HomeMy WebLinkAbout2005-2798 - Ordinance - 04/28/2005
ORDINANCE NO. 2798
PROVIDING FOR THE ISSUANCE OF $7,595,000 CITY OF COLLEGE
STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2005 AND
ORDAINING OTHER MATTERS RELATING TO THE SUBJECT, INCLUDING
IMMEDIATE EFFECTIVENESS
WHEREAS, on the 22nd day of March, 2005, the City Council of the City of College Station
(the "City" or the "Issuer") passed a resolution authorizing and directing notice of its intention to
issue the Certificates of Obligation herein authorized to be issued on April 28, 2005, to be published
in a newspaper as required by Section 271.049 of the Texas Local Government Code; and
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 6, 2005 and April 13, 2005; and
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; and
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;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
COLLEGE STATION, TEXAS
Section 1. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That said City's
Certificates of Obligation, to be designated the "City of College Station, Texas Certificates of
Obligation, Series 2005", are hereby authorized to be issued and delivered in the principal amount of
$7,595,000 for the purpose of paying contractual obligations to be incurred by the City, to-wit,
I)
construction of street and pedestrian improvement and extensions throughout the
City;
2)
construction of atWetic field and park improvements throughout the City;
3)
the acquisition of technology equipment for use by City departments;
4)
the acquisition of a fire ladder truck;
5)
construction of public restroom facilities, water features and related capital
improvements for the Northgate district;
6)
acquisition of land, signage and acquisition and construction of related capital
improvements for public use in the Spring Creek Corporate Campus business park;
7)
acquisition and construction of improvements to the Wolf Pen Creek development,
including the amphitheater, landscaping, utilities, site work, water features, and public
art;
8)
the acquisition ofland and design costs for a City-owned cemetery; and
9)
the payment of fiscal, engineering and legal fees incurred in connection therewith.
Section 2. DATE, DENOMINATIONS, NUMBERS AND MATURITIES. That said
Certificates of Obligation shall initially be issued, sold and delivered hereunder as fully registered
certificates, without interest coupons, dated May 1, 2005, in the respective denominations and
principal amounts hereinafter stated, numbered consecutively fTom R-I upward, payable to the
respective initial registered owners thereof, or to the registered assignee or assignees of said
certificates or any portion or portions thereof (in each case, the "Registered Owner"), and said
Certificates of Obligation shall mature and be payable on February IS in each of the years and in the
principal amounts as follows:
PRINCIPAL PRINCIPAL
YEAR AMOUNT ($) YEAR AMOUNT ($)
2006 1,470,000 2016 160,000
2007 950,000 2017 170,000
2008 1,005,000 2018 180,000
2009 515,000 2019 190,000
2010 535,000 2020 200,000
2011 185,000 2021 215,000
2012 195,000 2022 225,000
2013 205,000 2023 235,000
2014 215,000 2024 250,000
2015 230,000 2025 265,000
The term "Certificates" as used in this Ordinance shall mean and include collectively the Certificates
of Obligation initially issued and delivered pursuant to this Ordinance and all substitute Certificates
of Obligation exchanged therefor, as well as all other substitute Certificates of Obligation and
replacement Certificates of Obligation issued pursuant hereto, and the term "Certificate" shall mean
any of the Certificates.
Section 3. REDEMPTION. (a) That the City reserves the right to redeem the Certificates
of Obligation maturing on or after February 15, 2015, in whole or in part in principal amounts of
$5,000 or any integral multiple thereof, on February 15, 2014, or on any date thereafter, at the
redemption price of par plus accrued interest to the date fixed for redemption. Ifless than all of the
Certificates of Obligation are to be redeemed by the City, the City shall determine the maturity or
maturities and the amounts thereof to be redeemed and shall direct the Paying AgentlRegistrar to call
by lot Certificates of Obligation, or portions thereof, within such maturity or maturities and in such
principal amounts, for redemption provided, that during any period in which ownership of the
Certificates of Obligation is determined only by a book entry at a securities depository for the
Certificates of Obligation, if fewer than all of the Certificates of Obligation of the same maturity and
bearing the same interest rate are to be redeemed, the particular Certificates of Obligation of such
maturity and bearing such interest rate shall be selected in accordance with the arrangements between
the City and the securities depository. The City shall notify the Paying AgentlRegistrar at least forty-
five (45) days prior to the scheduled redemption date that a redemption of the Certificates of
Obligation is to be effected.
(b) The Certificates are not subject to mandatory sinking fund redemption prior to maturity.
