07 - Issuance & Sale of City of Paris GO Bonds, Series 2018Item No. 7
11 V101
TO: City Council
John Godwin, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: ISSUANCE & SALE OF CITY OF PARIS Go BONDS, SERIES 2018
DATE: March 23, 2018
BACKGWUND. On May 11, 2013 Paris residents voted to issue $45,000,000 in General
Obligation Bonds to re -build water and sewer lines. Only $35,000,000 of those bonds was issued
in 2013. In December 2016, the City issued another $8,800,000 of the bonds approved in 2013.
On May 6, 2017 Paris citizens voted to issue $10,,000,000 in General Obligation Bonds with $9.5
million dedicated to rebuild local streets and $500 thousand dedicated to park improvements. In
July 2017 the city issued 9,750,000 of the bonds authorized in May 2017. Because the City
wanted to make both the 2016 and 2017 issues "batik qualified" issues, the City took steps not to
issue more than $10,000,00�0 of long terra debt in those years. Long term debt includes things
like copier ]cases and bank financed fire trucks. Bank qualified bond issues have certain income
tax advantages and bring better bids than non-bank qualified bond issues. The City staff working
with Sanico Capital Markets, Inc. (the City's financial advisors) and McCall, Parkhurst & Horton
I..L.P. (the City's bond attorneys) are proposing to sell the small unissued portions of' the
2013/2016 and 2017 bond issues which were authorized by citizen vote. This 2018 bond issue
will be mostly water and sewer related ($1.2 million), but a small portion will be for streets
($190,000). Because of the small size of the 2018 bond Issue (approximately $1.39 million), the
City is seeking private placement of the bonds through a bid process as a cost savings, measure.
Using this method, the City will not have to pay for a bond rating or issue an official statement
on the bonds. The bonds will have a 1.0 year payoffseliedule.
STATUS OF ISSUE: Bids willbe received April 5, 2018 at the Dallas offices of Samco Capital
Markets,, Inc, A summary of those bids will be provided at the council meeting. An ordinance
has been prepared authorizing the issuance of these bonds and approving all other matters
incident to the bond issuance.
BUDGET- Cost of the bond issuance will be paid from the bond proceeds.
RECOMMENDATION: 1"he staff recommends the following motion: I move to adopt at)
ordinance authorizing the issuance and sale of City of` Maris, Texas' General Obligation Bonds,
Series 2018 for water and sewer system improvements and street and road improvement
purposes, and approving all other matters pertaining thereto,
MA-D'MIL
/\\. , ,w!\ !\. ..
TABLE OFCONTENTS
Section 1.
Recitals, Amount and Purpose of the Bonds— ....... —_.... .......... ....... ....... —_---2
Section 2.
Designation, Date Denomination,and Maturity' and Interest Rate of
Bond...................
-----..................... ....... ____,_._2
Section 3,,
Characteristics mfthe Bood.... _--............... _—...... --....................... ............
.3
Section 4.
Form of Bond_ ...... ........... ..^._.............. ..... —............ ^^.___^.__,_,,,.___~^,.^.^�
Section 5.
Interest and Sinking Fund ................. —.................. --- ........ .--_............. —........
U0
Section 6.
Defeasance mfBonds .............. ---............ ............. —.................. _-----_l1
Section 7.
Duozaged.Mutilated, Lost, Stolen, or Destroyed Bmnde—.......... —................ .......
]2
Section 0.
Custody, Approval, and Registration of Bonds; Bund Counsel's Opinion;
CUSUP'N/urnbersomd Contingent Insurance Provision, ifObtained; Engagement of
Bond
Counsel and Financial Advisor .................... ............. ..... ......... ........... .................
l3
Section 9.
Covenants Regarding Tax Exemption o[Interest onthe Bonds ........ ....... ....... ........
13
Section lO�.
Sale ofBond and Approval ofFurther Procedures ...... ...... .—_.......... .............. ...
l&
Section 11.
Default and Remedies .................... .... ............ ...... —.................. ............... ... ...
U6
Section 12.
NmRule l5oZ-I2Undertaking— ... .......... .......... ....... —........................ ............ l7
Section 13.
Method nfAmendment ...... .... ....... .................................. —............ ....................... ]7
Section 14.
Effective Date ... --.—...................... _—... ........ --............. ...... ...... —_......
yg
Section 15.
Allocation of, and Limitation on, Expendituresfor the Project ..................... .... .._l9
Section l0.
Interest on Bond Proceeds ................. .............. .............. —....... ......... _19
Section IT
Construction Fund ............ ........ ....... ---.~^_...... —....... _—............. .........
]9
Section 18.
Appropriation ......... .... —.................. —.... ........ .............. .... —..... .......... ..... —......
20
Section19.
Severability ............... .................. ............................................ .......... ...................
28
Section 20,
Designation as Qualified Tum- {)b( .... ...... —..............................
