14 - Sale of Combination Tax & Surplus Revenue Certificates of Obligation Series 2024Item No. 14
memorandum
TO: Mayor, Mayor Pro -Tem, and City Council
Grayson Path, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: ORDINANCE AUTHORIZING THE ISSUANCE OF CERTIFICATES OF
OBLIGATION TO FINANCE THE CONSTRUCTION OF A WASTEWATER
TREATMENT PLANT.
DATE: March 25, 2024
BACKGROUND: On January 22, 2024 the City Council approved a Notice of Intention
Resolution (NOI) to issue certificates of obligation to pay for the final construction phase of the
new wastewater treatment plant. This action authorized the City's financial advisor SAMCO, legal
counsel McCall Parkhurst Horton, and City officials to proceed with the issuance process for the
certificates of obligation. The City posted the NOI on its website and published it twice in the
newspaper as required by law.
STATUS OF ISSUE: The next step in issuing the certificates of obligations needed to complete
the new wastewater treatment plant is to adopt an ordinance approving the issuance and sale of
"City of Paris, Texas, Combination Tax and Surplus Revenue Certificates of Obligation, Series
2024" and approving all documents related to the certificates of obligation. The estimated issue
amount of $44,000,000 consists of the construction bid ($39,988,500), SCADA software for the
water treatment plant ($500,000), and contingency funds ($3,511,500).
BUDGET: A new construction fund and a new Interest & Sinking Fund will be established to
handle the expenditure of the CO proceeds and to make the required debt payments.
RECOMMENDATION: Suggested motion language to adopt the proposed ordinance: "I move to
adopt an ordinance authorizing the issuance and sale of City of Paris, Texas, Combination Tax and
Surplus Revenue Certificates of Obligation, Series 2024 and approving all other matters related
thereto."
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PARIS,
TEXAS, COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2024; LEVYING AN ANNUAL AD VALOREM TAX AND
PROVIDING FOR THE SECURITY FOR AND PAYMENT OF SAID CERTIFICATES;
APPROVING AN OFFICIAL STATEMENT; PROVIDING AN EFFECTIVE DATE; AND
ENACTING OTHER PROVISIONS RELATING TO THE SUBJECT
THE STATE OF TEXAS §
COUNTY OF LAMAR §
CITY OF PARIS §
WHEREAS, the City Council (the "Council") of the City of Paris, Texas (the "City"),
deems it advisable to issue it "City of Paris, Texas, Combination Tax and Surplus Revenue
Certificates of Obligation, Series 2024" (the "Certificates") in the amount of $ for the
purpose of paying all or a portion of the City's contractual obligations incurred in connection with:
(i) the acquisition, construction, installation and equipment of additions, improvements and
extensions to the City's waterworks and sewer system (the "System") and (ii) paying legal, fiscal
and engineering fees in connection with such projects (collectively, the "Projects"); and
WHEREAS, the Certificates hereinafter authorized and designated are to be issued and
delivered for cash pursuant to Subchapter C of Chapter 271, Local Government Code; and Chapter
1502 Texas Government Code; and
WHEREAS, the Council has heretofore passed a resolution authorizing and directing the
City Clerk to give notice of the City's intention to issue the Certificates, and the notice has been
duly (i) posted on the City's website and (ii) published in a newspaper of general circulation in the
City, said newspaper being a "newspaper" as defined in Section 2051.044, Texas Government
Code; and
WHEREAS, the City received no petition from the qualified electors of the City protesting
the issuance of the Certificates; and
WHEREAS, during the preceding three years, the City has not submitted a bond
proposition to authorize the issuance of bonds for any of the purposes for which the Certificates
are hereby being issued and which proposition was disapproved by voters; and
WHEREAS, it is considered to be to the best interest of the City that said interest-bearing
Certificates be issued; 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 Texas Government Code,
Chapter 551;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS:
Section 1. RECITALS, AMOUNT AND PURPOSE OF THE CERTIFICATES. The
recitals set forth in the preamble hereof are incorporated herein and shall have the same force and
effect as if set forth in this Section. The Certificates are hereby authorized to be issued and
delivered in the aggregate principal amount of $ for the purpose of paying all or a portion of
the City's contractual obligations incurred in connection with the Projects, including payment of
the costs of issuing the Certificates.
Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES AND INTEREST RATES OF CERTIFICATES; REDEMPTION PROVISIONS.
(a) Each certificate issued pursuant to this Ordinance shall be designated: "CITY OF
PARIS, TEXAS, COMBINATION TAX AND SURPLUS REVENUE CERTIFICATE OF
OBLIGATION, SERIES 2024," and initially there shall be issued, sold and delivered hereunder
one fully registered certificate, without interest coupons, dated April 1, 2024 (the "Dated Date"),
in the principal amount stated above and in the denominations hereinafter stated, numbered T-1,
with certificates issued in replacement thereof being in the denominations and principal amounts
hereinafter stated and numbered consecutively from R-1 upward, payable to the respective
Registered Owners thereof (with the initial Certificate being made payable to the Purchaser
(defined herein) as described herein), or to the registered assignee or assignees of said Certificates
or any portion or portions thereof (in each case, the "Registered Owner"), and said Certificates
shall mature and be payable on June 15 in each of the years and in the principal amounts,
respectively, and shall bear interest from the date and at the rates set forth in the FORM OF
CERTIFICATE attached hereto as Exhibit A to their respective dates of maturity or redemption
prior to maturity.
The term "Certificates", as used in this Ordinance, shall mean and include collectively the
certificates initially issued and delivered pursuant to this Ordinance and all substitute certificates
exchanged therefor, as well as all other substitute certificates and replacement certificates issued
pursuant hereto, and the term "Certificate" shall mean any of the Certificates.
(b) The Certificates shall be subject to redemption prior to maturity as set forth in the
FORM OF CERTIFICATE attached hereto as Exhibit A.
Section 3. CHARACTERISTICS OF THE CERTIFICATES.
(a) Rei istration Transfer Conversion and Exchane Authentication. The City shall
keep or cause to be kept at the principal corporate trust office of BOKF, NA, Dallas, Texas (the
"Paying Agent/Registrar") books or records for the registration of the transfer, conversion and
exchange of the Certificates (the "Registration Books"), and the City hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers, conversions and exchanges under such reasonable regulations as the City
and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, conversions and exchanges as herein provided. The Paying
Agent/Registrar Agreement in the form presented at the meeting at which this Ordinance is
adopted is hereby approved. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the registered owner of each Certificate to which payments with
respect to the Certificates shall be mailed, as herein provided; but it shall be the duty of each
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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 City 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 City shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such registration, transfer, conversion, exchange and delivery of a substitute
Certificate or Certificates. Registration of assignments, transfers, conversions and exchanges of
Certificates shall be made in the manner provided and with the effect stated in the FORM OF
CERTIFICATE set forth in this Ordinance. Each substitute Certificate shall bear a letter and/or
number to distinguish it from each other Certificate.