(c) At least thirty (30) days prior to the date any such Certificates of Obligation are to be
redeemed, a written notice of redemption shall be given by the Paying AgentlRegistrar to the
registered owner of each Certificate of Obligation 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 the address thereof as shown on the registration books of the Paying
AgentlRegistrar. By the date fixed for any such redemption due provision shall be made by the City
with the Paying AgentlRegistrar for the payment of the required redemption price for the Certificates
of Obligation or the portions thereof which are 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, the Certificates of Obligation, or the portions thereof which
are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities,
and shall not bear interest after the date fixed for their 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 fTom the Paying AgentlRegistrar out of the funds provided
for such payment. The Paying AgentlRegistrar shall record in the Registration Books all such
redemptions of principal of the Certificates of Obligation or any portion thereof If a portion of any
Certificate of Obligation shall be redeemed, a substitute Certificate of Obligation or Certificates of
Obligation having the same maturity date, bearing interest at the same rate, in any Authorized
Denomination, at the written request of the registered owner, and in an aggregate principal amount
equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender
thereoffor cancellation, at the expense of the City, all as provided in this Ordinance. In addition,
notice of such redemption shall be provided in the manner described in Section 5(h) hereof, but the
failure to provide such notice as described in Section 5(h) hereof shall not affect the validity or
effectiveness of the proceedings for the redemption of the Certificates of Obligation.
Section 4. INTEREST. The Certificates scheduled to mature during the years, respectively,
set forth below shall bear interest at the following rates per annum:
maturities 2006,5.000%
maturities 2007, 5.000%
maturities 2008, 4.500%
maturities 2009,3.000%
maturities 2010,3.000%
maturities 2011,3.250%
maturities 2012,3.500%
maturities 2013,3.500%
maturities 2014,4.250%
maturities 2015,4.000%
maturities 2016, 4.000%
maturities 2017, 4.000%
maturities 2018,4.125%
maturities 2019,4.125%
maturities 2020, 4.250%
maturities 2021, 4.250%
maturities 2022, 4.375%
maturities 2023, 4.375%
maturities 2024, 4.500%
maturities 2025, 4.500%
Said interest shall be payable to the registered owner of any such Certificate in the manner provided
and on the dates stated in the FORM OF CERTIFICATE.
Section 5. CHARACTERISTICS OF THE CERTIFICATES. (a) The Issuer shall keep or
cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office") of
JPMorgan Chase Bank, National Association, or such other bank, trust company, financial institution,
or other agency named in accordance with the provisions of (g) below (the "Paying
AgentlRegistrar"), books or records for the registration and transfer of the Certificates (the "Regis-
tration Books"), and the Issuer hereby appoints the Paying AgentlRegistrar as its registrar and
transfer agent to keep such books or records and make such transfers and registrations under such
reasonable regulations as the Issuer and Paying AgentlRegistrar may prescribe; and the Paying
AgentlRegistrar shall make such transfers and registrations as herein provided. It shall be the duty
of the Paying AgentlRegistrar 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 Issuer or its designee shall have the right to
inspect the Registration Books during regular business hours of the Paying AgentlRegistrar at its
Designated Trust Office, but otherwise the Paying AgentlRegistrar 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 AgentlRegistrar at its Designated Trust Office for
transfer of registration and cancellation, together with proper written instruments of assignment, in
form and with guarantee of signatures satisfactory to the Paying AgentlRegistrar, evidencing the
assignment of such Certificate, or any portion thereof in any integral multiple of $5,000, 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 ofthis Ordinance, whether
or not such certificate shall be overdue, and the City and the Paying AgentlRegistrar 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
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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 AgentlRegistrar 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 AgentlRegistrar shall keep proper
records of all payments made by the City and the Paying AgentlRegistrar 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 AgentlRegistrar, 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
AgentlRegistrar, 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 the denomination of$5,000, or any integral multiple thereof(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 fTom each other certificate. The Paying AgentlRegistrar 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 permitted 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 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 certificate 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
Certificate or Certificates issued under this Ordinance there shall be printed thereon a Paying
AgentlRegistrar's Authentication Certificate, in the form hereinafter set forth in the FORM OF
CERTIFICATE. An authorized representative of the Paying AgentlRegistrar shall, before the
delivery of any such substitute certificate, date such substitute certificate in the manner set forth
above, and manually sign and date such Authentication Certificate, and no such substitute certificate
shall be deemed to be issued or outstanding unless such Authentication Certificate is so executed.
The Paying AgentlRegistrar promptly shall cancel all Certificates surrendered for exchange or
replacement. No additional ordinances, orders, or resolutions need be passed or adopted by the City
Councilor any other body or person so as to accomplish the foregoing exchange or replacement of
any Certificates or portion thereof, and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute certificates in the manner prescribed herein. Pursuant to
Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates as
aforesaid is hereby imposed upon the Paying AgentlRegistrar, and, upon the execution of said Paying
AgentlRegistrar's 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 AgentlRegistrar
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 form, without interest coupons, with the principal of and
interest on such Certificates to be payable only to the registered owners thereof, (ii) may be redeemed
prior to their scheduled maturities, (iii) may be 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 re-
quired or indicated, in the FORM OF CERTIFICATE.
