HomeMy WebLinkAbout2012-3414 - Ordinance - 04/26/2012 Ordinance No. 2012 -3414
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
APRIL 26, 2012, at the designated meeting place, and the roll was called of the duly constituted
officers and members of said City Council, to wit:
Nancy Berry, • Mayor
Dave Ruesink, Mayor Pro Tem
Blanche Brick, Councilmember
Jess Fields, Councilmember
Karl Mooney, Councilmember
Katy-Marie Lyles, Councilmember
Julie M. Schultz, • Councilmember
Sherry Mashburn, City Secretary
and all of said persons were present, thus constituting a quorum. Whereupon, among other
business, the following was transacted at said Meeting: a written Ordinance
AUTHORIZING THE ISSUANCE OF UP TO $17,400,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF
OBLIGATION, SERIES 2012 "; DELEGATING THE AUTHORITY TO
CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS
RELATING TO THE SALE OF THE CERTIFICATES; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO
THE SUBJECT
was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said Ordinance; and, after due discussion, said motion prevailed and
carried by the following vote:
AYES 7 NOES 0
The Mayor of said City has approved and hereby approves the aforesaid Ordinance; that
the Mayor and the City Secretary of said City have duly signed said Ordinance; and that the
Mayor and the City Secretary of said City hereby declare that their signing of this Certificate
shall constitute the signing of the attached and following copy of said Ordinance for all purposes.
Ordinance No. 2012 -3414
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 holding 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 THE 26th DAY OF APRIL, 2012.
.._ r ,� L
ty Secretary Mayor
(SEAL)
ORDINANCE NO. 2012-3414
AUTHORIZING THE ISSUANCE OF UP TO $17,400,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS CERTIFICATES OF
OBLIGATION, SERIES 2012 "; DELEGATING THE AUTHORITY TO
CERTAIN CITY OFFICIALS TO EXECUTE CERTAIN DOCUMENTS
RELATING TO THE SALE OF THE CERTIFICATES; APPROVING AND
AUTHORIZING INSTRUMENTS AND PROCEDURES RELATING TO SAID
CERTIFICATES; AND ENACTING OTHER PROVISIONS RELATING TO
THE SUBJECT
WHEREAS, on March 22, 2012, the City Council of the City of College Station (the
"City") passed a resolution authorizing and directing notice of its intention to issue the
Certificates of Obligation herein authorized, to be published in a newspaper as required by
Section 271.049 of the Texas Local Government Code;
WHEREAS, said notice was published in the Bryan- College Station Eagle, a
"newspaper" of the type described in Section 2051.044, Texas Government Code, as required by
said Section 271.049 of the Texas Local Government Code, on March 25, 2012 and April 1,
2012;
WHEREAS, said notice provided that the ordinance authorizing the Certificates of
Obligation may authorize an authorized officer of the City to effect the sale and delivery of the
Certificates of Obligation on a date or dates subsequent to the adoption of the ordinance;
WHEREAS, no petition, signed by at least 5% of the qualified electors of said City as
permitted by said Section 271.049 of the Texas Local Government Code protesting the issuance
of such Certificates of Obligation, has been filed;
WHEREAS, the City is an "Issuer" within the meaning of Section 1371.001(4)(P), Texas
Government Code, having (i) a principal amount of at least $100 million in outstanding long-
term indebtedness, in long -term indebtedness proposed to be issued, or a combination of
outstanding or proposed long -term indebtedness and (ii) some amount of long -term indebtedness
outstanding or proposed to be issued that is rated in one of the four highest rating categories for
long -term debt instruments by a nationally recognized rating agency for municipal securities,
without regard to the effect of any credit agreement or other form of credit enhancement entered
into in connection with the obligation;
WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and
delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code and
Chapter 1371, Texas Government Code and the City's Home Rule Charter; and
WHEREAS, it is officially found, determined, and declared that the meeting at which this
Ordinance has been adopted was open to the public and public notice of the time, place and
subject matter of the public business to be considered and acted upon at said meeting, including
this Ordinance, was given, all as required by the applicable provisions of Texas Government
Code, Chapter 551;
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 2012 ", are hereby authorized to be issued and delivered in the principal
amount not to exceed $17,400,000 for (i) the purpose of paying contractual obligations to be
incurred by the City, to -wit, the construction of improvements and extensions to the City's
combined waterworks, sewer and electric systems; and the payment of fiscal, engineering and
legal fees incurred in connection therewith and (ii) to pay the costs of issuance of the
Certificates.
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Section 1371.053, Texas Goverment Code, the Mayor, the City
Manager and the Executive Director of Business Services of the City (each the "Pricing Officer ")
are each hereby authorized to act severally on behalf of the City in selling and delivering the
Certificates, carrying out the other procedures specified in this Ordinance, including, determining
the date of the Certificates, any additional or different designation or title by which the
Certificates shall be known, whether the Certificate shall be sold and delivered in one or more
series and the date and sale and delivery of each such series, the price at which the Certificates
will be sold, the years in which the Certificates will mature, the principal amount to mature in
each of such years, the rate of interest to be borne by each such maturity, the interest payment
and record dates, the price and terms upon and at which the Certificates shall be subject to
redemption prior to maturity at the option of the City, as well as any mandatory sinking fund
redemption provisions, and all other matters relating to the issuance, sale, and delivery of the
Certificates and obtaining municipal insurance for all or any portion of the Certificates and
providing for the terms and provisions thereof applicable to the Certificates, all of which shall be
specified in the Pricing Certificate; provided that:
(i) the aggregate principal amount of the Certificates shall not exceed
$17,400,000;
(ii) the true interest cost of the Certificates shall not exceed 4.250% per
annum;
(iii) the net effective interest rate on the Certificates shall not exceed the
maximum rate set forth in Chapter 1204, Texas Government Code, as amended;
(iv) the final maturity of the Certificates shall not exceed February 15, 2032;
(v) the delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to October 26, 2012; and
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(vi) on or prior to delivery, the Certificates shall be rated by a nationally
recognized rating agency for municipal securities in one of the four highest categories for
long -term obligations.
