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HomeMy WebLinkAboutORD 537 - ORD Authorizing the Issuance $ 85000 Water Revenue Refunding Bonds 99 ORDINANCE NO. 537 J AN ORDINANCE AUTHORIZING THE ISSUANCE OF EIGHTY FIVE THOUSAND ($85,000.00) DOLLARS WATER REVENUE REFUNDING BONDS; PRESCRIBING THE TERMS AND CONDITIONS THEREOF; RESERVING THE RIGHI' TO ISSUE TO THE EXTENT PERMITTED BY LAW ADDITIONAL BONDS UPON CERTAIN CONDITIONS; AND MAKING PROVISION FOR THE PAYMENT OF PRINCIPAL AND INTEREST ON SUCH BONDS WHEREAS, the City of West University Place, Texas, now has out- standing the following described revenue bonds: City of West University Place Water Revenue Bonds, dated December 15, 1938, numbered from 66 to 150, both inclusive, in the denomination of $1,000 each, aggregating $85,000, bearing interest at the rate of 4% per annum, and maturing serially on ~ecember 15th in each of the years 1951 to 1958, both inclusive; and I I -..J WHEREAS, said bonds constitue the valid, legal and binding' special obligations of the City of West University Place secured in the manner prescribed by Articles llll to 1118, Revised Civil Statutes of Texas, 1925, as amended, by a pledge of the net revenues of the City's waterworks system; and WHEREAS, said City expressly reserved an option to redeem said bonds on January I, 1951, or on any interest payment date thereafter; and Whereas, said City has duly elected to exercise such option on January 1, 1951, as per a resolution duly adopted on October 30, 1950, by the City Commission of said City; and WHEREAS, said bonds may.be refunded at a lower rate of interest, thereby effecting a substantial interest saving to the City; Therefore BE IT ORDAINED by the City Commission of the City of West Uni- versity Place, Texas: Section I: That the bonds of the City 'of West University Place, Texas, to be called ~CITY OF WEST UNIVERSITY PLACE WATER REVENUE REFUNDING BONDS, SERIES 195~ ,."shall be issued in the aggregate principal amount of Eighty Fi,ve Thousand ($85,000.00) Dollars, for the purpose of refunding, cancelling and in lieu of.the Eighty Five Thousand ($85,000.00) Dollars principal amount of outstanding and unpaid revenue bonds described in the preamble of this ordinance, under and by virtue of the Constitution and 'laws of the State of Texas and the Charter of said City. I I Section 2:. That said bonds. shall be dated January 1, 1951, $hall be numbered from One (I) to Eighty Five (85), both inclusive, shall b~ in the denomination of One Thousand ($1,000.00) Dollars each, aggregating Eighty Five Thousand ($85,000.00) Dollars, and shall become due and payable 1'-"' ._...._.".'~I.-' -:.~..-. 1---' .-...t .... . "I . ., - I . _.- 1 'Hl'll 111 . J II. I. j tOO serially on the 15th day of December in each of the years and in the re- spective amounts shown in the following schedule, to-wit: !1 I ' \~ Bond Nos. Maturity Amount 1 - 8 December 15, 1951 $ 8,000 9 - 17 It It 1952 9,000 18 - 27 II II 1953 10,000 28 - 37 It II 1954 10,OOO 38 - 47 " It 1955 10,000 48 - 59 It It 1956 12,00O 60 - 71 It II 1957 12,000 72 - 85 It It 1958 14,000 The City of West University Place expressly reserves the right to redeem all or any part of said bonds then outstanding on June 15, 1951, or on any interest payment date thereafter by paying to the owners and holders thereof, a price of one hundred one and one' half (101-1/2%) per cent of the principal amount of the bonds redeemed plus unpaid accrued in- terest to the date fixed for redemption. Notice of the exercise of the option to redeem shall be given in w,r.iting to ~ 9?.:'~Z;;>-"",.<-/.J'c<-,-~s' and by publication of such notice one (1) time in a financial journal of general circulation L~ the United States of America, which notice shall be published and mailed at least thirty (30) days prior to the time fixed for redemption. When said bonds, in whole or in part, have been called for redemption in the manner prescribed and when due provision has been made to pay the principal, unpaid accrued interest and redemption premium, as herein provided, the right of the owners and holders to collect interest which would otherwise accrue after the redemption date on the bonds called for redemption shall terminate on the date fixed for redemption. o Section 3: That said bonds shall bear interest at the following rates: Bonds Nos. One (1) to'Seventeen (17), both inclusive, and Bond Nos. Forty Eight (48) to Eighty Five (85), both inclusive, at the rate of one and three-fourths (1-3/4%) per cent per annum; and Bonds Nos. Eighteen (18) to Forty Seven ,(47), both inclusive, at the rate of one and one-half (1-1/2%) per cent per annum; interest payable June 15, 1951, and semi- annually thereafter on December 15th and June 15th of each year until the principal sum is paid.' Both principal of and interest on said bonds shall be payable in lawful money of the United States of America at , upon presentation and surrender of the bonds as they severally becpme due, or, as to interest falling due on. and prior to maturity, upon presentation and surrender of the interest coupons attached to said bonds as they severally become due. Section 4: Tha t each of said bonds shall be signed by the Mayor and countersigned by the City Secretary, and the corporate seal of said City shall be impressed upon each of them. The facsimile signatures of the Mayor and City Secretary may be lithographed, engraved or printed on the coupons attached to said bonds and shall ~ave the same effect as if they had been O'! signed by said officers. 