(f) The City shall pay the Paying AgentlRegistrar's reasonable and customary fees and charges
for making transfers of Certificates, but the registered owner of any Certificates 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 AgentlRegis-
trar'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 any integral multiple of $5,000, 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) pay the reasonable and standard or customary fees and charges of
the Paying AgentlRegistrar 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 AgentlRegistrar 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 Certificates are outstanding the City will provide a competent and legally qualified bank, trust
company, financial institution, or other agency to act as and perform the services of Paying
AgentlRegistrar for the Certificates under this Ordinance, and that the Paying AgentlRegistrar will
be one entity. The City reserves the right to, and may, at its option, change the Paying AgentlRegis-
trar upon not less than 60 days written notice to the Paying AgentlRegistrar. In the event that the
entity at any time acting as Paying AgentlRegistrar (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 are similar to the previous Paying
AgentlRegistrar to act as Paying AgentlRegistrar under this Ordinance. Upon any change in the
Paying AgentlRegistrar, the previous Paying AgentlRegistrar 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 AgentlRegistrar designated and appointed by the City. Upon any
change in the Paying AgentlRegistrar, the City promptly will cause a written notice thereof to be sent
by the new Paying AgentlRegistrar 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
AgentlRegistrar. By accepting the position and performing as such, each Paying AgentlRegistrar
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 AgentlRegistrar.
(h) (i) In addition to the manner of providing notice of redemption of Certificates as
set forth in this Ordinance, the Paying AgentlRegistrar shall give notice of redemption of Certificates
by United States mail, first-class postage prepaid, at least 30 days prior to a redemption date to each
NRMSIR (as defined in Section 18 hereof) and the SID (as defined in Section 18 hereof). In
addition, in the event of a redemption caused by an advance refunding ofthe Certificates, the Paying
AgentlRegistrar shall send a second notice of redemption to the persons specified in the immediately
preceding sentence at least 30 days but not more than 90 days prior to the actual redemption date.
Any notice sent to the NRMSIRs or the SID shall be sent so that they are received at least two days
prior to the general mailing or publication date of such notice. The Paying AgentlRegistrar shall also
send a notice of prepayment or redemption to the owner of any Certificate who has not sent the
Certificates in for redemption 60 days after the redemption date.
(ii) Each redemption notice, whether required in the FORM OF CERTIFICATE or
otherwise by this Ordinance, shall contain a description of the Certificates to be redeemed, including
the complete name of the Certificates, the series, the date of issue, the interest rate, the maturity date,
the CUSIP number, if any, the amounts called of each Certificate, the publication and mailing date
for the notice, the date of redemption, the redemption price, the name of the Paying AgentlRegistrar
and the address at which the Certificate may be redeemed, including a contact person and telephone
number.
(iii) All redemption payments made by the Paying AgentlRegistrar to the registered
owners of the Certificates shall include CUSIP numbers relating to each amount paid to such
registered owner.
Section 6. FORM OF CERTIFICATES. The form of the Certificates, including the form of
Paying AgentlRegistrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be attached
to the Certificates initially issued and delivered pursuant to this Ordinance, shall be in substantially
the form as set forth in Exhibit A to this Ordinance, with such appropriate variations, omissions, or
insertions as are permitted or required by this Ordinance. 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 7. DEFINITIONS. That the terms "Certificates" and "Certificates of Obligation"
shall mean the City of College Station, Texas Certificates of Obligation, Series 2005, authorized to
be issued and delivered by this Ordinance; and the term "Surplus Revenues" shall mean those
revenues fTom 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.
Section 8. INTEREST AND SINKING F1JND. That a special fund or account, to be
designated the "City of College Station, Texas Series 2005 Certificate of Obligation Interest and
Sinking Fund" is hereby created and shall be established and maintained by the Issuer. Said Interest
and Sinking Fund shall be kept separate and apart fTom all other funds and accounts of said Issuer,
and shall be used only for paying the interest on and principal of said Certificates. All ad valorem
taxes levied and collected for and on account of said Certificates shall be deposited, as collected, to
the credit of said Interest and Sinking Fund. During each year while any of said Certificates are
outstanding and unpaid, the governing body of said Issuer shall compute and ascertain the rate and
amount of ad valorem tax, based on the latest approved tax rolls of said Issuer, 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 said 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 said Certificates 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 said
Certificates as a sinking fund each year. Said rate and amount of ad valorem tax is hereby ordered
to be levied against all taxable property in said Issuer for each year while any of said Certificates are
outstanding and unpaid, and said ad valorem tax shall be assessed and collected each such year and
deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes necessary
to pay the interest on and principal of said Certificates, as such interest comes due and such principal
matures, are hereby pledged for such payment, within the limit prescribed by law. There shall be
appropriated fTom the General Fund ofthe City for deposit into the Interest and Sinking Fund moneys
as may be necessary to pay the principal and interest payments on the Certificates of Obligation
scheduled to occur on or before February 15, 2006.
