be
outstanding upon the issuance of the additional parity bonds; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
SECTION 1: Authorization -Princi~al Amount -Designation.
That in order to borrow the said sum ofIX MILLION FOUR HUNDRED
THOUSAND DOLLARS ($6,400,000) for the purpose of extending or
improving, or both, the City's Electric Light and Power System,
the City Council of the City of Lubbock, Texas, by virtue of the
authority expressly conferred at the aforesaid election and pur-
suant to the General Laws of the State of Texas, particularly
Article 1111 et seq., has determined that there shall be issued and
there is hereby ordered to be issued a series of coupon bonds,
to be designated "CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER
SYSTEM REVENUE BONDS, SERIES 1975,11 aggregating the sum of SIX
MILLION FOUR HUNDRED THOUSAND DOLLARS ($6,400,000), which said
series of bonds, together with the outstanding and unpaid previously
issued bonds (as herein defined) shall be payable as to both prin-
cipal and interest solely from and equally secured by a first lien
on and pledge of the net revenues of the City's Electric Light
and Power System.
SECTION 2: Date -Numbers -Maturity. Said bonds shall be
dated March 15, 1975; shall be numbered consecutively from One (1)
through One Thousand Two Hundred Eighty (1,280); shall each be in
the denomination of Five Thousand Dollars ($5,000), aggregating the
principal sum of SIX MILLION FOUR HUNDRED THOUSAND DOLLARS
($6,400,000); and shall become due and payable serially, without
right of prior redemption on April 15 in each of the years in
accordance with the following schedule:
BOND NUMBERS
~All inclusive) MATURITY AMOUNT
1 to 64 1976 $320,000
65 to 128 1977 320,000
129 to 192 1978 320,000 193 to 256 1979 320,000
257 to 320 1980 320,000
321 to 384 1981 320,000
385 to 446 1982 320,000
447 to 512 1983 320,000
513 to 576 1984 320,000
577 to 640 1985 320,000
641 to 704 1986 320,000
'I • :: •: ,.
r
BOND NUMBERS
(All inclusive) MATURITY AMOUNT
. (Cont I d)
705 to 768 1987 $320,000
769 to 832 1988 320,000
833 to 896 1.989 320,000
897 to 960 1990 320,000
961 to 1024 1991 320,000
1025 to 1088 1992 320,000
1089 to 1152 1993 320,000
1153 to 1216 1994 320,000
1217 to 1280 1995 320,000
SECTION 3: Interest. That said bonds shall bear interest
from date to maturity at the following rates per annum:
(a) Bonds naturing in each of the years 1976 through
1984 at 7. 00%.;.
5.25%; (b) Bonds maturillg ·in the years 1985 and 1986 at
(c) Bonds maturing· in the year 1987 at 5.40%;
(d) Bon,ds maturing in the year 1988 at 5.50%
(e) Bonds maturing in the year 1989 at 5.60%;
(£) Bonds maturing in the year 1990 at 5.75%
(g) Bonds maturing in the year 1991 at 5.90%;
(h) Bonds maturing in the year 1992 at 6~00%;
(i) Bonds maturing in
1995· at 4.50~~;
each of the years 1993 through
such interest to be evidenced by proper coupons attached to each
of said bonds; and said interest shall be payable on October 15,
1975, and semiannually thereafter on April 15 and October 15 in
each year.
SECTION 4: Places of ~ent. Both principal of and inter-
est on this issue of bonds shafr""be payable in lawful money of the
United STates of America. without exchange or collection charges
to the owner or holder, at the FIRST NATIONAL CITY BANK, New York,
New York, or, at the option of the holder, at the TEXAS COMMERCE
BANK, NATIONAL ASSOCIATION, Lubbock, Texas, upon presentation and
surrender of bonds or proper coupons.
... i
• I
SECTION 5: Execution of· Bond·s and Coupons. The seal of said
City may be impressed on each of said bonds or, in the alternative,
a facsimile of such seal may be printed on the said bonds. The
bonds and interest coupons appurtenant thereto may be executed
by the imprinted facsimile signatures of the Mayor and City Secre-
tary of the City and execution in such manner shall have the
same effect as if such bonds and coupons had been signed by the
Mayor and City Secretary in person by their manual signatures.
