HomeMy WebLinkAbout03560 ORD - 10/10/1953TEXAS:
AN ORDINANCE N0. 3560
AUTHORIZING AND DIRECTING THE CITY MANAGER FOR AND ON BEHALF
OF THE CITY OF CORPUS CHRISTI TO MAKE A WRITTEN OFFER TO THE
HOLDERS OF THE NOW OUTSTANDING WATER REVENUE BONDS, SERIES
1948 AND 1948A, ?UNDER CONDITIONS WHICH WOULD PERMIT THE CITY
TO MODIFY THE DEED OF TRUST SECURING SAID WATER REVENUE BONDS;
AND DECLARING AN EMERGENCY.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
SECTION 1. THAT THE CITY MANAGER BE, AND HE IS HEREBY, AUTHORIZED
AND DIRECTED FOR AND ON BEHALF OF THE CITY OF CORPUS CHRISTI TO MAKE A WRITTEN
OFFER TO THE HOLDERS OF THE NOW OUTSTANDING WATER REVENUE BONDS, SERIES 1948
AND 1948A, UNDER CONDITIONS WHICH WOULD PERMIT THE CITY TO MODIFY THE DEED OF
TRUST SECURING SAID WATER REVENUE BONDS, A COPY OF WHICH OFFER IS ATTACHED HERETO.
SECTION 2. THAT THE NECESSITY FOR MAKING THIS WRITTEN OFFER AT THIS
TIME TO THE HOLDERS OF CERTAIN OU75TANDING WATER REVENUE BONDS FOR THE PURCHASE
OF SUCH BONDS, AND TO MODIFY THE DEED OF TRUST SECURING SAID WATER REVENUE BONDS
CREATES A PUBLIC EMERGENCY AND AN IMPERATIVE PUBLIC NECESSITY REQUIRING THE SUS-
PENSION OF THE CHARTER RULE THAT NO ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY
ON THE DATE OF ITS INTRODUCTION AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE
READ AT THREE SEVERAL MEETINGS OF THE CITY COUNCIL, AND THE MAYOR, HAVING DECLARED
SUCH EMERGENCY AND NECESSITY TO EXIST, HAVING REQUESTED THE SUSPENSION OF SAID
CHARTER RULE AND THAT THIS ORDINANCE BE PASSED FINALLY ON THE DATE OF ITS INTRO-
DUCTION AND THAT SUCH ORDINANCE TAKE EFFECT AND BE IN FULL FORCE AND EFFECT FROM
AND AFTER ITS PASSAGE, IT IS ACCORDINGLY PASSED AND APPROVED, THIS THE
DAY OF OCTOBER, 1953° l7
ATTEST
CITY SECRETARY,
( r'i
APPROVED ASS TO LEGAL FORM: t'
CITY ATTORNEY
35(p C)
THE CITY CORPUS CHRISTI, TEXAS
CITY COUNCIL
A. A. LICHTENSTEIN
ELLROY KINO
.111. FAFTdN
W. TAMES BRACE
P. C. CALLAWAY
i. S, NAISMITH
CITV Of MM NETI/ T
TO THE HOLDERS OF:
CORPUS CHRISTI, TEXAS, WATERWORKS REVENUE BONDS
SERIES 1948 AND 1948A
CITY MANAGER
RUSSELL E, M CLURE
CITY OFFICES
'M SOUTH SHORELINE
POST OFFICE SOX IEII
TELEPHONE 3 -45R
THIS LETTER IS WRITTEN TO SOLICIT YOUR COOPERATION IN WORKING OUT A
PLAN WHICH WILL PROTECT YOUR INVESTMENT, MATERIALLY INCREASE THE YIELD YOU
ARE CURRENTLY RECEIVING AND ENHANCE THE VALUE OF THE BONDS YOU OW'N� ANO WILL
ENABLE OUR CITY TO FINANCE FUTURE IMPROVEMENTS TO ITS WATER WORKS 0.NO SEWER
SYSTEMS ON A MORE FAVORABLE BASIS.
