HomeMy WebLinkAbout2012-3413 - Ordinance - 04/26/2012 Ordinance No. 2012 -3413
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 $38,000,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS GENERAL
OBLIGATION IMPROVEMENT AND REFUNDING BONDS, SERIES 2012 ";
DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO
EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE
BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING TO SAID BONDS; 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 -3413
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.
City Secretary Mayor
(SEAL)
ORDINANCE NO. 2012-3413
AUTHORIZING THE ISSUANCE OF UP TO $38,000,000 IN PRINCIPAL
AMOUNT OF "CITY OF COLLEGE STATION, TEXAS GENERAL
OBLIGATION IMPROVEMENT AND REFUNDING BONDS, SERIES 2012 ";
DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS TO
EXECUTE CERTAIN DOCUMENTS RELATING TO THE SALE OF THE
BONDS; APPROVING AND AUTHORIZING INSTRUMENTS AND
PROCEDURES RELATING TO SAID BONDS; AND ENACTING OTHER
PROVISIONS RELATING TO THE SUBJECT
WHEREAS, it is deemed advisable and to be in the best interest of the City of College
Station (the "City") that certain bonds authorized at elections previously held in the City be
combined in a single issue and sold at this time, the dates of election, amount of bonds
authorized thereat, purpose, amount of bonds previously sold, and the amount now to be sold
being as follows as may be modified by the Pricing Officer (defined below):
AMOUNT AMOUNT
DATE OF AMOUNT PREVIOUSLY ISSUED
ELECTION AUTHORIZED PURPOSE SOLD HEREIN
November 4, 2003 $17,980,000 Street & transportation improvements $17,540,000 $440,000
November 4, 2003 7,610,000 Municipal complex improvements 3,955,000 0
November 4, 2008 48,785,000 Street & transportation improvements 12,540,000 3,820,000
November 4, 2008 8,385,000 City library improvements 0 0
November 4, 2008 12,790,000 Park & recreation improvements 3,665,000 $175,000
Total $95,550,000 $37,700,000 $4,435,000_
WHEREAS, this City Council fords and determines that it is necessary and proper to
order the issuance, sale and delivery of such voted bonds;
WHEREAS, the City has previously issued, and there are presently outstanding, revenue
bonds of the City secured by a pledge of revenues derived by the City from the ownership and
operation of the City's Utility System (consisting of the City's combined municipal electric light
and power, waterworks and sewer system), and general obligation bonds and certificates of
obligation which are secured by the full faith and credit of the City and a pledge by the City to
levy ad valorem taxes sufficient to pay principal of and interest on the bonds and certificates of
obligation as they become due and a pledge of surplus revenues of the Utility System to further
secure the certificates of obligation;
WHEREAS, the City now desires to refund all or part of the outstanding revenue bonds,
general obligation bonds and certificates of obligation described in Schedule I attached hereto
and incorporated herein (collectively, the "Eligible Obligations "), and those Eligible Obligations
designated by the Pricing Officer, as defined below, to be refunded are herein referred to as the
"Refunded Obligations ";
WHEREAS, Chapter 1207, Texas Government Code, authorizes the City to issue
refunding bonds and to deposit the proceeds from the sale thereof, together with any other
available funds or resources, directly with a paying agent for the Refunded Obligations or a trust
company or commercial bank that does not act as a depository for the City and is named in these
proceedings, and such deposit, if made before the payment dates of the Refunded Obligations,
shall constitute the making of firm banking and financial arrangements for the discharge and
final payment of the Refunded Obligations;
WHEREAS, Chapter 1207, Texas Government Code, further authorizes the City to enter
into an escrow or similar agreement with such paying agent for the Refunded Obligations or trust
company or commercial bank with respect to the safekeeping, investment, reinvestment,
administration and disposition of any such deposit, upon such terms and conditions as the City
and such paying agent or trust company or commercial bank may agree;
WHEREAS, the City Council hereby finds and declares a public purpose and it is in the
best interests of the City to refund the Refunded Obligations in order to achieve a debt service
savings, with such savings, among other information and terms to be included in the Purchase
Agreement described in Section 18 of this Ordinance to be executed by the Pricing Officer
(hereinafter designated), all in accordance with the provisions of Section 1207.007, Texas
Government Code;
WHEREAS, all the Refunded Obligations mature or -are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized;
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 in 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 bonds hereinafter authorized to be issued were voted and are to be
issued, sold and delivered pursuant to the general laws of the State of Texas, including Texas
Government Code Chapters 1207, 1331 and 1371, as amended, 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 BONDS. That said City's General Obligation
Improvement and Refunding Bonds, to be designated the "City of College Station, Texas
General Obligation Improvement and Refunding Bonds, Series 2012 ", are hereby authorized to
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be issued and delivered in the principal amount not to exceed $38,000,000 for the purpose of (i)
refunding the Refunded Obligations; (ii) acquiring property and making improvements for public
purposes in said City, to wit: street improvements, park and park facilities improvements, and the
payment of fiscal, engineering and legal fees incurred in connection therewith all in accordance
with and subject to the election propositions authorizing such bonds; and (iii) to pay the costs
incurred in connection with the issuance of the Bonds (collectively, the "Projects ").