Inasmuch as such bonds are required to be registered by the Comp-
troller of Public Accounts for the State of Texas, only his signa-
ture .(or that of a deputy designated in writing to act for the
Comptroller) shall be required to be manually subscribed to such
bonds in connection with his registration certificate to appear
thereon, as hereinafter provided; all in accordance with the
provisions of Article 717j-1, V.A.T.C,S.
SECTION 6: Form of Bonds. That the form of said bonds
shall be substantially as follows:
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF LUBBOCK
$5,000
CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER
SYSTEM REVENUE BOND, SERIES 1975
FOR VALUE RECEIVED, the City of Lubbock, a municipal corpora-
tion of the State of Texas, hereby acknowledges itself indebted
to and promises to pay to bearer, as hereinafter stated, without
right of prior redemption, on the FIFTEENTH DAY OF APRIL, 19_,
the sum of
FIVE THOUSAND DOLLARS
($5,000), in lawful money of the United States of America, with
interest thereon from the date hereof to maturity at the rate of =-------------PER CENTUM ( _____ %) per annum, payable on October 15, 1975, and semiannually thereafter on April 15 and
October 15 in each year, and interest falling due on or prior to
maturity hereof is payable only upon presentation and surrender
of the interest coupons hereto attached as they severally become
due.
BOTH PRINCIPAL OF and interest on this bond are hereby made
payable at the FIRST NATIONAL CITY BANK, New York, New York, or
at the option of the holder, at the TEXAS COMMERCE BANK, NATIONAL
ASSOCIATION, Lubbock, Texas, without exchange or collection charges
to the o,;.mer or holder, and the said City of Lubbock, Texas, is
hereby held and firmly bound to apply the pledged appropriated
net revenues of its Electric Light and Power System to the prompt
payment of principal of and interest on this bond at maturity, and
to pay said principol and interest as they mature.
THIS BOND is one of a series of bonds aggregating in amount
SIX MILLION FOUR HUNDRED THOUSAND DOLLARS ($6,400,000), nu.~bered
consecutively from One through One Thousand Two Hundred Eighty
(1,280), each in denomination of Five Thousand Dollars ($5,000),
issued for the purpose of extending or improving, or both, the City'
Electric Light and Power System, in accordance with the Constitution
· ... I
and laws of the State of Texas, particularly Article 1111 et seq.,
V.A.T.C.S., and by authority expressly conferred at an election
held for that purpose within said City, and pursuant to the Charter
of said City and an ordinance passed by the City Council of the
City of Lubbock, Texas, and duly recorded in the Minutes of said
City Council.
THE DATE of this bond in confo.rmi ty with the ordinance above
mentioned is MARCH 15, 1975.
THIS BOND and the series of which it is a part constitute
speci~l obligations of the City of Lubbock, Texas, and, together
with the outstanding and unpaid previously issued bonds (as defi.ned
in the ordinance authorizing the series of bonds of which this is
one), are payable solely from and equally secured by a first lien
on and pledge of the net revenues of the City's Electric Light and
Power System.
THE CITY, however, expressly reserves the right to issue
further and additional revenue bond obligations, in all things on
a parity with the outstanding previously issued bonds and the
bonds of this series and payable solely from and equally secured
by a first lien on and pledge of the net revenues of the City's
Electric Light and Power System; PROVIDED, HOWEVER, that any and
all such addtional parity bonds may be so issued only in accord-
ance with and subject to the covenants, conditions, limitations
and restrictions relating thereto which are set out and contained
in the ordinance authorizing this series and to which said ordi-
nance reference is hereby made for more complete and full
particulars.
THE HOLDER hereof shall never have the right to demand pay-
ment of this obligation out of any funds raised or to be raised
by taxation.
AND IT IS HEREBY CERTIFIED AND RECITED 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 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 limitation; 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 net
revenues of the Electric Light and Power System of the City of
Lubbock, Texas.
IN TESTIMONY WHEREOF, the City Council of the City of
Lubbock, Texas, in accordance with the provisions of Article
717j-l, V.A.T.C.S., has caused the seal of said City to be
impressed or a facsimile thereof to be printed hereon, and
this bond and its appurtenant coupons to be executed with the
imprinted facsimile signatures of the Mayor and City Secretary
of said City, as of the FIFTEENTH DAY OF MARCH, 1975.
