April 10, 2017 REGULAR MEETING OF THE CZTY COUNCIL OF THE
CITY OF NEC)EMLA NC)
4:30 p_rrm_ Aprii 10, 2017
1. MEETING
The meeting was called to order at 4:30 p.m. by Mayor Nugent at the Nederland City
Office Building, 207 N. 12�h Street, Nederland, Texas. See attached for quorum.
The following statement was posted:
"PURSUANT TO SECTION 30.07, PENAL CODTRES PASS BY LICENSE HOLC)ER
WITH AN OPENLY CARRIEC) MAN C)GU N3, A PERSON 01.1 500 Ill NC)ER
SUBCHAPTER H, CHAPTER 411, GOVERNMENT CODE CHAN C)G IJN LICENSING
LAW 3, MAY NOT ENTER THIS PROPERTY WITH A HAN CD GUN! THAT IS CARRIEC)
OPENLY_"
2_ INVOCATION AMC) PLECOG E OF ALLEGIANCE
The invocation and the Pledge of Allegiance were led by Gay Ferguson, City Clerk.
3. CONSENT AGENDA - All consent agenda items listed are considered to be routine by
the City Council and will be enacted by one motion. There will be no separate
discussion of these items unless a councilmember so requests, in which event the item
will be removed from the Consent Agenda and considered separately.
A motion was made by Mayor Pro Tem Albanese and seconded by Councilmember
Austin to approve the Consent Agenda Items a-b as presented. MOTION CARRIEC)_
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
a. Minutes — March 27, 2017 regular meeting
b. Consider action authorizing the closure of various city streets for the Boss Burger
Grand Opening.
4_ REGULAR AGENC)A
a. A motion was made by Mayor Pro Tem Albanese and seconded by Councilmember
Austin to approve a proclamation recognizing Nancy Landry. MOTION CARRIEC)_
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire_
Noes: None.
b_ A motion was made by Councilmember Neal and seconded by Mayor Pro Tem
Albanese to approve a proclamation in regards to National Fair Housing Month.
MOTION CA RRIEC)_
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
Minutes Continued, April 10, 2017
c. City Council recognized Nederland Domino's for their on-going support of the
Nederland community. Domino's has participated in raising funds for St. Jude's for
many years. This year they reached the National #1 rank for raising $18,303.00.
Five of their employees also received national recognition: Casey LeBleu, Kiara
McCarty, Haley Miller, Joseph Mayon, and Brytni Walton.
A motion was made by Councilmember Neal and seconded by Mayor Pro Tern
Albanese to approve a proclamation in regards to Nederland Domino's Appreciation
Week. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
d. A motion was made by Councilmember Austin and seconded by Councilmember
Neal to amend Ordinance 164, setting the calendar year for regular City Council
meetings for April 2017. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
e. A motion was made by Councilmember Neal and seconded by Mayor Pro Tern
Albanese to approve Ordinance No. 2017-08, amending the fiscal year 2016-2017
budget. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
f. A motion was made by Councilmember Austin and seconded by Mayor Pro Tern
Albanese to authorize the purchase of a generator for the Nederland Service Center
from BuyBoard in the amount of $106,505.00 plus installation costs in the amount
of $12,576.20. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Belaire, and Belaire.
Noes: None.
g. A motion was made by Mayor Pro Tern Albanese and seconded by Councilmember
Neal to approve an interlocal agreement between the City of Nederland and the
cities of Port Neches and Groves in regards to the 2016 Port Security Grant Program
for the purchase of a communications system. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
h. A motion was made by Councilmember Austin and seconded by Councilmember
Neal to approve a system purchase agreement with Motorola Solutions, Inc. for
the purchase of a communications system. MOTION CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
i. Rick Bourque with Schaumburg and Polk, Inc. and Steve Hamilton, Public Works
Director, gave a preliminary update on the wastewater line evaluation. Mr.
Bourque stated the TV of the lines finished about a month ago and data was
received on March 26th. The data was categorized into 5 levels with 5 being the
most deteriorated. He reviewed a map of the identified lines and which level the
line segments were placed into. Pictures were also presented to show deterioration
and loss of joint gaskets.
Minutes Continued, April 10, 2017
5. EXECUTIVE SESSION
The regular meeting was recessed at 5:26 p.m. by Mayor Nugent for the purpose of
conducting an Executive Session as authorized by Texas Government Code, Chapter
551.074 - Discuss Personnel - Public Works Director.
6. RECONVENE
The regular meeting was reconvened at 5:39 by Mayor Nugent. He announced the
Executive Session was held for informational purposes only and no action is necessary.
7. COMMUNICATION:
City Manager's Report:
a. Miscellaneous
• City offices will be closed April 14th in observance of Good Friday
• First Baptist Church Easter Egg Hunt will be April 15th
• Art in the Park will be April 22nd
• Relay for Life will be April 29th
8. ADJOURN
There being no further business a motion was made by Mayor Nugent and
seconded by Mayor Pro Tern Albanese to adjourn the meeting at 5:40 p.m. MOTION
CARRIED.
Ayes: Mayor Nugent, Councilmembers Austin, Neal, Albanese, and Belaire.
Noes: None.
//Y
R. A. Nugent, /;yor
City of Nederl.f d, Texas
A�EST:
_ /4,1 41
c ay Ferg /on, City Cler.
City of Nederland, Texas
CITY OF NEDERLAND
COUNCIL MEETING ATTENDANCE SHEET
NAME TITLE PRESET ABSENT
R.A. Nugent Mayor
Talmadge Austin Council Member-Ward I \7
VBillyNeal Council Member-Ward II
V
Don Albanese Council Member-Ward III
CraigBelaire Council Member-Ward IV
V
Chris Duque City Manager
V
Gay Ferguson City Clerk
Jesse Branick City Attorney
Cheryl Dowden Director of Finance
Darrell Bush Police Chief
Gary Collins Fire Chief
Steve Hamilton Director of Public Works
George Wheeler Building Official
Victoria Klehn Librarian V-
Holly Guidry Human Resources Director V
Joni Underwood Executive Secretary
Angela Fanette Parks Director
ozar
R. ugent, or
e.
Cil
4 (1/071 -
Gay Fergusbh, City Cler
April 10, 2017
Date
AN AMENDMENT TO ORDINANCE NO. 164
AN ORDINANCE SETTING REGULAR DATES FOR
COUNCIL MEETINGS TO BE HELD FROM MAY 9,
2016 THROUGH APRIL 24,2017.
NOW,THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF NEDERLAND,TEXAS:
THAT the following dates will be and are hereby regular meeting dates for
the meetings of the City Council of the City of Nederland,Texas. All of the below
regular meeting shall begin at 4:30 p.m. on each of the following dates:
May 9 and 23,2016
June 13 and 27, 2016
July 11 and 25, 2016
August 8 and 22, 2016
September 12 and 26,2016
October 10 and 24, 2016
November 14, 2016
December 5 and 12,2016
January 9 and 23, 2017
February 13 and 27, 2017
March 13 and 27, 2017
April 10 and 44, 24, 2017
ANY AND ALL ordinances of the City of Nederland, Texas which conflict
with any provisions of this amendment are hereby expressly repealed.
PASSED AND APPROVED by the City Council at a regular meeting this
0 0,������1,1,�,Ath day of April, 2017.
ii
V.•\Ur4',4 �';,20= R.A. ug rill,ayor
"J _ City of Nede -nd,Texas
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payFergon, City Cle
e
City of Nederland,Texas
APPROVED AS TO FORM AND LEGALITY:
Jess Brani k, City Attorney
City of Ne.-rland,Texas
ORDINANCE NO.2017-08
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
NEDERLAND,TEXAS AMENDING THE FISCAL YEAR 2016-
2017 BUDGET IN ACCORDANCE WITH THE BUDGET AND
THE CHARTER OF THE CITY OF NEDERLAND.
WHEREAS,the City Council previously approved Ordinance No.2016-20,which adopted
the Fiscal Year 2016-2017 City Budget;and,
WHEREAS, the City Council deems it necessary to amend the current budget to adjust
revenues and expenditures as set out in Attachment"A"attached hereto;and,
WHEREAS,the 2016-2017 City budget states"That any unencumbered funds remaining
on hand at the end of the fiscal year ending September 30, 2017 shall be construed with and
classified with Miscellaneous revenue anticipated during the fiscal year beginning October 1,
2016 and ending September 30,2017,and such funds are hereby appropriated as a City Council
Contingency Account for purposes approved by the City Council;and,
NOW,THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND,
TEXAS:
THAT the budget for the fiscal year 2016-2017 is amended to allow for adjustments in
revenues and expenditures as set out in Attachment"A."
THAT all ordinances and parts of ordinances in conflict herewith are expressly repealed.
THAT the City Clerk shall file a true copy of this ordinance and said budget amendment
with the Office of County Clerk of Jefferson County,Texas as provided by Section 102.011 of the
Local Government Code.
THAT,this being an ordinance not requiring publication,it shall take effect and be in force
from and after its passage.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF NEDERLAND AT A
REGULAR MEETING THIS THE 10th DAY OF APRIL,2017.
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GpOZ
rgus ,City Clerk
APPROVED AS TO FORM AND LEGALITY:
Jess: Branic , ity Attorney
1
CITY OF NEDERLAND
BUDGET AMENDMENT REQUEST
FISCAL YEAR: 2016-2017
DATE: April 10,2017
DEPARTMENT: Various
FUND: General(01)
AMOUNT
CURRENT INCREASE PROPOSED
ACCOUNT NO. ACCOUNT TITLE BUDGET (DECREASE) BUDGET
01-1300-6115 Extra Help 6,000 (6,000) -
01-1300-6393 Contractual Services 35,000 5,000 40,000
01-1300-6395 Election Services 10,000 (10,000) -
01-1600-6400 Special Programs 9,000 (3,000) 6,000
01-2100-6406 Contribution to Dispatch 491,779 42,634 534,413
01-2101-6115 Extra Help 8,000 4,000 12,000
01-2101-6126 Social Security 612 200 812
01-2102-6393 Contractual Services 90,000 (42,634) 47,366
01-2500-6318 Recording Fees 3,500 1,500 5,000
01-3000-6110 Salaries&Wages 167,704 15,296 183,000
01-3000-6113 Longevity 2,352 (352) 2,000
01-3000-6124 TMRS 10,770 1,230 12,000
01-3000-6126 Social Security 13,021 1,479 14,500
01-3400-6115 Extra Help 10,000 (8,000) 2,000
01-5100-6110 Salaries&Wages 192,907 (9,907) 183,000
01-5100-6124 TMRS 13,180 (380) 12,800
01-5100-6126 Social Security 25,344 (844) 24,500
01-9000-6336 Retiree Accrued Compensation 25,000 (17,653) 7,347
01-9000-6907 Transfer to Capital Outlay - 25,000 25,000
TOTAL 1,114,169 (2,431) 1,111,738
JUSTIFICATION
Mid-year budget amendments
Salary and benefits adjusted to reflect personnel changes,such as retirement of PW Director.
Dispatch allocation and emergency mgt adjusted for 2016 PSG local match.
Dept.Head Signature: Date:
Finance Director: Date:
Date Approved: Date Posted:
Page of
CITY OF NEDERLAND
BUDGET AMENDMENT REQUEST
FISCAL YEAR: 2016-2017
DATE: April 10,2017
DEPARTMENT: Various
FUND: Water&Sewer(50),Solid Waste(52)
Dispatch(70),Capital Outlay(31)
AMOUNT
CURRENT INCREASE PROPOSED
ACCOUNT NO. ACCOUNT TITLE BUDGET (DECREASE) BUDGET
50-6300-6210 General Office Supplies 150 18,450 18,600
50-9000-6406 Contingency 85,076 (18,450) 66,626
52-3300-6744 Miscellaneous Equipment - 6,816 6,816
52-9000-6406 Contingency 31,662 (6,816) 24,846
70-0000-4360 Grants&Entitlements - 340,619 340,619
70-0000-4390 Contributions-Groves 465,877 39,228 505,105
70-0000-4392 Contributions-Port Neches 408,572 31,678 440,250
70-0000-4394 Contributions-Nederland 491,779 42,634 534,413
70-0000-4700 Miscellaneous Equipment - 6,530 6,530
70-2100-6333 Training&Travel 750 6,030 6,780
70-2100-6747 Radio&Radar Equipment - 454,159 454,159
31-0000-4901 Transfer In - 25,000 25,000
TOTAL 1,483,866 945,878 2,429,744
JUSTIFICATION
Mid-year budget amendments
Adjustments in Water&Sewer Fund(furniture for Service Center)and in Solid Waste(file!tracking system)have$0 effect on budget.