(b) Except as provided in Section 3(d) of this Ordinance, an authorized representative
of the Paying Agent/Registrar shall, before the delivery of any such Certificate, date and manually
sign said Certificate, and no such Certificate shall be deemed to be issued or outstanding unless
such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid
Certificates and Certificates surrendered for conversion and exchange. No additional ordinances,
orders, or resolutions need be passed or adopted by the governing body of the City or any other
body or person so as to accomplish the foregoing conversion and exchange of any Certificate or
portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and
delivery of the substitute Certificates in the manner prescribed herein, and said Certificates shall
be printed or typed on paper of customary weight and strength. Pursuant to Chapter 1201,
Government Code, as amended, the duty of conversion and exchange of Certificates as aforesaid
is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate,
the converted and exchanged Certificate shall be valid, incontestable, and enforceable in the same
manner and with the same effect as the Certificates that initially were issued and delivered pursuant
to this Ordinance, approved by the Attorney General (the "Attorney General") of the State of Texas
(the "State") and registered by the Comptroller of Public Accounts of the State (the "Comptroller").
(c) Payment of Certificates and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the
Certificates, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper
records of all payments made by the City and the Paying Agent/Registrar with respect to the
Certificates, and of all conversions and exchanges of Certificates, and all replacements of
Certificates, 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 from the City. 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 each 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 Certificates (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Certificates to be payable only to the
registered owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be
converted and exchanged for other Certificates, (iv) may be transferred and assigned, (v) shall
have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal
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of and interest on the Certificates shall be payable, and (viii) shall be administered and the Paying
Agent/Registrar and the City shall have certain duties and responsibilities with respect to the
Certificates, all as provided, and in the manner and to the effect as required or indicated, in the
FORM OF CERTIFICATE set forth in this Ordinance. The Certificate initially issued and
delivered pursuant to this Ordinance is not required to be, and shall not be, authenticated by the
Paying Agent/Registrar, but on each substitute Certificate issued in conversion of and exchange
for any Certificate or Certificates issued under this Ordinance the Paying Agent/Registrar shall
execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form
set forth in the FORM OF CERTIFICATE.
(e) The City covenants with the registered owners of the Certificates that at all times
while the Certificates are outstanding the City 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 Certificates under this Ordinance, and that the Paying Agent/Registrar will
be one entity. The City reserves the right to, and may, at its option, change the Paying
Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, to be
effective not later than 60 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 City 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 Certificates, to the new Paying Agent/Registrar designated and appointed
by the City. Upon any change in the Paying Agent/Registrar, the City promptly will cause a written
notice thereof to be sent by the new Paying Agent/Registrar to each Registered Owner of the
Certificates, 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 performing 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 Certificate 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 Certificate of Paying Agent/Registrar substantially in the form provided in this
Ordinance, duly authenticated by manual execution of the Paying Agent/Registrar. It shall not be
required that the same authorized representative of the Paying Agent/Registrar sign the Certificate
of Paying Agent/Registrar on all of the Certificates. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the initial Certificate delivered on the Delivery Date (as shown
in the FORM OF CERTIFICATE) shall have attached thereto the Comptroller's Registration
Certificate substantially in the form provided in this Ordinance, manually executed by the
Comptroller or by his duly authorized agent, which certificate shall be evidence that the initial
Certificate has been duly approved by the Attorney General and that it is a valid and binding
obligation of the City, and has been registered by the Comptroller.
(g) Book-Entry-OnlSystem. The Certificates issued in exchange for the Certificate
initially issued to the Purchaser or its designee shall be initially issued in the form of a separate
single fully registered Certificate for each of the maturities thereof. Upon initial issuance, the
ownership of each such Certificate shall be registered in the name of Cede & Co., as nominee of
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The Depository Trust Company, New York, New York ("DTC"), and except as provided in
subsection (f) hereof, all of the outstanding Certificates shall be registered in the name of Cede &
Co., as nominee of DTC. With respect to Certificates registered in the name of Cede & Co., as
nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or
obligation to any securities brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations on whose behalf DTC was created ("DTC Participant") to hold
securities to facilitate the clearance and settlement of securities transactions among DTC
Participants or to any person on behalf of whom such a DTC Participant holds an interest in the
Certificates. Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the
Certificates, (ii) the delivery to any DTC Participant or any other person, other than a Registered
Owner of Certificates, as shown on the Registration Books, of any notice with respect to the
Certificates, or (iii) the payment to any DTC Participant or any other person, other than a
Registered Owner of Certificates, as shown in the Registration Books of any amount with respect
to principal of or interest on the Certificates. Notwithstanding any other provision of this
Ordinance to the contrary, the City and the Paying Agent/Registrar shall be entitled to treat and
consider the person in whose name each Certificate is registered in the Registration Books as the
absolute owner of such Certificate for the purpose of payment of principal and interest with respect
to such Certificate, for the purpose of registering transfers with respect to such Certificate, and for
all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and interest
on the Certificates only to or upon the order of the Registered Owners, as shown in the Registration
Books as provided in this Ordinance, or their respective attorneys duly authorized in writing, and
all such payments shall be valid and effective to fully satisfy and discharge the City's obligations
with respect to payment of principal of and interest on the Certificates to the extent of the sum or
sums so paid. No person other than a Registered Owner, as shown in the Registration Books, shall
receive a Certificate evidencing the obligation of the City to make payments of principal and
interest pursuant to this Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of
written notice to the effect that DTC has determined to substitute a new nominee in place of Cede
& Co., and subject to the provisions in this Ordinance with respect to interest checks being mailed
to the Registered Owner at the close of business on the Record Date, the words "Cede & Co." in
this Ordinance shall refer to such new nominee of DTC. The previous execution and delivery of
the Blanket Issuer Letter of Representations with respect to obligations of the City is hereby
ratified and confirmed; and the provisions thereof shall be fully applicable to the Certificates.