101 Section 5: That the form of such bonds shall be substantially as follows: $1,000.00 No. UNI'flID STATES OF AMERICA STATE OF TEXAS COUNTY OF HA..RRIS CITY OF vVEST UNIVERSITY PLACE WATER REVENUE REFUNDING BOND SERIES 195~ The City of West University Place, in the County of Harris, in the State of Texas, for value received, hereby acknowledges itself indebted to and promises to pay to bear\3r on the 15th day of December, 19 , solely from the special fund hereinafter specified, the sum of --. ONE THOUSAND DOLLARS ($1,000.00), with interest thereon from date hereof at the rate of (*~) per annum, interest payable June 15, 1951, and semi-annually thereafter on December 15th and June 15th of each year until the principal hereof shall have been paid. Both principal hereof and interest hereon are payable in lawful money of the Unitwd States of America at , and interest falling due on or prior to maturity is payable only upon presentation and surrender of the interest coupons hereto attached as they severally become due. The date of this bond, in conformity with the ordinance hereinafter named is January 1, 1951. This bond is one of a series of Eighty Five (85) bonds of like date and tenor, except as to number, maturity and interest rate, being numbered from One (1) to Eighty Five (85), both inclusive, in the denomination of, One Thousand ($I,OOO.OO) Dollars each, aggregating Eight~r Five Thousand ($85,000.00) Dollars, and is issued for the purpose of refunding, cancelling and in lieu of Eighty Five Thousand ($85,000.00) Dollars pr~ncipal amount of City of West University Place Water Revenue Bonds, 4%, dated December 15, 1938, under and in strict conformity with the Constitution and laws of the State of Texas and the Charter of said City, and pursuant to an ordinance duly passed and adopted by the City Commission of the City of West University Place, which ordinance is of record in the minutes of said City Commission. The City of West University Place expressly reserves the right to redeem all or any part of said bonds then outstanding on June 15, 1951, or on any interest payment date thereafter by paying to the owners and holders thereof, a price of one hundred one and one-half (101-1/2%) percent of the pr~ncipal amount of the bonds redeemed plus unpaid accrued interest to, the date fixed for redemption. Notice of the ~xercise of the option to redeem shall be given in writing to and by publication of such notice one (1) time in a financial journal of general circulation in the United States of America, which notice shall be publiShed and mailed at least thirty (30) days prior to the time fixed for redemption. \~en said bonds, in whole or in part, have been called for redemption in the manner prescribed and when due provision has been made to pay the principal, unpaid accrued interest and redemption premium, as herein provided, the right of the owners and holders to collect interest T . 1 ._1II III l. 02 which would otherwise accrue after the redemption date on the bonds called for redemption shall terminate on the date fixed for redemption. Each successive holder of this bond and each successive holder 'J,. of each of the coupons hereto attached is conclusively presumed to forego and renounce his equities in favor of subsequent holders for value with,out notice, and to agree that this bond and each of the coupons hereto attached, may be negotiated by delivery by any person having possession thereof, howsoever such possession may have been acquired, and that any holder who shall have taken this bond or any of the coupons from any person for value and without notice, thereby has acquired absolute title thereto, free from any defenses enforceable against any prior holder and free from all equities and claims of ownership of any such prior holder. The City of West University Place andits officials and fiscal agent shallnot~be affected by any notice to the contrary. To the extent permitted by law, the City expressly reserves the. right to issue other bonds and obligations payable from the net reve~ues of the system on a parity with the bonds of this issue, but only pursuant to and subject to the restrictions, covenants and limitations contained in the ordinance authorizing this issue of bonds, to which reference is made for full particulars. This bond shall not be deemed to constitute a debt of the City of West University Place nor a pledge of its faith and credit, but is, together with $IO,OOO Water Revenue Refunding Bonds, dated August 15, 1942, payable as to principal and interest solely from the net revenues derived from the operation of the City~s waterworks system, ,including all additions, extensions and improvements thereto which may hereafter be made, after deduction of the reasonable expenses of maintenance and operation of said system, and this bond and the series of which it isa part is on a parity with said $10,000 Water Revenue Refunding Bonds, dated August 15, 1942. 