COUNTERSIGNED:
Mayor, City o
City Secretary, City of Lubbock,
Texas
SECTION 7: Coupon Form. The form of said interest coupons
shall be substantially as follows:
NO. ON THE FIFTEENTH DAY OF
--------· 19_.
$ ____ _
the CITY OF LUBBOCK, a municipal corporation of the State of
Texas, hereby promises to pay to bearer, out of funds specified
in the bond to which this coupon is attached (without right to
demand payment out of any funds raised or to be raised by taxa-
tion), and in lawful money 0£ the United States of America, with-
out exchange or collection charges to the owner or holder, at the
FIRST NATIONAL CITY BANK, New York, New York, or, at the option
of the holder, at the TEXAS COMMERCE BANK, NATIONAL ASSOCIATION,
Lubbock, Texas, the sum of
DOLLARS
($ __ ......... =), said sum being,,.,,..,.....,_---==-=-= months' interest due that
day on "CITY OF LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER SYSTEM
REVENUE BOND, SERIES 1975," dated March 15, 1975. Bond No.
City Secretary Mayor
SECTION 8: Form of Coe]troller's Certificate. Substantially
the following shall be printe on the back of each bond:
OFFICE OF COMPTROLLER
STATE OF TEXAS
I
l
l
REGISTER NO.
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 Lubbock,
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 9: Definitions. For all purposes of this ordinance
and in particular for clarity with respect to the issuance of the
bonds herein authorized and the pledge and appropriation of reve-
nues therefor, the following definitions are provided:
(a) The term "System" shall mean all properties,
real, personal, mixed or otherwise, now owned or here-
after acquired by the City of Lubbock through purchase,
construction or otherwise, and used in connection with
the City's Electric Light and Power System and in anywise
appertaining thereto, whether situated within or without
the limits of the City.
(b) The term "net revenues" shall mean the gross
revenues of the City's Electric Light and Power System
less the expense of operation and maintenance. Such
expense of operation and maintenance shall not include
depreciation charges or funds pledged for the bonds,
previously issued bonds and for additional parity bonds
hereafter authorized, but shall include all salaries,
labor. materials, repairs, extensions necessary to render
services; provided, however, that in determining "net reve-
nues,11 only such repairs and extensions as in the judgment
_of the City Council, reasonably and fairly exercised are
necessary to keep the System in operation and render ade-
quate service to the City and inhabitants thereof, or
such as might be necessary to remedy some physical
defect which otherwise would impair the security of
the bonds, previously issued bonds, or additional
parity bonds permitted to be issued under Section 19
hereof, shall be deducted.
(c) The term "bonds" whenever same appears in
this ordinance without any qualifying language, shall
mean the revenue bonds authorized by this ordinance.
(d) The term "previously issued bonds11 shall mean
the outstanding and unpaid bonds designated "CITY OF
LUBBOCK, TEXAS, ELECTRIC LIGHT AND POWER SYSTEM REVENUE
BONDS," further identified by Series and dates as follows:
(1) Series 1964, dated March 15, 1964, in the original
principal amount of $4,500,000;
(2) Series 1965, dated March 15, 1965, in the original
principal amount of $3,000,000; and
(3) Series 1973, dated July 15, 1973, in the original
principal amount of $6,000,000.
(e) The term "additional bonds" or "additional
parity bonds11 shall mean those bonds which the City
reserves the right to issue under the provisions of
Section 19 hereof.
(f) The term 11bonds similarly secured11 shall mean
the previously issued bonds, the bonds and the additional
bonds at the time outstanding.
SECTION 10: Pledge. The City of Lubbock, covenants, reaffirms
and agrees that all of the net revenues of the System are hereby
irrevocably pledged equally for the payment of principal of and
interest on the bonds, previously issued bonds and additional
parity bonds, if issued under the conditions and in the manner
specified in this ordinance, all of which shall constitute a first
lien on and pledge of the net revenues of the System.