(b) In establishing the aggregate principal amount of the Certificates, the Pricing
Officer shall establish an amount that, when combined with premium used for purposes other
than the payment of costs of issuance, does not exceed the amount authorized in Subsection (a)
hereof, which shall be sufficient in amount to provide for the purposes for which the Certificates
are authorized and to pay costs of issuing the Certificates. The Certificates shall be sold with and
subject to such terms as set forth in the Purchase Agreement as described in Section 19 herein.
Section 3. CHARACTERISTICS OF THE CERTIFICATES. (a) The City shall keep or
cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office ") of
The Bank of New York Mellon Trust Company, N.A., or such other bank, trust company,
financial institution, or other agency named in accordance with the provisions of (g) below (the
"Paying Agent/Registrar "), books or records for the registration and transfer of the Certificates
(the "Registration Books "), and the City hereby appoints the Paying Agent/Registrar as its
registrar and transfer agent to keep such books or records and make such transfers and
registrations under such reasonable regulations as the City and the Paying Agent/Registrar may
prescribe; and the Paying Agent/Registrar shall make such transfers and registrations as herein
provided. It shall be the duty of the Paying Agent/Registrar to obtain from the registered owner
and record in the Registration Books the address of the registered owner of each Certificate to
which payments with respect to the Certificates shall be mailed, as herein provided. The City or
its designee shall have the right to inspect the Registration Books during regular business hours
of the Paying Agent/Registrar at its Designated Trust Office, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity. Registration of each Certificate may be
transferred in the Registration Books only upon presentation and surrender thereof to the Paying
Agent/Registrar at its Designated Trust Office for transfer of registration and cancellation,
together with proper written instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing the assignment of such Certificate, or any
portion thereof in any Authorized Denomination, to the assignee or assignees thereof, and the
right of such assignee or assignees to have such Certificate or any such portion thereof registered
in the name of such assignee or assignees. Upon the assignment and transfer of any Certificate
or any portion thereof, a new substitute certificate or certificates shall be issued in exchange
therefor in the manner herein provided.
(b) The entity in whose name any Certificate shall be registered in the Registration
Books at any time shall be treated as the absolute owner thereof for all purposes of this
Ordinance, whether or not such Certificate shall be overdue, and the City and the Paying
Agent/Registrar shall not be affected by any notice to the contrary; and payment of, or on
account of, the principal of, premium, if any, and interest on any such certificate shall be made
only to such registered owner. All such payments shall be valid and effectual to satisfy and
discharge the liability upon such certificate to the extent of the sum or sums so paid.
(c) The City hereby further appoints the Paying Agent/Registrar to act as the paying
agent for paying the principal of and interest on the Certificates, and to act as its agent to
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exchange or replace Certificates, all as provided in this Ordinance. The Paying Agent/Registrar
shall keep proper records of all payments made by the City and the Paying Agent/Registrar with
respect to the Certificates, and of all exchanges thereof, and all replacements thereof, as provided
in this Ordinance.
(d) Each Certificate may be exchanged for fully registered certificates in the manner
set forth herein. Each Certificate issued and delivered pursuant to this Ordinance may, upon
surrender thereof at the Designated Trust Office of the Paying Agent/Registrar, together with a
written request therefor duly executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representatives, with guarantee of signatures
satisfactory to the Paying Agent/Registrar, at the option of the registered owner or such assignee
or assignees, as appropriate, be exchanged for fully registered Certificates, without interest
coupons, in the form prescribed in the FORM OF CERTIFICATE, in an Authorized
Denomination (subject to the requirement hereinafter stated that each substitute Certificate shall
have a single stated maturity date), as requested in writing by such registered owner or such
assignee or assignees, in an aggregate principal amount equal to the principal amount of any
Certificate or Certificates so surrendered, and payable to the appropriate registered owner,
assignee, or assignees, as the case may be. If any Certificate or portion thereof is assigned and
transferred, each Certificate issued in exchange therefor shall have the same principal maturity
date and bear interest at the same rate as the Certificate for which it is being exchanged. Each
substitute Certificate shall bear a letter and/or number to distinguish it from each other
Certificate. The Paying Agent/Registrar shall exchange or replace Certificates as provided
herein, and each fully registered Certificate or Certificates delivered in exchange for or
replacement of any Certificate or portion thereof as 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 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
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Chapter 1206, Texas Government Code, the duty of exchange or replacement of any Certificates
as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of
Authentication Certificate, the exchanged or replaced Certificate shall be valid, incontestable,
and enforceable in the same manner and with the same effect as the Certificates which originally
were delivered pursuant to this Ordinance, approved by the Attorney General, and registered by
the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Certificate so selected for redemption, in whole or in part,
within 45 calendar days of the date fixed for redemption; provided, however, such limitation of
transfer shall not be applicable to an exchange by the registered owner of the uncalled principal
of a Certificate.
(e) All Certificates issued in exchange or replacement of any other Certificate or
portion thereof, (i) shall be issued in fully registered 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 required or indicated, in the FORM OF CERTIFICATE.