Section 2. DELEGATION TO PRICING OFFICER.
(a) As authorized by Sections 1207.007 and 1371.053, Texas Government Code, as
amended, 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 Bonds, carrying out the other procedures specified in this Ordinance,
including, determining the date of the Bonds, any additional or different designation or title by
which the Bonds shall be known, whether the Bond 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 Bonds will be
sold, the years in which the Bonds 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 Bonds 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 Bonds and obtaining
municipal insurance for all or any portion of the Bonds and providing for the terms and
provisions thereof applicable to the Bonds, all of which shall be specified in the Pricing
Certificate; provided that:
(i) the aggregate original principal amount of the Bonds shall not exceed
$38,000,000, with no more than $33,000,000 of such amount to be issued for the
purposes described in Section 1(i) and (iii) hereof, and no more than $5,000,000 of such
amount issued for the purposes described in Section 1(ii) and (iii) hereof;
(ii) the true interest cost of the Bonds shall not exceed 3.250% per annum;
(iii) the refunding must produce present value debt service savings of at least
5.000 %, net of any City contribution;
(iv) the net effective interest rate on the Bonds shall not exceed the maximum
rate set forth in Chapter 1204, Texas Government Code, as amended;
(v) the final maturity of the Bonds shall not exceed February 15, 2032;
(vi) the delegation made hereby shall expire if not exercised by the Pricing
Officer on or prior to October 26, 2012; and
(vii) on or prior to delivery, the Bonds shall be rated by a nationally recognized
rating agency for municipal securities in one of the four highest categories for long -term
obligations.
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(b) In establishing the aggregate principal amount of the Bonds, the Pricing Officer
shall establish an amount not exceeding the amount authorized in Subsection (a) of this Section,
which shall be sufficient in amount to provide for the purposes for which the Bonds are
authorized and to pay costs of issuing the Bonds. The Bonds shall be sold with and subject to
such terms as set forth in the Purchase Agreement as described in Section 18 herein.
Section 3. CHARACTERISTICS OF THE BONDS. (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 Bonds (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 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 Bond to which payments with
respect to the Bonds 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 Bond 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 Bond, 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 Bond or any such portion thereof registered in the name of such assignee
or assignees. Upon the assignment and transfer of any Bond or any portion thereof, a new
substitute Bond or Bonds shall be issued in exchange therefor in the manner herein provided.
(b) The entity in whose name any Bond 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 Bond 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 Bond shall be made only to such registered owner. All
such payments shall be valid and effectual to satisfy and discharge the liability upon such Bond
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 Bonds, and to act as its agent to exchange or
replace Bonds, 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
Bonds, and of all exchanges thereof, and all replacements thereof, as provided in this Ordinance.
(d) Each Bond may be exchanged for fully registered Bonds in the manner set forth
herein. Each Bond issued and delivered pursuant to this Ordinance may, upon surrender thereof
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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 Bonds, without interest coupons, in the form
prescribed in the FORM OF BOND, in an Authorized Denomination (subject to the requirement
hereinafter stated that each substitute Bond 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 Bond or Bonds so surrendered, and payable to the
appropriate registered owner, assignee, or assignees, as the case may be. If any Bond or portion
thereof is assigned and transferred, each Bond issued in exchange therefor shall have the same
principal maturity date and bear interest at the same rate as the Bond for which it is being
exchanged. Each substitute Bond shall bear a letter and/or number to distinguish it from each
other Bond. The Paying Agent/Registrar shall exchange or replace Bonds as provided herein,
and each fully registered Bond or Bonds delivered in exchange for or replacement of any Bond
or portion thereof as permitted or required by any provision of this Ordinance shall constitute
one of the Bonds for all purposes of this Ordinance, and may again be exchanged or replaced. It
is specifically provided, however, that any Bond delivered in exchange for or replacement of
another Bond prior to the first scheduled interest payment date on the Bonds (as stated on the
face thereof) shall be dated the same date as such Bond, but each substitute Bond 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 Bond is delivered, unless such substitute Bond 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 Bond the interest on the Bond
for which it is being exchanged has not been paid, then such substitute Bond shall be dated as of
the date to which such interest has been paid in full. On each substitute Bond issued in exchange
for or replacement of any Bond or Bonds 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 BOND (the "Authentication Certificate "). An authorized representative of the
Paying Agent/Registrar shall, before the delivery of any such substitute Bond, date such
substitute Bond in the manner set forth above, and manually sign and date the Authentication
Certificate, and no such substitute Bond shall be deemed to be issued or outstanding unless the
Authentication Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all
Bonds 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 Bonds or portion thereof, and the Paying
Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Bond in
the manner prescribed herein. Pursuant to Chapter 1206, Texas Government Code, the duty of
exchange or replacement of any Bonds as aforesaid is hereby imposed upon the Paying
Agent/Registrar, and, upon the execution of Authentication Certificate, the exchanged or
replaced Bond shall be valid, incontestable, and enforceable in the same manner and with the
same effect as the Bonds 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 Bond so selected for
redemption, in whole or in part, within 45 calendar days of the date fixed for redemption;
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provided, however, such limitation of transfer shall not be applicable to an exchange by the
registered owner of the uncalled principal of a Bond.
