HomeMy WebLinkAbout2020-4188 - Ordinance - 06/11/2020ORDINANCE NO. 2020-4188
AUTHORIZING THE ISSUANCE OF "CITY OF COLLEGE STATION,
TEXAS CERTIFICATES OF OBLIGATION, SERIES 2020"; DELEGATING
THE AUTHORITY TO CERTAIN CITY OFFICIALS TO EXECUTE
CERTAIN DOCUMENTS RELATING TO THE SALE OF Tl-IE
CERTIFICATE S; APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING TO SAID CERTIFICATES; AND ENACTING
OTHER PROVISIONS RELATING TO THE SUBJECT
WHEREAS, on April 9, 2020, the City Council of the City of College Station (the "City")
passed a resolution authorizing and directing notice of its intention to issue the Certificates of
Obligation herein authorized, to be published in a newspaper as required by Section 271.049 of
the Texas Local Government Code;
WHEREAS, said notice was published in the Bryan-College Station Eagle, a
"newspaper" of the type described in Section 2051.044, Texas Government Code, as required by
said Section 271.049 of the Texas Local Government Code, on April 16, 2020 and April 23,
2020;
WHEREAS, said notice provided that the ordinance authorizing the Certificates of
Obligation may authorize an authorized officer of the City to effect the sale and delivery of the
Certificates of Obligation on a date or dates subsequent to the adoption of the ordinance;
WHEREAS, no petition, signed by at least 5% of the qualified electors of said City as
permitted by said Section 271.049 of the Texas Local Government Code protesting the issuance
of such Certificates of Obligation, has been filed;
WHEREAS, the City is an "Issuer" within the meaning of Section 1371.001 (4)(P), Texas
Government Code, having (i) a principal amount of at least $I 00 million in outstanding long
term indebtedness, in long-term indebtedness proposed to be issued, or a combination of
outstanding or proposed long-term indebtedness and (ii) some amount of long-term indebtedness
outstanding or proposed to be issued that is rated in one of the four highest rating categories for
long-term debt instruments by a nationally recognized rating agency for municipal securities,
without regard to the effect of any credit agreement or other form of credit enhancement entered
into in connection with the obligation;
WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and
delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code and
Chapter 1371, Texas Government Code and the City's Home Rule Charter;
WHEREAS, during the preceding three years, the City has not submitted a bond
proposition to authorize the issuance of bonds for the same purpose for which the Certificates of
Obligation are hereby being issued and which proposition was disapproved by voters; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and
subject matter of the public business to be considered and acted upon at said meeting, including
this Ordinance, was given, all as required by the applicable provisions of Texas Government
Code, Chapter 5 51 ;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COLLEGE STATION, TEXAS:
Section 1. DEFINITIONS;
OBLIGATION.
AUTHORIZATION OF CERTIFICATES OF
(a) Definitions. Tenns not othe1wise defined herein shall have the following
meanmgs.
(i) The tenn "Authorized Denomination" shall mean a denomination of
$5,000 of principal amount of a Certificate or any integral multiple thereof.
(ii) The term "Business Day" means any day other than a Saturday, Sunday, a
legal holiday, or a day on which banking institutions in the City are, authorized by law or
executive order to close.
(iii) The tenn "Certificates" and "Certificates of Obligation" shall mean the
City of College Station, Texas Ce1iificates of Obligation, Series 2020, authorized to be
issued and delivered by this Ordinance.
(iv) The term "Financial Obligation" means a: (a) debt obligation; (b)
derivative instrument entered into in connection with, or pledged as security or a source
of payment for, an existing or planned debt obligation; or ( c) a guarantee of the foregoing
(a) and (b ). The term Financial Obligation does not include any municipal securities as to
which a final official statement has been provided to the MSRB consistent with the Rule.
(v) The term "MSRB" means the Municipal Securities Rulemaking Board.
(vi) The term "Pricing Certificate" means a certificate of the Pricing Officer
setting forth the terms of sale of the Certificates including the method of sale, principal
amount, maturity dates, interest payment dates, dated date, interest rates, yields,
redemption provisions, and other matters related to the sale of the Certificates.
(vii) The term "Pricing Officer" means the Mayor, the City Manager and the
Assistant City Manager/CFO of the City (each the "Pricing Officer") each of whom is
independently authorized to finalize the terms of sale of the Certificates by execution of
the Pricing Certificate.
(viii) The term "Purchaser" means (i) if the Certificates are sold by negotiated
sale, the underwriter or underwriting syndicate selected by the Pricing Officer, or (ii) if
the Certificates are sold by competitive sale by soliciting public bids, the underwriter or
underwriting syndicate awarded the Certificates by the Pricing Officer.
(ix) The term "Rule" means SEC Rule 15c2-12 (17 C.F.R. § 240.15C2-12), as
amended from time to time.
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(x) The term "SEC" means the United States Securities and Exchange
Commission.
(xi) The term "Surplus Revenues" shall mean those revenues from the
operation of the City's combined municipal electric light and power, waterworks and
sewer system remaining after payment of all operation and maintenance expenses thereof
and other obligations heretofore or hereafter incurred to which such revenues have been
or shall be encumbered by a lien on and pledge of such revenues superior to the lien on
and pledge of such revenues to the Certificates.
(b) The City's Certificates of Obligation, to be designated the "City of College
Station, Texas Certificates of Obligation, Series 2020", are hereby authorized to be issued and
delivered in the principal amount not to exceed $23,685,000 for the following public purposes:
(i) constructing and improving streets and roads including related drainage, landscaping,
signalization, lighting, pedestrian improvements and signage related thereto; (ii) designing,
constructing, equipping and installing parks and recreation equipment and improvements
including park infrastructure improvements and park rehabilitation, lighting, fencing, shade
structures and pavilions; (iii) purchasing and installing technology improvements including video
surveillance, network upgrades and replacements, diagnostic systems, fiber optic infrastructure
and communication equipment; (iv) constructing improvements and extensions to the City's
combined waterworks, sewer and electric systems including distribution, transmission, system
lines, lift stations, metering, wells, plant improvements, and acquisition of interests in land for
such purposes; and (v) the payment of fiscal, engineering and legal fees incurred in conne ction
therewith.
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053, Texas Government Code, each Pricing
Officer is hereby authorized to act individually and severally on behalf of the City in selling and
delivering the Certificates, carrying out the other procedures specified in this Ordinance,
including, determining the date of the Certificates, any additional or different designation or title
by which the Certificates shall be known, whether the Certificate shall be sold and delivered in
one or more series and the date and sale and delivery of each such series, the price at which the
Certificates will be sold, the years in which the Certificates will mature, the principal amount to
mature in each of such years, the rate of interest to be borne by each such maturity, the interest
payment and record dates, the price and terms upon and at which the Certificates shall be subject
to redemption prior to maturity at the option of the City, as well as any mandatory sinking fund
redemption provisions, and all other matters relating to the issuance, sale, and delivery of the
Certificates and obtaining municipal insurance for all or any portion of the Certificates and
providing for the tenns and provisions thereof applicable to the Certificates, all of which shall be
specified in the Pricing Certificate; provided that:
(i) the aggregate principal amount of the Certificates shall not exceed
$23,685,000;
(ii) the true interest cost of the Certificates shall not exceed 4.000%;
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(iii) the final maturity of the Certificates shall not exceed February 15, 2040;
(iv) the delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to June 11, 2021; and
(v) on or prior to delivery, the Certificates shall be rated by a nationally
recognized rating agency for municipal securities in one of the four highest categories for
long-term obligations.
(b) In establishing the aggregate principal amount of the Certificates, the Pricing
Officer shall establish an amount that, when combined with premium used for purposes other
than the payment of costs of issuance, does not exceed the amount authorized in Subsection (a)
hereof, which shall be sufficient in amount to provide for the purposes for which the Certificates
are authorized and to pay costs of issuing the Certificates. The Certificates shall be sold with and
subject to such terms as set f01ih in the Pricing Certificate.
( c) The Certificates may be sold by public offering (either through a negotiated or
competitive offering) and the Pricing Certificate shall so state, and the Pricing Certificate may
conform this Ordinance to such method of sale, including the provisions hereof that pertain to the
undertaking of the Issuer in accordance with the Rule.
( d) The City Council hereby determines that the delegation of the authority to the
Pricing Officer to approve the final tenns of the Certificates as set forth in this Ordinance is, and
the decisions made by the Pricing Officer pursuant to such delegated authority and incorporated
into the Pricing Certificate are required to be, in the Issuer's best interests, and the Pricing
Officer is hereby authorized to make and include in the Pricing Certificate a finding to that
effect.
Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) The City shall keep or
cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office") of
The Bank of New York Mellon Trust Company, N.A., or such other bank, trust company,
financial institution, or other agency named by the Pricing Officer or in accordance with the
provisions of (g) below (the "Paying Agent/Registrar"), books or records for the registration and
transfer of the Certificates (the "Registration Books"), and the City hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
transfers and registrations under such reasonable reg ulations as the Cily and lhe Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such transfers and
registrations as herein provided. It shall be the duty of the Paying Agent/Registrar to obtain from
the registered owner and record in the Registration Books the address of the registered owner of
each Certificate to which payments with respect to the Certificates shall be mailed, as herein
provided. The City or its designee shall have the right to inspect the Registration Books during
regular business hours of the Paying Agent/Registrar at its Designated Trust Office, but
otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless
otherwise required by law, shall not permit their inspection by any other entity. Registration of
each Certificate may be transferred in the Registration Books only upon presentation and
surrender thereof to the Paying Agent/Registrar at its Designated Trust Office for transfer of
registration and cancellation, together with proper written instruments of assignment, in form and
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with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing the
assignment of such Certificate, or any portion thereof in any Authorized Denomination, to the
assignee or assignees thereof, and the right of such assignee or assignees to have such Certificate
or any such portion thereof registered in the name of such assignee or assignees. Upon the
assignment and transfer of any Certificate or any portion thereof, a new substitute certificate or
certificates shall be issued in exchange therefor in the manner herein provided.
(b) The entity in whose name any Certificate shall be registered in the Registration
Books at any time shall be treated as the absolute owner thereof for all purposes of this
Ordinance, whether or not such Certificate shall be overdue, and the City and the Paying
Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on
account of, the principal of, premium, if any, and interest on any such certificate shall be made
only to such registered owner. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such certificate to the extent of the sum or sums so paid.
( c) The City hereby further appoints the Paying Agent/Registrar to act as the paying
agent for paying the principal of and interest on the Certificates, and to act as its agent to
exchange or replace Certificates, all as provided in this Ordinance. The Paying Agent/Registrar
shall keep proper records of all payments made by the City and the Paying Agent/Registrar with
respect to the Certificates, and of all exchanges thereof, and all replacements thereof, as provided
in this Ordinance.
(d) Each Certificate may be exchanged for fully registered certificates in the manner
set forth herein. Each Certificate issued and delivered pursuant to this Ordinance may, upon
surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a
written request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures
satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such assignee
or assignees, as appropriate, be exchanged for fully registered Certificates, without interest
coupons, in the form prescribed in the FORM OF CERTIFICATE, in an Authorized
Denomination (subject to the requirement hereinafter stated that each substitute Certificate shall
have a single stated maturity date), as requested in writing by such registered owner or such
assignee or assignees, in an aggregate principal amount equal to the principal amount of any
Certificate or Certificates so surrendered, and payable to the appropriate registered owner,
assignee, or assignees, as the case may be. If any Certificate or portion thereof is assigned and
transferred, each Certificate issued in exchange therefor shall have the same principal maturity
date and bear interest at the same rate as the Certificate for which it is being exchanged. Each
substitute Certificate shall bear a letter and/or number to distinguish it from each other
Certificate. The Paying Agent/Registrar shall exchange or replace Certificates as provided
herein, and each fully registered Certificate or Certificates delivered in exchange for or
replacement of any Certificate or portion thereof as pennitted or required by any provision of
this Ordinance shall constitute one of the Certificates for all purposes of this Ordinance, and may
again be exchanged or replaced. It is specifically provided, however, that any Certificate
delivered in exchange for or replacement of another Certificate prior to the first scheduled
interest payment date on the Certificates (as stated on the face thereof) shall be dated the same
date as such Certificate, but each substitute Certificate so delivered on or after such first
scheduled interest payment date shall be dated as of the interest payment date preceding the date
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on which such substitute Certificate is delivered, unless such substitute Certificate is delivered on
an interest payment date, in which case it shall be dated as of such date of delivery; provided,
however, that if at the time of delivery of any substitute Certificate the interest on the Certificate
for which it is being exchanged has not been paid, then such substitute Ce1iificate shall be dated
as of the date to which such interest has been paid in full. On each substitute Certificate issued
in exchange for or replacement of any Ce1iificate or Certificates issued under this Ordinance
there shall be printed thereon a Paying Agent/Registrar's Authentication Certificate, in the form
hereinafter set forth in the FORM OF CERTIFICATE (the "Authentication Certificate"). An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
substitute Ce1iificate, date such substitute Certificate in the manner set forth above, and manually
sign and date the Authentication Certificate, and no such substitute Ce1iificate shall be deemed to
be issued or outstanding unless the Authentication Certificate is so executed. The Paying
Agent/Registrar promptly shall cancel all Certificates smrendered for exchange or replacement.
No additional ordinances, orders, or resolutions need be passed or adopted by the City Council or
any other body or person so as to accomplish the foregoing exchange or replacement of any
Ce1iificates or portion thereof, and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute Certificate in the manner prescribed herein. Pursuant to
Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates
as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of
Authentication Certificate, the exchanged or replaced Certificate shall be valid, incontestable,
and enforceable in the same manner and with the same effect as the Certificates which originally
were delivered pursuant to this Ordinance, approved by the Attorney General, and registered by
the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Certificate so selected for redemption, in whole or in part,
within 45 calendar days of the date fixed for redemption; provided, however, such limitation of
transfer shall not be applicable to an exchange by the registered owner of the uncalled principal
of a Certificate.
( e) All Certificates issued in exchange or replacement of any other Certificate or
portion thereof, (i) shall be issued in fully registered fonn, without interest coupons, with the
principal of and interest on such Certificates to be payable only to the registered owners thereof,
(ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred and assigned,
(iv) may be exchanged for other Certificates, (v) shall have the characteristics, (vi) shall be
signed and sealed, and (vii) the principal of and interest on the Certificates shall be payable, all
as provided, and in the manner required or indicated, in the FORM OF CERTIFICATE.
(f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers of Certificates, but the registered owner of any Certificate
requesting such transfer shall pay any taxes or other governmental charges required to be paid
with respect thereto. The registered owner of any Certificates requesting any exchange shall pay
the Paying Agent/Registrar's reasonable and standard or customary fees and charges for
exchanging any such certificate or portion thereof, together with any taxes or governmental
charges required to be paid with respect thereto, all as a condition precedent to the exercise of
such privilege of exchange, except, however, that in the case of the exchange of an assigned and
transferred Certificate or Certificates or any portion or portions thereof in an Authorized
Denomination, as provided in this Ordinance, such fees and charges will be paid by the City. In
addition, the City hereby covenants with the registered owners of the Certificates that it will (i)
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pay the reasonable and standard or customary fees and charges of the Paying Agent/Registrar for
its services with respect to the payment of the principal of and interest on Certificates, when due,
and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the
transfer or registration of Certificates solely to the extent above provided, and with respect to the
exchange of Certificates solely to the extent above provided.
(g) The City covenants with the registered owners of the Certificates that at all times
while the Ce1iificates are outstanding the City will provide a competent and legally qualified
bank, trust company, financial institution, or other agency to act as and perfonn the services of
Paying Agent/Registrar for the Certificates under this Ordinance, and that the Paying
Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, change
the Paying Agent/Registrar upon not less than sixty days written notice to the Paying
Agent/Registrar. In the event that the entity at any time acting as Paying Agent/Registrar (or its
successor by merger, acquisition, or other method) should resign or otherwise cease to act as
such, the City covenants that it will promptly appoint a competent and legally qualified national
or state banking institution which shall be a corporation organized and doing business under the
laws of the United States of America or of any state, authorized under such laws to exercise trust
powers, subject to supervision or examination by federal or state authority, and whose
qualifications substantially arc similar to the previous Paying Agent/Registrar to act as Paying
Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a
copy thereof), along with all other pertinent books and records relating to the Certificates, to the
new Paying Agent/Registrar designated and appointed by the City. Upon any change in the
Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the
new Paying Agent/Registrar to each registered owner of the Certificates, by United States mail,
first-class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and perfonning as such, each Paying Agent/Registrar
shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
Section 4. FORM OF CERTIFICATES. The form of the Certificates, including the form
of the Authentication Certificate, the fonn of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached to the
Ce1iificates initially issued and delivered pursuant to this Ordinance, shall be in substantially the
form as set forth in Exhibit A to this Ordinance, shall he numhered consecutively from R-1
upward, with the Initial Certificate being numbered T-1, with such appropriate variations,
omissions, or insertions as are permitted or required by this Ordinance and with the FORM OF
CERTIFICATE to be modified pursuant to, and completed with information set forth in the
Pricing Certificate. The FORM OF CERTIFICATE as it appears in Exhibit A shall be
completed, amended and modified by Bond Counsel to incorporate the infonnation set forth in
the Pricing Certificate but it is not required for the FORM OF CERTIFICATE to reproduced as
an exhibit to the Pricing Certificate. The printer of the Certificates is hereby authorized to print
on the Certificates (i) the form of bond counsel's opinion relating to the Certificates, and (ii) an
appropriate statement of insurance furnished by a municipal bond insurance company providing
municipal bond insurance, if any, covering all or any part of the Certificates.
Section 5. RESERVED.
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Section 6. LEVY OF TAX; INTEREST AND SINKING FUND; REVENUE PLEDGE.