20
Schedule I
Voted Bonds ... —........... ................ —....... ...... ---------_-------.2l
ORDINANCE
AUTHORIZING THE ISSUANCE AND SALE OF CITY OF �PARIS,, TEXAS GENERAI
OBLIGATION BONDS, SERIES 2018; LEVYING AN ANNUAL AD VALOREM TA
FOR THE PAYMENT OF THE BONDS; ENGAGING CONSULTANTS WITH RESPEC
TO THE BONDS; AND ENACTING OTHER PROVISIONS RELATING TO TH
SUBjECT
THE STATE OF TEXAS
LAMAR COUNTY
CITY OF PARIS
WHEREAS, at an election in the City of Paris, Texas (the "Issuer"') held on May 11, 2013
(the "2013 Election"), the voters of the Issuer approved the issuance of tax bonds by the Issuer in
the aggregate principal amount of $45,000,000 for the purpose of constructing and acquiring
improvements and equipping the Issuer's waterworks and sewer system, to -wit: for replacing and
extending water distribution lines and sewer collection lines and constructing repairs to streets
and drainage infrastructure necessitated by such water and sewer line construction (the "Utility
System Purposes"); and
WHEREAS, the Issuer has heretofore issued (i) its General Obligation Bonds, Series 2013
using $35,000,000 (including principal and premium) of said voted bond authorization from the
2013 Election and (ii) its General Obligation Bonds, Series 2,016 using $8,800,000 (including
principal and premium) of said voted bond authorization from the 2013 Election, thereby leaving
$1,200,000 of voted but unissued bond authorization from the 2.013 Election for the Utility System
Purposes; and
WHEREAS, at an election in the Issuer held on May 6, 2017 (the "2017 Election"'), the
voters of the Issuer approved the issuance of tax bonds by the Issuer in the aggregate principal
amount of $10,000,000, with $9,500,000 of the bonds approved at said election for the purpose of
constructing, improving, extending, expanding, upgrading and developing streets and roads,
bridges and intersections including, utility relocation, landscaping, sidewalks, traffic safety and
operational improvements, the purchase of any necessary fight -of -way, drainage and other related
costs (the "Street Purposes") and with $500,000 of the bonds approved at said election for the
purpose of improving and equipping parks, trails and recreational facilities (the "Park Purposes");
and
WHEREAS, the Issuer has heretofore issued its General Obligation Bonds, Series 2017
using $9,310,000 (including principal and premium) of said voted bond authorization for the Street
Purposes from the 2017 Election and all $500,000 of said voted bond authorization (including
principal and premium) fi-orn the 2017,Election for the Park Purposes, thereby leaving $190,000 of
voted but unissued bond authorization frorn the 2017,Election for Street Purposes; and
WHEREAS, the City Council of the Issuer deems it necessary and advisable to authorize,
issue and deliver all remaining voted bond authorization from the 2013 Election and the 2017
Election for the Utility System Purposes and the Street Purposes, as stated above, and as further
shown on Schedule I hereto; and
WHEREAS, the Bonds hereinafter authorized are to be issued, sold and delivered pursuant
to the general laws of the State of Texas, including Tex, Govt Code Anil, Chapter 1331, as
amended, and the elections described above; and
WHEREAS, It is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and subject
matter of the public business to be considered and acted upon at said meeting, including this
Ordinance, was given, all as required by the applicable provisions of Tex. Gov't Code Ann. ch.
551; Now, Therefore
11111, JIIII,%,''I 11 11111 111111 �I 11111�1 III III
111111 IN!
MMI I
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE BONDS, The recitals set
forth in the prearrible hereof are incorporated herein and shall have the same force and effect as if
set forth in this Section. The bonds of the Issuer are hereby authorized to be issued and delivered
in the aggregate principal amount of [$1,390,000], with [$1,200,000] of such bonds issued to, fund
the Utility System Purposes and with [$190,0001] of such bonds issued to fund the Street Purposes
(tile Utility System Purposes and the Street Purposes are herein collectively referred to as the
"Project"), and to pay the costs incurred in connection with the issuance of the Bonds.
Section 2, DESIGNATION, DATE, DENOMINATION, NUMBER, AND MATURITY
AND INTEREST RATE OF BOND, Each bond issued pursuant to this Ordinance shall be
designated! "CITY OF PARIS, TEXAS, GENERAL OBLIGATION BOND, SERIES 2018,11
and there shall be issued, sold, and delivered hereunder one fully registered bond, without interest
coupons, dated May 1, 2018 (the "Dated Date"), in the denomination and principal amount of
[$1,390,000] or the remaining principal amount of the outstanding Bond of this series if an
exchange of a Bond is made after a reduction in the principal amount of the series by a payment of
a scheduled installment of principal, numbered R-1, with any bond issued in replacement thereof
being in the denomination of the full principal amount of the series of which the bond is issued and
numbered consecutively from R-2 upward, payable in installments to the registered owner thereof,
or to the registered assignee of said bond (in each case, the "Registered Owner"), Principal of
said Bond shall mature and be payable in installments on the dates and in the amounts stated in the
FORM OF BOND set forth in this Ordinance. The Bond shall bear interest on the unpaid balance
of the principal amount thereof from the Dated Date to the scheduled due date of the principal
installments of the Bond at the rates per annum specified in the FORM OF BOND, set forth in this
Ordinance, with such interest being payable in the manner provided and on the dates stated in the
FORM OF BOND set forth in this Ordinance,
The terms "Bond"' or "'Bonds" as used in this Ordinance shall mean and include collectively
the bond initially issued and delivered pursuant to this Ordinance and any substitute bond
exchanged therefor, as well as any other substitute or replacement bond issued pursuant hereto,
and the term "Bond" shall rnean any such bond.
Section 3. CHARACTERISTICS OF THE BOND,
(a) Registration. The Issuer shall keep or cause to be kept at the principal corporate trust
office of (the "Paying Agent/Registrar"), books or
records for the registration of the transfer and exchange of the Bond (the "Registration Books"),
and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep
such books or records and make such registrations of transfers and exchanges under such
reasonable regulations as the Issuer and Paying Agent/Registrar may prescribe; and the Paying
Agent/Registrar shall make such registrations, transfers and exchanges as herein provided. The
Paying Agent/Rcgistrar shall obtain and record in the Registration Books the address of the
Registered Owner of each Bond to which payments with respect to the Bond shall be mailed, as
herein provided; but it shall be the duty of each Registered Owner to notify the Paying
Agent/Registrar in writing of the address to which payments shall be mailed, and such interest
payments shall not be mailed unless such notice has been. given. The Issuer shall have the right to
inspect the Registration Books during regular business, hours of the Paying Agent/Registrar, but
otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless
otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall
pay the Paying Agent/Registrar's standard or customary fees and charges for making such
registration, transfer, exchange and delivery of a substitute Bond. Registration of assignments,
transfers and exchanges of a Bond shall be made in the manner provided and with the effect stated
in the FORM OF BOND set fiorth in this Ordinance. Each substitute Bond shall bear a letter
and/or number to distinguish it from each other Bond,
(b) Transfer and Exchange-, Authentication. Except as provided in Section 3(f) of this
Ordinance, an authorized representative of the Paying Agent/Registrar shall, before the delivery of
any such Bond, date and manually sign said Bond, and no such Bond shall be deerned to be issued
or outstanding unless such Bond is so authenticated. The Paying Agent/Registrar promptly shall
cancel any Bond surrendered for exchange. No additional ordinances, orders, or resolutions need
be passed or adopted by the governing body of the Issuer or any other body or person so as to
accomplish the foregoing conversion and exchange of any Bond or portion thereof, and the Paying
Agent/Registrar shall provide for the printing, execution, and delivery of a substitute Bond in the
manner prescribed herein. Pursuant to Chapter 1201, Government Code, as amended, the duty of
transfer of a Bond as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the
execution of said Bond, the exchanged Bond shall be valid, incontestable, and enforceable in the
same manner and with the sarric effect as the Bond that initially was issued and delivered pursuant
to this Ordinance, approved by the Attorney General and registered by the Comptroller of Public
Accounts.
