HomeMy WebLinkAboutOrdinance 3753 ORDINANCE NO. 3753
AUTHORIZING THE ISSUANCE OF
$3,645,000
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2022
Adopted August 22, 2022
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TABLE OF CONTENTS
Page
SECTION 1: Definitions 1
SECTION 2: Authorization — Designation — Principal Amount— Purpose. 3
SECTION 3: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Interest Rates - Certificate Date. 3
SECTION 4: Terms of Payment-Paying Agent/Registrar. 4
SECTION 5: Redemption. 5
SECTION 6: Registration - Transfer- Exchange of Certificates - Predecessor
Certificates 7
SECTION 7: Book-Entry-Only Transfers and Transactions 8
SECTION 8: Execution - Registration 8
SECTION 9: Initial Certificate(s). 9
SECTION 10: Forms. 9
SECTION 11: Certificate Fund. 9
SECTION 12: Tax Levy 10
SECTION 13: Limited Pledge of Net Revenues 11
SECTION 14: System Fund 11
SECTION 15: Deposits to Certificate Fund 12
SECTION 16: Security of Funds. 12
SECTION 17: Special Covenants 12
SECTION 18: Issuance of Prior Lien Obligations - Additional Obligations and Subordinate
Lien Obligations 12
SECTION 19: Application of Prior Lien Obligations Covenants and Agreements 13
SECTION 20: Further Procedures 13
SECTION 21: Notices to Holders -Waiver. 13
SECTION 22: Cancellation 14
SECTION 23: Covenants to Maintain Tax-Exempt Status. 14
SECTION 24: Satisfaction of Obligations of City 17
SECTION 25: Mutilated, Destroyed, Lost, and Stolen Certificates. 18
SECTION 26: Ordinance a Contract- Amendments 18
SECTION 27: Sale of the Certificates 19
SECTION 28: Official Statement. 19
SECTION 29: Proceeds of Sale. 19
SECTION 30: Control and Custody of Certificates. 19
SECTION 31: Bond Counsel's Opinion. 20
SECTION 32: CUSIP Numbers. 20
SECTION 33: Continuing Disclosure Undertaking. 20
SECTION 34: Benefits of Ordinance. 23
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TABLE OF CONTENTS
(cont.)
Page
SECTION 35: Inconsistent Provisions.. 23
- SECTION 36: Governing Law. 23
SECTION 37: Effect of Headings. 23
SECTION 38: Severability 23
SECTION 39: Construction of Terms. 24
SECTION 40: Incorporation of Findings and Determinations 24
SECTION 41: Public Meeting.. 24
SECTION 42: Effective Date. 24
EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT
EXHIBIT B FORMS OF CERTIFICATE
131630950.3/1001216715 I I
ORDINANCE NO. 3753
AN ORDINANCE authorizing the- issuance-of "CITY OF NORTH RICHLAND
HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM
(LIMITED PLEDGE) REVENUE CERTIFICATES OF OBLIGATION,
SERIES 2022"; providing for the payment of such certificates of obligation
by the levy of an ad valorem tax upon all taxable property within the City
and a limited pledge of the net revenues derived from the operation of the
City's waterworks and sewer system; providing the terms and conditions of
such certificates and resolving other matters incident and relating to the
issuance, payment, security and delivery of such certificates of obligation;
and providing an effective date.
WHEREAS, the City Council of the City of North Richland Hills, Texas (the "City"), has
heretofore determined that certificates of obligation should be issued in the maximum principal
amount not to exceed $3,875,000 for the purpose of paying contractual obligations to be incurred
for (i) constructing, acquiring, purchasing, renovating, enlarging, equipping, and improving the
City's water and sewer system facilities, including the acquisition of land and rights-of-way
therefor, (ii) acquiring fleet vehicles and equipment for various City departments, including the
fire/emergency services department, and (iii) professional services rendered in relation to such
projects and the financing thereof; and
WHEREAS, a "Notice of Intention to Issue City of North Richland Hills, Texas, Certificates
of Obligation, Series 2022" was duly published (i) in the Fort Worth Star Telegram, a newspaper
hereby found and determined to be of general circulation in the City of North Richland Hills, Texas,
on July 1, 2022, and July 8, 2022, the date of the first publication of such notice being not less
than forty-six (46) days prior to the tentative date stated therein for the passage and adoption of
this Ordinance, and (ii) continuously on the City's website for at least forty-five (45) days prior to
the tentative date stated therein for the passage and adoption of this Ordinance; and
WHEREAS, no petition protesting the issuance of such certificates of obligation and
bearing valid petition signatures of at least 5% of the qualified voters of the City, has been
presented to or filed with the Mayor, City Secretary or any other official of the City on or prior to
the date of the passage of this Ordinance; and
WHEREAS, no bond proposition to authorize the issuance of bonds for the same purpose
as any of the projects being financed with the proceeds of the Certificates was submitted to the
voters of the City during the preceding three years; and
WHEREAS, the City Council of the City (the "Council") hereby finds and determines that
all of the certificates of obligation described in such notice should be issued and sold at this time
in the amount and manner as hereinafter provided;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
NORTH RICHLAND HILLS, TEXAS:
SECTION 1: Definitions. For purposes of this Ordinance and for clarity with respect to
the issuance of the Certificates herein authorized, and the levy of taxes and appropriation of Net
Revenues therefor, the following words or terms, whenever the same appears herein without
qualifying language, are defined to mean as follows:
(a) The term "Certificate Fund" shall mean the special Fund created and established
under the provisions of Section 11 of this Ordinance.
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(b) The term "Certificates" shall mean the"City of North Richland Hills, Texas, Tax and
Waterworks and Sewer System (Limited Pledge)Revenue Certificates of Obligation, Series 2022"
authorized by this Ordinance.
(c) The term "Collection Date" shall mean, when reference is being made to the levy
and collection of annual ad valorem taxes, the date the annual ad valorem taxes levied each year
by the City become delinquent.
(d) The term "Fiscal Year" shall mean the twelve month financial accounting period for
the System ending,September 30th of each year; provided, however, the City, by ordinance, may
change the Fiscal Year to another period of not less than twelve calendar months.
(e) The term "Government Securities" shall mean (i) direct noncallable obligations of
the United States of America, including obligations the principal of and interest on which are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States, including obligations unconditionally guaranteed
or insured by the agency or instrumentality and, on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county,
municipality, or other political subdivision of a state that have been refunded and that, on the date
of their acquisition or purchase by the City, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent.
(f) The term "Gross Revenues" shall mean all income and revenues of every nature
derived or received from the operation and ownership (excluding refundable meter deposits,
restricted gifts and grants in aid of construction, impact fees charged developers and special
assessments against landowners)of the System, including earnings and income derived from the
investment or deposit of moneys in any special funds or accounts created and established for the
payment and security of the Prior Lien Obligations and other obligations payable solely from and
secured only by a lien on and pledge of the Net Revenues.
(g) The term "Net Revenues" shall mean Gross Revenues of the System, with respect
to any period, after deducting the System's Operating and Maintenance Expenses during such
period.
(h) The term "Operating and Maintenance Expenses" shall mean all current expenses
of operating and maintaining the System, including all salaries, labor, materials, repairs and
extensions necessary to render efficient service; provided, however, that only such repairs and
extensions, as in the judgment of the Council, reasonably and fairly exercised, are necessary to
maintain the operations and render adequate service to the City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or condition which would otherwise
impair obligations payable from Net Revenues shall be deducted in determining "Net Revenues".
Depreciation charges shall not be considered Operating and Maintenance Expenses. Operating
and Maintenance Expenses shall include payments under contracts for the purchase of water
supply, treatment of sewage or other materials, goods or services for the System to the extent
authorized by law and the provisions of such contract.
(i) The term "Outstanding" when used in this Ordinance with respect to Certificates
means, as of the date of determination, all Certificates theretofore issued and delivered under this
Ordinance, except:
(1) those Certificates cancelled by the Paying Agent/Registrar or delivered to
the Paying Agent/Registrar for cancellation;
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(2) those Certificates for which payment has been duly provided by the City in
accordance with the provisions of Section 24 hereof; and
- -(3)--- -those Certificates that have-been-mutilated; destroyed; lost or stolen and
replacement Certificates have been registered and delivered in lieu thereof as provided in
Section 25 hereof.
(j) The term "Prior Lien Obligations" shall mean all revenue bonds or other obligations
hereafter issued payable from and secured, in whole or in part, by a lien on and pledge of the Net
Revenues of the System that is superior to the lien on and pledge of the Net Revenues of the
System securing the Certificates, the Subordinate Lien Obligations and any obligations having a
lien on and pledge of the Net Revenues of the System that is on an parity with the lien on and
pledge of the Net Revenues of the System securing any of the Certificates and the Subordinate
Lien Obligations.
