HomeMy WebLinkAboutPACKET JULY 01 2008 RICH WITH OPPORTUNITY
BEA,UMON*
T • E • % • A • S
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS JULY 1, 2008 1:30 P.M.
CONSENT AGENDA
* Approval of minutes
* Confirmation of committee appointments
A) Authorize the acceptance of a water line easement to provide water services for Our
Mother of Mercy School
B) Approve a resolution accepting the First Baptist Church Parking Lot Construction Project
C) Approve a three(3)year financial advisory agreement with RBC Capital Markets
A
RICH WITH OPPORTUNITY
r
T • E • x • A • s City Council Agenda Item
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Tom Warner, of Public Works
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider authorizing the acceptance of a water
line easement.
RECOMMENDATION
The Administration recommends acceptance of a water line easement to provide water services
for Our Mother of Mercy School on Sarah Street.
BACKGROUND
The Catholic Diocese of Beaumont has agreed to convey a ten (10) foot wide water line
easement to the City of Beaumont. The easement is a 0.1084 acre tract of land out of the J.
W. Bullock Survey and will provide water service for the new building being constructed at
Our Mother of Mercy School [3390 Sarah Street].
BUDGETARY IMPACT
None.
\engmother_mercy_school-ib
24 June 2008
RESOLUTION NO.
WHEREAS, The Catholic Diocese of Beaumont, has agreed to convey a ten-foot
(10')wide Water Line Easement for property located at 3390Sarah Street, being out of the
J. W. Bullock Survey, as described in Exhibit "A," and shown on Exhibit "B, attached
hereto, to the City of Beaumont to provide water services for the new building being
constructed at Our Mother of Mercy School located at 3390 Sarah Street; and,
WHEREAS, the City Council has considered the purpose of said conveyance and
is of the opinion that the acceptance of said conveyance is necessary and desirable and
that same should be accepted;
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the easement conveyed by The Catholic Diocese of Beaumont, as described in
Exhibit 'A" and shown on Exhibit "B," be and the same is hereby accepted.
PASSED BY
THE CITY COUNCIL of the City f Beaumont this the 1st day of
tY Y
July, 2008.
- Mayor Becky Ames -
EXHIBIT "A"
Legal Description: 0.10 84 Acre Water Line Easement
J.W. Bullock Survey, Abstract No. 7
Beaumont, Jefferson County, Texas
BEING a 0.1084 acre water line easement situated in the J.W. Bullock Survey, Abstract No. 7,
Jefferson County, Texas and being out of and part of that certain called 4.325 acre tract of land
as described in a "Deed of Gift" from J.E. Broussard, Jr., et al. to Bernard J. Ganter, Resident
Bishop of the Catholic Diocese of Beaumont, Texas as recorded in Volume 2357, Page 380,
Deed Records, Jefferson County, Texas, said 0.1084 acre water line easement being more
particularly described as follows:
NOTE.- All bearings are based on the East line of that certain called I -2 13rd acre
tract of land as described in Volume 1102, Page 65, Deed Records, Jefferson
County, Texas as SOUTH 00°026'00" WEST.
COMMENCING at a V iron pipe found for the most Northerly Northeast corner of the said
4.325 acre Catholic Diocese of Beaumont tract, said corner also being an interior ell corner of
that certain called 28.22 acre tract of land as described in a "General Warranty Deed" from
Beaumont Independent School District to Beaumont I.S.D. Public Facility Corporation as
recorded in Clerk's File No. 2000032471, Official Public Records of Real Property, Jefferson
County, Texas;
THENCE NORTH 89°16'54" WEST, for the boundary between the said 4.325 acre Catholic
Diocese of Beaumont tract and the said 28.22 acre Beaumont I.S.D. Public Facility Corporation
tract, for a distance of 19.63 feet to a point for corner, said corner being the Northwest corner of
the said 4.325 acre Catholic Diocese of Beaumont tract and the Northeast corner of that certain
called 1 -2/3`d acre tract of land as described in a deed from Mary Belle Broussard, et al. to W. J.
Nold, as Bishop of the Catholic Diocese of Galveston as recorded in Volume 1102, Page 65,
Deed Records, Jefferson County, Texas;
THENCE SOUTH 00 026'00" WEST, for the boundary between the said 4.325 acre Catholic
Diocese of Beaumont tract and the said 1 -2/3`d acre Catholic Diocese of Galveston tract, for a
distance of 178.17 feet to a point;
THENCE NORTH 89 043'10" EAST, over and across the said 4.325 acre Catholic Diocese of
Beaumont tract, for a distance of 8.21 feet to the Northwest corner and POINT OF
BEGINNING of the tract herein described;
THENCE NORTH 89 043'10" EAST, continuing over and across the said 4.325 acre Catholic
Diocese of Beaumont tract, for a distance of 10.00 feet to a point for corner;
THENCE SOUTH 00016'50" EAST, continuing over and across the said 4.325 acre Catholic
Diocese of Beaumont tract, for a distance of 472.32 feet to a point for corner, said corner being
in the North right-of-way line of Sarah Street and said corner bears NORTH 89°52'15" WEST a
distance of 391.87 feet from a 1/2" iron rod found for an angle point in the South line of the said
4.325 acre Catholic Diocese of Beaumont tract and the North right-of-way line of Sarah Street;
EXHIBIT"A"
PaeIof2
MARK W. WHITELEYAND ASSOCIATES,INC.
THENCE NORTH 89°52'15" WEST, along and with the North right-of-way line of Sarah Street
and the South line of the said 4.325 acre Catholic Diocese of Beaumont tract, for a distance of
10.00 feet to a point for corner;
THENCE NORTH 00 016'50" WEST, over and across the said 4.325 acre Catholic Diocese of
Beaumont tract, for a distance of 472.24 feet to the POINT OF BEGINNING and containing
0.1084 ACRES, more or less.
Surveyed on February 29, 2008. This legal description is being submitted along with a plat
based on this survey(see EXHIBIT "B").
OF T
9
THOMAS S� ROWE
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Thomas S. Rowe, RPLS No. 5728 UR��
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EXHIBIT"A"
Page 2 of 2
MARK W.WHITELEYAND ASSOCIATES,INC.
�FND 1"
I. PIPE
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FATIMA STREET EXHIBIT BIT 'aB
(60' ROW) FOR FIELD NOTE DESCRIPTION
SCfILA' 1'=100,
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CALLED 7.947 ACRES
CALLED 8-1/3rds ACRES
'� W. J. NOLD, BISHOP OF IHBA IST CHURCH
x o THE CATHOLIC DIOCESE OF GALVESTON
5
o VOL. 1102 PG. 71
3 o DRJC x
°z CALLED i -2/3rds ACRES
� L W. J. NOLD, BISHOP OF i
THE CATHOLIC DIOCESE OF GALVESTON PD D x"60
VOL. 1102 PG. 65 f� PORTABLE LED 28.22 ACRES
� DRJC BUILDINGS ° MONT I.S.D. PUBLIC
ILITY CORPORATION 20 cALC.
HOPE STREET — — I o 32.38' NO.OPRJC032471
.)CORNER
FND N00'26'00'E 650.35'
— —— — — —FND 00°16'50"W 472.24'- — — — — — — { — FND S00'26'00'W 178.17' CORN R
FND N89'43'10 E 8.21' FIND N89'16 541V 19.63'
FND S00 016'50"E 472.32' " (CALL N89.1522W 19.63)
FND N89°43'10"E 1 D.00' ttJeNr:
0.1084 ACRE ARCHITECTURAL ALLIANCE, INC.
WATER LINE EASEMENT D C OR BY., SAW sue. sir No
Wit' CAD 2009 1"=10D' 1
Joe No. W:\2008 as-'go\ arv.
FND 1" 08-180 08-180emnt.dw 0
I. PIPE wre
CALLED 4.325 ACRES MARCH 25, 2008
i. TO THE OWNERS OF THE PREMISES SURVEYED
ro BERNARD J. GANTER, RESIDENT BISHOP OF AS OF THE DATE OF THE SURVEY: +MARK . WHITELEY
THE C ATHOLIC DIOCESE OF BEAUMONT D ASSOCIATES
n VOL. 2357 PG. 380 1, THOMAS S. ROW DO HEREBY CERTIFY THAT THIS SURVEY WAS THIS DAY INCORPORATED
L6 L'i 3 DRJC MADE ON THE SURFACE OF THE GROUND OF THE PROPERTY LEGALLY DESCRIBED``' HEREON AND CORRECTLY REPRESENTS THE FACTS FOUND AT THE TIME TING
ENCtNEERS,
OF THE SURVEY. ORS, AND PLANNERS
Z DATE SURVEYED: FEBRUARY 29, 2008 P. B, sox 34a 3260 Jurreal Herr,
B6AUYONr. TmGB TTM-3492 BGUMONT, TRW...
z 400-662-D.se (PAX) 409-M-1346
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U o s r e404 -fp 0.1084 ACRE WATER
LINE EASEMENT
TH OWE J,W, BULLOCK SURVEY,
FND 112" 9:90 5728 P
1. ROD ,L o? � ABSTRACT NO. 7
ESS�
' '�1� BEAUMONT, JEFFERSON
THOMAS S. ROWE - REGISTERED PROFESSIONAL No. 5728 COUNTY, TEXAS
B
RICH WITH OPPORTUNITY City Council Agenda Item
C
T • E • X • A • S
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Tom Warner, Director of Public Works
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider a resolution accepting the First Baptist
Church Parking Lot Construction Project.
RECOMMENDATION
The Administration recommends acceptance of the First Baptist Church Parking Lot
Construction Project and final payment in the amount of$13,450.00 to H.B.Neild and Sons, Inc.
BACKGROUND
On October 23, 2007, City Council awarded H.B.Neild and Sons, Inc. the contract for the First
Baptist Church Parking Lot Construction Project for a lump sum amount of$269,000.00.
This project has been inspected and completed in accordance with the Terms and Conditions set
out in the contract documents.
The MBE goal was met by subcontracting with the MBE firms of Crabtree Barricade Systems and
Garden of Gethsemane in the amount of$21,432.00 representing 8.0%of the final contract amount.
BUDGETARY IMPACT
Funds are available through the Capital Program.
RESOLUTION NO.
WHEREAS, on October 23, 2007, the City Council of the City of Beaumont, Texas,
passed Resolution No. 07-339 awarding a contract in the amount of $269,000 to H. B.
Neild and Sons, Inc. for the First Baptist Church Parking Lot Construction Project; and,
WHEREAS, this project has been inspected and completed in accordance with the
terms and conditions of the contract and should be accepted.
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the First Baptist Church Parking Lot Construction Project be and the same is hereby
accepted.
BE IT FURTHER RESOLVED that City Manager is hereby authorized to make final
payment in the amount of$13,450 to H. B. Neild and Sons, Inc.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 1st day of July,
2008.
- Mayor Becky Ames -
c
RICH WITH OPPORTUNITY
1
T • E • x • A • s City Council Agenda Item
TO: City Council
FROM: Kyle Hayes
PREPARED BY: Laura Clark, Chief Financial Officer
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider a resolution approving a three(3)year
financial advisory agreement with RBC Capital Markets.
RECOMMENDATION
Administration requests approval of a resolution authorizing a three (3)year financial advisory
agreement with RBC Capital Markets.
BACKGROUND
The current contract for financial advisory services with RBC Capital Markets has expired. Frank
Ildebrando, as Managing Director, and Ryan O'Hara, as Director, have assisted the City for many
years with the issuance of Obligations. Advisory services may include analyzing the financing
alternatives available to the City, recommending a plan for the issuance of debt, organizing the
financing team, working with bond counsel, assisting with the preparation of the Official
Statements, coordinating a competitive sale or other services related to the issuance of debt.
RBC Capital Markets will bill the City at closing for each issue of Obligations based on the fee
schedule included in the contract.
BUDGETARYIMPACT
None. Fees are added to the proceeds as a cost of issuance.
RESOLUTION NO.
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the City Council hereby approves a three(3)year financial advisory agreement with
RBC Capital Markets. The agreement is substantially in the form attached hereto as
Exhibit "A" and made a part hereof for all purposes.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 1st day of July,
2008.
- Mayor Becky Ames -
IRBC Frank J.Rdebrando Ryan WHara
Cap]#a M�a Fhnmoe M�i�1 Finance
.Markets Fhmm(713)651-3370 chow: (713)953-OW
Fmc(713)651 3347 F= (713)651-3347
Fiant0dekandonirbccm.00m Ryan.OhnnQftcm.com
I�
July 1,2008
Mayor and City Council
City of Beaumont,Texas - -
801 Main
Beaumont,TX 77704
Ladies and Gentlemen:
1. Retention of RBC Capital Markets Corporation. We understand that the City of Beaumont, Texas
'Issuer" or "you") will have under consideration the issuance of obligations evidencing indebtedness
("Obligations'), either in a single financing or in a series of financings, and that in connection with the
issuance of such Obligations you hereby agree to retain RBC Capital Markets Corporation(`RBC CM") as
your financial advisor in accordance with the terms of this financial advisory agreement("Agreement'). This
Agreement shall apply to all Obligations that may be authorized and/or issued or otherwise created or
assumed during the period in which this Agreement is effective.
2. Scone of Services. As financial advisor,we agree to perform the following services:
(a) Analyze the financing alternatives available to the Issuer, taking into account its borrowing capacity,
future financing needs, policy considerations, and such other factors as we deem appropriate to
consider.
(b) Recommend a plan for the issuance of Obligations that will include: (1) the type of bonds (current
interest; capital appreciation, deferred income, etc.); (2) the date of issue; (3) principal amount; (4)
interest structure(fixed or variable); (5)interest payment dates; (6)a schedule of maturities; (7)early
redemption options; (8) security provisions; (9) appropriate management fee and takedown; and (10)
other matters that we consider appropriate to best serve the Issuer's interests. To the extent
appropriate,the plan will address strategies in addition to the issuance of obligations, such as interest
rate derivative transactions.
(c) Advise you of current conditions in the relevant debt market,upcoming band issues,and other general
information and economic data which might reasonably be expected to influence interest rates,bidding
conditions or timing of issuance.
(d) Organize and coordinate the financing team. Unless otherwise directed by you, we will select the
paying agent, escrow agent and verification agent, as the particular transaction may require, each of
whom will be retained and compensated by you. In a negotiated offering,we will solicit and evaluate
underwriter proposals upon request and make a recommendation for the hiring of the underwriter(s).
EXHIBIT "A"
(e) Work with counsel on the transaction, including bond counsel whom you retain, who will be
recognized municipal bond attorneys, whose foes will be paid by you, and who will prepare the
proceedings, provide legal advice concerning the steps necessary to be taken to issue the Obligations,
and issue an unqualified opinion(in a form standard for the particular type of financing)approving the
legality of the Obligations and(as applicable)tax exemption of the interest paid thereon. In addition,
bond counsel will issue an opinion to the effect float the disclosure document does not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to mare the statements
contained therein, in light of the circumstances under which they were made, not misleading.
Generally, working with counsel will mean coordinating with the attorneys and assisting in the
financial advisory aspects of preparing appropriate legal proceedings and documents, including
documents concerning any required election.
(f) Assist in the Issuer's preparation of the Preliminary Official Statement CTOS') and the Official
Statement("OS') or equivalent document as the particular transaction may require (such as a private
placement memorandum).
(g) In connection with a competitive sale,we will:
I coordinate the preparation of the Official Notice of Sale, the Uniform Bid Form (containing
provisions recognized by the municipal securities industry as being consistent with the
securities offered for sale) and other such documents which you may request or deem
appropriate;
ii submit all such documents for examination,approval,and certification by appropriate officials,
employees,and agents of the Issuer,including bond attorneys;
iii coordinate delivery of these documents to a list of prospective bidders;
iv. where appropriate,organize investor meetings;
V. coordinate the receipt of bids;
vi advise as to the best bid,including acceptance or rejection of the best bid;
vii if a bid is accepted,coordinate the delivery of and payment for the Obligations;
viii. assist in verification of final closing figures;
ix. provide copies of documents to the purchaser of the Obligations in accordance with the terns
of the Official Notice of Sale and the Uniform Bid Form.
(h) Make recommendations as to the need for credit rating(s)for the proposed Obligations and, should the
Issuer seek a rating, coordinate the process of working with the rating agency or agencies and assist in
the preparation of presentations as necessary.
(i) Make recommendations as to obtaining municipal bond insurance, a liquidity facility or other credit
enhancement for the Obligations and, should the issuer seek any such credit enhancement, coordinate
the process and assist in the preppration of presentations as necessary.
(j) Attend meetings of governing bodies of the Issuer,its staff,representatives or committees as requested.
(k) Amer closing,we will deliver to the Issuer and the paying agent(s)definitive debt records,including a
schedule of annual debt service requirements on the Obligations.
You acknowledge that advice and recommendations involve professional judgment on our part and that the results
cannot be,and are not,guaranteed.
3. Information to be Provided to RBC CAL You agree(upon our request)to provide or cause to be provided
to us information relating to the Issuer,the security for the Obligations, and other matters that we consider
appropriate to enable us to perform our duties under this Agreement.With respect to all information provided
by you or on your behalf to us under this Agreement,you agree upon our request to obtain certifications(in a
form reasonably satisfactory to us) from appropriate Issuer representatives as to the accuracy of the
information and to use your best efforts to obtain certifications(in a form reasonably satisfactory to us)from
representatives of parties other than the Issuer.You acknowledge that we are entitled to rely on the accuracy
and completeness of all information provided by you or on your behalf.
4. Official Statement. You acknowledge that you are responsible for the contents of the POS and OS and will
take all reasonable steps to ensure that the governing body of the Issuer has reviewed and approved the
content of the POS and OS. You acknowledge that you are subject to and may be held liable under federal or
state securities laws for misleading or incomplete disclosure. To the extent permissible by law,you agree to
indemnify and hold us harmless against any losses, claims, damages or liabilities to which we may become
subject under federal or state law or regulation insofar as such losses,claims,damages or liabilities(or actions
in respect thereof) arise out of or are based upon omission or alleged omission to state in the disclosure
document a material fact required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse us for any legal or other expenses reasonably incurred by us in connection
with investigating or defending any such loss,claim,damage,liability or action.
5. G-23: Comaetitiye Issue. In connection with Rule G-23 of the Municipal Securities Rulemaking Board,the
Issuer agrees that RBC CM may submit a bid(either independently or as a member of a syndicate)for any
issue of Obligations when offered for sale at competitive bid and prior to submitting any such bid we shad
obtain the Issuer's written consent to bid on the particular issue of Obligations.