(a) That a special fund or account, to be designated the "City of College Station,
Texas Series 2020 Ce1iificate of Obligation Interest and Sinking Fund" (the "Interest and Sinking
Fund") is hereby created and shall be established and maintained by the City. The Interest and
Sinking Fund shall be kept separate and apati from all other funds and accounts of the City, and
shall be used only for paying the interest on and principal of the Certificates. All ad valorem
taxes levied and collected for and on account of the Cetiificates shall be deposited, as collected,
to the credit of the Interest and Sinking Fund. During each year while any of the Certificates are
outstanding and unpaid, the governing body of the City shall compute and ascertain the rate and
amount of ad valorem tax, based on the latest approved tax rolls of the City, with full allowances
being made for tax delinquencies and the cost of tax collections, which will be sufficient to raise
and produce the money required to pay the interest on the Certificates as such interest comes
due, and to provide a sinking fund to pay the principal (including mandatory sinking fund
redemption payments, if any) of the Ceiiificates as such principal matures or comes due through
operation of the mandatory sinking fund redemption, if any, but never less than 2% of the
original amount of the Certificates as a sinking fund each year. The rate and amount of ad
valorem tax is hereby ordered to be levied against all taxable property in the City for each year
while any of the Certificates is outstanding and unpaid, and the ad valorem tax shall be assessed
and collected each such year and deposited to the credit of the Interest and Sinking Fund. Ad
valorem taxes necessary to pay the interest on and principal of the Certificates, as such interest
comes due and such principal matures, are hereby pledged for such payment, within the limit
prescribed by law.
(b) That the Cetiificates are additionally secured by and shall be payable from a
limited pledge of Surplus Revenues (not to exceed $1,000). The Surplus Revenues are pledged
by the City pursuant to authority of Chapter 1502, Texas Government Code, specifically Section
1502.058 thereof. The City shall promptly deposit the Surplus Revenues upon their receipt to
the credit of the Interest and Sinking Fund created pursuant to Section 6, to pay the principal and
interest on the Certificates. The amount of Surplus Revenues pledged to the payment of the
Cetiificates shall not exceed $1,000. If Surplus Revenues or any other lawfully available
revenues, income or resources of the City are deposited or budgeted to be deposited in the
Interest and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be
levied for any year, then the amount of taxes that otherwise would have been required to be
levied pursuant to Section 6 may be reduced to the extent and by the amount of the Surplus
Revenues or other lawfully available revenues, income or resources then on deposit or budgeted
to be deposited to the credit of the Interest and Sinking Fund.
Section 7. TRANSFER. That the City shall do any and all things necessary to
accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to
pay such items of principal and interest due on the Certificates.
Section 8. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this
Ordinance shall be secured in the manner and to the fullest extent permitted or required by law
for the security of public funds, and such Interest and Sinking Fund shall be used only for the
purposes and in the manner permitted or required by this Ordinance.
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Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES.
(a) Replacement Certificates. That in the event any outstanding Certificate is
damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be
printed, executed, and delivered, a new Ce1iificate of the same principal amount, maturity, and
interest rate, as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for
such Ce1iificate in the manner hereinafter provided.
(b) Application for Replacement Certificates. That application for replacement of
damaged, mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner
thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate,
the registered owner applying for a replacement Certificate shall furnish to the City and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save each of
them harn1less from any loss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of a Certificate, the registered owner shall furnish to the City and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Certificate,
as the case may be. In every case of damage or mutilation of a Certificate, the registered owner
shall surrender to the Paying Agent/Registrar for cancellation the Certificate so damaged or
mutilated.
(c) No Default Occurred. That notwithstanding the foregoing provisions of this
Section, in the event any such Certificate shall have matured, and no default has occurred which
is then continuing in the payment of the principal of, redemption premium, if any, or interest on
the Certificate, the City may authorize the payment of the same (without surrender thereof except
in the case of a damaged or mutilated Certificate) instead of issuing a replacement certificate,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. That prior to the issuance of any
replacement Certificate, the Paying Agent/Registrar shall charge the registered owner of such
Ce1iificate with all legal, printing, and other expenses in connection therewith. Every
replacement Certificate issued pursuant to the provisions of this Section by virtue of the fact that
any Certificate is lost, stolen, or destroyed shall constitute a contractual obligation of the City
whether or not the lost, stolen, or destroyed Certificate shall be found at any time, or be
enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and
proportionately with any and all other Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. That in accordance with Section
1201.067, Texas Government Code, this Section of this Ordinance shall constitute authority for
the issuance of any such replacement Certificate without necessity of further action by the City
or any other body or person, and the duty of the replacement of such Certificates is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Certificates in the form and manner and with the effect, as provided
in Section 5( d) of this Ordinance for Certificates issued in conversion and exchange of other
Ce1iificates.
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Section 10. FEDERAL INCOME TAX MATTERS. The City covenants to refrain from
any action which would adversely affect, or to take such action as to ensure, the treatment of the
Certificates as obligations described in section 103 of the Code, the interest on which is not
includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the
Certificates (less amounts deposited to a reserve fund, if any) are used for any "private business
use," as defined in section 141 (b )( 6) of the Code or, if more than 10 percent of the proceeds are
so used, that amounts, whether or not received by the City, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service on the
Certificates, in contravention of section 141 (b )(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds five percent of the proceeds of the Ce1iificates (less
amounts deposited into a reserve fund, if any) then the amount in excess of five percent is used
for a "private business use" which is "related" and not "disproportionate", within the meaning of
section 141 (b )(3) of the Code, to the governmental use;
( c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or five percent of the proceeds of the Certificates (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141 ( c) of the Code;
( d) to refrain from taking any action which would otherwise result in the Certificates
being treated as "private activity bonds" within the meaning of section 141 (b) of the Code;
( e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Certificates, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b )(2) of the Code) which produces a materially
higher yield over the term of the Certificates, other than investment property acquired with -
(1) proceeds of the Certificates invested for a reasonahle temporary period of
three years or less until such proceeds are needed for the purpose for which the
Certificates are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148-1 (b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed 10 percent of the proceeds of the Certificates;
(g) to otherwise restrict the use of the proceeds of the Certificates or amounts treated
as proceeds of the Certificates, as may be necessary, so that the Certificates do not otherwise
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contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent
applicable, section 149(d) of the Code; and
(h) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery of the Certificates) an amount that is at least equal to 90
percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and to pay to
the United States of America, not later than 60 days after the Certificates have been paid in full,
100 percent of the amount then required to be paid as a result of Excess Earnings under section
148(f) of the Code.
For purposes of the foregoing (a) and (b ), the City understands that the term "proceeds"
includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of
refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended
prior to the date of issuance of the Ce1iificates. It is the understanding of the City that the
covenants contained herein are intended to assure compliance with the Code and any regulations
or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event
that regulations or rulings are hereafter promulgated which modify or expand provisions of the
Code, as applicable to the Ce1iificates, the City will not be required to comply with any covenant
contained herein to the extent that such failure to comply, in the opinion of nationally-recognized
bond counsel, will not adversely affect the exemption from federal income taxation of interest on
the Certificates under section 103 of the Code. In the event that regulations or rulings are
hereafter promulgated which impose additional requirements which are applicable to the
Certificates, the City agrees to comply with the additional requirements to the extent necessary,
in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal
income taxation of interest on the Certificates under section 103 of the Code. In furtherance of
such intention, the City hereby authorizes and directs the Mayor, the City Manager and any
Assistant City Manager/CFO, severally, to execute any documents, ce1iificates or reports
required by the Code, and to make such elections on behalf of the City which may be permitted
by the Code as are consistent with the purpose for the issuance of the Certificates.
In order to facilitate compliance with clause (h) above, a "Rebate Fund" is hereby
established by the City for the sole benefit of the United States of America, and such Fund shall
not be subject to the claim of any other person, including without limitation the bondholders.
The Rebate Fund is established for the additional purpose of compliance with section 148 of the
Code.
Section 11. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the City covenants to account for the expenditure of proceeds from the sale of
the Certificates and any investment earnings thereon to be used for the purposes described in
Section 1 of this Ordinance (such purpose referred to in this Section and Section 12 hereof as a
"Project") on its books and records by allocating proceeds to expenditures within 18 months of
the later of the date that (a) the expenditure on a Project is made or (b) such Project is completed.
The foregoing notwithstanding, the City shall not expend such proceeds or investment earnings
more than 60 days after the earlier of (a) the fifth anniversary of the date of delivery of the
Certificates or (b) the date the Certificates are retired, unless the City obtains an opinion of
nationally-recognized bond counsel substantially to the effect that such expenditure will not
adversely affect the tax-exempt status of the Certificates. For purposes hereof, the City shall not
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be obligated to comply with this covenant if it obtains an opinion that such failure to comply will
not adversely affect the excludability for federal income tax purposes from gross income of the
interest.
Section 12. DISPOSITION OF PROJECT. That the City covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the
receipt by the City of cash or other compensation, unless any action taken in connection with
such disposition will not adversely affect the tax-exempt status of the Certificates. For purpose
of the foregoing, the City may rely on an opinion of nationally-recognized bond counsel that the
action taken in connection with such sale or other disposition will not adversely affect the tax
exempt status of the Certificates. For purposes of the foregoing, the portion of the property
comprising personal property and disposed in the ordinary course shall not be treated as a
transaction resulting in the receipt of cash or other compensation. For purposes hereof, the City
shall not be obligated to comply with this covenant if it obtains an opinion that such failure to
comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
Section 13. PROCEDURES TO MONITOR COMPLIANCE WITH TAX
COVENANTS. The City hereby adopts the procedures attached hereto as Exhibit Bas a means
of monitoring compliance with the federal tax covenants made by the City herein.
Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES.
