R-74-115 - 2/28/1974THE STATE OF TEXAS,
CITY OF ROUND ROCK `
- ∎.RESOLUTION NO. 115R.
RESOLUTION
WHEREAS, final approval has been made by the consulting
engineers on that portion of Contract Six, DHUD Project, WS Tex - 349
and EPA Project, WPC- Tex -793, concerning Young Brothers, Inc., and
Roy W. Green Company, Contractors; and -
WHEREAS, DHUD and EPA have retained in excess of $ 91,620.00
as retainages under the terms of the above Contracts; and
WHEREAS, the City of Round Rock is assured that these sums
will be paid to the City no later than the period ending with the
new fiscal year which runs from February 1, 1974 to January 31, 1975;
and ,
WHEREAS, the said Young Brothers, Inc., and Roy W. Green
Company have petitioned the City for payment of the balance of the •
moneys due them under the above referred to Contracts; and
WHEREAS, the City'Coiincil deenms advisable to pay said
moneys to Young Brothers; Inc., and ,Roy,W, Green Company, which moneys
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total the sum of $ 77,896.26- J ; " dnd " . M ; * y,
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, 'WHEREAS, the City does not have sufficient funds in its
treasury to pay off the said Young Brothers; Inc., and Ro W. Green
Company; and ' t:`
WHEREAS, the City Council to borrow a'sum to
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pay off,said Contractors :and thus secure a-loah from either the
Farmers State Bank of Round Rock or- the.First National Bank of Round
-
Rock; • s'Y
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City
of Round Rock, Texas, that the City Manager attempt to secure a bid
from both the Farmers State Bank and the First National Bank of Round
Rock for the rate of interest that each would charge for a loan totaling :
- .
' the sum of $ 77,896.26 ' - ' tole paid<.on or before January 31,
1975, and with the total principal and-interest of said note to -
due and payable on or before January 31, 1975.
IT IS FURTHER RESOLVED that upon receipt of the bids that the
• Mayor is hereby authorized and ordered to execute a promissory note
,,.for the sum of $77,896.26 with'whichever of the above banks
submits the lowest bid for the interest rate to be charged and , -
be
with the terms of the note to spell out that all principal and accrued
..
interest to be payable on or before January 31, 1975; the proceeds
• - of said note to be used - solely y to'pdy,off. • Young Brothers, Inc., and
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Roy W. Green Company', the amounts : due.to them under the terms of
the above described Contracts 4 1 "4 ,f. " i.h ' p
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IT IS FURTHER"rRESOLVED that.should either Bank fail or refuse
to submit a bid' for said loan, then - the Mayor authorized to execute
the said note to the sole bidder., t y r -
IT IS 'FURTHER RESOLVED that Should each _of the two Banks submit
identical bids, then the:Mayor,.at his discretion, may execute the
note with either of said Banks.'
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READ, PASSED <ANDADOPTED, this the Ai— day-of February, 1974, •
• i ,- .•. -tr a 4 e: • •v "''
• RA LITTI MAYOR,
CITY OF ROUND ROCK, TEXAS
FARMERS STATE BRf1-e
M. J. COWAN
VICE PRESIDENT AND CASHIER
Mr. Jim Hislip,City Manager
Mr. Ray Litton, Mayor
Round Rock City Council
Round Rock, Texas
Gentlemen:
In response to your request for a loan in the amount of
$77,896.26 for a period of 90 days, with the option to
renew, but not to exceed the date of January 31, 1975,
the Farmers State Bank of Round Rock is more than pleased
to submit a bid as follows:
To make the above loan at an interest rate of 4.09% per
annum on a 90 day basis with the option to renew for 90
days, but to be paid in full by January 31, 1975.
Thank you for the opportunity to serve the City of Round
Rock.
Respectfully yours,
M. owan
Vi resident
MJC:mp
March 7, 1974
POST OFFICE BOX 368 • ROUND ROCK, TEXAS 78664 (512) 255 -3622
FIRST
NATIONAL
BANK
OF ROUND ROCK
ROUND ROCK, TEXAS
78664
March 7, 1974
Mr. Jim Hislap
City Manager
City of Round Rock
Round Rock, Texas 78664
Dear Mr. Hislop:
I am unable to submit a bid on the proposed loan in the amount of
$77,896.26 due to the following reason. This would require board ap-
proval from the Board of Directors of First National Bank. Our board
meeting will be held the latter part of this month.
If you wish for us to submit a bid after our board meeting, please
let me know.
Thank you for asking us to bid on the proposed loan and if I can
assist you in any way, please do not hesitate to call or come by.
Yours truly,
Dale Hester
President
DH /ms_
MEMBER FEDERAL DEPOSIT INSURANCE CORPORATION
W. K. MCCLAIN
W. R. STUMP
TIM L. WRIGHT
Mr. Jim Hislup
City Manager
Mr. Ray Litton, Mayor, and
City Council
Round Rock, Texas
Gentlemen:
McCLAIN. STUMP & WRIGHT
ATTORNEYS AT LAW
GEORGETOWN, TEXAS 78826
February 27, 1974
This letter is written to answer your inquiry concerning
whether or not the City can lawfully borrow sufficient funds
from a local lending institution to pay off Young Brothers,
Inc., and Roy W. Green Company for the amounts that are due to
them under the DHUD and EPA Water and Sewer Projects.
Article 11 of the Constitution of the State of Texas,
declares that no debt shall be created by any City, unless at
the same time provision be made for its payment and the one
claiming compensation under a Contract with the City must show
that the obligation was to be satisfied out of the current
revenues, or out of some fund within the immediate control of
the City.
The case of McNeill Vs. City of Waco, 33 S.W. 322, Supreme
Court of Texas Decision dated December 23, 1895, sets forth the
definition of the word, "debt" as used in the Constitution and
they set.forth as that definition the following:
" Any pecuniary obligation imposed by a contract, except
such as were, at the date of the contract, within the
lawful and reasonable contemplation of the parties,
to be satisfied out of the current revenues for the year,
or out of some funds then within the immediate control
of the corporation. "
It is my ophion that the loan that the City wishes to secure
from one of the Round Rock lending institutions is outside of the
definition of the word, "debt" as used in the Constitutional pro-
visions above quoted, and the fact that the obligation will be paid
during our current fiscal year and the additional fact that we know
TELEPHONE 883 -5594
A/C (512) 863-5595
P. O. BOX 286
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that the revenues from DHUD and EPA will certainly be paid within
the next few months, makes such loan well within the power and
authority of-the City Council. 4 4 *1 i
be passed at a special called mee'ting of the 'Council. '
,A f Respectfully submitted,
(Ai
TirtL. Wright
City Attorney