SECTION 11: Rates and Charges. The City of Lubbock cove-
nants, reaffirms and agrees that so long as any of the revenue
bonds and coupons authorized herein, and any of the previously
issued bonds and coupons remain outstanding and unpaid, it shall
fix and maintain rates and collect. charges for the facilities and
services afforded by its Electric Light and Power System, which
will produce income and revenues sufficient at all times to:
(1) Pay all necessary operation, maintenance
and betterment charges and expenses ·of•the System;
(2) Establish and fully maintain the "Bond Fund"
including the reserve portion thereof for the bonds
herein authorized, the previously issued bonds and for
any additional parity bonds hereafter issued in accord-
ance with the provisions hereof;
(3) Pay the requirements of all other lawful obli-
gations and indebtedness of the System chargeable against
the System, as and when the same shall accrue and become
due .
. SECTION 12: System Fund. All receipts, revenues and income
of every nature in any manner derived from ownership and operation
of the System shall constitute a separate and sacred ftmd which
in no event shall be diverted or drawn upon except under the
provisions and for the purposes herein prescribed. All such
receipts, revenues and income shall be paid over and deposited
with the City's depository within twenty-four (24) hours after
collection. The account to which said Fund shall be deposited
shall be known as the ELECTRIC LIGHT AND POWER SYSTEM FUND (here-
inafter referred to as the "System Fund") to be kept separate
and apart from all other City funds or accounts. Specifically as
related to the bonds herein authorized and the previously issued
bonds, the System Frmd shall be and is hereby pledged and shall
be devoted and applied to the purposes enumerated in Section 13
following and in the order of precedence shown therein.
SECTION 13: Flow of System Fund. All moneys paid over and
deposited in the System Fund as provided in Section 12 above shall
be pledged, appropriated and employed as follows:
(1) For the payment of those necessary and reason-
able expenses of operating and maintaining the System as
are set forth in Section 9(b) hereof relating to the
definition of "net revenues."
(2) To the "Special Electric Light and Power System
Revenue Bond Retirement and Reserve Fund" (hereinafter
referred to as the "Bond Fund") heretofore created and
hereby reaffirmed for the bonds, previously issued bonds
and such additional parity bonds as may hereafter,be issued
under the provisions of Section 19 hereof. Said Bond
Fund shall be us~d for no purpose other than for the pay-
ment, redemption and retirement of such bonds and the
interest thereon in accordance with the terms and provi-
sions of the ordinances authorizing their issuance. All
funds received from the purchasers of such bonds as ac-
crued interest thereon shall be placed in the Bond Fund.
The City covenants, reaffirms and agrees to provide the
Bond Fund with all amounts required to pay as due, each
of the principal and interest installments pertaining to
all bonds, previously issued bonds and additional parity
bonds, and that in addition thereto said Bond Fund shall
contain a Reserve Portion. Said Reserve Portion of the
Bond Fund presently contains the amount of $846,834.07
(which nmoun t is the s ,!ill required to be on dG.posi t therein
by the provisions of the ordinances authorizing the pre-
viously issued bonds). On or before the 1st day of April,
1975, and on or before the 1st day of each month there-
after, the City shall deposit into the Reserve Fund portion
of the Bond Fund the additional amount of $5,886.50 and
such monthly deposits shall continue to be made until the
Revenue Portion of the Bond Fund contains the sum of $1,200,00
in cash and book value of investment securities. Said Re-
serve Portion, when so accumulated, shall continue to
contain the sum of not less than $1,200,000 in cash and
book value of investment securities on deposit therein
,
such amount being not less than the average annual principal
and interest requirements of all series of bonds which are
secured by a first lien on and pledge of the net revenues
of the System and which are outstanding after the issuance
of the bonds herein authorized). Said Reserve Portion shall
be made available for and seasonably employed in meeting
the requirements of the Bond Fund if need be, and if any
amount thereof is so employed, said Reserve Portion shall
be supplemented out of the first System Funds available
. therefor to such extent as will, as rapidly as possible,
fully restore same to the sum of $1,200,000. The
ordinances of the City Council authorizing any series
of additional parity bonds shall make due provision
for supplementing, if necessary, the Reserve Portion of
the Bond Fund so that same shall be accumulated and
maintained in an amount equal to not less than the
average annual principal and interest requirements of
all series of bonds then to be secured by a first lien
on and pledge of the net revenues of the System and
which will be outstanding upon the issuance of any
series of additional parity bonds.