(h) Successor Securities Dereositgry,.Transfers Outside Book-Enta- -Onl stem. In
the event that the City determines that DTC is incapable of discharging its responsibilities
described herein and in the representations letter of the City to DTC or that it is in the best interest
of the beneficial owners of the Certificates that they be able to obtain certificated Certificates, the
City shall (i) appoint a successor securities depository, qualified to act as such under Section 17A
of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Certificates
to such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Certificates and transfer one or more separate certificated Certificates to DTC
Participants having Certificates credited to their DTC accounts. In such event, the Certificates
shall no longer be restricted to being registered in the Registration Books in the name of Cede &
Co., as nominee of DTC, but may be registered in the name of the successor securities depository,
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or its nominee, or in whatever name or names Registered Owners transferring or exchanging
Certificates shall designate, in accordance with the provisions of this Ordinance.
(i) Pa ments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Certificate is registered in the name of Cede & Co., as nominee of
DTC, all payments with respect to principal of and interest on such Certificate and all notices with
respect to such Certificate shall be made and given, respectively, in the manner provided in the
representations letter of the City to DTC.
6) Cancellation of Initial Certificate. On the Delivery Date, one initial Certificate
representing the entire principal amount of the Certificates, payable in stated installments to the
Purchaser or its designee, executed by manual or facsimile signature of the Mayor or Mayor Pro
Tem and City Clerk of the City, approved by the Attorney General, and registered and manually
signed by the Comptroller, will be delivered to the Purchaser or its designee. Upon payment for
the initial Certificate, the Paying Agent/Registrar shall cancel the initial Certificate and deliver to
DTC on behalf of the Purchaser one registered definitive Certificate for each year of maturity of
the Certificates, in the aggregate principal amount of all of the Certificates for such maturity.
(k) Conditional Notice of Redemption. With respect to any optional redemption of the
Certificates, unless certain prerequisites to such redemption required by this Ordinance have been
met and money sufficient to pay the principal of and premium, if any, and interest on the
Certificates to be redeemed will have been received by the Paying Agent/Registrar prior to the
giving of such notice of redemption, such notice may state that said redemption may, at the option
of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money
by the Paying Agent/Registrar on or prior to the date fixed for such redemption or upon any
prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given
and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect,
the City will not redeem such Certificates, and the Paying Agent/Registrar will give notice in the
manner in which the notice of redemption was given, to the effect that such Certificates have not
been redeemed.
Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form
of Paying Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached
to the Certificates initially issued and delivered pursuant to this Ordinance, shall be substantially
in the form provided in Exhibit A, with such appropriate variations, omissions or insertions as are
permitted or required by this Ordinance.
Section 5. INTEREST AND SINKING FUND; SURPLUS REVENUES.
(a) A special "Interest and Sinking Fund" is hereby created and shall be established
and maintained by the City at an official depository bank of said City. Said Interest and Sinking
Fund shall be kept separate and apart from all other funds and accounts of said City, and shall be
used only for paying the interest on and principal of said Certificates. All amounts received from
the sale of the Certificates 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 Certificates
shall be deposited, as collected, to the credit of said Interest and Sinking Fund. During each year
while any of said Certificates are outstanding and unpaid, the governing body of said City shall
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compute and ascertain a rate and amount of ad valorem tax that will be sufficient to raise and
produce the money required to pay the interest on said Certificates as such interest comes due, and
to provide and maintain a sinking fund adequate to pay the principal of said Certificates as such
principal matures (but never less than 2% of the original amount of said Certificates as a sinking
fund each year); and said tax shall be based on the latest approved tax rolls of said City, 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 City, for each year while any of said Certificates 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 Certificates, as such interest comes due and such principal matures, are hereby
pledged for such payment, within the limits prescribed by law.
(b) The Certificates are additionally secured by a pledge of the revenues of the System
that remain after the payment of all maintenance and operation expenses thereof, and all debt
service, reserve and other requirements in connection with all of the City's revenue obligations
(now or hereafter outstanding) that are secured by a lien on all or any part of the net revenues of
the System, constituting "Surplus Revenues". The City shall deposit such Surplus Revenues to the
credit of the Interest and Sinking Fund created pursuant to this Section, to the extent necessary to
pay the principal and interest on the Certificates. Notwithstanding the requirements of this Section,
if revenues are actually on deposit or budgeted for deposit in the Interest and Sinking Fund in
advance of the time when ad valorem taxes are scheduled to be levied for any year, then the amount
of taxes which otherwise would have been required to be levied pursuant to this Section may be
reduced to the extent and by the amount of the revenues then on deposit in the Interest and Sinking
Fund or budgeted for deposit therein. The City reserves the right, without condition or limitation,
to issue other obligations secured in whole or in part by a parity lien on and pledge of the Surplus
Revenues, for any purpose permitted by law.
(c) Chapter 1208, Government Code, applies to the issuance of the Certificates and the
pledge of the taxes and Surplus Revenues granted by the City hereunder, and is therefore valid,
effective and perfected. Should State law be amended at any time while the Certificates are
outstanding and unpaid, the result of such amendment being that the pledge of the taxes and
Surplus Revenues granted by the City hereunder is to be subject to the filing requirements of
Chapter 9, Business and Paris Code, in order to preserve to the registered owners of the Certificates
a security interest in said pledge, the City agrees to take such measures as it determines are
reasonable and necessary under State law to comply with the applicable provisions of Chapter 9,
Business and Paris Code and enable a filing of a security interest in said pledge to occur.
Section 6. DEFEASANCE OF CERTIFICATES.
(a) Any Certificate and the interest thereon shall be deemed to be paid, retired and no
longer outstanding (a "Defeased Certificate") within the meaning of this Ordinance, except to the
extent provided in subsection (d) of this Section, when payment of the principal of such Certificate,
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 made 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
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States of America sufficient to make 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 City with the Paying Agent/Registrar for the payment of its services until
all Defeased Certificates shall have become due and payable. At such time as a Certificate shall
be deemed to be a Defeased Certificate hereunder, as aforesaid, such Certificate 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 or the pledge of Surplus Revenues as provided in this Ordinance,
and such principal and interest shall be payable solely from such money or Defeasance Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that
any determination not to redeem Defeased Certificates that is made in conjunction with the
payment arrangements specified in subsection 6(a)(i) or (ii) shall not be irrevocable, provided that:
(1) in the proceedings providing for such payment arrangements, the City expressly reserves the
right to call the Defeased Certificates for redemption; (2) gives notice of the reservation of that
right to the owners of the Defeased Certificates immediately following the making of the payment
arrangements; and (3) directs that notice of the reservation be included in any redemption notices
that it authorizes.