(k) The term "Subordinate Lien Obligations" shall mean all revenue bonds or other
obligations now outstanding or hereafter issued payable from and secured, in whole or in part, by
a lien on and pledge of the Net Revenues of the System that is inferior to the lien on and pledge
of the Net Revenues of the System securing the Prior Lien Obligations, the Certificates, and any
obligation having a lien on and pledge of the Net Revenues of the System that is on a parity with
the lien on and pledge of the Net Revenues of the System securing any of the Prior Lien
Obligations and the Certificates.
(I) The term "System" shall mean all properties, facilities and plants currently owned,.
operated and maintained by the City for the supply, treatment and transmission of treated potable
water and the collection, treatment and disposal of water-carried wastes, together with all future
extensions, improvements, replacements and additions thereto; provided, however, that
notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by law,
the term "System" shall not mean to include facilities of any kind which are declared not to be a
part of the System and which are acquired or constructed by or on behalf of the City with the
proceeds from the issuance of "Special Facilities Bonds", which are hereby defined as being
special revenue obligations of the City which are not Prior Lien Obligations 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 Prior Lien Obligations including, but not limited to, special contract
revenues or payments received from any other legal entity in connection with such facilities.
SECTION 2: Authorization — Designation — Principal Amount— Purpose. Certificates of
obligation of the City shall be and are hereby authorized to be issued in an aggregate original
principal amount of$3,645,000 to be designated and bear the title "CITY OF NORTH RICHLAND
HILLS, TEXAS, TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2022" (hereinafter referred to as the
"Certificates"), for the purpose of paying contractual obligations to be incurred for(i) constructing,
acquiring, purchasing, renovating, enlarging, equipping, and improving the City's water and sewer
system facilities, including the acquisition of land and rights-of-way therefor, (ii) acquiring fleet
vehicles and equipment for various City departments, including the fire/emergency services
department, and (iii) professional services rendered in relation to such projects and the financing
thereof, pursuant to authority conferred by and in conformity with the Constitution and laws of the
State of Texas, including Texas Local Government Code, Subchapter C of Chapter 271, as
amended.
SECTION 3: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Interest Rates - Certificate Date. The Certificates are issuable in fully registered form
only; shall be dated August 15, 2022 (the "Certificate Date") and shall be in denominations of
$5,000 or any integral multiple thereof(within a Stated Maturity)and the Certificates shall become
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due and payable on February 15 in each of the years and in principal amounts (the "Stated
Maturities") and bear interest at the per annum rates in accordance with the following schedule:
Year of- - - Principal Interest - - - - - - -
Stated Maturity Amount ($) Rate (%)
2023 215,000 5.000
2024 220,000 5.000
2025 220,000 5.000
2026 220,000 5.000
2027 215,000 5.000
2028 215,000 5.000
2029 215,000 5.000
2030 165,000 5.000
2031 165,000 5.000
2034 495,000 4.250
*** *** ***
2036 330,000 5.000
*** *** ***
2038 330,000 4.000
*** *** ***
2040 320,000 4.000
2042 320,000 4.000
The Certificates shall bear interest on the unpaid principal amounts from the date of
delivery to the initial purchasers (anticipated to be September 21, 2022) at the rates per annum
shown above in this Section (calculated on the basis of a 360-day year of twelve 30-day months)
and shall be payable on February 15 and August 15 of each year, commencing February 15,
2023, until maturity or prior redemption.
SECTION 4: Terms of Payment-Paying Agent/Registrar. The principal of, premium, if
any, and the interest on the Certificates, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Certificates(hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and the payment thereof shall be 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,
and shall be without exchange or collection charges to the Holders.
The selection and appointment of UMB Bank, N.A., Dallas, Texas, to serve as the paying
agent/registrar for the Certificates (the "Paying Agent/Registrar") is hereby approved and
confirmed. Books and records relating to the registration, payment, exchange and transfer of the
Certificates(the"Security Register")shall at all times be kept and maintained on behalf of the City
by the Paying Agent/Registrar, all as provided herein, in accordance with the terms and provisions
of a "Paying Agent/Registrar Agreement," substantially in the form attached hereto as Exhibit A
and such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor or Mayor Pro Tern and City Secretary or Assistant City Secretary are
hereby authorized to execute and deliver such Paying Agent/Registrar Agreement in connection
with the delivery of the Certificates. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the. Certificates are paid and discharged, and any successor
Paying Agent/Registrar shall be a commercial bank, trust company, financial institution, or other
entity qualified and authorized to serve in such capacity and perform the duties and services of
Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Certificates, the
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City agrees to promptly cause a written notice thereof to be sent to each Holder by United States
mail, first-class, postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
The Certificates shall be payable at their Stated Maturities or upon their earlier redemption,
only upon the presentation and surrender of the Certificates to the Paying Agent/Registrar at its
designated offices, initially in Kansas City, Missouri, or, with respect to a successor Paying
Agent/Registrar, at the designated offices of such successor (the "Designated Payment/Transfer
Office"); provided, however, while a Certificate is registered to Cede & Co., the payment thereof
upon a partial redemption of the principal amount thereof may be accomplished without
presentation and surrender of such Certificate. Interest on a Certificate shall be paid by the
Paying Agent/Registrar to the Holders whose names appears in the Security Register at the close
of business on the Record Date (the last business day of the month next preceding each interest
payment date) and such interest payments shall be made (i) by check sent United States mail,
first-class postage prepaid, to the address of the Holder recorded in the Security Register or (ii)
by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk
and expense of, the Holder. If the date for the payment of the principal of or interest on the
Certificates shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions
in the city where the Designated Payment/Transfer Office of the Paying Agent/Registrar is located
are authorized by law or executive order to be closed, then the date for such payment shall be
the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which
such banking institutions are authorized to be closed; and payment on such date shall have the
same force and effect as if made on the original date payment was due.
In the event of a non-payment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Ageht/Registrar, if and when funds for the payment of such interest
have been received. Notice of the Special Record Date and of the scheduled payment date of
the past due interest(which shall be 15 days after the Special Record Date)shall be sent at least
five (5) business days prior to the Special Record Date by United States mail, first-class, postage
prepaid, to the address of each Holder appearing on the Security Register at the close of business
on the last business day next preceding the date of mailing of such notice.
SECTION 5: Redemption.
(a) Optional Redemption. The Certificates having Stated Maturities on and after
February 15, 2034, shall be subject to redemption prior to maturity, at the option of the City, in
whole or in part, in principal amounts of $5,000 or any integral multiple thereof (and if within a
Stated Maturity by lot by the Paying Agent/Registrar), on February;15, 2032, or on any date
thereafter at the redemption price of par plus accrued interest to the date of redemption.
At least forty-five(45)days prior to an optional redemption date for the Certificates(unless
a shorter notification period shall be satisfactory to the Paying Agent/Registrar), the City shall
notify the Paying Agent/Registrar of the decision to redeem Certificates, the principal amount of
each Stated Maturity to be redeemed, and the date of redemption therefor. The decision of the
City to exercise the right to redeem Certificates shall be entered in the minutes of the governing
body of the City.
(b) Mandatory Redemption. The Certificates having a Stated Maturity of February 15,
2034, February 15, 2036, February 15, 2038, February 15, 2040 and February 15, 2042 (the
"Term Certificates") shall be subject to mandatory redemption in part prior to maturity at the
redemption price of par and accrued interest to the date of redemption on the respective dates
and in principal amounts as follows:
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Term Certificates due February 15, 2034 Term Certificates due February 15, 2036
Redemption Date Principal Amount Redemption Date Principal Amount
February 15, 2032 $165,000 February 15, 2035 $165,000
February 15, 2033 $165,000_. _February 1.5,2036 (maturity) __ $1.65,000
February 15, 2034 (maturity) $165,000
Term Certificates due February 15, 2038 Term Certificates due February 15, 2040
Redemption Date Principal Amount Redemption Date Principal Amount
February 15, 2037 $165,000 February 15, 2039 $160,000
February 15, 2038 (maturity) $165,000 February 15, 2040 (maturity) . $160,000
Term Certificates due February 15, 2042
Redemption Date Principal Amount
February 15, 2041 $160,000
February 15, 2042 (maturity) $160,000
Approximately forty-five (45) days prior to each mandatory redemption date for the Term
Certificates, the Paying Agent/Registrar shall select by lot the numbers of the Term Certificates
within the applicable Stated Maturity to be redeemed on the next following February 15 from
moneys set aside for that purpose in the Interest and Sinking Fund (as hereinafter defined). Any
Term Certificate not selected for prior redemption shall be paid on the date of their Stated Maturity.
The principal amount of the Term Certificates for a Stated Maturity required to be
redeemed on a mandatory redemption date may be reduced, at the option of the City, by the
principal amount of Term Certificates of like Stated Maturity which, at least fifty (50) days prior to
the mandatory redemption date, (1) shall have been acquired by the City at a price not exceeding
the principal amount of such Term Certificates plus accrued interest to the date of purchase
thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall have been
redeemed pursuant to the optional redemption provisions set forth in subsection (a)of this Section
and not theretofore credited against a mandatory redemption requirement.