That the Mayor of the City is hereby authorized to have control of the Certificates initially issued
and delivered hereunder and all necessary records and proceedings pertaining to the Certificates
pending their delivery and their investigation, examination, and approval by the Attorney
General of the State of Texas, and their registration by the Comptroller of Public Accounts of the
State of Texas. Upon registration of the Certificates said Comptroller of Public Accounts (or a
deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's
Registration Certificate attached to such Certificates, and the seal of said Comptroller shall be
impressed, or placed in facsimile, on such ce1iificate. The Certificates thus registered shall
remain in the custody of the Mayor (or the designee thereof such as the City's Bond Counsel)
until delivered to the Purchaser (as defined in Section 18 of this Ordinance).
Section 15. DTC REGISTRATION. That the Certificates initially shall be issued and
delivered in such manner that no physical distribution of the Certificates will be made to the
public, and The Depository Trust Company ("DTC"), New York, New York, initially will act as
depository for the Certificates. DTC has represented that it is a limited purpose trust company
incorporated under the laws of the State of New York, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered under Section 17 A of the Securities Exchange Act of 1934, as
amended, and the City accepts, but in no way verifies, such representations. The Certificates
initially authorized by this Ordinance shall be delivered to and registered in the name of CEDE
& CO., the nominee of DTC. It is expected that DTC will hold the Certificates on behalf of the
Purchaser and its participants. So long as each Certificate is registered in the name of CEDE &
CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it
were the actual and beneficial owner thereof. It is expected that DTC will maintain a book-entry
system which will identify ownership of the Certificates in Authorized Denominations, with
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transfers of ownership being effected on the records of DTC and its participants pursuant to rules
and regulations established by them, and that the Certificates initially deposited with DTC shall
be immobilized and not be further exchanged for substitute Certificates except as hereinafter
provided. The City is not responsible or liable for any functions of DTC, will not be responsible
for paying any fees or charges with respect to its services, will not be responsible or liable for
maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any
interests or rights of the beneficial owners of the Certificates. It shall be the duty of the DTC
Participants, as defined in the Official Statement herein approved, to make all arrangements with
DTC to establish this book-entry system, the beneficial ownership of the Certificates, and the
method of paying the fees and charges of DTC. The City does not represent, nor does it in any
way covenant that the initial book-entry system established with DTC will be maintained in the
future. Notwithstanding the initial establishment of the foregoing book-entry system with DTC,
if for any reason any of the originally delivered Certificates is duly filed with the Paying
Agent/Registrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there
will be no assurance or representation that any book-entry system will be maintained for such
Certificates. In connection with the initial establishment of the foregoing book-entry system
with DTC, the City heretofore has executed a "Blanket Letter of Representations" prepared by
DTC in order to implement the book-entry system described above.
Section 16. CONTINUING DISCLOSURE OBLIGATION PURSUANT TO RULE
15C2-12 (17 C.F.R. § 240.15C2-12).
(a) Annual Reports.
(i) The City will provide certain updated financial information and operating
data to the MSRB on an annual basis in an electronic fonnat that is prescribed by the
MSRB and available via the Electronic Municipal Market Access System ("EMMA") at
www.emma.msrb.org. The information to be updated includes all quantitative financial
information and operating data with respect to the City of the general type included in the
Official Statement under Tables numbered 1 through 6; 8 through 20 and in Appendix B.
The City will update and provide the information in Tables 1 through 6 and 8 through 20
within six months after the end of each fiscal year ending in and after 2020. The City will
additionally provide audited financial statements when and if available, and in any event,
within 12 months after the end of each fiscal year ending in or after 2020. If the audit of
such financial statements is not complete within 12 months after any such fiscal year end,
then the City will file unaudited financial statements within such 12 month period and
audited financial statements for the applicable fiscal year, when and if the audit report on
such statements becomes available. Any such financial statements will be prepared in
accordance with the accounting principles described in Appendix B of the Official
Statement or such other accounting principles as the City may be required to employ
from time to time pursuant to State law or regulation.
(ii) The financial information and operating data to be provided may be set
forth in full in one or more documents or may be included by specific reference to any
document available to the public on the MSRB's Internet Web site or filed with the SEC,
as permitted by the Rule. If the City changes its fiscal year, it will notify the MSRB of
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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 infonnation and operating data to be provided
pursuant to this Section may be set fotih in full in one or more documents or may be
included by specific reference to any document that is available to the public on the
MSRB's internet website or filed with the SEC. All documents provided to the MSRB
pursuant to this Section shall be accompanied by identifying information as prescribed by
the MSRB.
(b) Event Notices. The City shall notify the MSRB in an electronic format as
prescribed by the MSRB, in a timely manner (but not in excess of ten Business Days after the
occurrence of the event) of any of the following events with respect to the Ce1iificates:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final detenninations 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 Ce1iificateholders, 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 an obligated
person (which 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
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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);
13. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry
into 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. Incun-ence 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
Bondholders, if material.
16. Default, event of acceleration, termination event, modification of tenns, or
other similar events under the terms of a Financial Obligation of the City,
any of which reflect financial difficulties.
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 this Section by the time required by
such subsection.
( c) Limitations, Disclaimers, and Amendments.
(i) The City shall be obligated to observe and perform the covenants specified
in this Section for so long as, but only for so long as, the City remains an "obligated
person" with respect to the Certificates within the meaning of the Rule, except that the
City in any event will give notice of any deposit made in accordance with this Ordinance
or applicable law that causes Certificates no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered
owners and beneficial owners of the Certificates, and nothing in this Section, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder
to any other person. The City undertakes to provide only the financial information,
operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the City's financial results,
condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The City
15
does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCE SHALL THE CITY BE LIABLE TO
THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE
OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES
RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS
OR SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under
this Section shall comprise a breach of or default under this Ordinance for purposes of
any other provision of this Ordinance. Nothing in this Section is intended or shall act to
disclaim, waive, or otherwise limit the duties of the City under federal and state securities
laws.
(v) Should the Rule be amended to obligate the City to make filings with or
provide notices to entities other than the MSRB, the City hereby agrees to undertake such
obligation with respect to the Certificates in accordance with the Rule as amended. The
provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or
a change in the identity, nature, status, or type of operations of the City, but only if ( 1) the
provisions of this Section, as so amended, would have permitted an underwriter to
purchase or sell Certificates in the primary offering of the Certificates in compliance with
the Rule, taking into account any amendments or interpretations of the Rule since such
offering as well as such changed circumstances and (2) either (a) the registered owners of
a majority in aggregate principal amount (or any greater amount required by any other
provision of this Ordinance that authorizes such an amendment) of the outstanding
Certificates consent to such amendment or (b) a person that is unaffiliated with the City
(such as nationally recognized bond counsel) determined that such amendment will not
materially impair the interest of the registered owners and beneficial owners of the
Certificates. If the City so amends the provisions of this Section, it shall include with any
amended financial information or operating data next provided in accordance with
subsection (b) of this Section an explanation, in narrative form, of the reason for the
amendment and of the impact of any change in the type of financial info1mation or
operating data so provided. The City may also amend or repeal the provisions of this
continuing disclosure agreement if the SEC amends or repeals the applicable provision of
the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule
are invalid, but only if and to the extent that the provisions of this sentence would not
prevent an underwriter from lawfully purchasing or selling Certificates in the primary
offering of the Certificates.
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(d) Procedures to Monitor Compliance with Continuing Disclosure Covenants. The
City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring
compliance with the continuing disclosure covenants made by the City herein.
Section 17. DEFEASANCE.
(a) Deemed Paid. Any Certificate and the interest thereon shall be deemed to be
paid, retired and no longer outstanding (a "De/eased Certificate") within the meaning of this
Ordinance, except to the extent provided in subsection ( e) of this Section, when payment of the
principal of such Ce1iificate, plus interest thereon to the due date (whether such due date be by
reason of maturity or otherwise) either (i) shall have been made or caused to be made in
accordance with the terms thereof, or (ii) shall have been provided for on or before such due date
by irrevocably depositing with or making available to the Paying Agent/Registrar in accordance
with an escrow agreement or other instrument (the "Future Escrow Agreement") for such
payment (1) lawful money of the United States of America sufficient to make such payment or
(2) Defeasance Securities that mature as to principal and interest in such amounts and at such
times as will insure the availability, without reinvestment, of sufficient money to provide for
such payment, and when proper arrangements have been made by the City with the Paying
Agent/Registrar for the payment of its services until all Defeased Certificates shall have become
due and payable. At such time as a Certificate shall be deemed to be a Defeased Certificate
hereunder, as aforesaid, such Certificate and the interest thereon shall no longer be secured by,
payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged or the
pledge of Surplus Revenues as provided in this Ordinance, and such principal and interest shall
be payable solely from such money or Defeasance Securities.
(b) Investments. Any moneys so deposited with the Paying Agent/Registrar may at
the written direction of the City be invested in Defeasance Securities, maturing in the amounts
and times as hereinbefore set forth, and all income from such Defeasance Securities received by
the Paying Agent/Registrar that is not required for the payment of the Ce1iificates and interest
thereon, with respect to which such money has been so deposited, shall be turned over to the
City, or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to
which the money and/or Defeasance Securities are held for the payment of Defeased Certificates
may contain provisions permitting the investment or reinvestment of such moneys in Defeasance
Securities or the substitution of other Defeasance Securities upon the satisfaction of the
requirements specified in subsection (a)(i) or (ii) above. All income from such Defeasance
Securities received by the Paying Agent/Registrar which is not required for the payment of the
Defeased Securities, with respect to which such money has been so deposited, shall be remitted
to the City or deposited as directed in writing by the City.