Adjustments in Dispatch Fund reflect 2016 Port Security Grant and interlocal agreement between Ned,PN,and Groves.
Dept.Head Signature: Date:
Finance Director: Date:
Date Approved: Date Posted:
Page of
Ordinance Number 2017-09
AN ORDINANCE
1 1
AUTHORIZING THE ISSUANCE OF
CITY OF NEDERLAND,TEXAS,
TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2017;
AND LEVYING AN AD VALOREM TAX;
PLEDGING CERTAIN NET REVENUES; AUTHORIZING
THE EXECUTION OF A TRANSFER AND
PAYING AGENCY AGREEMENT;
AND OTHER MATTERS IN CONNECTION THEREWITH
CITY OF NEDERLAND,TEXAS
ADOPTED April 10,2017
56355884.2
r
TABLE OF CONTENTS
Page
ARTICLE ONE
THE CERTIFICATES
SECTION 1.1 Authorization and Terms; Purpose 2
SECTION 1.2 Redemption 3
SECTION 1.3 Execution,Registration,Delivery, and Dating 5
SECTION 1.4 Registration,Transfer, and Exchange 6
SECTION 1.5 Mutilated,Destroyed, Lost,and Stolen Certificates 7
SECTION 1.6 Persons Deemed Owners 7
SECTION 1.7 Cancellation 8
SECTION 1.8 ;',Book-Entry Only 8
ARTICLE TWO
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 2.1 Definitions 10
SECTION 2.2 Notices 14
SECTION 2.3 Effect of Headings and Table of Contents;Recitals 14
SECTION 2.4 Ordinance a Contract; Amendments 14
SECTION 2.5 Benefits of Ordinance 15
SECTION 2.6 Repealer 15
SECTION 2.7 Governing Law 15
SECTION 2.8 Severability 16
SECTION 2.9 Public Meeting 16
SECTION 2.10 Authority of Officers 16
ARTICLE THREE
FORMS
SECTION 3.1 Forms Generally 17
SECTION 3.2 Form of Definitive Certificate 18
SECTION 3.3 Form of Registration Certificate of Comptroller of Public Accounts 25
SECTION 3.4 Form of Certificate of Paying Agent 265
SECTION 3.5 Form of Assignment 26
SECTION 3.6 Form of Initial Certificate 27
SECTION 3.7 Insurance Legend
ARTICLE FOUR
TAXES,REVENUES, AND FUNDS; INVESTMENTS
SECTION 4.1 Certificate Fund 28
SECTION 4.2 Deposits to Certificate Fund; Excess Certificate Proceeds 28
SECTION 4.3 System Account 28
SECTION 4.4 Construction Accounts 29
SECTION 4.5 Investments and Security For Funds 29
SECTION 4.6 Tax Levy 30
56355884.2 i
TABLE OF CONTENTS
Page
SECTION 4.7 Net Revenues 30
SECTION 4.8 Issuance of Additional Obligations 31
ARTICLE FIVE
COVENANTS
SECTION 5.1 To Maintain Agency 32
SECTION 5.2 To Maintain and Operate the System and Insure Property 32
SECTION 5.3 Rates and Charges 33
SECTION 5.4 Records and Accounts, Annual Audit 33
SECTION 5.5 Special Covenants 33
SECTION 5.6 Covenants to Maintain Tax-Exempt Status 34
SECTION 5.7 Remedies in Event of Default 36
ARTICLE SIX
DEFEASANCE
SECTION 6.1 Discharge of Obligations 38
ARTICLE SEVEN
SALE
SECTION 7.1 Sale of the Certificates 40
SECTION 7.2 Payment of Costs of Issuance; Engagement of Bond Counsel 40
SECTION 7.3 Official Statement 41
ARTICLE EIGHT
CONTINUING DISCLOSURE UNDERTAKING
SECTION 8.1 Definitions 42
SECTION 8.2 Updated Information and Data 42
SECTION 8.3 Material Event Notices 43
SECTION 8.4 Limitations,Disclaimers, and Amendments 43
56355884.2 ll
AN ORDINANCE
AUTHORIZING THE ISSUANCE OF
CITY OF NEDERLAND, TEXAS,
TAX AND REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2017;
AND LEVYING AN AD VALOREM TAX;
PLEDGING CERTAIN NET REVENUES; AUTHORIZING
THE EXECUTION OF A TRANSFER AND
PAYING AGENCY AGREEMENT;
AND OTHER MATTERS IN CONNECTION THEREWITH
RECITALS
1. The City Council (the "Governing Body") of the City of Nederland, Texas (the
"Issuer"), a home rule city, has given notice of its intent to issue certificates of obligation (the
"Certificates") in an amount not to exceed $6,500,000 for the purpose of paying contractual
obligations of the Issuer to be incurred for construction of public works,and purchase of materials,
supplies, equipment, machinery, buildings, land, and rights-of-way for authorized needs and
purposes, to wit: (1) rehabilitation and improvement of streets and roads within the Issuer, (2)
drainage improvements throughout the Issuer; and (3)to pay for professional services related
thereto and the issuance costs of the Certificates. The notice was published once a week for two
consecutive weeks in a newspaper of general circulation in the Issuer, the first publication being
before and not less than 30 days prior to the tentative date stated in the notice for the passage of
this ordinance.
2. No petition signed by at least 5% of the qualified electors of the Issuer protesting
the issuance of the Certificates has been presented to or filed with the City Clerk of the Issuer prior
to the date set in such notice for passage of this Ordinance,nor has any such petition been filed as
of this date.
3. The Governing Body has found and determined that $5,500,000 in aggregate
principal amount of the Certificates described in such notice should now be issued and sold, and
has adopted this ordinance authorizing issuance of such Certificates.
4. It is in the Issuer's best interest to issue the certificate of obligations described
herein.
NOW,THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
'NEDERLAND,TEXAS,THAT:
56355884.2 1
ARTICLE ONE
THE CERTIFICATES
SECTION 1.1 Authorization and Terms; Purpose.
A. Authorization, Title, Principal Amount, and Purpose. The Certificates are hereby
authorized to be issued in the aggregate principal amount of $5,500,000 and are entitled the
Issuer's "TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2017", to pay
contractual obligations incurred to make permanent public improvements and for other public
purposes all as stated in Recital 1 hereto,pursuant to the authority conferred by and in conformity
with the laws of the State of Texas, particularly Texas Government Code section 1502.052, and
the Certificate of Obligation Act of 1971,Texas Local Government Code sections 271.041 through
271.065, each as now in effect. The Certificates shall have a Dated Date of May 1, 2017 (which
is the`,`.Dated Date"of the Certificates and to be inserted below"Dated D„ate” immediately below
the title thereof).
B. Denominations, Maturities, Rates of Interest. The Stated Maturities of the
Certificates are September 1 of the years and the aggregate principal amounts set forth below in
this Subsection,and interest on the Certificates of each Stated Maturity accrues from the IssueDate
or the most recent Interest Payment Date to which interest has been paid or duly provided for,until
such Certificates are paid or due provision therefor is made at or after the Maturity thereof, at the
per annum rates set forth opposite such Stated Maturity below, calculated on the basis of a 360-
day year of twelve 30-day months and payable semiannually on each September 1 and March 1
commencing September 1, 2017:
Year of Principal Interest
Stated Maturity Amount($) Rate(%)
2018 110,000
2019 110,000
2020 595,000
2021 610,000
2022 630,000
2023 650,000
2024 670,000
2025 685,000
2026 710,000
2027 730,000
C. Payment. The principal and Redemption Price of the Certificates is payable upon
surrender, and the interest on the Certificates is payable,at the corporate trust office of the Paying
Agent in Austin, Texas or at such other city as designated by the Issuer upon Notice to the
Registered Owners. Such place is herein referred to as the"Place of Payment".
The Issuer shall transfer the principal and Redemption Price of the Certificates to the
Paying Agent on or prior to the date it is due.
56355884.2 2
If the specified date for any payment of principal (or Redemption Price) of or interest on
the Certificates is a Saturday, Sunday, or legal holiday or equivalent(other than a moratorium)for
banking institutions generally in the city of the Place of Payment, such payment may be made on
the next succeeding day which is not one of the foregoing days without additional interest and with
the same force and effect as if made on the specified date for such payment.
D. Payment of Interest; Interest Rights Preserved. Interest on any Certificate is
payable to the Registered Owner thereof as of the Record Date and is payable(i)by check sent by
United States Mail, first-class postage prepaid, by the Paying Agent, to the address of the
Registered Owner appearing in the Security Register, or (ii) by such other method acceptable to
the Paying Agent requested in writing by the Registered Owner at the Registered Owner's risk and
expense.
In the event of a not 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, if and when funds for the payment of such interest have been
received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of
the past due interest ("Special Payment Date", 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 Registered Owner of a Certificate appearing
on the registration books of the Paying Agent at the close of business on the last business day next
preceding the date of mailing of such notice. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest must be paid to the Persons in whose names the Certificates (or their respective
Predecessor Certificates) are registered on such Special Record Date.
E. Legal Tender. The principal or Redemption Price of and interest on the Certificates
is payable in any coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts,without exchange or collection charges
to the Registered Owner.
SECTION 1.2 Redemption.
A. Optional and Mandatory Redemption. The Certificates are subject to redemption at
the option of the Issuer and by mandatory redemption prior to Stated Maturity on the Redemption
Dates and Redemption Prices as provided in the Form of Certificate in Section 3.2.
B. Exercise of Redemption Option. At least 45 days prior to a date of redemption(the
"Redemption Date")(unless a shorter notification period shall be satisfactory to the Paying Agent),
the Issuer shall notify the Paying Agent of its decision to exercise the right to optionally redeem
Certificates, the principal amount of each Stated Maturity to be redeemed, and the Redemption
Date. The decision of the Issuer to exercise the right to redeem Certificate shall be entered in the
minutes of the Governing Body.
C. Selection of Certificates for Redemption. If less than all Outstanding Certificates
•
of the same Stated Maturity are to be redeemed on a Redemption Date, the Paying Agent shall
56355884.2 3
select at random and by lot the Certificates to be redeemed, provided that if less than the entire
principal amount of a Certificate is to be redeemed, the Paying Agent shall treat such Certificate
then subject to redemption as representing the number of Certificates Outstanding which is
obtained by dividing the principal amount of such Certificate by$5,000.
D. Notice of Redemption. Not less than 30 days prior to a Redemption Date,the Issuer
shall cause a notice of redemption to be sent by United States Mail, first-class postage prepaid, in
the name of the Issuer and at the Issuer's expense, by the Paying Agent to each Holder of a
Certificate to be redeemed in whole or in part at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such notice,
and any notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder. All notices of redemption shall state:
(1) the Redemption Date,
(2) the redemption price (the "Redemption Price"),
(3) the principal amount and identification (by Issuer and Certificate name,
CUSIP number, Stated Maturity, interest rate, Dated Date, and, in the case of partial
redemption,the Certificate numbers and respective principal amounts)of Certificates to be
redeemed,
(4) that on the Redemption Date the Redemption Price of each of the
Certificates to be redeemed will become due and payable and that interest thereon shall
cease to accrue from and after said date, and
(5) that the Certificates to be redeemed are to be surrendered for payment of the
Redemption Price at the Place of Payment, and the address of such Place of Payment.