SECTION 14: Method of Providing Amounts for Principal and
Semiannual interest Re!uirements of the Bonds. The City Treasurer
is instructed to calcu ate the amount of each next succeeding
installment of principal of and interest on the bonds and to
withdraw the necessary amounts from the System Fund. There shall
be deposited in said Bond Fund on the 1st day of May, 1975, and
~nor before the 1st day of each month thereafter (until the bonds
are paid and retired) an amount not less than one-six (1/6) of the
next semiannual installment of interest, and not less than one-
twelfth (1/12) of the next annual principal maturity to become
due on the bonds. In the event the income and revenues of the
System are insufficient in any month to permit the required de-
posits into the Bond Fund in accordance with the provisions
hereof or if for any other reason the City shall fail to make
the required deposits into the Bond Fund (including the Reserve
Portion if same has become depleted), the amount of such deficien-
cies shall be made up as promptly as available System Funds will
permit.
SECTION 15: Sur~lus Revenues. After all requirements of
Section 13(1) and (2)ereof have been satisfied and all similar
requirements of any additional parity bonds hereafter issued and
after all deficiencies existing in such requirements have been
remedied, surplus revenues of the System may be used for any other
proper City purposes now or hereafter permitted by General Law,
including the use thereof for retiring in advance of maturity any
such bonds or additional parity bonds by purchase on the open
market at not exceeding the market value thereof. 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 legally issued by it.
SECTION 16: Securit Power System
Bond Fund. All funs erein provi e or t e Bon un hereto-
fore established and herein reaffirmed shall be kept separate and
apart from all other City funds and shall be continuously secured
by a valid pledge of direct obligations of, or obligations uncon-
ditionally guaranteed by the United States of America, having a
par value, or market value when less than par, exclusive of accrued
interest, at all times at least equal to the amount of money to be
deposited in said Fund. All sums deposited in said Bond Fund shall
be held as a trust fund for the benefit of the holders of the
bonds herein authorized and the previously issued bonds, the
beneficial interest in which shall be regarded as existing in
such holders. To the extent that money in the Reserve Portion
of the Bond Fund is invested under the provisions of Section 18
hereof, such security is not required.
SECTION 17: Custodian of Bond Fund. The custodian of the
Bond Fund shall be the City's official depository bank, and all
deposits prescribed shall be placed in said Fund with said
custodian bank. Prior to each interest and principal maturity
date,· it shall be the duty of the City Treasurer to withdraw from
said Fund and place with the paying agent banks money in such
amounts as will be fully sufficient to pay and at such times as
will permit prompt payment of each interest and principal install-
ment.
SECTION 18: Investment of Reserve Portion of Bond Fund.
The custodian bank shall, when authorized by the City Council,
invest the Reserve Portion of the Bond Fund in direct obligations
of, or obligations guaranteed by the United States of America, or
invested in direct obligations of the Federal Intermediate Credit
Banks, Federal Land Banks, Federal National Mortgage Association,
Federal Home Loan Banks or Banks for Cooperatives, and which such
investment obligations must mature or be subject to redemption at
the option of the holder, within not to exceed ten years from the
date of making the investment. Such obligations shall be held by
the depository impressed with the same trust for the benefit of the
bondholders as the Bond Fund itself, and if at any time uninvested
funds shall be insufficient to permit payment of principal and
interest maturities herein authorized as herein directed, the said
depository shall sell on the open market such amount of the securi-
ties as is required to pay said bonds and interest when due and
shall give notice thereof to the City Treasurer. All moneys re-
sulting from maturity of principal and interest of the securities
in which the reserve funds are invested shall be reinvested or
accumulated in said Reserve Portion of said Bond Fund and con-
sidered a part thereof and used for and only for the purposes
hereinabove provided with respect to said reserve, provided that
when the full amount required to be accumulated in the Reserve
Portion of the Bond Fund (being the amounts required to be accumu-
lated by the ordinances authorizing the bonds similarly secured),
any interest increment'may be used in the Bond Fund to reduce the
payments that would otherwise be required to pay the debt service
requirements on bonds similarly secured.