Section 9. REVENUES. That the Certificates of Obligation are additionally secured by and
shall be payable from the Surplus Revenues. 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 8, to pay the principal and interest on the Certificates of
Obligation. The amount of Surplus Revenues pledged to the payment of the Certificates of
Obligation shall not exceed $1,000.
Section 10. 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 of Obligation.
Section II. 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 Fund shall be used only for the purposes and in the manner
permitted or required by this Ordinance.
Section 12. 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 AgentlRegistrar shall cause to be printed,
executed, and delivered, a new certificate of the same principal amount, maturity, and interest rate,
as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate
in the manner hereinafter provided.
(b) 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 AgentlRegistrar. 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
AgentlRegistrar such security or indemnity as may be required by them to save each of them harmless
fTom any loss or damage with respect thereto. Also, in every case ofloss, theft, or destruction of a
Certificate, the registered owner shall furnish to the City and to the Paying AgentlRegistrar 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
AgentlRegistrar 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 AgentlRegistrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in connection therewith. Every replacement
certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate
is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall
be entitled to all the benefits of this Ordinance equally and proportionately with any and all other
Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. 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 AgentlRegistrar, and the Paying AgentlRegistrar shall authenticate and
deliver such Certificates in the form and manner and with the effect, as provided in Section Sea) of
this Ordinance for Certificates issued in conversion and exchange of other Certificates.
Section 13. FEDERAL INCOME TAX MATTERS. That the City covenants to refrain
fTom any action which would adversely affect, or to take such action as to ensure, the treatment of
the Certificates of Obligation 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 offederal 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 of Obligation (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 of Obligation, 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 5 percent of the proceeds of the Certificates of
Obligation (less amounts deposited into a reserve fund, if any) then the amount in excess of
5 percent is used for a "private business use" which is "related" and not "disproportionate",
within the meaning of Section 141(b)(3) ofthe 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 of Obligation (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 refTain ITom taking any action which would otherwise result in the
Certificates of Obligation being treated as "private activity bonds" within the meaning of
Section 141(b) of the Code;
(e) to refTain fTom taking any action that would result in the Certificates of
Obligation being "federally guaranteed" within the meaning of section 149(b) of the Code;
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(f) to refrain fTom using any portion of the proceeds of the Certificates of
Obligation, 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 of Obligation, other than
investment property acquired with -
(I) proceeds of the Certificates of Obligation invested for a reasonable
temporary period of three years or less until such proceeds are needed for the purpose
for which the certificates of obligation 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 of Obligation;
(g) to otherwise restrict the use of the proceeds of the Certificates of Obligation
or amounts treated as proceeds of the Certificates of Obligation, as may be necessary, so that
the Certificates of Obligation do not otherwise contravene the requirements of Section 148
of the Code (relating to arbitrage) and, to the extent applicable, Section I 49(d) of the Code
(relating to advance refundings); 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 of Obligation) 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 of Obligation 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 Issuer understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Certificates of Obligation. It is the understanding of the City that the covenants con-
tained herein are intended to assure compliance with the Code and any regulations or rulings
promulgated by the US. Department of the Treasury pursuant thereto. In the event that regulations
or ruling are hereafter promulgated which modify or expand provisions of the Code, as applicable to
the Certificates of Obligation, the City will not be required to comply with any covenant contained
herein to the extent that such failure to comply, in the opinion ofnationally-recogruzed bond counsel,
will not adversely affect the exemption from federal income taxation of interest on the Certificates
of Obligation 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 of
Obligation, 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 of Obligation under Section 103 ofthe Code. In furtherance
of such intention, the City hereby authorizes and directs the Mayor, the City Manager, any Assistant
City Manager and the Finance and Strategic Planning Director to execute any documents, certificates
11
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 of
Obligation.
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 14. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the Issuer covenants to account for the expenditure of proceeds fTom the sale of the
Certificates and any investment earnings thereon to be used for the purposes described in Section I
of this Ordinance (such purpose referred to herein and Section 15 hereof as a "Project") on its books
and records by allocating proceeds to expenditures within 18 months ofthe later of the date that (a)
the expenditure on a Project is made or (b) such Project is completed. The foregoing
notwithstanding, the Issuer 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 Issuer 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 Issuer 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 fTom gross income of the interest.