(e) All Bonds issued in exchange or replacement of any other Bond or portion
thereof, (i) shall be issued in fully registered form, without interest coupons, with the principal of
and interest on such Bonds 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 Bonds, (v) shall have the characteristics, (vi) shall be signed and sealed, and
(vii) the principal of and interest on the Bonds shall be payable, all as provided, and in the
manner required or indicated, in the FORM OF BOND.
(f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees
and charges for making transfers of Bonds, but the registered owner of any Bond requesting such
transfer shall pay any taxes or other governmental charges required to be paid with respect
thereto. The registered owner of any Bonds requesting any exchange shall pay the Paying
Agent/Registrar's reasonable and standard or customary fees and charges for exchanging any
such Bond 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 Bond
or Bonds 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 Bonds 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 Bonds, when due, and (ii) pay the fees and charges of
the Paying Agent/Registrar for services with respect to the transfer or registration of Bonds
solely to the extent above provided, and with respect to the exchange of Bonds solely to the
extent above provided.
(g) The City covenants with the registered owners of the Bonds that at all times while
the Bonds 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 Bonds 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 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 Bonds, 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 Bonds, by United States mail, first -class
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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 BONDS. The form of the Bonds, 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 Bonds 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 BOND to be modified pursuant
to, and completed with information set forth in the Pricing Certificate. The printer of the Bonds
is hereby authorized to print on the Bonds (i) the form of bond counsel's opinion relating to the
Bonds, 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 Bonds.
Section 5. DEFINITIONS. That the term "Authorized Denomination" shall mean a
denomination of $5,000 of principal amount of a Bond or any integral multiple thereof; the term
"Bonds" shall mean the City of College Station, Texas General Obligation Improvement and
Refunding Bonds, Series 2012; 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 "MSRB" means the Municipal Securities Rulemaking Board; the term
"Rule" means SEC Rule 15c2 12, as amended from time to time; and the term "SEC' means the
United States Securities and Exchange Commission.
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 Improvement and Refunding Bond 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 Bonds. All ad
valorem taxes levied and collected for and on account of the Bonds shall be deposited, as
collected, to the credit of the Interest and Sinking Fund. During each year while any of the
Bonds 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 Bonds 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 Bonds 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 Bonds 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 Bonds 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 Bonds, as such interest comes
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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 for deposit into the
Interest and Sinking Fund moneys as may be necessary to pay the principal and interest
payments on the Bonds scheduled to occur on or before August 15, 2012.
Section 7. TRANSFER. That the City shall do any and all things necessary to
accomplish the transfer of monies to the Interest and Sinking Fund of this issue in ample time to
pay such items of principal and interest due on the Bonds.
Section 8. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this
Ordinance shall be secured in the manner and to the fullest extent permitted or required by law
for the security of public funds, and such Interest and Sinking Fund shall be used only for the
purposes and in the manner permitted or required by this Ordinance.
Section 9. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Replacement Bonds. That in the event any outstanding Bond is damaged,
mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new Bond of the same principal amount, maturity, and interest rate, as
the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the
manner hereinafter provided.
(b) Application for Replacement Bonds. That application for replacement of
damaged, mutilated, lost, stolen, or destroyed Bonds shall be made by the registered owner
thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the
registered owner applying for a replacement Bond 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 Bond, 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 Bond, as
the case may be. In every case of damage or mutilation of a Bond, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. That notwithstanding the foregoing provisions of this
Section, in the event any such Bond 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
Bond, the City may authorize the payment of the same (without surrender thereof except in the
case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security
or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. That prior to the issuance of any
replacement Bond, the Paying Agent/Registrar shall charge the registered owner of such Bond
with all legal, printing, and other expenses in connection therewith. Every replacement Bond
issued pursuant to the provisions of this Section by virtue of the fact that any Bond is lost, stolen,
or destroyed shall constitute a contractual obligation of the City whether or not the lost, stolen, or
destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to
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all the benefits of this Ordinance equally and proportionately with any and all other Bonds duly
issued under this Ordinance.
(e) Authority for Issuing Replacement Bonds. 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 Bond without necessity of further action by the City or any
other body or person, and the duty of the replacement of such Bonds is hereby authorized and
imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and
deliver such Bonds in the form and manner and with the effect, as provided in Section 5(d) of
this Ordinance for Bonds issued in conversion and exchange of other Bonds.