(b) Any moneys so deposited with the Paying Agent/Registrar may at the written
direction of the City 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 Certificates and interest thereon, with
respect to which such money has been so deposited, shall be turned over to the City, or deposited
as directed in writing by the City. Any Future Escrow Agreement pursuant to which the money
and/or Defeasance Securities are held for the payment of Defeased Certificates 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 6(a)(i) or (ii). All income from such Defeasance Securities received by the Paying
Agent/Registrar which is not required for the payment of the Defeased Certificates, with respect
to which such money has been so deposited, shall be remitted to the City or deposited as directed
in writing by the City.
(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 Certificates.
(d) Until all Defeased Certificates shall have become due and payable, the Paying
Agent/Registrar shall perform the services of Paying Agent/Registrar for such Defeased
Certificates the same as if they had not been defeased, and the City shall make proper arrangements
to provide and pay for such services as required by this Ordinance.
(e) In the event that the City elects to defease less than all of the principal amount of
Certificates of a maturity, the Paying Agent/Registrar shall select, or cause to be selected, such
amount of Certificates by such random method as it deems fair and appropriate.
Section 7. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES.
(a) Replacement Certificates. In the event any outstanding Certificate is damaged,
mutilated, lost, stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed
and delivered, a new certificate of the same principal amount, maturity and interest rate, as the
damaged, mutilated, lost, stolen or destroyed Certificate, in replacement for such Certificate in the
manner hereinafter provided.
(b) A. )lication for Replacement Certificates. Application for replacement of
damaged, mutilated, lost, stolen or destroyed Certificates shall be made by the registered owner
thereof to the Paying Agent/Registrar. In every case of loss, theft or destruction of a Certificate,
the registered owner applying for a replacement certificate shall furnish to the City 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 damage with respect thereto. Also, in every case of loss, theft or
destruction of a Certificate, the registered owner shall furnish to the City and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Certificate,
as the case may be. In every case of damage or mutilation of a Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or
mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Ordinance,
in the event any such Certificate 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
Certificate, the City may authorize the payment of the same (without surrender thereof except in
the case of a damaged or mutilated Certificate) instead of issuing a replacement Certificate,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge formmmmIssuinmmmmReplacementm Certificates. Prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in connection therewith. Every replacement
certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate
is lost, stolen or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen or destroyed Certificate 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 Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. In accordance with Section
1206.022, Government Code, this Section shall constitute authority for the issuance of any such
replacement certificate without necessity of further action by the governing body of the City or
any other body or person, and the duty of the replacement of such certificates is hereby authorized
and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate
and deliver such Certificates in the form and manner and with the effect, as provided in Section
3(a) of this Ordinance for Certificates issued in conversion and exchange for other Certificates.
Section 8. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES;
BOND COUNSEL'S OPINION; CUSIP NUMBERS AND CONTINGENT INSURANCE
PROVISION, IF OBTAINED; ENGAGEMENT OF BOND COUNSEL.
(a) The Mayor of the City is hereby authorized to have control of the Certificates
initially issued and delivered hereunder and all necessary records and proceedings pertaining to
the Certificates pending their delivery and their investigation, examination and approval by the
Attorney General and their registration by the Comptroller. Upon registration of the Certificates,
the Comptroller (or a deputy designated in writing to act for the Comptroller) shall manually sign
the Comptroller's Registration Certificate attached to such Certificates, and the seal of the
Comptroller shall be impressed, or placed in facsimile, on such Certificate. The approving legal
opinion of the City's Bond Counsel and the assigned CUSIP numbers may, at the option of the
City, be printed on the Certificates 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 Certificates. In addition, if bond insurance is obtained, the payment of the insurance
premium is hereby approved and the Certificates may bear an appropriate legend as provided by
the insurer.
(b) The obligation of the Purchaser to accept delivery of the Certificates is subject to
the Purchaser being furnished with the final, approving opinion of McCall, Parkhurst & Horton
L.L.P., bond counsel to the City, which opinion shall be dated the Delivery Date. The engagement
of such firm as bond counsel to the City in connection with issuance, sale and delivery of the
Certificates is hereby approved and confirmed.
Section 9. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
CERTIFICATES.
(a) Covenants. The City covenants to take any action necessary to assure, or refrain
from any action which would adversely affect, the treatment of the Certificates as obligations
described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the
interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates or the projects financed therewith (less amounts deposited to a reserve fund,
if any) are used for any "private business use," as defined in section 141(b)(6) of the Code
or, if more than 10 percent of the proceeds or the projects financed therewith are so used,
such amounts, whether or not received by the City, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service
on the Certificates, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Certificates or
the projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and
not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
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(3) to take any action to assure that no amount which is greater than the lesser
of $5,000,000, or 5 percent of the proceeds of the Certificates (less amounts 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 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the
Certificates 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 Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Certificates, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2) of the Code) which produces
a materially higher yield over the term of the Certificates, other than investment property
acquired with -
(A) proceeds of the Certificates invested for a reasonable temporary
period of 3 years or less or, in the case of a refunding bond, for a period of 90 days
or less until such proceeds are needed for the purpose for which the bonds are
issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148 1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10 percent of the
proceeds of the Certificates;
(7) to otherwise restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not
otherwise contravene the requirements of section 148 of the Code (relating to arbitrage);
(8) to refrain from using the proceeds of the Certificates or proceeds of any
prior bonds to pay debt service on another issue more than 90 days after the date of issue
of the Certificates in contravention of the requirements of section 149(d) of the Code
(relating to advance refundings); and
(9) to pay to the United States of America at least once during each five-year
period (beginning on the Delivery Date) an amount that is at least equal to 90 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 Certificates have been paid in
full, 100 percent of the amount then required to be paid as a result of Excess Earnings under
section 148(f) of the Code.
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(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a
"Rebate Fund" is hereby established by the City 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. The City understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Certificates. It is the understanding of the City 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 which modify or expand provisions of the Code, as applicable to the
Certificates, the City will not be required to comply with any covenant contained herein to the
extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Certificates under
section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which
impose additional requirements which are applicable to the Certificates, the City agrees to comply
with the additional requirements to the extent necessary, in the opinion of nationally recognized
bond counsel, to preserve the exemption from federal income taxation of interest on the
Certificates under section 103 of the Code. In furtherance of such intention, the City hereby
authorizes and directs the Mayor, the Mayor Pro Tem, the City Manager, the Finance Director and
the City Clerk (collectively, the "Authorized Officers") to execute any documents, certificates or
reports required by the Code and to make such elections, on behalf of the City, which may be
permitted by the Code as are consistent with the purpose for the issuance of the Certificates.