Section IS. DISPOSITION OF PROJECT. That the Issuer covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt
by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally-
recognized bond counsel substantially to the effect that such sale or other disposition will not
adversely affect the tax-exempt status ofthe Certificates. For purposes of the foregoing, the portion
ofthe 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
Issuer 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 fTom gross income
of the interest.
Section 16. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES. That
the City Manager 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 certificate.
12
Section 17. DTCREGISTRATION. That the Certificates ofObligationinitially shall be issued
and delivered in such manner that no physical distribution of the Certificates of Obligation will be
made to the public, and The Depository Trust Company ("DTC"), New York, New York, initially
will act as depository for the Certificates of Obligation. 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 of Obligation initially authorized by this Ordinance shall be delivered to and registered
in the name of CEDE & CO., the nominee ofDTc. It is expected that DTC will hold the Certificates
of Obligation on behalf of the Underwriters (as defined in Section 20 of this Ordinance) and its
participants. So long as each Certificate of Obligation is registered in the name of CEDE & CO., the
Paying AgentlRegistrar 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 of Obligation in integral amounts of$5,000, with transfers of
ownership being effected on the records ofDTC and its participants pursuant to rules and regulations
established by them, and that the Certificates of Obligation initially deposited with DTC shall be
immobilized and not be further exchanged for substitute Certificates of Obligation except as
hereinafter provided. The City is not responsible or liable for any functions ofDTC, 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 ofDTC or its participants, or protecting any
interests or rights of the beneficial owners ofthe Certificates of Obligation. 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 of Obligation,
and the method of paying the fees and charges ofDTC. 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 of Obligation is duly filed with the Paying
AgentlRegistrar with proper request for transfer and substitution, as provided for in this Ordinance,
substitute Certificates of Obligation 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 of Obligation. 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 18. CONTINUlNGDISCLOSUREOBLIGATION. (a) Definitions. Thatasused
in this Section, the following terms have the meanings ascribed to such terms below:
"MAC" means the Municipal Advisory Council of Texas
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule from
time to time.
13
"Rule" means SEC Rule 15c2-12, as amended fTom time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(b) Annual Reports. (i) The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year ending in or after 2005, financial information and
operating data with respect to the City of the general type included in the final Official Statement
authorized by Section 20 of this Ordinance, being the information described in Exhibit A hereto. Any
financial statements so to be provided shall be (I) prepared in accordance with the accounting
principles described in Exhibit A hereto, or such other accounting principles as the City may be
required to employ fTom time to time pursuant to state law or regulation, and (2) audited, if the City
commissions an audit of such statements and the audit is completed within the period during which
they must be provided. If the audit of such financial statements is not complete within such period,
then the City shall provide unaudited financial statements by the required time, and shall provide
audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and
if the audit report on such statements become available.
(ii) If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise would
be required to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in one
or more documents or may be included by specific reference to any document (including an official
statement or other offering document, if it is available fTom the MSRB) that theretofore has been
provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Certificates of
Obligation, if such event is material within the meaning of the federal securities laws:
7.
8.
9.
10.
1.
2.
3.
4.
s.
6.
Principal and interest payment delinquencies;
Non-payment related defaults;
Unscheduled draws on debt service reserves reflecting financial difficulties;
Unscheduled draws on credit enhancements reflecting financial difficulties;
Substitution of credit or liquidity providers, or their failure to perform;
Adverse tax opinions or events affecting the tax-exempt status of the
Certificates of Obligation;
Modifications to rights of holders of the Certificates of Obligation;
Certificates of Obligation calls;
Defeasances;
Release, substitution, or sale of property securing repayment of the
Certificates of Obligation; and
14
\1.
Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with subsection
(b) of this Section by the time required by such subsection. Any filing under this Section may be
made solely by transmitting such filing to the MAC as provided at http://www.disclosureusa.org,
unless the SEC has withdrawn the interpretive advice stated in its letter to the MAC dated September
7, 2004.
(d) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Certificates of Obligation 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 of Obligation 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 of Obligation, and nothing in this Section, express or implied,
shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person.
The City undertakes to provide only the financial information, operating data, financial statements,
and notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update any
information provided in accordance with this Section or otherwise, except as expressly provided
herein. The City does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Certificates of Obligation at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OF OBLIGATION
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 F AUL T ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT
EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACTOR 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 the 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) The provisions of this Section may be amended by the City fTom time to time to adapt to
changed circumstances that arise fTom 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 of
Obligation in the primary offering of the Certificates of Obligation in compliance with the Rule, taking
into account any amendments or interpretations of the Rule since such offering as well as such
15
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 of Obligation 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 of Obligation. 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
ofthe impact of any change in the type of financial information or operating data so provided. The
City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC
amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment
that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter fTom lawfully purchasing or selling Certificates of
Obligation in the primary offering of the Certificates of Obligation.