(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/Registrar
shall treat such Certificates as representing the number of Certificates Outstanding which is
obtained by dividing the principal amount of such Certificates by $5,000 and shall select the
Certificates, or principal amount thereof, to be redeemed within such Stated Maturity by lot.
(d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date for
the Certificates, a notice of redemption shall be sent by United States mail, first-class, postage
prepaid, in the name of the City and at the City's expense, 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 (i) specify the date of redemption for the Certificates,
(ii) identify the Certificates to be redeemed and, in the case of a portion of the principal amount to
be redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Certificates, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Certificates, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/Registrar only upon presentation and surrender thereof by the Holder.
If a Certificate is subject by its terms to prior redemption, and has been called for redemption, and
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notice of redemption thereof has been duly given as hereinabove provided, such Certificate (or
the principal amount thereof to be redeemed)shall become due and payable and interest thereon
shall cease to accrue from and after the redemption date therefor; provided moneys sufficient for
the payment of such Certificate (or of the principal-amount thereof to be redeemed) at the then - -
applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
(e) Conditional Notice of Redemption. With respect to any optional,redemption of the
Certificates, unless moneys sufficient to pay the principal of and premium, if any, and interest on
the Certificates to be redeemed shall have been received by the Paying Agent/Registrar prior to
the giving of such notice of redemption, such notice may state that such redemption is conditional
upon the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for
such redemption, or upon the satisfaction of any prerequisites set forth in such notice of
redemption; and, if sufficient moneys are not received or such prerequisites are not satisfied, such
notice shall be of no force and effect, the City shall not redeem such Certificates and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Certificates have not been redeemed.
SECTION 6: Registration - Transfer - Exchange of Certificates - Predecessor
Certificates. The Paying Agent/Registrar shall obtain, record and maintain in the Security
Register the name and address of each and every owner of the Certificates issued under and
pursuant to the provisions of this Ordinance or, if appropriate, the nominee thereof. Any
Certificate may be transferred or exchanged for Certificates of other authorized denominations by
the Holder, in person or by his duly authorized agent, upon surrender of such Certificate to the
Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer or
request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/Registrar.
Upon surrender of any Certificate (other than the Initial Certificate authorized in Section 9
hereof)for transfer at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Certificates, executed on behalf of, and furnished by, the City, of
authorized denominations and having the same Stated Maturity and of a like aggregate principal
amount as the Certificate or Certificates surrendered for transfer.
At the option of the Holders, Certificates (other than the Initial Certificate(s) authorized in
Section 9 hereof) may be exchanged for other Certificates of authorized denominations and
having the same Stated Maturity, bearing the same rate of interest and of like aggregate principal
amount as the Certificates surrendered for exchange upon surrender of the Certificates to be
exchanged at the Designated Payment/Transfer Office of the Paying Agent/Registrar. Whenever
any Certificates are so surrendered for exchange, the Paying Agent/Registrar shall register and
deliver new Certificates, executed on behalf of, and furnished by the City, to the Holder requesting
the exchange.
All Certificates issued upon any transfer or exchange of Certificates shall be delivered at
the Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
mail, first-class, postage prepaid, to the Holder and, upon the registration and delivery thereof,
the same shall be valid obligations of the City, evidencing the same obligation to pay, and entitled
to the same benefits under this Ordinance, as the Certificates surrendered in such transfer or
exchange.
All transfers or exchanges of Certificates pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
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exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Certificates canceled by reason of-an exchange or transfer pursuant-to--the provisions --- -
hereof are hereby defined to be "Predecessor Certificates," evidencing all or a portion, as the
case may be, of the same obligation to pay evidenced by the new Certificate or Certificates
registered and delivered in the exchange or transfer therefor. Additionally, the term "Predecessor
Certificates" shall include any mutilated, lost, destroyed, or stolen Certificate for which a
replacement Certificate has been issued, registered and delivered in lieu thereof pursuant to
Section 25 hereof and such new replacement Certificate shall be deemed to evidence the same
obligation as the mutilated, lost, destroyed, or stolen Certificate.
Neither the City nor the Paying Agent/Registrar shall be required to issue or transfer to an
assignee of a Holder any Certificate called for redemption, in whole or in part, within 45 days of
the date fixed for the redemption of such Certificate; provided, however, such limitation on
transferability shall not be applicable to an exchange by the Holder of the unredeemed balance
of a Certificate called for redemption in part.
SECTION 7: Book-Entry-Only Transfers and Transactions. Notwithstanding the
provisions contained herein relating to the payment and transfer/exchange of the Certificates, the
City hereby approves and authorizes the use of the "Book-Entry-Only" securities clearance,
settlement and transfer system provided by The Depository Trust Company, a limited purpose
trust company organized under the laws of the State of New York("DTC"), in accordance with the
operational arrangements referenced in the Blanket Issuer Letter of Representations by and
between the City and DTC (the "Depository Agreement").
Pursuant to the Depository Agreement and the rules of DTC, the Certificates shall be
deposited with DTC who shall hold such Certificates for its participants (the "DTC Participants").
While the Certificates are held by DTC under the Depository Agreement, the Holder 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 in the event the City decides to discontinue use of the system of book-
entry transfers through DTC, the City covenants and agrees with the Holders of the Certificates
to cause Certificates to be printed in definitive form and 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/Registrar and payment of such Certificates shall be made in accordance with the provisions
of Sections 4, 5 and 6 hereof.
SECTION 8: Execution - Registration. The Certificates shall be executed on behalf of
:the City by the Mayor or the Mayor Pro Tem under its seal reproduced or impressed thereon and
countersigned by the City Secretary or Assistant City Secretary. The signature of such officers on
the Certificates may be manual or facsimile. Certificates bearing the manual or facsimile
signatures of such individuals who are or were the proper officers of the City on the date of
adoption of this Ordinance shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or any of them shall cease to hold such offices prior to the
delivery of the Certificates to the initial purchaser(s), and with respect to Certificates delivered in
subsequent exchanges and transfers, all as authorized and provided by Texas Government Code,
Chapter 1201, as amended.
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No Certificate shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Certificate either a certificate of
registration substantially in the form provided in Exhibit B, manually executed by the Comptroller
of Public Accounts of-the State of-Texas--or--his or her duly-authorized agent; or a--certificate-of-
registration substantially in the form provided in Exhibit B, manually executed by an authorized
officer, employee or representative of the Paying Agent/Registrar, and either such certificate duly
signed upon any Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly certified, registered and delivered.
SECTION 9: Initial Certificate(s). The Certificates herein authorized shall be initially
issued either(i)as a single fully registered certificate in the total principal amount stated in Section
2 hereof with principal installments to become due and payable as provided in Section 3 hereof
and numbered T-1 or(ii)as multiple fully registered certificates, being one certificate for each year
of maturity in the applicable principal amount and denomination and to be numbered
consecutively from T-1 and upward (hereinafter called the "Initial Certificate(s)") and, in either
case, the Initial Certificate(s) shall be registered in the name of the initial purchaser(s) or the
designee thereof. The Initial Certificate(s) shall be the Certificate submitted to the Office of the
Attorney General of the State of Texas for approval, certified and registered by the Office of the
Comptroller of Public Accounts of the State of Texas and delivered to the initial purchaser(s). Any
time after the delivery of the Initial Certificate(s), the Paying Agent/Registrar, pursuant to written
instructions from the initial purchaser(s), or the designee thereof, shall cancel the Initial
Certificate(s) delivered hereunder and exchange therefor definitive Certificates of authorized
denominations, Stated Maturities, principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses identified therefor; all pursuant to
and in accordance with such written instructions from the initial purchaser(s), or the designee
thereof, and such other information and documentation as the Paying Agent/Registrar may
reasonably require.
SECTION 10: Forms.
(a) Forms Generally. The Certificates, the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the Registration Certificate of Paying
Agent/Registrar, and the form of Assignment to-be printed on each of the Certificates, shall be
substantially in the forms set forth in Exhibit B with such appropriate insertions, omissions,
substitutions, and other variations as are permitted or required by this Ordinance and 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 insurance legends in the event the
Certificates, or any maturities thereof, are purchased with bond insurance and any reproduction
of an opinion of counsel),thereon as may, consistently herewith, be established by the City or
determined by the officers executing such Certificates as evidenced by their execution. 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 definitive Certificates, including the Initial Certificate(s), shall be typewritten, printed,
lithographed, or photocopied, or produced in any other similar manner, all as determined by the
officers executing such Certificates as evidenced by their execution.
SECTION 11: Certificate Fund. For the purpose of paying the interest on and to provide
a sinking fund for the payment, redemption and retirement of the Certificates, there shall be and
is hereby created a special account on the books of the City to be designated "SPECIAL SERIES
2022 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND," and all moneys deposited
to the credit of such account shall be kept and maintained in a banking fund maintained at the
City's depository. The Mayor, Mayor Pro Tern, City Manager, Deputy City Manager, Assistant
131630950.3/1001216715 9
City Manager, Director of Finance, City Secretary and Assistant City Secretary, individually or
collectively, are hereby authorized and directed to make withdrawals from the Certificate Fund
sufficient to pay the principal of and interest on the Certificates as the same become due and
payable, and, shall cause to-be transferred to the-Paying Agent/Registrar from moneys on deposit-
in the Certificate Fund an amount sufficient to pay the amount of principal and/or interest falling
due on the Certificates, such transfer of funds to the Paying Agent/Registrar to be made in such
manner as will cause immediately available funds to be deposited with the Paying Agent/Registrar
on or before the last business day next preceding each interest and principal payment date for
the Certificates.