Section 10. 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 Bonds as obligations described in section 103 of the Code, the interest on which is not
includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds (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
Bonds, 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 Bonds (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 Bonds (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 Bonds 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 Bonds 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 Bonds, 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 Bonds, other than investment property acquired with —
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(1) proceeds of the Bonds invested for a reasonable temporary period until
such proceeds are needed for the purpose for which the Bonds 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 Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as
proceeds of the Bonds, as may be necessary, so that the Bonds 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 Bonds) 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 the United
States of America, not later than 60 days after the Bonds 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 Bonds. 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 Bonds, 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
Bonds 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 Bonds, 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 Bonds 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 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 Bonds.
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.
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Section 11. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT. That the City covenants to account for the expenditure of proceeds from the sale of
the Bonds and any investment earnings thereon to be used for the purposes described in Section
1 of this Ordinance (such purpose referred to in this Section and Section 12 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 Bonds or
(b) the date the Bonds 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 Bonds. 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 12. DISPOSITION OF PROJECT. That the City covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the
receipt by the City of cash or other compensation, unless 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 Bonds. For purposes of the foregoing, the
portion of the property comprising personal property and disposed in the ordinary course shall
not be treated as a transaction resulting in the receipt of cash or other compensation. For
purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the interest.
Section 13. PROCEDURES TO MONITOR COMPLIANCE WITH TAX
COVENANTS. The City hereby adopts the procedures attached hereto as Exhibit B as a means
of monitoring compliance with the federal tax covenants made by the City herein.
Section 14. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS. That the
Executive Director of Business Services of the City is hereby authorized to have control of the
Bonds initially issued and delivered hereunder and all necessary records and proceedings
pertaining to the Bonds 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 Bonds 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 Bonds, and the seal of said Comptroller
shall be impressed, or placed in facsimile, on such certificate. The Bonds 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 18 of this Ordinance).
Section 15. DTC REGISTRATION. That the Bonds initially shall be issued and
delivered in such manner that no physical distribution of the Bonds will be made to the public,
and The Depository Trust Company ( "DTC "), New York, New York, initially will act as
depository for the Bonds. 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
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"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 Bonds 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 Bonds on behalf of the Underwriter
and its participants. So long as each Bond 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 Bonds 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 Bonds initially deposited with DTC shall be immobilized and not be further
exchanged for substitute Bonds except as hereinafter provided. The City is not responsible or
liable for any functions of DTC, will not be responsible for paying any fees or charges with
respect to its services, will not be responsible or liable for maintaining, supervising, or reviewing
the records of DTC or its participants, or protecting any interests or rights of the beneficial
owners of the Bonds. 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 Bonds, 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 Bonds is duly filed with the Paying Agent/Registrar with proper request for
transfer and substitution, as provided for in this Ordinance, substitute Bonds 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 Bonds. In connection with the initial
establishment of the foregoing book -entry system with DTC, the City heretofore has executed a
"Blanket Letter of Representations" prepared by DTC in order to implement the book -entry
system described above.
Section 16. CONTINUING DISCLOSURE OBLIGATION.
(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 18 of this Ordinance,
being the information described in Exhibit C hereto. Any fmancial 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
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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 Bonds:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or the issuance by the Internal Revenue Service of
proposed or final 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 Bonds, or other material events affecting the
tax status of the Bonds;
7. Modifications to rights of Bondholders, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds,
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,
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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.
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 Bonds 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 Bonds 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 Bonds, 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 Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCE SHALL THE CITY BE LIABLE TO
THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND 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.
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(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 Bonds 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 Bonds in the primary offering of the Bonds in compliance with the Rule,
taking into account any amendments or interpretations of the Rule since such offering as
well as such changed circumstances and (2) either (a) the registered owners of a majority
in aggregate principal amount (or any greater amount required by any other provision of
this Ordinance that authorizes such an amendment) of the outstanding Bonds 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 Bonds. 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 Bonds in the primary offering of the Bonds.
(d) Procedures to Monitor Compliance with Continuing Disclosure Covenants. The
City hereby adopts the procedures attached hereto as Exhibit B as a means of monitoring
compliance with the continuing disclosure covenants made by the City herein.
Section 17. DEFEASANCE. (a) Deemed Paid. Any Bond and the interest thereon shall
be deemed to be paid, retired and no longer outstanding (a "Defeased Bond ") within the meaning
of this Ordinance, except to the extent provided in subsection (e) of this Section, when payment
of the principal of such Bond, 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
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Agent/Registrar for the payment of its services until all Defeased Bonds shall have become due
and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as
aforesaid, such Bond 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 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 Bonds 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 Bonds 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 Bonds. In the event that the City elects to defease less than
all of the principal amount of Bonds of a maturity, the Paying Agent/Registrar shall select, or
cause to be selected, such amount of Bonds 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 Bonds.