(d) Allocation of. and Limitation on Ex �enditures for the Projects. The City covenants
to account for the expenditure of sale proceeds and investment earnings to be used for the Projects
on its books and records in accordance with the requirements of the Code. The City recognizes
that in order for the proceeds to be considered used for the reimbursement of costs, the proceeds
must be allocated to expenditures within 18 months of the later of the date that (1) the expenditure
is made, or (2) the Projects are completed; but in no event later than three years after the date on
which the original expenditure is paid. The foregoing notwithstanding, the City recognizes that in
order for proceeds to be expended under the Code, the sale proceeds or investment earnings must
be expended no more than 60 days after the earlier of (1) the fifth anniversary of the Delivery Date,
or (2) the date the Certificates are retired. The City agrees to obtain the advice of nationally -
recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such
expenditure will not adversely affect the tax-exempt status of the Certificates. For purposes hereof,
the City 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
income of the interest.
(e) Disposition of the Projects. The City covenants that the property constituting the
Projects will not be sold or otherwise disposed in a transaction resulting in the receipt by the City
of cash or other compensation, unless any action taken in connection with such disposition will
not adversely affect the tax-exempt status of the Certificates. For purpose of the foregoing, the
City 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
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the Certificates. 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 City 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 income of the interest.
Section 10. SALE OF CERTIFICATES AND APPROVAL OF OFFICIAL
STATEMENT; FURTHER PROCEDURES.
(a) The Certificates are hereby sold and shall be delivered to Raymond James &
Associates, Inc., Robert W. Baird & Co. Incorporated and Estrada Hinojosa & Company, Inc. (the
"Underwriters") for the purchase price of $ (representing the aggregate principal amount of
the Certificates, plus a [net] reoffering premium of $ , less an underwriters' discount of
$, plus interest accrued from the Dated Date to the Delivery Date in the amount of $
The Certificates shall initially be registered in the name of Raymond James & Associates, Inc., or
its designee.
(b) The Certificates are sold pursuant to the terms and provisions of a Bond Purchase
Agreement, in substantially the form presented at this meeting, which the Mayor and Mayor Pro
Tem are hereby authorized to execute and deliver. It is hereby officially found, determined and
declared that the terms of this sale are the most advantageous reasonably obtainable to the City.
(c) The City hereby approves the form and content of the Official Statement relating
to the Certificates and any addenda, supplement or amendment thereto, and approves the
distribution of such Official Statement in the reoffering of the Certificates by the Underwriters in
final form, with such changes therein or additions thereto as any Authorized Officer may deem
advisable. The distribution and use of the Preliminary Official Statement prior to the date hereof
is hereby ratified and confirmed.
(d) The Authorized Officers, individually or jointly, shall be and they are hereby
expressly authorized, empowered and directed from time to time and at any time to do and perform
all such acts and things and to execute, acknowledge and deliver in the name and under the
corporate seal and on behalf of the City such documents, certificates and instruments, whether or
not herein mentioned, as may be necessary or desirable in order to carry out the terms and
provisions of this Ordinance, the Blanket Issuer Letter of Representations, the Certificates and the
sale of the Certificates. In addition, prior to the delivery of the Certificates, the Authorized Officers
are each hereby authorized and directed to approve any changes or corrections to this Ordinance
or to any of the documents authorized and approved by this Ordinance: (i) in order to cure any
ambiguity, formal defect, or omission in this Ordinance or such other document, or (ii) as requested
by the Attorney General or his representative to obtain the approval of the Certificates by the
Attorney General. In case any officer whose signature shall appear on any Certificate shall cease
to be such officer before the delivery of such Certificate, such signature shall nevertheless be valid
and sufficient for all purposes the same as if such officer had remained in office until such delivery.
Section 11. INTEREST EARNINGS ON CERTIFICATE PROCEEDS. Interest earnings
derived from the investment of proceeds from the sale of the Certificates shall be used along with
other Certificate proceeds for the Projects; 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
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and Sinking Fund. It is further provided, however, that any interest earnings on certificate proceeds
that are required to be rebated to the United States of America pursuant to the provisions hereof in
order to prevent the Certificates from being arbitrage bonds shall be so rebated and not considered
as interest earnings for the purposes of this Section.
Section 12, CONSTRUCTION FUND.
(a) The City hereby creates and establishes and shall maintain on the books of the City
a separate fund to be entitled the "Series 2024 Certificate of Obligation Construction Fund" (the
"Construction Fund") for use by the City for payment of all lawful costs associated with the
Projects as hereinbefore provided. Proceeds of the Certificates in the amount of $ shall be
deposited into the Construction Fund. The remaining amounts of Certificate proceeds shall be
used to pay the costs of issuance of the Certificates, with any surplus to be deposited into the
Construction Fund, provided that the total amount deposited into the Construction Fund shall not
exceed $65,000,000.00. Upon payment of all such Project costs, any moneys remaining on deposit
in said Fund shall be transferred to the Interest and Sinking Fund. Amounts so deposited to the
Interest and Sinking Fund shall be used in the manner described herein.
(b) The City may place proceeds of the Certificates (including investment earnings
thereon) and amounts 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 City hereby covenants that the proceeds of the sale of the Certificates will be
used as soon as practicable for the purposes for which the Certificates 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 13. COMPLIANCE WITH RULE 15c2-12.
(a) Definitions,. As used in this Section, the following terms have the meanings
ascribed to such terms below:
"Financial Obligation" means a: (a) debt obligation; (b) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned
debt obligation; or (c) a guarantee of the foregoing (a) and (b). The term Financial
Obligation does not include any municipal securities as to which a final official statement
has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
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(b) Annual Roorts.
(i) The City shall provide annually to the MSRB, in the electronic format
prescribed by the MSRB certain updated financial information and operating data pertaining to the
City, consisting of the following: (1) the quantitative financial information and operating data of
the type included in Tables numbered 1, 2, 10, 11, 12, 15, 20 and 21 in Appendix A to the Official
Statement and (2) the City's comprehensive annual financial report. The City will update and
provide the information in the numbered tables within six months after the end of each fiscal year
ending in and after 2023 and, if not submitted as part of such annual financial information, the City
will provide its audited financial statements when and if available, and in any event, within 12
months after the end of each fiscal year ending in and after 2023. If the audit of such financial
statements is not complete within 12 months after any such fiscal year end, then the City will file
unaudited financial statements within such 12 -month period and audited financial statements for
the applicable fiscal year, when and if the audit report on such statements becomes available. Any
such financial statements will be prepared in accordance with the accounting principles described
in Appendix D to the Official Statement or such other accounting principles as the City may be
required to employ from time to time pursuant to State law or regulation.