E. Limitation on Transfer/Exchange of Certificates. Neither the Issuer nor the Paying
Agent is required to transfer or exchange any Certificates selected for redemption within 45 days
of the Redemption Date,provided however,such limitation shall not be applicable to an exchange
by the Holder of the unredeemed balance of a Certificate which is subject to partial redemption.
F. Payment of the Redemption Price. If a Certificate is subject by its terms to
redemption and has been called for redemption and notice of redemption thereof has been duly
given as hereinabove provided, such Certificate (or the principal amount thereof to be redeemed)
so called for redemption shall become due and payable, and if money sufficient for the payment
of such Certificates (or of the principal amount thereof to be redeemed) at the then applicable
Redemption Price is held for the purpose of such payment by the Paying Agent, then on the
Redemption Date, interest on the Certificate (or the principal amount thereof to be redeemed)
called for redemption shall cease to accrue and such Certificates shall no longer be deemed
Outstanding hereunder.
If any Certificate called for redemption shall not be so paid upon surrender thereof for
redemption,the same shall continue to bear interest from the Redemption Date therefore at the rate
borne by such Certificates.
56355884.2 4
SECTION 1.3 Execution, Registration, Delivery, and Dating.
The Mayor of the Issuer shall execute the Certificates on behalf of the Issuer and such
signature shall be attested by the City Clerk of the Issuer. The signature of either of said officers
on the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile
signatures of individuals who were at the time the proper officers of the Issuer bind the Issuer,
notwithstanding that such individuals or either of them cease to hold such offices prior to the
certification and delivery of such Certificates.
The Mayor of the Issuer is authorized and directed to execute and the City Clerk of the
Issuer to attest the Initial Certificates in the name of Cede&Co. The Mayor of the Issuer is further
authorized and directed to submit the Initial Certificates, together with the record of the
proceedings authorizing the issuance thereof and any and all other necessary orders, certificates,
and records, to the Attginey General of Texas for approval. Aftet the Attorney General has
approved such Certificates,the Mayor of the Issuer shall cause such Certificates to be delivered to
the Comptroller of Public Accounts of the State of Texas for registration. If requested by the
Attorney General or its representatives,or if otherwise deemed necessary to properly evidence the
intent of the Issuer in the adoption of this Ordinance, the Mayor or Mayor pro tern of the Issuer
may make such ministerial changes in the written text of this Ordinance as such officer determines
are consistent with the intent and purposes of this Ordinance, which determination shall be final.
Upon registration of the Certificates, the Comptroller is authorized and directed to deliver the
Certificates in accordance with instructions of the Mayor of the Issuer. At any time thereafter the
Issuer may deliver such Certificates to the Paying Agent together with definitive Certificates to be
issued in exchange therefor, and the Paying Agent is directed, within not more than five business
days following receipt of instructions from the payee named therein designating the Persons,
Stated Maturities, and denominations to and in which such Certificates are to be transferred,
register and deliver such definitive Certificates as provided in such instructions. The officers or
acting officers of the Governing Body are authorized to execute and deliver on behalf of the
Governing Body such certificates and instruments as may be necessary to accomplish or in
furtherance of the delivery of the Certificates to and payment therefor by the Purchasers.
All Certificates registered and delivered by the Paying Agent hereunder are to be dated by
the Paying Agent the date of their registration.
No Certificate is entitled to any right or benefit under this Ordinance, or is valid or
obligatory for any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Section 3.3, executed by the Comptroller of
Public Accounts of the State of Texas or his duly authorized agent by manual signature, or a
certificate of registration substantially in the form provided in Section 3.4,executed by the Paying
Agent by manual signature,and either such certificate upon any Certificate is conclusive evidence,
and the only evidence,that such Certificate has been duly certified or registered and delivered.
SECTION 1.4 Registration, Transfer, and Exchange.
The Issuer shall cause to be kept at the Place of Payment a register (herein referred to as
the"Security Register")in which,subject to such reasonable regulations as the Issuer or the Paying
56355884.2 5
Agent may prescribe,the Paying Agent shall provide for the registration of the Certificates and of
transfers of the Certificates as herein provided.
Upon surrender for transfer of any Certificate at the Place of Payment, the Issuer shall
execute, and the Paying Agent shall register and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Stated Maturity, of any authorized
denominations, and of a like aggregate principal amount. New Certificates registered, and
delivered in an exchange or transfer will be delivered by the Paying Agent at the Place of Payment
or sent by United States mail at the Registered Owner's written request,risk, and expense.
At the option of the Registered Owner,Certificates may be exchanged for other Certificates
of the same Stated Maturity, of any authorized denominations, and of like aggregate principal
amount, upon surrender of the Certificates to be exchanged at the Place of Payment. Whenever
any Certificates are so s surrendered for exchange, the Issuer shall execute, and the Paying Agent
shall register and deliver, the Certificates which the Registered Owner of Certificates making the
exchange is entitled to receive.
All Certificates issued in any transfer or exchange of Certificates shall be delivered to the
Registered Owners at the principal corporate trust office of the Paying Agent or sent by United
States Mail, first class, postage prepaid to the Registered Owners, and, upon the registration and
delivery thereof, the same shall be the valid obligations of the Issuer, evidencing the same
obligation to pay, and entitled to the same benefits under this Ordinance, as the Certificates
surrendered in such transfer or exchange.
Every Certificate presented or surrendered for transfer or exchange must be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to the Paying Agent
duly executed,by the Registered Owner thereof or his attorney duly authorized in writing.
No service charge may be made to the Registered Owner for any registration, transfer, or
exchange of Certificates, but the Issuer or the Paying Agent may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
Neither the Issuer nor the Paying Agent is required (1) to transfer or exchange any
Certificate during a period beginning 45 days prior to a Redemption Date hereunder and ending at
the close of business on the day of mailing of a notice of redemption or (2) thereafter to transfer
or exchange in whole or in part any Certificate so selected for redemption.
SECTION 1.5 Mutilated, Destroyed, Lost, and Stolen Certificates.
If(1) any mutilated Certificate is surrendered to the Paying Agent, or the Issuer and the
Paying Agent receive evidence to their satisfaction of the destruction, loss, or theft of any
Certificate,and(2)there is delivered to the Issuer and the Paying Agent such security or indemnity
as they require to save each of them harmless, then, in the absence of notice to the Issuer or the
Paying Agent that such Certificate has been acquired by a bona fide purchaser, the Issuer shall
execute and upon its request the Paying Agent shall register and deliver,in exchange for or in lieu
of any such mutilated, destroyed, lost, or stolen Certificate, a new Certificate of the same Stated
56355884.2 6
Maturity, and of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost, or stolen Certificate has become or is about to
become due and payable, the Issuer in its discretion may pay such Certificate instead of issuing a
new Certificate.
Upon the issuance of any new Certificate under this Section,the Issuer or the Paying Agent
may require the payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any mutilated, destroyed,
lost, or stolen Certificate constitutes an original additional contractual obligation of the Issuer,
whether or not the mutilated, destroyed, lost, o`r stolen Certificate is;,'at any time enforceable by
anyone, and the new Certificate is entitled to all the benefits of this Ordinance equally and ratably
with all other Outstanding Certificates.
The provisions of this Section are exclusive and preclude (to the extent lawful) all other
rights and remedies with respect to the replacement and payment of mutilated, destroyed, lost, or
stolen Certificates.
SECTION 1.6 Persons Deemed Owners.
The Issuer and the Paying Agent, and any agent of either,may treat the Registered Owner
as the owner of a Certificate for purposes of receiving payment of principal and Redemption Price
of and (subject to Section 1.1) interest on the Certificate and for all other purposes whatsoever,
whether or not the Certificate is due or overdue, and neither the Issuer nor the Paying Agent, or
any agent of either, is affected by notice to the contrary. All payments made to or duly provided
for the Bondholder in accordance with this Ordinance will be valid and effectual and will discharge
the liability of the Issuer to the extent of the sums paid in or duly provided for.
SECTION 1.7 Cancellation.
All Certificates surrendered for payment, redemption, transfer, exchange, or replacement,
if surrendered to the Paying Agent, are to be promptly canceled by it and, if surrendered to the
Issuer, are to be delivered to the Paying Agent and, if not already canceled, are to promptly be
canceled by the Paying Agent. The Issuer may at any time deliver to the Paying Agent for
cancellation any Certificates previously certified and delivered which the Issuer acquires in any
manner whatsoever, and all Certificates so delivered are to be promptly canceled by the Paying
Agent. No Certificate may be certified in lieu of or in exchange for any Certificate canceled as
provided in this Section,except as expressly provided by this Ordinance. All canceled Certificates
held by the Paying Agent are to be disposed of in accordance with the standard document retention
policies of the Issuer.
56355884.2 7
SECTION 1.8 Book-Entry Only.
Notwithstanding the provisions contained in Sections 1.3, 1.4 and 1.5 relating to the
payment, redemption and transfer/exchange of the Certificates, the Issuer hereby approves and
authorizes the use of "Book-Entry Only" securities clearance, settlement and transfer system
provided by The Depository Trust Company("DTC"), a limited purpose trust company organized
under the laws of the State of New York,in accordance with DTC's requirements and procedures,
and authorizes the Issuer and the Paying Agent to take such as actions as are necessary to qualify
the Certificates with DTC and to deliver the Certificates through DTC.
Pursuant to the rules and procedures of DTC now in effect, the Certificates shall be
deposited with DTC(or with the Paying Agent on behalf of DTC)who shall hold said Certificates
for its participants (the "DTC Participants"). While the Certificates are so held, the Registered
Owner of the Certificates on the Security Register for all purposes,including payment and notices,
shall be Cede&Co., as nominee of DTC,notwithstanding the ownership of each actual purchaser
or owner of each Certificate (the "Beneficial Owners")being recorded in the records of DTC and
DTC Participants.
In the event DTC determines to discontinue serving as securities depository for the
Certificates or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the Issuer determines that DTC is incapable of properly discharging its
duties as securities depository for the Certificates, the Issuer covenants and agrees with the
Registered Owners of the Certificates to cause Certificates to be printed in definitive form and
provide for the certificated certificates to be issued and delivered to DTC Participants and
Beneficial Owners, as the case may be. Thereafter, the Certificates in definitive form shall be
assigned,transferred and exchanged on the Security Register maintained by the Paying Agent and
payment of such Certificates shall be made in accordance with the provisions of Sections 1.3, 1.4
and 1.5.
56355884.2 8
ARTICLE TWO
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
SECTION 2.1 Definitions.
For all purposes of this Ordinance, except as otherwise expressly provided or unless the
context otherwise requires:
(1) The terms defined in this Section have the meanings assigned to them in
this Section.
(2) All terms defined herein include the plural as well as the singular.
(3) "' All references in this Ordinance to designated "Articles", "Sections",
"Exhibits", and other subdivisions are to the designated Articles, Sections, Exhibits, and
other subdivisions of this Ordinance as originally adopted.
(4) The words "herein", "hereof', and"hereunder" and other words of similar
import refer to this Ordinance as a whole and not to any particular Article,Section,Exhibit,
or other subdivision.
"Certificate Fund" means the special fund of the Issuer created and established by the
provisions of Section 4.1.
"Certificates" means any obligation of the Issuer authorized to be issued by Article One,
whether initially delivered or issued in exchange for or upon transfer or in lieu of any Predecessor
Certificate.
"Code"means the Internal Revenue Code of 1986,as amended by any amendments thereto
enacted prior to the Issue Date.
"Collection Date"means,for any year,the date that annual ad valorem taxes levied by the
Issuer in that year become delinquent.
"Computation Date"has the meaning set forth in section 1.148-1(b)of the Regulations.
"Debt Service Requirement"has the meaning stated in Section 4.6.
"Fiscal Year" means the annual financial accounting period for the Issuer as established
by the Issuer on or prior to the date of this Ordinance; provided, however, the Governing Body
may change such annual financial accounting period to end on another date if such change is found
and determined to be necessary for accounting purposes or is required by applicable law.