(e) Continuing Duty of Paying Agent /Registrar. Until all Bonds defeased under this
Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for such
Bonds shall perform the services of Paying Agent/Registrar for such Bonds the same as if they
had not been defeased, and the City shall make proper arrangements to provide and pay for such
services.
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Section 18. SALE OF BONDS; OFFICIAL STATEMENT. (a) The Bonds 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 Bonds (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 Bonds 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 Bonds 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 Bonds by the Underwriter in final form, with such changes
therein or additions thereto as the Pricing Officer executing the same may deem advisable. The
Pricing Officer is hereby authorized, in the name and on behalf of the City, to approve,
distribute, and deliver a final preliminary official statement and a final official statement relating
to the Bonds to be used by the Underwriter in the marketing of the Bonds.
(c) The Pricing Officer is authorized, in connection with effecting the sale of the
Bonds, 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 Bonds. 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 Bonds, the sale
of the Bonds, any Purchase Agreement and the Official Statement. In case any officer whose
signature shall appear on any Bond shall cease to be such officer before the delivery of such
Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if
such officer had remained in office until such delivery.
Section 19. FURTHER PROCEDURES. That the Mayor, the City Secretary, the City
Manager, the 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
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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 Bonds 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
Bonds, in the amount determined in accordance with the provisions of Section 1202.004, Texas
Government Code.
Section 20. CONSTRUCTION FUND; USE OF PROCEEDS.
(a) The City hereby creates and establishes and shall maintain on the books of the
City a separate fund to be entitled the "Series 2012 Bond 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 described in the preambles to this Ordinance.
(b) The proceeds from the sale of the Bonds 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 Bonds 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 10 hereof, and
THEREAFTER to the Interest and Sinking Fund.
Section 21. INTEREST EARNINGS. That the interest earnings derived from the
investment of proceeds from the sale of the Bonds may be used along with other proceeds for the
construction of the permanent improvements set forth in Section 1 hereof for which the Bonds
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 Bonds from being arbitrage bonds shall be so rebated and not considered as
interest earnings for the purposes of this Section.
Section 22. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS.
In furtherance of authority granted by Section 1207.007(b), Texas Government Code, the Pricing
Officer is further authorized to enter into and execute on behalf of the City with the escrow agent
named therein, an escrow or similar agreement, in the form and substance as presented at the
meeting at which this Ordinance was adopted, which agreement will provide for the payment in
full of the Refunded Obligations. In addition, the Pricing Officer is authorized to purchase such
securities, to execute such subscriptions for the purchase of the Escrowed Securities, (as defined
in the agreement), if any, and to authorize such contributions to the escrow fund as provided in
the agreement.
Section 23. REDEMPTION OF REFUNDED OBLIGATIONS.
(a) The City hereby directs that certain of the Refunded Obligations be called for
redemption on the dates and as set forth in the Escrow Agreement. Each of such Refunded
Obligations shall be redeemed at the redemption price of par plus accrued interest. The Pricing
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Officer is hereby authorized and directed to issue or cause to be issued the Notices of
Redemption of the Refunded Obligations.
(b) In addition, the paying agent/registrars for the Refunded Obligations are hereby
directed to provide the appropriate notices of redemption and defeasance as specified by the
ordinances authorizing the issuance of the Refunded Obligations and are hereby directed to make
appropriate arrangements so that the Refunded Obligations may be redeemed on their
redemption dates. The Refunded Obligations shall be presented for redemption at the paying
agent/registrars therefore, and shall not bear interest after the date fixed for redemption.
(c) The source of funds for payment of the principal of and interest on the Refunded
Obligations on their redemption date shall be from the funds placed in escrow with the Escrow
Agent, pursuant to the Escrow Agreement approved in Section 22 of this Ordinance.
Section 24. DEFAULT AND REMEDIES.
(a) Events of Default. Each of the following occurrences or events for the purpose of
this Ordinance is hereby declared to be an Event of Default:
(i) the failure to make payment of the principal of or interest on any of the
Bonds 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 Bonds, 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 Bonds then outstanding.
(c) Remedies Not Exclusive.
19
(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 Bonds 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 Bonds
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 Bond authorized under this Ordinance, such
registered owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise
to a personal or pecuniary liability or charge against the officers, employees or members
of the City or the City Council.
(iv) None of the members of the City Council, nor any other official or officer,
agent, or employee of the City, shall be charged personally by the registered owners with
any liability, or be held personally liable to the registered owners under any term or
provision of this Ordinance, or because of any Event of Default or alleged Event of
Default under this Ordinance.
Section 25. MISCELLANEOUS PROVISIONS. (a) Preamble. The preamble to this
Ordinance is incorporated by reference and made a part hereof for all purposes.
(b) Titles Not Restrictive. That the titles assigned to the various sections of this
Ordinance are for convenience only and shall not be considered restrictive of the subject matter
of any section or of any part of this Ordinance.