(f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers of Certificates, but the registered owner of any Certificate
requesting such transfer shall pay any taxes or other governmental charges required to be paid
with respect thereto. The registered owner of any Certificates requesting any exchange shall pay
the Paying Agent/Registrar's reasonable and standard or customary fees and charges for
exchanging any such certificate or portion thereof, together with any taxes or governmental
charges required to be paid with respect thereto, all as a condition precedent to the exercise of
such privilege of exchange, except, however, that in the case of the exchange of an assigned and
transferred Certificate or Certificates or any portion or portions thereof in an Authorized
Denomination, as provided in this Ordinance, such fees and charges will be paid by the City. In
addition, the City hereby covenants with the registered owners of the Certificates that it will (i)
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/Registrar 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
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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 4. 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 and with the FORM OF CERTIFICATE
to be modified pursuant to, and completed with information set forth in the Pricing Certificate.
The printer of the Certificates is hereby authorized to print on the Certificates (i) the form of
bond counsel's opinion relating to the Certificates, and (ii) an appropriate statement of insurance
furnished by a municipal bond insurance company providing municipal bond insurance, if any,
covering all or any part of the Certificates.
Section 5. DEFINITIONS. That the term "Authorized Denomination" shall mean a
denomination of $5,000 of principal amount of a Certificate or any integral multiple thereof; the
term "Business Day" means a Saturday, Sunday, a legal holiday, or a day on which banking
institutions in the City are, authorized by law or executive order to close; the term "Certificates"
and "Certificates of Obligation" shall mean the City of College Station, Texas Certificates of
Obligation, Series 2012, authorized to be issued and delivered by this Ordinance; the term
"MSRB" means the Municipal Securities Rulemaking Board; the term "Rule" means SEC Rule
15c2 12, as amended from time to time; the term "SEC' means the United States Securities and
Exchange Commission; 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 6. LEVY OF TAX; INTEREST AND SINKING FUND.
(a) That a special fund or account, to be designated the "City of College Station,
Texas Series 2012 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
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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.
(b) There shall be appropriated from the General Fund of the City or other lawfully
available funds 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 August 15, 2012.
Section 7. 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 6, 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 6 may
be reduced to the extent and by the amount of the Surplus Revenues or other lawfully available
revenues, income or resources then on deposit or budgeted to be deposited to the credit of the
Interest and Sinking Fund.
Section 8. 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 9. 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 10. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. That in the event any outstanding Certificate is
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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.
(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 11. 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:
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(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 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); and
(h) to pay to the United States of America at least once during each five -year period
(beginning on the date of delivery of the Certificates) an amount that is at least equal to 90
percent of the "Excess Earnings," within the meaning of section 148(0 of the Code and to pay to
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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(0 of the Code.
For purposes of the foregoing (a) and (b), the City understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding
bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the
date of issuance of the 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 Executive Director of Business Services, severally, 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 12. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the City covenants to account for the expenditure of proceeds from the sale of
the Certificates and any investment earnings thereon to be used for the purposes described in
Section 1 of this Ordinance (such purpose referred to in this Section and Section 13 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.
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Section 13. 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 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 14. PROCEDURES TO MONITOR COMPLIANCE WITH TAX
COVENANTS. The City hereby adopts the procedures attached hereto as Exhibit B as a means
of monitoring compliance with the federal tax covenants made by the City herein.
Section 15. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES.
That the Executive Director of Business Services 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 Executive Director
of Business Services (or the designee thereof) until delivered to the Underwriter (as defined in
Section 19 of this Ordinance).
Section 16. 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
Underwriter and its participants. So long as each Certificate is registered in the name of CEDE
& CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it
were the actual and beneficial owner thereof. It is expected that DTC will maintain a book -entry
system which will identify ownership of the Certificates in Authorized Denominations, with
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
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maintaining, supervising, or reviewing the records of DTC or its participants, or protecting any
interests or rights of the beneficial owners of the Certificates. It shall be the duty of the DTC
Participants, as defined in the Official Statement herein approved, to make all arrangements with
DTC to establish this book -entry system, the beneficial ownership of the Certificates, and the
method of paying the fees and charges of DTC. The City does not represent, nor does it in any
way covenant that the initial book -entry system established with DTC will be maintained in the
future. Notwithstanding the initial establishment of the foregoing book -entry system with DTC,
if for any reason any of the originally delivered Certificates is duly filed with the Paying
Agent/Registrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there
will be no assurance or representation that any book -entry system will be maintained for such
Certificates. In connection with the initial establishment of the foregoing book -entry system
with DTC, the City heretofore has executed a "Blanket Letter of Representations" prepared by
DTC in order to implement the book -entry system described above.
Section 17. CONTINUING DISCLOSURE OBLIGATION.
(a) 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 2012, financial information and operating data with respect to the City of the
general type included in the final Official Statement authorized by Section 19 of this Ordinance,
being the information described in Exhibit C hereto. Any financial statements so to be provided
shall be (1) prepared in accordance with the accounting principles described in Exhibit C, 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.
