HomeMy WebLinkAbout2010-3273 - Ordinance - 08/26/2010ORDINANCE NO. 2010-3273
PROVIDING FOR THE ISSUANCE OF $3,900,000 CITY OF COLLEGE
STATION, TEXAS CERTIFICATES OF OBLIGATION, SERIES 2010 AND
ORDAINING OTHER MATTERS RELATING TO THE SUBJECT, INCLUDING
IMMEDIATE EFFECTIVENESS
WHEREAS, on July 8, 2010, 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 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 July 23, 2010 and July 30, 2010; 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 2010", are hereby authorized to be issued and delivered in the principal amount
of $3,900,000 for the purpose of paying contractual obligations to be incurred by the City, to-wit,
(1) the acquisition and installation of technology improvements including new electronic
storage equipment for the City and fiber optic infrastructure for use by the City;
(2) acquisition of a building located at 2275 Dartmouth Street for municipal purposes,
including the exhibition of art and related uses;
(3) the construction of improvements and extensions to the City's combined electric,
waterworks and sewer systems; and
(4) the payment of fiscal, engineering and legal fees incurred in connection therewith.
Section 2. PREAMBLE. That the preamble to this Ordinance is incorporated by reference
and made a part hereof for all purposes.
Section 3. DATE, DENOMINATIONS, NUMBERS, MATURITIES AND INTEREST
RATES. That said Certificates shall initially be issued, sold and delivered hereunder as fully
registered certificates, without interest coupons, dated August 15, 2010, in the respective
denominations and principal amounts hereinafter stated, numbered consecutively from R-1 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 shall mature and be payable on February 15 in each of the years and in the principal
amounts, and shall bear interest at the rates per annum, as follows:
Principal Interest
Year
Amount
Rate
Year
2011
695,000
2.000
2021
2012
165,000
2.000
2022
2013
170,000
2.000
2023
2014
175,000
2.000
2024
2015
180,000
2.250
2025
2016
190,000
2.250
2026
2017
205,000
2.500
2027
2018
125,000
2.500
2028
2019
130,000
2.500
2029
2020
135,000
2.500
2030
Principal
Interest
Amount
Rate
140,000
3.000
145,000
3.000
155,000
3.000
160,000
3.000
170,000
3.125
175,000
3.250
185,000
3.375
190,000
3.500
200,000
3.500
210,000
3.500
The term "Certificates" as used in this Ordinance shall mean and include collectively the Certificates
initially issued and delivered pursuant to this Ordinance and all substitute Certificates exchanged
therefor, as well as all other substitute Certificates and replacement Certificates issued pursuant
hereto, and the term "Certificate" shall mean any of the Certificates. Interest on the Certificates shall
be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest shall be
payable to the registered owner of any such Certificates in the same manner provided and on the
dates stated in the FORM OF CERTIFICATE.
Section 4. REDEMPTION. (a) That the City reserves the right to redeem the Certificates
maturing on or after February 15, 2020, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof, on February 15, 2019, or on any date thereafter, at the redemption price of
par plus accrued interest to the date fixed for redemption. If less than all of the Certificates 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 Agent/Registrar to call by lot Certificates, or portions
thereof, within such maturity or maturities and in such principal amounts, for redemption; provided,
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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 particular Certificates 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 Agent/Registrar at least forty-five (45)
days prior to the scheduled redemption date that a redemption of the Certificates 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 are to be redeemed, a
written notice of redemption shall be given by the Paying Agent/Registrar 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 the address
thereof as 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 the Certificates 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, 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 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 the Certificates or any
portion thereof. 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 of principal amount, 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 thereof for cancellation, at the expense of the
City, all as provided in this Ordinance.
(d) In addition to the foregoing, the Paying Agent/Registrar 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 the MSRB (as defined in Section 18 hereof). The failure to cause such notice
to be given, however, or any defect therein, shall not affect the validity or effectiveness of such
redemption.
(e) In addition, in the event of a redemption caused by an advance refunding of the
Certificates, the Paying Agent/Registrar shall send a second notice of redemption to the persons
specified above at least 30 days but not more than 90 days prior to the actual redemption date. The
Paying Agent/Registrar 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.
(f) 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 mailing date for the notice, the
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date of redemption, the redemption price, the name of the Paying Agent/Registrar and the address
at which the Certificate may be redeemed, including a contact person and telephone number.
(g) All redemption payments made by the Paying Agent/Registrar to the registered
owners of the Certificates shall include CUSIP numbers relating to each amount paid to such
registered owner.
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 The
Bank of New York Mellon Trust Company, N.A., or such other bank, trust company, financial
institution, or other agency named in accordance with the provisions of (g) below (the "Paying
Agent/Registrar"), books or records for the registration and transfer of the Certificates (the "Regis-
tration Books"), and the Issuer 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 regulations as the Issuer and 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 Issuer 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 with guarantee of signatures satisfactory to the Paying Agent/Registrar, 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 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 Ordi-
nance.
(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 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 sur-
rendered, 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 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 replace-
ment of any Certificate 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 Certificate, date such substitute .
Certificate in the manner set forth above, and manually sign and date the Authentication Certificate,
and no such substitute Certificate shall be deemed to be issued or outstanding unless the
Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all
Certificates surrendered 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 Certificates 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,
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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 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 ex-
changed 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 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 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 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
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/Regis-
trar upon not less than 60 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 are 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 performing 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 6. FORM OF CERTIFICATES. The form of the Certificates, including the form
of the 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 2010, authorized to
be issued and delivered by this Ordinance; and 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.
Section 8. LEVY OF TAX; INTEREST AND SINKING FUND. That a special fund or
account, to be designated the "City of College Station, Texas Series 2010 Certificate 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
apart 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
Certificates 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 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 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. There shall be appropriated from the General Fund of the City for deposit into
the Interest and Sinking Fund moneys as may be necessary to pay the principal and interest payments
on the Certificates scheduled to occur on or before February 15, 2011.