( c) Selection of De/eased Certificates. In the event that the City elects to defease less
than all of the principal amount of Certificates of a maturity, the Paying Agent/Registrar shall
select, or cause to be selected, such amount of Certificates by such random method as it deems
fair and appropriate.
(d) Defeasance Securities. The term "Defeasance Securities" means (i) direct,
noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
17
agency or instrumentality of the United States, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the governing body
of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are
rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent; (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 the governing body of the City adopts or approves the proceedings authorizing the issuance
of refunding bonds, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iv) any securities and obligations now or
hereafter authorized by State law that are eligible to refund, retire or otherwise discharge
obligations such as the Certificates.
( e) Continuing Duty of Paying Agent/Registrar. Until all Certificates defeased under
this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for
such Certificates shall perform the services of Paying Agent/Registrar for such Certificates the
same as if they had not been defeased, and the City shall make proper arrangements to provide
and pay for such services.
(f) The Pricing Officer is hereby authorized to modify the securities that are eligible
as Defeasance Securities and any such modification shall described in the Pricing Certificate.
Section 18. SALE OF CERTIFICATES; OFFICIAL STATEMENT.
(a) The Certificates may be sold by public offering (either through a negotiated or
competitive offering) and the terms and provisions of which are to be determined by the Pricing
Officer in accordance with Section 2 hereof, and in which the purchasers of the Certificates are
designated. The Certificates may be sold pursuant to a purchase agreement or notice of sale and
bidding instructions (collectively, the "Purchase Agreement") which the Pricing Officer is
hereby authorized to execute and deliver and in which the Purchaser of the Certificates shall be
designated. The Certificates shall initially be registered in the name of the Purchaser thereof as
set forth in the Pricing Certificate.
(b) The City hereby approves the form and content of the draft preliminary official
statement relating to the Certificates in the form attached hereto as Exhibit C and any addenda,
supplement or amendment thereto, and deems final the preliminary official statement and
approves the distribution of such preliminary official statement in the reoftering of the
Certificates by the Purchaser, with such changes therein or additions thereto as the Pricing
Officer executing the same may deem advisable or as are required by the Rule. The Pricing
Officer is hereby authorized, in the name and on behalf of the City, to approve, distribute, and
deliver a final preliminary official statement and a final official statement relating to the
Certificates to be used by the Purchaser in the marketing of the Certificates.
( c) The Pricing Officer is authorized, in connection with effecting the sale of the
Certificates, to obtain from a municipal bond insurance company so designated in the Pricing
Certificate (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support
of the Certificates. To that end, should the Pricing Officer exercise such authority and commit
the City to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in
18
effect, the requirements of the Insurer relating to the issuance of the Insurance Policy are
incorporated by reference into this Ordinance and made a part hereof for all purposes,
notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall
have the authority to execute any documents to effect the issuance of the Insurance Policy by the
Insurer.
( d) The Mayor and Mayor Pro Tern, the City Manager, the Assistant City
Manager/CFO, Director of Finance and City Secretary, shall be and they are hereby expressly
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the corporate seal
and on behalf of the City a Paying Agent/Registrar Agreement, in the form presented at the
meeting at which this Ordinance is adopted, with the Paying Agent/Registrar and all other
instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry
out the terms and provisions of this Ordinance, the Certificates, the sale of the Certificates, the
Purchase Agreement and the Official Statement. In case any officer whose signature shall
appear on any Certificate shall cease to be such officer before the delivery of such Certificate,
such signature shall nevertheless be valid and sufficient for all purposes the same as if such
officer had remained in office until such delivery.
Section 19. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Assistant City Manager/CFO, and Director of Finance, shall be and they are hereby
expressly authorized, empowered, and directed from time to time and at any time to do and
perfonn all such acts and things and to execute, acknowledge, and deliver in the name and under
the corporate seal and on behalf of the City all such instruments, whether or not herein
mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this
Ordinance, and the sale and delivery of the Certificates and fixing all details in connection
therewith. The City Council hereby authorizes the payment of the fee of the Office of the
Attorney General of the State of Texas for the examination of the proceedings relating to the
issuance of the Certificates, in the amount determined in accordance with the provisions of
Section 1202.004, Texas Government Code.
Section 20. CONSTRUCTION FUND; USE OF PROCEEDS.
(a) The City hereby creates and establishes and shall maintain on the books of the
City a separate fund to be entitled the "Series 2020 Certificates of Obligation Construction Fund"
(the "Construction Fund") for use by the City for payment of all lawful costs associated with the
acquisition and construction of the projects as provided in Section 1.
(b) The proceeds from the sale of the Certificates shall be deposited, on the date of
closing, in the manner described in a letter of instructions prepared by the City or on behalf of
the City by the City's financial advisor. The foregoing notwithstanding, any proceeds
representing accrued interest on the Certificates shall be deposited to the credit of the Interest
and Sinking Fund.
Section 21. INTEREST EARNINGS. That the interest earnmgs derived from the
investment of proceeds from the sale of the Certificates may be used along with other proceeds
for the construction of the permanent improvements set forth in Section 1 hereof for which the
19
Certificates are issued; provided that after completion of such permanent improvements, if any of
such interest earnings remain on hand, such interest earnings shall be deposited in the Interest
and Sinking Fund. It is further provided, however, that any interest earnings on proceeds which
are required to be rebated to the United States of America pursuant to this Ordinance hereof in
order to prevent the Certificates from being arbitrage bonds shall be so rebated and not
considered as interest earnings for the purposes of this Section.
Section 22. DEFAULT AND REMEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of
this Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the
Certificates when the same becomes due and payable; or
(ii) default in the perfonnance or observance of any other covenant,
agreement or obligation of the City, the failure to perform which materially, adversely
affects the rights of the registered owners of the Certificates, including, but not limited to,
their prospect or ability to be repaid in accordance with this Ordinance, and the
continuation thereof for a period of 60 days after notice of such default is given by any
registered owner to the City.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any
registered owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the City, or any official, officer or
employee of the City in their official capacity, for the purpose of protecting and enforcing
the rights of the registered owners under this Ordinance, by mandamus or other suit,
action or special proceeding in equity or at law, in any court of competent jurisdiction,
for any relief permitted by law, including the specific perf01mance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or
in violation of any right of the registered owners hereunder or any combination of such
remedies.
(ii) IL is provided that all such proceedings shall be instituted and maintained
for the equal benefit of all registered owners of Certificates then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or under the Certificates
or now or hereafter existing at law or in equity; provided, however, that notwithstanding
any other provision of this Ordinance, the right to accelerate the debt evidenced by the
Certificates shall not be available as a remedy under this Ordinanc e.
20
(ii) The exercise of any remedy herein conferred or reserved shall not be
deemed a waiver of any other available remedy.
(iii) By accepting the delivery of a Ce1iificate authorized under this Ordinance,
such registered owner agrees that the certifications required to effectuate any covenants
or representations contained in this Ordinance do not and shall never constitute or give
rise to a personal or pecuniary liability or charge against the officers, employees or
members of the City or the City Council.
(iv) None of the members of the City Council, nor any other official or officer,
agent, or employee of the City, shall be charged personally by the registered owners with
any liability, or be held personally liable to the registered owners under any tenn or
provision of this Ordinance, or because of any Event of Default or alleged Event of
Default under this Ordinance.
Section 23. MISCELLANEOUS PROVISIONS.
(a) Preamble. The preamble to this Ordinance is incorporated by reference and made
a part hereof for all purposes.
(b) Titles Not Restrictive. That the titles assigned to the various sections of this
Ordinance are for convenience only and shall not be considered restrictive of the subject matter
of any section or of any part of this Ordinance.
(c) Rules of Construction. The words "herein", "hereof' and "hereunder" and other
words of similar import refer to this Ordinance as a whole and not to any particular section or
other subdivision. Except where the context otherwise requires, terms defined in this Ordinance
to impaii the singular number shall be considered to include the plural number and vice versa.
References to any named person means that party and its successors and assigns. References to
any constitutional, statutory or regulatory provision means such provision as it exists on the date
this Ordinance is adopted by the City and any future amendments thereto or successor provisions
thereof. Any reference to "FORM OF CERTIFICATE" shall refer to the fo1m of the Certificates
set forth in Exhibit A to this Ordinance. Any reference to the payment of principal in this
Ordinance shall be deemed to include the payment of any mandatory sinking fund redemption
payments as may be described herein.
(d) Inconsistent Provisions. All ordinances, orders and resolutions, or parts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed
and declared to be inapplicable, and the provisions of this Ordinance shall be and remain
controlling as to the matters prescribed herein.
( e) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or
provision of this Ordinance or the application thereof to any person or circumstance shall be held
to be invalid, the remainder of this Ordinance shall nevertheless be valid and the City hereby
declares that this Ordinance would have been enacted without such invalid word, phrase, clause,
paragraph, sentence, part, portion, or provisions.