"Governing Body"means the City Council of the Issuer.
56355884.2 9
"Governmental Obligations" means (1) direct obligations of, or obligations the timely
payment of the principal of and interest on which are fully and unconditionally guaranteed by,the
United States of America, or (2) obligations authorized under Texas law from time to time for
discharge and final payment of political or governmental obligations which,at the time of deposit
have been assigned ratings in the highest rating category by a nationally recognized investment
rating firm, but in the case of both Clauses (1) and (2) only if such obligations may not be called
for redemption prior to maturity.
"Gross Proceeds"means any proceeds as defined in section 1.148-1(b)of the Regulations,
and any replacement proceeds as defined in section 1.148-1(c) of the Regulations, of the
Certificates.
"Gross Revenues" for any period means all revenue during such period in respect or on
account of the operation or ownership of;the System, excluding';refundable deposits,;.restricted
gifts, refunds for amounts advanced in aid of construction, and grants in aid of construction, but
including earnings and income derived from the investment or deposit of money in any special
fund or account (other than earnings on the Certificate Fund) created and established for the
payment or security of the Certificates.
"Interest Payment Date"means a date specified in the Certificates as a fixed date on which
an installment of interest thereon is due and payable.
"Issue Date"means the date on which Certificates are first registered and delivered to the
Purchasers in exchange for the purchase price therefor.
"Issuer"has the meaning stated in the Recitals.
"Investment"has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Maintenance and Operating Expenses" means all current expenses of operating and
maintaining the System not paid from the proceeds of the Certificates, including the cost of all
salaries, labor, materials, interest, repairs, and extensions necessary to provide efficient service,
and each proper item of expense,but only if, in the case of repairs and extensions,they are, in the
judgment of the Governing Body,necessary to keep the System in operation and render adequate
service to the Issuer and its residents, or respond to a physical accident or condition that would
otherwise impair the Certificates or Prior Obligations or Parity Obligations.
"Maturity"when used with respect to any Certificate means the date on which the principal
of such Certificate becomes due and payable as therein provided, whether at the Stated Maturity,
by call for redemption, or otherwise.
"Net Revenues" for any period means the Gross Revenues less the Maintenance and
Operating Expenses.
"Nonpurpose Investment" means any investment property, as defined in section 148(b) of
the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to
carry out the governmental purposes of the Certificates.
56355884.2 10
"Ordinance" means this Ordinance as finally passed and adopted by the Governing Body
or as it may from time to time be supplemented, modified, or amended in accordance with the
provisions hereof
"Outstanding" when used with respect to Certificates means, as of the date of
determination, all Certificates theretofore issued and delivered under this Ordinance, except,
without duplication:
(1) Canceled Certificates: Certificates theretofore canceled by the Paying
Agent or delivered to the Paying Agent for cancellation;
(2) Gross Cash Defeasance: Certificates for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Paying Agent in
trust for the Registered Owner of such,Certificates, provided,that, if such Certificates are
to be redeemed,notice of such redemption has been duly given pursuant to this Ordinance,
irrevocably provided for to the satisfaction of the Paying Agent, or waived;
(3) Replaced Certificates: Certificates in exchange for or in lieu of which other
Certificates have been registered and delivered pursuant to this Ordinance;
(4) Paid Missing Certificates: Certificates alleged to have been destroyed,lost,
or stolen which have been paid as provided in Section 1.5; and
(5) Net Cash Defeasance : Certificates for the payment of the principal (or
Redemption Price) of and interest on which money or Governmental Obligations or both
are held by the Paying Agent or other bank or trust company and with the effect specified
in Section 6.1;
provided, however, that in determining whether the Registered Owners of the requisite principal
amount of Certificates Outstanding have given any request, demand, authorization, direction,
notice, consent, or waiver hereunder, Certificates owned by the Issuer or any other obligor upon
the Certificates are disregarded and deemed not Outstanding, except that, in determining whether
the Paying Agent is protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Certificates which the Paying Agent knows to be so owned are
required to be so disregarded.
"Parity Obligations" means the obligations of the Issuer now or hereafter issued with a
lien on Net Revenues on a parity with the lien on Net Revenues granted the Certificates.
"Paying Agent" means the corporation named as the "Paying Agent" herein until a
successor Paying Agent becomes such pursuant to the applicable provisions of this Ordinance,and
thereafter"Paying Agent"means such successor Paying Agent.
"Person" means any individual, corporation, partnership,joint venture, association,joint-
stock company, trust, unincorporated organization, or government or any agency or political
subdivision thereof
56355884.2 11
"Place of Payment" means a corporate trust office of the Paying Agent in the State of
Texas, as established in Section 1.1.
"Predecessor Certificates" of any particular Certificate means every previous Certificate
evidencing all or a portion of the same debt as that evidenced by such particular Certificate, and,
for purposes of this definition, any Certificate registered and delivered under Section 1.5 in lieu
of a mutilated, lost, destroyed, or stolen Certificate is deemed to evidence the same debt as the
mutilated, lost, destroyed, or stolen Certificate.
"Prior Obligations"means the obligations of the Issuer so defined in Section 4.7.
"Purchaser" means the initial purchaser or purchasers of the Certificates named in
Section 7.1 of this Ordinance.
"Rebate Amount"has the meaning set forth in section 1.148-1(b) of the Regulations.
"Redemption Date" means the date fixed for redemption of a Certificate pursuant to the
terms of this Ordinance.
"Redemption Price"means the price specified in the Form of Certificate in Section 3.2 as
the price at which a Certificate may be redeemed pursuant to the terms of the Ordinance.
"Registered Owner" mean the registered owner, whose name appears in the Security
Register, for any Certificate.
"Regular Record Date" for the interest payable on any Interest Payment Date means the
close of business on the 15th day (whether or not a business day) of the calendar month next
preceding such Interest Payment Date.
"Regulations" means any temporary or final Income Tax Regulations issued pursuant to
sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code of 1954,
which are applicable to the Certificates. Any reference to any specific Regulation shall also mean,
as appropriate, any temporary or final Income Tax Regulation designed to supplement, amend or
replace the specific Regulation referenced.
"Security Register"has the meaning stated in Section 1.4.
"Stated Maturity" when used with respect to any Certificate means the date specified in
such Certificate as the fixed date on which the principal of such Certificate is due and payable.
"Subordinate Lien Obligations" means any bonds, notes, warrants, certificates of
obligation, or any similar obligations hereafter issued by the Issuer that are payable, in whole or
in part, from and equally and ratably secured by a lien on and pledge of the Net Revenues, such
pledge being subordinate and inferior to the lien on and pledge of Net Revenues to payment of the
Certificates.
56355884.2 12
"System" means all of the Issuer's waterworks and sewer system, together with all future
extensions, improvements, and additions thereto and replacements thereof, excluding from the
foregoing,however,to the extent now or hereafter authorized or permitted by law,facilities of any
kind which are declared by the Governing Body,prior to the acquisition or construction thereof by
the Issuer, not to be a part of the System and which are acquired or constructed by or on behalf of
the Issuer with the proceeds from the issuance of "Special Facilities Obligations", which are
hereby defined as being special revenue obligations of the Issuer which are not payable from Net
Revenues but which are payable from and secured by other liens on and pledges of any revenues,
sources, or payments,not pledged to the payment of the Certificates.
"Yield"of
(1) any Investment has the meaning set forth in section 1.148-5 of the
Regulations; and
(2) the Certificates has the meaning set forth in section 1.148-4 of the
Regulations.
SECTION 2.2 Notices.
Where this Ordinance provides for notice to Registered Owners of any event, such notice
is sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-
class postage prepaid, to each Registered Owner, at the address of such Registered Owner as it
appears in the Security Register. Neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Registered Owner affects the sufficiency of such notice with
respect to all other Registered Owners. Any notice so mailed shall be conclusively presumed to
have been duly given, whether or not the Registered Owner receives such notice. Where this
Ordinance provides for notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice,either before or after the event with respect to which such notice is
given, and such waiver is the equivalent of such notice. Waivers of notice by Registered Owners
are to be filed with the Issuer, but such filing is not a condition precedent to the validity of any
action taken in reliance upon such waiver.
SECTION 2.3 Effect of Headings and Table of Contents; Recitals.
The section headings herein and in the Table of Contents are for convenience only and do
not affect the construction hereof.
The Recitals contained in the preamble hereof are hereby found to be true, and such
Recitals are hereby made a part hereof for all purposes and are adopted as part of the judgment
and findings of the Governing Body.
SECTION 2.4 Ordinance a Contract;Amendments.
This Ordinance constitutes a contract with the Registered Owners entered into upon the
initial purchase of the Certificates, is binding on the Issuer and its successors and assigns whether
56355884.2 13
or not so expressed, and may not be amended or repealed by the Issuer so long as any Certificate
remains Outstanding except as permitted in this Section.
The Issuer may, without the consent of or notice to any Registered Owner, from time to
time and at any time amend this Ordinance in any manner not detrimental to the interests of the
Registered Owners, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein or therein. In addition,the Issuer may, with the written consent of the Registered
Owners of a majority in aggregate principal amount of the Certificates then Outstanding affected
thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without
the consent of the Registered Owners of all of the affected Outstanding Certificates, no such
amendment, addition, or rescission may (1) change the Stated Maturity of the Certificates or any
Interest Payment Date for an installment of interest thereon, reduce the principal amount thereof,
the Redemption Price therefor, or the rate of interest thereon, change the place or places at, or the
coin or currency in, which any Certificate or the interest thereon is payable, or in any other way
modify the terms or sources of payment of the principal of or interest on the Certificates, (2) give
any preference to any Certificate over any other Certificate, (3) modify any of the provisions of
the proviso to the definition of the term"Outstanding", or(4)modify any of the provisions of this
Section, except to increase the percentage provided hereby or to provide that certain other
provisions of this Ordinance cannot be modified or waived without the consent of the Registered
Owner of each Certificate affected thereby.
Any consent to any amendment hereof by the Registered Owner of any Certificate binds
every future Registered Owner of the same Certificate and the Registered Owner of every
Certificate issued upon transfer or in lieu thereof or in exchange therefor, in respect of anything
done or suffered to be done by the Issuer in reliance thereon,whether or not notation of such action
is made upon such Certificate.
SECTION 2.5 Benefits of Ordinance.
Nothing in this Ordinance,expressed or implied, is intended or may be construed to confer
upon any Person(other than the Issuer and Registered Owners) any right, remedy, or claim, legal
or equitable, under or by reason of this Ordinance or any provision hereof,this Ordinance and all
its provisions being intended to be and being for the sole and exclusive benefit of the Issuer and
the Registered Owners.
SECTION 2.6 Repealer.
All orders, ordinances, and resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Ordinance are hereby repealed and declared to be
inapplicable to the extent of such conflict, and the provisions of this Ordinance are controlling as
to the matters prescribed herein.
SECTION 2.7 Governing Law.
This Ordinance is to be construed in accordance with and governed by the laws of the State
of Texas and the United States of America.
56355884.2 14
SECTION 2.8 Severability.
If any provision of this Ordinance or the application thereof to any Person or circumstance
is held to be invalid, illegal, or unenforceable,the remainder of this Ordinance and the application
of such provision to other Persons and circumstances is nevertheless valid, legal, and enforceable
and the Governing Body hereby declares that this Ordinance would have been enacted without
such invalid provision or application.
SECTION 2.9 Public Meeting.
The Governing Body officially finds, determines, and declares that notice of the adoption
of this Ordinance was posted as required by law at a location within the Issuer in a place readily
accessible to the general public at all times for at least 72 hours preceding the scheduled time of
the meetings at which this Ordinance is'read and approved; that such meetings were open to the
public; and that public notice of the time, place, and purpose of such meetings was given as
required by Texas Government Code chapter 551, as amended.
SECTION 2.10 Authority of Officers.