Section 9. REVENUES. That the Certificates 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. The
amount of Surplus Revenues pledged to the payment of the Certificates 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 8 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 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.
Section 11. 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.
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 Agent/Registrar 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 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
harmless 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.
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(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
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 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 Certificates.
Section 13. FEDERAL INCOME TAX MATTERS. That 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 Certificates
(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
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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 reasonable 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 contravene the requirements of section 148 of the Code (relating to arbitrage) and,
to the extent applicable, section 149(d) of the Code (relating to advance refundings);
(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; and
(i) to assure that the proceeds of the Certificates will be used solely for new
money projects.
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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 Certificates. 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
Certificates, 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, any Assistant City Manager and the Chief Financial Officer to execute any
documents, certificates 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 14. 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 herein and Section 15 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 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 15. 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 the City -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 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
11
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 16. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES. That
the Chief Financial Officer 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. The Certificates thus registered shall remain
in the custody of the Chief Financial Officer (or the designee thereof) until delivered to the
Purchasers (as defined in Section 20 of this Ordinance).
Section 17. 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 17A 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 Purchasers 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 integral amounts of $5,000, with 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
12
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 18. CONTINUING DISCLOSURE OBLIGATION. (a) Definitions. That as used
in this Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
(b) Annual Reports. (i) The City shall provide annually to the MSRB, in an electronic
format as prescribed by the MSRB, within six months after the end of each fiscal year. ending in or
after 2010, 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 ExhibitB hereto. Any financial statements so to be provided shall be (1)
prepared in accordance with the accounting principles described in Exhibit B hereto, or such other
accounting principles as the City may be required to employ from 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 the MSRB, when and if the audit report on such statements become available.
(ii) If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Section. The financial information
and operating data to be provided pursuant to this Section may be set forth in full in one or more
documents or may be included by specific reference to any 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.
(c) Material Event Notices. The City shall notify the MSRB in an electronic format as
prescribed by the MSRB, in a timely manner, of any of the following events with respect to the
Certificates, if such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
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;
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6. Adverse tax opinions or events affecting the tax-exempt status of the
Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the
Certificates; and
11. Rating changes.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide financial
information or operating data in accordance with subsection (b) of this Section by the time required
by such subsection.
(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 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
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.
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(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 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 from lawfully purchasing or
selling Certificates in the primary offering of the Certificates.
Section 19. DEFEASANCE. (a) Deemed Paid. Any Certificate 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, 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
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Agent/Registrar that is not required for the payment of the Certificates 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 Defeased 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 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 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.
Section 20. SALE OF CERTIFICATES. (a) Sale to Best Bidder. That the sale of the
Certificates to UBS Financial Services Inc., and syndicate members (the "Purchasers"), at a price
of par, plus a net premium of $47,909.20, and less the Purchasers' discount of $47,892.00, 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.
16
The use of the "Preliminary Official Statement" prepared in connection with the sale of the
Certificates is hereby ratified.
Section 21. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Chief Financial Officer of the City, 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 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 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
ofthe 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 22. USE OF PROCEEDS. That the proceeds from 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 of the Interest and Sinking Fund. Any
amounts remaining after completion of the improvements described in Section 1 hereof shall be
transferred FIRST to the Rebate Fund, to the extent required by Section 13 hereof, and
THEREAFTER to the Interest and Sinking Fund.
Section 23. INTEREST EARNINGS. That the interest earnings 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 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 24. 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 performance 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
17
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 performance 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) It 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 Ordinance.
(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 Certificate 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 term or provision of
this Ordinance, or because of any Event of Default or alleged Event of Default under this
Ordinance.
Section 25. 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.
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(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 Lain. This Ordinance shall be construed and enforced in accordance with the
laws of the 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 551, 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. 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.
(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.
[Remainder of page intentionally left blank.]
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PASSED AND APPROVED THIS AUGUST 26, 2010.
City Secretary, ity of College Station, Texas Mayor, Cit f College Station, (Texas
(CITY SEAL)
APPROVED:
McCall, Parkhurst & Horton L.L.P., Dallas, Texas
Bond Counsel
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EXHIBIT A
FORM OF CERTIFICATE
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
CERTIFICATES OF OBLIGATION
SERIES 2010
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP
% SEPTEMBER 23, 2010
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, from 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 15, 2011, and semiannually on each
August 15 and February 15 thereafter until maturity or prior redemption; except that if this Certifi-
cate is required to be authenticated and the date of its authentication is later than February 15, 2011,
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 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 Issuer 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 Issuer 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 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 Agent/Registrar 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 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 August 15, 2010,
authorized in accordance with the Constitution and laws of the State of Texas in the principal amount
of $3,900,000, 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, 2019, or on any date thereafter, the Certificates of this Series maturing
on February 15, 2020 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 Agent/Registrar; proWded, 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 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 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 Issuer 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 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 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 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, will
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 $5,000. 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 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 any
integral multiple of $5,000 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 Agent/Registrar may be used to evidence the assignment of this Certificate
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 portions thereof, such fees and charges of the Paying Agent/Registrar will be paid
by the Issuer. 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 Issuer 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 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 Agent/Registrar 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 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
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 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 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 of the 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
The Bank of New York Mellon Trust Company,
N.A.,
Paying Agent/Registrar
By
Authorized Representative
*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO.
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 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:
NOTICE: Signature(s) must be guaranteed by an
eligible guarantor institution participating in a
securities 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.
EXHIBIT B
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 1 through 6, 8 through 14, and 20, 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 1 described above, as.such principles
may be changed from time to time to comply with state law or regulation.