(c) Payment of Bond and Interest. The Issuer hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bond, all
3
as provided in this Ordinance, The Paying AgenURegistrar shall keep proper records of all
payments made by the Issuer and the Paying Agent/Registrar with respect to the Bond, shall
properly and accurately record all payments on the Bond on the Registration Books, and shall keep
proper records of all exchanges of Bonds, and all replacements of Bonds, as provided in this
Ordinance. However, in the event of a nonpayment of interest on a scheduled payment date, and
for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record
Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of
such interest have been received frorn the Issuer, Notwithstanding the foregoing, any such
nonpayment of' interest shall constitute an Event of Default as defined in Section I I of this
Ordinance. Notice of the past due interest shall be sent at least five (5) business, days prior to the
Special Record Date by United States mail, first-class postage prepaid, to the address of the
Registered Owner appearing on the Registration Books at the close of business on the last business
day next preceding the date of mailing of such notice.
(d) In General. The Bond (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bond to be payable only to the Registered
Owner thereof, (ii) shall not be subject to redemption prior to its scheduled maturity, (iii) nay be
exchanged for another Bond, (1v) may be transferred and assigned in whole but not in part,
(v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the
principal of and interest on the Bond shall be payable, and (viii) shall be administered and the
Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to
the Bond, all as provided, and in the manner and to the effect as required or indicated, in the FORM
OF BOND set forth in this Ordinance.
(e) Pavin,� Agent/Registrar. The Issuer covenants with the Registered Owner of the
Bond that at all times while the Bond is outstanding the Issuer will provide a competent and legally
qualified bank, trust company, financial institution, or other entity to act as and perform the
services of Paying Agent/Registrar for the Bond under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than 20 days written notice to the Paying
Agent/Registrar, to be effective not later than 15 days prior to the next principal or interest
payment date after such notice, In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the Issuer covenants that promptly it will appoint a competent and
legally qualified bank, trust company, financial institution, or other agency to act as Paying
Agent/Registrar under this Ordinance, Upon any change in the Paying Agent/Registrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
copy thereof), along with all other pertinent books and records relating to the Bond, to the new
Paying Agent/Registrar desigi-iated and appointed by the Issuer. Upon any change in the Paying
Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new
Paying Agent/Registrar to the Registered Owner of the Bond, by United States mail, first-class
postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By
accepting the position and perfonning as such, each Paying Agent/Registrar shall be deemed to
have agreed to the provisions of this Ordinance, and a certified copy of this Ordinance shall be
delivered to each Paying Agent/Registrar.
(f) Except as provided below, no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Paying Agent/Registrar's Authentication Certificate substantially in the forni provided in this
Ordinance, duly authenticated byrnanual execution of the Paying Agent/Registrar. Itshall not be
required that the same authorized representative of the Paying Agent/Registrar sign the Certificate
of Paying Agent/Registrar on the Bond. In lieu of the executed Ceili ficate of Paying
Agent/Registrar described above, the Initial Bond delivered on the closing date shall have attached
thereto the Comptroller's Registration Certificate substantially in the form provided in this
Ordinance, manually executed by the Comptroller of Public Accounts of the State of Texas or by
his duly authorized agent, which certificate shall be evidence that the Initial Bond has been duly
approved by the Attorney General of the State of Texas and that it is a valid and binding obligation
of the Issuer, and has been registered by the Comptroller,
(g) Cancellation of Initial Bond, On the closing date, one initial Bond representing the
entire principal amount of the Bond, payable in stated installments to the purchaser designated in
Section 10 or its designee, executed by manual or facsimile signature of the Mayor and City Clerk
of the Issuer, approved by the Attorney General of Texas, and registered and manually signed by
the Comptroller of Public Accounts of the State of Texas, and with the date of delivery inserted
thereon by the Paying Agent/Registrar, will be delivered to such purchaser or its designee.
Section 4. FORM OF BOND. The fbnn of the Bond, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the forin, of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the Bond
initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as
follows, with such appropriate variations, omissions or insertions as are permitted or required by
this Ordinance.
(a) Form of Bond.
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF PARIS, TEXAS
GENERAL OBLIGATION BOND
SERIES 2018
Interest Rate Delivery Date
As shown below May 8, 2018
REGISTERED OWNER:
PRINCIPAL., AMOUNT- DOLLARS
THE CITY OF PARIS, TEXAS (the "Issuer"), being a political subdivision of the State of
Texas located in Lamar County, Texas, for value received, promises to pay, from the sources
described herein, to the registered owner specified above, or, registered assigns, the principal
amount specified above, and to pay interest thereon, from the Delivery Date set forth above, on
the balance of said principal amount frorn time to time remaining unpaid, at the interest rate per
annum set forth below. The unpaid principal of this Bond shall finally mature on June 15,, 2028,
but shall be paid in instal I in ents on the dates and in the amounts set forth in the table below:.
Principal Interest Rate
Payment Date Installment
.lune 15, 201
June 15, 2020
June 15, 2021
June 15, 2022
June 15, 202?