OUR CITY CONTINUES TO GROW AT A STRONG BUT STEADY RATE. A5 THIS
GROWTH TAKES PLACE THE CITY I5 CALLED UPON TO ENLARGE AND EXTEND ITS
MUNICIPAL SERVICES, ESPECIALLY THOSE FOR WATER AND SANITARY SEWER. MANY
IMPROVEMENTS AND EXTENSIONS HAVE BEEN MADE FROM EARNINGS BUT THE INCREASED
DEMANDS FOR SERVICE MAKE IT IMPOSSIBLE TO FINANCE MAJOR ENLARGEMENTS AND EX-
TENSIONS FROM TH15 SOURCE. CURRENT DEMANDS ON EXISTING FACILITIES ARE VIRTUALLY
AT THE MAXIMUM LEVEL. WATER AND SEWER SERVICES ARE CLOSELY RELATED. A SEWER
SYSTEM WITHOUT WATER IS USELESS. AS WATER SERVICE IS EXTENDED THE DEMAND FOR
SEWER SERVICE FOLLOWS. IN ORDER TO FINANCE FUTURE NEEDS ON A SOUND BASIS
CONSISTENT WITH GOOD BUSINESS POLICY, WE THINK IT IS TO THE BEST INTEREST OF
THE BONDHOLDERS AND THE CITY TO WORK OUT A PLAN WHICH WILL PERMIT THE CITY TO
FINANCE FUTURE IMPROVEMENTS AND EXTENSIONS THROUGH THE ISSUANCE OF WATERWORKS
AND SEWER SYSTEMS REVENUE BONDS SECURED BY AND PAYABLE FROM THE COMBINED NET
EARNINGS OF THE TWO SYSTEMS.
AT THE PRESENT TIME THE CITY HAS OUTSTANDING $3,961,,0100 OF WATERWORKS
REVENUE BOND ($1,861,000 SERIES 1948 AND $2,100,000 SERIES 1948-A) AND $72,000
SEWER REVENUE BONDS. THE SEWER REVENUE BONDS ARE SCHEDULED TO MATURE IN 1954
AND 1955; AND THE CITY HAS MADE ARRANGEMENTS TO ACQUIRE AND CANCEL THESE BONDS
RELEASING THE LIEN ON THE NET REVENUES OF THAT SYSTEM.
THE OUTSTANDING WATER �EVENUE *ONDS ARE SECURED BY A DEED OF TRUST.
IN ORDER TO CHANGE THE DEED OF TRUST AND PUT THIS PLAN IN OPERATION, IT WILL BE
NECESSARY TO OBTAIN THE CONSENT OF THE HOLDERS OF NOT LESS THAN 75% OF THE OUT-
STANDING BONDS. IF THE NECESSARY 75% 15 OBTAINED, CONSENTING HOLDERS WILL TURN
IN THEIR WATER REVENUE BONDS AND RECEIVE IN EXCHANGE FOR THEM A LIKE AMOUNT
OF WATERWORKS & SEWER SYSTEMS REFUNDING REVENUE BONDS, MATURING SERIALLY FROM
JUNE 1, 1954, TO JUNE 1, 1965, AND BEARING INTEREST AT THE RATE OF R 1/2%. ELSE-
WHERE IN THIS LETTER THESE BONDS_. WILL BE CALLED THE 11REFUNDING BONOSII. BONDS
WILL BE EXCHANGED IN ORDER OF MATURITIES. FOR EXAMPLE; THE LONGEST MATURITY
OUTSTAND BONDS ARE DUE JUNE 1, 1977, AND THESE MATURITIES WOULD BE EXCHANGED
FOR THE REFUNDING 3 112% BONDS DUE JUNE 1, 1965. A SCHEDULE SHOWING HOW THIS
EXCHANGE WILL BE MADE 15 ATTACHED AND MARKED EXHIBIT NO. 1.