SECTION 19: Issuance of Additional Parity Bonds. In addi-
tion to the right to issue bonds of inferior lien as authorized
by the laws of the State of Texas, the City of Lubbock reserves
I the right to issue additional revenue bonds payable from the net
income and ·revenues of the System, and when issued in compliance
with law and the terms and conditions hereinafter appearing, such
additional bonds shall occupy a position of parity with and shall
11 be equally and ratably secured by a first lien on and pledge of
the net revenues of the System to the same extent as the seri es
j of bonds authorized by this ordinance and the previously issued
bonds. The City hereby covenants, reaffirms and agrees that no
additional bonds or other obligations payable from the net reve-
nues of its Electric Light and Power System shall be issued on a I parity with the series of bonds herein authorized and with the
previously issued bonds, unless and until the following conditions
have been met:
... _ ·-·--· .. ------_____ .,. ... ~ ........ _ ... .., .....
(a) That the Mayor and City Treasurer have certi-
fied that the City is not then in default as to any cove-
nant, condition or obligation prescribed by this ordinance,
the ordinances authorizing the issuance of the previously
issued bonds, or any ordinance authorizing the issuance of
additional parity bonds then outstanding, including showings
that all interest, sinking and reserve funds then provided
for have been fully maintained in accordance with the pro-
visions of said ordinances;
(b) That the applicable laws of the State of Texas in
force at the time provide permission and authority for the
issuance of such bonds and have been fully complied with;
(c) That the City has secured from an independent
Certified Public Accountant his written report demonstrating
that the net revenues of the System were, during the last
completed fiscal year, or during any consecutive twelve
(12) months period of the last fifteen (15) consecutive
months prior to the month of adoption of the ordinance
authorizing the additional parity bonds, equal to at
least one and one-half (1-1/2) times the average annual
principal and interest requirements of all the bonds which
will be secured by a first lien on and pledge of the net
revenues of the System and which will be outstanding upon
the issuance of the additional parity bonds; and further
demonstrating that for the same period as is employed in
arriving at the aforementioned test said net revenues were
equal to at least one and one-fifth (1-1/5) times the maxi-
mum annual principal and interest requirements of all such
bonds as will be outstanding upon the issuance of the addi-
tional parity bonds;
(d) That the additional parity bonds are made to
mature on April 15 or October 15, or both, in each of the
years in which they are provided to mature;
(e) As hereinabove provided the Reserve Portion of
the Bond Fund shall be accumulated and supplemented as
necessary to maintain it in a sum which shall be not less
than the average annual principal and interest requirements
of all bonds secured by a first lien on and pledge of the
net revenues of the System which will be outstanding upon
the issuance of any series of additional parity bonds.
Accordingly, each ordinance authorizing the issuance of
any series of additional parity bonds shall provide for
any required increase in said Reserve Portion, and if
supplementation is necessary to meet all conditions of
said Reserve Portion, said ordinances shall make provision
that same be supplemented by the required amounts in
equal monthly installments over a period of not to ex-
ceed sixty (60) calendar months from the dating of such
additional parity bonds.
When thus issued, such additional parity bonds may be
secured by a pledge of the revenues of the City's System on a
parity in all things with the pledge securing the issuance of
the bonds herein authorized and the previously issued bonds.
....
SECTION 20: Maintenance ·and Operation. The City of Lubbock
hereby covenants, reaffirms and agrees that it will maintain the
System facilities in good condition and operate the same in an
efficient manner and at reasonable costs so long as the bonds,
previously issued bonds or the additional parity bonds are out-
standing and unpaid. The City further agrees to maintain insur-
ance for the benefit of the holder or holders of the bonds of the
kinds and in the amounts which are usually carried by private com-
panies operating similar properties, and that during such time all
policies of insurance shall be maintained in force and kept current
as to. premium payments. All 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
thereof 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 ade-
quate provisions made within ninety (90) days after the date of
the loss for making good such loss or damage. The premiums for
all insurance policies required under the provisions of this
section shall be considered as maintenance and operation expenses.