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. oil ; I ~~ It is hereby certified, recited and represented that the issuance of this b<;>nd 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 series of bonds to render the same lawful and valid, have been properly done and performed and have happened in regular and due time, form and manner, as required by law; that due provision has been made for the payment of the principal and interest of this bond and the series of which it is a part by irrevocab~ pledging the net revenues of said waterworks system; and that the issuance of this series of bonds does not exceed any constitutional or statutory limitation. IN TESTIMONY WHEREOF, the City Commission of the City of West University Place, Texas, has caused the corporate seal of said City to be affixed hereto and this bond to be signed by the Mayor, countersigned by the City Secretary and has caused the annexed coupons to be signed t>y the facsimile signatures of said Mayor and City Secretary, all as of the 1st day of January, 1951. Countersigned: Mayor, City of West Universi~y Place, Texas I] City Secretary, City of West University Place, Texas Ii.,1 i I I I TI i ~! -.L1 II II ~ 103 *(Bonds Nos. One (I) to Seventeen (17), both inclusive, and Bonds Nos. Forty Eight (48) to Eighty Five (85), both inclusive, bear 'interest at the rate of one and three-fourths (1-3/4%) per cent per annum; Bonds Nos. Eighteen (18) to Forty Seven (47), both inclusive, bear interest at the rate of one and one-half (1-1/2%) per cent per annum) Srection 6: That the form of coupon attached to such bond shall be substantially as follows: No. $ . On the 15th day of , 19 , unless the bond to which this coupon is attached has been called for previous redemption and due provision made to redeem same, the City of vVest University Place, in the County of Harris, State of Texas, promises to pay to bearer at , sole~ from the special fund specified in the bond to which this coupon is attached, the sum of . . ($ ) Dollars in lawful money of the United States of America, being the interest due that date on ,the City of West University Place, Texas, Water Revenue Refunding Bond, Series 1951, dated January I, 1951. The holder hereof shall never have the right to demand payment of this obligation out of any funds raised or to be raised by taxation. Bond No. Mayor, City of West University Place, Texas City Secretary, City of West University Place, Texas Section 7: That substantially the follo'Qng certificate shall be printed on the back of each of said bonds: OFFICE OF THE COMPTROLLER THE STATE OF TEXAS 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 is a valid and binding special obliga- tion of said City of West University Place, Texas, payable from 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, this day of , 1951. 9omptroller of Public Accounts of the State of Texas [TI--"~~===,,_..,,._,,_.~ '[ '. Ie 104 Section 8: DEFINITIONS: (a) The term ItSystem", as used in this or~inance, shall mean the Ci~yts waterworks system, including all present and future extensions, additions, replacements and improvements thereto. iJ (b) The term ltNet Revenueslt, as used in this 9rdinance, shall mean the gross revenues of the System less the expense of operation and maintenance, including all salaries, labor, materials, repairs and exten- sions necessary to render efficient service, provided, however, that only such repairs and extensions, as in the judgment of the City Commission, reasonably and fairly exercised, are necessary to keep the plant or utility in operation and render adequate service to the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or condition which would otherwise impair the Bonds authorized by this ordinance and the Additional Bonds permitted to be issued under Section 20 hereof, shall be deducted in determining "Net Revenues". (c) The term IlBonds1J shall mean the Eighty Five Thousand ($85,000.00) Dollars bonds authorized by this ordinance. (d) The term "Additional Bondslt means the Additional Bonds which the City reserves the right to issue under Section 20 bereof. ~~;iQn....2...;, PLEDGE: All of the Net Revenues of the waterworks system with the exception of those in excess of the amounts required to establish and maintain the funds as hereafter provided ar~ hereby , irrevocably pledged for the payment of the $10,000 Water Revenue Refund- ing Bonds, dated August 15, 1942, now outstanding, the Bonds, and of the Additional Bonds if issued under the conditions and in the manner specified in this ordinance, and the interest thereon, and it is hereby ordained that the $10,000 Water Revenue Refunding Bonds, dated August 15, 1942, now outstanding, the Bonds, and the