(c) Rules of Construction. The words "herein ", "hereof' and "hereunder" and other
words of similar import refer to this Ordinance as a whole and not to any particular Section or
other subdivision. Except where the context otherwise requires, terms defined in this Ordinance
to 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 BOND" shall refer to the form of the Bonds set forth in
Exhibit A to this Ordinance. Any reference to the payment of principal in this Ordinance shall
be deemed to include the payment of any mandatory sinking fund redemption payments as may
be described herein.
(d) Inconsistent Provisions. All ordinances, orders and resolutions, or parts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed
and declared to be inapplicable, and the provisions of this Ordinance shall be and remain
controlling as to the matters prescribed herein.
(e) Severability. If any word, phrase, clause, paragraph, sentence, part, portion, or
provision of this Ordinance or the application thereof to any person or circumstance shall be held
20
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.
(f) Governing Law. This Ordinance shall be construed and enforced in accordance
with the laws of the State of Texas.
(g) Open Meeting. The City officially finds and determines that the meeting at which
this Ordinance is adopted was open to the public; and that public notice of the time, place, and
purpose of such meeting was given, all as required by Chapter 551, Texas Government Code.
(h) Application of Chapter 1208, Government Code. Chapter 1208, Texas
Government Code, applies to the issuance of the Bonds and the pledge of ad valorem taxes
granted by the City under Section 6, and such pledge is therefore valid, effective, and perfected.
If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the
pledge of the ad valorem taxes 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 Bonds 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.]
21
PASSED, APPROVED AND EFFECTIVE THIS 2012.
T 44
City Secretary, ity of College Station, Texas Mayor, City of ollege Station, Texas
(CITY SEAL)
APPROVED:
McCall, Parkhurst & Horton L.L.P., Dallas, Texas
Bond Counsel
' f I/
I
Ordinance
City of College Station, Texas
General Obligation Improvement and Refunding Bonds,
Series 2012
SIGNATURE PAGE
SCHEDULE I
ELIGIBLE OBLIGATIONS
See attached
Schedule I -1
Schedule I
SCHEDULE OF REFUNDED OBLIGATIONS
General Obligation Debt
General Obligation Bonds, Series 2003 Certificates of Obligation Si ries 2003A
Maturity Date Interest Par Amount Call Cal Maturity Date Interest Par Amo uu Call Call
February 15 Rate to be Refunded Date Pnce February 15 Rate to be Refm de i Date Price
2014 3.125% $ 240,000 2/15/2013 100.00 2014 3.400% $ 4( ,0o0 2/152013 100.00
2015 3.375% 250,000 2/15/2013 100.00 2015 3.600% 4( ,0( 2/152013 100.00
2016 3.500% 260,000 2/152013 100.00 2016 3.700% 4( ,0('0 2/152013 100.00
2017 3.625% 275,000 2/15/2013 100.00 2017 3.900% 4' ,000 2/152013 100.00
2018 3.750% 285,000 2/152013 100.00 2019 4.000% 9' 0(10 2/1512013 100.00
2019 3.875% 300,000 2/152013 100.00 2021 4.150% 10' 01'0 2/15/2013 100.00
2020 4.000% 315,000 2/15/2013 100.00 2023 4.200% 11' 01'0 2/15/2013 100.00
2021 4.000% 330,000 2/152013 100.00 $ 48( 01'0
2022 4.125% 345,000 2/152013 100.00
2023 4.125% 360,000 2/15/2013 100.00
$ 2,960,000
General Obligation Improvement and Refunding Bonds, Series 2004 Certificates of Obligatio: _!cries 2004
Maturity Date Interest Par Amount Call Call Maturity Date Interest Par Ame irr Call Call
February 15 Rate to be Refunded Date Price February 15 Rate to be Refui de 3 Date Price
2014 4.000% $ 550,000 2/15/2013 100.00 2014 4.000% $ 43( ,000 2/15/2013 100.00
2015 4.125% 335,000 2/15/2013 100.00 2015 4.125% 45(,01) 2/15/2013 100.00
2016 4.250% 350,000 2/15/2013 100.00 2016 4.250% 47( ,0110 2/152013 100.00
2017 4.300% 365,000 2/15/2013 100.00 2017 4.300% 49( ,0O 2/15/2013 100.00
2018 4.375% 380,000 2/15/2013 100.00 2018 4.375% 51( 0110 2/152013 100.00
2019 4.500% 400,000 2/15/2013 100.00 2019 4.500% 53' ,0(10 2/15/2013 100.00
2020 4.500% 420,000 2/15/2013 100.00 2020 4.500% 56(0110 2/15/2013 100.00
2021 4.625% 435,000 2/15/2013 100.00 2021 4.625% 58' 0■10 2/152013 100.00
2022 4.750% 460,000 2/15/2013 100.00 2022 4.750 % 61' 0(10 2/152013 100.00