June 15, 2024
June 15, 2025
June 15, 2026
June 15, 2027
June 15, 2028
THE PRINCIPAL OF AND INTEREST ON THIS BOND are payable in. lawful money of
the United States of America, without exchange or collection charges. The Issuer shall pay
interest on this Bond on December 15, 2018 and on each June 15 and December 15 thereafter to
the date of maturity. The last principal installment and interest payment of this Bond shall be paid
to the registered owner hereof upon presentation and Surrender of this Bond at inaturity at the
principal office of which is the "Paying
Agent/Registrar"' for this Bond. The payment of all other principal installments of and interest oil
this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on each
principal and interest payment date by check or draft, dated as of such principal and interest
payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the
Issuer required by the Bond Ordinance to be on deposit with the Paying Agent/Registrar for such
purpose as hereinafter provided-, and such check or draft shall be sent by the Paying
Agent/Registrar by United States rnail, first-class postage prepaid, on each such interest payment
date, to the registered owner hereof, at its address as, it appeared on the last business day of the
month next preceding each such date (the "'Record Date") on the Registration Books kept by the
Paying Agent/Registrar, as hereinafter described. In addition, principal and interest may be paid
by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and
expense of, the registered owner.
ANY ACCRUED INTEREST due in connection with the final installment of principal of
this Bond shall be paid to the registered owner upon presentation and surrender of this Bond for
payment at the principal corporate trust office of the Paying Agent/Registrar, The Issuer
covenants with the registered owner of this Bond that on or before each principal payment date and
interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for
the payment, in immediately available funds, of all principal of and interest on the Bond, when
due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday,. Sunday, a legal holiday or a day on which banking institutions in the city where the
principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day that is not
such a Saturday, Sunday, legal holiday or day on which banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original date
payment was due.
THIS BOND is one of a series of Bonds dated May 1, 2018, authorized in accordance with
the Constitution and laws of the State of Texas in the principal amount of [S1,3 t1�,000], with
[$1,200,000] issued for the Utility System Improvements (as defined in the Bond Ordinance) and
[S 190,000] issued for the Street Improvements (as defined in the Bond Ordinance), and to, pay the
costs incurred in connection with the issuance of the Bonds.
THE UNPAID PRINCIPAL INSTALLMENTS OF THIS BOND are not subject to
redemption prior to maturity.
THIS BOND is, issuable in the form of one fully -registered Bond without coupons in the
denomination of [$1,3,90,000] or the: remaining principal amount of the outstanding Bond of this
series if an exchange of a Bond is made after a reduction in the principal amount of the series by a
payment of a scheduled installment of principal. The Paying Agent/Registrar shall record in the
Bond Registration Books all payments of principal installments on this Bond when made on their
respective due dates. This Bond may be transferred or exchanged, in whole but not in part, as
provided in the Bond Ordinance, only upon the registration books kept for that purpose at the
above-mentioned office of the Paying Agent/Registrar upon surrender of this Bond together with a
written instrument of transfer or authorization for exchange satisfactory to the Paying
Agent/Registrar and duly executed by the registered owner or its duly authorized attorney, and
thereupon a new Bond of the same maturity and in the same aggregate principal arnount shall be
issued by the Paying Agent/Registrar to the transferee in exchange therefor as provided in the
Bond Ordinance, and upon payment of the charges therein prescribed, The Issuer and the Paying
Agent/Registrar may deem and treat the person in whose name this Bond is registered as the
absolute owner hereof for the purpose of receiving payment of, or on account of, the principal
hereof and interest due hereon and for all other purposes. The Paying Agent/Registrar shall not
be required to make any such transfer or exchange during the period commencing with the close of
business on any Record Date and ending with the opening of business on the next following
principal or interest payment date.
IN THE EVENT any Paying Agent/Registrar, for this Bond is changed by the Issuer,
resigns, or otherwise ceases to act as such, the issuer has covenanted in the Bond Ordinance that it
promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to, be mailed to the registered owner of the Bond.
THIS BOND shall not be valid or becorne obligatory for any purpose or be entitled to any
security or benefit under- the Bond Ordinance until the Certificate of Authentication shall have
been executed by the Paying Agent/Registrar or the Comptroller's Registration Certificate hereon
shall have been executed by the Texas Comptroller Of Public Accounts,
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered-, that all acts, conditions and things required or proper to be
performed, exist and be done precedent to or in the authorization, issuance and delivery of this
Bond have been performed, existed and been done in accordance with law; and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Bond, as
such interest cornes due and such principal matures, have been levied and ordered to be levied
against all taxable property in said Issuer, and have been pledged for such payrnent, within the
limit prescribed by law.
THE ISSUER HAS RESERVED THE RIGHT to amend the Bond Ordinance as provided
therein, and under some (but not all) circurnstances amendments thereto must be approved by the
registered owner of the Bond,
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
tennis and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the Issuer, and agrees that
the terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the Issuer and countersigned with the manual or -facsimile
signature of the City Clerk of said Issuer, and has caused the official sea] of the Issuer to be duly
impressed, or placed in facsimile, on this Bond,
(sip -nature)
City Clerk
(SEAL)
(si2nature)
Mayor
(b) [Form of Paying Agent/Registrar's Authentication Certificate]
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts ofthe State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in replacement of,
or in exchange for, a Bond that originally was approved by the Attorney General of the State of
Texas and registered by the Comptroller of Public ACCOUntS of the State of Texas.
Dated:
............
Paying Agent/Registrar
Authorized Representative
(c) [Form of Assignment]
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code, of Transferee,)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
. ..... .... . ........... . . ....... attorney, to register the transfer of the
within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a securities transfer
association recognized signature guarantee
prograrn,
9
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever,
(d) [Foran of Registration Certificate of the Comptroller of Public Accounts]
I hereby certify that this Bond has been examined, certified as to validity and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and sea] this
Comptroller of Public Accounts of the State of Texas
(COMPTROLLER'S SEAL)
Section 5. INTEREST AND SINKING FUND.