SECTION 21: Records and Accounts. The City of Lubbock here-
by covenants, reaffirms and agrees that so long as any of the
bonds herein authorized or the previously issued bonds, or any
interest thereon, remain outstanding and unpaid, it will keep and
maintain a proper and complete system of books, records and ac-
counts pertaining to the operation of the System, separate and
apart from all other records and accounts in which complete and
correct entries shall be made of all transactions relating to the
System as provided by Article 1113, V.A.T.C.S., and that the
. ~ :.
holder or holders of any of the bonds or any duly authorized
agent or agents of such holders shall have the right at all reason-
able times to inspect all such books, records, accounts and
data relating thereto and to inspect the System and all proper-
ties comprising same. The appropriate City officials are hereby
instructed and directed to do any and all things necessary or
convenient in reference to keeping and maintaining of such books,
records and accounts and to make the moneys available for payment
of the bonds in the manner provided by the aforementioned statute.
The City further agrees that within sixty (60) days following the
close of each fiscal year it will cause an audit of its books and
accounts to be made by an independent firm of Certified Public
Accountants showing the receipts and disbursements for the ac-
count of the System for the fiscal year. Each such audit shall
in addition to whatever other matters may be thought proper by
the Accountant, particularly include the following:
(a) A detailed statement of the income and expen-
ditures for account 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 change or im-
provements in the operation, records and accounts of the
System;
(d) A list of the insurance policies in force
at the end of the fiscal year on 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 statement verifying that the securities
herein specified therefor have been on deposit as security
for the money in the Electric Light and Power System Bond
Fund throughout the fiscal year, and a list of the securi-
ties, if any, in which the reserve portion of such Special
Fund have been invested;
(f) The number of metered and urunetered customers.
if any, connected with any department of the System,
showing totals at the end of the fiscal year.
·Expenses incurred in making the audits above required are to
be regarded as maintenance and operation expenses 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. At the close of the first six months' period of the
fiscal year, the City Manager is directed to furnish a copy of an
·operating and income statement in reasonable detail covering such
period to any bondholder upon his request therefor, received not
more than thirty days after the close of said six months' period.
Any bondholder shall have the right to discuss with the Accountants
making the annual audit the contents thereof and to ask the City
Manager for such additional information as he may reasonabely request.
SECTION 22: Remedies in Evenut of Default. In addition to
all the rights and remedies provided by law by the State of Texas,
the City covenants and agrees particularly that in the event the
City (a) defaults in payment of principal or interest on any of
the bonds when due, (b) fails to make the payments into the Bond
Fund as required by this ordinance, or (c) defaults in the obser-
vance or performance of any other of the covenants, conditions or
obligations set forth in this ordinance, the following remedies
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 Council and other officers of the City to
observe and perform any covenants, obligations or con-
ditions prescribed in the bond ordinance.
(2) No delay or omission to exercise any right or
power accruing upon any default shall impair any such
power or right 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 cumulative of
all other existing remedies and the specification of such shall
not be deemed to be exclusive.
SECTION 23: Sale, Lease or Other Encumbrance of System.
The City of Lubbock further covenants, reaffirms, binds and obli-
gates itself not to seil, lease or in any manner dispose of the
System, its properties, or any part thereof. including any and all
extensions and additions that may be made thereto, and it acknow-
ledges and accepts restraint from doing so until the bonds and
previously issued bonds shall have been paid in full as to both
principal and interest at maturity, or under the provisions hereof
relating to their redemption prior to maturity, or until other
arrangements have been made for continuance of payment of prin-
cipal and interest then outstanding for the full retirement
thereof; provided, however, that this covena~t 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.
SECTION 24: Further Covenants. The City further covenants,
reaffirms and agrees by and through this ordinance as follows:
(a) That it has the lawful power to pledge the
revenues supporting this issue of bonds and has law-
fully exercised said power under the Constitution and
· laws of the State of Texas, including the powers
existing under Articles 1111 through 1118, V.A.T.C.S.,
and that the bonds, the previously issued bonds and any
additional parity bonds issued pursuant to the provi-
sions hereof shall be ratably secured in such manner
that no one bond of any such issues shall have prefer-
ence over any other bond of such issues.
(b) That the net revenues and income of the System
are pledged exclusively to the payment of the bonds, the
previously issued bonds and such additional parity bonds
as may hereafter be issued pursuant to the provisions
hereofi that said net revenues and income have not
been pledged in any manner to the payment of any other
debt or obligation of the City or the System and other-
wise said System is free and clear of all encumbrances
whatsoever.
(c) That nothing in this ordinance shall require
the City to make any expenditure except from money in the
System Fund, but nothing herein shall prohibit the City
from doing so at its election.