2023 4.750% 480,000 2/152013 100.00 2023 4.750% 64',0(10 2/152013 100.00
2024 5.000% 505,000 2/15/2013 100.00 2024 5.000% 67' 0110 2/15/2013 100.00
- $ 4,680,000 $ 5,96' 01(0
General Obligation Improvement Bonds, Series 2005 Certificates of Obligatio _'series 2005
Maturity Date Interest Par Amount Call Call Maturity Date Interest Par Amc in Call Call
February 15 Rate to be Reftmded Date Price February 15 Rate to be Refw de d Date Price
2015 4.000% $ 245,000 2/15/2014 100.00 2015 4.000% $ 231,111/0 2/152014 100.00
2016 4.000% 255,000 2/15/2014 100.00 2016 4.000% 161 000 2/152014 100.00
2017 4.000% 270,000 2/152014 100.00 2017 4.000% 171 ,000 2/152014 100.00
2018 4.125% 285,000 2/15/2014 100.00 2018 4.125% 18( ,0110 2/152014 100.00
2019 4.125% 305,000 2/15/2014 100.00 2019 4.125% 191 ,0110 2/15/2014 100.00
2020 4.250% 320,000 2/152014 100.00 2020 4.250% 201 ,0110 2/15/2014 100.00
2021 4.250 340,000 2/15/2014 100.00 2021 4.250% 21' ,0110 2/15/2014 100.00
2022 4.375% 360,000 2/15/2014 100.00 2022 4.375% 22' ,0+10 2/15/2014 100.00
2023 4.375% 380,000 2/152014 100.00 2023 4.375% 23'0110 2/15/2014 100.00
2024 4.500% 400,000 2/152014 10000 2024 4.500 251 ,0+10 2/15/2014 100.00
2025 4.500% 420,000 2/152014 100.00 2025 4.500% 26',01) 2/15/2014 100.00
$ 3,580,000 $ 2,321,010
S -1
SCHEDULE OF REFUNDED OBLIGATIONS*
Utility System Revenue Debt
Utility System Revenue Refunding Bonds, Series 2003
Maturity Date Interest Par Amount Call Call
February 1 Rate to be Refunded Date Price
2013 4.125% $ 1,035,000 t1l 100.00
2014 4.250% 765,000 (I) 100.00
$ 1,800,000
Utility System Revenue Bonds, Series 2003A
Maturity Date Interest Par Amount Call Call
February 1 Rate to be Refunded Date Price
2014 3.125% $ 245,000 2/1/2013 100.00
2015 3.250% 255,000 2/12013 100.00
2016 3.500% 265,000 2112013 100.00
2017 3.625% 275,000 2112013 100.00
2018 3.750% 290,000 2/12013 100.00
2019 3.875% 300,000 2/12013 100.00
2020 4.000% 315,000 2/1/2013 100.00
2021 4.000% 330,000 2/1/2013 100.00
2022 4.125% 345,000 2/1/2013 100.00
2023 4.250% 365,000 2/12013 100.00
$ 2,985,000
Utility System Revenue Bonds, Series 2005
Maturity Date Interest Par Amount Call Call
February 1 Rate to be Refunded Date Price
2015 4.000% $ 375,000 2/12014 100.00
2016 4.000% 395,000 2/1/2014 100.00
2017 4.000% 420,000 2/1/2014 100.00
2018 4.000% 445,000 2/1/2014 100.00
2019 4.125% 470,000 2/12014 100.00
2020 4.125% 495,000 2/1/2014 100.00
2021 4.250% 525,000 2/12014 100.00
2022 4.375% 555,000 2/12014 100.00
2023 4.375% 585,000 2/1/2014 100.00
2024 4.500% 615,000 2/1/2014 100.00
2025 4.500% 650,000 2/1/2014 100.00
$ 5,530,000
(1) Call date to be determined at pricing of the bonds.
S -2
EXHIBIT A
FORM OF BOND
NO. UNITED STATES OF AMERICA $
STATE OF TEXAS
COUNTY OF BRAZOS
CITY OF COLLEGE STATION, TEXAS
GENERAL OBLIGATION IMPROVEMENT AND
REFUNDING BOND, 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 Bond 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 Bond 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 Bond shall be paid to the registered owner
hereof upon presentation and surrender of this Bond 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 Bond. The payment of interest on this Bond
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 Bond (the "Bond 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
A -1
Paying Agent/Registrar, as hereinafter described. Any accrued interest due at maturity as
provided herein shall be paid to the registered owner upon presentation and surrender of this
Bond for payment at the Designated Trust Office of the Paying Agent/Registrar. The City
covenants with the registered owner of this Bond that on or before each principal and interest
payment date for this Bond it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" created by the Bond Ordinance, the amounts required to provide for
the payment, in immediately available funds, of all principal of and interest on the Bonds, 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 Bond
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 Bond 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 BOND is one of a Series of Bonds 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 Bond Ordinance, and the payment of fiscal,
engineering and legal fees incurred in connection therewith.