Pending the transfer of funds to the Paying Agent/Registrar, money in the Certificate Fund
may, at the option of the City, be invested in obligations identified in, and in accordance with the
provisions of the "Public Funds Investment Act" relating to the investment of "bond proceeds";
provided that all such investments shall be made in such a manner that the money required to be
expended from such Fund will be available at the proper time or times. All interest and income
derived from deposits and investments in such Certificate Fund shall be credited to, and any
losses debited to, the such Certificate Fund. All such investments shall be sold promptly when
necessary to prevent any default in connection with the Certificates.
SECTION 12: Tax Levy. To provide for the payment of the "Debt Service Requirements"
on the Certificates being (i) the interest on such Certificates and (ii) a sinking fund for their
redemption at maturity or a sinking fund of 2% (whichever amount shall be the greater), there
shall be and there is hereby levied, within the limitations prescribed by law, a sufficient tax on
each one hundred dollars' valuation of taxable property in the City, adequate to pay such Debt
Service Requirements while the Certificates remain Outstanding, full allowance being made for
delinquencies and costs of collection; such tax shall be assessed and collected each year and
applied to the payment of the Debt Service Requirements, and the same shall not be diverted to
any other purpose. The taxes so levied and collected shall be paid into the Certificate Fund. The
Council hereby declares its purpose and intent to provide and levy a tax legally and fully sufficient
to pay the Debt Service Requirements, it having been determined that the existing and available
taxing authority of the City for such purpose is adequate to permit a legally sufficient tax in
consideration of all other outstanding indebtedness.
The amount of taxes to be provided annually for the payment of the principal of and interest
on the Certificates shall be determined and accomplished in the following manner:
(a) Prior to the date the Council establishes the annual tax rate and passes an
ordinance levying ad valorem taxes each year, the Council shall determine:
(1) The amount on deposit in the Certificate Fund 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 to be levied and
(b) adding thereto the amount of the Net Revenues of the System appropriated
and allocated to pay such Debt Service Requirements prior to the Collection Date
for the ad valorem taxes to be levied.
(2) The amount of Net Revenues of the System, and any other lawfully
available revenues which are 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 calendar year.
(3) The amount of Debt Service Requirements to become due and
payable on the Certificates between the Collection Date for the taxes then to be
131630950.3/1001216715 1 0
levied and the Collection Date for the taxes to be levied during the next succeeding.
calendar year.
•
(b) -The-amount of taxes to be levied annually each year to pay the Debt
Service Requirements on the Certificates shall be the amount established in paragraph (3)above
less the sum total of the amounts established in paragraphs (1) and (2), after taking into
consideration delinquencies and costs of collecting such annual taxes.
The City has sufficient current funds available and such funds are hereby appropriated to
make the payments to become due on the Certificates on February 15, 2023, and August 15,
2023, and the Mayor, Mayor Pro Tern, City Manager, Deputy City Manager, Assistant City
Manager, Director of Finance, City Secretary, and Assistant City Secretary, individually or jointly,
are hereby authorized and directed to transfer and deposit in the Certificate Fund such amount of
current funds which will be sufficient to pay the amounts to become due on the Certificates on
February 15, 2023, and August 15, 2023.
SECTION 13: Limited Pledge of Net Revenues. The City hereby covenants and agrees
that, subject to the prior lien on and pledge of the Net Revenues of the System to the payment
and security of Prior Lien Obligations, the Net Revenues of the System, in the amount of$1,000
are hereby irrevocably pledged, equally and ratably, to the payment of the principal of and interest
on the Certificates, and the limited pledge of $1,000 of the Net Revenues of the System herein
made for the payment of the Certificates shall constitute a lien on the Net Revenues of the System
until such time as the City shall pay all of such $1,000, after which time the pledge shall cease.
Furthermore, such lien on and pledge of the Net Revenues securing the payment of the
Certificates shall be valid and binding and fully perfected from and after the date of adoption of
this Ordinance without physical delivery or transfer or transfer of control of the Net Revenues, the
filing of this Ordinance or any other act; all as provided in Texas Government Code, Chapter
1208, as amended.
Texas Government Code, Section 1208, as amended, -applies to the issuance of the
Certificates and the pledge of the Net Revenues of the System granted by the City under this
Section 13, and such pledge is therefore valid, effective and perfected. If Texas law is amended
at any time while the Certificates are Outstanding such that the pledge of the Net Revenues of
the System granted by the City under this Section 13 is to be subject to the filing requirements of
Texas Business and Commerce Code, Chapter 9, as amended, then in order to preserve to the
registered owners of the Certificates the perfection of the security interest in such pledge, the City
agrees to take such measures as it determines are reasonable and necessary under Texas law
to comply with the applicable provisions of Texas Business and Commerce Code, Chapter 9, as
amended, and enable a filing to perfect the security interest in such pledge to occur.
SECTION 14: System Fund. The City covenants and agrees that all Gross Revenues
(excluding earnings from the investment of money held in any special funds or accounts created
for the payment and security of the Prior Lien Obligations) shall be deposited as collected into a
fund maintained at an official depository of the City and known on the books of the City as the
"Water and Sewer System Fund" (hereinafter called the "System Fund"). All moneys deposited
to the credit of the System Fund shall be allocated, dedicated and disbursed to the extent required
for the following purposes and in the order of priority shown, to wit:
First: To the payment of all necessary and reasonable Operating and
Maintenance Expenses of the System as defined herein or required by
statute to be a first charge on and claim against the Gross Revenues of _
the System.
131630950.3/1001216715 11
Second: To the payment of all amounts required to be deposited in the special
Funds created and established for the payment, security and benefit of
Prior Lien Obligations in accordance with the terms and provisions of the
ordinances authorizing-the issuance of Prior Lien Obligations. -- - - -- -
Third: To the payment, equally and ratably, of the limited amounts pledged to
the payment of the Certificates.
Any Net Revenues remaining in the System Fund after satisfying the foregoing
payments, or making adequate and sufficient provision for the payment thereof, may be
appropriated and used for payment of the Subordinate Lien Obligations and then for any
other City purpose now or hereafter permitted by law.
SECTION 15: Deposits to Certificate Fund. Subject to the provisions of Section 13
hereof, the City hereby covenants and agrees to cause to be deposited in the Certificate Fund
from the.pledged Net Revenues of the System in the System Fund, the amount of Net Revenues
of the System pledged to the payment of the Certificates.
The City covenants and agrees that the amount of pledged Net Revenues of the System
($1,000), together with other lawfully available revenues appropriated by the City for payment of
the debt service requirements on the Certificates and ad valorem taxes levied, collected, and
deposited in the Certificate Fund for and on behalf of the Certificates, will be an amount equal to
one hundred percent(100%) of the amount required to fully pay the interest and principal due and
payable on the Certificates. In addition, any surplus proceeds from the sale of the Certificates
not expended for authorized purposes shall be deposited in the Certificate Fund, and such
amounts so deposited shall reduce the sums otherwise required to be deposited in such Fund
from ad valorem taxes and the Net Revenues of the System.
SECTION 16: Security of Funds. All moneys on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly invested)
shall be secured in the manner and to the fullest extent required by the laws of Texas for the
security of public funds, and moneys on deposit in such Funds shall be used only for the purposes
permitted by this Ordinance.
SECTION 17: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the Net Revenues of the System
supporting this issue of Certificates and has lawfully exercised such powers under the Constitution
and laws of the State of Texas, including the powers existing under Texas Government Code,
Chapter 1502, as amended, and Texas Local Government Code, Sections 271.041, et seq., as
amended.
(b) Other than for the payment of the Certificates, the Net Revenues of the
System are not pledged to the payment of any debt or obligation of the City or of the System.
SECTION 18: Issuance of Prior Lien Obligations -Additional Obligations and Subordinate
Lien Obligations. The City expressly reserves the right to hereafter issue Prior Lien Obligations,
without limitation as to principal amount but subject to any terms, conditions or restrictions
applicable thereto under law or otherwise. Prior Lien Obligations hereafter issued may be
payable, in whole or in part, from the Net Revenues (without impairment of the obligation of
contract with the Holders of the Certificates) upon such terms and conditions as the Council may
determine. Additionally, the City reserves the right to issue (a) obligations payable, in whole or in
part, from the Net Revenues of the System and, to the extent provided, secured by a lien on and
131630950.3/1001216715 12
pledge of the Net Revenues of equal rank and dignity with the lien and pledge securing the
payment of the Certificates and (b) Subordinate Lien Obligations.