Additional Bonds if so issued, and the interest thereon shall constitute a first lien upon said Net Revenues. r1 '-----' ~j.Qu....1.Ql RATES: TheCi ty covenants and agrees with the original holders of the Bonds and the Additional Bonds, if and when issued: (a) That it will at all times charge and collect for services rendered by the System rates sufficient to pay all operating" maintenance, depreciation, replacement and betterment expense and other costs deductible in determining "Net Revenues" as herein defined, and to produce Net Revenues equal to at least one and one-half (1-1/2) times the average annual require~ent for the payment of principal of and interest on the $10,000 Water Revenue Refunding Bonds, dated August 15, 1942, now out- standing, the Bonds, and the Additional Bonds if issued. (b) If the Addit ional Bonds are is sued, or if the Syst em should become legally liable for any other indebtedness, the City will fix and maintain rates and collect charges for the services of the SJrstem sufficient to discharge such indebtedness. Section~lJJ. FUNDS: All revenues derived from the operation of the System shall be kept separate from other funds of the City. To that end, the following special funds are hereby created: I I IJ 105 (a) City of West University Place Waterworks Revenue Fund, hereinafter called "Revenue Fund". This Fund shall be kept in the Cityts:; depository bank. (b ) City of West Uni versi tyPlace \.lfaterworks Revenue Bonds Interest and Sinking Fund, hereinafter called "Interest and Sinking Fund". This Fund shall be deposited with (c) City of West University Place Contingencies Fund, herein- after called ttContingenciesFundtt. This Fund shall be kept in the City's depository bank. Section 12: REVENUE FUND: All revenues of every nature received through the operation of the System shall be deposited from day to day as collected, into the Revenue Fund, and the reasonable and proper expenses of operating and maintaining the System, including salaries, labor and materials, shall be paid therefrom upon approval of. the City Commission. The City Treasurer shall not make any disbursement from said Fund for repairs in excess of Five Hundred ($500.00) Dollars or for extensions, except pursuant to a resolution adopted by the City Commission declaring that it is the judgment of the City Commission that such repairs or extensions are necessary to keep the plant or system in operation and render adequate service to the City, its inhabitants and the users thereof, or that such repairs or extensions are necessary to meet some physical accident or condition which would otherwise impair the Bonds, or the Additional Bonds if issued, and such resolution, in either case, shall recite the facts and reasons for such judgment. Certified copies of such resolution shall be furnished without cost to bondholders requesting the same. Such resolution shall not be binding or conclusive upon any bondholder. All revenues of the Syst~m not actua~ly required to pay expenses and costs incurred as permitted by this Section shall be deposited in the other funds created by this ordinance, each of which shall have priority thereto in the order inwhichth~ are treated in the following sections. Section 13 :' INTEREST AND SINKING FUND: On the lOth day of each month, from January 10, c1951, through December 10, 1958, the City shall deposit in the Interest and Sinking Fund in each of the years and in the respective amounts shown in the following schedule, to-wit: Deposit to Interest and Sinking Fund Year 1951 1952 1953 1954 1955 1956 1957 1958 $ 1,021.79 I,093.46 1,163.67 1, 151. 17 1,138.67 1,055.42 1,036.46 1,185.37 1 I At least five (5) days prior to each interest payment date, the City shall cause to be transferred to the bank ?f ~aymen~, an amount of . money sufficient to pay the interest and the prmc1.pal, if any, then fall1.ng -------=--------------rc---:"----,-.: j--------"...-:::==-::rrr------ lIT r . 106 c!ue. Such remittance shall be made out of the Interest and Sinking Fund. When there has been accumulated in the Interest and Sinking Fund, a sum fully sufficient to pay the: 'principal, interest to final maturity date or to the date on which the bonds have been duly called for redemption, and premiums, if any, on all bonds then outstanding, payments into the Interest and Sinking Fund, may be discontinued but shall be resumed, if necessary, for any reason to prevent default on the bonds. II :J Section 111 t CONTINGENCIES FUND: There shall be deposited into the Contingencies Fund from time to time, such amounts of money as in the judgment of the City Commission shall be necessary to provide a reasonable reserve for unforeseen contingencies. The Contingencies Fund shall be used to pay the cost of any repairs, extensions or improvements to the System under the circumstances and to the extent permitted by iaw, and to pay maturing principal of or interest on the Bonds when the Interest and Sinking Fund is inadequate for such purposes. Money in the Contingencies Fund may, at the option of the City, be invested