6. G-23: Negotiated Issue. If,during the term of the Agreement;we are asked to serve as underwriter with
respect to any issue of Obligations of the Issuer to be sold on a negotiated basis,we will,by written notice to
the Issuer and upon the Issuer's written consent,terminate our obligations under this Agreement with respect
to that issue of Obligations. This Agreement,however,will stay in effect with respect to other Obligations of
the Issuer for which we are not acting as underwriter.
7. Fees and Expenses. In connection with the authorization,issuance, and sale of Obligations,you agree that
our fee will be computed as shown on the "Fee Schedule" attached hereto. Our fee will become due and
payable simultaneously with the delivery of the Obligations to the Purchaser. Our fee does not include and
we will be entitled to reimbursement from you for any actual"out-of-pocket"expenses incurred in connection
with the provision of our services, including reasonable travel expenses or any other expenses incurred on
your behalf. These expenses will be due and payable when presented to the Issuer, which normally will be
simultaneously with the delivery of the Obligations to the Purchaser.
8. Interest Rate Derivatives. If you decide to consider the use of interest rate derivative products as part of the
financing plan for Obligations covered by this Agreement,we will be pleased to provide our assistance upon
request. The nature of our assistance will be set forth in an amendment to this Agreement or in another
separate document.
9. Term of Agreement and Waiver of Sdvereien Immunity, This Agreement shall be for a period of 36
months(the"Term")from its date;however,this Agreement may be terminated by either party upon 30 days
written notice. If neither party provides written termination prior to the end of the Term,this Agreement will
automatically renew for another Term. You agree and understand that this Agreement is a contract for
services and waive any claims you may have that you are immune from suit by virtue of any law, statute,or
claim for any matter arising from or relating to this Agreement. Paragraphs 4, 7 (insofar as it concerns
reimbursable expenses) and 9 (insofar as it concerns waiver of sovereign immunity) will survive any
termination of this Agreement.
10. Miscellaneous P02dlions. This Agreement is submitted in duplicate originals. Your acceptance of this
Agreement will occur upon the return of one original executed by an authorized Issuer representative,and you
hereby represent that the signatory below is so authorized. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other provision of the Agreement,
which shall remain in&H force and effect. This Agreement constitutes the entire agreement between the
parties as to the subject matter thereof and supersedes any prior understandings or reresentabons. This
Agreement may be amended or modified only by a writing signed by both parties. This Agreement is solely
for the benefit of you and RBC CM,and no other person. RBC CM may not assign this Agreement without
your prim written consent.
Respectfully submitted,
RBC CAPITAL MARKETS CORPORATION
By By
Name Frank Ildebrando Name Ryan O'Hara
Title Managing Director Title Director
Date Date
ACCEPTANCE
ACCEPTED pursuant to motion adopted by the governing body of City of Beaumont,Texas on July 1,2008.
By
Name
Title
Attest:
By
Name
Title
Date
03/03/08
FEE SCHEDULE
In consideration for the services rendered by RBC CM, the Issuer agrees that our fee for each issue of
Obligations will be as follows:
STANDARD FEE SCHEDULE
More And Not
Than More Tban The Fee Is
$ -0- $ 500,000 $5,000(minimum fee)
$ 500,000 $ 1,000,000 $5,000 plus$5.00 per$1,000 for all
over$500,000
$1,000,000 $5,000,000 $7,500 plus$2.50 per$1,000 for all
over$1,000,000
$5,000,000 $10,000,000 $ 17,500 plus$I.25 per$1,000
for all over$5,000,000
$10,000,000 $20,000,000 $23,500 plus$1.00 per$1,000
for all over$10,000,000
$20,000,000 No Limit $33,500 plus$0.40 per$1,000
for all over$20,000,000
Fees for refunding Obligations and/or other Obligations involving escrow Agreements, will be the fee schedule
set out above plus 25%,and, in addition to our Financial Advisory fee, we will charge a structuring fee to be
negotiated on a case-by-case basis. The additional fees will not exceed 25%of the fee set out in the schedule
above.
RBC CM will bill the Issuer at Closing for each issue of Obligations a net amount which will include a fee
calculated on the above schedule as well as any"out-of-pocket"expenses incurred on behalf of the Issuer.
03/03/08
RICH WITH OPPORTUNITY
1
T • E • X • A • S
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS JULY 1,2008 1:30 P.M.
AGENDA
CALL TO ORDER
* Invocation Pledge Roll Call
* Presentations and Recognition
* Public Comment: Persons may speak on scheduled agenda items 1-3/Consent
Agenda
* Consent Agenda
GENERAL BUSINESS
1. Consider authorizing the issuance and sale of$30 million City of Beaumont,
Texas, Certificates of Obligation, Series 2008; levying taxes to provide for
payment thereof; and containing other matters related thereto
2. Consider authorizing the issuance of$20 million City of Beaumont, Texas,
Waterworks and Sewer System Revenue Bonds, Series 2008; and containing other
matters related thereto
3. Consider approving a resolution accepting the Hayes Gully Drainage
Improvements Project
COMMENTS
* Councilmembers/City Manager comment on various matters
* Public Comment (Persons are limited to 3 minutes)
EXECUTIVE SESSION
* Consider matters related to contemplated or pending litigation in accordance with
Section 551.071 of the Government Code:
Claim of Albert Landry
Claim of Robert Ramsey
Claim of Geraldine Tevis
Consider matters related to employment, evaluation and duties of a public officer
or employee in accordance with Section 551.074 of the Government Code:
Chief Magistrate James D. McNicholas
Magistrate Theodore Johns
Magistrate Craig Lively
Persons with disabilities who plan to attend this meeting and who may need auxiliary aids or
services are requested to contact Lenny Caballero at SM3716 three days prior to the meeting.
1
July 1, Zoos
Consider authorizing the issuance and sale of$30 million City of Beaumont, Texas, Certificates of
Obligation, Series 2008; levying taxes to provide for payment thereof, and containing other
matters related thereto
RICH WITH OPPORTUNITY
BEA,UMON*
T • E • X • A • s City Council Agenda Item
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Laura Clark, Chief Financial Officer
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider an ordinance authorizing the issuance and
sale of$30 million City of Beaumont, Texas, Certificates of
Obligation, Series 2008; levying taxes to provide for
payment thereof; and containing other matters related
thereto.
RECOMMENDATION
The administration requests approval of an ordinance authorizing the issuance of$30 million City
of Beaumont, Texas, Certificates of Obligation, Series 2008; levying taxes to provide for payment
thereof; and containing other matters related thereto.
BACKGROUND
Results of the sale will be presented by the City's Financial Advisor, Ryan O'Hara of RBC Capital
Markets. A recommendation will be made to award the bonds to the underwriters.
The certificates will mature March 1,2010 through March 1,2030 with interest payable semiannually
in March and September beginning March 1, 2009. The Bank of New York Trust Company, N.A.,
Dallas, Texas, will serve as paying agent/registrar.
Delivery and receipt of proceeds by the City is scheduled for July 29, 2008. Proceeds will be used
to provide funds for various street, drainage and general improvement projects.
BUDGETARY IMPACT
All debt shall be incurred in the Debt Service Fund which is supported by property taxes. The current
debt service property tax rate of$.220/$100 assessed valuation is expected to be sufficient to meet
debt service requirements on the certificates.
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $30,000,000
THE CITY OF BEAUMONT, TEXAS, CERTIFICATES OF OBLIGATION, SERIES 2008;
LEVYING TAXES TO PROVIDE FOR PAYMENT THEREOF;
AND CONTAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THE CITY OF BEAUMONT §
WHEREAS, the City Council of The City of Beaumont,Texas (the "City"),has heretofore
authorized the publication of a notice of intention to issue certificates of obligation to the effect that
the City Council would meet on July 1, 2008, the date tentatively set for passage of an ordinance
and such other action as may be deemed necessary to authorize the issuance of certificates of
obligation payable from City ad valorem taxes and a pledge of certain revenues of the City's
waterworks and sewer system, or as soon thereafter as may be practicable, for the purpose of
evidencing the indebtedness of the City for the cost of (1) Alice Keith Park improvements,
including new Community Center, playground, restrooms, expanded parking and Police Sub-
Station, (2) Athletic Complex improvements, including new restrooms, new scorekeeper
structures, and new covers for spectator areas and dugouts, (3) improvements at the Athletic
Complex Tennis Center, including new tennis courts, jogging trail, new tennis pavilion and
clubhouse, lighting, additional parking, landscaping, picnic tables, bleachers and fencing, (4)
renovations and building improvements to Beaumont City Hall, (5) renovations and building
improvements to Beaumont Civic Center, including kitchen renovations, new warehouse, dock and
ticket center renovations, (6) expansion of and improvements to the City's Communications
Building, (7) construction of a new Downtown Event Center and Lake Park, including construction
of a lake, walking trails, lighting, parking, bathrooms and picnic areas, and construction of a new
Event Center to replace the Harvest Club, (8) construction of a downtown waterway and amenities,
including a waterway, sidewalks, lighting, fountains, benches and landscaping, (9) construction of a
new EMS Station No. 2 and warehouse facility, (10) relocation and consolidation of Fire Stations
No. 1 and 7 and construction of a new fire station, administrative offices and training library,
construction of a new Fire Station No. 11, and relocation and construction of a new Fire Station No.
2, (11) construction of a new Fleet Fire Maintenance Facility, (12) improvements to the Fleet
Service Center facility, including new and expanded parking and drainage improvements, (13)
construction of City hike and bike trails between Delaware and Folsom Roads, (14) improvements
at the Municipal Airport, including upgrades to runways and taxiways, drainage improvements and
construction of new aviation hangers, (15) renovations and improvements to the Police Department
Property Building, (16) replacement of the Police Department Building chilled water air
conditioning system, (17) construction of a new Public Health Complex, (18) acquisition of land
within the City for future capital improvement projects and demolition of dilapidated structures that
exist on such land, (19) improvements at Riverfront Park, including erosion stabilization
improvements, new lighting and renovations to restrooms, (20) construction of a new Senior Center
Facility to replace the Best Years Center, (21) construction of a new Transportation Operations
Shop, (22) additions and improvements to the Tyrrell Historical Library, (23) improvements at
Tyrrell Park, including refurbishing the existing recreation building into a new community center,
construction of new shelters and restrooms, (24) authorized street and drainage improvements
throughout the City and(25)the cost of professional services incurred in connection therewith; and
WHEREAS, such notice was published at the times and in the manner required by the
Constitution and the laws of the State of Texas and the United States of America, respectively,
particularly Chapter 271, Texas Local Government Code, as amended; and
WHEREAS, no petition or other request has been filed with or presented to any official of
the City requesting that any of the proceedings authorizing such certificates of obligation be
submitted to a referendum or other election; and
WHEREAS, the City Council of the City has determined to authorize such certificates of
obligation for the purposes set out in this Ordinance; and
WHEREAS, the City is authorized, pursuant to Chapter 1502, Texas Government Code, as
amended, to pledge not more than $10,000 of the net revenues of the City's waterworks and sewer
system as security for the certificates of obligation authorized herein;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF BEAUMONT, TEXAS:
1. Preamble. The matters and facts contained in the preamble to this Ordinance are
hereby found to be true and correct.
2. Definitions. Throughout this Ordinance, the following terms and expressions as
used herein shall have the meanings set forth below:
The term 'Business Day" shall mean any day which is not a Saturday, Sunday, a legal
holiday, or a day on which the Registrar is authorized by law or executive order to close.
The term "Certificates" or "Series 2008 Certificates" shall mean the Certificates of
Obligation, Series 2008, authorized in this Ordinance, unless the context clearly indicates
otherwise.
The term "Certificates Insurance Policy" shall mean the municipal bond guaranty insurance
policy issued by the Insurer insuring the payment when due of the principal of and interest on the
Certificates as provided therein.
The term "City" shall mean The City of Beaumont, Texas.
The term "Code" shall mean the Internal Revenue Code of 1986, as amended.
The term "Comptroller" shall mean the Comptroller of Public Accounts of the State of
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Texas.
The term Construction Fund shall mean the construction fund established by the City
pursuant to Section 20 of this Ordinance.
The term "DTC" shall mean The Depository Trust Company of New York, New York, or
any successor securities depository.
The term "DTC Participant" shall mean brokers and dealers, banks, trust companies,
clearing corporations, and certain other organizations on whose behalf DTC was created to hold
securities to facilitate the clearance and settlement of securities transactions among the DTC
Participants.
The term "Insurer" shall mean , the issuer of the Certificates Insurance
Policy.
The term "Interest and Sinking Fund" shall mean the interest and sinking fund established
by the City pursuant to Section 20 of this Ordinance.
The term "Interest Payment Date", when used in connection with any Certificate, shall mean
March 1, 2009, and each March 1 and September 1 thereafter until maturity or earlier redemption.
The term "Net Revenues" shall mean the revenues of the System remaining after deduction
of the reasonable and necessary expenses of operation and maintenance of the System.
The term "Ordinance" as used herein and in the Certificates shall mean this Ordinance
authorizing the Certificates.
The term "Owner" or "Registered Owner", when used with respect to any Certificate, shall
mean the person or entity in whose name such Certificate is registered in the Register.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date" shall mean, for any Interest Payment Date, the 15th day of the
month next preceding such Interest Payment Date.
The term "Register" shall mean the books of registration kept by the Registrar in which are
maintained the names and addresses of and the principal amounts registered to each Owner.
The term "Registrar" shall mean THE BANK OF NEW YORK MELLON TRUST
COMPANY,N.A., Dallas, Texas, and its successors in that capacity.
The term "SEC" shall mean the United States Securities and Exchange Commission and its
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successors.
The term "System" shall mean the City's waterworks and sewer system.
The term "Underwriter" shall mean, collectively, Coastal Securities, Estrada Hinojosa &
Company, Inc., First Southwest Company and Morgan,Keegan & Co.,Inc.
3. Authorization. The Certificates shall be issued in fully registered form, without coupons,
in the total authorized aggregate amount of Thirty Million Dollars ($30,000,000), for the purpose
of evidencing the indebtedness of the City for the cost of (1) Alice Keith Park improvements,
including new Community Center, playground, restrooms, expanded parking and Police Sub-
Station, (2) Athletic Complex improvements, including new restrooms, new scorekeeper
structures, and new covers for spectator areas and dugouts, (3) improvements at the Athletic
Complex Tennis Center, including new tennis courts, jogging trail, new tennis pavilion and
clubhouse, lighting, additional parking, landscaping, picnic tables, bleachers and fencing, (4)
renovations and building improvements to Beaumont City Hall, (5) renovations and building
improvements to Beaumont Civic Center, including kitchen renovations, new warehouse, dock and
ticket center renovations, (6) expansion of and improvements to the City's Communications
Building, (7) construction of a new Downtown Event Center and Lake Park, including construction
of a lake, walking trails, lighting, parking, bathrooms and picnic areas, and construction of a new
Event Center to replace the Harvest Club, (8) construction of a downtown waterway and amenities,
including a waterway, sidewalks, lighting, fountains, benches and landscaping, (9) construction of a
new EMS Station No. 2 and warehouse facility, (10) relocation and consolidation of Fire Stations
No. 1 and 7 and construction of a new fire station, administrative offices and training library,
construction of a new Fire Station No. 11, and relocation and construction of a new Fire Station No.
2, (11) construction of a new Fleet Fire Maintenance Facility, (12) improvements to the Fleet
Service Center facility, including new and expanded parking and drainage improvements, (13)
construction of City hike and bike trails between Delaware and Folsom Roads, (14) improvements
at the Municipal Airport, including upgrades to runways and taxiways, drainage improvements and
construction of new aviation hangers, (15) renovations and improvements to the Police Department
Property Building, (16) replacement of the Police Department Building chilled water air
conditioning system, (17) construction of a new Public Health Complex, (18) acquisition of land
within the City for future capital improvement projects and demolition of dilapidated structures that
exist on such land, (19) improvements at Riverfront Park, including erosion stabilization
improvements, new lighting and renovations to restrooms, (20) construction of a new Senior Center
Facility to replace the Best Years Center, (21) construction of a new Transportation Operations
Shop, (22) additions and improvements to the Tyrrell Historical Library, (23) improvements at
Tyrrell Park, including refurbishing the existing recreation building into a new community center,
construction of new shelters and restrooms, (24) authorized street and drainage improvements
throughout the City and (25) the cost of professional services incurred in connection therewith,
which projects shall be financed with the proceeds of the Certificates in such order of priority as
determined by the City Council.
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4. Designation, Date, and Interest Payment Dates. The Certificates shall be designated
as the "THE CITY OF BEAUMONT, TEXAS, CERTIFICATES OF OBLIGATION, SERIES
2008", and shall be July 1, 2008. The Certificates shall bear interest from the later of July 1, 2008,
or the most recent Interest Payment Date to which interest has been paid or duly provided for,
calculated on the basis of a 360-day year of twelve 30-day months, which interest shall be payable
on March 1, 2009, and semiannually thereafter on March 1 and September 1 of each year until
maturity or earlier redemption.
5. Certificates, Numbers and Denominations. The Certificates shall be issued bearing
the numbers, in the principal amounts, and bearing interest at the rates set forth in the following
schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall
mature, subject to prior redemption in accordance with this Ordinance, on March 1 in each of the
years and in the amounts set out in such schedule. Certificates delivered upon transfer of or in
exchange for other Certificates shall be numbered in order of their authentication by the Registrar,
shall be in the denomination of$5,000 or integral multiples thereof, and shall mature on the same
date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are
delivered.
Certificate Year Principal Interest
Number of Maturity Amount Rate
CR-1 2010 $ 100,000 %
CR-2 2011 $ 160,000 %
CR-3 2012 $ 165,000 %
CR-4 2013 $ 175,000 %
CR-5 2014 $ 190,000 %
CR-6 2015 $ 195,000 %
CR-7 2016 $ 205,000 %
CR-8 2017 $ 210,000 %
CR-9 2018 $ 220,000 %
CR-10 2019 $1,745,000 %
CR-11 2020 $1,835,000 %
CR-12 2021 $1,935,000 %
CR-13 2022 $2,040,000 %
CR-14 2023 $2,150,000 %
CR-15 2024 $2,265,000 %
CR-16 2025 $2,390,000 %
CR-17 2026 $2,520,000 %
CR-18 2027 $2,655,000 %
CR-19 2028 $2,795,000 %
CR-20 2029 $2,945,000 %
CR-21 2030 $3,105,000 %
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6. Execution of Certificates; Seal. The Certificates shall be signed by the Mayor or
Mayor Pro Tern of the City and countersigned by the City Clerk or Deputy City Clerk of the City,
by their manual, lithographed, or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon. Such facsimile signatures on the Certificates shall have
the same effect as if each of the Certificates had been signed manually and in person by each of said
officers, and such facsimile seal on the Certificates shall have the same effect as if the official seal
of the City had been manually impressed upon each of the Certificates. If any officer of the City
whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer
before the authentication of such Certificates or before the delivery of such Certificates, such
manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such
officer had remained in such office.