SECTION 19: Application of Prior Lien Obligations Covenants and-Agreements. It is-the
intention of this governing body and accordingly hereby recognized and stipulated that the
provisions, agreements and covenants contained herein bearing upon the management and
operations of the System, and the administering and application of revenues derived from the
operation thereof, shall to the extent possible be harmonized with like provisions, agreements and
covenants contained in the ordinances authorizing the issuance of the Prior Lien Obligations, and
to the extent of any irreconcilable conflict between the provisions contained herein and in the
ordinances authorizing the issuance of the Prior Lien Obligations, the provisions, agreements and
covenants contained therein shall prevail to the extent of such conflict and be applicable to this
Ordinance but in all respects subject to the priority of rights and benefits, if any, conferred thereby
to the holders of the Prior Lien Obligations.
SECTION 20: Further Procedures. Any one or more of the Mayor, Mayor Pro Tern, City
Manager, Deputy City Manager, Assistant City Manager, Director of Finance, City Secretary and
Assistant City Secretary are hereby expressly authorized, empowered and directed from time to
time and at any time to do and perform all such acts and things and to execute, acknowledge and
deliver in the name and on behalf of the City all agreements, instruments, certificates or other
documents, whether mentioned herein or not, as may be necessary or desirable in order to carry
out the terms and provisions of this Ordinance and the issuance of the Certificates. In addition,
prior to the initial delivery of the Certificates, the Mayor, Mayor Pro Tern, City Manager, Deputy
City Manager, Assistant City Manager, Director of Finance, City Secretary or Assistant City
Secretary or Bond Counsel to the City are each hereby authorized and directed to approve any
changes or corrections to this Ordinance or to any of the documents authorized and approved by
this Ordinance: (i) in order to cure any ambiguity, formal defect, or omission in the Ordinance or
such other document; or (ii) as requested by the Attorney General of the State of Texas or his
representative to obtain the approval of the Certificates by the Attorney General and if such officer
or counsel determines that such changes are consistent with the intent and purpose of the
Ordinance, which determination shall be final. In the event that any officer of the City whose
signature shall appear on any document shall cease to be such officer before the delivery of such
document, such signature nevertheless shall be valid and sufficient for all purposes the same as
if such officer had remained in office until such delivery.
Additionally, the Mayor, Mayor Pro Tern, the City Manager, the Deputy City Manager, the
Assistant City Manager, Director of Finance, City Secretary, and Assistant City Secretary may
execute, authenticate, certify, or endorse or authorize to be executed, authenticated, certified, or
endorsed with such officer's facsimile signature instead of the officer's manual signature any
written agreement, including a contract, purchase order or surety bond, and any related
document, including an application, certificate, or approval. For purposes of this Ordinance,
"facsimile signature" means a reproduction of the manual signature of an authorized officer that
is made by any method.
SECTION 21: Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given="(unless otherwise herein expressly
provided) if in writing and sent by United States mail, first-class postage prepaid, to the address
of each Holder appearing on the Security Register at the close of business on the business day
next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such notice
to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Certificates. Where this Ordinance provides for notice in any
manner, such notice may be waived in writing by the Holder entitled to receive such notice, either
131630950.3/1001216715 13
before or after the event with respect to which such notice is given, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver: — -
SECTION 22: Cancellation. All Certificates surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be
promptly canceled by it and, if surrendered to the City, shall be delivered to the Paying
Agent/Registrar and, if not already canceled, shall be promptly canceled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying Agent/Registrar for cancellation
any Certificates previously certified or registered and delivered which the City may have acquired
in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by the
Paying Agent/Registrar. All canceled Certificates held by the Paying Agent/Registrar shall be
returned to the City.
SECTION 23: 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.
131630950.3/1001216715 14
(b) Not to Cause Interest to Become Taxable. The City 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 City 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 City 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 City 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, 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 iri 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,
other than taxes of general application within the City 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 City 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 City shall not at any time prior
to the final Stated Maturity of the Certificates directly or indirectly invest Gross Proceeds in any
Investment (or use Gross Proceeds to replace money so invested), if as a result of such
investment the Yield from the Closing Date of all Investments acquired with Gross Proceeds (or
with money replaced thereby), whether then held or previously disposed of, exceeds the Yield of
the Certificates.
131630950.3/1001216715 15
(f) Not Federally Guaranteed. Except to the extent permitted by Section
149(b) of the Code and the Regulations and rulings thereunder, the City 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 City 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 City 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 City may commingle Gross Proceeds of the Certificates with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than. each Computation Date, the City 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 City 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 Purchaser(defined below) 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 City shall pay to the United States from the 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 Certificate 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 City 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 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.
131630950.3/1001216715 16
(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 (h) of -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 party.
(j) Elections. The City hereby directs and authorizes the Mayor, Mayor Pro
Tern, City Manager, Deputy City Manager, Assistant City Manager, Director of Finance, City
Secretary or Assistant City Secretary, individually or jointly, 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 24: Satisfaction of Obligations of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Certificates, at the times and in the manner stipulated in this Ordinance, then the pledge of
taxes levied under this Ordinance and the Net Revenues of the System (to the extent such limited
pledge of Net Revenues shall not have been discharged or terminated by prior payment of
principal of or interest on the Certificates) and all covenants, agreements, and other obligations
of the City to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Certificates or any principal amount(s) thereof shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section ("Defeased Certificates") when
(i) money sufficient to pay in full such Certificates or the principal amount(s)thereof at maturity or
the redemption date therefor, together with all interest due thereon, shall have been irrevocably
deposited with and held in trust by the Paying Agent/Registrar, or an authorized escrow agent, or
(ii) Government Securities shall have been irrevocably deposited in trust with the Paying
Agent/Registrar, or an authorized escrow agent, which Government Securities shall mature as to
principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money, together with any moneys deposited therewith, if any, to pay
when due the principal of and interest on such Certificates, or the principal amount(s)thereof, on
and prior to the Stated Maturity thereof or(if notice of redemption has been duly given or waived
or if irrevocable arrangements therefor acceptable to the Paying Agent/ Registrar have been
made) the redemption date thereof. In the event of a defeasance of the Certificates, the City shall
deliver a certificate from its financial advisor, the Paying Agent/Registrar, an independent certified
public accountant, or another qualified third party concerning the sufficiency of the deposit of cash
and/or Government Securities to pay, when due, the principal of, redemption premium (if any),
and interest due on any Defeased Certificates.
The City reserves the right, subject to satisfying the requirements of (i) and/or (ii) above,
to substitute other Government Securities for the Government Securities originally deposited, to
reinvest the uninvested moneys on deposit for such defeasance and to withdraw for the benefit
of the City moneys in excess of the amount required for such defeasance. At such time as
Certificates shall be deemed to be Defeased Certificates hereunder, as aforesaid, such
Certificates and the interest thereon shall no longer be secured by, payable from, or entitled to
the benefits of, the taxes or revenues levied and pledged as provided in this Ordinance, and such
principal and interest shall be payable solely from such money or Government Securities.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby provided that
any determination not to redeem the Defeased Certificates that is made in conjunction with the
payment arrangements specified in (i) or (ii) above in this paragraph shall not be irrevocable,
provided that in the proceedings providing for such payment arrangements, the City: (1) expressly
reserves the right to call the Defeased Certificates for redemption; (2) gives notice of the
131630950.3/1001216715 17
reservation of that right to the registered owners of the Defeased Certificates immediately
following the making of the payment arrangements; and (3) directs that notice of the reservation
be included in any redemption notices that it authorizes. The City covenants that no deposit of
moneys or Government Securities will be made-.under-this Section and no-use made of-any-such
deposit which would cause the Certificates to be treated as "arbitrage bonds" within the meaning
of Section 148 of the Internal Revenue Code of 1986, as amended, or regulations adopted
pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or an authorized escrow agent,
and all income from Government Securities held in trust by the Paying Agent/Registrar, or an
authorized escrow agent, pursuant to this Section which is not required for the payment of the
Certificates, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the City.
Furthermore, any money held by the Paying Agent/Registrar for the payment of the principal of
and interest on the Certificates and remaining unclaimed for a period of three (3) years after the
Stated Maturity, or applicable redemption date, of the Certificates such moneys were deposited
and are held in trust to pay shall upon the request of the City be remitted to the City against a
written receipt therefor. Notwithstanding the above and foregoing, any remittance of funds from
the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed property laws
of the State of Texas.
SECTION 25: Mutilated, Destroyed, Lost, and Stolen Certificates. In case any Certificate
shall be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and
deliver a replacement Certificate of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and substitution for such mutilated
Certificate, or in lieu of and in substitution for such destroyed, lost or stolen Certificate, only upon
the approval of the City and after(i)the filing by the Holder thereof with the Paying Agent/Registrar
of evidence satisfactory to the Paying Agent/Registrar of the destruction, loss or theft of such
Certificate, and of the authenticity of the ownership thereof and (ii) the furnishing to the Paying
Agent/Registrar of indemnification in an amount satisfactory to hold the City and the Paying
Agent/Registrar harmless. All expenses and charges associated with such indemnity and with
the preparation, execution and delivery of a replacement Certificate shall be borne by the Holder
of the Certificate mutilated, or destroyed, lost or stolen.
Every replacement Certificate issued pursuant to this Section shall be a valid and binding
obligation, and shall be entitled to all the benefits of this Ordinance equally and ratably with all
other Outstanding Certificates; notwithstanding the enforceability of payment by anyone of the
destroyed, lost, or stolen Certificates.
The provisions of this Section are exclusive and shall 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 26: Ordinance a Contract - Amendments. This Ordinance shall constitute a
contract with the Holders from time to time, be binding on the City, and shall not be amended or
repealed by the City so long as any Certificate reTnains Outstanding except as permitted in this
Section and Section 33 hereof. The City, may, without the consent of or notice to any Holders,
from time to time and at any time, amend this Ordinance in any manner not detrimental to the
interests of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the City may, with the written consent of Holders holding a majority
in aggregate principal amount of the Certificates then Outstanding, amend, add to, or rescind any
of the provisions of this Ordinance; provided that, without the consent of all Holders of Outstanding
Certificates, no such amendment, addition, or rescission shall (1) extend the time or times of
payment of the principal of, premium, if any, and interest on the Certificates, reduce the principal
131630950.3/1001216715 18
amount thereof, the redemption price, or the rate of interest thereon, or in any other way modify
the terms of payment of the principal of, premium, if any, or interest on the Certificates, (2) give
any preference to any Certificate over any other Certificate, or (3) reduce the aggregate principal
amount of- Certificates required to be held by Holders for consent-to any such amendment, -- - -
addition, or rescission.
SECTION 27: Sale of the Certificates. Pursuant to a public sale for the Certificates, the
bid submitted by The Baker Group LP (herein referred to as the "Purchaser") is declared to be
the best bid received producing the lowest true interest cost rate to the City; such bid is hereby
accepted and incorporated herein by reference as a part of this Ordinance for all purposes and
the sale of the Certificates to the Purchaser at the price of par, plus a cash premium of
$214,996.13, is hereby approved and confirmed. Delivery of the Certificates to the Purchaser
shall occur as soon as possible upon payment being made therefor in accordance with the terms
of sale. The terms of sale are hereby declared to be in the best interest of the City.
SECTION 28: Official Statement. The use of the Preliminary Official Statement in the
offering and sale of the Certificates is hereby ratified, confirmed and approved in all respects, and
the Council hereby finds that the information and data contained in such Preliminary Official
Statement pertaining to the City and its financial affairs is true and correct in all material respects
and no material facts have been omitted therefrom which are necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. The form and
content of the final Official Statement, which reflects the terms of sale (together with such changes
approved by the Mayor, Mayor Pro Tem, City Manager, Deputy City Manager, Assistant City
Manager, Director of Finance, City Secretary and Assistant City Secretary, any one or more of
such officials), shall be and is hereby in all respects approved and the Purchaser is hereby
authorized to use and distribute the final Official Statement, dated August 22, 2022, in the offering,
sale and delivery of the Certificates to the public.
SECTION 29: Proceeds of Sale. The proceeds of sale of the Certificates excluding
accrued interest, if any, received from the Purchaser, and amounts to pay costs of issuance and
any additional proceeds to be deposited to the Certificate Fund, shall be deposited in a fund
maintained at a City depository bank (the "Construction Fund"). Pending expenditure for
authorized projects and purposes, such proceeds of sale may be invested in authorized
investments in accordance with the provisions of Texas Government Code, Chapter 2256, as
amended, including specifically guaranteed investment contracts permitted by Texas Government
Code, Section 2256.015, et seq., and the City's investment policies and guidelines, and any
investment earnings realized may be expended for such authorized projects and purposes or
deposited in the Certificate Fund as shall be determined by the Council. Accrued interest or
premium, if any, received from the Purchaser as well as proceeds of sale, including investment
earnings thereon, remaining after completion of all authorized projects or purposes shall be
deposited to the credit of the Certificate Fund.
SECTION 30: Control and Custody of Certificates. The Mayor or Mayor Pro Tem of the
City shall be and is hereby authorized to take and have charge of all necessary orders and records
pending the sale of the Certificates, the investigation by the Attorney General of the State of
Texas, including.the printing and supply of definitive Certificates, and shall take and have charge
and control of the Initial Certificate(s) pending the approval thereof by the Attorney General and
its registration thereof by the Comptroller of Public Accounts.
Furthermore, the Mayor, Mayor Pro Tern, City Manager, Deputy City Manager, Assistant
City Manager, Director of Finance, City Secretary and Assistant City Secretary, individually or
collectively, are hereby authorized and directed to furnish and execute such documents and
certifications relating to the City and the issuance of the Certificates, including a certification as to
facts, estimates, circumstances and reasonable expectations pertaining to the use and
131630950.3/1001216715 19
expenditure and investment of the proceeds of the Certificates as may be necessary for the
approval of the Attorney General and their registration by the Comptroller of Public Accounts. In
addition, such officials, together with the City's financial advisor, Bond Counsel and the Paying
Agent/Registrar, are authorized and directed to make the necessary arrangements for the delivery
of the Initial Certificate to the Purchaser.
SECTION 31: Bond Counsel's Opinion. The Purchaser's obligation to accept delivery of
the Certificates is subject to being furnished a final legal opinion of the City's bond counsel, Norton
Rose Fulbright US LLP, Dallas, Texas ("Bond Counsel"), approving the Certificates'as to their
validity, such opinion to be dated and delivered as of the date of delivery and payment for the
Certificates. An executed counterpart of such opinion shall accompany the global certificates
deposited with DTC or a reproduction thereof shall be printed on the definitive Certificates in the
event the book-entry-only system shall be discontinued. The prior engagement of Bond Counsel
as bond counsel to the City is hereby approved, ratified and confirmed.
SECTION 32: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive
Certificates. It is expressly provided, however, that the presence or absence of CUSIP numbers
on the definitive Certificates shall be of no significance or effect as regards the legality thereof
and neither the City nor attorneys approving such Certificates as to legality are to be held
responsible for CUSIP numbers incorrectly printed or typed on the definitive Certificates.
SECTION 33: Continuing Disclosure Undertaking..
(a) Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
"Financial Obligation"means a (a)debt obligation; (b)derivative instrument
entered into in connection with, or pledged as a security or a source of
payment for, an existing or planned debt obligation; or (c) guarantee of a
debt obligation or any such derivative instrument; provided that "financial
obligation" shall not include municipal securities as to which a final official
statement (as defined in the Rule) has been provided to the MSRB
consistent with the Rule.
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. The City shall provide annually to the MSRB (1)within six
months after the end of each fiscal year, beginning in or after 2022, financial information and
operating data with respect to the City of the general type included in Official. Statement under
Tables numbered 1 through 5 and 7 through 14, and (2) if not provided as part of such financial
information and operating data, audited financial statements of the City within twelve (12) months
after the end of each year ending in or after 2022. Any financial statements so provided shall (i)
be prepared in accordance with the accounting principles described in Appendix B to the Official
Statement, or such other accounting principles as the City may be required to employ from time
to time pursuant to state law or regulation, and (ii) audited, if the City commissions an audit of
such statements and the audit is completed within the period during which they must be provided.
If the audit of such financial statements is not complete within twelve (12) months after any such
fiscal year of the City, then the City will provide unaudited financial statements within such twelve-
month period and audited financial statements when and if such audited financial statements
become available.
131630950.3/100121671,5 20
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date of
the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
documents available to the public on the MSRB's Internet web site or filed with the SEC.
(c) Notice of Certain Events.
The City shalt provide notice of any of the following events with respect to the Certificates
to the MSRB in a timely manner and not more than ten (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 status of the Certificates, or other material events affecting the tax status of the
Certificates;
(7) Modifications to rights of holders of the Certificates, if material;
(8) Certificate calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City,
which shall occur as described below;
(13) The consummation of a merger, consolidation, or acquisition
involving the City 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;
(14) Appointment of a successor or additional trustee or the change of -
name of a trustee, if material;
(15) Incurrence of a Financial Obligation of the City, if material, or
agreement to covenants, events of default, remedies, priority rights, or other similar
terms of a Financial Obligation of the City, any of which affect security holders, if
material; and
131630950.3/1001216715 21
(16) Default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of a Financial Obligation of the City,
any of which reflect financial difficulties.
For these purposes, (a) any event described in the immediately preceding subsection
(c)(12) is considered to occur when any of the following occur: the appointment of a receiver,
fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy
Code or in any other proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or business of the City, or if
such jurisdiction has been assumed by leaving the existing governing body and officials or officers
in possession but subject to the supervision and orders of a court or governmental authority, or
the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City, and (b) the City intends the words used in the immediately preceding
subsections (c)(15) and (c)(16) and the definition of Financial Obligation in this Section to have
the meanings ascribed to them in SEC Release No. 34-83885, dated August 20, 2018.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with Subsection (b) of this Section by the
time required by such Section.
(d) Filings with the MSRB.
All financial information, operating data, financial statements, notices and other
documents provided to the MSRB in accordance with this Section shall be provided in an
electronic format prescribed by the MSRB and shall be accompanied by identifying information
as prescribed by the MSRB.
(e) Limitations, Disclaimers, and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the City remains an "obligated person" with respect to the
Certificates within the meaning of the Rule, except that the City in any event will give the notice
required by Subsection (c) of this Section of any Certificate calls and defeasance that cause the
City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial owners
of the Certificates; and, nothing in this Section, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Section. Except as expressly provided within
this Section, the City does not undertake to provide any other information, whether or not it may
be relevant or material to a complete presentation of the City's financial results, condition, or
prospects; nor does the City undertake to update any information provided in accordance with
this Section or otherwise. Furthermore, the City does not make any representation or warranty
concerning such information or its usefulness to a decision to invest in or sell Certificates at any
future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
131630950.3/1001216715 22
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 City in observing or performing its obligations under this Section shall - - -- -
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
Notwithstanding anything herein to the contrary, the provisions of this Section may be
amended by the City 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 City, but only if (1) the provisions of this Section, as so amended, would have
permitted an underwriter to purchase or sell the 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 Holders of a majority in aggregate principal amount(or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the Outstanding
Certificates consent to such amendment or (b) a person that is unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment will not materially impair
the interests of the Holders and beneficial owners of the Certificates. The provisions of this
Section may also be amended from time to time or repealed by the City 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 only if and to the extent that reservation of the City's right to do so would
not prevent underwriters of the initial public offering of the Certificates from lawfully purchasing or
selling Certificates in such offering. If the City so amends the provisions of this Section, it shall
include with any amended financial information or operating data next provided pursuant to
subsection (b) of this Section 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.
SECTION 34: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar, and the Holders, 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 City, the Paying Agent/Registrar
and the Holders.
SECTION 35: Inconsistent Provisions. Subject to Section 19 hereof, all ordinances,
orders, or resolutions, or parts thereof which are in conflict or inconsistent with any provision of
this Ordinance are hereby repealed to the extent of such conflict and the provisions of this
Ordinance shall be and remain controlling as to the matters contained herein.
SECTION 36: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 37: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 38: Severability. If any provision of this Ordinance or the application thereof to
any circumstance shall be held to be invalid, the remainder of this Ordinance or the application
thereof to other circumstances shall nevertheless be valid, and this governing body hereby
declares that this Ordinance would have been enacted without such invalid provision.
131630950.3/1001216715 23
•
SECTION 39: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural number
shall be considered to include the singular, and words of the masculine, feminine or neuter gender
shall be considered to include the other genders.
SECTION 40: Incorporation of Findings and Determinations. The findings and
determinations of the Council contained in the preamble hereof are hereby incorporated by
reference and made a part of this Ordinance for all purposes as if the same were restated in full
in this Section.
SECTION 41: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by Texas Government Code, Chapter 551, as amended.
SECTION 42: Effective Date. In accordance with the provisions of Texas Government
Code, Section 1201.028, as amended, this Ordinance shall be in force and effect from and after
its passage on the date shown below and it is so ordained.
[Remainder of page intentionally left blank]
131630950.3/1001216715 24
PASSED AND ADOPTED, this August 22, 2022.
CITY OF NORTH I LAND LS, TEXAS
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APPROVED AS TO FORM AND LEGALITY:
•
City Attorney
131630950.3 [signature page of Ordinance]
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
131630950.3 A-1
, EXHIBIT B
FORMS
(a) Form of Definitive Certificate.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF NORTH RICHLAND HILLS, TEXAS
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATE OF OBLIGATION
SERIES 2022
Certificate Date: Interest Rate: Stated Maturity: CUSIP No.:
August 15, 2022 February 15, 20_
Registered Owner:
Principal Amount: DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, on the Stated Maturity date specified above the Principal
Amount stated above(or so much thereof as shall not have been paid upon prior redemption)and
to pay interest on the unpaid principal amount hereof from the interest payment date next
preceding the "Registration Date" of this Certificate appearing below(unless this Certificate bears
a "Registration Date" as of an interest payment date, in which case it shall bear interest from such
date, or unless the"Registration Date" of this Certificate is prior to the initial interest payment date,
in which case it shall bear interest from the date of delivery to the initial purchasers) at the per
annum rate of interest specified above computed on the basis of a 360-day year of twelve 30-day
months; such interest being payable on February 15 and August 15 of each year, commencing
February 15, 2023, until maturity or prior redemption. Principal of this Certificate is payable at its
Stated Maturity or redemption to the registered owner hereof upon presentation and surrender at
the Designated Payment/Transfer Office of the Paying Agent/Registrar executing the registration
certificate appearing hereon, or its successor; provided, however, while the Certificate is
registered to Cede & Co., the payment of principal upon a partial redemption of the principal
amount may be accomplished without presentation and surrender of this Certificate. Interest is
payable to the registered owner of this Certificate (or one or more Predecessor Certificates, as
defined in the Ordinance hereinafter referenced)whose name,appears on the "Security Register"
maintained by the Paying Agent/Registrar at the close of business on the "Record Date," which
is the last business day of the month next preceding each interest payment date and interest shall
be paid by the Paying Agent/Registrar by check sent United States mail, first-class, postage
prepaid, to the address of the registered owner recorded in the Security Register or by such other
method, acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of,
the registered owner. If the date for the payment of the principal of or interest on the Certificates
shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where
the Designated Payment/Transfer Office of the Paying Agent/Registrar is located are authorized
by law or executive order to close, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made
131630950.3 B-1
on the original date payment was due. All payments of principal of, premium, if any, and interest
on this Certificate shall be without exchange or collection charges to the owner hereof and 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.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $3,645,000 (hereinafter referred to as the "Certificates"), for the purpose of paying
contractual obligations to be incurred for (i) constructing, acquiring, purchasing, renovating,
enlarging, equipping, and improving the City's water and sewer system facilities, including the
acquisition of land and rights-of-way therefor, (ii) acquiring fleet vehicles and equipment for
various City departments, including the fire/emergency services department, and (iii) professional
services rendered in relation to such projects and the financing thereof, under and in strict
conformity with the Constitution and laws of the State of Texas, particularly Texas Local
Government Code, Subchapter C of Chapter 271, as amended, and pursuant to an ordinance
adopted by the City Council of the City (herein referred to as the "Ordinance").
The Certificates maturing on the dates hereinafter identified (the "Term Certificates") are
subject to mandatory redemption prior to maturity with funds on deposit in the Interest and Sinking
Fund established and maintained for the payment thereof in the Ordinance, and shall be
redeemed in part prior to maturity at the price of par and accrued interest thereon to the date of
redemption, and without premium, on the dates and in the principal amounts as follows:
Term Certificates due February 15, 2034 Term Certificates due February 15, 2036
Redemption Date Principal Amount Redemption Date Principal Amount
February 15, 2032 $165,000 February 15, 2035 $165,000
February 15, 2033 $165,000 February 15, 2036 (maturity) $165,000
February 15, 2034 (maturity) $165,000
Term Certificates due February 15, 2038 Term Certificates due February 15, 2040
Redemption Date Principal Amount Redemption Date Principal Amount
February 15, 2037 $165,000 February 15, 2039 $160,000
February 15, 2038 (maturity) $165,000 February 15, 2040 (maturity) $160,000
Term Certificates due February 15, 2042
Redemption Date Principal Amount
February 15, 2041 $160,000
• February 15, 2042 (maturity) $160,000
The particular Term Certificates to be redeemed on each redemption date shall be chosen
by lot by the Paying Agent/Registrar; provided, however, that the principal amount of Term
Certificates for a Stated Maturity required to be redeemed on a mandatory redemption date may
be reduced, at the option of the City, by the principal amount of Term Certificates of like maturity
which, at least 50 days prior to a mandatory redemption date, (1)shall have been acquired by the
City at a price not exceeding the principal amount of such Term Certificates plus accrued interest
to the date of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or
(2) shall have been redeemed pursuant to the optional redemption provisions appearing below
and not theretofore credited against a mandatory redemption requirement.
The Certificates having Stated Maturities on and after February 15, 2034, may be
redeemed prior to their Stated Maturities, at the option of the City, in whole or in part, in principal
amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity by lot by the
Paying Agent/Registrar), on February 15, 2032, or on any date thereafter, at the redemption price
of par, togethe.r with accrued interest to the date of redemption.
131630950.3/1001216715 B-2
At least thirty (30) days prior to a redemption date, the City shall cause a written notice of
such redemption to be sent by United States mail, first-class, postage prepaid, to the registered
owners of each Certificate to be redeemed at the address shown on the Security Register and
subject to the terms and provisions relating thereto contained- in the Ordinance. If-a Certificate
(or any portion of its principal sum) shall have been duly called for redemption and notice of such
redemption duly given, then upon the redemption date such Certificate (or the portion of its
principal sum to be redeemed) shall become due and payable, and, if moneys for the payment of
the redemption price and the interest accrued on the principal amount to be redeemed to the date
of redemption are held for the purpose of such payment by the Paying Agent/Registrar, interest
shall cease to accrue and be payable from and after the redemption date on the principal amount
redeemed.
In the event a portion of the principal amount of a Certificate is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Certificate to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a
new Certificate or Certificates of like maturity and interest rate in any authorized denominations
provided by the Ordinance for the then unredeemed balance of the principal sum thereof will be
issued to the registered owner, without charge. If a Certificate is selected for redemption, in whole
or in part, the City and the Paying Agent/Registrar shall not be required to transfer such Certificate
to an assignee of the registered owner within forty-five (45) days of the redemption date therefor;
provided, however, such limitation on transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Certificate redeemed in part.
With respect to any optional redemption of the Certificates, unless moneys sufficient to
pay the principal of and premium, if any, and interest on the Certificates to be redeemed shall
have been received by the Paying Agent/Registrar prior to the giving of such notice of redemption,
such notice may state that such redemption may, at the option of the City, be conditional upon
the receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed for such
redemption, or upon the satisfaction of any prerequisites set forth in such notice of redemption;
and, if sufficient moneys are not received or such prerequisites are not satisfied, such notice shall
be of no force and effect, the City shall not redeem such Certificates and the Paying
Agent/Registrar shall give notice, in the manner in which the notice of redemption was given, to
the effect that the Certificates have not been redeemed.
The Certificates are payable from the proceeds of an ad valorem tax levied, within the
limitations prescribed by law, upon all taxable property in the City and are additionally payable
from and secured by a lien on and limited pledge of the Net Revenues (as defined in the
Ordinance) of the City's combined waterworks and sewer system (the "System"), such lien and
pledge being limited to the amount of$1,000 and being junior and subordinate to the lien on and
pledge of the Net Revenues of the System securing the payment of"Prior Lien Obligations" (as
defined in the Ordinance) now outstanding and hereafter issued by the City. In the Ordinance,
the City reserves and retains the right to issue Prior Lien Obligations while the Certificates are
outstanding without limitation as to principal amount but subject to any terms, conditions or
restrictions as may be applicable thereto under law or otherwise, as well as the right to issue
additional obligations payable from the same sources as the Certificates and, together with the
Certificates, equally and ratably secured by a parity lien on and pledge of the Net Revenues of
the System.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office of the Paying Agent/Registrar, and to all the provisions of which the
Holder by the acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the tax levied for the payment of the Certificates; the Net Revenues of
the System pledged to the payment of the principal of and interest on the Certificates; the nature
131630950.3/1001216715 B-3
and extent and manner of enforcement of the limited pledge; the terms and conditions relating to, -
the transfer or exchange of this Certificate; the conditions upon which the Ordinance may be
amended or supplemented with or without the consent of the Holders; the rights, duties, and
obligations of the City and the Paying Agent/Registrar; the terms and provisions upon which-the
tax levy and the liens, pledges, charges and covenants made therein may be discharged at or
prior to the maturity of this Certificate, and this Certificate deemed to be no longer Outstanding
thereunder; and for the other terms and provisions contained therein. Capitalized terms used
herein and not otherwise defined have the meanings assigned in the Ordinance.
This Certificate, subject to certain limitations contained in the Ordinance, may be
transferred on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Paying
Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized agent.
When a transfer on the Security Register occurs, one or more new fully registered Certificates of
the same Stated Maturity, of authorized denominations, bearing the same rate of interest, and of
the same aggregate principal amount will be issued by the Paying Agent/Registrar to the
designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the registered
owner hereof whose name appears on the Security Register(i) on the Record Date as the owner
entitled to payment of interest hereon, (ii) on the date of surrender of this Certificate as the owner
entitled to payment of principal hereof at its Stated Maturity or its redemption, in whole or in part,
and (iii) on any other date as the owner for all other purposes, and neither the City nor the Paying
Agent/Registrar, or any agent of either, shall be affected by notice to the contrary. In the event of
a non-payment of interest on a scheduled payment date, and for thirty (30)days thereafter, a new
record date for such interest payment (a "Special Record Date")will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received. Notice
of the Special Record Date and of the scheduled payment date of the past due interest (which
shall be 15 days after the Special Record Date) shall be sent at least five (5) business days prior
to the Special Record Date by United States mail, first-class, postage prepaid, to the address of
each Holder appearing on the Security Register at the close of business on the last business day
next preceding the date of mailing of such notice.
It is hereby certified, recited, represented and covenanted that the City is duly organized
and legally incorporated under and by virtue of the Constitution and laws of the State of Texas;
that the issuance of the Certificates is duly authorized by law; that all acts, conditions and things
required to exist and be done precedent to and in the issuance of the Certificates to render the
same lawful and valid obligations of the City have been properly done, have happened and have
been performed in regular and due time, form and manner as required by the Constitution and
laws of the State of Texas, and the Ordinance; that the Certificates do not exceed any
constitutional or statutory limitation; and that due provision has been made for the payment of the
principal of and interest on the Certificates by the levy of a tax and a pledge of the Net Revenues
of the System as aforestated. In case any provision in this Certificate or any application thereof
shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining
provisions and applications shall not in any way be affected or impaired thereby. The terms and
provisions of this Certificate and the Ordinance shall be construed in accordance with and shall
be governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the City Council of the City has caused this Certificate to be
duly executed under the official seal of the City.
CITY OF NORTH RICHLAND HILLS, TEXAS
[Mayor][Mayor Pro Tem]
COUNTERSIGNED:
[City Secretary][Assistant City Secretary]
(CITY SEAL)
(b) Form of Registration Certificate of Comptroller of Public Accounts to appear
on the Initial Certificate only.
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)
131630950.3/1001216715 B-5
(c) Form of Certificate of Paying Agent/Registrar to appear on Definitive
Certificates only.
- REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR - -
This Certificate has been duly issued and registered 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/Registrar.
The designated office of the Paying Agent/Registrar located in Kansas City, Missouri, is
the Designated Payment/Transfer Office for this Certificate.
UMB Bank, N.A., Dallas, Texas
as Paying Agent/Registrar
Registration Date:
By:
Authorized Signature
(d) 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
Signature guaranteed: assignment must correspond with the
name of the registered owner as it appears
on the face of the within Certificate in every
particular.
131630950.3/1001216715 B-6
(e) The Initial Certificate shall be in the form set forth in paragraph (a) of this
Section, except that the heading and first paragraph shall be modified as follows:
REGISTERED: — REGISTERED: --
NO. T-1 $3,645,000
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATE OF OBLIGATION
SERIES 2022
Certificate Date: August 15, 2022
Registered Owner: THE BAKER GROUP LP
Principal Amount: THREE MILLION SIX HUNDRED FORTY-FIVE THOUSAND DOLLARS
The City of North Richland Hills (hereinafter referred to as the "City"), a body corporate
and municipal corporation in the County of Tarrant, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the Registered Owner named
above, or the registered assigns thereof, the above stated Principal Amount on February 15 in
each of the years and in principal installments in accordance with the following schedule:
PRINCIPAL INTEREST
YEAR INSTALLMENTS RATE
(Information to be inserted from Section 3 hereof)
(or so much thereof as shall not have been redeemed prior to maturity) and to pay interest on the
unpaid Principal Amount from the interest payment date next preceding the "Registration Date"
of this Certificate appearing below (unless this Certificate bears a "Registration Date" as of an
interest payment date, in which case it shall bear interest from such date, or unless the
"Registration Date" of this Certificate is prior to the initial interest payment date, in which case it
shall bear interest from the date of delivery to the initial purchasers (anticipated to be September
21, 2022) at the per annum rate(s) of interest specified above computed on the basis of a 360-
day year of twelve 30-day months; such interest being payable on February 15 and August 15 of
each year, commencing February 15, 2023, until maturity or prior redemption. Principal
installments of this Certificate are payable at the year of maturity or on a redemption date to the
registered owner hereof by UMB Bank, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon
presentation and surrender at its designated offices in Kansas City, Missouri, or, with respect to
a successor paying agent/registrar, at the designated office of such successor (the "Designated
Payment/Transfer Office"). Interest is payable to the registered owner of this Certificate whose
name appears on the "Security Register" maintained by the Paying Agent/Registrar at the close
of business on the "Record Date," which is the last business day of the month next preceding
each interest payment date hereof and interest shall be paid by the Paying Agent/Registrar by
check sent United States mail, first-class, postage prepaid, to the address of the registered owner
recorded in the Security Register or by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the registered owner. If the date
for the payment of the principal of or interest on the Certificates shall be a Saturday, Sunday, a
legal holiday, or a day when banking institutions in the city where the Designated
Payment/Transfer Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
131630950.3/1001216715 B-7
is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to
close; and payment on such date shall have the same force and effect as if made on the original
date payment was due. All payments of principal of, premium, if any, and interest on this
Certificate shall-be without exchange or collection-charges-to the owner hereof and 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.
•
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