(b) Event Notices. The City shall notify the MSRB in an electronic format as
prescribed by the MSRB, in a timely manner (but not in excess of ten Business Days after the
occurrence of the event) of any of the following events with respect to the Certificates:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults, if material;
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3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701 —TEB) or other material notices or determinations with
respect to the tax status of the Certificates, or other material events
affecting the tax status of the Certificates;
7. Modifications to rights of Certificateholders, if material;
8. Certificate calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the
Certificates, if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of an obligated
person (which is considered to occur when any of the following occur: the
appointment of a receiver, fiscal agent, or similar officer for the City in a
proceeding under the United States Bankruptcy Code or in any other
proceeding under state or federal law in which a court or governmental
authority has assumed jurisdiction over substantially all of the assets or
business of the City, or if such jurisdiction has been assumed by leaving
the existing governing body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority,
or the entry of an order confirming a plan of reorganization, arrangement,
or liquidation by a court or governmental authority having supervision or
jurisdiction over substantially all of the assets or business of the City);
13. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry
into a definitive agreement to undertake such an action or the termination
of a definitive agreement relating to any such actions, other than pursuant
to its terms, if material;
14. Appointment of a successor or additional trustee or the change of name of
a trustee, if material.
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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.
(c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Certificates within the meaning of
the Rule, except that the City in any event will give notice of any deposit made in accordance
with this Ordinance or applicable law that causes Certificates no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered
owners and beneficial owners of the Certificates, and nothing in this Section, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder
to any other person. The City undertakes to provide only the financial information,
operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the City's financial results,
condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The City
does not make any representation or warranty concerning such information or its
usefulness to a decision to invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCE SHALL THE CITY BE LIABLE TO
THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE
OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES
RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS
OR SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under
this Section shall comprise a breach of or default under this Ordinance for purposes of
any other provision of this Ordinance. Nothing in this Section is intended or shall act to
disclaim, waive, or otherwise limit the duties of the City under federal and state securities
laws.
(v) Should the Rule be amended to obligate the City to make filings with or
provide notices to entities other than the MSRB, the City hereby agrees to undertake such
obligation with respect to the Certificates in accordance with the Rule as amended. The
provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or
a change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to
purchase or sell Certificates in the primary offering of the Certificates in compliance with
the Rule, taking into account any amendments or interpretations of the Rule since such
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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.
(d) Procedures to Monitor Compliance with Continuing Disclosure Covenants. The
City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring
compliance with the continuing disclosure covenants made by the City herein.
Section 18. 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 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
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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, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the governing body
of the City adopts or approves the proceedings authorizing the issuance of refunding bonds, are
rated as to investment quality by a nationally recognized investment rating firm not less than
AAA or its equivalent; (iii) noncallable obligations of a state or an agency or a county,
municipality, or other political subdivision of a state that have been refunded and that, on the
date the governing body of the City adopts or approves the proceedings authorizing the issuance
of refunding bonds, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iv) any securities and obligations now or
hereafter authorized by State law that are eligible to refund, retire or otherwise discharge
obligations such as the Certificates.
(e) Continuing Duty of Paying Agent /Registrar. Until all Certificates defeased under
this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for
such Certificates shall perform the services of Paying Agent/Registrar for such Certificates the
same as if they had not been defeased, and the City shall make proper arrangements to provide
and pay for such services.
Section 19. SALE OF CERTIFICATES; OFFICIAL STATEMENT. (a) The Certificates
shall be sold and delivered subject to the provisions of Section 1 and Section 2 hereof through a
negotiated sale and pursuant to the terms and provisions of a purchase contract (the "Purchase
Agreement "), the terms and provisions of which are to be determined by the Pricing Officer in
accordance with Section 2 hereof, and in which the purchaser or purchasers of the Certificates
(the "Underwriter ") shall be designated. The Pricing Officer is hereby authorized to execute and
deliver the Purchase Agreement for an on behalf of the City. The Certificates shall initially be
registered in the name of the Underwriter or its designee.
(b) The City hereby approves the form and content of the draft preliminary official
statement relating to the Certificates in the form attached hereto as Exhibit D and any addenda,
supplement or amendment thereto, and approves the distribution of such preliminary official
statement in the reoffering of the Certificates by the Underwriter in final form, with such changes
therein or additions thereto as the Pricing Officer executing the same may deem advisable. The
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Pricing Officer is hereby authorized, in the name and on behalf of the City, to approve,
distribute, and deliver a final preliminary official statement and a final official statement relating
to the Certificates to be used by the Underwriter in the marketing of the Certificates.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the
Certificates, to obtain from a municipal bond insurance company so designated in the Purchase
Agreement (the "Insurer ") a municipal bond insurance policy (the "Insurance Policy ") in support
of the Certificates. To that end, should the Pricing Officer exercise such authority and commit
the City to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in
effect, the requirements of the Insurer relating to the issuance of the Insurance Policy as set forth
in the Pricing Certificate are incorporated by reference into this Ordinance and made a part
hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary.
The Pricing Officer shall have the authority to execute any documents to effect the issuance of
the Insurance Policy by the Insurer.
(d) The Mayor and Mayor Pro Tem, the City Manager, the Executive Director of
Business Services and City Secretary, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such acts and
things and to execute, acknowledge and deliver in the name and under the corporate seal and on
behalf of the City a Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all
other instruments, whether or not herein mentioned, as may be necessary or desirable in order to
carry out the terms and provisions of this Ordinance, the Pricing Certificate, the Certificates, the
sale of the Certificates, any Purchase Agreement and the Official Statement. In case any officer
whose signature shall appear on any Certificate shall cease to be such officer before the delivery
of such Certificate, such signature shall nevertheless be valid and sufficient for all purposes the
same as if such officer had remained in office until such delivery.
Section 20. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the Executive Director of Business Services 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 of the Certificates and fixing all details in connection
therewith. The City Council hereby authorizes the payment of the fee of the Office of the
Attorney General of the State of Texas for the examination of the proceedings relating to the
issuance of the Certificates, in the amount determined in accordance with the provisions of
Section 1202.004, Texas Government Code.
Section 21. CONSTRUCTION FUND; USE OF PROCEEDS.