7. Approval by Attorney General; Registration by Comptroller. The Certificates to be
initially issued shall be delivered to the Attorney General of the State of Texas for approval and
shall be registered by the Comptroller of Public Accounts of the State of Texas. The manually
executed registration certificate of the Comptroller of Public Accounts substantially in the form
provided in Section 17 of this Ordinance shall be attached or affixed to the initial Certificates.
8. Authentication. Except for the Certificates to be initially issued, which need not be
authenticated by the Registrar, only Certificates which bear thereon a certificate of authentication,
substantially in the form provided in Section 17 of this Ordinance, manually executed by an
authorized representative of the Registrar, shall be entitled to the benefits of this Ordinance or shall
be valid or obligatory for any purpose. Such duly executed certificate of authentication shall be
conclusive evidence that the Certificates so authenticated were delivered by the Registrar
hereunder.
9. Payment of Principal and Interest. The Registrar is hereby appointed as the paying
agent for the Certificates. The principal of the Certificates shall be payable, without exchange or
collection charges, in any coin or currency of the United States of America which, on the date of
payment, is legal tender for the payment of debts due the United States of America, upon their
presentation and surrender as they become due and payable, at the designated corporate trust office
of the Registrar. The interest on each Certificate shall be payable by check payable on the Interest
Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of
record as of the Record Date, to the address of such Owner as shown on the Register.
If the date for payment of the principal of or interest on any Certificate is not a Business
Day, then the date for such payment shall be the next succeeding Business Day, and payment on
such date shall have the same force and effect as if made on the original date payment was due.
10. Successor Registrars. The City covenants that at all times while any Certificates are
outstanding it will provide a bank, trust company, financial institution or other entity duly qualified
and duly authorized to act as Registrar for the Certificates. The City reserves the right to change the
Registrar on not less than sixty (60) days' written notice to the Registrar, so long as any such notice
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is effective not less than sixty (60) days prior to the next succeeding principal or interest payment
date on the Certificates. Promptly upon the appointment of any successor Registrar, the previous
Registrar shall deliver the Register or copies thereof to the new Registrar, and the new Registrar
shall notify each Owner, by United States mail, first class postage prepaid, of such change and of
the address of the new Registrar. Each Registrar hereunder, by acting in that capacity, shall be
deemed to have agreed to the provisions of this Section.
11. Special Record Date. If interest on any Certificate is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a
new record date for the payment of such interest, to be known as a Special Record Date. The
Registrar shall establish a Special Record Date when funds to make such interest payment are
received from or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to
the date fixed for payment of such past due interest, and notice of the date of payment and the
Special Record Date shall be sent by United States mail, first class, postage prepaid, not later than
five (5) business days prior to the Special Record Date, to each affected Owner of record as of the
close of business on the day prior to the mailing of such notice.
12. Ownership; Unclaimed Principal and Interest. The City, the Registrar and any other
person may treat the person in whose name any Certificate is registered as the absolute Owner of
such Certificate for the purpose of making payment of principal or interest on such Certificate, and
for all other purposes, whether or not such Certificate is overdue, and neither the City nor the
Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the
person deemed to be the Owner of any Certificate in accordance with this Section 12 shall be valid
and effectual and shall discharge the liability of the City and the Registrar upon such Certificate to
the extent of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Certificates
remaining unclaimed by the Owner after the expiration of three (3) years from the date such
amounts have become due and payable shall be reported and disposed of by the Registrar in
accordance with the provisions of Texas law, including to the extent applicable, Title 6 of the Texas
Property Code, as amended.
13. Registration, Transfer, and Exchange; Special Election for Uncertificated
Certificates. So long as any Certificates remain outstanding, the Registrar shall keep the Register at
its principal corporate trust office and, subject to such reasonable regulations as it may prescribe,
the Registrar shall provide for the registration and transfer of Certificates in accordance with the
terms of this Ordinance.
Each Certificate shall be transferable only upon the presentation and surrender thereof at the
principal corporate trust office of the Registrar, duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his authorized representative in form
satisfactory to the Registrar. Upon due presentation of any Certificate for transfer, the Registrar
shall authenticate and deliver in exchange therefor, within three (3) Business Days after such
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presentation, a new Certificate or Certificates, registered in the name of the transferee or
transferees, in authorized denominations and of the same maturity and aggregate principal amount
and bearing interest at the same rate as the Certificate or Certificates so presented.
All Certificates shall be exchangeable upon presentation and surrender thereof at the
principal corporate trust office of the Registrar for a Certificate or Certificates of the same maturity
and interest rate in any authorized denomination, in an aggregate principal amount equal to the
unpaid principal amount of the Certificate or Certificates presented for exchange. The Registrar
shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance
with the provisions of this Section 13. Each Certificate delivered in accordance with this Section
13 shall be entitled to the benefits and security of this Ordinance to the same extent as the
Certificate or Certificates in lieu of which such Certificate is delivered.
The City or the Registrar may require the Owner of any Certificate to pay a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection with the transfer
or exchange of such Certificate. Any fee or charge of the Registrar for such transfer or exchange
shall be paid by the City.
Neither the City nor the Registrar shall be required to transfer or exchange any Certificate
called for redemption, in whole or in part, within forty-five (45) days of the date fixed for
redemption; provided, however, such limitation on transfer shall not be applicable to an exchange
by the Owner of the unredeemed balance of a Certificate called for redemption in part.
Notwithstanding any other provision hereof, but at the sole election of the Underwriter, the
ownership of the Certificates shall be registered in the name of Cede & Co., as nominee of DTC,
and except as otherwise provided in this Section, all of the outstanding Certificates shall be
registered in the name of Cede & Co., as nominee of DTC. The definitive Certificates shall be
initially issued in the form of a single separate certificate for each of the maturities thereof. If the
Underwriter shall elect to invoke the provisions of this Section, then the following provisions shall
take effect with respect to the Certificates.
With respect to Certificates registered in the name of Cede & Co., as nominee of DTC, the
City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any
person on behalf of whom such a DTC Participant holds an interest in the Certificates. Without
limiting the immediately preceding sentence, the City and the Registrar shall have no responsibility
or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any DTC
Participant with respect to any ownership interest in the Certificates, (ii) the delivery to any DTC
Participant or any other person, other than an Owner of a Certificate, as shown on the Register, of
any notice with respect to the Certificates, including any notice of redemption, or (iii) the payment
to any DTC Participant or any other person, other than an Owner of a Certificate, as shown in the
Register, of any amount with respect to principal of, premium, if any, or interest on the Certificates.
Notwithstanding any other provision of this Ordinance to the contrary, the City and the Registrar
shall be entitled to treat and consider the person in whose name each Certificate is registered in the
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Register as the absolute Owner of such Certificate for the purpose of payment of principal of,
premium, if any, and interest on the Certificates, for the purpose of all matters with respect to such
Certificates, for the purpose of registering transfers with respect to such Certificates, and for all
other purposes whatsoever. The Registrar shall pay all principal of, premium, if any, and interest
on the Certificates only to or upon the order of the respective Owners, as shown in the Register as
provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such
payments shall be valid and effective to fully satisfy and discharge the City's obligations with
respect to payment of principal of, premium, if any, and interest on the Certificates to the extent of
the sum or sums so paid. No person other than an Owner as shown in the Register, shall receive a
certificate for a Certificate evidencing the obligation of the City to make payments of amounts due
pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the effect
that DTC has determined to substitute a new nominee in place of Cede & Co., the word "Cede &
Co." in this Ordinance shall refer to such new nominee of DTC.
In the event that the City or the Registrar determines that DTC is incapable of discharging
its responsibilities described herein and in the Letter of Representation and that it is in the best
interest of the beneficial Owners of the Certificates that they be able to obtain certificated
Certificates, or if DTC Participants owning at least 50% of the Certificates outstanding based on
current records of the DTC determine that continuation of the system of book-entry transfers
through the DTC (or a successor securities depository) is not in the best interest of such beneficial
Owners of the Certificates, or in the event DTC discontinues the services described herein, the City
or the Registrar shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, and notify DTC of the
appointment of such successor securities depository and transfer one or more separate Certificates
to such successor securities depository or (ii) notify DTC of the availability through DTC of
Certificates and transfer one or more separate Certificates to DTC Participants having Certificates
credited to their DTC accounts. In such event, the Certificates shall no longer be restricted to being
registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered in
the name of the successor securities depository, or its nominee, or in whatever name or names
Owners transferring or exchanging Certificates shall designate, in accordance with the provisions of
this Ordinance.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of, premium, if any, and interest on the Certificates, and all notices with respect
thereto, shall be made and given in the manner provided in the Letter of Representation.
14. Mutilated, Lost, or Stolen Certificates. Upon the presentation and surrender to the
Registrar of a mutilated Certificate, the Registrar shall authenticate and deliver in exchange therefor
a replacement Certificate of like maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding. If any Certificate is lost, apparently destroyed, or wrongfully
taken, the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or
knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute and the
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Registrar shall authenticate and deliver a replacement Certificate of like amount, bearing a number
not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Certificate to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection
therewith and any other associated expenses, including the fees and expenses of the Registrar.
The City or the Registrar may require the Owner of a lost, apparently destroyed or
wrongfully taken Certificate,before any replacement Certificate is issued,to:
(1) furnish to the City and the Registrar satisfactory evidence of the ownership
of and the circumstances of the loss, destruction or theft of such Certificate;
(2) furnish such security or indemnity as may be required by the Registrar and
the City to save them harmless;
(3) pay all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Registrar and any tax or other governmental
charge that may be imposed; and
(4) meet any other reasonable requirements of the City and the Registrar.
If, after the delivery of such replacement Certificate, a bona fide purchaser of the original
Certificate in lieu of which such replacement Certificate was issued presents for payment such
original Certificate, the City and the Registrar shall be entitled to recover such replacement
Certificate from the person to whom it was delivered or any person taking therefrom, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the City or the Registrar in connection
therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become
or is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Certificate, authorize the Registrar to pay such Certificate.
Each replacement Certificate delivered in accordance with this Section 14 shall be entitled
to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in
lieu of which such replacement Certificate is delivered.
15. Cancellation of Certificates. All Certificates paid in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance herewith, shall be cancelled and destroyed upon the
making of proper records regarding such payment. The Registrar shall furnish the City with
appropriate certificates of destruction of such Certificates.
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16. Optional and Mandatory Redemption. The City reserves the right, at its option, to
redeem Certificates having stated maturities on and after March 1, 2018, in whole or in part, on
March 1, 2017, or any date thereafter, at a price of par plus accrued interest to the date fixed for
redemption. If less than all of the Certificates are to be redeemed, the City shall determine the
Certificates, or portions thereof,to be redeemed.
The Certificates maturing in the year 2025 (the "Term Certificates") are also subject to
mandatory redemption prior to scheduled maturity, in the amount, on the date, and on the terms
set out in the form of Certificates in this Ordinance, at a price of par plus accrued interest to the
date fixed for redemption.
Certificates may be redeemed only in integral multiples of$5,000. If a Certificate subject to
redemption is in a denomination larger that $5,000, a portion of such Certificate may be redeemed,
but only in integral multiples of$5,000. Upon surrender of any Certificate for redemption in part,
the Registrar, in accordance with Section 13 hereof, shall authenticate and deliver in exchange
therefor a Certificate or Certificates of like maturity and interest rate in an aggregate principal
amount equal to the unredeemed portion of the Certificate so surrendered.
Not less than thirty (30) days prior to a redemption date for the Certificates, the City shall
cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to each
Owner of each Certificate to be redeemed in whole or in part, at the address of the Owner appearing
on the Register at the close of business on the Business Day next preceding the date of the mailing
of such notice. Such notice shall state the redemption date,the redemption price,the place at which
Certificates are to be surrendered for payment and, if less than all the Certificates are to be
redeemed, the numbers of the Certificates or portions thereof to be redeemed. Any notice of
redemption so mailed shall be conclusively presumed to have been duly given whether or not the
Owner receives such notice. By the date fixed for redemption, due provision shall be made with the
Registrar for payment of the redemption price of the Certificates or portions thereof to be redeemed.
When Certificates have been called for redemption in whole or in part and due provision made to
redeem the same as herein provided, the Certificates or portions thereof so redeemed shall no
longer be regarded as outstanding except for the purpose of being paid solely from the funds so
provided for redemption, and the rights of the Owners to collect interest which would otherwise
accrue after the redemption date on any Certificate or portion thereof called for redemption shall
terminate on the date fixed for redemption.
17. Forms. The form of the Certificates, including the form of the Registrar's
Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the
Comptroller of Public Accounts of the State of Texas which shall be attached or affixed to the
Certificates initially issued shall be, respectively, substantially as follows, with such additions,
deletions and variations as may be necessary or desirable and not prohibited by this Ordinance:
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UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
NUMBER DENOMINATION
CR-_ $
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS
CERTIFICATE OF OBLIGATION
SERIES 2008
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
July 1, 2008
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF BEAUMONT, TEXAS (the "City"), promises to pay to the registered owner
identified above, or registered assigns, on the date specified above, upon presentation and surrender
of this certificate at the designated corporate trust office of THE BANK OF NEW YORK
MELLON TRUST COMPANY, N.A., Dallas, Texas (the "Registrar"), or at its principal payment
office in Dallas, Texas, the principal amount identified above, payable in any coin or currency of
the United States of America which on the date of payment of such principal is legal tender for the
payment of debts due the United States of America, and to pay interest thereon at the rate shown
above, calculated on the basis of a 360-day year of twelve 30-day months, from the later of the
Dated Date specified above, or the most recent interest payment date to which interest has been
paid or duly provided for. Interest on this Certificate is payable by check on March 1, 2009, and
semiannually thereafter on each March 1 and September 1, mailed to the registered owner as shown
on the books of registration kept by the Registrar as of the 15th day of the month next preceding
each interest payment date.
THIS CERTIFICATE is one of a duly authorized issue of Certificates of Obligation,
aggregating $30,000,000 (the "Certificates"), issued in accordance with the Constitution and the
laws of the State of Texas, particularly Chapter 271, Texas Local Government Code, as amended,
for the cost of construction of authorized street and drainage improvements, building repairs and
improvements, public park facilities and improvements, the purchase of equipment and the cost of
issuance of the Certificates, pursuant to an ordinance duly adopted by the City Council of the City
on July 1, 2008 (the "Ordinance"), which Ordinance is of record in the official minutes of the City
Council.
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THE CITY RESERVES THE RIGHT, at its option,to redeem the Certificates having stated
maturities on or after March 1, 2018, in whole or in part, on March 1, 2017, or any date thereafter,
in integral multiples of $5,000, at a price of par plus accrued interest to the date fixed for
redemption. Reference is made to the Ordinance for complete details concerning the manner of
redeeming the Certificates.
THE CERTIFICATES maturing in the year 2025 (the "Term Certificates")are also subject
to mandatory redemption prior to maturity in the amounts and on the dates set out below, at a price
equal to the principal amount to be redeemed;plus accrued interest to the redemption date:
TERM CERTIFICATES DUE MARCH 1 2025
Date Amount
311/2023 $1,890,000
311/2024 $2,000,000
3/1/2025 (Maturity) $2,095,000
The Paying Agent shall select for redemption by lot, or by any other customary method that
results in random selection, a principal amount of Term Certificates equal to the aggregate
principal amount of such Term Certificates to be redeemed, shall call such Term Certificates for
redemption on the scheduled mandatory redemption date, and shall give notice of such redemption
in accordance with the Bond Ordinance. The principal amount of Term Certificates required to be
mandatorily redeemed shall be reduced by the principal amount of Term Certificates which, at least
45 days prior to the mandatory redemption date, shall have been delivered to the Registrar for
cancellation or shall have been optionally redeemed and not previously credited against a
mandatory redemption requirement.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior the date
fixed for redemption by first class mail, addressed to the registered owner of each Certificate to be
redeemed in whole or in part at the address shown on the books of registration kept by the
Registrar. When Certificates or portions thereof have been called for redemption and due provision
has been made to redeem the same, the principal amounts so redeemed shall be payable solely from
the funds provided for redemption and interest which would otherwise accrue on the amounts
called for redemption shall terminate on the date fixed for redemption.
THIS CERTIFICATE is transferable only upon presentation and surrender at the principal
corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
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THE CERTIFICATES are exchangeable at the principal corporate trust office of the
Registrar for Certificates in the principal amount of$5,000 or any integral multiple thereof, subject
to the terms and conditions of this Ordinance.
NEITHER THE CITY NOR THE REGISTRAR shall be required to transfer or exchange
any Certificate called for redemption, in whole or in part, within forty-five (45) days of the date
fixed for redemption; provided, however, such limitation on transfer shall not be applicable to an
exchange by the Owner of the unredeemed balance of a Certificate called for redemption in part.
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any
benefit under the Ordinance unless this Certificate either (i) is registered by the Comptroller of
Public Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii)
authenticated by the Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Certificate, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally
qualified registrar for the Certificates and will cause notice of any change of registrar to be mailed
to each registered owner.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be performed,
to exist and to be done precedent to or in the issuance and delivery of this Certificate have been
performed, exist and have been done in accordance with law; and that annual ad valorem taxes
sufficient to provide for the payment of the interest on and principal of this Certificate, as such
interest comes due and such principal matures, have been levied, within the limits prescribed by
law, against all taxable property in the City, and have been pledged irrevocably for such payment.
IT IS FURTHER certified, recited and represented that the net revenues (the "Net
Revenues") to be derived from the operation of the City's waterworks and sewer system (the
"System"), but only to the extent of and in an amount not to exceed Ten Thousand Dollars
($10,000.00) in the aggregate, are also pledged to the payment of the principal of and interest on
this Certificate and the series of Certificates of which it is a part to the extent that taxes may ever be
insufficient or unavailable for said purpose, all as set forth in the Ordinance to which reference is
made for all particulars; provided, how-ever, that such pledge of Net Revenues is and shall be
junior and subordinate in all respects to the pledge of such Net Revenues to the payment of any
obligation of the City, whether authorized heretofore or hereafter, which the City designates as
having a pledge senior to the pledge of such Net Revenues to the payment of this Certificate and
that series of Certificates of which it is a part, and the City also reserves the right to issue, for any
lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other
obligations of any kind payable in whole or in part from the Net Revenues of the System, secured
by a pledge of the Net Revenues of the System that may be prior and superior in right to, on a parity
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with, or junior and subordinate to the pledge of Net Revenues securing this Certificate and the
series of Certificates of which it is a part.
IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the City and countersigned with the manual or facsimile signature of the
City Clerk of the City and the official seal of the City has been duly impressed, or placed in
facsimile, on this Certificate.
THE CITY OF BEAUMONT, TEXAS
Mayor
(SEAL)
City Clerk
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this certificate has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas, and that this certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this day of , 2008.
xxxxxxxxx
Comptroller of Public Accounts
(Seal) of the State of Texas
Form of Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been delivered pursuant to the Ordinance
described in the text of this Certificate.
The Bank of New York Mellon Trust Company,N.A.
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Dallas,Texas
By:
Authorized Signature
Date of Authentication
Form of Assianme nt
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said certificate on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: The signature
above must correspond to
the name of the registered
NOTICE: Signature must be owner as shown on the face
guaranteed by a member firm of this Certificate in
of the New York Stock Exchange every particular,without
or a commercial bank or trust any alteration, enlargement
company. or change whatsoever.
18. Form of Statement of Insurance. The following statement of insurance shall be
printed on the back of or attached to each of the Certificates:
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STATEMENT OF INSURANCE
(" "), New York, New York, has delivered its
financial guaranty insurance policy (the "Policy") with respect to the scheduled payments of
principal of and interest on this Certificate as described herein below to The Bank of New York
Trust Company, N.A., Dallas, Texas, or its successor, as paying agent/registrar (the "Paying
Agent/Registrar") for the $30,000,000 The City of Beaumont, Texas (Jefferson County)
Certificates of Obligation, Series 2006. Said Policy is on file and available for inspection at the
principal office of the Paying Agent/Registrar and a copy thereof may be obtained from CIFG
NA or the Paying Agent/Registrar.
19. Legal Opinion; Cusip Numbers. The approving opinion of Orgain, Bell & Tucker,
L.L.P., Beaumont, Texas, Bond Counsel, and CUSIP Numbers may be printed on the Certificates,
but errors or omissions in the printing of such opinion or such numbers shall have no effect on the
validity of the Certificates.
20. Interest and Sinking Fund, Tax Lew; Pledge of Revenues; Construction Fund. The
proceeds from all taxes levied, assessed and collected for and on account of the Certificates
authorized by this Ordinance are hereby irrevocably pledged and shall be deposited, as collected, in
a special fund to be designated "City of Beaumont, Texas, Certificates of Obligation, Series 2008,
Interest and Sinking Fund". While the Certificates or any part of the principal thereof or interest
thereon remain outstanding and unpaid, there is hereby levied and there shall be annually levied,
assessed and collected in due time, form and manner within the limits prescribed by law, and at the
same time other City taxes are levied, assessed and collected, in each year, beginning with the
current year, a continuing direct annual ad valorem tax upon all taxable property in the City
sufficient to pay the current interest on the Certificates as the same becomes due, and to provide and
maintain a sinking fund adequate to pay the principal of the Certificates as such principal matures
but in each year never less than 2% of the original principal amount of the Certificates, full
allowance being made for delinquencies and costs of collection, and said taxes when collected shall
be applied to the payment of the interest on and principal of the Certificates and to no other
purpose.
The Net Revenues of the System, but only to the extent of and in an amount not to exceed
$10,000 in the aggregate, are hereby irrevocably pledged to the payment of the principal of and
interest on the Certificates as the same come due; provided, however, that such pledge of Net
Revenues is and shall be junior and subordinate in all respects to the pledge of the Net Revenues to
the payment of any obligation of the City, whether authorized heretofore or hereafter, which the
City designates as having a pledge senior to the pledge of such Net Revenues to the payment of the
Certificates; and the City also reserves the right to issue, for any lawful purpose at any time, in one
or more installments, bonds, certificates of obligation and other obligations of any kind payable in
whole or in part from the Net Revenues of the System that may be prior and superior in right to, on
a parity with, or junior and subordinate to the pledge of Net Revenues securing this series of
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Certificates.
There is hereby created and there shall be established on the books of the City a separate
account to be entitled the "City of Beaumont, Texas, Certificates of Obligation, Series 2008,
Construction Fund". Immediately after the sale and delivery of the Certificates, that portion of the
proceeds of the Certificates to be used for the cost of construction of authorized street
improvements and the cost of issuance of the Certificates shall be deposited into the Construction
Fund and disbursed for such purposes. Pending completion of construction of such projects, interest
earned on such proceeds may be used, at the City's discretion, for such projects and shall be
accounted for, maintained, deposited and expended as permitted by the provisions of Section
1201.043, Texas Government Code Annotated, as from time to time in effect, or as otherwise
required by applicable law. Thereafter, such interest shall be deposited in the Interest and Sinking
Fund. Upon completion of such street improvements, the monies, if any, remaining in the
Construction Fund shall be transferred and deposited by the City into the Interest and Sinking Fund.
21. Further Proceedings. After the Certificates shall have been executed, it shall be the
duty of the Mayor of the City to deliver the Certificates to be initially issued and all pertinent
records and proceedings to the Attorney General of the State of Texas for examination and
approval. After the Certificates to be initially issued shall have been approved by the Attorney
General of the State of Texas, the Certificates shall be delivered to the Comptroller of Public
Accounts of the State of Texas for registration. Upon registration of the Certificates to be initially
issued, the Comptroller of Public Accounts (or a deputy lawfully designated in writing to act for the
Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be
affixed or attached to the Certificates to be initially issued, and the seal of the Comptroller shall be
impressed, or placed in facsimile, thereon. In addition, the Mayor, the Mayor Pro Tem, the City
Clerk, the City Manager and other appropriate officials of the City are hereby authorized and
directed to do any and all things necessary or convenient to carry out the purposes of this
Ordinance, and each of such persons are authorized, acting alone and without the joinder of the
others, to execute any and all closing certificates, instruments and such other documents as may be
necessary or appropriate to carry out the purposes of this Ordinance.
22. Sale of Certificates. The Certificates are hereby sold and shall be delivered to
the Underwriter at a price of $ , which represents the par amount of the
Certificates of$30,000,000.00, plus a premium of $ , and less an underwriting
discount of $ , plus any accrued interest thereon from the dated date of the
Certificates to the date of issuance, all in accordance with the terms of a bond purchase
agreement of even date herewith, presented to and hereby approved by the City Council, which
price and terms are hereby found and determined to be the most advantageous reasonably
obtainable by the City. Each of the Mayor and the Mayor Pro Tern and other appropriate officials
of the City are hereby authorized and directed to execute such bond purchase agreement on
behalf of the City, and each of the Mayor and Mayor Pro Tern and all other officers, agents and
representatives of the City are hereby authorized to do any and all things necessary or desirable to
satisfy the conditions set out therein and to provide for the issuance and delivery of the
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Certificates. The purchase of and payment of the premium for the Bond Insurance Policy by the
City, in accordance with the terms of a commitment for such insurance presented to and hereby
approved by the City Council is hereby authorized. All officials and representatives of the City
are authorized and directed to execute such documents and to do any and all things necessary or
desirable to obtain such insurance, and the printing on the Certificates of an appropriate legend
regarding such insurance is hereby approved.
23. Tax Exemption. (a) The City intends that the interest on the Certificates shall be
excludable from gross income for purposes of federal income taxation pursuant to Sections 103 and
141 through 150 of the Code, and applicable regulations. The City covenants and agrees not to take
any action, or knowingly omit to take any action within its control, that if taken or omitted,
respectively, would cause the interest on the Certificates to be includable in gross income, as
defined in Section 61 of the Code, of the holders thereof for purposes of federal income taxation. In
particular, the City covenants and agrees to comply with each requirement of this Section 23;
provided, however, that the City shall not be required to comply with any particular requirement of
this Section 23 if the City has received an opinion of nationally recognized bond counsel (a
"Counsel's Opinion") that such noncompliance will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on the Certificates or if the City has received a
Counsel's Opinion to the effect that compliance with some other requirement set forth in this
Section 23 will satisfy the applicable requirements of the Code, in which case compliance with such
other requirement specified in such Counsel's Opinion shall constitute compliance with the
corresponding requirement specified in this Section 23.
(b) The City covenants and agrees that its use of Net Proceeds of the Certificates will at
all times satisfy the following requirements:
(i) The City will use all of the Net Proceeds of the Certificates for the cost of
construction of authorized street and drainage improvements, building repairs and
improvements, public park facilities and improvements, equipment purchases and the cost
of issuance of the Certificates. The City has limited and will limit with respect to the
Certificates the amount of original or investment proceeds thereof to be used(other than use
as a member of the general public) in the trade or business of any person other than a
governmental unit to an amount aggregating no more than 10% of the Net Proceeds of the
Certificates ("private-use proceeds"). For purposes of this Section, the term "person"
includes any individual, corporation, partnership, unincorporated association, or any other
entity capable of carrying on a trade or business; and the term "trade or business" means,
with respect to any natural person, any activity regularly carried on for profit and, with
respect to persons other than natural persons, any activity other than an activity carried on
by a governmental unit. Any use of proceeds of the Certificates in any manner contrary to
the guidelines set forth in Revenue Procedure 93-19, including any revisions or
amendments thereto, shall constitute the use of such proceeds in the trade or business of one
who is not a governmental unit;
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(ii) The City has not permitted and will not permit more than 5% of the Net
Proceeds of the Certificates to be used in the trade or business of any person other than a
governmental unit if such use is unrelated to the governmental purpose of the Certificates.
Further, the amount of private-use proceeds of the Certificates in excess of 5% of the Net
Proceeds thereof("excess private-use proceeds") did not and will not exceed the proceeds of
the Certificates expended for the governmental purpose of the Certificates to which such
excess private-use proceeds relate;
(iii) Principal of and interest on the Certificates shall be paid solely from ad
valorem tax receipts collected by the City and from the Net Revenues of the System to the
extent pledged hereunder. Further, no person using more than 10% of the Net Proceeds of
the Certificates in a trade or business, other than a governmental unit, has made or shall
make payments (other than as a member of the general public), directly or indirectly,
accounting for more than 10%of such receipts;
(iv) The City has not permitted and will not permit with respect to the
Certificates an amount of proceeds thereof exceeding the lesser of(a) $5,000,000 or(b) 5%
of the Net Proceeds of the Certificates to be used, directly or indirectly, to finance loans to
persons other than a governmental unit; and
(v) The City will use $ of the Net Proceeds of the
Certificates to pay the costs of issuance of the Certificates.
When used in this Section 23, the term "Net Proceeds" of the Certificates shall mean the proceeds
from the sale thereof to the Underwriter, including investment earnings on such proceeds, less
accrued interest with respect to such issue.
(c) The City covenants and agrees not to take any action, or knowingly omit to take any
action within its control, that, if taken or omitted, respectively, would cause the Certificates to be
"federally guaranteed" within the meaning of Section 149(b) of the Code and applicable regulations
thereunder, except as permitted by Section 149(b)(3) of the Code and such regulations.
(d) The City shall certify, through an authorized officer, employee or agent, that based
upon all facts and estimates known or reasonably expected to be in existence on the date the
Certificates are delivered, the City will reasonably expect that the proceeds of the Certificates will
not be used in a manner that would cause the Certificates to be "arbitrage bonds" within the
meaning of Section 148(a) of the Code and applicable regulations thereunder. Moreover, the City
covenants and agrees that it will make such use of the proceeds of the Certificates, including
interest or other investment income derived from the proceeds of the Certificates, regulate
investments of such proceeds and amounts, and take such other and further action as may be
required so that the Certificates will not be "arbitrage bonds" within the meaning of Section 148(a)
of the Code and applicable regulations thereunder.
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(e) The City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the "gross proceeds" of the Certificates (within the
meaning of Section 148(f)(6)(B) of the Code), be rebated to the federal government. Specifically,
the City will (i) maintain records regarding the investment of the gross proceeds of the Certificates
as may be required to calculate the amount earned on the investment of the gross proceeds of the
Certificates separately from records of amounts on deposit in the funds and accounts of the City
allocable to other bond issues of the City or moneys which do not represent gross proceeds of any
bonds of the City, (ii) calculate at such times as are required by applicable regulations, the amount
earned from the investment of the gross proceeds of the Certificates which is required to be rebated
to the federal government, and (iii) pay, not less often than every 5th anniversary date of the
delivery of the Certificates, and within sixty (60) days after retirement of the Certificates, all
amounts required to be rebated to the federal government. Further, the City will not indirectly pay
any amount otherwise payable to the federal government pursuant to the foregoing requirements to
any person other than the federal government by entering into any investment arrangement with
respect to the gross proceeds of the Certificates that might result in a reduction in the amount
required to be paid to the federal government because such arrangement results in a smaller profit
or larger loss than would have resulted if the arrangement had been at arm's length and had the yield
on the issue not been relevant to either party.
(f) The City covenants and agrees to file or cause to be filed with the Secretary of the
Treasury, not later than the 15th day of the second calendar month after the close of the calendar
quarter in which the Certificates are issued, an information statement concerning the Certificates,
all under and in accordance with Section 149(e)of the Code and applicable regulations thereunder.
Section 24. Application of Proceeds. Proceeds from the sale of the Certificates shall,
promptly upon receipt by the City, be applied as follows:
(a) Accrued interest and the premium received from the sale of the Certificates shall be
deposited into the Series 2008 Certificates of Obligation Interest and Sinking Fund;
and
(b) The remaining proceeds from the sale of the Certificates, together with investment
earnings thereof, shall be deposited into the Series 2008 Certificates of Obligation
Construction Fund and shall be used for the purposes set out in Section 3 of this
Ordinance, with any remainder constituting a reserve to be deposited into the Series
2008 Certificates of Obligation Interest and Sinking Fund.
25. Open Meeting. The meeting at which this Ordinance was adopted 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 of the Texas Government Code Annotated, Vernon's 1994, as amended, and such
notice as given is hereby authorized, approved, adopted and ratified.
26. Re isg tray. The form of agreement setting forth the duties of the Registrar is hereby
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approved, and the appropriate officials of the City are hereby authorized to execute such agreement
for and on behalf of the City.
27. Official Statement. The Preliminary Official Statement and the Official Statement
prepared in the initial offering and sale of the Certificates have been and are hereby authorized,
approved and ratified as to form and content. The use of the Preliminary Official Statement and the
Official Statement in the reoffering of the Certificates by the Underwriter is hereby approved,
authorized and ratified. The proper officials of the City are hereby authorized to execute and
deliver a certificate pertaining to the Preliminary Official Statement and the Official Statement as
prescribed therein, dated as of the date of payment for and delivery of the Certificates.
28. Partial Invalidity. If any Section, paragraph, clause or provision of this Ordinance
shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
Section, paragraph, clause or provision shall not affect any of the remaining provisions of this
Ordinance.
29. Related Matters. To satisfy in a timely manner all of the City's obligations under
this Ordinance, the Mayor, the City Clerk, the City Treasurer, and all other appropriate officers and
agents of the City are hereby authorized and directed to take all other actions that are reasonably
necessary to provide for issuance of the Certificates, including, without limitation, executing and
delivering on behalf of the City all certificates, consents, receipts, requests and other documents as
may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the
application of funds of the City consistent with the provisions hereof.
30. No Personal Liability. No recourse shall be had for payment of the principal of or
premium, if any, or interest on Certificate, or for any claim based thereon, or under this Ordinance,
against any official or employee of the City or any person executing any Certificate.
31. Additional Obligations. The City undertakes and agrees for the benefit of the
holders of the Certificates to provide directly, on or before six months after the end of the City's
fiscal year,which fiscal year presently ends on September 30,
a. to each nationally recognized municipal securities information repository and to the
appropriate state information depository, if any, annual financial information (which
may be unaudited) and operating data regarding the City for fiscal years ending on
or after January 1, 2008 which annual financial information and operating data shall
be of the type included in the following listed sections contained in the Final
Official Statement:
SELECTED FINANCIAL INFORMATION
DEBT STATEMENT
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TAX DATA
SELECTED FINANCIAL DATA
ADMINISTRATION OF THE CITY
Appendix "B"
b. to each nationally recognized municipal securities information repository and to the
appropriate state information depository, if any, audited financial statements for the
City for fiscal years ending on or after January 1, 2008, when available, if the City
commissions an audit and it is completed by the required time; provided that if
audited statements are not commissioned or are not available by the required time,
the City will provide unaudited statements when and if they become available.
C. in a timely manner, to each nationally recognized municipal securities information
repository or to the Municipal Securities Rulemaking Board, and to the appropriate
state information depository, if any, notice of any of the following events with
respect to the Certificates, if material within the meaning of the federal security laws
to a decision to purchase or sell Certificates:
i. Principal and interest payment delinquencies;
ii. Non-payment related defaults;
iii. Unscheduled draws on debt service reserves
reflecting financial difficulties;
iv. Unscheduled draws on credit enhancements
reflecting financial difficulties;
V. Substitution of credit or liquidity
providers, or their failure to perform;
vi. Adverse tax opinions or events affecting the
tax-exempt status of the Certificates;
vii. Modifications to rights of Certificate holders;
viii. Calls;
ix. Defeasances;
X. Release, substitution or sale of property
securing repayment of the Certificates; and
xi. Rating changes.
d. in a timely manner, to each nationally recognized municipal securities information
repository or to the Municipal Securities Rulemaking Board, and to the appropriate
state information depository, if any, notice of a failure of the City to provide
required annual financial information and operating data, on or before six months
after the end of the City's fiscal year.
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These undertakings and agreements are subject to appropriation of necessary funds and to
applicable legal restrictions, if any.
The accounting principles pursuant to which the City's financial statements are currently
prepared are generally accepted accounting principles set out by the Government Accounting
Standards Board, and, subject to changes in applicable law or regulations, such principles will be
applied in the future.
If the City changes its fiscal year, it will notify each nationally recognized municipal
securities information repository and the appropriate state information depository of the change
(and of the new fiscal year end) prior to the next date by which the City otherwise would be
required to provide annual financial information.