BRIEFLY THE DEED OF TRUST WILL BE AMENDED TO PROVIDE:
A. THAT THE BONDS ISSUED TO REFUND THE OUTSTANDING WATERWORKS REVENUE
BONDS, SERIES 1948 AND SERIES 1948A AS WELL AS ANY ADDITIONAL BONDS
TO BE ISSUEDj WILL BE SECURED BY THE COMBINED NET EARNINGS OF THE
WATERWORKS AND SEWER SYSTEMS; AND
B. THAT ADDITIONAL PARITY BONDS MAY BE ISSUED ONLY FOR IMPROVEMENTS OR
EXTENSIONS OR REPAIRS ORI£PLACEMENTS OF AND TO THE WATERWORKS SYSTEM
AND SEWER SYSTEM. THE RIGHT TO ISSUE ADDITIONAL BONDS AT ANY TIME
WILL BE SUBJECT TO THE FOLLOWING LIMITATIONS AND CONDITIONS:
(1) THAT NET EARNING FOR THE PRECEDING YEAR ARE NOT LESS THAN ONE
AND THREE QUARTER (1 3/4) TIMES THE MAXIMUM TOTAL AMOUNT OF
PRINCIPAL AND INTEREST TO BECOME DUE IN ANY FUTURE YEAR ON ALL
OBLIGATIONS THEN OUTSTANDING AND THEN TO BE ISSUED;
(2) THAT AN ESTIMATE BY AN INDEPENDENT ENGINEER OR ENGINEERING FIRM
EMPLOYED BY THE CITY AND ACCEPTABLE TO THE TRUSTEE SHOWS THAT,
IN HIS OR THEIR OPINION, THE NET REVENUES OF THE SYSTEMS FOR
EACH YEAR FROM THE DATE OF SUCH CERTIFICATE UNTIL THE MATURITY
DATE OF THE LAST MATURING BOND WILL BE EQUAL TO AT LEAST ONE
AND THREE — QUARTER. (1 3/4) TIMES THE MAXIMUM AMOUNT REQUIRED IN
ANY YEAR TO PAY PRINCIPAL OF AND INTEREST ON ALL OBLIGATIONS THEN
OUTSTANDING AND THEN TO BE ISSUED;
(3) A CERTIFICATE BY THE MAYOR AND CITY SECRETARY SHOWING THE NET
REVENUES OF THE SYSTEMS FOR THE PRECEDING CALENDAR YEAR AND FOR
ALL COMPLETED MONTHS OF THE THEN CURRENT YEAR;
(4) A CERTIFICATE BY AN INDEPENDENT AUDITOR ACCEPTABEL TO THE TRUSTEE
OR BY A CERTIFIED PUBLIC ACCOUNTANT ATTESTING TO THE CORRECTNESS
OF THE FIGURES CONTAINED IN THE CERTIFICATE BY THE MAYOR AND
CITY SECRETARY;
(5) A BALANCE SHEET AND ANY SUCH ADDITIONAL DATA AS MAY BE NECESSARY
TO SHOW THE STATUS OF EACH OF THE FUNDS CREATED UNDER THE DEED
OF TRUSTS CERTIFIED TO BY AN AUDITOR OR CERTIFIED PUBLIC ACCOUNT -
ANT, EFFECTIVE AT A TIME NOT MORE THAN THIRTY (30) DAYS PRIOR TO
THE DATE OF SUCH CERTIFICATE;
C. THAT FUNDS IN THE REDEMPTION FUND MAY BE USED TO PURCHASE BONDS ON THE
"TENDER PLAN" AFTER PROPER ADVERTISEMENT FOR TENDERS. IF SUFFICIENT
BONDS CANNOT BE BOUGHT AT SATISFACTORY PRICES UNDER THE TENDER PLAN
THE CITY SHALL BE OBLIGATED TO EXHAUST ALL FUNDS IN EXCESS OF �5a000
AT LEAST ONCE EACH TWO YEARS BY EXERCISING THE CITY'S RIGHT TO REDEEM
BONDS PRIOR TO THEIR SCHEDULED MATURITY DATES IN ACCORDANCE WITH THE
— 2 —
REDEMPTION PROVISION CONTAINED IN THE BONDS;
D. THAT IN THE EVENT THE CITY SHOULD SELL MATHIS DAM TO THE LOWER NUECES
RIVER WATER SUPPLY DISTRICT, THE PROCEEDS ($2,071,165) WILL BE PLACED
IN THE REDEMPTION FUND AND BE USED TO REDEEM OUTSTANDING BONDS. (IN
1152 THIS PROVISION WAS AGREED TO BY THE HOLDERS OF MORE THAN 80% OF
THE OUTSTANDING BONDS AND WILL NOT BE DISTRUSED BY THE PROPOSED
OPERATION).