The Mayor, the Mayor Pro Tem, the City Clerk or any assistant City Clerk, Manager,
Attorney, or Director of Finance of the Issuer, or any of them, are authorized to evidence adoption
of this Ordinance and to do any and all things proper and necessary to carry out the intent hereof.
56355884.2 15
ARTICLE THREE
FORMS
SECTION 3.1 Forms Generally.
The Certificates, the Registration Certificate of the Comptroller of Public Accounts of the
State of Texas to be reproduced on the initial Certificates,the Registration Certificate of the Paying
Agent to be reproduced on subsequently delivered Certificates, and the form of Assignment to be
reproduced on each of the Certificates are to be substantially in the forms set forth in this Article
with such appropriate insertions, omissions, substitutions,and other variations as are permitted or
required by this Ordinance, and the Certificates may have such letters,numbers,or other marks of
identification (including identifying numbers and letters of the Committee on Uniform Securities
Identification Procedures of the American Bankers Association) and such legends and
endorsements.;(including any reproduction of an opinion of counsel or notice of insurance)thereon
as may, consistently'herewith, be determined by the officers executing such Certificates as
evidenced by their execution thereof. Any portion of the text of any Certificates may be set forth
on the reverse thereof,with an appropriate reference thereto on the face of the Certificate.
The Certificates may be printed, lithographed, engraved, typewritten, photocopied, or
produced by any combination of these methods,or produced in any other manner,all as determined
by the officers executing such Certificates as evidenced by their execution thereof. The initial
Certificates to be delivered to the Attorney General may be issued either (i) as a single fully
registered certificate in the total principal amount of the Certificates with principal installments
to become due and payable as provided in Section 1.1 hereof and numbered consecutively T-1 and
upward, or (ii) as fully registered certificates, being one note for each stated maturity in the
applicable principal amount and denomination and to be numbered consecutively from T-1 and
upward (hereinafter called the"Initial Certificate(s)").
[The remainder of this page intentionally left blank.]
56355884.2 16
SECTION 3.2 Form of Definitive Certificate.
Unless this certificate is presented by an authorized representative of The Depository Trust
Company, a New York corporation ("DTC"), to the Issuer or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC(and any payment is made
to Cede& Co. or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede& Co.,
has an interest herein.
REGISTERED REGISTERED
NO. $
United States of America
State of Texas
CITY OF NEDERLAND, TEXAS
TAX AND REVENUE CERTIFICATE OF OBLIGATION,
SERIES 2017
Interest Rate: Dated Date: Stated Maturity: CUSIP NO:
May 1, 2017
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Nederland, Texas (hereinafter together with its successors referred to as the
"Issuer"),a body politic and municipal corporation duly organized and existing under and by virtue
of the laws of the State of Texas, for value received, hereby promises to pay, but solely to and
from the extent of the sources described herein, to the Registered Owner specified above or
registered assigns, on the Stated Maturity specified above,the Principal Amount specified above,
and to pay interest thereon to the Person herein specified from the Issue Date thereof, or from the
most recent Interest Payment Date to which interest has been paid or duly provided for, until such
principal is paid or duly provided for on or after such Stated Maturity or any earlier Redemption
Date, semiannually on September 1 and March 1 in each year commencing September 1, 2017, at
the per annum Interest Rate specified above, computed on the basis of a 360-day year of twelve
30-day months and, except as otherwise permitted by the Ordinance hereinafter referred to, to
make the payments to the United States of America in the amounts and on the date therein
described when due. Principal of this Bond is payable at its Stated Maturity to the Registered
Owner hereof, upon presentation and surrender, at the principal payment office of the Paying
Agent executing the Registration Certificate of Paying Agent appearing hereon, which shall
initially be BOKF, NA dba Bank of Texas, or its successor in its designated place of payment,
initially Austin,Texas(the"Place of Payment").
56355884.2 17
The interest so payable on, and paid or duly provided for on or within 10 days after, any
Interest Payment Date will be paid to the Person in whose name this Certificate (or one or more
Predecessor Certificates evidencing the same debt) is registered at the close of business on the
Regular Record Date for such interest, which is the 15th day (whether or not a business day) of
the calendar month next preceding such Interest Payment Date. Any such interest not so paid or
duly provided for ceases to be payable to the Person in whose name such Certificate is registered
on such Regular Record Date, and shall be paid to the Person in whose name this Certificate (or
one or more Predecessor Certificates) is registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest to be fixed by the Paying Agent, notice whereof
being sent to the Registered Owners of the Certificates not less than five business days prior to
the Special Record Date. All such interest is payable at the Place of Payment. Such interest is
payable (1) by check or draft mailed to the address of the Registered Owner as the same appears
on the Security Register of the Issuer kept by the Paying Agent,as Registrar,or(2) in accordance
with other customary arrangements acceptable to the Paying Agent made by the Registered Owner.
The principal or Redemption Price of this Certificate is payable at the Place of Payment upon
presentation and surrender of this Certificate. All such payments must be made in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of
public and private debts.
If the specified date for any such payment is a Saturday, Sunday, or legal holiday or
equivalent (other than a moratorium) for banking institutions generally in the city in which the
Place of Payment is located, such payment may be made on the next succeeding day which is not
one of the foregoing days without additional interest and with the same force and effect as if made
on the specified date for such payment.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of$5,500,000 (the "Certificates") pursuant to an Ordinance adopted by the governing
body of the Issuer (the "Ordinance"), to pay contractual obligations of the Issuer incurred
construction of public works, and purchase of materials, supplies, equipment, machinery,
buildings, land, and rights-of-way for authorized needs and purposes,to wit: (1)rehabilitation and
improvement of streets and roads within the Issuer, (2) drainage improvements throughout the
Issuer; and (3)to pay for professional services related thereto and the issuance costs of the
Certificates,under and in strict conformity with the laws of the State of Texas,particularly Texas
1502.052 section and the Certificate of Obligation, Act of 1971, as amended, Texas Local
Government Code sections 271.041 through 271.063, as amended.
The Certificates with a Stated Maturity on or after September 1,2027 may be redeemed at
the option of the Issuer, on notice mailed to the Registered Owners thereof not less than 30 days
prior to the Redemption Date as provided in the Ordinance,as a whole or from time to time in part
in integral multiples of$5,000 principal on any date prior to their Stated Maturity, but not before
September 1, 2026,upon payment of the Redemption Price,which is the principal amount thereof
together with interest, if any, accrued from the most recent Interest Payment Date to the
Redemption Date. The optional redemption of certificates may be conditioned upon issuance of
one or more series of refunding bonds or obligations to pay the redemption price of the Bonds to
be redeemed on or prior to the redemption date.
56355884.2 18
[Certificates maturing on the dates specified below are subject to mandatory redemption
prior to maturity in the principal amounts and on the redemption dates set out below, at a price
equal to such principal amounts plus accrued interest from the most recent interest payment date
to such redemption dates:
$ Certificates maturing September 1, 20_
Redemption Date Principal
(September 1) Amount($)
Such Certificates to be redeemed shall be selected by lot from and among the Certificates of such
maturity then subject to redemption. The Issuer, at its option, may credit against any mandatory
sinking fund redemption requirement Certificates of the maturity then subject to redemption which
have been purchased and canceled by the Issuer or have been redeemed and theretofore applied as
a credit against any mandatory sinking fund redemption requirement.]
Certificates of a denomination larger than$5,000 may be redeemed in part(in,and leaving
unredeemed,an authorized denomination)and upon any partial redemption of any such Certificate
the same must be surrendered in exchange for one or more new Certificates of the same Stated
Maturity in authorized denominations for the unredeemed portion of principal. Certificates (or
portions thereof) for whose redemption and payment provision is made in accordance with the
Ordinance cease to bear interest from and after the Redemption Date.
If this Certificate (or any portion of the principal sum hereof) has been duly called for
redemption and notice of such redemption duly given, then upon such redemption date this
Certificate (or the portion of the principal sum hereof to be redeemed) is due and payable, and, if
money for the payment of the redemption price and the interest accrued on the principal amount
to be redeemed to the date of redemption is held for the purpose of such payment by the Paying
Agent, interest ceases to accrue and to be payable hereon from and after the redemption date on
the principal amount hereof to be redeemed.
The Certificates of this series are payable from the proceeds of an ad valorem tax levied
upon all taxable property within the Issuer,within the limitations prescribed by law,and are further
payable from and secured by a lien on and pledge of the Net Revenues derived from the operation
of the Issuer's waterworks and sanitary sewer system (the "System") as identified and defined in
the Ordinance. In the Ordinance, the Issuer reserves and retains the right to issue additional
obligations prior and superior in right to, on a parity with, or subordinate to the Certificates with
respect to the lien on Net Revenues,and the Certificates are issued with the pledge of Net Revenues
subordinate to the pledge of Net Revenues to the Issuer's other outstanding obligations, and any
other obligations of the Issuer hereafter issued which are issued with a pledge of Net Revenues
prior and senior to or on a parity with the pledge of Net Revenues to the Certificates.
56355884.2 19
Reference is hereby made to the Ordinance, copies of which are on file in the principal
corporate trust office of the Paying Agent, and to all of the provisions of which the Registered
Owner by his acceptance hereof hereby assents,for definitions of terms;the description of and the
nature and extent of the tax levied and the revenues pledged for the payment of the Certificates;
the terms and conditions relating to the transfer or exchange of the Certificates; the conditions
upon which the Ordinance may be amended or supplemented with or without the consent of the
Registered Owner;the rights, duties,and obligations of the Issuer and the Paying Agent;the terms
and provisions upon which this Certificate may be redeemed or discharged at or prior to the Stated
Maturity thereof, and deemed to be no longer Outstanding thereunder; and for the other terms and
provisions specified in the Ordinance. Capitalized terms used herein have the same meanings
assigned in the Ordinance.
The Ordinance permits,with certain exceptions as therein provided,the amendment thereof
and the modification of the rights and obligations of the Issuer and the rights of the Registered •
Owners of the Certificates under the Ordinance at any time by the Issuer with the consent of the
Registered Owners of a majority in aggregate principal amount of such Certificates at the time
outstanding affected by such modification. Any such consent by the Registered Owners of this
Certificate or any Predecessor Certificate herefor evidencing the same debt is conclusive and
binding upon such Registered Owner and all future Registered Owners of this Certificate and of
any Certificate issued upon the transfer or in lieu hereof or in exchange herefor, whether or not
notation of such consent is made upon this Certificate.
As provided in the Ordinance and subject to certain limitations therein set forth, this
Certificate is transferable on the Security Register of the Issuer,upon surrender of this Certificate
for transfer to the Paying Agent at the Place of Payment, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Paying Agent duly executed by, the
Registered Owner hereof or its attorney duly authorized in writing, and thereupon one or more
new fully registered Certificates of the same Stated Maturity, of authorized denominations, and
for the same aggregate principal amount will be issued to the designated transferee or transferees.
The Certificates are issuable as fully registered Certificates in denominations of principal,
equal to $5,000 and any integral multiple thereof. Upon surrender of this Certificate for exchange
to the Paying Agent at the Place of Payment, and subject to certain limitations set forth in the
Ordinance,one or more new fully registered Certificates of the same Stated Maturity,of designated
authorized denominations, and for the same aggregate principal amount will be issued to the
Registered Owner of this Certificate.
No service charge may be made for any transfer or exchange hereinabove referred to, but
the Issuer or the Paying Agent may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Issuer,the Paying Agent,and any agent of either of them may treat the Person in whose
name this Certificate is registered as the Registered Owner hereof for the purpose of receiving
payment as herein provided and for all other purposes,whether or not this Certificate be overdue,
and none of the Issuer,the Paying Agent, and any such agent is affected by notice to the contrary.