(d) That except under the conditions of this ordi-
nance relating to parity bonds, the City will not suffer
any indebtedness on a parity or superior to the bonds of
this issue and the previously issued bonds to accrue to
or against the City or said System, and that if the System
shall become liable for any other indebtedness, the City
Council will fix and maintain rates and collect charges
for the services afforded by the System entirely suffi-
cient to discharge any such indebtedness or obligation.
(e) The City will cause to be rendered monthly to
each customer receiving electric services a statement
therefor and will not accept payment of less than all of
any statement so rendered, using its powers under existing
ordinances and under all such ordinances to become effective
in the future to enforce payment, to withhold service
from such delinquent customers and to enforce and author-
ize reconnection charges.
(f) That the City will faithfully and punctually
perform all duties with respect to the Sy~tem re(}uired by
the Constitution and laws of the State of Texas, including
the making and collecting of reasonable and sufficient
rates for services supplied by the System, and the segre-
gation and application of the revenues of the System as
required by the provisions of this ordinance.
. . . " .
'
•
' ..
SECTION 25: Ordinance to Constitute· Contract. That the
provisions of this ordinance shall constitute a contract between
the City of Lubbock 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 alteration of
any kind of the provisions of this ordinance may be made, unless
as herein otherwise provided, until all of the bonds isused here-
under shall have been paid as to both principal and interest .
. SECTION 26: Ma~or to Have Charge of Records and Bonds.
That the Mayor of sai City shall be, and he is hereby authorized
to take and have charge of all necessary records and orders pend-
ing 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. It
shall be the duty of the Mayor (or attorneys acting for the City)
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
the bonds registered by the Comptroller of Public Accounts.
SECTION 27: Bonds are Special Obligations. The bonds are
special obligations of the City payable from the pledged revenues,
and the holders thereof shall never have the right to demand pay-
ment thereof out of funds raised or to be raised by taxation.
SECTION 28: Bonds as Nefotiable Instruments. Each of the
bonds herein authorized shalle deemed and construed to be
a "Security," and as such a negotiable instrument, within the
meaning of Article 8 of the Uniform Commercial Code.
SECTION 29: Printed Legal OSinion on Bonds. The purchasers'
obligation to accept delivery oft e bonds herein authorized is
subject to their being furnished a final opinion of Messrs. Dumas ,
Huguenin , Boothman and Morrow, Attor neys, Dallas, Texas, approving
such bonds as to their validity, said opinion to be dated and
delivered as of the date of delivery and payment for such bonds.
Printing of a true and correct copy of said opinion on the re-
verse side of each of such bonds with appropriate certificate
pertaining thereto executed by facsimile signature of the City
Secretary is hereby approved and authorized. ,
SECTION 30: CUSIP Numbers. CUSIP numbers are to be
printed on the bonds herein authorized. It is expressly provided,
however, that the presence or absence of CUSIP numbers on the bonds
shall be of no significance or effect as regards the legality
thereof and neither the City nor attorneys approving said bonds
as to legality are to be held responsible for CUSIP numbers in-
correctly printed on the bonds.
SECTION 31: Confinnation of Sale. That the sale of the
bonds herein authorized to MERRILL LYNCH, PIERCE, FENNER & SMITH,
INC. AND ASSOCIATES, Dallas, Texas
at the price of par and accrued interest to date of delivery,
plus a premium of$ -0-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.
' . ..
..... t:>
SECTION 32: No Arb it~. That the City hereby covenants
that the proceeds from thesaTe of said bonds will be used as soon
as practicable for the purpose for which said bonds are issued;
that such proceeds will not be invested in any securities or obli-
gations except for the temporary period pending such use; and that
such proceeds will not be used directly or indirectlr. so as to
cause all or any part of said bonds to be or become 'arbitrage
bonds" within the meaning of Section 103(d) of the Internal Reve-
nue Code of 1954, as amended, or any regulations or rulings pre-
scribed or made pursuant thereto.
-SECTION 33: Effective Date. This ordinance shall take
effect and be in force immediately from and after its final passage,
and it is so ordained.
PASSED AND APPROVED on first reading the 27th day of
February, 1975.
PASSED AND APPROVED on second and final reading this the 28th
day of February • 1975.
ATTEST:
(CITY SEAL)