(a) A special "Interest and Sinking Fund" is Hereby created and shall be established and
maintained by the Issuer at an official depository bank of said Issuer. Said Interest and Sinking
Fund shall be kept separate and apart from all other funds and accounts of said Issuer, and shall be
used only for paying the interest on and principal of said Bonds. All amounts, received from the
sale of the Bonds as accrued interest shall be deposited upon receipt to the Interest and Sinking
Fund, and all ad valorem taxes levied and collected for and on account of said Bonds shall be
deposited, as collected, to the credit of said Interest and Sinking Fund. During each year while
any of said Bonds are outstanding and unpaid, the governing body of said Issuer shall compute and
ascertain a rate and amount of ad valoreni tax that will be sufficient to raise and produce the money
required to pay the interest on said Bonds as such interest comes due, and to provide and maintain
a sinking fund adequate to pay the principal of said Bonds as such principal matures (but never less
than 2% of the original amount of said Bonds as a sinking fund each year); and said tax shall be
based on the latest approved tax rolls of said Issuer, with full allowances being made for tax
delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby
levied, and is hereby ordered to be levied, against all taxable property in said Issuer, for each year
while any of said Bonds are outstanding and unpaid, and said tax shall be assessed and collected
each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad
valorem taxes sufficient to provide for the payment of the interest on and principal of` said Bonds,
as such interest cornes due and such principal matures, are hereby pledged for such payment,
within the limit prescribed by law. Notwithstanding the requirements of this subsection, if
lawfully available moneys of the Issuer are actually on deposit in the Interest and Sinking Fund in
advance of the tirrie when ad valorem taxes are scheduled to be levied for any year, then the
amount of taxes that otherwise would have been required to be levied pursuant to this Section may
be reduced to the extent and by the amount of the lawfully available funds then on deposit in the
Interest and Sinking I"und.
10
N Chapter 1208, Government Code, applies to the issuance of the Bonds, and the pledge
of the taxes granted by the Issuer under this Section, and is therefore valid, effective, and
perfected, Should Texas law be amended at any time while the Bonds are outstanding and
unpaid, the result of such amendment being that the pledge of the taxes granted by the Issuer under
this Section is to be subject to the filing requirements of Chapter 9, Business & Commerce Code,
in order to preserve: to the registered owners of the Bonds a security interest in said pledge, the
Issuer agrees to take such measures as it deten-nines, are reasonable and necessary under Texas law
to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a
filing of a security interest in said pledge to occur.
Section 6. DEFEASANCE OF BONDS.
(a) Any Bond and the interest thereon shall be deemed to be paid, retired and no longer
outstanding (a "Defeased Bond") within the meaning of this Ordinance, except to the extent
provided in subsection (d) of this Section, when payment of the principal of such Bond, plus
interest thereon to the due date (whether such due date be by reason of maturity or otherwise)
either (i) shall have been made or caused to be arcade in accordance with the terms thereof., or (ii)
shall have been provided for on or before such due date by irrevocably depositing with or making
available to the Paying Agent/Registrar in accordance with an escrow agreement or other
instrument (the "Future Escrow Agreement") for such payment (1) lawful money of the United
States of America sufficient to awake such payment or (2) Defeasance Securities that mature as to
principal and interest in Such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to, provide for such payment, and when proper arrangements
have been made by the Issuer with the Paying Agent/Registrar for the payment of its services, until
all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed
to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer
be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and
pledged as provided in this Ordinance, and such principal and interest shall be payable solely from
such money or Defeasance Securities, and thereafter the Issuer will have no further responsibility
with respect to arnounts available to the Paying Agent/Registrar (or other financial institution
permitted by applicable law) for the payment of such Defeased Bonds, including any insufficiency
therein caused by the I"ai lure of the Paying Agent/Registrar (or other financial institution permitted
by applicable law) to receive payment when due on the Defeasance Securities.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the Issuer be invested in Defeasance Securities, maturing in the amounts and times as
hereinbefore set forth, and all income from such Defeasance Securities received by the Paying
Agent/Registrar that is not required for the payment of the Bonds and interest thereon, with respect
to which such money has, been so deposited, shall be turned over to the Issuer, or deposited as
directed in writing by the Issuer, Any Future Escrow Agreement pursuant to which the money
and/or Defeasance Securities are held for the payment of Defeased Bonds may contain provisions
permitting the investment or reinvestment of such moneys in Defeasance Securities or the
substitution of other Defeasance Securities upon the satisfaction of the requirements, specified in
Subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received by
the Paying Agent/Registrar which is not required for the payment of the Defeased Bonds, with
respect to which such money has been so deposited, shall be ren-litted to the Issuer or deposited as
directed in writing by the Issuer.
(c) The term "Defeasance Securities" means any securities and obligations now or
hereafter authorized by State law that are eligible to refund, retire or otherwise discharge
obligations such as the Bonds,
(d) Until all Defeased Bonds shall have becorne due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased Bonds the
same as if they had not been defeased, and the Issuer shall make proper arrangements to provide
and pay for such services as required by this, Ordinance.
(e) In the event that the Issuer elects to defease less than all of the principal amount of
Bonds of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such amount
of Bonds by such random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST', STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated, lost,
stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and delivered, a
now Bond of the same principal amount, maturity and interest rate, as the darnaged, mutilated, lost,
stolen or destroyed Bond, in replacernent for such Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered owner
applying for a replacement Bond shall furnish to the Issuer and to the Paying Agent/Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or
darnage with respect thereto. Also, in every case of loss, theft or destruction of a Bond, the
registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their
satisfaction of the loss, theft or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so darnaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Bond shall have matured, and no default has occurred that is then continuing in
the payment of the principal of, redemption premium, if any, or interest on the Bond, the Issuer
may authorize the payment of the same (without surrender thereof except in the case of a damaged
or mutilated Bond) instead of issuing a replacement Bond, provided security or indernnity is
furnished as above provided in this Section,
(d) Charge for Issuing Replacement Bonds, Prior to the issuance of any replacement
Bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,
printing, and other expenses in connection therewith. Every replacement Bond issued pursuant to
the provisions of this Section by virtue of the fact that any Bond is lost, stolen or destroyed shall
constitute a contractual obligation of the Issuer whether or not the lost, stolen or destroyed Bond
19
shall be found at .any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds, In accordance with Sec, 1206.022,
Government Code, this Section 7 of this Ordinance shall constitute authority for the issuance of
any such replacement Bond without necessity of further action by the governing body of the Issuer
or any other body or person, and the duty of the replacement of such Bonds is hereby authorized
and imposed upon the Paying Agent/Registrar, and the Paying Agent/R.egistrar shall authenticate
and deliver such Bonds in the form and manner and with the effect, as provided in Section 3(a) of
this Ordinance for Bonds issued in conversion and exchange for other Bonds.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS,; BOND
COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE PROVISION,
IF OBTAINED; ENGAGEMENT OF BOND COUNSEL AND FINANCIAL ADVISOR.