21
(f) Governing Law. This Ordinance shall be construed and enforced in accordance
with the laws of the State of Texas.
(g) Open Meeting. The City officially finds and determines that the meeting at which
this Ordinance is adopted was open to the public; and that public notice of the time, place, and
purpose of such meeting was given, all as required by Chapter 551, Texas Government Code.
(h) Application of Chapter 1208, Government Code. Chapter 1208, Texas
Government Code, applies to the issuance of the Certificates and the pledge of ad valorem taxes
and the Surplus Revenues granted by the City under Section 6(b ), and such pledge is therefore
valid, effective, and perfected. If Texas law is amended at any time while the Certificates are
outstanding and unpaid such that the pledge of the ad valorem taxes and Surplus Revenues
granted by the City is to be subject to the filing requirements of Chapter 9, Texas Business &
Commerce Code, then in order to preserve to the Registered Owners of the Certificates the
perfection of the security interest in said 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 Chapter 9, Texas Business & Commerce Code and enable a filing to perfect the
security interest in said pledge to occur.
(i) Immediate Effect. In accordance with the provisions of Section 1201.028, Texas
Government Code, this Ordinance shall be effective immediately upon its adoption by the City
Council.
[Remainder of page intentionally left blank.]
22
PASSED, APPROVED AND EFFECTIVE THIS JUNE 11, 2020.
(CITY SEAL)
APPROVED:
McCall, Parkhurst & Horton L.L.P., Dallas, Texas
Bond Counsel
Ordinance
City of College Station, Texas
Certificates of Obligation, Series 2020
EXHIBIT A
FORM OF CERTIFICATE
The form of the Certificates, including the fonn of Paying Agent/Registrar's
Authentication Certificate, the form of Assignment and the form of Registration Certificate of
the Comptroller of Public Accounts of the State of Texas to be attached only to the Certificates
initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially as
follows, with such appropriate variations, omissions, or insertions as are pennitted or required by
this Ordinance and with the Certificates to be completed with information set forth in the Pricing
Certificate. The Fonn of Certificate as it appears in this Exhibit A shall be completed, amended
and modified by Bond Counsel to incorporate the information set forth in the Pricing Ce1iificate
but it is not required for the Form of Certificate to be reproduced as an exhibit to the Pricing
Certificate.
NO.
MATURITY DATE
REGISTERED OWNER:
PRINCIPAL AMOUNT:
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
CERTIFICATES OF OBLIGATION
SERIES 2020
INTEREST RATE DELIVERY DATE
% [],2020
PRINCIPAL
AMOUNT
$[]
CUSIPNO.
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE
STATION, TEXAS, in Brazos County (the "City"), being a political subdivision of the State of
Texas, hereby promises to pay to the Registered Owner specified above or to the registered
assignee hereof (either being hereinafter called the "registered owner") the Principal Amount
specified above, and to pay interest thereon (calculated on the basis of a 360-day year of twelve
30-day months), from the Delivery Date specified above, to the Maturity Date specified above,
or the date of its redemption prior to scheduled maturity, at the interest rate per annum specified
above, with said interest payable on [], and semiannually on each August 15 and February 15
thereafter until maturity or prior redemption; except that if this Certificate is required to be
authenticated and the date of its authentication is later than [], such interest is payable
semiannually on each August 15 and February 15 following such date.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. At maturity or
redemption prior to maturity, the principal of this Certificate shall be paid to the registered owner
hereof upon presentation and surrender of this Certificate at the designated corporate trust office
in Dallas, Texas (the "Designated Trust Office") of The Bank of New York Mellon Trust
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Company, N.A., which is the "Paying Agent/Registrar" for this Certificate. The payment of
interest on this Certificate shall be made by the Paying Agent/Registrar to the registered owner
hereof on each interest payment date by check, dated as of such interest payment date, drawn by
the Paying Agent/Registrar on, and payable solely from, funds of the City required by the
ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such
check shall be sent by the Paying Agent/Registrar by United States mail, first-class postage
prepaid, on each such interest payment date, to the registered owner hereof, at its address as it
appeared on the last business day of the month preceding each such date (the "Record Date") on
the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any
accrued interest due at maturity as provided herein shall be paid to the registered owner upon
presentation and surrender of this Certificate for payment at the Designated Trust Office of the
Paying Agent/Registrar. The City covenants with the registered owner of this Certificate that on
or before each principal and interest payment date for this Certificate it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate
Ordinance, the amounts required to provide for the payment, in immediately available funds, of
all principal of and interest on the Certificates, when due.
IN THE EVENT OF NON-PAYMENT of interest on a scheduled payment date, and for
30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest ("Special Payment Date", which shall be 15 days after the
Special Record Date) shall be sent at least five business days prior to the Special Record Date by
United States mail, first-class postage prepaid, to the address of each registered owner of a
Certificate appearing on the Registration Books kept by the Paying Agent/Registrar at the close
of business on the last business day next preceding the date of mailing of such notice.
IF THE DA TE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made on
the original date payment was due.
THIS CERTIFICATE is one of a Series of Certificates dated as of lJ, 2020, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of$[_],
for the purpose of paying contractual obligations to be incurred by the City for the following
public purposes: (i) constructing and improving streets and roads including related drainage,
landscaping, signalization, lighting, pedestrian improvements and signage related thereto; (ii)
designing, constructing, equipping and installing parks and recreation equipment and
improvements including park infrastructure improvements and park rehabilitation, lighting,
fencing, shade structures and pavilions; (iii) purchasing and installing technology improvements
including video surveillance, network upgrades and replacements, diagnostic systems, fiber optic
infrastructure and communication equipment; (iv) constructing improvements and extensions to
the City's combined waterworks, sewer and electric systems including distribution, transmission,
A-2
system lines, lift stations, metering, wells, plant improvements, and acquisition of interests in
land for such purposes; and (v) the payment of fiscal, engineering and legal fees incurred in
connection therewith.
ON FEBRUARY 15, 20[], or on any date thereafter, the Certificates of this Series
maturing on February 15, 20[] and thereafter may be redeemed prior to their scheduled
maturities, at the option of the City, in whole, or in part, at par and accrued interest to the date
fixed for redemption. The years of maturity of the Certificates called for redemption at the
option of the City prior to their stated maturity shall be selected by the City. The Certificates or
portions thereof redeemed within a maturity shall be selected by lot or other method by the
Paying Agent/Registrar; provided, that during any period in which ownership of the Certificates
is determined only by a book entry at a securities depository for the Certificates, if fewer than all
of the Certificates of the same maturity and bearing the same interest rate are to be redeemed, the
paiiicular Certificates of such maturity and bearing such interest rate shall be selected in
accordance with the arrangements between the City and the securities depository.
AT LEAST THIRTY days prior to the date fixed for any such redemption, a written
notice of such redemption shall be given to the registered owner of each Certificate or a portion
thereof being called for redemption by depositing such notice in the United States mail, first
class postage prepaid, addressed to each such registered owner at his address shown on the
Registration Books of the Paying Agent/Registrar. By the date fixed for any such redemption
due provision shall be made by the City with the Paying Agent/Registrar for the payment of the
required redemption price for this Certificate or the portion hereof which is to be so redeemed,
plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is
given, and if due provision for such payment is made, all as provided above, this Certificate, or
the pmiion hereof which is to be so redeemed, thereby automatically shall be redeemed prior to
its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall
not be regarded as being outstanding except for the right of the registered owner to receive the
redemption price plus accrued interest to the date fixed for redemption from the Paying
Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall
record in the Registration Books all such redemptions of principal of this Certificate or any
portion hereof. If a portion of any Ce1iificate shall be redeemed a substitute Certificate or
Certificates having the same maturity date, bearing interest at the same rate, in Authorized
Denominations, at the written request of the registered owner, and in aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon the
surrender thereof for cancellation, at the expense of the City, all as provided in the Ordinance.
IF AT THE TIME OF MAILING of notice of optional redemption there shall not have
either been deposited with the Paying Agent/Registrar or legally authorized escrow agent
immediately available funds sufficient to redeem all the Certificates called for redemption, such
notice must state that it is conditional, and is subject to the deposit of the redemption moneys
with the Paying Agent/Registrar or legally authorized escrow agent at or prior to the redemption
date, and such notice shall be of no effect unless such moneys are so deposited on or prior to the
redemption date. If such redemption is not effectuated, the Paying Agent/Registrar shall, within
five days thereafter, give notice in the manner in which the notice of redemption was given that
such moneys were not so received and shall rescind the redemption.
