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RULE §53.51Municipal Revenue Bond Elections

The following are the minimum requirements for statutory compliance and documentary composition of transcripts prerequisite to approval of municipal revenue bonds.

  (1) Where a Texas Civil Statutes, Article 1112, election is applicable.

    (A) Minutes excerpt relative to call of election.

    (B) Findings; advisability of calling the bond election, etc.

    (C) Resolution or ordinance recitals and directions.

      (i) Election date: not less than 15 nor more than 30 days from date of passage, and designation of polling hours.

      (ii) Text of propositions in full, stating purpose, amount, interest rate maximum, sources of revenue for payment of principal and interest, maximum maturity.

      (iii) Places of election, election officers, and number of clerks, absentee voting provision with days and hours of polling.

      (iv) Election to be held in accordance with Texas Election Code, applicable general laws and laws applicable to the issuance of municipal bonds by such city or town.

      (v) Ballot proposition, form and method of voting (paper ballots, etc.).

      (vi) Directions for posting and publication of notice.

    (D) Notice of election: substantial copy of election order addressed to qualified electors.

      (i) Affidavit (or certificate) of posting notice.

        (I) Posted in each election precinct and at city hall.

        (II) At least 14 days prior to election or, if a lesser period, designation of such period and statement of reasons longer notice period cannot be afforded.

        (III) Copy of notice attached.

      (ii) Affidavit of publication of notice.

        (I) Published the same day in two successive weeks, indicating dates published, first publication not less than 14 days prior to election date.

        (II) Newspaper of general circulation published in the city or, if no newspaper published there, circulated in the city.

        (III) Copy of notice as published attached.

        (IV) Executed by officer of employee of the newspaper, with job title indicated.

    (E) Canvass resolution or ordinance.

      (i) Meeting minutes excerpt relative to canvassing.

      (ii) Recitation.

        (I) All circumstances surrounding calling of election, giving of notice, holding of election and return of ballots, finding all have been legally had and done.

        (II) Tabulations of votes.

      (iii) Operative provisions.

        (I) Election duly and lawfully held.

        (II) Result declared and declaration that council, board of aldermen, or commission authorized to issue the described bonds and pledge revenues.

        (III) In non-Article 1112 election issues, notice of intention to issue revenue bonds must be furnished in accordance with Texas Civil Statutes, Article 2368a.

  (2) Bond ordinance.

    (A) Minutes excerpt relative to bond ordinance passage.

    (B) Recitation.

      (i) Election circumstances, if Article 1112 election involved; if non-Article 1112 issue, recital of publication of notice of intention to issue revenue bonds.

      (ii) Amount to be issued and recital of identification of all prior issues, including amount of each such issue, made under authority of the election, if any, ordered in paragraph (1) of this section, or under prior ordinance, as well as a description of any system mortgages incurred pursuant to Texas Civil Statutes, Article 1118a, and constitutional, statutory, and charter, if any, authority for issue.

    (C) Operative provisions.

      (i) Designation of issue, aggregate amount, purposes.

      (ii) Numbers, denominations, bond date (numbers corresponding to listed years and maturity amounts must be set out).

      (iii) Maturity schedule.

      (iv) Interest rates and payment dates.

      (v) Redemption option, if any.

      (vi) Places of payment, names of paying agents, manner of payment.

      (vii) Manner of execution.

      (viii) Bond form, coupon form, if any, (must refer to redemption option, if any), form of comptroller's registration certificate.

      (ix) Creation of sinking fund, declaration or sources of payments of defined revenues and pledge thereof, with specification of source of payment of maintenance and operating expenses.

      (x) Pledge to render no free service.

      (xi) Sale of bonds; mayor to have charge of bonds pending attorney general approval.

      (xii) Declaration of mode of sale.

      (xiii) Bond statement: "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."

  (3) Copy of official notice of sale, if any.

  (4) If contract for sale of water by issuer is involved requiring Texas Water Rights Commission approval, a certified copy of the approval of such contract by the Texas Water Rights Commission must be inserted in the transcript.

  (5) Incumbency certificate.

  (6) Certificate of incorporation.

  (7) Certificate regarding adoption of Texas Civil Statutes, Title 28, if first issue for a general law city.

  (8) Appropriation certificate by chief financial officer of city or town is required when the first coupon due or the first principal maturity comes before any pledged monies from system operation will be available and no other sources of payment are provided.

  (9) Certification, as to home rule cities, of no charter amendment since approval of last preceding bond issue, or, if amended, certified copies of all amendments adopted since such approval.

  (10) Certified copy of current ordinance regulating and fixing rates, charges, and fees for consumption or use of the self-liquidating project or its products, including affirmation that, where required by law, public rate hearing has been held prior to adoption of the ordinance, all findings required by cited applicable law have been made by the council or board upon which to base such rates, charges, and fees, and a finding that the same are reasonable and necessary, or certification of continuing effect of rate ordinance previously submitted to this office in connection with issue pledging such revenues.

  (11) If other than a first revenue bond issue, certificate of no-default on any prior revenue bond issue payable from all or part of the same sources as the subject issue.

  (12) Nonencumbrance certificate.

  (13) Transcripts of additional parity bond issues must include certified copies of every document or certificate required to be executed by any relevant, prior revenue issue as conditional to power to delivery the additional issue.

  (14) Revenue bond ordinances providing for a deed of trust, a trust indenture, or both, must be accompanied by a certified copy of each such instrument.

  (15) If the management and control of the system or systems is confided to a board of trustees, the first encumbrance providing funding subject to such trustees' control should describe the composition of the board, its compensation, and the powers and duties conferred.

  (16) Engineer's certified projection of income combined with debt service requirements over life of bonds.

  (17) Refunding bonds which do not bear the same or a lower rate of interest than borne by the bonds being refunded must have incorporated in the transcript a dated and signed worksheet executed by the city or town chief financial officer or financial advisor mathematically demonstrating that a saving in total amount of interest to be paid by the issuer will result and, if applicable, that the increase in debt service will not impair covenanted payments or security on either prior superior or parity bonds. If interest saving will not result, such officer or advisor must furnish affidavit showing actual consideration moving to issuer for such refunding and demonstrating the adequacy thereof.

  (18) Refunding bond transcripts shall be accompanied by a sinking fund certificate of the following tenor and effect.

Attached Graphic

Source Note: The provisions of this §53.51 adopted to be effective January 1, 1976.

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