(a) The City hereby creates and establishes and shall maintain on the books of the
City a separate fund to be entitled the "Series 2012 Certificates of Obligation Construction Fund"
(the "Construction Fund ") for use by the City for payment of all lawful costs associated with the
acquisition and construction of the projects as provided in Section 1.
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rPION 44110010101., -MN
(b) The proceeds from the sale of the Certificates shall be deposited, on the date of
closing, in the manner described in a letter of instructions prepared by the City or on behalf of
the City by the City's financial advisor. The foregoing notwithstanding, 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 11
hereof, and THEREAFTER to the Interest and Sinking Fund.
Section 22. 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 23. 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 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.
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(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 24. MISCELLANEOUS PROVISIONS. (a) Preamble. The preamble to this
Ordinance is incorporated by reference and made a part hereof for all purposes.
(b) Titles Not Restrictive. That the titles assigned to the various sections of this
Ordinance are for convenience only and shall not be considered restrictive of the subject matter
of any section or of any part of this Ordinance.
(c) Rules of Construction. The words "herein ", "hereof' and "hereunder" and other
words of similar import refer to this Ordinance as a whole and not to any particular section or
other subdivision. Except where the context otherwise requires, teens 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.
(d) Inconsistent Provisions. All ordinances, orders and resolutions, or parts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed
and declared to be inapplicable, and the provisions of this Ordinance shall be and remain
controlling as to the matters prescribed herein.
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(e) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or
provision of this Ordinance or the application thereof to any person or circumstance shall be held
to be invalid, the remainder of this Ordinance shall nevertheless be valid and the City hereby
declares that this Ordinance would have been enacted without such invalid word, phrase, clause,
paragraph, sentence, part, portion, or provisions.
(0 Governing Law. This Ordinance shall be construed and enforced in accordance
with the laws of the State of Texas.
(g) Open Meeting. The City officially finds and determines that the meeting at which
this Ordinance is adopted was open to the public; and that public notice of the time, place, and
purpose of such meeting was given, all as required by Chapter 551, Texas Government Code.
(h) Application of Chapter 1208, Government Code. Chapter 1208, Texas
Government Code, applies to the issuance of the Certificates and the pledge of ad valorem taxes
and the Surplus Revenues granted by the City under Sections 6 and 7, and such pledge is
therefore valid, effective, and perfected. If Texas law is amended at any time while the
Certificates are outstanding and unpaid such that the pledge of the ad valorem taxes and Surplus
Revenues granted by the City is to be subject to the filing requirements of Chapter 9, Texas
Business & Commerce Code, then in order to preserve to the Registered Owners of the
Certificates the perfection of the security interest in said pledge, the City agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the
applicable provisions of Chapter 9, Texas Business & Commerce Code and enable a filing to
perfect the security interest in said pledge to occur.
(i) Immediate Effect. In accordance with the provisions of Section 1201.028, Texas
Government Code, this Ordinance shall be effective immediately upon its adoption by the City
Council.
[Remainder of page intentionally left blank.]
20
PASSED, APPROVED AND EFFECTIVE THIS Q 2/ , 2012.
City Secretary, y of College Station, Texas Mayor, City gf College Station, Texas
(CITY SEAL)
APPROVED:
McCall, Parkhurst & Horton L.L.P., Dallas, Texas
Bond Counsel
.
Ordinance
City of College Station, Texas
Certificates of Obligation, Series 2012
SIGNATURE PAGE
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 2012
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP
, 2012
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF COLLEGE
STATION, TEXAS, in Brazos County (the "City "), being a political subdivision of the State of
Texas, hereby promises to pay to , or to the registered assignee hereof (either
being hereinafter called the "registered owner ") the principal amount of
DOLLARS
and to pay interest thereon (calculated on the basis of a 360 -day year of twelve 30 -day months),
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 , 2012, and semiannually on each August 15 and February 15
thereafter until maturity or prior redemption; except that if this Certificate is required to be
authenticated and the date of its authentication is later than February 15, 2012, 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 City required by the
ordinance authorizing the issuance of this Certificate (the "Certificate Ordinance ") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such
check shall be sent by the Paying Agent/Registrar by United States mail, first -class postage
prepaid, on each such interest payment date, to the registered owner hereof, at its address as it
appeared on the last business day of the month preceding each such date (the "Record Date ") on
the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any
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accrued interest due at maturity as provided herein shall be paid to the registered owner upon
presentation and surrender of this Certificate for payment at the Designated Trust Office of the
Paying Agent/Registrar. The City covenants with the registered owner of this Certificate that on
or before each principal and interest payment date for this Certificate it will make available to the
Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Certificate
Ordinance, the amounts required to provide for the payment, in immediately available funds, of
all principal of and interest on the Certificates, when due.
IN THE EVENT OF NON - PAYMENT of interest on a scheduled payment date, and for
30 days thereafter, a new record date for such interest payment (a "Special Record Date ") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled
payment date of the past due interest ( "Special Payment Date ", which shall be 15 days after the
Special Record Date) shall be sent at least five business days prior to the Special Record Date by
United States mail, first -class postage prepaid, to the address of each registered owner of a
Certificate appearing on the Registration Books kept by the Paying Agent/Registrar at the close
of business on the last business day next preceding the date of mailing of such notice.