A-3
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered
certificates, without interest coupons, in Authorized Denominations. As provided in the
Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee
or assignees hereof, be assigned, transferred, and exchanged for a like aggregate principal
amount of fully registered certificates, without interest coupons, payable to the appropriate
registered owner, assignee, or assignees, as the case may be, having the same maturity date, and
bearing interest at the same rate, in Authorized Denominations as requested in writing by the
appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of this
Certificate to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in
accordance with the form and procedures set forth in the Certificate Ordinance. Among other
requirements for such assignment and transfer, this Certificate must be presented and
surrendered to the Paying Agent/Registrar at its Designated Trust Office, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in an
Authorized Denomination to the assignee or assignees in whose name or names this Certificate
or any such portion or portions hereof is or are to be transferred and registered. The form of
Assignment printed or endorsed on this Certificate may be executed by the registered owner to
evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this Ce1iificate or any portion or portions hereof from time to time by the registered owner. The
foregoing notwithstanding, in the case of the exchange of an assigned and transferred Certificate
or Certificates or any portion or pmiions thereof, such fees and charges of the Paying
Agent/Registrar will be paid by the City. The one requesting such exchange shall pay the Paying
Agent/Registrar's reasonable standard or customary fees and charges for exchanging any
Certificate or portion thereof. In any circumstance, any taxes or governmental charges required
to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, or
exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither
the City nor the Paying Agent/Registrar shall be required (1) to make any transfer or exchange
during a period beginning at the opening of business 30 days before the day of the first mailing
of a notice of redemption of Certificates and ending at the close of business on the day of such
mailing, or (2) to transfer or exchange any Certificates so selected for redemption when such
redemption is scheduled to occur within 45 calendar days.
WHENEVER the beneficial ownership of this Certificate is determined by a book entry
at a securities depository for the Certificates, the foregoing requirements of holding, delivering
or transferring this Ce1iificate shall be modified to require the appropriate person or entity to
meet the requirements of the securities depository as to registering or transferring the book entry
to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the City,
resigns, or otherwise ceases to act as such, the City has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and promptly
will cause written notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper
to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
A-4
this Certificate have been performed, existed, and been done in accordance with law; that this
Certificate is a direct obligation of said City, issued on the full faith and credit thereof; and that
in accordance with the terms of the Certificate Ordinance, annual ad valorem taxes sufficient to
provide for the payment of the interest on and principal of this Certificate, as such interest comes
due and such principal matures, have been levied and ordered to be levied against all taxable
property in said City, and have been pledged for such payment, within the limit prescribed by
law; and that a limited pledge (not to exceed $1,000) of the Surplus Revenues from the operation
of the City's combined municipal electric light and power, waterworks and sewer system
remaining after payment of all operation and maintenance expenses thereof and any other
obligations heretofore or hereafter incurred to which such revenues have been or shall be
encumbered by a lien on and pledge of such revenues superior to the lien on and pledge of such
revenues to the Certificates, have been pledged as additional security for the Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such tem1s and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the City, and agrees that the terms
and provisions of this Certificate and the Certificate Ordinance constitute a contract between
each registered owner hereof and the City.
IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the City, attested by the manual or facsimile signature of the City
Secretary, and the official seal of the City has been duly affixed to, or impressed, or placed in
facsimile, on this Certificate.
Xxxxx xxxxx
City Secretary; City of College Station Mayor; City of College Station
(SEAL)
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate of Obligation has been issued under the
provisions of the proceedings adopted by the City as described in the text of this Ce1iificate of
Obligation; and that this Certificate of Obligation has been issued in exchange for or replacement
of a Certificate of Obligation of an issue which originally was approved by the Attorney General
of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated: The Bank of New York Mellon
Trust Company, N.A.
Paying Agent/Registrar
A-5
By: ____________ _
Authorized Representative
FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATE (CERTIFICATE NO. T-1) UPON INITIAL DELIVERY THEREOF
COMPTROLLER'S CERTIFICATE
OFFICE OF COMPTROLLER §
REGISTER NO.
----
STATE OF TEXAS §
I hereby certify that there is on file and of record in my office a ce1iificate of the Attorney
General of the State of Texas to the effect that this Certificate has been examined by him as
required by law, and that he finds that it has been issued in conformity with the Constitution and
laws of the State of Texas, and that it is a valid and binding obligation of the City of College
Station, Texas, payable in the manner provided by and in the ordinance authorizing same, and
said Certificate has this day been registered by me.
WITNESS MY HAND and seal of office at Austin, Texas this
(SEAL)
---------
Comptroller of Public Accounts of
the State of Texas
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto:
Please insert Social Security or Taxpayer Identification Number o,fTransferee
Please print or type name and address, including zip code of Transferee
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints:
---------------�
, attorney, to register the transfer of the within
Certificate on the books kept for registration thereof, with full power of substitution in the
premises.
Dated:
--------
Signature Guaranteed:
A-6
NOTICE: Signature(s) must be guaranteed
by an eligible guarantor institution
participating in a secuntles transfer
association recognized signature guarantee
program.
NOTICE: The signature above must
correspond with the name of the registered
owner as it appears upon the front of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
INSERTIONS FOR THE INITIAL CERTIFICATE. The initial Certificate shall be in the
fonn set forth in paragraph (a) of this Form of Certificate, except that:
1. immediately under the name of the Certificate, the headings "INTEREST
RA TE" and "MATURITY DATE" shall both be completed with the
words "As shown below" and "CUSIP NO. " shall be deleted.
11. the first paragraph shall be deleted and the following will be inserted:
THE CITY OF COLLEGE STATION, TEXAS, in Brazos County, Texas (the "City"),
being a political subdivision of the State of Texas, hereby promises to pay to the Registered
Owner specified above or to the registered assignee hereof (either being hereinafter called the
"registered owner") on the Maturity Dates, in the Principal Amounts and bearing interest at the
per annum Interest Rates set forth in the following schedule:
Principal Interest
Maturity Date Amount Rate
Information from Pricing Certificate to be Inserted in Initial Certificate
The City promises to pay interest on the unpaid principal amount hereof (calculated on
the basis of a 360-day year of twelve 30-day months) from the Delivery Date above at the
respective Interest Rate per annum specified above. Interest is payable on [] and on each August
15 and February 15 thereafter to the date of payment of the Principal Amounts specified above,
or the date of redemption prior to maturity; except, that if this Certificate is required to be
authenticated and the date of its authentication is later than the first Record Date (hereinafter
defined), such principal amount shall bear interest from the interest payment date next preceding
the date of authentication, unless such date of authentication is after any Record Date but on or
before the next following interest payment date, in which case such principal amount shall bear
interest from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Ce1iifieate or Certificates, if any, for which this
Certificate is being exchanged is due but has not been paid, then this Certificate shall bear
interest from the date to which such interest has been paid in full."
iii. The initial Certificate shall be numbered "T-1."
A-7
EXHIBIT B
PROCEDURES REGARDING COMPLIANCE WITH FEDERAL TAX AND
CONTINUING DISCLOSURE COVENANTS
This Exhibit is intended to assist the City of College Station (the "City") in complying
with the federal income tax covenants and securities disclosure covenants as they apply to the
issuance of tax-exempt debt securities such as the certificates of obligations (the "Obligations").
These procedures should be read together with any federal tax certifications, bond covenants,
letters or memoranda from bond counsel and any attachments thereto (collectively, the "Closing
Documents"). Failure to comply with federal guidelines could have serious consequences for
investors, the City and its officials.
These procedures shall apply to the Obligations, until they are superseded by a change in
circumstances at which time the City's bond counsel will propose new procedures to be adopted.
I. FEDERAL TAX LAW
1. Arbitrage Compliance.
Arbitrage refers to the difference between the interest paid on tax-exempt Obligations and
the interest earned by investing the proceeds of tax-exempt Obligations in higher-yielding
investments. Such higher-yielding investments could take the fonn of loans, securities, real
property, personal property, or other investments that could yield a profit to the City. Federal
income tax laws generally restrict the ability to earn arbitrage utilizing the proceeds of tax
exempt Obligations. Generally, any profit from investing Obligation proceeds at a yield above
the yield paid on the Obligations belongs to the federal government and must be rebated to the
federal government. If the City fails to comply federal tax guidelines, Obligations could be
deemed to be "arbitrage bonds" by the Internal Revenue Service (the "IRS"), which would
expose the City to monetary liability from the City's investors.
The arbitrage yield on the Obligations is set forth on the IRS Form 8038-G.
The Assistant City Manager/CFO and the City Treasurer (including such other employees
of the City who report to such officers) (collectively, the "Responsible Person") will review the
Closing Documents periodically (at least once a year) to ascertain if an exception to arbitrage
compliance applies.
a. Procedures applicable to the Obligation. The Responsible Person shall undertake
the following procedures.
B-1
i. If the City plans to spend funds currently on hand for a future project with
the intent to later repay such funds from a debt issue, the Responsible
Person shall contact Bond Counsel to obtain advice regarding a
reimbursement resolution. The Responsible Person shall maintain any
official action of the City (such as a reimbursement resolution) stating the
City's intent to reimburse with the proceeds of the Obligations any amount
expended prior to the Issue Date for the acquisition, renovation or
construction of the Project.
11. The Responsible Person shall ensure that the applicable information return
(e.g., U.S. Internal Revenue Service ("IRS") Form 8038-G, 8038-GC, or
any successor forms) is timely filed with the IRS.
111. If proceeds of the Obligations are to be invested in interest-earning
investments, assure that, unless excepted from rebate and yield restriction
under section 148(£) of the Code, excess investment earnings are
computed and paid to the U.S. government at such time and in such
manner as directed by the IRS (i) at least every 5 years after the Issue Date
and (ii) within 30 days after the date the Obligations are retired. If
proceeds of the Obligations are to be invested in interest-earning
investments, the Responsible Person should contact the City's arbitrage
consultant regarding such matters.