(ii) Any financial information so to be provided shall be (i) prepared in
accordance with the accounting principles described in the financial statements of the City
appended to the Official Statement, or such other accounting principles as the City may be required
to employ from time to time pursuant to state law or regulation, and (ii) audited, if the City
commissions an audit of such statements and the audit is completed within the period during which
they must be provided.
(iii) If the City changes its fiscal year, it will notify the MSRB of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise
would be required to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may be set
forth in full in one or more documents or may be included by specific reference to any document
that is available to the public on the MSRB's internet website or filed with the SEC. All documents
provided to the MSRB pursuant to this Section shall be accompanied by identifying information
as prescribed by the MSRB.
(c) Event Notices.
(i) The City shall notify the MSRB, in a timely manner not in excess of ten business
days after the occurrence of the event, of any of the following events with respect to the
Certificates:
(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
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TEB), or other material notices or determinations with respect to the tax status of
the Certificates, or other material events affecting the tax status of the Certificates;
(7) Modifications to rights of holders of the Certificates, if material;
(8) Certificate calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City;
(13) The consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into of a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional paying agent/registrar or the change
of name of a paying agent/registrar, if material;
(15) Incurrence of a Financial Obligation of the City, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the City, any of which affect security holders, if material;
and
(16) Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the City, any of
which reflect financial difficulties.
For these purposes, (a) any event described in the immediately preceding paragraph
(12) is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States
Bankruptcy Code or in any other proceeding under state or federal law in which a court or
governmental authority has assumed jurisdiction over substantially all of the assets or
business of the City, or if such jurisdiction has been assumed by leaving the existing
governing body and officials or officers of the City in possession but subject to the
supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement, or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business
of the City, and (b) the City intends the words used in the immediately preceding
paragraphs (15) and (16) and the definition of Financial Obligation in this Section to have
the same meanings as when they are used in the Rule, as evidenced by SEC Release No.
34-83885, dated August 20, 2018.
In addition, the City shall notify the MSRB, in a timely manner, of any failure by
the City to provide financial information or operating data in accordance with subsection
(b) of this Section by the time required by subsection (b).
(d) Limitations. Disclaimers, and Amendments.
(i) The City shall be obligated to observe and perform the covenants specified
in this Section for so long as, but only for so long as, the City remains an "obligated person" with
respect to the Certificates within the meaning of the Rule, except that the City in any event will
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give notice of any deposit made in accordance with this Ordinance or applicable law that causes
Certificates no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered
owners and beneficial owners of the Certificates, and nothing in this Section, express or implied,
shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other
person. The City undertakes to provide only the financial information, operating data, financial
statements, and notices which it has expressly agreed to provide pursuant to this Section and does
not hereby undertake to provide any other information that may be relevant or material to a
complete presentation of the City's financial results, condition, or prospects or hereby undertake
to update any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty concerning
such information or its usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO
THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY
OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR
IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY
RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON
ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR
MANDAMUS OR SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under this
Section shall comprise a breach of or default under this Ordinance for purposes of any other
provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
(v) Should the Rule be amended to obligate the City to make filings with or
provide notices to entities other than the MSRB, the City hereby agrees to undertake such
obligation with respect to the Certificates in accordance with the Rule as amended. The provisions
of this Section may be amended by the City from time to time to adapt to changed circumstances
that arise from a change in legal requirements, a change in law, or a change in the identity, nature,
status, or type of operations of the City, but only if (1) the provisions of this Section, as so
amended, would have permitted an underwriter to purchase or sell Certificates in the primary
offering of the Certificates in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the registered owners of a majority in aggregate principal amount (or any greater amount
required by any other provision of this Ordinance that authorizes such an amendment) of the
outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the
City (such as nationally recognized 1 counsel) determined that such amendment will not materially
impair the interest of the registered owners and beneficial owners of the Certificates. If the City
so amends the provisions of this Section, it shall include with any amended financial information
or operating data next provided in accordance with subsection (b) of this Section an explanation,
in narrative form, of the reason for the amendment and of the impact of any change in the type of
financial information or operating data so provided. The City may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the
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Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent
an underwriter from lawfully purchasing or selling Certificates in the primary offering of the
Certificates.
Section 14. METHOD OF AMENDMENT. The City hereby reserves the right to amend
this Ordinance subject to the following terms and conditions, to -wit:
(a) The City 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 ambiguity, defect or omission in this Ordinance that does not materially adversely affect
the interests of the holders, (ii) 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
the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from
time 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 City's Bond Counsel materially adversely affect the interests of the
holders.
(b) Except as provided in paragraph (a) above, the holders of Certificates aggregating
a majority of the aggregate principal amount of then outstanding Certificates that are the subject
of a proposed amendment shall have the right from time to time to approve any amendment hereto
that may be deemed necessary or desirable by the City; provided, however, that without the consent
of 100% of the holders in aggregate principal amount of the then outstanding Certificates, nothing
herein contained shall permit or be construed to permit amendment of the terms and conditions of
this Ordinance or in any of the Certificates so as to:
(1) Make any change in the maturity of any of the outstanding Certificates;
(2) Reduce the rate of interest borne by any of the outstanding Certificates;
(3) Reduce the amount of the principal of, or redemption premium, if any,
payable on any outstanding Certificates;
(4) Modify the terms of payment of principal or of interest or redemption
premium on outstanding Certificates 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
Certificates necessary for consent to such amendment.
(c) If at any time the City shall desire to amend this Ordinance under subsection (b) of
this Section, the City shall send by U.S. mail to each registered owner of the affected Certificates
a copy of the proposed amendment.
(d) Whenever at any time within one year from the date of mailing of such notice the
City shall receive an instrument or instruments executed by the holders of at least a majority in
aggregate principal amount of all of the Certificates then outstanding that are required for the
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amendment, which instrument or instruments shall refer to the proposed amendment and that shall
specifically consent to and approve such amendment, the City may adopt the amendment in
substantially the same form.
(e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be modified and amended in accordance with such
amendatory Ordinance, and the respective rights, duties, and obligations of the City and all holders
of such affected Certificates shall thereafter be determined, exercised, and enforced, subject in all
respects to such amendment.