IF THE 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 , 2012,
authorized in accordance with the Constitution and laws of the State of Texas in the principal
amount of $ , for the purpose of paying contractual obligations to be incurred by the
City, 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, , or on any date thereafter, the Certificates of this Series
maturing on February 15, and thereafter may be redeemed prior to their scheduled
maturities, at the option of the City, in whole, or in part, at par and accrued interest to the date
fixed for redemption. The years of maturity of the Certificates called for redemption at the
option of the City prior to stated maturity shall be selected by the City. The Certificates or
portions thereof redeemed within a maturity shall be selected by lot or other method by the
Paying Agent/Registrar; provided, that during any period in which ownership of the Certificates
is determined only by a book entry at a securities depository for the Certificates, if fewer than all
of the Certificates of the same maturity and bearing the same interest rate are to be redeemed, the
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.
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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 City with the Paying Agent/Registrar for the payment of the
required redemption price for this Certificate or the portion hereof which is to be so redeemed,
plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is
given, and if due provision for such payment is made, all as provided above, this Certificate, or
the 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 Authorized Denominations, at the written request of the registered owner,
and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the City, all as
provided in the Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered
certificates, without interest coupons, in Authorized Denominations. As provided in the
Certificate Ordinance, this Certificate may, at the request of the registered owner or the assignee
or assignees hereof, be assigned, transferred, and exchanged for a like aggregate principal
amount of fully registered certificates, without interest coupons, payable to the appropriate
registered owner, assignee, or assignees, as the case may be, having the same maturity date, and
bearing interest at the same rate, in Authorized Denominations as requested in writing by the
appropriate registered owner, assignee, or assignees, as the case may be, upon surrender of this
Certificate to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in
accordance with the form and procedures set forth in the Certificate Ordinance. Among other
requirements for such assignment and transfer, this Certificate must be presented and
surrendered to the Paying Agent/Registrar at its Designated Trust Office, together with proper
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment of this Certificate or any portion or portions hereof in an
Authorized Denomination to the assignee or assignees in whose name or names this Certificate
or any such portion or portions hereof is or are to be transferred and registered. The form of
Assignment printed or endorsed on this Certificate may be executed by the registered owner to
evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this 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 City. The one requesting such exchange shall pay the Paying
Agent/Registrar's reasonable standard or customary fees and charges for exchanging any
Certificate or portion thereof. In any circumstance, any taxes or governmental charges required
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to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, or
exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither
the City nor the Paying Agent/Registrar shall be required (1) to make any transfer or exchange
during a period beginning at the opening of business 30 days before the day of the first mailing
of a notice of redemption of Certificates and ending at the close of business on the day of such
mailing, or (2) to transfer or exchange any Certificates so selected for redemption when such
redemption is scheduled to occur within 45 calendar days.
WHENEVER the beneficial ownership of this Certificate is determined by a book entry
at a securities depository for the Certificates, the foregoing requirements of holding, delivering
or transferring this 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 City,
resigns, or otherwise ceases to act as such, the City has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and promptly
will cause written notice thereof to be mailed to the registered owners of the Certificates.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper
to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
this Certificate have been performed, existed, and been done in accordance with law; that this
Certificate is a direct obligation of said City, issued on the full faith and credit thereof; and that
in accordance with the terms of the Certificate Ordinance, annual ad valorem taxes sufficient to
provide for the payment of the interest on and principal of this Certificate, as such interest comes
due and such principal matures, have been levied and ordered to be levied against all taxable
property in said City, and have been pledged for such payment, within the limit prescribed by
law; and that a limited pledge (not to exceed $1,000) of the Surplus Revenues from the operation
of the City's combined municipal electric light and power, waterworks and sewer system
remaining after payment of all operation and maintenance expenses thereof and any other
obligations heretofore or hereafter incurred to which such revenues have been or shall be
encumbered by a lien on and pledge of such revenues superior to the lien on and pledge of such
revenues to the .Certificates, have been pledged as additional security for the Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the City, and agrees that the terms
and provisions of this Certificate and the Certificate Ordinance constitute a contract between
each registered owner hereof and the City.
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IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the City, attested by the manual or facsimile signature of the City
Secretary, and the official seal of the City has been duly affixed to, or impressed, or placed in
facsimile, on this Certificate.
xxxxx xxxxx
City Secretary, City of College Station, Texas Mayor, City of College Station, Texas
(SEAL)
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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
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*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
COMPTROLLER'S CERTIFICATE
OFFICE OF COMPTROLLER §
REGISTER NO.
STATE OF TEXAS §
I hereby certify that there is on file and of record in my office a 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 .
Comptroller of Public Accounts of
the State of Texas
(SEAL)
NOTE: *to accompany initial certificates only.
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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 NOTICE: The signature above must
by an eligible guarantor institution correspond with the name of the registered
participating in a securities transfer owner as it appears upon the front of this
association recognized signature guarantee Certificate in every particular, without
program. alteration or enlargement or any change
whatsoever.
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EXHIBIT B
PROCEDURES REGARDING COMPLIANCE WITH FEDERAL TAX AND
CONTINUING DISCLOSURE COVENANTS
This Exhibit is intended to assist the City of College Station (the "City ") in complying
with the federal income tax covenants and securities disclosure covenants as they apply to the
issuance of tax- exempt debt securities such as the Certificates of Obligation (the "Obligations ").
These procedures should be read together with any federal tax certifications, bond covenants,
letters or memoranda from bond counsel and any attachments thereto (collectively, the "Closing
Documents "). Failure to comply with federal guidelines could have serious consequences for
investors, the City and its officials.
These procedures shall apply to the Obligations, until they are superseded by a change in
circumstances at which time the City's bond counsel will propose new procedures to be adopted.