E. THAT THE CITY SHALL HAVE THE RIGHT TO CALL BONDS FOR PAYMENT IN
ACCORDANCE WITH THE REDEMPTION PROVISION CONTAINED IN THE BONDS OUT
OF ANY FUNDS AVAILABLE TO THE CITY.
IF THIS PLAN IS PUT INTO EFFECT, THE CITY EXPECTS TO CALL AN ELECTION
(TENTATIVE DATE, NOVEMBER 24, 1953) TO AUTHORIZE THE ISSUANCE OF:
I. REFUNDING BONDS
$3,9611,000 WATERWORKS AND SEWER SYSTEMS REFUNDING � 11/2% REVENUE BONDS
TO BE DATED DECEMBER 1, 1153, INTEREST PAYABLE JUNE 1, 1954, AND SEMIANNUALLY
THEREAFTER, BOTH PRINCIPAL AND INTEREST TO BE PAYABLE AT MERCANTILE NATIONAL
BANK AT DALLAS, TEXAS, OR AT THE OPTION OF THE HOLDER AT CHEMICAL BANK AND TRUST
COMPANY, NEW YORK, NEW YORK. SUCH BONDS TO MATURE SERIALLY AS FOLLOWS:
288,000
JUNE
1,
10/54
298,000
JUNE
1,
1955
300/,000
JUNE
1,
1956
320,000
JUNE
1,
1957
30,000
JUNE
1,
1
3 2,000
JUNE
11,
1959
354,000
JUNE
1,
11160
367,000
JUNE
1,
1961
380,000
JUNE
1,
1962
JUNE
1,
1116
�93,000
07,000
JUNE
1,
196
173,000
JUNE
1,
1965
ALL OF THE REFUNDING BONDS SHALL BE OPTIONAL ON ANY INTEREST PAYMENT
DATE ON AND AFTER DECEMBER 1, 1975, AT A PRICE OF PAR AND ACCRUED INTEREST TO
THE DATE FIXED FOR REDEMPTION PLUS A PREMIUM OF 3 1/2% OF THE PRINCIPAL AMOUNT.
THE REFUNDING BONDS WILL BE EXCHANGED FOR THE OUTSTANDING WATERWORKS
REVENUE BONDS, SERIES 1948 AND 1548A. IN THE EVENT THAT THE HOLDERS OF AT LEAST
15 %, BUT LESS THAN ALL, OF THE REFUNDING BONDS SERIES 1948 AND 1948A BONDS AGREE
TO THIS EXCHANGE, THE DEED OF TRUST WILL BE MODIFIED AS AGREED TO BY THE 75%
CONSENTING MAJORITY BUT THE AMOUNT OF THE REFUNDING BONDS WILL BE DECREASED 50
AS TO TAKE CARE OF ONLY SUCH HOLDERS AS DO AGREE TO ACCEPT THE EXCHANGE OFFER.
THE MINORITY NON-CONSENTED BONDS WILL BE UNDISTRUBED.