1v. The Responsible Person shall monitor all amounts deposited into a sinking
fund or funds pledged (directly or indirectly) to the payment of the
Obligations, such as the Interest and Sinking Fund (the "I&S Fund"), to
assure that the maximum amount invested within such applicable fund at a
yield higher than the yield on the Obligations does not exceed an amount
equal to the debt service on the Obligations in the succeeding 12 month
period plus a canyover amount equal to one-twelfth of the principal and
interest payable on the Obligations for the immediately preceding 12-
month period.
NOTE: the purpose of the I&S Fund is to achieve a proper
matching of revenues ivith principal and interest payments 11dthin
each fiscal year. The I&S Fund should be used a mechanism for
payment of current debt service and not as a long-term investment
fund for debt service many years in the future.
v. The Responsible Person shall ensure that no more than 50% of the
proceeds of the Obligations are invested in an investment with a
guaranteed yield for 4 years or more.
b. With respect to the investment and expenditure of the proceeds of the Obligations
that are issued to finance public improvements or to acquire land or personal
property, the Responsible Person shall undertake the following.
B-2
1. The Responsible Person shall instruct the persons who are primarily
responsible for the construction, renovation or acquisition of the facilities
financed with Obligations (the "Project") that the Project must (i) proceed
with due diligence toward completion and that (ii) binding contracts for
the expenditure of at least 5% of the proceeds of the Obligations will be
entered into within six ( 6) months of the date of closing of the Obligations
(the "Issue Date"). The Responsible Person shall monitor that the above
requirements are satisfied.
11. The Responsible Person shall monitor that at least 85% of the proceeds of
the Obligations to be used for the construction, renovation or acquisition
of the Project are expended within three years of the Issue Date.
111. The Responsible Person shall monitor investment of proceeds of the
Obligations and restrict the yield of the investments to the yield on the
Obligations after three years of the Issue Date.
1v. To the extent that there are any unspent proceeds of the Obligations at the
time the Obligations are later refunded, or if there are unspent proceeds of
the Obligations that are being refunded by a new issuance of Obligations,
the Responsible Person shall continue monitoring the expenditure of such
unspent proceeds to ensure compliance with federal tax law with respect
to both the refunded Obligations and any Obligations being issued for
refunding purposes, and shall contact Bond Counsel as necessary.
c. Procedures applicable to Escrow Accounts for the Obligations. In addition to the
foregoing, with respect to the proceeds of the Obligations deposited to the escrow
fund to be administered pursuant to the terms of an escrow agreement, the
Responsible Person shall undertake the following.
1. The Responsible Person shall review invoices, reports and other
notifications from the escrow agent to ensure compliance with the
applicable provisions of the escrow agreement, including with respect to
reinvestment of cash balances.
11. The Responsible Person shall contact the escrow agent on the date of
redemption of obligations being refunded to ensure that they were
redeemed.
111. The Responsible Person shall monitor any unspent proceeds of the
refunded obligations to ensure that the yield on any investments applicable
to such proceeds are invested at the yield on the applicable obligations or
otherwise applied (see Closing Documents).
B-3
B. Private Business Use.
Generally, the proceeds of tax-exempt Obligations may not inure to the benefit of entities
other than state or local governments ("private business use"). Private business use occurs
whenever Obligation proceeds are used to benefit any entity other than a state or local
government, including nonprofit corporations and the federal government.
A series of Obligations may lose their tax-exempt status if: (i) more than 10% of the
proceeds of the Obligations are to be used for any private business use and the payment of the
principal or interest on more than 10% of the proceeds of the Obligations is secured by or
payable from property used for a private business use, or (ii) the amount of proceeds of the
Obligations used to make loans to botTowers other than state and local governments exceeds the
lesser of 5% of the proceeds or $15 million.
With respect to the use of the facilities financed or refinanced with the proceeds of the
Obligations, the Responsible Person shall undertake the following to ensure the Obligations do
not violate private business use tests.
a. The Responsible Person shall develop procedures or a "tracking system" to
identify, log and record all property financed with tax-exempt debt and identify
the issue of Obligations used to finance such property.
b. The Responsible Person shall monitor and record the date on which the Project is
substantially complete and available to be used for the purpose intended.
c. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, the employees of the
City, the agents of the City or members of the general public has any contractual
right (such as a lease, research contract, naming rights agreement, purchase
contract, management agreement or other service agreement) with respect to any
portion of the Project.
d. Before entering into any private business use arrangement that involves the use of
the Project, the Responsible Person must obtain a description of the proposed
private business use arrangement and detennine whether such arrangement, if put
into effect, will be consistent with the restrictions on private business use of the
Project. In connection with the evaluation of any proposed private business use
mrnngement, the Responsible Person should consult with Bond Counsel to
discuss whether such arrangement, if put into effect, will be consistent with the
restrictions on private business use of the Project, and, if not, whether any
"remedial action" permitted under federal guidelines may be taken as a means of
enabling such private business use without adversely affecting the tax-exempt
status of the Obligations.
e. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, the employees of the
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City, the agents of the City or members of the general public has a right to use the
output of the Project (e.g., water, gas, electricity, capacity) on any basis other than
standard rates and charges.
f. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, has a naming right
for the Project or any other contractual right granting an intangible benefit.
g. Prior to any sale of property owned by the City (real or personal), the Responsible
Person must confirm whether such property was financed with tax-exempt debt,
and if so, detennine whether the proposed disposition of the property could
impact the tax-exempt status of the series of Obligations that financed the
acquisition of such prope1iy.
h. The Responsible Person shall take any action necessary to remediate any failure
to maintain compliance with the covenants contained in the ordinance authorizing
the issuance of the applicable series of Obligations.
C. Record Retention.
The Responsible Person will maintain or cause to be maintained all records relating to the
investment and expenditure of the proceeds of the Obligations and the use of the Project financed
or refinanced thereby for a period ending three (3) years after the complete extinguishment of the
Obligations. If any portion of the Obligations is refunded with the proceeds of another series of
Obligations, such records shall be maintained until the three (3) years after the refunding
Obligations mature or are otherwise paid off. Such records can be maintained in paper or
electronic format.
For purposes of these procedures, the Memorandum of Bond Counsel dated December 1,
2011 styled "Certain Federal Income Tax Considerations for Record Retention -Record
Management Program and Periodic Compliance Review" in incorporated herein and should be
reviewed periodically, at least once per year, by the Responsible Person.
D. Responsible Person & Continuity.
Each Responsible Person shall receive appropriate trammg regarding the City's
accounting system, contract intake system, facilities management and other systems necessary to
track the investment and expenditure of the proceeds and the use of the facilities financed with
the proceeds of the Obligations. The foregoing notwithstanding, the Responsible Person is
authorized and instructed to retain such experienced advisors and agents as may be necessary to
carry out the purposes of these instructions.
Prior to cessation of employment with the City, the Responsible Person should identify
their successor to maintain compliance with these procedures.
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II. FEDERAL SECURITIES LAW
Obligations, whether taxable or tax-exempt, sold in a public offering in an amount of
$1 million or more are subject to Rule 15c2-12 (the "Rule") of the United States Securities and
Exchange Commission (the "SEC"). Additionally, the City may have covenanted to comply
with the Rule even with respect to Obligations that would otherwise be exempt from the Rule
(e.g., Obligations sold in a private placement or Obligations sold in an amount less than
$1 million). Pursuant to the Rule, the City is required to make annual filings of certain
information, as well as make filings upon the occurrence of certain specified events. All filings
must be made with the Municipal Securities Rulemaking Board (the "MSRB") through its
Electronic Municipal Market Access System ("EMMA") at emma.msrb.org.
A. Annual Filings.
The City must file certain updated financial infom1ation and operating data to the MSRB on an
annual basis in an electronic format that is prescribed by the MSRB and available via EMMA.
The infom1ation to be updated includes all quantitative financial information and operating data
with respect to the City of the general type included in the City's Official Statements under
Tables numbered 1 through 6; 8 through 20 and in Appendix B. The City will update and provide
the information in such tables within six months after the end of each fiscal year. The City will
additionally provide audited financial statements when and if available, and in any event, within
12 months after the end of each fiscal year. If the audit of such financial statements is not
complete within 12 months after any such fiscal year end, then the City will file unaudited
financial statements within such 12 month period and audited financial statements for the
applicable fiscal year, when and if the audit report on such statements becomes available.
The Responsible Person must compile, prepare and make such filings within the required
time, or, alternatively, contract with a third-party, such as the City's financial advisor, to make
such filings on the City's behalf.
B. Notices of Specified Events.
The City must provide notice of any of the following events with respect to the
Obligations to the MSRB in a timely manner (but not in excess of ten business days after the
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 perfonn;
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( 6) Adverse tax opinions, the issuance by the IRS 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 Obligations, or other
material events affecting the tax status of the Obligations;
(7) Modifications to rights of Obligation holders, if material;
(8) Obligations calls (includes redemptions and other early payments), if material,
and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Obligations, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City;
(13) The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional paying agent or the change of name of a
paying agent, 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 bondholders, if material;
(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; and
(17) In a timely manner, notice of a failure of the City to make the required annual
filings listed in Subsection II(A) above.
The Responsible Person should review this list at regular intervals to determine whether
any event has occurred that may require a filing with EMMA.
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EXHIBIT C
PRELIMINARY OFFICIAL STATEMENT
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