Section 19. DEFEASANCE. (a) Deemed Paid. Any Certificate of Obligation and the
interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased
Certificate") within the meaning of this Ordinance, except to the extent provided in subsection (e) of
this Section, when payment of the principal of such Certificate of Obligation, 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
AgentlRegistrar 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
AgentlRegistrar for the payment of its services until all Defeased Certificates shall have become due
and payable. At such time as a Certificate of Obligation shall be deemed to be a Defeased Certificate
hereunder, as aforesaid, such Certificate of Obligation and the interest thereon shall no longer be
secured by, payable fTom, or entitled to the benefits of, the ad valorem taxes or revenues herein levied
and pledged 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 AgentlRegistrar 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 fTom such Defeasance Securities received by the Paying
AgentlRegistrar that is not required for the payment of the Certificates of Obligation 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 fTom such Defeasance Securities received by the Paying
AgentlRegistrar which is not required for the payment of the Defeased Securities, with respect to
16
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 Defeased Certificates. In the event that the City elects to defease less than
all of the principal amount of Certificates of Obligations of a maturity, the Paying AgentlRegistrar
shall select, or cause to be selected, such amount of Certificates of Obligations by such random
method as it deems fair and appropriate.
(d) Defeasance Obligations. 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 agency or instrumentality of the
United States of America, including obligations that are unconditionally guaranteed or insured by the
agency or instrumentality and that, on the date of the purchase thereof are rated as to investment
quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii)
noncallable obligations of a state or an agency or a county, municipality, or other political subdivision
of a state that have been refunded and that, on the date the governing body of the City adopts or
approves the proceedings authorizing the financial arrangements are rated as to investment quality
by a nationally recognized investment rating firm not less than AAA or its equivalent
(e) Continuing Duty of Paying Agent/Registrar. Until all Certificates of Obligation defeased
under this Section of this Ordinance shall become due and payable, the Paying AgentlRegistrar for
such Certificates of Obligation shall perform the services of Paying AgentlRegistrar for such
Certificates of Obligation the same as if they had not been defeased, and the City shall make proper
arrangements to provide and pay for such services.
Section 20. SALE OF CERTIFICATES. (a) Sale to Best Bidder. That the sale of the
Certificates to Citigroup Global Markets Inc., and syndicate members (the "Purchaser"), at a price
of par and accrued interest on the Certificates to the date of delivery, is hereby authorized, ratified
and confirmed. It is hereby officially found, determined and declared that the Certificates were sold
to the highest bidder at terms that were the most advantageous reasonably obtained.
(b) Offering Documents. The Certificates were sold pursuant to the terms of a "Notice of
Sale and Bidding Instructions", "Official Bid Form" and "Official Statement", the use of which
documents, a true and correct copy of each such document is attached hereto, is hereby approved.
The use of the "Preliminary Official Statement" prepared in connection with the sale of the
Certificates is hereby ratified.
(c) Bond Insurance. The Mayor, City Manager and the Finance and Strategic Planning
Director each is authorized, in connection with effecting the sale of the Certificates, to obtain fTom
XL Capital Assurance Inc. (the "Insurer") a municipal bond insurance policy in support of the
Certificates. To that end, for so long as such policy is in effect, the requirements of the Insurer
relating to the issuance of said policy is incorporated by reference into this Ordinance and made a part
hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. A
statement of insurance provided by the Insurer shall be printed on the Certificates.
17
Section 21. APPROVAL AND REGISTRATION OF CERTIFICATES. That the Finance
and Strategic Planning Director is hereby authorized to have control of the Certificates 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, the Comptroller of Public Accounts (or a deputy designated in writing to act therefor)
shall manually sign the Comptroller's Registration Certificate. The Certificates thus registered shall
remain in the custody of the City Manager (or the designee thereof) until delivered to the
Underwriters.
Section 22. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Finance and Strategic Planning Director, any Assistant City Manager, and all other
officers, employees, and agents of the City, and each of them, shall be and they are hereby expressly
authorized, empowered, and directed fTom 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 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 dc13;!s in connection therewith.
Section 23. USE OF PROCEEDS. That the proceeds fTom the sale of the Certificates shall
be used 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, proceeds representing accrued interest
on the Certificates shall be deposited to the credit ofthe Interest and Sinking Fund. Any amounts
remaining after completion of the improvements described in Section I hereof shall be transferred
FIRST to the Rebate Fund, to the extent required by Section 13 hereof and as further described in
Section 24 hereof, and THEREAFTER to the Interest and Sinking Fund.
Section 24. INTEREST EARNINGS. That the interest earnings derived fTom the investment
of proceeds fTom 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 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 fTom being arbitrage bonds shall be so rebated and not considered as interest earnings for
the purposes of this Section.