(a) The Mayor of the Issuer is hereby authorized to have control of the Bonds initially
issued and delivered hereunder and all necessary records and proceedings pertaining to the Bonds
pending their delivery and their investigation, examination, and approval by the Attorney General
of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of
Texas. Upon registration of the Bonds said Comptroller of Public Accounts (or a deputy
designated in writing to act for said Comptroller) shall manually sign the Comptroller's
Registration Certificate attached to such Bonds, and the sea] of said Comptroller shall be
impressed, of placed in facsimile, on such Bond. The approving legal opinion of the Issuer's
Bond Counsel and the assigned CUSJP numbers may, at the option of the Issuer, be printed on the
Bonds issued and delivered under this Ordinance, but neither shall have any legal effect, and shall
be solely for the convenience and information of the registered owners of the Bonds. In addition,
if bond insurance is obtained, the Bonds may bear an appropriate legend as provided by the
insurer.
(b) The obligation of the initial purchaser to accept delivery of the Bonds is subject to the
initial purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton
L.L.P., bond counsel to the Issuer, which opinion shall be dated as of and delivered on the date of
initial delivery of the Bonds to, the initial purchaser. The engagement of such firrn as bond
Counsel to the Issuer in connection with issuance, sale and delivery of the Bonds is hereby
approved and confin-ned. The execution and delivery of an engagement letter between the Issuer
and such firm, with respect to such services as bond counsel, is hereby authorized in such form as
may be approved by the Mayor or the City Manager, and the Mayor or the City Manager is hereby
authorized to execute such engagement letter. In addition, the execution and delivery of a
professional services agreement between the Issuer and SAMCO Capital Markets, Inc., with
respect to services as Financial Advisor to the Issuer, is hereby authorized in such form as may be
approved by the Mayor and the Mayor is hereby authorized to execute such agreement.
im
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS,
(a) Covenants, The Issuer covenants to take any action necessary to assure, or refrain
frorn any action that would adversely affect, the treatment of the Bonds as obligations described in
section 103 of the Code, the interest on which is not includable in the "'gross inconle" of the holder
for purposes of federal incorne taxation. In furtherance thereof, the Issuer covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds (less amounts deposited to a reserve fund, if any) are used for any "private business
use," as defined in section 14 1 (b)(6) of the Code or, if more than 10 percent of the proceeds
or the Project are so used, such amounts, whether or not received by the Issuer, with respect
to such private business use, do not, Linder the terms of this Ordinance or any underlying
arrangement, directly or indirectly, Secure or provide for the payll-lelit of more than 10
percent of the debt service on the Bonds, in contravention of section 1,41(1)0) of the Code;
(2) to take any action to assure that in tile event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve find, if any) then the
amount in excess of 5 percent is used for a "private business use" that is "'related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
(3) to take any action to assure that no amount that is, greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less arnounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 1.41(c) of the Code;
(4) to refrain from taking any action that would otherwise result in. the Bonds
being treated as "private activity bonds "' within the meaning of section 141(b) of the Code;
(5) to refrain from taking any action that would result in the Bonds being
"'federally guaranteed" within the rileaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds that were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) of the Code) that produces a
materially higher yield over the term of the Bonds, other than investment property acquired
with B
(A) proceeds ofthe Bonds invested for a reasonable temporary period of 3
years or less or, in the case of a refunding bond, for a period of 9O days or less until
such proceeds are needed for the purpose for which the bonds are issued,
(B) arnounts invested in a bona fide debt service fund, within the meaning
of section 1.145-1(b) of the Treasury Regulations, and
14
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such arnounts do not exceed 10 percent of the proceeds of the
Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds do newtother-wisecontravene
the requirernents of section 148 of the Code (relating to arbitrage);
(8) to refrain fi-orn using the proceeds of the Bonds or proceeds of any prior bonds
to pay debt service on another issue more than 90 days after the date of issue of the Bonds
in contravention of the requirements of section 149(d) of the Code (relating to advance
reftindings); and
(9) to pay to the United States of Arnerica at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
9,0 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and
to pay to the United States of America, not later than 60 days after the Bonds have been
paid in full, 100 percent of the arnount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code,
(b) Rebate Fund, In order to facilitate compliance with the above covenant (a)(8), a
"Rebate Fund" is hereby established by the Issuer for the sole benefit of the United States of
America, and such Fund shall not be subject to, the claim of any other person, including without
limitation the Bondholders. The Rebate Fund is established for the additional purpose of
compliance with section 148 of the Code.
(c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the
Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the
Treasury Regulations. It is the understanding of the Issuer that the covenants contained herein are
intended to assure compliance with the Code and any regulations or rulings promulgated by the
U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bonds,
the Issuer will not be required to comply with any covenant contained herein to the extent that such
failure to cornply, in the opinion of nationally recognized bond counsel, will not adversely affect
the exemption frorn federal incorne taxation of interest on the Bonds under section 10�3 of the
Code. In the event that regulations or rulings are hereafter promulgated that impose additional
requirements applicable to the Bonds, the Issuer agrees to comply with the additional requirements
to, the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the
exemption frorn federal incorne taxation of interest, on the Bonds under section 103 of the Code.