H. IMPROVEMENT BONDS
THE CITY WILL ALSO VOTE TO AUTHORIZE THE ISSUANCE OF $12,000,000,
- 3 -
WATERWORKS AND SEWER SYSTEM REVENUE BONDS TO BE ISSUED FROM TIME TO TIME TO
MAKE SUCH IMPROVEMENTS, BETTERMENTS AND EXTENSIONS TO THE WATERWORKS AND SEWER
SYSTEMS AS MAY BE NEEDED. SUCH ADDITIONAL BONDS CAN BE ISSUED ONLY IN ACCORD-
ANCE WITH THE PROVISIONS OF THE DEED OF TRUST GOVERNING THE ISSUANCE OF ADDI-
TIONAL BONDS.M IT IS PROBABLE THAT 1T'HE CITY WILL SELL APPROXIMATELY $6,300,000
OF SUCH ADDITIONAL BONDS DURING 1954 AND POSSIBLY $4,700,000 DURING 1955.
IMPROVEMENTS TO THE WATER SYSTEM WILL INCLUDE SUCH MAJOR ITEMS AS: THE
CONSTRUCTION OF A BADLY NEEDED TREATMENT PLANT ($4,000,000), TRANSMISSION LINE
FROM THE TREATMENT PLANT TO THE DISTRIBUTION SYSTEM ($2,880,000), GENERAL
IMPROVEMENTS TO DISTRIBUTION SYSTEM ($1,113,200).
THE SANITARY SEWER SYSTEM HAS BECOME GREATLY OVERLOADED AND ENLARGE -
MENT5 AND IMPROVEMENTS MUST BE MADE. THESE IMPROVEMENTS WILL INCLUDE SUCH
MAJOR Il -EMS AS: LATERALS (.4p174,000), ENLARGEMENTS OF BROADWAY TREATMENT PLANT
($902 '000), EXPANSION OF 050 TREATMENT PLANT ($956,800) TRUNK LINES ($635,700)
ALL OF THESE IMPROVEMENTS ARE A NECESSITY AND WILL ADD MATERIALLY TO
THE NET EARNINGS OF THE WATERWORKS AND SEWER SYSTEMS.
INFORMATION AS To NET REVENUES
NET EARNINGS OF THE SYSTEMS FOR THE FISCAL YEAR ENDED JULY 31, 1953,
WERE AS FOLLOWS:
WATERWORKS SYSTEM . . . . . . . . . . . . . $1,236,671.24
SEWER SYSTEM . . . . . . . . . . . . . 221,025.62
COMBINED NET EARNINGS . . . . . . . . . . . $1,457,696.86
'SEWER RATES WERE INCREASED 50% ON MAY 16, 1953. HAD THE RATE
INCREASE BEEN IN EFFECT FOR THE ENTIRE YEAR, IT IS ESTIMATED
NET EARNINGS WOULD HAVE AMOUNTED TO $379,833.77 OR A TOTAL OF
$1,616,505.01 FOR THE COMBINED SYSTEMS.
THE MAXIMUM ANNUAL DEBT SERVICE REQUIREMENT FOR THE $3,961,000
REFUNDING 3 1/2,% BONDS WILL BE $427,550.
IIMMEDIATE PROCEDURE
WE WOULD APPRECIATE HIGHLY HAVING YOUR INFORMAL REPLY TO THIS LETTER
NOT LATER THAN OCTOBER 30, 1953• FOR YOUR CONVENIENCE WE ARE ENCLOSING IN
DUPLICATE A FORM FOR INDICATING YOUR CONSENT. PLEASE RETAIN ONE COPY FOR YOUR
FILES AND SEND THE EXECUTED COPY TO THE CITY, USING, IF CONVENIENT, THE ENCLOSED
SELF-ADDRESSED STAMPED ENVELOPE. BY THIS METHOD WE WILL BE ABLE TO DETERMINE
PROMPTLY WHETHER THE HOLDERS OF THE REQUIRED PERCENTAGE OF BONDS ARE FAVORABLE
TO THE PROCEDURE.