(f) Any consent given by the holder of a Certificate pursuant to the provisions of this
Section shall be irrevocable for a period of six months from the date of the mailing of the notice
provided for in this Section, and shall be conclusive and binding upon all future holders of the
same Certificate during such period. Such consent may be revoked at any time after six months
from the date of the mailing of said notice by the holder who gave such consent, or by a successor
in title, by filing notice with the City, but such revocation shall not be effective if the holders of a
majority in aggregate principal amount of the affected Certificates then outstanding, have, prior to
the attempted revocation, consented to and approved the amendment.
(g) For the purposes of establishing ownership of the Certificates, the City shall rely
solely upon the registration of the ownership of such Certificates on the registration books kept by
the Paying Agent/Registrar.
Section 15. 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
Certificates when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the City, the failure to perform which materially, adversely affects the rights of the
registered owners of the Certificates, 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 City,
(b) Remedies for Default.
(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 City 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 competent jurisdiction, for any relief permitted by
law, including the specific performance of any 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.
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(ii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all Registered Owners of Certificates 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 Certificates 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 Certificates 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 Certificate 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 trustees of the City or
the Council.
Section 16. APPLICATION OF PREMIUM FROM SALE OF CERTIFICATES. The
Certificates have a [net] reoffering premium of $ , all of which shall be used to pay costs of
issuance of the Certificates, including underwriter's discount, with any surplus premium not used
to pay such costs of issuance to be deposited into the Construction Fund, provided that the total
amount deposited into the Construction Fund shall not exceed $65,000,000.00, in which case such
excess shall be deposited into the Interest and Sinking Fund.
Section 17. 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
Council.
Section 18. 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
remain in full force and effect.
Section 19. APPROPRIATION. To pay the debt service coming due on the Certificates,
if any, 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 20. BOND INSURANCE. The Certificates shall be insured by a municipal bond
insurance policy issued by ]
Exhibit A
FORM OF CERTIFICATES
(a) The form of the Certificates, including the form of Paying Agent/Registrar's
Authentication Certificate, the form of Assignment and the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas to be attached to the Certificates 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.
NO. R-_ UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF PARIS, TEXAS,
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATE OF OBLIGATION,
SERIES 2024
Interest Rate
Dated Date
April 1, 2024
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Delivery Date Maturity Date
April 8, 2024 June 15, 20_
PRINCIPAL
AMOUNT
CUSIP No.
ON THE MATURITY DATE specified above, the City of Paris, located in Lamar County,
Texas (the "City"), being a political subdivision and municipal corporation of the State of Texas,
hereby promises to pay to the Registered Owner specified above, or registered assigns (hereinafter
called the "Registered Owner"), the Principal Amount specified above. The City promises to pay
interest on the unpaid principal amount hereof (calculated on the basis of a 360 -day year of twelve
30 -day months) from the Dated Date above at the Interest Rate per annum specified above. Interest
is payable on December 15, 2024 and semiannually on each June 15 and December 15 thereafter
to the Maturity Date specified above, or the date of redemption prior to�maturity; except, if this
Certificate is required to be authenticated and the date of its authentication is later than the first
Record Date (hereinafter defined), such Principal Amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after
any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Certificate or Certificates,
if any, for which this Certificate is being exchanged is due but has not been paid, then this
Certificate shall bear interest from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
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Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the principal
corporate trust office of BOY -F, NA, Dallas, Texas, which is the "Paying Agent/Registrar" for this
Certificate. The payment of interest on this Certificate shall be made by the Paying Agent/Registrar
to the registered owner hereof on each interest payment date by check or draft, dated as of such
interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of
the City required by the ordinance authorizing the issuance of this Certificate (the "Certificate
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
mail, 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 preceding each such date
(the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter
described. In addition, 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. In the event
of a non-payment of interest on a scheduled payment date, and for 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 from the
City. Notice of the Special Record Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date) shall be sent at least five business days
prior to the Special Record Date by United States mail, first-class postage prepaid, to the address
of each owner of a Certificate appearing on the Registration Books at the close of business on the
last business day next preceding the date of mailing of such notice.
ANY ACCRUED INTEREST due at maturity or upon the redemption of this Certificate
prior to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Certificate for redemption and payment at the principal corporate trust office of
the Paying Agent/Registrar. The City covenants with the registered owner of this Certificate that
on or before each principal payment date, interest payment date, and accrued interest payment date
for this Certificate it will make available to the Paying Agent/Registrar, from the "Interest and
Sinking Fund" created by the Certificate Ordinance, the amounts required to provide for the
payment, in immediately available funds, of all principal of and interest on the Certificates, when
due.
IF THE DATE for the payment of the principal of or interest on this Certificate 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 CERTIFICATE is dated April 1, 2024, and is authorized in accordance with the
Constitution and laws of the State of Texas in the principal amount of $ for paying all or a
portion of the City's contractual obligations incurred in connection with (i) the acquisition,
construction, installation and equipment of additions, improvements and extensions to the City's
waterworks and sewer system (the "System") and (ii) paying legal, fiscal and engineering fees in
connection with such projects, including paying the costs of issuance of the Certificates.
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ON JUNE 15, 2033 or any date thereafter, the Certificates of this series may be redeemed
prior to their scheduled maturities, at the option of the City, with funds derived from any available
and lawful source, as a whole, or in part, and, if in part, the particular Certificates, or portions
thereof, to be redeemed shall be selected and designated by the City (provided that a portion of a
Certificate may be redeemed only in an integral multiple of $5,000), at a redemption price equal
to the principal amount to be redeemed plus accrued interest to the date fixed for redemption.
AT LEAST THIRTY days prior to the date fixed for any redemption of Certificates or
portions thereof prior to maturity a written notice of such redemption shall be sent by the Paying
Agent/Registrar by United States mail, first-class postage prepaid to the registered owner of each
Certificate to be redeemed at its address as it appeared on the 45th day prior to such redemption
date; provided, however, that the failure of the registered owner to receive such notice, or any
jW11W_4"iW1a_%1a1 "Rise
the proceedings for the redemption of any Certificate. By the date fixed for any such redemption
due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Certificates or portions thereof that are to be so redeemed. If such written
notice of redemption is sent and if due provision for such payment is made, all as provided above,
WITH RESPECT TO ANY OPTIONAL REDEMPTION OF THE CERTIFICATES,
unless certain prerequisites to such redemption required by the Certificate Ordinance have been
met and money sufficient to pay the principal of and premium, if any, and interest on the
Certificates to be redeemed will have been received by the Paying Agent/Registrar prior to the
of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money
by the Paying Agent/Registrar on or prior to the date fixed for such redemption or upon any
prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given
WIMCA-EIC AULAUX Ul XU 1Vr'11' LL+ --al Ulit:UL Ulat SUCII %_CrM1CaLCS JUIV Elf"
been redeemed.