The City's obligation to update information and to provide notices of material events shall
be limited to the agreements herein. The City shall not be obligated to provide other information
that may be relevant or material to a complete presentation of its financial results of operations,
condition, or prospects and shall not be obligated to update any information that is provided, except
as described herein. The City makes no representation or warranty concerning such information or
concerning its usefulness to a decision to invest in or sell Certificates at any future date. THE CITY
DISCLAIMS ANY CONTRACTUAL OR TORT LIABILITY FOR DAMAGES RESULTING IN
WHOLE OR IN PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT
FAULT ON ITS PART, OF ITS CONTINUING DISCLOSURE AGREEMENT OR FROM ANY
STATEMENT MADE PURSUANT TO ITS AGREEMENT. HOLDERS OR BENEFICIAL
OWNERS OF CERTIFICATES MAY SEEK AS THEIR SOLE REMEDY A WRIT OF
MANDAMUS TO COMPEL THE CITY TO COMPLY WITH THIS AGREEMENT. No default
by the City with respect to its continuing disclosure agreement shall constitute a breach of or default
under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this
paragraph is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under
federal and state securities laws.
The City may amend its continuing disclosure obligations and agreement in this Section 32
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, if the agreement, as
amended, would have permitted the Underwriter to purchase or sell the Certificates in compliance
with SEC Rule 15c2-12, taking into account any amendments or interpretations of such Rule to the
date of such amendment, as well as such changed circumstances, and either the holders of a
majority in aggregate principal amount of the outstanding Certificates consent or any person
unaffiliated with the City (such as nationally recognized bond counsel) determines the amendment
will not materially impair the interests of the holders and beneficial owners of the Certificates. The
City may also amend or repeal the obligations and agreement in this Section 35 if the SEC amends
or repeals the applicable provisions of Rule 15c2-12 or a court of final jurisdiction determines that
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such provisions are invalid, and the City may amend the agreement in its discretion in any other
circumstance or manner, but in either case only to the extent that its right to do so would not
prevent the Underwriter from lawfully purchasing or reselling the Certificates in the primary
offering of the Certificates in compliance with Rule 15c2-12. If the City amends its agreement, it
must include with the next financial information and operating data provided in accordance with its
agreement an explanation, in narrative form, of the reasons for the amendment and of the impact of
any change in the type of information and operating data so provided.
The City's continuing obligation to provide annual financial information and operating data
and notices of events will terminate if and when the City no longer remains an "obligated person"
(as such term is defined in SEC Rule 15C2-12)with respect to the Certificates.
32. Repealer. All orders, resolutions, and ordinances, and parts thereof inconsistent
herewith are hereby repealed to the extent of such inconsistency.
33. Effective Date. This Ordinance shall be in force and effect from and after its final
passage, and it is so ordered.
34. Provisions Relating to Bond Insurance. Notwithstanding any provision in this
Ordinance to the contrary, as long as the Bond Insurance Policy shall be in full force and effect,
the City and the Registrar agree to comply with the following provisions:
PASSED AND APPROVED this 1 st day of July, 2008.
Mayor, The City of
Beaumont, Texas
ATTEST:
City Clerk,
The City of Beaumont, Texas
(SEAL)
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2
July 1, 2008
Consider authorizing the issuance of$20 million City of Beaumont, Texas, Waterworks and
Sewer System Revenue Bonds, Series 2008; and containing other matters related thereto
RICH WITH OPPORTUNITY
[I 11EM . �
T • E . X . A • S City Council Agenda Item
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Laura Clark, Chief Financial Officer'
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider an ordinance authorizing the issuance of
$20 million City of Beaumont, Texas, Waterworks and
Sewer System Revenue Bonds, Series 2008; and
containing other matters related thereto.
RECOMMENDATION
The administration requests approval of an ordinance authorizing the issuance of$20 million
City of Beaumont, Texas, Waterworks and Sewer System Revenue Bonds, Series 2008; and
containing other matters related thereto.
BACKGROUND
Results of the sale will be presented by the City's Financial Advisor, Ryan O'Hara of RBC Capital
Markets. A recommendation will be made to award the bonds to the underwriters.
The bonds will mature September 1, 2009 through September 1, 2036 with interest payable
semiannually in March and September beginning March 1, 2009. The Bank of New York Trust
Company, N.A., Dallas, Texas, will serve as paying agent/registrar.
Delivery and receipt of proceeds by the City is scheduled for July 29, 2008. Proceeds will be
used to provide funds for the expansion, repair, renovation and related improvements to the
waterworks and sewer system.
BUDGETARYIMPACT
All debt shall be incurred in the Water Utilities Fund which is supported by revenues of the
waterworks and sewer system. Increased Water and Sewer rates, necessary to meet debt service
requirements on the Revenue Bonds, will be presented at the time the FY 2009 Budget is
submitted for approval in September, 2008.
ORDINANCE NO.
ORDINANCE AUTHORIZING THE ISSUANCE OF $20,000,000
THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE BONDS, SERIES 2008; AND
CONTAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THE CITY OF BEAUMONT §
WHEREAS, The City of Beaumont, Texas (herein referred to as the "City" or
the "Issuer") is authorized, pursuant to Chapter 1502, Texas Government Code, as
amended, to issue bonds payable from the net revenues of its waterworks and sewer
system to provide money for acquisitions, extensions, construction, improvement or
repair of such system; and
WHEREAS, the City now desires to issue bonds in order to provide funds to
finance the expansion, repair, renovation and related improvements to the City's
waterworks and sewer system;
Now, Therefore
BE IT ORDAINED BY THE CITY OF BEAUMONT, TEXAS:
1. Findings and Determinations. It is hereby found and determined that the
matters and facts contained in the preamble to this Ordinance are hereby found to be true
and correct.
2. Definitions. Throughout this ordinance the following terms and
expressions as used herein shall have the meanings set forth below:
The term "Act" shall mean Chapter 1502, Texas Government Code, as amended.
The term "Additional Parity Bonds" shall mean the additional parity revenue
bonds permitted to be issued by the City pursuant to Section 20 of this Ordinance.
The term "Blanket Issuer Letter of Representations" means the Blanket Issuer
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Letter of Representations between the City, the Registrar and DTC.
The term "Bond Insurance Policy" shall mean the municipal bond new issue
insurance policy issued by the Bond Insurer that guarantees payment of principal and
interest on the Bonds when due.
The term "Bond Insurer" shall mean , a New
York stock insurance company, or any successor thereto or assignee thereof.
The term "Bond Register" shall mean the books of registration kept by the
Registrar in which are maintained the names and addresses of, and the principal amounts
of the Bonds registered to, each Owner.
The term "Bonds" shall mean the $20,000,000 The City of Beaumont, Texas,
Waterworks and Sewer System Revenue Bonds, Series 2008 authorized in this
Ordinance, unless the context clearly indicates otherwise.
The term "Business Day" shall mean any day which is not a Saturday, Sunday, a
day on which banking institutions in the city where the principal corporate trust office of
the Registrar is located are authorized by law or executive order to close, or a legal
holiday.
The term "City" shall mean The City of Beaumont, Texas.
The term "Closing Date" means the date of the initial delivery of and payment for
the Bonds.
The term "Code" means the Internal Revenue Code of 1986, as amended.
The term "Comptroller" means the Comptroller of Public Accounts of the State of
Texas.
The term "DTC" means The Depository Trust Company of New York, New York,
or any successor securities depository.
The term "DTC Participant" means brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations on whose behalf DTC was created
to hold securities to facilitate the clearance and settlement of securities transactions
among DTC Participants.
The term "Gross Revenues" shall mean all revenues, income and receipts of every
nature derived or received by the City from the operation and ownership of the System
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(but excluding any utility deposits) and the interest income from the investment or deposit
of money in the Revenue Fund, the Interest and Sinking Fund, and the Reserve Fund.
The term "Interest Payment Date", when used in connection with any Bond, shall
mean March 1, 2008, and each March 1 and September 1 thereafter until maturity or
earlier redemption of such Bond.
The term "Maintenance and Operation Expenses" shall mean the reasonable and
necessary expenses of operation and maintenance of the System, including all salaries,
labor, materials, repairs and extensions necessary to render efficient service, and all
payments under contracts now or hereafter defined as operating expenses by the
Legislature of the State of Texas. Depreciation shall never be considered as a
Maintenance and Operation Expense.
The term "MSRB" shall mean the Municipal Securities Rulemaking Board.
The term "Net Revenues" shall mean all Gross Revenues remaining after
deducting the Maintenance and Operation Expenses.
The term "NRMSIR" means each person whom the SEC or its staff has
determined to be a nationally recognized municipal securities information repository
within the meaning of the Rule from time to time.
The term "Ordinance" as used herein and in the Bonds shall mean this ordinance
authorizing the Bonds and all amendments and supplements hereto.
The term "Owner" shall mean any person who shall be the registered owner of any
outstanding Bonds.
The term "Parity Bonds" shall mean the Bonds, the City's outstanding
Waterworks and Sewer System Revenue Refunding Bonds, Series 1998, and the
City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2000, and
the City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2004,
and the City's outstanding Waterworks and Sewer System Revenue Refunding Bonds,
Series 2005, and the City's outstanding Waterworks and Sewer System Revenue
Bonds, Series 2005, and the City's outstanding Waterworks and Sewer System
Revenue Refunding Bonds, Series 2006, and the City's outstanding Waterworks and
Sewer System Revenue Bonds, Series 2006A, and each series of Additional Parity
Bonds from time to time hereafter issued, but only to the extent such Parity Bonds remain
outstanding within the meaning of this Ordinance.
The term "Paying Agent" shall mean the Registrar.
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The term "Record Date" shall mean, for any Interest Payment Date, the fifteenth
(15th) calendar day of the month next preceding each Interest Payment Date.
The term "Registrar" shall mean The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas, and its successors in that capacity.
The term "Reserve Fund Requirement" shall mean an amount equal to the average
annual principal and interest requirement on the Parity Bonds, which may be determined
and redetermined each year by the City but in no event less frequently than upon the
issuance of each series of Parity Bonds.
The term "Rule" shall mean SEC Rule 15c-12, as amended from time to time.
The term "SEC" shall mean the United States Securities and Exchange
Commission.
The term "SID" shall mean the Municipal Advisory Council of Texas, which has
been designated by the State of Texas as, and determined by the SEC staff to be, a state
information depository within the meaning of the Rule.
The term "Special Project" shall mean, to the extent permitted by law, any
property, improvement or facility declared by the City not to be part of the System and
substantially all of the costs of the acquisition, construction and installation of which is
paid from proceeds of a financing transaction other than the issuance of bonds payable
from ad valorem taxes or Net Revenues of the System, and for which all maintenance and
operation expenses are payable from sources other than revenues of the System, but only
to the extent that and for so long as all or any part of the revenues or proceeds of which
are or will be pledged to secure the payment or repayment of such costs of acquisition,
construction and installation under such financing transaction.
The term "System" shall mean all properties, facilities, improvements, equipment,
interests and rights constituting the waterworks and sewer system of the City, including
all future extensions, replacements, betterments, additions, improvements, enlargements,
acquisitions, purchases and repairs to the System, but excluding all Special Projects.
The term "Underwriter" shall mean, collectively, Estrada Hinojosa &
Company, Inc., Coastal Securities, First Southwest Company and Morgan Keegan &
Co., Inc.
3. Authorization. The Bonds shall be issued in fully registered form in the
total authorized aggregate amount of TWENTY MILLION DOLLARS ($20,000,000)
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for the purpose of providing funds to (i) finance the expansion, repair, renovation and
related improvements to the City's waterworks and sewer system, and (ii) paying all costs
of issuance of the Bonds (the "Project").
4. Designation Date, and Interest Payment Dates. The Bonds shall be
designated as "THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND
SEWER SYSTEM REVENUE BONDS, SERIES 2008" and shall be dated July 1,
2008. The Bonds shall bear interest at the rates set forth in Section 5 below from the later
of July 1, 2008, or the most recent Interest Payment Date to which such interest has been
paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day
months, payable on March 1, 2009, and semiannually thereafter on March 1 and
September 1 of each year until maturity or prior redemption.
5. Initial Bonds: Numbers and Denominations. The Bonds shall be initially
issued bearing the numbers, in the principal amounts, and bearing interest at the rates set
forth in the following schedule, and may be transferred and exchanged as set out in this
Ordinance. The Bonds shall mature, in accordance with this Ordinance, on September 1
in each of the years and in the amounts set out in such schedule. Bonds delivered on
transfer of or in exchange for other Bonds shall be numbered (with appropriate prefix) in
order of their authentication by the Registrar, shall be in the denomination of$5,000 or
integral multiples thereof, and shall mature on the same date and bear interest at the same
rate as the Bond or Bonds in lieu of which they are delivered.
Bond Principal Interest
Number Year Amount Rate
R-1 2009 $ 45,000 %
R-2 2010 $ 155,000 %
R-3 2011 $ 170,000 %
R-4 2012 $ 180,000 %
R-5 2013 $ 195,000 %
R-6 2014 $ 210,000 %
R-7 2015 $ 215,000 %
R-8 2016 $ 225,000 %
R-9 2017 $ 240,000 %
R-10 2018 $ 255,000 %
R-11 2019 $ 270,000 %
R-12 2020 $ 265,000 %
R-13 2021 $ 285,000 %
R-14 2022 $ 290,000 %
R-15 2023 $ 305,000 %
R-16 2024 $ 775,000 %
R-17 2025 $ 860,000 %
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I
R-18 2026 $ 945,000 %
R-19 2027 $1,015,000 %
R-20 2028 $1,070,000 %
R-21 2029 $1,335,000 %
R-22 2030 $1,390,000 %
R-23 2031 $1,360,000 %
R-24 2032 $1,430,000 %
R-25 2033 $1,505,000 %
R-26 2034 $1,585,000 %
R-27 2035 $1,670,000 %
R-28 2036 $1,755,000 %
6. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor or
Mayor Pro Tern and countersigned by the City Clerk or Deputy City Clerk, by their
manual, lithographed, or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon. Such facsimile signatures on the Bonds shall
have the same effect as if each of the Bonds had been signed manually and in person by
each of said officers, and such facsimile seal on the Bonds shall have the same effect as if
the official seal of the City had been manually impressed upon each of the Bonds. If any
officer of the City whose manual or facsimile signature shall appear on the Bonds shall
cease to be such officer before the authentication of such Bonds or before the delivery of
such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient
for all purposes as if such officer had remained in such office.
7. Approval by Attorney General; Registration by Comptroller. The Bonds
to be initially issued shall be delivered to the Attorney General of Texas for approval and
shall be registered by the Comptroller of Public Accounts of the State of Texas. The
manually executed registration certificate of the Comptroller of Public Accounts
substantially in the form provided in Section 18 of this Ordinance shall be attached or
affixed to the Bonds to be initially issued.
8. Authentication. Except for the Bonds to be initially issued, which need
not be authenticated by the Registrar, only such Bonds which bear thereon a certificate of
authentication, substantially in the form provided in Section 18 of this Ordinance,
manually executed by an authorized representative of the Registrar, shall be entitled to the
benefits of this Ordinance or shall be valid or obligatory for any purpose. Such duly
executed certificate of authentication shall be conclusive evidence that the Bonds so
authenticated were delivered by the Registrar hereunder.
9. Payment of Principal and Interest. The Registrar is hereby appointed as
the paying agent for the Bonds. The principal of and premium, if any, on the Bonds shall
be payable, without exchange or collection charges, in any coin or currency of the United
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States of America which, on the date of payment, is legal tender for the payment of debts
due the United States of America, upon their presentation and surrender as they
respectively become due and payable, whether at maturity or by prior redemption, at the
principal corporate trust office of the Registrar. The interest on each Bond shall be
payable by check on the Interest Payment Date, mailed by the Registrar on or before each
Interest Payment Date to the Owner of record as of the Record Date, to the address of
such Owner as shown on the Bond Register. Any accrued interest payable at maturity on
a Bond shall be paid upon presentation and surrender of such Bond at the principal
corporate trust office of the Registrar.
If the date for payment of the principal of or interest on any Bond is not a
Business Day, then the date for such payment shall be the next succeeding Business Day,
and payment on such date shall have the same force and effect as if made on the original
date such payment was due.
10. Successor Registrars. The City covenants that at all times while any
Bonds are outstanding it will provide a legally qualified bank, trust company, financial
institution or other agency to act as Registrar for the Bonds. The City reserves the right to
change the Registrar for the Bonds on not less than 60 days written notice to the
Registrar, so long as any such notice is effective not less than 60 days prior to the next
succeeding principal or interest payment date on the Bonds. Promptly upon the
appointment of any successor Registrar, the previous Registrar shall deliver the Bond
Register or copies thereof to the new Registrar, and the new Registrar shall notify each
Owner, by United States mail, first class postage prepaid, of such change and of the
address of the new Registrar. Each Registrar hereunder, by acting in that capacity, shall
be deemed to have agreed to the provisions of this Section.
11. Special Record Date. If interest on any Bond is not paid on any Interest
Payment Date and continues unpaid for thirty (30) days thereafter, the Registrar shall
establish a new record date for the payment of such interest, to be known as a Special
Record Date. The Registrar shall establish a Special Record Date when funds to make
such interest payment are received from or on behalf of the City. Such Special Record
Date shall be fifteen (15) days prior to the date fixed for payment of such past due
interest, and notice of the date of payment and the Special. Record Date shall be sent by
United States mail, first class, postage prepaid, not later than five (5) days prior to the
Special Record Date, to each affected Owner of record as of the close of business on the
day prior to the mailing of such notice.
12. Ownership; Unclaimed Principal and Interest. The City, the Registrar and
any other person may treat the person in whose name any Bond is registered as the
absolute owner of such Bond for the purpose of making and receiving payment of
principal of and premium, if any, or interest on such Bond, and for all other purposes,
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whether or not such Bond is overdue, and neither the City nor the Registrar shall be
bound by any notice or knowledge to the contrary. All payments made to the person
deemed to be the owner of any Bond in accordance with this Section 12 shall be valid and
effectual and shall discharge the liability of the City and the Registrar upon such Bond to
the extent of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the
Bonds remaining unclaimed by the Owner after the expiration of three years from the date
such amounts have become due and payable shall be reported and disposed of by the
Registrar in accordance with the applicable provisions of Texas law, including Title 6 of
the Texas Property Code, as amended.
13. Registration, Transfer, and Exchange. So long as any Bonds remain
outstanding, the Registrar shall keep the Bond Register at its principal corporate trust
office and, subject to such reasonable regulations as it may prescribe, the Registrar shall
provide for the registration and transfer of Bonds in accordance with the terms of this
Ordinance. If the Registrar does not maintain its principal offices in the State of Texas,
the City agrees to keep a Bond Register at its offices which is identical to the Bond
Register maintained by the Registrar and the Registrar will notify the City as to any
changes in the Bond Register within 1 business day.