IF IT APPEARS THAT THE HOLDERS OF AT LEAST 75% OF THE OUTSTANDING
BONDS ARE WILLING TO GO ALONG ON THIS PLAN WE WILL THEN TAKE IMMEDIATE STEPS
OR THE TRUSTEE TO GIVE THE NECESSARY NOTICE AND AT THAT TIME WILL ASK THAT
YOU FILE THE FORMAL CONSENT WHICH IS REQUIRED FOR ACTUAL MODIFICATION OF THE
DEED OF TRUST.
THE ELECTION ON THE ISSUANCE OF THE BONDS HAS BEEN SET TENTATIVELY
FOR NOVEMBER 24TH. THIS MEANS THAT THE CITY MUST PASS THE ORDINANCE CALLING
THE ELECTION DURING THE FIRST FOUR OR FIVE DAYS OF THE MONTHS OF NOVEMBER.
UNLESS SUFFICIENT INFORMAL CONSENTS SHALL HAVE BEEN RECEIVED BY THAT DATE THE
CITY WOULD NOT BE AUTHORIZED TO SUBMIT THE NECESSARY QUESTIONS TO THE VOTERS.
ASSUMING THAT SUFFICIENT INFORMAL CONSENTS HAVE BEEN RECEIVED BY NOVEMBER 15T
THE CITY WILL ALSO SET IN MOTION THE MACHINERY FOR MODIFYING THE DEED OF TRUST
WHICH REQUIRES AT LEAST ONE MONTH.
SHOULD YOU DESIRE ADDITIONAL INFORMATION WE SUGGEST THAT YOU CONTACT
OUR FINANCIAL ADVISORS, M. E. ALLISON & CO.; INC. 16TH FLOOR MILAM BUILDING,
SAN ANTONIO 5, TEXAS.
YOU MAY BE ASSURED THAT YOUR COOPERATION WILL BE APPRECIATED BY THE
CITY OF CORPUS CHRISTI AND ITS CITIZENS.
YOURS VERY TRULY,
CITY OF CORPUS CHRISTI
BY
COORR;PU,S /CHRISTI, TEXAS
TO THE MEMBERS OF THE CITY COUNCIL
CORPUS CHRISTI, TEXAS
GENTLEMEN:
FOR THE REASONS SET FORTH 1N THE EMERGENCY CLAUSE OF
THE FOREGOING ORDINANCE, A PUBLIC EMERGENCY AND IMPERATIVE NECESSITY
EXIST FOR THE SUSPENSION OF THE CHARTER RULE OR REQUIREMENT THAT NO
ORDINANCE OR RESOLUTION SHALL BE PASSED FINALLY ON THE DATE IT IS
INTRODUCED, AND THAT SUCH ORDINANCE OR RESOLUTION SHALL BE READ AT
THREE MEETINGS OF THE CITY COUNCIL; I, THEREFORE, HEREBY REQUEST
THAT YOU SUSPEND SAID CHARTER RULE OR REQUIREMENT AND PASS TH15
ORDINANCE FINALLY ON THE DATE IT IS INTRODUCED, OR AT THE PRESENT
MEETING OF THE CITY COUNCIL.
RESPECTFULLY,
MAYOR
CITY OF C S CHRISTI, TEXAS
THE CHARTER RULE WAS SUSPENDED BY THE FOLLOWING VOTE:
A. A. LICHTENSTEIN
ELLROY KING
P. C. CALLAWAY
4
JAMES,d NAISMITH
W. JAMES BRACE
THE ABOVE ORDINANCE WAS PASSED BY THE
FOLLOWING VOTE:
A. A. LICHTENSTEIN
ELLROY KING
P. C. CALLAWAY
JAMES NAISMITH
\
W. JAMES BRACE
V
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