56355884.2 20
It is hereby certified, covenanted, and represented that all acts, conditions, and things
required to be performed, exist, and be done precedent to the issuance of this Certificate in order
to render the same a legal, valid, and binding obligation of the Issuer have been performed, exist,
and have been done, in regular and due time, form, and manner, as required by law, and that
issuance of the Certificates does not exceed any constitutional or statutory limitation. In case any
provision in this Certificate or any application thereof is deemed invalid,illegal,or unenforceable,
the validity, legality, and enforceability of the remaining provisions and applications is not in any
way affected or impaired thereby. The terms and provisions of this Certificate and the Ordinance
are to be construed in accordance with and governed by the laws of the State of Texas.
Unless either a Registration Certificate hereon has been executed by the Comptroller of
Public Accounts of the State of Texas or his duly authorized agent or by the Paying Agent,
respectively, by manual signature, this Certificate shall not be entitled to any benefit under the
Ordinance;or be valid or obligatdry for any purpose.
56355884.2 21
IN WITNESS WHEREOF, the Issuer has caused this Certificate to be duly executed.
F NEDF '% CITY OF NEDERLAND, TEXAS
; By A;91 eitece
•`1 110" z= a or
City Clerk
[The remainder of this page intentionally left blank.]
56355884.2 22
SECTION 3.3 Form of Registration Certificate of Comptroller of Public Accounts.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS*
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS §
§ REGISTER NO
THE STATE OF TEXAS §
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 duly registered by the Comptroller of
Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
* Note to Printer: Not to appear on printed Certificates
SECTION 3.4 Form of Certificate of Paying Agent.
CERTIFICATE OF PAYING AGENT*
This Certificate has been duly issued under the provisions of the within-mentioned
Ordinance; the Certificate or Certificates of the above-entitled and designated series originally
delivered having been approved by the Attorney General of the State of Texas and registered by
the Comptroller of Public Accounts, as shown by the records of the Paying Agent.
Registration Date.
56355884.2 23
[Insert name of Paying Agent]
as Paying Agent
By
Authorized Officer
* Note to Printer: Not to appear on initial Certificates
56355884.2 24
SECTION 3.5 Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,assigns, and transfers unto (Print
or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number: )
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints...
attorney to transfer the within Certificate on the books kept for registration thereof,with full power
of substitution in the premises.
DATED:
NOTICE: The signature on this assignment
Signature guaranteed: must correspond with the name of the
registered owner as it appears on the face of
the within Certificate in every particular.
SECTION 3.6 Form of Initial Certificate.
The Initial Certificate shall be in the form set forth in Section 3.2 except that the form of a
single fully registered Certificate shall be modified as follows:
(i) immediately under the name of the Certificate the headings "Interest Rate
", "Stated Maturity ", and "CUSIP No. " will be
omitted;
(ii) Paragraph one will read as follows:
The City of Nederland, Texas (hereinafter together with its successors referred to as the
"Issuer"),a body politic and municipal corporation duly organized and existing under and by virtue
of the laws of the State of Texas, for value received, hereby promises to pay, but solely to and
from the extent of the sources described herein, to the Registered Owner specified above or
registered assigns, the hereinabove stated the Principal Amount on September 1 in each of the
years and in principal amounts and bearing interest at per annum rates in accordance with the
following schedule:
56355884.2 25
Year of Principal Interest
Stated Maturity Amount Rate(%)
(Information to be inserted from schedule in Section 1.1 hereof).
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest thereon
computed on the basis of a 360-day year of twelve 30-day months to the Person herein specified
from the Dated Date specified above, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, until such principal is paid or duly provided for on or
after such Stated Maturity or any earlier Redemption Date, semiannually on September 1 and
March;,;1 in each year commencing September 1, 2017, at the per annum.;Interest Rates specified
above, computed on the basis of a 360-day year of twelve 30-day months. Principal installments
of this Certificate are payable at its Stated Maturity or on a prepayment date to the registered owner
hereof by BOKF, NA dba Bank of Texas (the "Paying Agent"), upon its presentation and
surrender,at its designated offices in Austin, Texas (the"Place of Payment").
SECTION 3.7 Insurance Legend
If bond insurance is obtained by the Issuer or the Purchaser for the Certificates, the
Definitive Certificates and the Initial Certificate(s) shall bear an appropriate legend as provided by
the insurer.
56355884.2 26
ARTICLE FOUR
TAXES, REVENUES, AND FUNDS;
INVESTMENTS
SECTION 4.1 Certificate Fund
To pay interest on and to provide a sinking fund for the payment, redemption, and
retirement of the Certificates,the Issuer hereby creates and shall maintain solely for such purposes
(subject to the provisions of Section 5.5) a special fund designated as its "CERTIFICATES OF
OBLIGATION, SERIES 2017, INTEREST AND SINKING FUND" (the "Certificate Fund").
The Issuer authorizes and directs its authorized officials to withdraw from the Certificate Fund and
to transfer to the Paying Agent money on deposit in the Certificate Fund sufficient to pay the
amount of principal or interest falling due on the Certificates, such transfer of funds to the Paying
Agent to be made in such manner as will cause immediately available funds to be deposited with
the Paying Agent on or before the last business day next preceding each Maturity or Interest
Payment Date for the Certificates.
SECTION 4.2 Deposits to Certificate Fund; Excess Certificate Proceeds.
The Issuer, prior to a Maturity or Interest Payment Date for the Certificates, may deposit
any of the Net Revenues to the Certificate Fund in accordance with Section 4.3. The Net
Revenues, if deposited, shall be expended annually to pay principal of and interest on the
Certificates as the same become due and payable. The Net Revenues so deposited shall be
accounted for and transferred to the Paying Agent in accordance with the provisions of Section 4.1
governing other money in the Certificate Fund.
The Issuer shall deposit accrued interest and premium, if any, received from the Purchaser
and ad valorem taxes levied and collected to pay principal or Redemption Price of or interest on
the Certificates to the Certificate Fund. In addition,the Issuer shall deposit any surplus proceeds,
including investment income therefrom, from the sale of the Certificates not expended for
authorized purposes to the Certificate Fund.
SECTION 4.3 System Account.
The Issuer shall keep all Gross Revenues derived from operation of the System separate
and apart from all other funds, accounts, and money of the Issuer and shall deposit amounts
collected into the Issuer's"WATERWORKS AND SEWER SYSTEM ACCOUNT"(the"System
Account"). The Issuer shall pledge and appropriate money in the System Account as required for
the following purposes and in the order of priority shown:
First: as a first charge on and claim against the Gross Revenues, to pay reasonable and
proper Maintenance and Operating Expenses required by statute or ordinances authorizing
the issuance of any indebtedness of the Issuer;
Second: to deposit amounts required in the special funds and accounts established for
payment of any obligations of the Issuer with a lien on Gross Revenues or Net Revenues
prior or superior to the lien granted to secure payment of the Certificates;
56355884.2 27
Third: to deposit amounts required in the special funds and accounts established for the
payment of the Certificates or any additional obligations of the Issuer secured by the Net
Revenues on a parity with the Certificates; and
Fourth: any Net Revenues remaining in the System Account after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment, security and
benefit thereof, to be appropriated and used for any other Issuer purpose now or hereafter
permitted by law.
SECTION 4.4 Construction Accounts.
Except as provided in Section 4.2, the Issuer will deposit proceeds derived from the sale
of the Certificates (after paying costs of issuance) into special construction account or accounts
created for the projects to'be constructed with sich proceeds. Pending completion of construction
of the projects financed with such proceeds interest earned on the such proceeds must be accounted
for, maintained, deposited, and expended as permitted by the provisions of Texas Government
Code section 1201.043, as from time to time in effect, or as otherwise required by applicable law.
Thereafter, such interest must be accounted for, maintained, deposited, and expended in
accordance with Section 4.5.
SECTION 4.5 Investments and Security For Funds.
The Issuer is required to keep all money in such funds and accounts at a depository of the
Issuer except when invested pursuant to this Section. Subject to Section 5.6, money in any fund
established by this Ordinance may, at the option of the Issuer, be invested in a manner permitted
by the provisions of the Public Funds Investment Act of 1987, Texas Government Code chapter
2256, subchapter A, as then in effect, the Public Funds Collateral Act, Texas Government Code
chapter 2257, as then in effect, or by any other law applicable to the Issuer; provided that all such
investments must be made so that money required to be expended will be available at the proper
time or times. The Issuer shall credit or debit all interest and income or losses from deposits and
investments in any fund or account established pursuant to the provisions of this Ordinance shall
be credited to such fund or account. The Issuer shall sell investments promptly as necessary to
prevent any default in connection with the Certificates.
All money on deposit in the Funds for which this Ordinance makes provision(except any
portion thereof as may be at any time properly invested as provided herein) shall be secured in the
manner and to the fullest extent required by the laws of Texas for the security of public funds,and
money on deposit in such Funds shall be used only for the purposes permitted by this Ordinance.
SECTION 4.6 Tax Levy.
To provide for the payment of the Debt Service Requirements, which are defined to be
(i)the interest on the Certificates and(ii)a sinking fund for payment of principal of the Certificates
at Stated Maturity or earlier redemption or a sinking fund of 2% (whichever amount is greater),
the Issuer levies and shall levy for the current year and each succeeding year thereafter while the
Certificates or any interest thereon is Outstanding,a sufficient tax on each$100 of taxable property
in the Issuer, within the limitations prescribed by law, adequate to pay such amounts, full
56355884.2 28
allowance being made for delinquencies and costs of collection. Such tax shall be assessed and
collected each year, and the same may not be diverted to any other purpose. The Issuer shall pay
the taxes so levied and collected into the Certificate Fund. The Governing Body hereby declares
its purpose and intent to provide and levy such tax,it having been determined that the existing and
available taxing authority of the Issuer for such purpose is adequate to permit a legally sufficient
tax in consideration of all other outstanding indebtedness.
The Issuer shall determine the amount of taxes to be provided annually for the Debt Service
Requirement in the following manner:
A. Prior to establishing the annual tax rate,the Governing Body shall determine:
(1) the amount of Debt Service Requirements to become due and payable on
the Certificates between the Collection Date for the taxes„then to be levied and the
Collection Date for the taxes to be levied during the next succeeding calendar year;
(2) the amount on deposit in the Certificate Fund(including surplus Certificate
proceeds transferred to the Certificate Fund under Section 4.2) after (a) deducting
therefrom the total amount of Debt Service Requirements to become due on Certificates
prior to the Collection Date for the ad valorem taxes then to be levied and(b)adding thereto
the amount of the Net Revenues, if any,to be appropriated and allocated to pay such Debt
Service Requirements, if any,prior to the Collection Date for the ad valorem taxes then to
be levied; and
(3) the amount of Net Revenues, if any, to be appropriated and to be set aside
for the payment of the Debt Service Requirements on the Certificates between the
Collection Date for the taxes then to be levied and the Collection Date for the taxes to be
levied during the next succeeding Fiscal Year.
B. The Issuer shall assess and levy annually each year a tax to pay the Debt Service
Requirements sufficient to provide tax revenues in the amount established in paragraph(1) above
less the sum total of the amounts established in paragraphs (2) and (3), after taking into
consideration delinquencies and costs of collecting such annual taxes.
SECTION 4.7 Net Revenues.
The Issuer covenants and agrees that the Net Revenues are hereby irrevocably pledged to
the payment of the principal of and interest on the Certificates and the pledge of Net Revenues
herein made for the payment of the Certificates shall constitute a lien on the Net Revenues in
accordance with the terms and provisions hereof and be valid and binding without any physical
delivery thereof or further act by the Issuer. The pledge of Net Revenues hereunder is subordinate
to the prior pledge of Net Revenues to secure the Issuer's outstanding obligations secured by a
pledge of Net Revenues to the extent of such pledge (together with prior obligations hereafter
issued pursuant to Section 4.8 (the"Prior Obligations").
Section 1208, Government Code,applies to the issuance of the Certificates and the pledge
of the Net Revenues of the System granted by the Issuer under this Section, and such pledge is
56355884.2 29
therefore valid, effective and perfected. If Texas law is amended at any time while the Bonds are
Outstanding such that the pledge of the Net Revenues of the System granted by the Issuer under
this Section is subject to the filing requirements of Chapter 9, Business & Commerce Code, then
to preserve to the Bondholders the perfection of the security interest in said pledge, the Issuer
agrees to take such measures as it determines are reasonable and necessary under Texas law to
comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a
filing to perfect the security interest in said pledge to occur.