Each Bond shall be transferable only upon the presentation and surrender thereof
at the principal corporate trust office of the Registrar, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered Owner or his authorized
representative in form satisfactory to the Registrar. Upon due presentation of any Bond in
proper form for transfer, the Registrar shall authenticate and deliver in exchange therefor,
within 72 hours after such presentation, a new Bond or Bonds, registered in the name of
the transferee or transferees, in authorized denominations and of the same maturity and
aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so
presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the
principal corporate trust office of the Registrar for a Bond or Bonds of the same type,
maturity and interest rate and in any authorized denomination, in an aggregate amount
equal to the unpaid principal amount of the Bond or Bonds presented for exchange. The
Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in
accordance with the provisions of this Section 13. Each Bond delivered in accordance
with this Section 13 shall be entitled to the benefits and security of this Ordinance to the
same extent as the Bond or Bonds in lieu of which such Bond is delivered.
The City or the Registrar may require the Owner of any Bond to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
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connection with the transfer or exchange of such Bond. Any fee or charge of the
Registrar for such transfer or exchange shall be paid by the City.
14. Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender to
the Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange
therefor a replacement Bond of like maturity, interest rate, and principal amount, bearing
a number not contemporaneously outstanding. If any Bond is lost, apparently destroyed,
or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in
the absence of notice or knowledge that such Bond has been acquired by a bona fide
purchaser, shall execute and the Registrar shall authenticate and deliver a replacement
Bond of like maturity, interest rate and principal amount or Maturity Amount, bearing a
number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Bond to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith and any other expenses connected therewith, including the fees and
expenses of the Registrar. The City or the Registrar may require the Owner of a lost,
apparently destroyed or wrongfully taken Bond, before any replacement Bond is issued,
to:
(1) furnish to the City and the Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Bond;
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(2) furnish such security or indemnity as may be required by the
Registrar and the City to save them harmless;
(3) pay all expenses and charges in connection therewith, including,
but not limited to, printing costs, legal fees, fees of the Registrar and any tax or
other governmental charge that may be imposed; and
(4) meet any other reasonable requirements of the City and the
Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond
in lieu of which such replacement Bond was issued presents for payment such original
Bond, the City and the Registrar shall be entitled to recover such replacement Bond from
the person to whom it was delivered or any person taking therefrom, except a bona fide
purchaser, and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the City or the
Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has
9
become or is about to become due and payable, the City in its discretion may, instead of
issuing a replacement Bond, authorize the Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section 14 shall be
entitled to the benefits and security of this Ordinance to the same extent as the Bond or
Bonds in lieu of which such replacement Bond is delivered.
15. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance,
and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated
and delivered in accordance herewith, shall be cancelled and destroyed upon the making
of proper records regarding such payment. The Registrar shall furnish the City with
appropriate certificates of destruction of such Bonds.
16. Book-EntySystem. (a) Notwithstanding any other provision hereof, upon
initial issuance of the Bonds but at the sole election of the Underwriter,the ownership of the
Bonds shall be registered in the name of Cede & Co., as nominee of DTC, and except as
otherwise provided in this Section, all of the outstanding Bonds shall be registered in the
name of Cede & Co., as nominee of DTC. The definitive Bonds shall be initially issued in
the form of a single separate certificate for each of the maturities thereof. If the Underwriter
shall elect to invoke the provisions of this Section, then the following provisions shall take
effect with respect to the Bonds.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of
DTC, the City and the Registrar shall have no responsibility or obligation to any DTC
Participant or to any person on behalf of whom such a DTC Participant holds an interest in
the Bonds. Without limiting the immediately preceding sentence, the City and the Registrar
shall have no responsibility or obligation with respect to (i) the accuracy of the records of
DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in the
Bonds, (ii) the delivery to any DTC Participant or any other person, other than an Owner of
a Bond, as shown on the Register, of any notice with respect to the Bonds, including any
notice of redemption, or (iii) the payment to any DTC Participant or any other person, other
than an Owner of a Bond, as shown in the Register, of any amount with respect to principal
of, premium, if any, or interest on the Bonds. Notwithstanding any other provision of this
Ordinance to the contrary, the City and the Registrar shall be entitled to treat and consider
the person in whose name each Bond is registered in the Register as the absolute Owner of
such Bond for the purpose of payment of principal of, premium, if any, and interest on the
Bonds, for the purpose of all matters with respect to such Bond, for the purpose of
registering transfers with respect to such Bond, and for all other purposes whatsoever. The
Registrar shall pay all principal of, premium, if any, and interest on the Bonds only to or
upon the order of the respective Owners, as shown in the Register as provided in this Order,
or their respective attorneys duly authorized in writing, and all such payments shall be valid
and effective to fully satisfy and discharge the City's obligations with respect to payment of
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principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so
paid. No person other than an Owner as shown in the Register, shall receive a Bond
certificate evidencing the obligation of the District to make payments of amounts due
pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written notice to the
effect that DTC has determined to substitute a new nominee in place of Cede & Co., the
word "Cede& Co." in this Order shall refer to such new nominee of DTC.
(c) In the event that the City in its sole discretion determines that the beneficial
owners of the Bonds be able to obtain certificated Bonds, or in the event DTC discontinues
the services described herein, the City shall (i) appoint a successor securities depository,
qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as
amended, and notify DTC and DTC Participants, as identified by DTC, of the appointment
of such successor securities depository and transfer one or more separate Bonds to such
successor securities depository or (ii) notify DTC and DTC Participants, as identified by
DTC, of the availability through DTC of Bonds and transfer one or more separate Bonds to
DTC Participants having Bonds credited to their DTC , as identified by DTC. In such
event, the Bonds shall no longer be restricted to being registered in the Register in the name
of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names Owners transferring or
exchanging Bonds shall designate, in accordance with the provisions of this Ordinance.
(d) The execution and delivery of the Blanket Letter of Representations is hereby
approved with such changes as may be approved by the Mayor or City Manager of the City
and the Mayor is hereby authorized and directed to execute such Blanket Letter of
Representations.
(e) Notwithstanding any other provision of this Ordinance to the contrary, so long
as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments
with respect to principal of, premium, if any, and interest on such Bonds, and all notices
with respect to such Bonds, shall be made and given, respectively, in the manner provided
in the Blanket Letter of Representations.
17. Optional Redemption and Mandatory Redemption. The City reserves the
right, at its option, to redeem Bonds having stated maturities on and after September 1,
2018, in whole or in part, on September 1, 2017, or any date thereafter, at a price of par plus
accrued interest to the date fixed for redemption. If less than all of the Bonds are to be
redeemed,the City shall determine the Bonds, or portions thereof, to be redeemed.
Bonds may be redeemed only in integral multiples of$5,000. If a Bond subject to
redemption is in a denomination larger that $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of $5,000. Upon surrender of any Bond for
redemption in part, the Registrar, in accordance with Section 13 hereof, shall authenticate
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and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an
aggregate principal amount equal to the unredeemed portion of the Bond so surrendered.
Not less than thirty (30) days prior to a redemption date for the Bonds, the City shall
cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to
each Owner of each Bond to be redeemed in whole or in part, at the address of the Owner
appearing on the Register at the close of business on the Business Day next preceding the
date of the mailing of such notice. Such notice shall state the redemption date, the
redemption price, the place at which Bonds are to be surrendered for payment and, if less
than all the Bonds are to be redeemed, the numbers of the Bonds or portions thereof to be
redeemed. Any notice of redemption so mailed shall be conclusively presumed to have
been duly given whether or not the Owner receives such notice. By the date fixed for
redemption, due provision shall be made with the Registrar for payment of the redemption
price of the Bonds or portions thereof to be redeemed. When Bonds have been called for
redemption in whole or in part and due provision made to redeem the same as herein
provided, the Bonds or portions thereof so redeemed shall no longer be regarded as
outstanding except for the purpose of being paid solely from the funds so provided for
redemption, and the rights of the Owners to collect interest which would otherwise accrue
after the redemption date on any Bond or portion thereof called for redemption shall
terminate on the date fixed for redemption.
18. Form. The form of the Bonds, including the form of the Registrar's
Authentication Certificate, the form of Assignment, the form of Statement of Insurance,
and the form of Registration Certificate of the Comptroller of Public Accounts of the
State of Texas which shall be attached or affixed to the Bonds initially issued shall be,
respectively, substantially as follows, with such additions, deletions and variations as may
be necessary or desirable and not prohibited by this Ordinance:
FORM OF BOND
United States of America
State of Texas
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 2008
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INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
July 1, 2008
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Beaumont, Texas (the "City") promises to pay, but solely from certain
Net Revenues as hereinafter provided, to the Registered Owner identified above, or
registered assigns, on the maturity date specified above, upon presentation and surrender
of this bond at the principal corporate trust office of The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas (the "Registrar"), the principal amount identified above,
payable in any coin or currency of the United States of America which on the date of
payment of such principal is legal tender for the payment of debts due the United States
of America, and to pay, solely from such Net Revenues, interest thereon at the rate shown
above, calculated on the basis of a 360 day year of twelve 30 day months, from the later
of July 1, 2008, or the most recent interest payment date to which interest has been paid
or duly provided for. Interest on this bond is payable by check on March 1 and
September 1, beginning on March 1, 2009, mailed to the registered owner of record as
shown on the books of registration kept by the Registrar as of the fifteenth day of the
month next preceding each interest payment date. Any accrued interest due at maturity
shall be paid upon presentation and surrender of this Bond at the principal corporate trust
office of the Registrar.
THIS BOND is one of a duly authorized issue of Bonds, aggregating $20,000,000
(the "Bonds"), issued for the purpose of providing funds to (i) finance the expansion,
repair, renovation and related improvements to the City's waterworks and sewer system,
and (ii) paying all costs of issuance of the Bonds, pursuant to an ordinance adopted by the
City Council on July 1, 2008 (the "Ordinance"), and in accordance with the authority of
Chapter 1502, Texas Government Code, as amended, and all other applicable law.
THIS BOND AND ALL OF THE BONDS OF THIS SERIES are special
obligations of the City, and together with the City's outstanding Waterworks and Sewer
System Revenue Refunding Bonds, Series 1998, the City's outstanding Waterworks and
Sewer System Revenue Bonds, Series 2000, the City's outstanding Waterworks and
Sewer System Revenue Bonds, Series 2004, and the City's outstanding Waterworks and
Sewer System Revenue Refunding Bonds, Series 2005, and the City's outstanding
Waterworks and Sewer System Revenue Bonds, Series 2005, and the City's outstanding
13
Waterworks and Sewer System Revenue Refunding Bonds, Series 2006, and the City's
outstanding Waterworks and Sewer System Revenue Bonds, Series 2006A, are equally
and ratably payable from and secured by a first lien on the "Net Revenues" collected and
received by the City from the operation and ownership of those properties, facilities,
improvements, equipment, interests, rights and powers constituting the waterworks and
sewer system of the City which are defined in the Ordinance as the "System", which Net
Revenues are required to be set aside for and pledged to the payment of this series of
bonds, the outstanding bonds and all additional bonds issued on a parity therewith, in the
Interest and Sinking Fund and the Reserve Fund required to be maintained for the
payment of all such bonds, all as more fully described and provided for in and subject to
the restrictions and limitations imposed by the Ordinance. This Bond and the series of
which it is a part, together with the interest thereon, are payable solely from such Net
Revenues and do not constitute an indebtedness or general obligation of the City. THE
HOLDER OF THIS OBLIGATION IS NOT ENTITLED TO DEMAND
PAYMENT OF THIS OBLIGATION OUT OF ANY MONEY RAISED BY
TAXATION.
THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL PARITY
REVENUE BONDS, subject to the restrictions and limitations contained in the
Ordinance, which shall be equally and ratably payable from, and secured by a first lien on
and pledge of, the aforesaid Net Revenues in the same manner and to the same extent as
this Bond and the series of which it is a part.
THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds having
stated maturities on or after September 1, 2018, in whole or in part, on September 1, 2017,
or any date thereafter, in integral multiples of$5,000, at a price of par plus accrued interest
to the date fixed for redemption. Reference is made to the Ordinance for complete details
concerning the manner of redeeming the Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to
the date fixed for redemption by first class mail, addressed to the registered owner of each
Bond to be redeemed in whole or in part at the address shown on the books of registration
kept by the Registrar. When Bonds or portions thereof have been called for redemption and
due provision has been made to redeem the same, the principal amounts so redeemed shall
be payable solely from the funds provided for redemption and interest which would
otherwise accrue on the amounts called for redemption shall terminate on the date fixed for
redemption.
THIS BOND IS TRANSFERABLE only upon presentation resentation and surrender at the
principal corporate trust office of the Registrar, duly endorsed for transfer or accompanied
by an assignment duly executed by the registered owner or his authorized representative,
subject to the terms and conditions of the Ordinance.
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THE BONDS ARE EXCHANGEABLE at the principal corporate trust office of
the Registrar for bonds in the principal amount of$5,000 or any integral multiple thereof,
subject to the terms and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any
benefit under the Ordinance unless this Bond either (i) is registered by the Comptroller of
Public Accounts of the State of Texas by registration certificate attached or affixed hereto
or (ii) is authenticated by the Registrar by due execution of the authentication certificate
endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof, acknowledges
and agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a
legally qualified registrar for the Bonds and will cause notice of any change of registrar to
be mailed to each registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and
validly issued and delivered; that all acts, conditions and things required or proper to be
performed, to exist and to be done precedent to or in the issuance and delivery of this
Bond have been performed, exist and have been done in accordance with law; that the
bonds of this series do not exceed any statutory limitation; and that provision has been
made for the payment of principal and interest on this bond and all of the bonds of this
series by the aforesaid lien on and pledge of the Net Revenues of the System.
I
IN WITNESS WHEREOF, this bond has been signed with the manual or
facsimile signature of the Mayor and countersigned with the manual or facsimile
signature of the City Clerk, and the official seal of the City has been duly impressed, or
placed in facsimile, on this bond.
THE CITY OF BEAUMONT, TEXAS
(SEAL)
Mayor
City Clerk
15
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this bond has been examined, certified as to validity, and
approved by the Attorney General of the State of Texas, and that this bond has been
registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
(SEAL) of the State of Texas
Form of Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this bond has been delivered pursuant to the Bond
Ordinance described in the text of this Bond.
The Bank of New York Mellon Trust Company,N.A.
By:
Authorized Signature
Date of Authentication:
Form of Assignmen
ASSIGNMENT
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For value received, the undersigned hereby sells, assigns, and transfers
unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said
bond on the books kept for registration thereof, with full power of substitution in the
premises.
DATED
Signature Guaranteed:
Registered Owner
NOTICE: The signature above
must correspond to the name of
the registered owner as shown
NOTICE: Signature must be on the face of this bond in
guaranteed by a member firm every particular, without
of the New York Stock any alteration, enlargement
Exchange or a commercial or change whatsoever.
bank or trust company.
STATEMENT OF INSURANCE
(" "), New York, New York, has
delivered its municipal bond insurance policy with respect to the scheduled payments due
of principal of and interest on this Bond to The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas, or its successor, as paying agent for the Bonds (the
"Paying Agent"). Said Policy is on file and available for inspection at the principal office
of the Paying Agent and a copy thereof may be obtained from Financial Security or the
Paying Agent.]
18. Legal Opinion; Cusip. The approving opinion of Orgain, Bell & Tucker,
L.L.P., Beaumont, Texas, Bond Counsel, and CUSIP Numbers may be printed on the
Bonds, but errors or omissions in the printing of such opinion or such numbers shall have
no effect on the validity of the Bonds.
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19. (a) Pledge and Source of Payment. The City hereby covenants and
agrees that all Gross Revenues of the System shall, as collected and received by the City,
be deposited and paid into the special funds established in this Ordinance, and shall be
applied in the manner hereinafter set forth, in order to provide for (i) the payment of all
Maintenance and Operation Expenses, and (ii) the payment of principal, interest and any
redemption premiums on the Parity Bonds, and all expenses of paying, securing and
insuring the same. The Parity Bonds shall constitute special obligations of the City that
shall be payable solely from, and shall be equally and ratably secured by a first lien on,
the Net Revenues, as collected and received by the City from the operation and ownership
of the System, which Net Revenues shall, in the manner hereinafter provided, be set aside
for and are hereby pledged by the City to the payment of the Parity Bonds in the Interest
and Sinking Fund and the Reserve Fund as hereinafter provided, and except as otherwise
expressly provided herein, the Parity Bonds shall be in all respects on a parity with and of
equal dignity with one another. The holders of the Parity Bonds shall never have the right
to demand payment of either the principal of or interest on the Parity Bonds out of any
funds raised or to be raised by taxation.
(b) Construction Fund. There is hereby created and there shall be
established on the books of the City a separate account to be entitled the "City of Beaumont,
Texas, Waterworks and Sewer System Revenue Bonds, Series 2008, Construction Fund".
Immediately after the sale and delivery of the Bonds, that portion of the proceeds of the
Bonds to be used for the cost of the Project and the cost of issuance of the Bonds shall be
deposited into the Construction Fund and disbursed for such purposes. Pending completion
of construction of the Project, interest earned on such proceeds may be used, at the City's
discretion, for the Project and shall be accounted for, maintained, deposited and expended
as permitted by the provisions of Section 1202.043 of the Texas Government Code, as from
time to time in effect, or as otherwise required by applicable law. Thereafter, such interest
shall be deposited in the Interest and Sinking Fund. Upon completion of the Project, the
monies, if any, remaining in the Construction Fund shall be transferred and deposited by the
City into the Interest and Sinking Fund.
(c) Rates and Charges. So long as any Parity Bonds remain
outstanding, there shall be fixed, charged and collected rates and charges for the use and
services of the System, which may be fully sufficient at all times:
(i) to pay all Maintenance and Operation Expenses; and
(ii) to produce Net Revenues in each fiscal year at least equal to 110
percent of the principal and interest requirements scheduled to occur in such fiscal
year on all Parity Bonds then outstanding plus an amount equal to the sum of all
deposits required to be made to the Reserve Fund in such fiscal year, but in no
event less than the amount required to establish and maintain the Interest and
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Sinking Fund, the Reserve Fund as hereinafter provided, and, to the extent that
funds for such purpose are not otherwise available, to pay all other outstanding
obligations payable from the Net Revenues of the System as and when the same
become due.
The City covenants that it will not grant or permit any free service from the
System except for public buildings and institutions operated by the City.
( ) � g p d Special Funds. The following special funds shall be maintained
and accounted for as hereinafter provided so long as any of the Parity Bonds remain
outstanding:
(i) Waterworks and Sewer System Revenue Fund (the "Revenue
Fund");
(ii) Waterworks and Sewer System Revenue Bond Interest and Sinking
Fund (the "Interest and Sinking Fund"); and
(iii) Waterworks and Sewer System Revenue Bond Reserve Fund (the
"Reserve Fund").