I. FEDERAL TAX LAW
1. Arbitrage Compliance.
Arbitrage refers to the difference between the interest paid on tax- exempt Obligations and
the interest earned by investing the proceeds of tax- exempt Obligations in higher- yielding
investments. Such higher - yielding investments could take the form of loans, securities, real
property, personal property, or other investments that could yield a profit to the City. Federal
income tax laws generally restrict the ability to earn arbitrage utilizing the proceeds of tax -
exempt Obligations. Generally, any profit from investing Obligation proceeds at a yield above
the yield paid on the Obligations belongs to the federal government and must be rebated to the
federal government. If the City fails to comply federal tax guidelines, Obligations could be
deemed to be "arbitrage bonds" by the Internal Revenue Service (the "IRS "), which would
expose the City to monetary liability from the City's investors.
The arbitrage yield on the Obligations is set forth on the IRS Form 8038 -G.
The Executive Director of Business Services and the City Treasurer (including such other
employees of the City who report to such officers) (collectively, the "Responsible Person ") will
review the Closing Documents periodically (at least once a year) to ascertain if an exception to
arbitrage compliance applies.
a. Procedures applicable to the Obligation. The Responsible Person shall undertake
the following procedures.
i. If the City plans to spend funds currently on hand for a future project with
the intent to later repay such funds from a debt issue, the Responsible
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Person shall contact Bond Counsel to obtain advice regarding a
reimbursement resolution. The Responsible Person shall maintain any
official action of the City (such as a reimbursement resolution) stating the
City's intent to reimburse with the proceeds of the Obligations any amount
expended prior to the Issue Date for the acquisition, renovation or
construction of the Project.
ii. The Responsible Person shall ensure that the applicable information return
(e.g., U.S. Internal Revenue Service ( "IRS ") Form 8038 -G, 8038 -GC, or
any successor forms) is timely filed with the IRS.
iii. If proceeds of the Obligations are to be invested in interest - earning
investments, assure that, unless excepted from rebate and yield restriction
under section 148(0 of the Code, excess investment earnings are
computed and paid to the U.S. government at such time and in such
manner as directed by the IRS (i) at least every 5 years after the Issue Date
and (ii) within 30 days after the date the Obligations are retired. If
proceeds of the Obligations are to be invested in interest - earning
investments, the Responsible Person should contact the City's arbitrage
consultant regarding such matters.
iv. The Responsible Person shall monitor all amounts deposited into a sinking
fund or funds pledged (directly or indirectly) to the payment of the
Obligations, such as the Interest and Sinking Fund (the "I &S Fund "), to
assure that the maximum amount invested within such applicable fund at a
yield higher than the yield on the Obligations does not exceed an amount
equal to the debt service on the Obligations in the succeeding 12 month
period plus a carryover amount equal to one - twelfth of the principal and
interest payable on the Obligations for the immediately preceding 12-
month period.
NOTE: the purpose of the I &S Fund is to achieve a proper
matching of revenues with principal and interest payments within
each fiscal year. The I &S Fund should be used a mechanism for
payment of current debt service and not as a long -term investment
fund for debt service many years in the future.
v. The Responsible Person shall ensure that no more than 50% of the
proceeds of the Obligations are invested in an investment with a
guaranteed yield for 4 years or more.
b. With respect to the investment and expenditure of the proceeds of the Obligations
that are issued to finance public improvements or to acquire land or personal
property, the Responsible Person shall undertake the following.
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i. The Responsible Person shall instruct the persons who are primarily
responsible for the construction, renovation or acquisition of the facilities
financed with Obligations (the "Project ") that the Project must (i) proceed
with due diligence toward completion and that (ii) binding contracts for
the expenditure of at least 5% of the proceeds of the Obligations will be
entered into within six (6) months of the date of closing of the Obligations
(the "Issue Date "). The Responsible Person shall monitor that the above
requirements are satisfied.
ii. The Responsible Person shall monitor that at least 85% of the proceeds of
the Obligations to be used for the construction, renovation or acquisition
of the Project are expended within three years of the Issue Date.
iii. The Responsible Person shall monitor investment of proceeds of the
Obligations and restrict the yield of the investments to the yield on the
Obligations after three years of the Issue Date.
iv. To the extent that there are any unspent proceeds of the Obligations at the
time the Obligations are later refunded, or if there are unspent proceeds of
the Obligations that are being refunded by a new issuance of Obligations,
the Responsible Person shall continue monitoring the expenditure of such
unspent proceeds to ensure compliance with federal tax law with respect
to both the refunded Obligations and any Obligations being issued for
refunding purposes, and shall contact Bond Counsel as necessary.
B. Private Business Use.
Generally, the proceeds of tax- exempt Obligations may not inure to the benefit of entities
other than state or local governments ( "private business use "). Private business use occurs
whenever Obligation proceeds are used to benefit any entity other than a state or local
government, including nonprofit corporations and the federal government.
A series of Obligations may lose their tax- exempt status if: (i) more than 10% of the
proceeds of the Obligations are to be used for any private business use and the payment of the
principal or interest on more than 10% of the proceeds of the Obligations is secured by or
payable from property used for a private business use, or (ii) the amount of proceeds of the
Obligations used to make loans to borrowers other than state and local governments exceeds the
lesser of 5% of the proceeds or $15 million.
With respect to the use of the facilities financed or refinanced with the proceeds of the
Obligations, the Responsible Person shall undertake the following to ensure the Obligations do
not violate private business use tests.