SECTION 4.8 Issuance of Additional Obligations.
The Issuer hereby expressly reserves the right to hereafter issue bonds, notes, warrants,
certificates of obligation, or similar obligations, payable, wholly or in part, as appropriate, from
and secured by a pledge of and lien on the Net Revenues of the System prior and superior in right
to,;on a parity with the Certificates as Parity Obligations, or subordinate to the pledge of anal lien
on the Net Revenues in favor of the Certificates, without limitation as to principal amount, but
subject to any terms,conditions, or restrictions applicable thereto under existing ordinances,laws,
or otherwise.
56355884.2 30
ARTICLE FIVE
COVENANTS
SECTION 5.1 To Maintain Agency.
The Issuer will at all times until the Certificates are duly paid maintain an agency meeting
the qualifications herein described, for the performance of the duties of the Paying Agent
hereunder. BOKF, NA dba Bank of Texas, is hereby appointed Paying Agent for such purposes.
The Issuer retains the right to replace the Paying Agent, and the Paying Agent may be removed
from its duties hereunder at any time upon not less than 30 days notice with or without cause by
action of the Governing Body entered in its minutes, but no such removal is effective until a
successor has accepted the duties of the Paying Agent hereunder by written instrument.
Every Paying Agent appointed hereunder must at all times boa commercial bank or trust
company organized and doing business under the laws of the United States of America or of any
state, authorized under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $10,000,000, subject to supervision or examination by federal or state
authority, registered as a transfer agent with the Securities and Exchange Commission. If such
corporation publishes reports of condition at least annually pursuant to law or to the requirements
of such supervising or examining authority, then for the purposes of this Section the combined
capital and surplus of such corporation shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. Upon any change in the Paying Agent,
the City agrees to promptly cause a written notice thereof to be sent to each Registered Owner
affected by the change, which notice shall also give the address of the new Paying Agent, which
shall be the designated Place of Payment.
This Section is subject to the provisions of Section 8.2.
The terms of the Transfer and Paying Agency Agreement with the initial Paying Agent are
hereby approved in substantially the form and to the effect presented to the Governing Body on
this date,and the Mayor and the Mayor Pro Tem of the Issuer,or either of them,and the City Clerk
and any Assistant or Acting City Clerk of the Issuer, or any of them, are hereby authorized to
execute and deliver such Transfer and Paying Agency Agreement.
SECTION 5.2 To Maintain and Operate the System and Insure Property.
The Issuer covenants and agrees that while the Certificates remain Outstanding it will
maintain and operate the System with all possible efficiency and maintain casualty and other
insurance on the properties of the System and its operations of a kind and in such amounts
customarily carried by municipalities in the State of Texas engaged in a similar type of business
and that it will faithfully and punctually perform all duties with reference to the System required
by the laws of the State of Texas. All money received from losses under such insurance policies,
other than public liability policies, are hereby pledged as security for the Certificates until and
unless the proceeds are paid out in making good the loss or damage in respect of which such
proceeds are received, either by replacing the property destroyed or repairing the property
damaged, and adequate provision for making good such loss or damage must be made within 90
56355884.2 31
days after the date of loss. The payment of premiums for all insurance policies required under the
provisions hereof shall be considered Maintenance and Operating Expenses. Nothing in this
Ordinance may be construed as requiring the Issuer to expend any funds which are derived from
sources other than the operation of the System but nothing herein may be construed as preventing
the Issuer from doing so.
SECTION 5.3 Rates and Charges.
The Issuer hereby covenants and agrees that rates and charges for services afforded by the
System will be established and maintained to provide Gross Revenues sufficient at all times:
A. to pay all Maintenance and Operating Expenses;
B. to produce Net Revenues sufficient (but subject to the maximum amount of Net
Revenues pledged hereunder), together with any other lawfully'available funds, to produce an
amount of Net Revenues sufficient to pay the interest on and principal of the Certificates and any
additional obligations of the Issuer hereafter issued on a parity therewith; and
C. to pay other legally incurred indebtedness payable from the Net Revenues or
secured by a lien on the System or the Net Revenues thereof.
SECTION 5.4 Records and Accounts, Annual Audit.
The Issuer covenants and agrees that so long as any of the Certificates remain Outstanding
it will keep and maintain separate and complete records and accounts pertaining to the operations
of the System in which complete and correct entries shall be made of all transactions relating
thereto,as provided by Texas Government Code section 1502.067,as amended,or other applicable
law. The Registered Owners or any duly authorized agent or agents of the Registered Owners may
inspect the System and all properties comprising the same. The Issuer agrees that, following the
close of each Fiscal Year, it will cause an audit of its books and accounts to be made by an
independent firm of Certified Public Accountants. Copies of each annual audit shall be furnished
to the Executive Director of the Municipal Advisory Council of Texas at his office in Austin,
Texas, and, upon written request,to the original purchaser of the Certificates and any subsequent
Registered Owner thereof. Expenses incurred in making the annual audit of the operations of the
System are Maintenance and Operating Expenses.
SECTION 5.5 Special Covenants.
The Issuer covenants that:
A. Lawful Authority: it has the lawful power to pledge the Net Revenues supporting
the Certificates and has lawfully exercised said powers under the laws of the State of Texas;
B. No Encumbrance: as long as any Certificates or any interest thereon remain
Outstanding,the Issuer will not sell, lease or encumber(except in the manner provided in Section
4.8)the System or any substantial part thereof, provided that this covenant shall not be construed
56355884.2 32
to prohibit the sale of such machinery,or other properties or equipment which has become obsolete
or otherwise unsuited to the efficient operation of the System; and
C. No Franchise: to the extent that it legally may, the Issuer further covenants and
agrees that,so long as any of the Certificates,or any interest thereon,are Outstanding,no franchise
shall be granted for the installation or operation of any competing systems other than those owned
by the Issuer, and the operation of any such systems by anyone other than the Issuer is hereby
prohibited.
SECTION 5.6 Covenants to Maintain Tax-Exempt Status.
A. Definitions. When used in this Section, the following terms have the following
meanings:
"Closing Date'" means the date on which the Certificates are first authenticated and
delivered to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date"has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Gross Proceeds"means any proceeds as defined in Section 1.148-1(b)of the Regulations,
and any replacement proceeds as defined in Section 1.148-1(c) of the Regulations, of the
Certificates.
"Investment"has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment"means any investment property, as defined in section 148(b) of
the Code, in which Gross Proceeds of the Certificates are invested and which is not acquired to
carry out the governmental purposes of the Certificates.
"Rebate Amount"has the meaning set forth in Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue Code
of 1954, which are applicable to the Certificates. Any reference to any specific Regulation shall
also mean, as appropriate, any proposed, temporary or final Income Tax Regulation designed to
supplement, amend or replace the specific Regulation referenced.
"Yield"of
(1) any Investment has the meaning set forth in Section 1.148-5 of the Regulations; and
(2) the Certificates has the meaning set forth in Section 1.148-4 of the Regulations.
56355884.2 33
B. Not to Cause Interest to Become Taxable. The Issuer shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross Proceeds)
in a manner which if made or omitted,respectively, would cause the interest on any Certificate to
become includable in the gross income, as defined in section 61 of the Code, of the owner thereof
for federal income tax purposes. Without limiting the generality of the foregoing,unless and until
the Issuer receives a written opinion of counsel nationally recognized in the field of municipal
bond law to the effect that failure to comply with such covenant will not adversely affect the
exemption from federal income tax of the interest on any Certificate,the Issuer shall comply with
each of the specific covenants in this Section.
C. No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder,the Issuer shall at all times prior to the last Stated
Maturity of Certificates:
(1) exclusively own, operate and possess all property the acquisition, construction or
improvement of which is to be financed or refinanced directly or indirectly with Gross Proceeds
of the Certificates(including property financed with Gross Proceeds of the Refunded Obligations),
and not use or permit the use of such Gross Proceeds (including all contractual arrangements with
terms different than those applicable to the general public) or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or entity(including
the United States or any agency,department and instrumentality thereof)other than a state or local
government, unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other payment by any
person or entity who is treated as using Gross Proceeds of the Certificates or any property the
acquisition, construction or improvement of which is to be financed or refinanced directly or
indirectly with such Gross Proceeds (including property financed with Gross Proceeds of the
Refunded Obligations), other than taxes of general application within the Issuer or interest earned
on investments acquired with such Gross Proceeds pending application for their intended purposes.
D. No Private Loan. Except to the extent permitted by section 141 of the Code and
the Regulations and rulings thereunder,the Issuer shall not use Gross Proceeds of the Certificates
to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant,such Gross Proceeds are considered to be "loaned"to a person
or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is sold or
leased to such person or entity in a transaction which creates a debt for federal income tax
purposes; (2)capacity in or service from such property is committed to such person or entity under
a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or burdens and
benefits of ownership, of such Gross Proceeds or any property acquired, constructed or improved
with such Gross Proceeds are otherwise transferred in a transaction which is the economic
equivalent of a loan.
E. Not to Invest at Higher Yield. Except to the extent permitted by section 148 of the
Code and the Regulations and rulings thereunder,the Issuer shall not at any time prior to the final
Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any Investment,
56355884.2 34
if as a result of such investment the Yield of any Investment acquired with Gross Proceeds,whether
then held or previously disposed of, exceeds the Yield of the Certificates.
F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the Issuer shall not take or omit to take any
action which would cause the Certificates to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
G. Information Report. The Issuer shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and in
such place as the Secretary may prescribe.
H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The Issuer shall account for all Gross Proceeds (including all receipts, expenditures
and investments thereof) on its books of account separately and apart from all other funds (and
receipts, expenditures and investments thereof) and shall retain all records of accounting for at
least six years after the day on which the last outstanding Certificate is discharged. However, to
the extent permitted by law, the Issuer may commingle Gross Proceeds of the Certificates with
other money of the Issuer, provided that the Issuer separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date,the Issuer shall calculate the Rebate
Amount in accordance with rules set forth in section 148(f) of the Code and the Regulations and
rulings thereunder. The Issuer shall maintain such calculations with its official transcript of
proceedings relating to the issuance of the Certificates until six years after the final Computation
Date.
(3) As additional consideration for the purchase of the Certificates by the Purchasers and
the loan of the money represented thereby and in order to induce such purchase by measures
designed to insure the excludability of the interest thereon from the gross income of the owners
thereof for federal income tax purposes,the Issuer shall pay to the United States out of its general
fund, other appropriate fund, or, if permitted by applicable Texas statute, regulation or opinion of
the Attorney General of the State of Texas,the [Interest and Sinking] Fund,the amount that when
added to the future value of previous rebate payments made for the Certificates equals (i) in the
case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the Regulations, one
hundred percent (100%) of the Rebate Amount on such date; and (ii) in the case of any other
Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, the
rebate payments shall be made at the times, in the installments, to the place and in the manner as
is or may be required by section 148(f) of the Code and the Regulations and rulings thereunder,
and shall be accompanied by Form 8038-T or such other forms and information as is or may be
required by Section 148(f) of the Code and the Regulations and rulings thereunder.
(4) The Issuer shall exercise reasonable diligence to assure that no errors are made in the
calculations and payments required by paragraphs (2)and(3), and if an error is made,to discover
56355884.2 35
and promptly correct such error within a reasonable amount of time thereafter (and in all events
within one hundred eighty(180)days after discovery of the error),including payment to the United
States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed
under Section 1.148-3(h) of the Regulations.