The Revenue Fund shall be maintained as a separate account on the books of the City.
The Interest and Sinking Fund and the Reserve Fund shall be maintained at an official
depository bank of the City, separate and apart from all other funds and accounts of the
City, and shall constitute trust funds which shall be held in trust for the benefit of the
holders of the Parity Bonds, and the proceeds of which (except for interest income, which
shall be transferred to the Revenue Fund) shall be and are hereby pledged to the payment
of the Parity Bonds. All of the Funds named above shall be used solely as provided in
this Ordinance so long as any Parity Bonds remain outstanding.
(e) Flow of Funds. All Gross Revenues of the System shall be
deposited as collected into the Revenue Fund. Moneys from time to time on deposit to
the credit of the Revenue Fund shall be applied as follows in the following order of
priority:
(i) First, to pay Maintenance and Operation Expenses and to provide
by encumbrance for the payment of all obligations incurred by the City for
Maintenance and Operation Expenses which may include an operating reserve
equal to one month's estimated Maintenance and Operation Expenses.
(ii) Second, to make all deposits into the Interest and Sinking Fund
required by this Ordinance and any ordinance authorizing the issuance of any
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outstanding Parity Bonds and any ordinance authorizing the issuance of
Additional Parity Bonds.
(iii) Third, to make all deposits into the Reserve Fund required by this
Ordinance and any ordinance authorizing the issuance of any outstanding Parity
Bonds and any ordinance authorizing the issuance of Additional Parity Bonds.
(iv) Fourth, to pay any amounts due to any bond insurer of Parity
Bonds not paid pursuant to subsections (ii) or (iii) above.
(v) Fifth, for any lawful purpose, including transfers to the General
Fund as permitted by law.
Whenever the total amounts on deposit to the credit of the Interest and Sinking Fund and
the Reserve Fund shall be equivalent to the sum of the aggregate principal amount of all
outstanding Parity Bonds plus the aggregate amount of all interest accrued and to accrue
thereon, no further payments need be made into the Interest and Sinking Fund or the
Reserve Fund.
(f) Interest and Sinking. On or before the last Business Day of
each month so long as any Parity Bonds remain outstanding, after making all required
payments and provision for payment of Maintenance and Operation Expenses, there shall
be transferred into the Interest and Sinking Fund from the Revenue Fund the following
amounts:
(i) Such amounts, in approximately equal monthly installments, as
will be sufficient to pay the interest scheduled to become due on the Parity Bonds
on the next interest payment date; and
(ii) Such amounts, in approximately equal monthly installments, as
will be sufficient to pay the next maturing principal of the Parity Bonds, including
the principal amounts of, and any redemption premiums on, any Parity Bonds
payable as a result of the exercise or operation of any redemption provision
contained in this Ordinance or in any ordinance authorizing the issuance of Parity
Bonds.
Moneys deposited to the credit of the Interest and Sinking Fund (except for interest
income, which shall be transferred to the Revenue Fund) shall be used solely for the
purpose of paying principal (either at maturity or prior redemption or to purchase Parity
Bonds in the open market to be credited against mandatory redemption requirements),
interest and redemption premiums on the Parity Bonds, plus all bank charges and other
costs and expenses relating to such payment, on a pro rata basis among all series of Parity
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Bonds. On or before each principal and/or interest payment date for the Parity Bonds, the
City shall transfer from the Interest and Sinking Fund to the paying agents for the Parity
Bonds an amount equal to the principal, interest and redemption premiums payable on the
Parity Bonds on such date, together with an amount equal to all bank charges and other
costs and expenses relating to such payment. The paying agents for the Parity Bonds
shall totally destroy all paid Parity Bonds and coupons (if any) and shall provide the City
with an appropriate certificate of destruction.
(g) Reserve Fund. Unless the Reserve Fund is fully funded, on or
before the last Business Day of each month so long as any Parity Bonds remain
outstanding, after making all required payments and provision for payment of
Maintenance and Operation Expenses, and after making the transfers into the Interest and
Sinking Fund required in the preceding Section, there shall be transferred into the
Reserve Fund from the Revenue Fund an amount at least equal to one-sixtieth (1/60`h) of
the average annual principal and interest requirements on the Parity Bonds, so that the
Reserve Fund shall contain, in no more than 60 months after the issuance of each such
issue of Parity Bonds, money and investments in an aggregate amount at least equal to the
average annual principal and interest requirements on all Parity Bonds then outstanding.
After such amount has accumulated in the Reserve Fund and so long thereafter as such
Fund contains such amount, no further deposits shall be required to be made into the
Reserve Fund, and any excess amounts may be transferred to the Revenue Fund. But if
and whenever the balance in the Reserve Fund is reduced below such amount, monthly
deposits into such Fund shall be resumed and continued in amounts at least equal to one-
sixtieth (1/601h) of the average annual principal and interest requirements on the Parity
Bonds until the Reserve Fund has been restored to such amount; provided however, if a
Reserve Fund Surety Policy has been obtained by the City pursuant to the next paragraph
below, then the provisions of such next paragraph shall govern and control with respect to
replenishment of amounts drawn under the Reserve Fund Surety Policy. The Reserve
Fund shall be used to pay the principal of and interest on the Parity Bonds at any time
when there is not sufficient money available in the Interest and Sinking Fund for such
purpose and it may be used finally to pay and retire the last Parity Bonds to mature or be
redeemed.
To the extent permitted by law, the City expressly reserves the right at any time to
satisfy all or any part of the amounts required to be on deposit in the Reserve Fund (the
"Reserve Fund Requirement") by obtaining for the benefit of the Reserve Fund one or
more Reserve Fund Surety Policies (a "Reserve Fund Surety Policy"). In the event the
city elects to substitute at any time a Reserve Fund Surety Policy for any funded amounts
in the Reserve Fund, it may apply any bond proceeds thereby released, to the greatest
extent permitted by law, to any purposes for which the bonds were issued, and if all such
purposes have been satisfied, to the payment of debt service on such bonds, and it may
apply any other funds thereby released to any of the purposes for which such funds may
21
lawfully be applied including the payment of debt service on the Parity Bonds. A Reserve
Fund Surety Policy shall be an insurance policy or other similar guarantee in a principal
amount equal to the portion of the Reserve Fund Requirement to be satisfied which is
issued by a financial institution or insurance company with a rating for its long term
unsecured debt or claims paying ability in the highest letter category by two major
municipal securities evaluation sources. The premium for any such policy shall be paid
from bond proceeds or other funds of the City lawfully available for such purpose. The
City reserves the right to fund any increase in the Reserve Fund Requirement caused by
the issuance of Additional Parity Bonds by the purchase of a Reserve Fund Surety Policy
in the amount of such increase or by making transfers from the Revenue Fund to the
Reserve Fund, in approximately equal monthly installments, in amounts sufficient to
accumulate the increase in the Reserve Fund Requirement within sixty (60) months of the
issuance of such Additional Parity Bonds. If the Reserve Fund contains only cash and
the balance in the Reserve Fund is reduced below the Reserve Fund Requirement at any
time, the City shall make monthly transfers from the Revenue Fund to the Reserve Fund,
in approximately equal monthly installments, in amounts sufficient to restore the balance
in the Reserve Fund to the Reserve Fund Requirement within twelve (12) months of the
date on which the balance in the Reserve Fund was so reduced. If the Reserve Fund
contains a Reserve Fund Surety Policy (and no cash) and a draw is made against such
policy, the City shall make monthly transfers from the Revenue Fund, in approximately
equal monthly installments, in amounts sufficient to reimburse the amount drawn under
such policy within twelve (12) months. If the Reserve Fund contains a combination of
cash and a Reserve Fund Surety Policy, and the balance in the Reserve Fund is reduced
below the Reserve Fund Requirement by a combination of cash withdrawals and draws
against the Reserve Fund Surety Policy, the City shall make monthly transfers from the
Revenue Fund, in approximately equal monthly installments, in amounts sufficient to
restore the cash balance in the Reserve Fund and reimburse the amount drawn under such
policy within twelve (12) months, with reimbursement to be made for all amounts drawn
under such policy before any cash deposits are made into the Reserve Fund. Any
reimbursement of amounts drawn against a Reserve Fund Surety Policy shall be limited
to the amounts actually paid under such policy, and the City shall have no obligation to
make any reimbursement payment with respect to any such policy except as provided
herein.
(h) Deficiencies in Funds. If in any month there shall not be deposited
into any Fund maintained pursuant to this Section 19 the full amounts required herein,
amounts equivalent to such deficiency shall be set apart and paid into such Fund or Funds
from the first available and unallocated money in the Revenue Fund, and such payment
shall be in addition to the amounts otherwise required to be paid into such Funds during
the succeeding month or months. To the extent necessary, the rates and charges for the
System shall be increased to make up for any such deficiencies.
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(i) Investment of Funds; Transfer of Investment Income. Money in
each Fund maintained pursuant to this Section of this Ordinance may, at the option of the
City, be invested as permitted by law, provided that all such deposits and investments
shall be made in such manner that the money required to be expended from any Fund will
be available at the proper time or times, and provided further that in no event shall
deposits or investment of money in the Reserve Fund mature later than the final maturity
date of the Parity Bonds. Any obligation in which money is so invested shall be kept and
held in the Fund from which the investment was made. All such investments shall be
promptly sold when necessary to prevent any default in connection with the Parity Bonds.
All interest and income derived from such deposits and investments shall be transferred
or credited as received to the Revenue Fund, and shall constitute Gross Revenues of the
System; provided, however, to the extent such interest and income is derived from bond
proceeds, such interest and income shall not constitute Gross Revenues of the System and
shall only be used for the purposes for which the bond proceeds may be used.
20. Additional Bonds.
(a) Additional Parity Bonds. The City reserves the right to issue, for
any lawful purpose, including the refunding of any previously issued Parity Bonds or any
other bonds or obligations of the City issued in connection with the System, one or more
series of Additional Parity Bonds payable from, and secured by a first lien on and pledge
of, the Net Revenues of the System, on a parity with the Bonds and any other Additional
Parity Bonds then outstanding; provided, however, that no Additional Parity Bonds may
be issued unless:
(i) The Additional Parity Bonds mature on September 1, and interest
is payable on March 1 and September 1;
(ii) The Interest and Sinking Fund and the Reserve Fund each contain
the amount of money then required to be on deposit therein;
(iii) For either the preceding Fiscal Year or any consecutive 12-month
calendar period ending no more than 90 days prior to adoption of the ordinance
authorizing such Additional Parity Bonds, Net Revenues were equal to at least
125% of the average annual principal and interest requirements on all Parity
Bonds that will be outstanding after the issuance of the series of Additional Parity
Bonds then proposed to be issued, as certified by the City's Finance Officer or by
an independent certified public accountant or firm of independent certified public
accountants; or
(iv) If the City cannot meet the test described in (iii) above, but a change
in the rates and charges applicable to the System becomes effective at least sixty
23
(60) days prior to the adoption of the ordinance authorizing Additional Parity
Bonds and the City's Finance Officer certifies that, had such change in rates and
charges been effective for the preceding fiscal year or 12 consecutive calendar
month period ending no more than 90 days prior to adoption of said ordinance, the
Net Revenues for such period would have met the test described in (iii) above.
(b) Subordinate Lien Obligations. The City reserves the right to issue,
for any lawful purpose, bonds, notes or other obligations secured in whole or in part by
liens on and pledges of the Net Revenues that are junior and subordinate to the lien on
and pledge of Net Revenues securing payment of the Parity Bonds. Such subordinate lien
obligations may be further secured by any other source of payment lawfully available for
such purposes.
(c) Special Project Bonds. The City reserves the right to issue revenue
bonds secured by liens on and pledges of revenues and proceeds derived from Special
Projects.
21. Covenants and Provisions Relating to all Pari. Bonds.
(a) Punctual Payment of Pari1y Bonds. The City will punctually pay or
cause to be paid the interest on and principal of all Parity Bonds according to the terms
thereof and will faithfully do and perform, and at all times fully observe, any and all
covenants, undertakings, stipulations and provisions contained in this Ordinance and in
any ordinance authorizing the issuance of Additional Parity Bonds.
(b) Maintenance of System. So long as any Parity Bonds remain
outstanding, the City covenants that it will at all times maintain the System, or within the
limits of its authority cause the same to be maintained, in good condition and working
order and will operate the same, or cause the same to be operated, in an efficient and
economical manner at a reasonable cost and in accordance with sound business
principles. In operating and maintaining the System, the City will comply with all
contractual provisions and agreements entered into by it and with all valid rules,
regulations, directions or order of any governmental, administrative or judicial body
promulgating same, noncompliance with which would materially an adversely affect the
operation of the System.
(c) Sale or Encumbrance of System. So long as any Parity Bond
remain outstanding, the City will not sell, dispose of or, except as permitted in this
Ordinance, further encumber the System; provided, however, that this provision shall not
prevent the City from disposing of any portion of the System which is being replaced or is
24
deemed by the City to be obsolete, worn out, surplus or no longer needed for the proper
operation of the System. Any agreement pursuant to which the City contracts with a
person, corporation, municipal corporation or political subdivision to operate the System
or to lease and/or operate all or part of the System shall not be considered as an
encumbrance of the System.
(d) Insurance. The City further covenants and agrees that it will keep
the System insured with insurers of good standing against risks, accidents or casualties
against which and to the extent insurance is customarily carried by political subdivisions
of the State of Texas operating similar properties, to the extent that such insurance is
available. The cost of all such insurance, together with any additional insurance, shall be
a part of the Maintenance and Operation Expenses. All net proceeds of such insurance
shall be applied to repair or replace the insured property that is damaged or destroyed, or
to make other capital improvements to the System, or to redeem Parity Bonds.
(e) Accounts, Records and Audits. So long as any Parity Bonds
remain outstanding, the City covenants and agrees that it will maintain a proper and
complete system of records and accounts pertaining to the operation of the System in
which full, true and proper entries will be made of all dealings, transactions, business and
affairs which in any way affect or pertain to the System or the Gross Revenues or the Net
Revenues thereof. The City shall after the close of each of its Fiscal Years cause an audit
report of such records and accounts to be prepared by an independent certified public
accountant or independent firm of certified public accountants. Each year promptly after
such audit report is prepared, the City shall furnish a copy thereof without cost to the
Municipal Advisory Council of Texas and any holders of Parity Bonds who shall request
same. All expenses incurred in preparing such audits shall be Maintenance and Operation
Expenses.
(f) Competition. To the extent it legally may, the City will not grant
any franchise or allow for the acquisition, construction or operation of any competing
facilities which might be used as a substitute for the System and will prohibit the
operation of any such competing facilities.
(g) Pledge and Encumbrance of Net Revenues. The City covenants
and represents that it has the lawful power to pledge the Net Revenues to the payment of
the Parity Bonds and has lawfully exercised such power under the Constitution and laws
of the State of Texas. The City further covenants and represents that, other than to the
payment of the Parity Bonds, the Net Revenues are not and will not be pledged to the
payment of any debt or obligation of the City, or in any other manner encumbered unless
such pledge or encumbrance is junior and subordinate to the lien and pledge securing
payment of the Parity Bonds.
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(h) Remedies. This Ordinance shall constitute a contract between the
City and the holders of the Parity Bonds from time to time outstanding, and the Bond
Insurers, and shall remain in effect until the Parity Bonds and the interest thereon and all
amounts owing to the Bond Insurers under any Bond Insurance Policy shall be fully paid
or discharged or provision therefor shall have been made as provided herein. In the event
of a default in the payment of the principal of or interest on any of the Parity Bonds or a
default in the performance of any duty or covenant provided by law or in this Ordinance
or a default in respect of any Bond Insurance Policy, the holder or holders of any of the
Parity Bonds or any Bond Insurer, as appropriate, may pursue all legal remedies afforded
by the Constitution and laws of the State of Texas to compel the City to remedy such
default and to prevent further default or defaults. Without in any way limiting the
generality of the foregoing, it is expressly provided that any holder of any of the Parity
Bonds or any Bond Insurer may at law or in equity, by suit, action, mandamus, or other
proceedings, enforce and compel performance of all duties required to be performed by
the City under this Ordinance, including the making and collection of reasonable and
sufficient rates and charges for the use and services of the System, the deposit of the
Gross Revenues thereof into the special funds as herein provided, and the application of
such Gross Revenues and Net Revenues in the manner required in this Ordinance.
(i) Defeasance. The City may defease the provisions of this
Ordinance and discharge its obligation to the holders of any or all of the Parity Bonds to
pay principal, interest and redemption premium (if any) thereon in any manner permitted
by law, including, without limitation, by depositing with any paying agent for such Parity
Bonds or with the State Treasurer of the State of Texas either: (i) cash in an amount
equal to the principal amount and redemption premium, if any, of such Parity Bonds plus
interest thereon to the date of maturity or redemption, or (ii) pursuant to an escrow or
trust agreement, direct obligations of, or obligations the principal and interest of which
are guaranteed by, the United States of America, in principal amounts and maturities and
bearing interest at rates sufficient to provide for the timely payment of the principal
amount and redemption premium, if any, of such Parity Bonds plus interest thereon to the
date of maturity or redemption; provided, however, that if any of such Parity Bonds are to
be redeemed prior to their respective dates of maturity, provision shall have been made
for giving notice of redemption as provided in the ordinance authorizing such Parity
Bonds. Upon such deposit, such Parity Bonds and coupons appertaining thereto shall no
longer be regarded to be outstanding or unpaid, and the lien on and pledge of Net
Revenues securing such Parity Bonds shall thereupon cease and terminate.
0) Legal Holidays. In any case where the date fixed for payment of
interest on or principal of the Parity Bonds or the date fixed for redemption of any Parity
Bonds shall be a legal holiday or a day on which a paying agent for the Parity Bonds is
authorized by law to close, then payment of interest or principal by such paying agent
need not be made on such date but may be made on the next succeeding business day
26
with the same force and effect as if made on the date fixed for such payment and no
interest shall accrue for the period from such date to the date of actual payment.
(k) Unavailability of Authorized Publication. If, because of the
temporary or permanent suspension of any newspaper,journal or other publication, or, for
any reason, publication of notice cannot be made meeting any requirements herein
established, any notice required to be published by the provisions of this Ordinance shall
be given in such other manner and at such time or times as in the judgment of the City
shall most effectively approximate such required publication and the giving of such
notice in such manner shall for all purposes of this Ordinance be deemed to be in
compliance with the requirements for publication thereof.