ALL CERTIFICATES OF' THIS SERIES are issuable solely as fully registered certificates,
without interest coupons, in the principal denomination of any integral multiple of $5,000. As
provided in the Certificate Ordinance, this Certificate may, at the request of the registered owner
or the assignee or assignees hereof, be assigned, transferred, converted into and exchanged for a
like aggregate principal amount of fully registered certificates, without interest coupons, payable
to the appropriate registered owner, assignee or assignees, as the case may be, having the same
denomination or denominations in any integral multiple of $5,000 as requested in writing by the
W
appropriate registered owner, assignee or assignees, as the case may be, upon surrender of this
Certificate to the Paying Agent/Registrar for cancellation, all in accordance with the form and
procedures set forth in the Certificate Ordinance. Among other requirements for such assignment
and transfer, this Certificate must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or any portion
or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name
or names this Certificate or any such portion or portions hereof is or are to be registered. The form
of Assignment printed or endorsed on this Certificate may be executed by the registered owner to
evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this Certificate or any portion or portions hereof from time to time by the registered owner. The
Paying Agent/Registrar's reasonable standard or customary fees and charges for assigning,
transferring, converting and exchanging any Certificate or portion thereof will be paid by the City.
In any circumstance, any taxes or governmental charges required to be paid with respect thereto
shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a
condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be
required to make any such transfer, conversion or exchange of any Certificates 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 or, with respect to any Certificate
or any portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date; provided, however, such limitation on transfer shall not be applicable to an
exchange by the registered owner of the uncalled balance of a Certificate called for redemption in
part.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the City,
resigns, or otherwise ceases to act as such, the City has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted. that this Certificate 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
Certificate have been performed, existed and been done in accordance with law; that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this
Certificate, as such interest comes due and such principal matures, have been levied and ordered
to be levied against all taxable property in said City, and have been pledged for such payment,
within the limits prescribed by law, and that this Certificate is additionally secured by and payable
from a pledge of the Surplus Revenues of the System remaining after payment of all operation and
maintenance expenses thereof, and all debt service, reserve, and other requirements in connection
with all of the City's revenue bonds or other obligations (now or hereafter outstanding) which are
payable from all or any part of the net revenues of the System, all as provided in the Certificate
Ordinance.
THE CITY HAS RESERVED THE RIGHT to amend the Certificate Ordinance as
provided therein, and under some (but not all) circumstances amendments thereto must be
approved by the registered owners of a majority in aggregate principal amount of the outstanding
Certificates.
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BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the governing body of the City, and
agrees that the terms and provisions of this Certificate and the Certificate Ordinance constitute a
contract between each registered owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Certificate to be signed with the
manual or facsimile signature of the Mayor of the City and countersigned with the manual or
facsimile signature of the City Clerk of the City, and has caused the official seal of the City to be
duly impressed, or placed in facsimile, on this Certificate.
City Clerk
City of Paris, Texas
(City Seal)
Mayor
City of Paris, Texas
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Certificate is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Certificate has been issued under the provisions of the
Certificate Ordinance described in the text of this Certificate; and that this Certificate has been
issued in conversion or replacement of, or in exchange for, a certificate, certificates, or a portion
of a certificate or certificates of a series 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:
BOKF, NA,
Dallas, Texas
Paying Agent/Registrar
Authorized Representative
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 type name and address, including zip code of Transferee
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints:
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_...._. ..._........._.... m attorney, to register the transfer of the within
Certificate 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 program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts
of the State of Texas
(COMPTROLLER'S SEAL)
(b) Initial Certificate Insertions.
(i) The initial Certificate shall be in the form set forth is paragraph (a) of this
Section, except that:
A. immediately under the name of the Certificate, the headings
"Interest Rate" and "Maturity Date" shall both be completed with
the words "As shown below" and "CUSIP No. " shall be
deleted.
B. the first paragraph shall be deleted and the following will be
inserted:
"THE CITY OF PARIS, TEXAS, in Lamar County, Texas (the "City"), being a political
subdivision and municipal corporation of the State of Texas, hereby promises to pay to the
Registered Owner specified above, or registered assigns (hereinafter called the "Registered
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Owner"), on June 15 in each of the years, in the principal amounts and bearing interest at the per
annum rates set forth in the following schedule
The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360 -day year of twelve 30 -day months) from the Dated Date above, at the respective Interest
Rate per annum specified above. Interest is payable on December 15, 2024 and semiannually on
each June 15 and December 15 thereafter to the date of payment of the principal installment
specified above, or the date of redemption prior to maturity; except, that if this Certificate is
required to be authenticated and the date of its authentication is later than the first Record Date
(hereinafter defined), such Principal Amount shall bear interest from the interest payment date
next preceding the date of authentication, unless such date of authentication is after any Record
Date but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date; provided, however, that
if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for
which this Certificate is being exchanged is due but has not been paid, then this Certificate shall
bear interest from the date to which such interest has been paid in full."
C. The initial Certificate shall be numbered "T-1."
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Principal Interest Principal Interest
Years
Amount Rates Years Amount Rates
2026
2041
2027
2042
2028
2043
2029
2044
2030
2045
2031
2046
2032
2047
2033
2048
2034
2049
2035
2050
2036
2051
2037
2052
2038
2053
2039
2054
The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360 -day year of twelve 30 -day months) from the Dated Date above, at the respective Interest
Rate per annum specified above. Interest is payable on December 15, 2024 and semiannually on
each June 15 and December 15 thereafter to the date of payment of the principal installment
specified above, or the date of redemption prior to maturity; except, that if this Certificate is
required to be authenticated and the date of its authentication is later than the first Record Date
(hereinafter defined), such Principal Amount shall bear interest from the interest payment date
next preceding the date of authentication, unless such date of authentication is after any Record
Date but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date; provided, however, that
if on the date of authentication hereof the interest on the Certificate or Certificates, if any, for
which this Certificate is being exchanged is due but has not been paid, then this Certificate shall
bear interest from the date to which such interest has been paid in full."
C. The initial Certificate shall be numbered "T-1."
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