in direct obligations of the United States of America, having maturities not in excess of ten (10) years from the date of the making of such investments. Any obligations in which money in such Fund is so invested shall be kept in escrow in the bank in which money in the Fund is kept and shall be promptly sold and the proceeds of sale applied to the making of payments required to be made from the Contingencies Fund, whenever such payments are necessary to be made under the foregoing provisions of this Section. S~ction 15: DEFICIENCIES IN FUNDS: If in any fiscal year, the Ci ty shall, for any reason, fail to pay into the ::I:nterest and Sinking Fund I] and Contingencies Fund, the full amounts above stipulated, amounts equiva~ lent to such deficiencies shall beset apart and paid into said Funds from th~ first available and unallocated revenues of the following, fiscal year or years, and such payments shall be in addition to the amounts hereinabove provided to be otherwise paid into said Funds during such fiscal year or years. Section 16t EXCESS REVENUES: Any revenues in excess of those required to establish and maintain the Funds as above required may be used for the redemption of Bonds or for any lawful pU!jNse. ~p.~t.i on 17. SECURITY OF FUNDS: All Funds created by this ordinance shall be secured in the manner and to the fullest extent permitted by the laws of Texas for the security of public funds, and such funds shall be used only for the purposes permitted in this ordinance. ~p.~t.; on 1 Ii . MAINTENANCE AND OPEP.ATION - INSURANCE: The City shall maintain the .System in good condition and operate the same in an efficient manner and at a reasonable cost. So long as any of the Bonds or the Additional Bonds are outstanding, the City agrees to maintain insurance for the benefit of the holder or holders of the Bonds, on the system of a kind and in an amount which would usually be carried by private companies engaged in a similar type of business. Nothing in this ordinance shall be construed as requir.ing the City to expend any funds which are derived from sources other than the operation of the System, but nothing herein shall be construed as preventing the City from doing so. Section 19: ACCOUNTS AND FISCAL YEAR: The City shall keep proper [ 107 ,books of records and accounts (separate from all other records and accounts of the City) in which complete and correct entries shall be made of all transactions relating to the System. The City shall operate the System and will keep its books of records and ac.counts on the basis of a fiscal year ending December 31st~ Section 20~ ADDITIONAL BONDS: To the extent permitted by law, the City reserves the right hereafter to issue Additional Bonds. As above stated, the Eighty,Five Thousand ($85,000.00) Dollars of Bonds directed by this ordinance to be issued shall be called "Bonds II , and the Additional Bonds shall be called "Additional Bondstt. The Additional Bonds, when issued, may be secured by and payable from a first lien" on and pledge of the Net Revenues of the System in the same manner and to the same extent as are the bonds, authorized by this ordinance, and the $10,000 Water Revenue Refunding Bonds, dated July 15, 1942, now outstanding, the Bonds, and the Additional Bonds shall in all respects be of equal dignity. The Additional ~onds may be issued in one or more install."Ilents. It is provided, however, that none of the Additional Bonds shall be issued unless: (a) Each of the Funds created by this ordinance contains the amountscof money then required to be on deposit therein. (b) The Net Earnings of the System for each of the two (2) twelve (12) calendar months periods next preceding the adoption of an ordin~nce authorizing the issuance of Additional Bonds shall have been at least one and one-half (1-1/2) times the maximum debt service require- ments coming due in any calendar year on the $10,000 Water Revenue Refund- ing Bonds, dated July 15, 1942, now outstanding, the bonds of this issue then outstanding, and such proposed Additional Bonds, as such Net Earnings are shown by a report by an independent public accountant. The term "Net Earningsft as used in this Section 20 shall mean the gross revenues after deducting expenses of operation and maintenance, but not deducting expenditures which, under standard accounting practice, should be charged to capital expenditures. (c) A competent independent enginee~ certifies in writing his opinion as to the annual expenses and income and net earnings of the System throughout the life of the $10,000 Water Revenue Refunding Bonds, dated August 15, 1942, now outstanding, the Bonds, and the Additional Bonds, and such opinion shows that the average annual Net Earnings from the System will be at least one and one-half (1-1/2) times the average annual require- ments for the payment of principal and interest on the $10,000 Water Revenue Refunding Bonds, dated August 15, 1942, now outstanding, the out- standing Bonds and the Additional Bonds. (d) The Additional Bonds are made to mature on December 15th in each of