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a. The Responsible Person shall develop procedures or a "tracking system" to
identify, log and record all property financed with tax- exempt debt and identify
the issue of Obligations used to finance such property.
b. The Responsible Person shall monitor and record the date on which the Project is
substantially complete and available to be used for the purpose intended.
c. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, the employees of the
City, the agents of the City or members of the general public has any contractual
right (such as a lease, research contract, naming rights agreement, purchase
contract, management agreement or other service agreement) with respect to any
portion of the Project.
d. Before entering into any private business use arrangement that involves the use of
the Project, the Responsible Person must obtain a description of the proposed
private business use arrangement and determine whether such arrangement, if put
into effect, will be consistent with the restrictions on private business use of the
Project. In connection with the evaluation of any proposed private business use
arrangement, the Responsible Person should consult with Bond Counsel to
discuss whether such arrangement, if put into effect, will be consistent with the
restrictions on private business use of the Project, and, if not, whether any
"remedial action" permitted under federal guidelines may be taken as a means of
enabling such private business use without adversely affecting the tax- exempt
status of the Obligations.
e. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, the employees of the
City, the agents of the City or members of the general public has a right to use the
output of the Project (e.g., water, gas, electricity, capacity) on any basis other than
standard rates and charges.
f. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, has a naming right
for the Project or any other contractual right granting an intangible benefit.
g. Prior to any sale of property owned by the City (real or personal), the Responsible
Person must confirm whether such property was financed with tax - exempt debt,
and if so, determine whether the proposed disposition of the property could
impact the tax- exempt status of the series of Obligations that financed the
acquisition of such property.
h. The Responsible Person shall take any action necessary to remediate any failure
to maintain compliance with the covenants contained in the ordinance authorizing
the issuance of the applicable series of Obligations.
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C. Record Retention.
The Responsible Person will maintain or cause to be maintained all records relating to the
investment and expenditure of the proceeds of the Obligations and the use of the Project financed
or refinanced thereby for a period ending three (3) years after the complete extinguishment of the
Obligations. If any portion of the Obligations is refunded with the proceeds of another series of
Obligations, such records shall be maintained until the three (3) years after the refunding
Obligations mature or are otherwise paid off. Such records can be maintained in paper or
electronic format.
For purposes of these procedures, the Memorandum of Bond Counsel dated December 1,
2011 styled "Certain Federal Income Tax Considerations for Record Retention — Record
Management Program and Periodic Compliance Review" in incorporated herein and should be
reviewed periodically, at least once per year, by the Responsible Person.
D. Responsible Person & Continuity.
Each Responsible Person shall receive appropriate training regarding the City's
accounting system, contract intake system, facilities management and other systems necessary to
track the investment and expenditure of the proceeds and the use of the facilities financed with
the proceeds of the Obligations. The foregoing notwithstanding, the Responsible Person is
authorized and instructed to retain such experienced advisors and agents as may be necessary to
carry out the purposes of these instructions.
Prior to cessation of employment with the City, the Responsible Person should identify
their successor to maintain compliance with these procedures.
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II. FEDERAL SECURITIES LAW
Obligations, whether taxable or tax- exempt, sold in a public offering in an amount of
$1 million or more are subject to Rule 15c2 -12 (the "Rule ") of the United States Securities and
Exchange Commission (the "SEC "). Additionally, the City may have covenanted to comply
with the Rule even with respect to Obligations that would otherwise be exempt from the Rule
(e.g., Obligations sold in a private placement or Obligations sold in an amount less than
$1 million). Pursuant to the Rule, the City is required to make annual filings of certain
information, as well as make filings upon the occurrence of certain specified events. All filings
must be made with the Municipal Securities Rulemaking Board (the "MSRB ") through its
Electronic Municipal Market Access System ( "EMMA ") at emma.msrb.org.
A. Annual Filings.
The City must file the information listed below with EMMA within six (6) months of
each fiscal year end for so long as the respective series of Obligations remains outstanding. The
City's fiscal year ends on September 30 of each year. Therefore, the City must provide updated
information by March 31 of the subsequent year. If audited financial statements are not available
by February 28, the City must provide unaudited financial information by such date and provide
audited financial statements when such statements become available. The City must file each of
the following items with EMMA:
(1) The City's audited financial statements; and
(2) An update of the financial tables included in the Official Statement used in
connection with the Obligations as described under the caption "Continuing
Disclosure of Information ". The information should be from the most recent
fiscal year end.
The Responsible Person must compile, prepare and make such filings within the required
time, or, alternatively, contract with a third - party, such as the City's financial advisor, to make
such filings on the City's behalf.
B. Notices of Specified Events.
The City must provide notice of any of the following events with respect to the
Obligations to the MSRB in a timely manner (but not in excess of ten business days after the
occurrence of the event):
(1) Principal and interest payment delinquencies;
(2) Non - payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
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(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the IRS of proposed or final determinations
of taxability, Notices of Proposed Issue (IRS Form 5701 —TEB) or other material
notices or determinations with respect to the tax status of the Obligations, or other
material events affecting the tax status of the Obligations;
(7) Modifications to rights of Obligation holders, if material;
(8) Obligations calls (includes redemptions and other early payments), if material,
and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Obligations, if
material;
(1 1) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City;
(13) The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional paying agent or the change of name of a
paying agent, if material; and
(15) In a timely manner, notice of a failure of the City to make the required annual
filings listed in Subsection II(A) above.
The Responsible Person should review this list at regular intervals to determine whether
any event has occurred that may require a filing with EMMA.
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EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 17 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 "Annual Financial Report" for the most recently concluded fiscal year.
2. The information included in the Official Statement under the following tables, but
for the most recently concluded fiscal year: Tables 1 through 6, 8 through 20.
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.
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EXHIBIT D
PRELIMINARY OFFICIAL STATEMENT
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