Section 25. PREAMBLE. That the preamble to this Ordinance is incorporated by reference
and made a part hereof for all purposes.
Section 26. MISCELLANEOUS PROVISIONS. (a) 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.
18
(b) 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 impart
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 form 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.
(c) 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.
(d) 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.
(e) Governing Law. This Ordinance shall be construed and enforced in accordance with the
laws ofthe State of Texas.
(f) 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 55 I, Texas Government Code.
(g) 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 Sections 8 and 9, and such pledge is therefore valid, effective,
and perfected. 1fT exas 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.
(h) 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.
19
PASSED AND APPROVED this April 28, 2005.
(CITY SEAL)
APPROVED
McCall, Parkhurst & Horton L.L.P.
Bond Counsel
~~~
20
Exhibit A
to
Ordinance
FORM OF CERTIFICATE
NO.
$
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
CERTIFICATES OF OBLIGATION
SERIES 2005
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE
% MAY I, 2005
CUSIP
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE STATION,
TEXAS, in Brazos County (the "City" or the "Issuer"), being a political subdivision of the State of
Texas, hereby promises to pay to , or to the
registered assignee hereof( either being hereinafter called the "registered owner") the principal amount
of
DOLLARS
and to pay interest thereon, fTom the Original Issue 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 February IS, 2006, and semiannually on each
August 15 and February 15 thereafter; except that if this Certificate is required to be authenticated
and the date of its authentication is later than February 15,2006, such interest is payable semiannually
on each August IS and February IS 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") ofJPMorgan Chase Bank, National Association, which is the "Paying
AgentlRegistrar" for this Certificate. The payment of interest on this Certificate shall be made by the
Paying AgentlRegistrar to the registered owner hereof on each interest payment date by check, dated
as of such interest payment date, drawn by the Paying AgentlRegistrar on, and payable solely fTom,
funds of the Issuer required by the ordinance authorizing the issuance of this Certificate (the
"Certificate Ordinance") to be on deposit with the Paying AgentlRegistrar for such purpose as herein-
after provided; and such check shall be sent by the Paying AgentlRegistrar 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 AgentlRegistrar, as hereinafter described. Any
accrued interest due at maturity as provided herein shall be paid to the registered owner upon
presentation and surrender ofthis Certificate for payment at the Designated Trust Office of the Paying
AgentlRegistrar. The Issuer covenants with the registered owner ofthis Certificate that on or before
each principal and interest payment date for this Certificate it will make available to the Paying
AgentlRegistrar, 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 AgentlRegistrar, if and when funds for the payment of such interest have
been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date
of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record
Date) shall be sent at least five business days prior to the Special Record Date by United States mail,
first-class postage prepaid, to the address of each registered owner of a Certificate appearing on the
Registration Books kept by the Paying AgentlRegistrar at the close of business on the last business
day next preceding the date of mailing of such notice
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust Office of the Paying AgentlRegistrar 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 the Original Issue Date
stated above, authorized in accordance with the Constitution and laws of the State of Texas in the
principal amount of$7,59S,000, for the purpose of paying contractual obligations to be incurred by
the City, to-wit, the construction of improvements as described in the Certificate Ordinance, and the
payment of fiscal, engineering and legal fees incurred in connection therewith.
ON FEBRUARY 15, 2014, or on any date thereafter, the Certificates of this Series maturing
on February 15, 2015 and thereafter may be redeemed prior to their scheduled maturities, at the
option of the Issuer, 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 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 AgentlRegistrar; 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, iff ewer than all of the Certificates of the same maturity and bearing
the same interest rate are to be redeemed, the particular Certificates of such maturity and bearing such
interest rate shall be selected in accordance with the arrangements between the Issuer and the
securities depository.
AT LEAST 30 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 thereofbeing 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 AgentlRegistrar. By the date fixed for any such redemption due provision shall be made by
the Issuer with the Paying AgentlRegistrar for the payment of the required redemption price for this
Certificate or the portion hereofwhich 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 portion 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 fTom the Paying AgentlRegistrar out of the funds provided for such payment. The
Paying AgentlRegistrar shall record in the Registration Books all such redemptions of principal of
this Certificate or any portion hereof If a portion of any Certificate shall be redeemed a substitute
Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the written request of the
registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, wil1
be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the
Issuer, all as provided in the Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered certificates,
without interest coupons, in the denomination of any integral multiple of$S,OOO. 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 any denomination or denominations in any integral multiple of $5,000 as requested in
writing by the appropriate registered owner, assignee, or assignees, as the case may be, upon
surrender of this Certificate to the Paying AgentlRegistrar at its Designated Trust Office for
cancellation, all in accordance with the form and procedures set forth in the Certificate Ordinance.