the years in which they. are scheduled to mature. Nothing in this ordinance, however, shall be contrued to prevent the issuance .of bonds payable from the revenues of the System other than the Bonds and the Additional Bonds specified in this ordinance, so long as the lien of such other bonds on the revenues of the System is made junior and subordinate in all respects to the $10,000 Water Revenue Refunding Bonds, dated August 15,1942, now outstanding and said Bonds, and Additional Bonds, as provided by Chapter 249, 51st Legislature, Regular Session, 1949. ~ , .. ill 108 nr- r . Section 21: ACCOUNTING REPORTS: Wi thin ninety (90) days after the close of each fiscal year hereafter, the City will furnish (without cost) to Rowles, Winston & Company, Houston, Texas and any bondholder who may so request, a signed or certified copy of a report by an independent accountant covering the next preceding fiscal year showing the following information relating to the System: II '--~ (a) (b) (c) Income and Expense Statement; Balance Sheet; Accountant's comment regarding the manner in which the City has complied w~th the requirements of this ordinance, and his recommendation Ior any changes or improvement in the operation of the System; List of insurance policies in force at the end of the fiscal year, showing as to each policy, the risk covered, the name of the insur~r, and the expiration date; The number of properti~s connected with the System and the total income of the System for the year; The number of unmetered customers at the end of the year; The number of gallons of water registered through the master meter and the number of gallons sold during the year. (d) (e) (f) (g) Section 22: INSPECTION: Any holder or holders of the Bonds or Additional Bonds have the right at all reasonable times to inspect the System and all records, accounts and data of the City relating thereto. Section 23: SPECIAL COVENANTS: The City hereby further covenants as follows: f ':.~ ~ (a) That it has the lawful power to pledge the revenues support- ing this issue of Bonds and has lawfully exercised said power under the Constitution and laws of the State of Texas, including said power existing under Articles 1111 to 1118, both inclusive, Revised Civil Statutes of the State of Texas, with amendments thereto; that the Bonds issued hereunder, and the Additional Bonds, when issued, 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. (b) The City covenants and represents that other than for the payment of the $10,000 Water Revenue Refunding Bonds, dated August 15, 1942, now outstanding) the Bonds herein authorized, the rents, revenues and income of the System have not in any manner been pledged to the payment of any debt or obligation of the City or of the System. (c) That, so long as any,of said Bonds or Additional Bonds remain outstanding, the City will not sell or encumber the System, or any sub- stantial part thereof, and that, with the exception of the Additional Bonds expressly permitt~d by this ordinance to be issued, to the extent permitted by law, it will not encumber the revenues thereof unless such encumbrance is made junior and subordinate to all of the provisions of this ordinance, as provided by Chapter 249, 51st Legislature, Regular Session,1949. (d) That no free service of the System shall be allowed and should the City or any of its agencies or instrumentalities make use of the services and facilities of the System, payment of the reasonable value thereof shall be made by the City out of Funds from sources other than the --, I I 109 revenues and income of th~ System. ' (e) To the extent that it legally may, the City further covenan-tsand agrees that, so long as any of the Bonds or Additional Bonds or any interest thereon are outstanding, no franchise shall be granted for the installation or operation of any competing waterworks system, that the City will prohibit the operation of any water system, other than the System owned by the City, and the operation of any said System by anyone other than this City is hereby prohibited. ' Section 21.: BONDS ARE SPECIAL OBLIGATIONS: The Bonds are special obligations of the City payable from the pledged revenues, and the holder thereof shall never have the right to demand payment thereof out of any Funds raised or to be raised by taxation. Section 2t;: The Mayor of the City of West University Place is hereby authorized to take and have charge of said bonds pe!lldmg th~ir _ investigation and approval by the Attorney General and when the same have been so approved, he shall deliver them to the Comptroller of Public Accounts of the State of Texas for registration. Said refunding bonds shall not be registered until and after a like amount of said original bonds have been surrendered for cancellation. As and when said original bonds, either in one delivery or in installments, are surrendered to the Comptroller, he is authorized and directed to deliver the refunding bonds in like amounts to the holder or holders of said original bonds. PASSED AND APPROVED this 10th day 1950. ATTEST: