HomeMy WebLinkAboutOrdinance 3884 ORDINANCE NO. 3884
AUTHORIZING THE ISSUANCE OF
$5,105,000
CITY OF NORTH RICHLAND HILLS, TEXAS,
TAX AND WATERWORKS AND SEWER SYSTEM (LIMITED PLEDGE)
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2025
!I'
Adopted December 9, 2024 t
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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 6
SECTION 7: Book-Entry-Only Transfers and Transactions 7
SECTION 8: Execution - Registration 8
SECTION 9: Initial Certificate(s). 8
SECTION 10: Forms. 9
SECTION 11: Certificate Fund. 9
SECTION 12: Tax Levy 9
SECTION 13: Limited Pledge of Net Revenues 10
SECTION 14: System Fund 11
SECTION 15: Deposits to Certificate Fund 11
SECTION 16: Security of Funds 11
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 12
SECTION 20: Further Procedures. 12
SECTION 21: Notices to Holders -Waiver. 13
SECTION 22: Cancellation. 13
SECTION 23: Covenants to Maintain Tax-Exempt Status. 13
SECTION 24: Satisfaction of Obligations of City 16
SECTION 25: Mutilated, Destroyed, Lost, and Stolen Certificates 17
SECTION 26: Ordinance a Contract-Amendments 18
SECTION 27: Sale of the Certificates 18
SECTION 28: Official Statement. 18
SECTION 29: Proceeds of Sale. 19
SECTION 30: Control and Custody of Certificates 19
SECTION 31: Bond Counsel's Opinion. 19
SECTION 32: CUSIP Numbers. 19'
SECTION 33: Continuing Disclosure Undertaking. 19
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 23
SECTION 40: Incorporation of Findings and Determinations. 23
SECTION 41: Public Meeting.. 23
SECTION 42: Effective Date. 23
EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT
EXHIBIT B FORMS OF CERTIFICATE
203855245.3/1001308047 li
ORDINANCE NO. 3884
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 2025"; 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 $5,700,000 for the purpose of paying contractual obligations to be
incurred for (i) designing, constructing, improving, and equipping park and recreation facilities
that are generally accessible to the public and are part of the City park system, and
(ii) 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 2025" 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 October 11, 2024, and October 18, 2024, 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
2025" 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 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, 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 $5,105,000 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 2025" (hereinafter referred to
as the "Certificates"), for the purpose of paying contractual obligations to be incurred for (i)
designing, constructing, improving, and equipping park and recreation facilities that are
generally accessible to the public and are part of the City park system, and (ii) 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 December 1, 2024 (the "Certificate Date") and shall be in
denominations of $5,000 or any integral multiple thereof (within a Stated Maturity) and the
Certificates shall become due and payable on August 15, 2025, and February 15 in the years
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and in principal amounts (the "Stated Maturities") and bear interest at the per annum rates in
accordance with the following schedule:
Stated Principal Interest
Maturity Amount ($) Rate (%)
08/15/2025 260,000 5.000
02/15/2026 255,000 5.000
02/15/2027 255,000 5.000
02/15/2028 255,000 5.000
02/15/2029 255,000 5.000
02/15/2030 255,000 5.000
02/15/2031 255,000 5.000
02/15/2032 255,000 5.000
02/15/2033 255,000 5.000
02/15/2034 255,000 5.000
02/15/2035 255,000 5.000
02/15/2036 255,000 5.000
02/15/2037 255,000 5.000
02/15/2038 255,000 5.000
02/15/2039 255,000 5.000
02/15/2040 255,000 4.000
02/15/2041 255,000 4.000
02/15/2042 255,000 4.000
02/15/2043 255,000 4.000
02/15/2044 255,000 4.000
The Certificates shall bear interest on the unpaid principal amounts from the date of
delivery to the initial purchasers (anticipated to be January 9, 2025) 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 August
15, 2025, 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
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duties and services of Paying Agent/Registrar. Upon any change in the Paying Agent/Registrar
for the Certificates, the 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 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.
SECTION 5: Redemption.
(a) Optional.Redemption. The Certificates having Stated Maturities on and after
February 15, 2035, 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, 2034, 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) 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
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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.
(c) 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 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.
(d) 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,
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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
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
203855245.3/1001308047 7
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.
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 Certificates)") 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.
203855245.3/1001308047 8
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 2025 TAX AND REVENUE CERTIFICATE OF OBLIGATION FUND" (the "Certificate
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,
any Assistant City Manager, Finance Director, 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 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
203855245.3/1001308047 9
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
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 payment to become due on the Certificates on August 15, 2025, and the Mayor,
Mayor Pro Tern, City Manager, any Assistant City Manager, Finance Director, 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 amount to become due on the Certificates on August 15, 2025.
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 ("Chapter 1208").
203855245.3/1001308047 10
Chapter 1208 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.
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
203855245.3/1001308047 1 1
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 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, any Assistant City Manager, Finance Director, 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 Tem, City Manager, any Assistant
City Manager, Finance Director, 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
203855245.3/1001308047 12
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, any Assistant City Manager,
Finance Director, 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 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.
203855245.3/1001308047 13
"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.
(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 in any activity carried on by
any person or entity (including the United States or any agency, department and
instrumentality thereof) other than a state or local government, unless such use
is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Certificates or any property the acquisition, construction or improvement of which
is to be financed or refinanced directly or indirectly with such Gross Proceeds,
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.
203855245.3/1001308047 14
(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.
(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,
203855245.3/1001308047 15
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.
(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, any Assistant City Manager, Finance Director, 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
203855245.3/1001308047 16
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 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
203855245.3/1001308047 17
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 remains 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 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 Robert W. Baird & Co. Incorporated (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 $384,302.74 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 Preliminary Official Statement is hereby deemed "final" as of its date except for the
omission of the information permitted by the Rule (hereinafter defined), within the meaning of
the Rule. 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, any
Assistant City Manager, Finance Director, 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 December 9, 2024, in
the offering, sale and delivery of the Certificates to the public.
203855245.3/1001308047 18
SECTION 29: Proceeds of Sale. The proceeds of sale of the Certificates, excluding
accrued interest, if any, received from the Purchaser, amounts to pay costs of issuance, and
any additional proceeds to be deposited to the Certificate Fund, if any, 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 Tern 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, any Assistant City Manager,
Finance Director, 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 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:
203855245.3/1001308047 19
•
"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 2024, financial information and
operating data with respect to the City of the general type included in the 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 2024. 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.
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 shall 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;
203855245.3/1001308047 20
(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
(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.
•
203855245.3/1001308047 21
(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,
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
203855245.3/1001308047 22
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.
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]
203855245.3/1001308047 23
PASSED AND ADOPTED, this December 9, 2024.
CITY OF NORTH RICHLAND HILLS, TEXAS
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City Secretary re) h
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(City Seal)
APPROVED AS TO FORM AND LEGALITY:
City Attor
203855245.3 [signature page of Ordinance]
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
203855245.3 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 2025
Certificate Date: Interest Rate: Stated Maturity: CUSIP No.:
December 1, 2024 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 August 15, 2025, 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
203855245.3 B-1.
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.
This Certificate is one of the series specified in its title issued in the aggregate principal
amount of $5,105,000 (hereinafter referred to as the "Certificates") for the purpose of paying
contractual obligations to be incurred for (i) designing, constructing, improving, and equipping
park and recreation facilities that are generally accessible to the public and are part of the City
park system, and (ii) 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 having Stated Maturities on and after February 15, 2035, 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, 2034, or on any date thereafter, at the redemption
price of par, together with accrued interest to the date of redemption.
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
203855245.3/1001308047 B-2
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 any "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 bythe acceptance hereof herebyassents, for definitions of terms; the description of and
p
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
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
203855245.3/1001308047 B-3
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.
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)
203855245.3/1001308047 B-4
(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)
(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
203855245.3/1001308047 B-r5
(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.
(e) The Initial Certificate shall be in the form set forth in paragraph (a) of this
Exhibit, except that the heading and first paragraph shall be modified as follows:
REGISTERED: REGISTERED:
NO. T-1 $5,105,000
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 2025
Certificate Date: December 1, 2024
Registered Owner: ROBERT W. BAIRD & CO. INCORPORATED
Principal Amount: FIVE MILLION ONE HUNDRED 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 or
August 15 in each of the years and in principal installments in accordance with the following
schedule:
STATED PRINCIPAL INTEREST
MATURITY INSTALLMENTS RATE
(Information to be inserted from Section 3 hereof)
203855245.3/1001308047 B-6
(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 January 9,
2025) 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 August 15, 2025, 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
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.
203855245.3/1001308047 B-7