I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Issuer shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Certificates, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection Hof this Section
because such transaction results in a smaller profit or a larger loss than would have resulted if the
transaction had been at arm's length and had the Yield of the Certificates not been relevant to either
ply
J. Elections. The Issuer hereby directs and authorizes the Mayor Mayor' Pro Tern,
Secretary, Manger, Attorney, or Director of Finance of the Issuer, either or any combination of
them, to make elections permitted or required pursuant to the provisions of the Code or the
Regulations, as they deem necessary or appropriate in connection with the Certificates, in the
Certificate as to Tax Exemption or similar or other appropriate certificate, form or document.
SECTION 5.7 Remedies in Event of Default.
In addition to all the rights and remedies provided by the laws of the State of Texas, the
Issuer covenants and agrees particularly that in the event the Issuer(a)defaults in the payments to
be made to the Certificate Fund, or (b) defaults in the observance or performance of any other of
the covenants,conditions,or obligations set forth in this Ordinance,the Registered Owners of any
of the Certificates shall be entitled to seek a writ of mandamus issued by a court of proper
jurisdiction compelling and requiring the governing body of the Issuer and other officers of the
Issuer to observe and perform any covenant,condition,or obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised from time to time and as often as may
be deemed expedient. The specific remedies herein provided shall be cumulative of all other
existing remedies and the specification of such remedies shall not be deemed to be exclusive.
56355884.2 36
ARTICLE SIX
DEFEASANCE
SECTION 6.1 Discharge of Obligations.
Any Certificate is deemed paid and is no longer considered to be Outstanding within the
meaning of this Ordinance when payment of the principal of and interest on such Certificate to the
Stated Maturity thereof or(if notice of redemption has been duly given, irrevocably provided for,
or waived as provided herein)to the Redemption Date has been made or has been provided for by
deposit with the Paying Agent for such payment (or with any other bank or trust company which
has agreed to hold the same for such purpose) (1) money sufficient to make such payment, (2)
Governmental Obligations certified by an independent public accounting firm of national
reputation to be of such maturities and interest payment dates and to bear such interest as will,
without further investment or reinvestment of either the principal amount thereof oz the interest
earnings therefrom, be sufficient to make such payment, or (3) a combination of money and
Governmental Obligations together so certified sufficient to make such payment,provided that all
the expenses pertaining to the Certificates with respect to which such deposit is made have been
paid or the payment thereof provided for to the satisfaction of the Paying Agent(and to such other
bank or trust company).
If such deposit is made with respect to some but not all of the Certificates then Outstanding,
the Issuer shall designate the Stated Maturities of Certificates with respect to which such deposit
is made. If such deposit is sufficient so to provide for the payment of the principal of and interest
on some but not all Outstanding Certificates of a particular Stated Maturity so designated, the
Paying Agent shall select the Outstanding Certificates of such Stated Maturity with respect to
which such deposit is made by such random method as the Paying Agent deems fair and
appropriate and which may provide for the selection of portions(equal to and leaving unredeemed
an authorized denomination) of Certificates a denomination larger than$5,000.
Notwithstanding anything herein to the contrary, no such deposit has the effect described
in this Section (a) if made during the subsistence of a default in the payment of any Certificate
unless made with respect to all of the Certificates then Outstanding or(b) unless accompanied by
an opinion of counsel of recognized standing in the field of federal income taxation to the effect
that neither such deposit nor the investment thereof adversely affects the excludability of interest
on any Certificate from the gross income of any owner thereof for federal income tax purposes.
The Paying Agent(or other bank or trust company)with which a deposit is made of money
and Governmental Obligations for such purpose shall hold the deposit in a segregated account in
trust or escrow for the Registered Owners of the Certificates with respect to which such deposit is
made and,together with any investment income therefrom,the deposit may be disbursed solely to
pay the principal of and interest on such Certificates when due, except that cash receipts may be
withdrawn and paid to the Issuer provided the date and amount of such withdrawals are taken into
account in the most recent verification of the accounting firm referred to in this Section. No money
or Governmental Obligations so deposited may be invested or reinvested unless in Governmental
Obligations and unless such money and Governmental Obligations not invested and such new
investments are together certified by an independent public accounting firm of national reputation
56355884.2 37
to be of such amounts, maturities, and interest payment dates and to bear such interest as will,
without further investment or reinvestment of either the principal amount thereof or the interest
earnings therefrom,be sufficient to make such payment.
At such times as a Certificate is deemed to be paid hereunder, as aforesaid, it is no longer
entitled to the benefits of this Ordinance, except for the purposes of any such payment from such
money or Governmental Obligations and for the provisions of Sections 1.4 and 1.5 and for the
continuing compliance of the Issuer with the provisions of Section 5.6.
Upon such deposit as described above, such Certificates shall no longer be regarded to be
outstanding or unpaid. Provided, however, the Issuer has reserved the option, to be exercised at
the time of the defeasance of the Certificates, to call for redemption at an earlier date those
Certificates which have been defeased to their maturity date, if the Issuer (i)in the proceedings
providing for the firm banking and financial arrangements, expressly reserves the right to call the
Certificates for redemption, (ii)gives notice of the reservation of that right to the owners of the
Certificates immediately following the making of the firm bank and financial arrangements, and
(iii)directs that notice of the reservation be included in any redemption notices that it authorizes.
56355884.2 3 8
ARTICLE SEVEN
SALE
SECTION 7.1 Sale of the Certificates.
The sale of the Certificates to Sterne,Agee&Leach,Inc. (the"Purchaser")at the price of
par in the amount of$ , plus a net premium of$ , less an underwriters
discount of$ ,plus accrued interest thereon from the Dated Date to the date of initial
delivery, is hereby confirmed and determined to be in compliance with the terms of the Notice of
Sale, except for the requirement that no maturity may be adjusted by more than 10% which is
waived, and the maturities submitted are approved.
Delivery of the Certificates shall be made to the Purchaser as soon as practicable after the
adoption of this Ordinance,upon payment therefor in accordance with the terms of sale.
SECTION 7.2 Payment of Costs of Issuance; Engagement of Bond Counsel.
The Issuer has in consultation with its financial advisor, US Capital Advisors, LLC set
aside an amount of the proceeds of the Certificates to pay costs of issuance of the Certificates. The
amount of such proceeds will be designated in a closing letter prepared by the financial advisor,
and in the absence of contrary written instructions included as part of such closing letter to deposit
such proceeds with the Issuer, the Paying Agent will pay such costs of issuance on behalf of the
Issuer in accordance with invoices.
The Issuer hereby confirms engagement of Norton Rose Fulbright US LLP as Bond
Counsel ("Bond Counsel") for the City in accordance with the terms of the Letter of Engagement
between the Issuer and Bond Counsel.
SECTION 7.3 Official Statement.
The Issuer hereby approves and ratifies distribution of the Preliminary Official Statement
and Notice of Sale and Bidding Instructions relating to the Certificates. The Issuer further
approves and authorizes distribution of the Official Statement, dated the date hereof, substantially
in the form of the Preliminary Official Statement but completed and modified to reflect the terms
of sale of the Certificates and such other changes as the Mayor of the Issuer shall approve. The
Mayor of the Issuer and City Clerk of the Issuer are authorized to execute and deliver for and on
behalf of the Issuer sufficient copies of such Official Statement, and, in the form and content
manually executed by said officials of the Issuer, the same shall be deemed approved by this
Governing Body and constitute the Official Statement duly authorized for distribution.
56355884.2 3 9
ARTICLE EIGHT
CONTINUING DISCLOSURE UNDERTAKING
SECTION 8.1 Definitions.
As used in this Article, the following terms have the meanings ascribed to such terms
below:
"EMMA"means the Electronic Municipal Market Access system.
"MSRB"means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time or officially interpreted
by the SEC. , ,
"SEC"means the United States Securities and Exchange Commission.
SECTION 8.2 Updated Information and Data.
The Issuer shall provide annually to the MSRB through EMMA, within six months after
the end of each fiscal year ending in or after September 30, 2016, financial information and
operating data with respect to the Issuer of the general type included in the Preliminary Official
Statement provided to the Purchaser in connection with its initial approval of its purchase of the
Certificate of Obligations, being the information described in Exhibit A hereto. Any financial
statements so to be provided shall be(1)prepared in accordance with the accounting principles set
forth in Appendix B to the Official Statement, or as may otherwise hereafter be established
consistent with Texas law and Generally Accepted Accounting Principles, and (2) audited, if the
Issuer commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If audited financial statements are not so provided, then the Issuer
shall provide audited financial statements for the applicable fiscal year to the MSRB through
EMMA, when and if audited financial statements become available but if such audited financial
statements are unavailable the Issuer will provide such financial statements on an unaudited basis
within the above-described six-month period.
If the Issuer changes its fiscal year, it will notify the MSRB through EMMA of the change
(and of the date of the new fiscal year end) prior to the next date by which the Issuer 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 (including an official statement or other offering document, if it is available from the
MSRB)that theretofore has been provided to the MSRB through EMMA or filed with the SEC,or
may be provided in any other manner consistent with the Rule.
56355884.2 40
SECTION 8.3 Material Event Notices.
The Issuer shall notify the MSRB through EMMA of any of the following events with
respect to the Certificates in a timely manner,and not more than 10 business days after occurrence
of the event:
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-
TEB), or other material notices or determinations with respect to the tax-exempt
status of the Certificates, or other material events affecting the tax status of the
Certificates;
7. Modifications to rights of Registered Owners 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 Issuer, which shall
occur as described below;
13. The consummation of a merger, consolidation, or acquisition involving the Issuer
or the sale of all or substantially all of its assets, 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; and
14. Appointment of a successor or additional trustee or the change of name of a trustee,
if material.
The Issuer shall notify the MSRB through EMMA., in a timely manner, of any failure by
the Issuer to provide financial information or operating data in accordance with Section 8.2 by the
time required by such Section.
56355884.2 41
SECTION 8.4 Limitations, Disclaimers, and Amendments.
The Issuer shall be obligated to observe and perform the covenants specified in this Section
with respect to the Issuer and the Certificates while, but only while, the Issuer remains an
"obligated person"with respect to the Certificates within the meaning of the Rule,except that the
Issuer in any event will give the notice required by Section 8.3 of any Certificate calls and
defeasance that cause the Issuer to be no longer such an"obligated person".
The provisions of this Article are for the sole benefit of the Registered Owners and
beneficial owners of the Certificates,and nothing in this Article,express or implied,shall give any
benefit or any legal or equitable right,remedy,or claim hereunder to any other person. The Issuer
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Article and does not hereby
undertake to provide any other information that may be; relevant or material,;to a complete
presentation of the financial results, condition, or prospects of the Issuer or the State of Texas or
hereby undertake to update any information provided in accordance with this Article or otherwise,
except as expressly provided herein. The Issuer 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.
UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE ANY OTHER
PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, 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.
No default by the Issuer in observing or performing its obligations under this Article shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
The provisions of this Article may be amended by the Issuer from time to time to adapt to
changed circumstances resulting from a change in legal requirements,a change in law,or a change
in the identity, nature, status, or type of operations of the Issuer, but only if(1) the provisions of
this Article, 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 to the date of such amendment,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 Issuer (such as nationally recognized bond counsel) determines that
56355884.2 42
such amendment will not materially impair the interests of the Registered Owners and beneficial
owners of the Certificates. The Issuer may also amend or repeal the provisions of this Article if
the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, but in either case only to the extent that its right to do
so would not prevent the Purchaser from lawfully purchasing the Certificates in the offering
described herein. If the Issuer so amends the provisions of this Article, it shall include with any
amended financial information or operating data next provided in accordance with Section 8.2 an
explanation, in narrative form, of the reasons for the amendment and of the impact of any change
in the type of financial information or operating data so provided.
56355884.2 43
This Ordinance is in force and effect from and after its final passage, and it is so ordained.
PASSED AND ADOPTED on April 10, 2017.
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56355884.2 SIGNATURE PAGE
EXHIBIT A
In the Preliminary Official Statement dated April 4, 2017, the quantitative financial
information and operating data with respect to the Issuer of general type contained in Schedules
through_and certain information in the annual financial statements in Appendix C.
56355884.2 A-1