Among other requirements for such assignment and transfer, this Certificate must be presented and
surrendered to the Paying AgentlRegistrar at its Designated Trust Office, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
AgentlRegistrar, evidencing assignment of this Certificate or any portion or portions hereof in any
integral multiple of$S,OOO 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 Assign-
ment 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 AgentlRegistrar may be used to evidence the assignment of this Certificate or any
portion or portions hereoffrom 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 portions thereof, such fees and charges of the Paying AgentlRegistrar will be paid by the Issuer.
The one requesting such exchange shall pay the Paying AgentlRegistrar'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 Issuer nor the Paying AgentlRegistrar 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 30 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 Certificate 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 AgentlRegistrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer 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 this
Certificate have been performed, existed, and been done in accordance with law; that this Certificate
is a direct obligation of said Issuer, issued on the full faith and credit thereof; and that annual ad
valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in said Issuer, 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 fTom 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
terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and available for
inspection in the official minutes and records of the Issuer, and agrees that the terms and provisions
of this Certificate and the Certificate Ordinance constitute a contract between each registered owner
hereof and the Issuer.
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 ofthe City Secretary,
and the official seal of the Issuer has been duly affixed to, or impressed, or placed in facsimile, on this
Certificate.
xxxxx
City Secretary
City of College Station, Texas
xxxxx
Mayor
City of College Station, Texas
(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 Certificate 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
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION
Paying AgentlRegistrar
By
Authorized Representative
-FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
OFFICE OF COMPTROLLER
REGISTER NO. -
STATE OF TEXAS
I hereby certify that there is on file and of record in my office a certificate 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
NOTE:-'\[ to accompany initial certificates only
FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Please insert Social Security or Taxpayer Identification Number of Transferee)
(Please print or typewrite name and address, including zip code of Transferee)
the within Certificate of Obligation and all rights thereunder, and hereby irrevocably constitutes
and appoints
attorney to
register the transfer of the within Certificate of Obligation on books kept for registration thereof,
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the fTont of this
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.
Exhibit B
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 18 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided annually
in accordance with such Section are as specified below (and included in the Appendix or under the
headings of the Official Statement referred to):
1. The "Audit Report" for the most recently concluded fiscal year.
2. The information included in the Official Statement under the following captions, but for
the most recently concluded fiscal year Tables] through 6 and 8 through 13, and Appendix B
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described
in the notes to the financial statements referred to in paragraph I described above, as such principles
may be changed fTom time to time to comply with state law or regulation.
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in REGULAR MEETING ON THE 28TH DAY
OF APRIL, 2005, at the designated meeting place, and the roll was called of the duly constituted
officers and members of said City Council, to wit:
Ron Silvia,
Dennis Maloney,
John Happ,
James Massey,
Robert Wareing,
Susan Lancaster,
Nancy Berry,
Mayor
Mayor, Pro Tern
Councilmembers,
Connie L. Hooks,
City Secretary
and all of said persons were present, except the following absentees: thus constituting
a quorum. Whereupon, among other business, the following was transacted at said Meeting: a written
ORDINANCE PROVIDING FOR THE ISSUANCE OF
$5,710,000 CITY OF COLLEGE STATION, TEXAS, GENERAL
OBLIGATION IMPROVEMENT BONDS, SERIES 2005jAND
ORDAINING OTHER MATIERS RELATING TO THE
SUBJECT, INCLUDING IMMEDIATE EFFECTIVENESS
was duly introduced for the consideration of said City Council and read in full. It was then duly moved
and seconded that said Ordinance be passed; and, after due discussion, said motion prevailed and
carried by the following vote:
AYES: í
NOES:
Jl
ABSTAINED 1 Council member
Wareing
2. That a true, full and correct copy of the aforesaid Ordinance described in the above and
foregoing paragraph is attached to and follows this Certificate; that said Ordinance has been duly
recorded in said City Council's minutes of said Meeting; that the above and foregoing paragraph is a
true, full and correct excerpt from said City Council's minutes of said Meeting pertaining to the passage
of said Ordinance; that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of said City Council as indicated therein; that each of the
officers and members of said City Council was duly and sufficiently notified officially and personally,
in advance, of the time, place and purpose of the aforesaid Meeting, and that said Ordinance would be
introduced and considered at said Meeting, and each of said officers and members consented, in
advance, to the ho1ding of said Meeting for such purpose, and that said Meeting was open to the public
and public notice of the time, place and purpose of said meeting was given, all as required by Chapter
551, Texas Government Code.
SIGNED AND SEALED THIS THE 28TH DAY OF APRIL, 2005.
(î~~
City SecretJry
~ /J L'~
Mayor
(SEAL)