In furtherance of such intention, the Issuer hereby authonizes, and directs the Mayor, the City
Manager or the Finance Director to execute any documents, certificates or reports required by the
Code and to make such elections, on behalf of the Issuer, that may be permitted by the Code as are
consistent with the purpose for the issuance of the Bonds.
(d) Disposition of Project. The Issuer covenants that the property constituting the
Project will not be sold or otherwise disposed of in a transaction resulting in the receipt by the
IN
Issuer of cash or other compensation, unless any action taken in connection with such disposition
will not adversely affect the tax-exempt status of the Bonds. For purpose of the foregoing, the
Issuer may rely on an opinion of nationally -recognized bond counsel that the action taken in
connection with such sale or other disposition will not adversely affect the tax-exempt status of the
Bonds. For purposes of the foregoing, the portion of the property comprising personal property
and disposed in the ordinary Course shall not be treated as a transaction resulting in the receipt of
cash or other compensation. For purposes hereof, the Issuer shall not be obligated to, comply with
this covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross incorne of the interest.
Section lO. SALE OF BOND AND APPROVAL OF FURTHER PROCEDURES.
(a) The Bond is hereby sold and shall be delivered to Texas (the
"'Purchaser") for cash for the par value thereof, pursuant to the pursuant to the Private Placement
Letter dated the date of the adoption of this Ordinance, The Certificate shall initially be registered
in the name of the Purchaser. It is hereby officially found, detennined, and declared that the terms
of this sale are the most advantageous reasonably obtainable,
(b) The Mayor and Mayor Pro -Tern, the City Manager, the Finance Director and City
Clerk and all other officers, employees and agents of the Issuer, and each of them, shall be and they
are hereby expressly authorized, empowered and directed frorn tirne to time and at any tirne to do
and perform all such acts and things and to execute, acknowledge and deliver in the narric and on
behalf of the Issuer a Paying Agent/Registrar Agreement with the Paying Agent/Registrar, and all
other instruments, whether or not herein mentioned, as may be necessary or desirable in order to
carry out the terrns and provisions of this Ordinance, the Bonds and the sale of the Bonds. Incase
any officer whose signature shall appear on any Bond shall cease to be such officer before the
delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the
sarne as if such officer had remained in office until such delivery.
Section ll. DEFAULT AND REMEDIES
(a) Events of Default. Each of the following occurrences or events for the purpose of
this Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds
when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the Issuer, the failure to perforrn which materially, adversely affects the rights
of the registered owners of the Bonds, including, but not limited to, their prospect or ability
to be repaid in accordance with this Ordinance, and the continuation thereof for a period of
60 days after notice of such default is given by any Registered Owner to the Issuer.
16
b�) es fo
d'
Rerfor Default.
. .. ............. .. . .... l
(i) Upon the happening of any Event of Default, then and in every case, any
Registered Owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and
enforcing the rights of the Registered Owners under this Ordinance, by mandamus or other
suit, action or special proceeding in equity or at law, in any court of cornpetentjurisdiction,
for any relief permitted by law, including the specific perforillance of ally covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in
violation of any right of the Registered Owners hereunder or any combination of such
remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or under the Bonds or now
or hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall
not be available as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy,
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to
a personal or pecuniary liability or charge against the officers, employees or
councilmernbers of the Issuer.
Section 12. NO RULE 15c2-12 UNDERTAKING The Issuer has not made an
undertaking in accordance with Rule 15c2-12 of the Securities and Exchange Commission (the
"'Rule"'). The Issuer is not, therefore, obligated pursuant to the Rule to provide any on-going
disclosure relating to the Issuer or the Bond.
Section 13. METHOD OF AMENDMENT. The Issuer hereby reserves the right to
amend this Ordinance subject to the following terins and conditions, to -wit:
(a) The Issuer may from time to time, without the consent of any holder, except as,
otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i)
cure any arribiguity, defect or omission in this Ordinance that does not materially adversely affect
the interests of the holders, (h) grant additional rights or security for the: benefit of the holders, (iii)
add events of default as shall not be inconsistent with the provisions of this Ordinance and that
shall not materially adversely affect the interests of the holders, (iv) qualify this Ordinance under
17
the 'rrust Indenture Act of 1939„ as arnended, or corresponding provisions of federal laws from
tine to time in effect, or (v) make such other provisions in regard to matters or questions arising
under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that
shall not in the opinion of the Issuer's Bond Counsel inaterially adversely affect the interests of the
holders,.
(b) Except as provided in paragraph (a) above, the holders of Bonds aggregating in
principal annount 51 % of the aggregate principal amount of then outstanding Bonds that are the
subject of a proposed amendment shall have the right from tinne to time to approve any amendment
hereto that may be deemed necessary or desirable by the Issuer; provided, however, that without
the consent of I 00% of the holders in aggregate principal amount of the then outstanding Bonds,
nothing herein contained shall pen -nit or be construed to permit amendment of the terms and
conditions of this Ordinance or in any of the Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Bonds;
(3) Reduce the amount of the principal of,, or redemption premium, if any,
payable on any outstanding Bonds,
(4) Modify the terms of payment of principal or of interest or redemption
premium on outstanding Bonds or any of them or impose any condition with
respect to such payment; or
(5) Change the minimum percentage of the principal amount of any series of
Bonds necessary for consent to such amendment.
(c) If at any til-ne the Issuer shall desire to amend this Ordinance under this Section, tile
Issuer shall send by U.S. mail to each registered owner of the affected Bonds a copy of the
proposed amendinent and cause notice of the proposed amendment to be published at least once in
a financial publication published in The City of New York, New York or in the State of Texas.
Such published notice shall briefly set forth the nature of the proposed amendment and shall state
that a copy thereof is on file at the office of the Issuer for inspection by all holders of such Bonds.
(d) Whenever at any time within one year from the date of publication of such notice the
Issuer shall receive an instrument or instruments executed by the holders of at least 51% in
aggregate principal amount of all of the Bonds then outstanding that are required for the
amendment, which instrument or instruments shall refer to the proposed amendment and that shall
specifically consent to and approve such amendment, the Issuer may adopt the amendment in
substantially the same form.