ON FEBRUARY 15, , or on any date thereafter, the Bonds 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 Bonds called for redemption at the option of the City
prior to stated maturity shall be selected by the City. The Bonds 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 Bonds is determined only by a book
entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity
and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and
bearing such interest rate shall be selected in accordance with the arrangements between the City
and the securities depository.
A -2
;..
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 Bond 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 Bond 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 Bond, 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 Bond or any portion
hereof. If a portion of any Bond shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in Authorized Denominations, at the written
request of the registered owner, and in aggregate principal amount equal to the unredeemed
portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation,
at the expense of the City, all as provided in the Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in Authorized Denominations. As provided in the Bond Ordinance, this Bond
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 Bonds,
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 Bond to the Paying Agent/Registrar at its
Designated Trust Office for cancellation, all in accordance with the form and procedures set
forth in the Bond Ordinance. Among other requirements for such assignment and transfer, this
Bond 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 Bond or any portion or
portions hereof in an Authorized Denomination to the assignee or assignees in whose name or
names this Bond or any such portion or portions hereof is or are to be transferred and registered.
The form of Assignment printed or endorsed on this Bond 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 Bond 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 Bond or Bonds 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
Bond or portion thereof. In any circumstance, any taxes or governmental charges required to be
paid with respect thereto shall be paid by the one requesting such assignment, transfer, or
exchange as a condition precedent to the exercise of such privilege. In any circumstance, neither
A -3
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 Bonds and ending at the close of business on the day of such
mailing, or (2) to transfer or exchange any Bonds so selected for redemption when such
redemption is scheduled to occur within 45 calendar days.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering or
transferring this Bond 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 Bonds is changed by the City,
resigns, or otherwise ceases to act as such, the City has covenanted in the Bond 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 Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond 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
Bond have been performed, existed, and been done in accordance with law; that this Bond is a
direct obligation of said City, issued on the full faith and credit thereof; and that in accordance
with the terms of the Bond Ordinance, annual ad valorem taxes sufficient to provide for the
payment of the interest on and principal of this Bond, 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.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond 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 Bond and the Bond Ordinance constitute a contract between each registered
owner hereof and the City.
IN WITNESS WHEREOF, this Bond 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 Bond.
)0000c mom(
City Secretary, City of College Station, Texas Mayor, City of College Station, Texas
(SEAL)
A -4
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the
proceedings adopted by the City as described in the text of this Bond; and that this Bond has
been issued in exchange for or replacement of a Bond 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
A -5
*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE BONDS 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 Bond 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 Bond
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 Bonds only.
A -6
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 Bond and all rights thereunder, and hereby irrevocably constitutes and appoints:
, attorney, to register the transfer of the within Bond
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 Bond in every particular, without alteration
program. or enlargement or any change whatsoever.
A -7
EXHIBIT B
. PROCEDURES REGARDING COMPLIANCE WITH FEDERAL TAX AND
CONTINUING DISCLOSURE COVENANTS
This Exhibit is intended to assist the City of College Station (the "City") in complying
with the federal income tax covenants and securities disclosure covenants as they apply to the
issuance of tax- exempt debt securities such as the General Obligation Improvement and
Refunding Bonds (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.
B -1
i. If the City plans to spend funds currently on hand for a future project with
the intent to later repay such funds from a debt issue, the Responsible
Person shall contact Bond Counsel to obtain advice regarding a
reimbursement resolution. The Responsible Person shall maintain any
official action of the City (such as a reimbursement resolution) stating the
City's intent to reimburse with the proceeds of the Obligations any amount
expended prior to the Issue Date for the acquisition, renovation or
construction of the Project.
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(f) 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.
c. Procedures applicable to Escrow Accounts for the Obligations. In addition to the
foregoing, with respect to the proceeds of the Obligations deposited to the escrow
fund to be administered pursuant to the terms of an escrow agreement, the
Responsible Person shall undertake the following.
i. The Responsible Person shall review invoices, reports and other
notifications from the escrow agent to ensure compliance with the
applicable provisions of the escrow agreement, including with respect to
reinvestment of cash balances.
ii. The Responsible Person shall contact the escrow agent on the date of
redemption of obligations being refunded to ensure that they were
redeemed.
iii. The Responsible Person shall monitor any unspent proceeds of the
refunded obligations to ensure that the yield on any investments applicable
to such proceeds are invested at the yield on the applicable obligations or
otherwise applied (see Closing Documents).
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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.
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
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City, the agents of the City or members of the general public has a right to use the
output of the Project (e.g., water, gas, electricity, capacity) on any basis other than
standard rates and charges.
f. The Responsible Person shall monitor and record whether, at any time the
Obligations are outstanding, any person, other than the City, has a naming right
for the Project or any other contractual right granting an intangible benefit.
g. Prior to any sale of property owned by the City (real or personal), the Responsible
Person must confirm whether such property was financed with tax- exempt debt,
and if so, 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.
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;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership or similar event of the City;
(13) The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material;
(14) Appointment of a successor or additional paying agent or the change of name of a
paying agent, if material; 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 16 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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