(c) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deerned to be modified and amended in accordance with such
amendatory Ordinance, and tile respective rights, duties, and obligations of the Issuer and all
holders of such affected Bonds shall thereafter be deterrinned, exercised, and enforced, subject in
all respects to such amendment,
10
(f) Any consent given by the holder of a Bond pursuant to the provisions ons of this Section
shall be irrevocable for a period of six months from the date of the publication of the notice
provided for in this Section, and shall be conclusive and binding upon all future holders of the
saine Bond during such period. Such consent may be revoked at any time after six months from
the date of the publication of said notice by the holder who gave such consent, or by a successor in
title, by filing notice with the Issuer, but such revocation shall not be effective if the holders of
51 % in aggregate principal amount of the affected Bonds then outstanding, have, prior to the
attempted revocation, consented to and approved the amendment,
For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon
the registration of the ownership of such Bonds on the registration books kept by the Paying
Agent/Registrar.
Section 14, EFFECTIVE DATE. In accordance with the provisions of Texas
Government Code, Section 1201,.028, this Ordinance shall be effective immediately upon its
adoption by the City Council of the Issuer.
Section 15. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. The Issuer covenants to account for the expenditure of sale proceeds and investment
earnings to be used for the construction and acquisition of the Project on its books and records by
allocating proceeds to expenditures within 18 months of the later of the date that (1) the
expenditure is made, or (2) the Project is co repleted. The foregoing notwithstanding, the Issuer
shall not expend proceeds of the sale of the Bonds or investment earnings thereon more than 60
days after the earlier of (l) the fifth anniversary of the delivery of the Bonds, or (2) the date the
Bonds are retired, unless the Issuer obtains an opinion of nationally -recognized bond counsel that
such expenditure will not adversely affect the status, for federal income tax purposes, of the Bonds
or the interest thereon. For purposes hereof, the Issuer shall not be obligated to comply with this
covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross incorne of the interest.
Section 16,. INTEREST EARNINGS ON BOND PROCEEDS, Interest earnings
derived from the investment of proceeds from the sale of the Bonds shall be used along with other
Bond proceeds for the Project; provided that after completion of such purpose, if any of such
interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that any interest earnings on Bond proceeds that
are required to be rebated to the United States of America pursuant to Section 9 hereof in order to
prevent the Bonds from being arbitrage bonds shall be so rebated and not considered as interest
earnings for the purposes of this Section.
Section 17. CONSTRUCTION FUND.
(a) The Issuer hereby creates and establishes and shall maintain on the books of the Issuer
a separate fund to be entitled the "'Series 2018 General Obligation Bonds Construction Fund" for
use by the Issuer for payment of all lawful costs associated with the acquisition and construction of
the Project as hereinbefore provided. Upon payment of all such costs, any moneys remaining on
19
deposit in said fund shall be transferred to the Interest and Sinking, fund. Arnounts so deposited to
the Interest and Sinking Fund shall be used in the manner described in Section 5 of this Ordinance,
(b) The Issuer may invest proceeds of the Bonds (including investment earnings thereon)
issued for PrQject and an-iounts deposited into the Interest and Sinking Fund in investments
authorized by the Public Funds Investment Act, Chapter 2256, Texas Government Code, as
amended; provided, however, that the Issuer hereby covenants that the proceeds of the sale of the
Bonds will be used as soon as practicable for the purposes for which the Bonds are issued.
(c) All deposits authorized or required by this Ordinance shall be secured to the fullest
extent required by law for the security of public funds.
Section 18,. APPROPRIATION. To pay the debt service corning due on the: Bonds oil
June December 15, 2018, prior to receipt of the taxes levied to pay such debt service, there is
hereby appropriated from current funds on hand, which are hereby certified to be on hand and
available for such purpose, an amount sufficient to pay such debt service, and such amount shall be:
used for no other purpose.
Section 19. SEVERABILITY, If any section, article, paragraph, sentence,, clause,
phrase or word in this Ordinance, or application thereof to any persons or circumstances is held
invalid or unconstitutional by a. court of competent jurisdiction,, such holding shall not affect the
validity of the remaining portion of this Ordinance, despite such invalidity, which. remaining
portions shall rernain in full force and effect.
Section 20. DESIGNATION AS QUALIFIED TAX-EXEMPT OBLIGATIONS. The
Issuer hereby designates the Bonds as "qualified tax-exempt obligations" as defined in section
265(b)(3) of the Code. In furtherance of such designation, the Issuer represents, covenants and
warrants the following: (a) that during the calendar year in which the Bonds, are issued, the Issuer
(including any subordinate entities) has not designated nor will designate obligations that when
aggregated with the Bonds, will result in more than $10,000,000 (or such other arnount pennitted
by such section 265 of the Code) of "qualified tax-exempt obligations" being issued; (b) that the
Issuer reasonably anticipates that the aniount of tax-exempt obligations issued, during the
calendar year in which the Bonds are issued, by the Issuer (or any subordinate entities) will not
exceed $ 10,000,000 (or such other arnount permitted by such section 265 of the Code); and, (c)
that the Issuer will take such action or refrain from such action as necessary, and as more
particularly set forth in Section 11, hereof in order that the Bonds will not be considered "private
activity bonds" within the meaning of section 141 of the Code,
PASSED AND ADOPTED this 9th day of April, 2018,
Steven J. Clifford, M.D., Mayor
20
PLI'my
Janice Ellis, City Clerk
Stephanie FL f larris, City Attorney
21
Election and Purpose
May 11, 2013 Election
Utility System Improvements
May 6, 2017 Election
Street Improvements
SCHEDULE I
Voted Bonds
Amount
Authorized
Amount
Amount
Previously
Being
Issued
Issued
$45,000,000 $43,800,000 $1,200,000
$9,500,000 $9,310,000 $190,000
Unissued
Balance
-0-
-0-
Park Improvements $500,000 $500,000 -0- -0-
w