(1) Obligations Owing to Insurers. The City stipulates and agrees that
it shall make full and timely payment of all amounts owing to any Insurer under any
Financial Guaranty Agreements and there shall be no termination of this Ordinance or
redemption, refunding or defeasance of the Parity Bonds unless and until all of such
amounts owing under the Financial Guaranty Agreement in respect of those Bonds shall
have been paid in full.
22. Further Proceedings. After the Bonds to be initially issued shall have been
executed, it shall be the duty of the Mayor and other appropriate officials and agents of
the City to deliver the Bonds to be initially issued and all pertinent records and
proceedings to the Attorney General of the State of Texas, for examination and approval.
After the Bonds to be initially issued shall have been approved by the Attorney General,
they shall be delivered to the Comptroller of Public Accounts of the State of Texas for
registration. Upon registration of the Bonds to be initially issued, the Comptroller of
Public Accounts (or the Comptroller's bond clerk or an assistant bond clerk lawfully
designated in writing to act for the Comptroller) shall manually sign the Comptroller's
Registration Certificate prescribed herein and the seal of said Comptroller shall be
impressed or placed in facsimile, thereon.
23. Sale of Bonds. The Bonds are hereby sold and shall be delivered to the
Underwriter at a price of$ , which represents the par amount of the
Bonds of$20,000,000.00, plus a premium of$ , and less an underwriting
discount of$ , plus any accrued interest thereon from the dated date of
the Bonds to the date of issuance, all in accordance with the terms of a bond purchase
agreement of even date herewith, presented to and hereby approved by the City Council,
which price and terms are hereby found and determined to be the most advantageous
reasonably obtainable by the City. Each of the Mayor and the Mayor Pro Tern and other
appropriate officials of the City are hereby authorized and directed to execute such bond
purchase agreement on behalf of the City, and each of the Mayor and Mayor Pro Tern and
all other officers, agents and representatives of the City are hereby authorized to do any
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and all things necessary or desirable to satisfy the conditions set out therein and to
provide for the issuance and delivery of the Bonds.
The purchase of and payment of the premium for the Bond Insurance Policy by
the City, in accordance with the terms of a commitment for such insurance presented to
and hereby approved by the City Council is hereby authorized. All officials and
representatives of the City are authorized and directed to execute such documents and to
do any and all things necessary or desirable to obtain such insurance, and the printing on
the Bonds of an appropriate legend regarding such insurance is hereby approved.
24. Tax Exemption.
(a) General Tax Covenant. The City intends that the interest on the
Bonds shall be excludable from gross income for purposes of federal income taxation
pursuant to Sections 103 and 141 through 150 of the Code, and the applicable Income
Tax Regulations (the "Regulations"). The City covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that if taken or omitted,
respectively, would cause the interest on the Bonds to be includable in gross income, as
defined in Section 61 of the Code, of the holders thereof for purposes of federal income
taxation. In particular, the City covenants and agrees to comply with each requirement of
this Section; provided, however, that the City shall not be required to comply with any
particular requirement of this Section if the City has received an opinion of nationally
recognized bond counsel ("Counsel's Opinion") that such noncompliance will not
adversely affect the exclusion from gross income for federal income tax purposes of
interest on the Bonds or if the City has received Counsel's Opinion to the effect that
compliance with some other requirement set forth in this Section will satisfy the
applicable requirements of the Code, in which case compliance with such other
requirement specified in such Counsel's Opinion shall constitute compliance with the
corresponding requirement specified in this Section. The City represents and warrants
that the City shall realize present value debt service savings (determined without regard to
administrative expenses) in connection with issuance of the Bonds to the extent that the
proceeds thereof are used to refund the Refunded Bonds.
(b) No Private Use or Payment and No Private Loan Financing. The City
shall certify, through an authorized officer, employee or agent that based upon all facts
and circumstances known or reasonably expected to be in existence on the date the Bonds
are delivered, that the proceeds of the Refunded Bonds have not been used, and that
proceeds of the Refunded Bonds and the Bonds will not be used in a manner that would
cause the Bonds to be "private activity bonds" within the meaning of Section 141 of the
Code and the Regulations promulgated thereunder. Moreover, the City covenants and
agrees that it will make such use of the proceeds of the Refunded Bonds and the Bonds
including interest or other investment income derived from Bond proceeds, regulate the
use of property financed, directly or indirectly, with such proceeds, and take such other
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and further action as may be required so that the Bonds will not be "private activity
bonds" within the meaning of Section 141 of the Code and the Regulations promulgated
thereunder.
(c) No Federal Guaranty. The City covenants and agrees not to take
any action, or knowingly omit to take any action within its control, that, if taken or
omitted, respectively, would cause the Bonds to be "federally guaranteed" within the
meaning of Section 149(b) of the Code and applicable regulations thereunder, except as
permitted by Section 149(b)(3) of the Code and such Regulations.
(d) No-Arbitrage Covenant. The City shall certify, through an
authorized officer, employee or agent, that based upon all facts and estimates known or
reasonably expected to be in existence on the date the Bonds are delivered, the City will
reasonably expect that the proceeds of the Bonds and the amounts transferred from the
Reserve Fund for the Refunded Bonds pursuant to Section 26 of this Ordinance will not
be used in a manner that would cause the Bonds to be "arbitrage bonds" within the
meaning of Section 148(a) of the Code and applicable Regulations thereunder.
Moreover, the City covenants and agrees that it will make such use of the proceeds of the
Bonds and the amounts so transferred from said Reserve Fund (including interest or other
investment income derived therefrom), regulate investments of such proceeds and
amounts, and take such other and further action as may be required so that the Bonds will
not be "arbitrage bonds" within the meaning of Section 148(a) of the Code and applicable
Regulations thereunder.
(e) Arbitrage Rebate. If the City does not qualify for an exception to
the requirements of Section 148(f) of the Code relating to rebate to the United States, the
City will take all necessary steps to comply with the requirement that certain amounts
earned by the City on the investment of the "gross proceeds" of the Bonds (within the
meaning of Section 148(f)(6)(B) of the Code), be rebated to the federal government.
Specifically, the City will (i) maintain records regarding the investment of the gross
proceeds of the Bonds as may be required to calculate the amount earned on the
investment of the gross proceeds of the Bonds separately from records of amounts on
deposit in the funds and accounts of the City allocable to other bond issues of the City or
moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at
such times as are required by applicable regulations, the amount earned from the
investment of the gross proceeds of the Bonds which is required to be rebated to the
federal government, and (iii)pay, not less often than every fifth anniversary date of the
delivery of the Bonds, and within sixty days after the retirement of the Bonds, or on such
other date as may be permitted under applicable regulations with respect to "gross
proceeds" in the Escrow Fund, all amounts required to be rebated to the federal
government. Further, the City will not indirectly pay any amount otherwise payable to
the federal government pursuant to the foregoing requirements to any person other than
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the federal government by entering into an investment arrangement with respect to the
gross proceeds of the Bonds that might result in a reduction in the amount required to be
paid to the federal government because such arrangement results in a smaller profit or a
larger loss than would have resulted if the arrangment had been at arm's length and had
the yield on the issue not been relevant to either party.
(f) Information Reporting. The City covenants and agrees to file or
cause to be filed with the Secretary of the Treasury, not later than the 15th day of the
second calendar month after the close of the calendar quarter in which the Bonds are
issued, an information statement concerning the Bonds, all under and in accordance with
Section 149(e) of the Code and applicable regulations thereunder.
(g) Continuing Obligation. Notwithstanding any other provision of
this Ordinance, the City's obligations under the covenants and provisions of this Section
shall survive the defeasance and discharge of the Bonds.
25. Application of Proceeds. Proceeds from the sale of the Bonds shall,
promptly upon receipt by the City, be applied as follows:
(i) Accrued interest, if any, shall be deposited into the Interest and
Sinking Fund;
(ii) $ from the sale of the Bonds shall be used to pay the
costs of issuing the Bonds, with any remaining portion thereof to be deposited into
the Construction Fund and used to pay the costs of the Project; and
(iii) The sum of$ from the sale of the Bonds shall
be deposited into the Construction Fund and used to pay the costs of the Project; and
(iv) Any proceeds from the Bonds remaining after making all such
deposits and payments shall be deposited into the Interest and Sinking Fund.
26. Re ice. The form of agreement setting forth the duties of the Registrar
is hereby approved, and the appropriate officials of the City are hereby authorized to
execute such agreement for and on behalf of the City.
27. Official Statement. The Preliminary Official Statement and the Official
Statement prepared in the initial offering and sale of the Bonds have been and are hereby
authorized, approved and ratified as to form and content. The use of the Preliminary
Official Statement and the Official Statement in the reoffering of the Bonds by the
Underwriter is hereby approved, authorized and ratified. The proper officials of the City are
hereby authorized to execute and deliver a certificate pertaining to the Preliminary Official
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I
Statement and the Official Statement as prescribed therein, dated as of the date of payment
for and delivery of the Certificates.
28. No Personal Liability. No recourse shall be had for payment of the
principal of or interest on any Bonds or for any claim based thereon, or on this Ordinance,
against any official or employee of the City or any person executing any Bonds.
29. Continuing Disclosure Undertaking. (a) Annual Reports. The City shall
provide annually to each NRMSIR and the SID, within six months after the end of each
fiscal year, financial information and operating data with respect to the City of the general
type included in the final Official Statement authorized in this Ordinance (i) under the
headings "SELECTED FINANCIAL INFORMATION", "CITY REVENUE DEBT",
"ADMINISTRATION OF THE CITY", "THE SYSTEM-Water and Sewer Rates" and in
APPENDIX B. The information to be provided shall include the financial statements of the
City prepared in accordance with the accounting principles the City may be required to
employ from time to time pursuant to State law or regulation and audited, if the audit is
completed within the period during which they must be provided. If the audit of such
financial statements is not completed within such period, then the City shall provide
unaudited financial statements for the applicable fiscal year to each NRMSI and the SID
within such six month period, and audited financial statements when the audit report on
such statement becomes available.
If the City changes its fiscal year, it will notify each NMSIR and the SID of the
change (and of the date of the new fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant to
this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific reference
to any document (including an official statement or other offering document, if it is
available from the MSRB)that theretofore has been provided to each NRMSIR and the SID
or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to
the Bonds, if such event is material within the meaning of the federal securities laws:
i. Principal and interest payment delinquencies;
ii. Non-payment related defaults;
iii. Unscheduled draws on debt service reserves
reflecting financial difficulties;
iv. Unscheduled draws on credit enhancements
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reflecting financial difficulties;
V. Substitution of credit or liquidity providers,
or their failure to perform;
vi. Adverse tax opinions or events affecting the
tax-exempt status of the Bonds;
vii. Modifications to rights of Bondholders;
viii. Bond calls;
ix. Defeasances;
X. Release, substitution or sale of property
securing repayment of the securities; and
xi. Rating changes.
The City shall notify the SID and either each NRMSIR or the MSRB, in a timely
manner, of any failure by the City to provide financial information or operating data in
accordance with section(a) above..
(c) Limitations Disclaimers and Amendments. 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 Texas law that causes Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders 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.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
HOLDER 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, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION. HOLDERS OR
BENEFICIAL OWNERS OF BONDS MAY SEEK AS THEIR SOLE REMEDY A WRIT
OF MANDAMUS TO COMPEL THE CITY TO COMPLY WITH ITS AGREEMENT.
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No default by the City with respect to its continuing disclosure agreement shall
constitute 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.
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, if(i) the
agreement, as amended, would have permitted the Underwriter to purchase or sell the
Bonds in the initial primary offering in compliance with the Rule, taking into account any
amendments or interpretations of such rule to the date of such amendment, as well as such
changed circumstances, and (ii) either (a) the holders of a majority in aggregate principal
amount of the outstanding Bonds consent to such amendment, or(b) any person unaffiliated
with the City (such as nationally recognized bond counsel) determines the amendment will
not materially impair the interests of the holders and beneficial owners of the Bonds. The
City may also amend or repeal the obligations and agreement in this Section if the SEC
amends or repeals the applicable provisions of the Rule or a court of final jurisdiction
determines that such provisions are invalid, and the City may amend the agreement in its
discretion in any other circumstance or manner, but in either case only to the extent that its
right to do so would not prevent an underwriter from lawfully purchasing or reselling the
Bonds in the primary offering of the Bonds in compliance with the Rule. If the City amends
its agreement, it must include with the next financial information and operating data
provided in accordance with its agreement an explanation, in narrative form, of the reasons
for the amendment and of the impact of any change in the type of information and operating
data so provided.
30. Open Meeting. It is hereby officially found and determined that the
meeting at which this Ordinance was adopted 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 of
the Texas Government Code.
31. Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The
titles and headings of the sections of this Ordinance have been inserted for convenience
of reference only and are not to be considered a part hereof and shall not in any way
modify or restrict any of the terms or provisions hereof. This Ordinance and all of the
terms and provisions hereof shall be liberally construed to effectuate the purposes set
forth herein and to sustain the validity of the Parity Bonds and the validity of the lien on
and pledge of the Net Revenues to secure the payment of the Parity Bonds.
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32. Bondholders Rights and Remedies. This Ordinance shall constitute a
contract between the City and the Owners of the Bonds from time to time Outstanding and
this Ordinance shall be and remain irrepealable until the Bonds and the interest thereon shall
be fully paid or discharged or provision therefor shall have been made as provided herein.
In the event of a default in the payment of the principal of or interest on any of the Bonds or
a default in the performance of any duty or covenant provided by law or in this Ordinance,
the Owner or Owners of any of the Bonds may pursue all legal remedies afforded by the
Constitution and laws of the State of Texas to compel the City to remedy such default and
to prevent further default or defaults. Without in any way limiting the generality of the
foregoing, it is expressly provided that any Owner of any of the Bonds may at law or in
equity, by suit, action, mandamus, or other proceedings, enforce and compel performance of
all duties required to be performed by the City under this Ordinance, including the making
and collection of reasonable and sufficient rates and charges for the use and services of the
System, the deposit of the revenues thereof into the Special Funds herein provided, and the
application of such revenues in the manner required in this Ordinance.
[33. Provisions Relating to Bond Insurance. Notwithstanding any provision
in this Ordinance to the contrary, as long as the Bond Insurance Policy shall be in full
force and effect, the City and the Registrar agree to comply with the following provisions:
(a) The prior written consent of the Insurer shall be a condition precedent to the deposit
of any credit instrument provided in lieu of a cash deposit into the Debt Service
Reserve Fund, if any. Notwithstanding anything to the contrary set forth in this
Ordinance, amounts on deposit in the Debt Service Reserve Fund shall be applied
solely to the payment of debt service due on the Bonds.
(b) The Insurer shall be deemed to be the sole holder of the Insured Bonds for the
purpose of exercising any voting right or privilege or giving any consent or
direction or taking any other action that the holders of the Bonds insured by it are
entitled to take pursuant to Section 32 of this Ordinance pertaining to (i) defaults
and remedies and (ii)the duties and obligations of the Paying Agent.
(c) If acceleration is permitted under this Ordinance, the maturity of Bonds insured by
the Insurer shall not be accelerated without the consent of the Insurer and in the
event the maturity of the Bonds is accelerated, the Insurer may elect, in its sole
discretion, to pay accelerated principal and interest accrued on such principal to the
date of acceleration (to the extent unpaid by the Issuer) and the Paying Agent shall
be required to accept such amounts. Upon payment of such accelerated principal
and interest accrued to the acceleration date as provided above, the Insurer's
obligations under the Insurance Policy with respect to such Bonds shall be fully
discharged.
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(d) No grace period for a covenant default shall exceed 30 days or be extended for
more than 60 days, without the prior written consent of the Insurer. No grace
period shall be permitted for payment defaults.
(e) The Insurer is a third party beneficiary to this Ordinance.
(f) Upon the occurrence of an extraordinary optional, special or extraordinary
mandatory redemption in part, the selection of Bonds to be redeemed shall be
subject to the approval of the Insurer. The exercise of any provision of this
Ordinance which permits the purchase of Bonds in lieu of redemption shall require
the prior written approval of the Insurer if any Bond so purchased is not cancelled
upon purchase.
(g) Any amendment, supplement, modification to, or waiver of, this Ordinance or any
other transaction document, including any underlying security agreement (each a
"Related Document"), that requires the consent of Bondowners or adversely affects
the rights and interests of the Insurer shall be subject to the prior written consent of
the Insurer.
(h) The rights granted to the Insurer under this Ordinance or any other Related
Document to request, consent to or direct any action are rights granted to the
Insurer in consideration of its issuance of the Insurance Policy. Any exercise by
the Insurer of such rights is merely an exercise of the Insurer's contractual rights
and shall not be construed or deemed to be taken for the benefit, or on behalf, of
the Bondholders and such action does not evidence any position of the Insurer,
affirmative or negative, as to whether the consent of the Bondowners or any other
person is required in addition to the consent of the Insurer.
(i) Only (1) cash, (2) non-callable direct obligations of the United States of America
("Treasuries"), (3) evidences of ownership of proportionate interests in future
interest and principal payments on Treasuries held by a bank or trust company as
custodian, under which the owner of the investment is the real party in interest and
has the right to proceed directly and individually against the obligor and the
underlying Treasuries are not available to any person claiming through the
custodian or to whom the custodian may be obligated, (4) subject to the prior
written consent of the Insurer, pre-refunded municipal obligations rated "AAA"
and "Aaa" by S&P and Moody's, respectively, or (5) subject to the prior written
consent of the Insurer, securities eligible for "AAA" defeasance under then
existing criteria of S & P or any combination thereof, shall be used to effect
defeasance of the Bonds unless the Insurer otherwise approves.
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To accomplish defeasance, the Issuer shall cause to be delivered (i) a report of an
independent firm of nationally recognized certified public accountants or such
other accountant as shall be acceptable to the Insurer ("Accountant") verifying the
sufficiency of the escrow established to pay the Bonds in full on the maturity or
redemption date ("Verification"), (ii) an Escrow Deposit Agreement (which shall
be acceptable in form and substance to the Insurer), (iii) an opinion of nationally
recognized bond counsel to the effect that the Bonds are no longer "Outstanding"
under this Ordinance and (iv) a certificate of discharge of the Paying Agent with
respect to the Bonds; each Verification and defeasance opinion shall be acceptable
in form and substance, and addressed, to the Issuer, Paying Agent and Insurer. The
Insurer shall be provided with final drafts of the above-referenced documentation
not less than five business days prior to the funding of the escrow.
Bonds shall be deemed "Outstanding" under this Ordinance unless and until they
are in fact paid and retired or the above criteria are met.
(j) Amounts paid by the Insurer under the Insurance Policy shall not be deemed paid
for purposes of this Ordinance and the Bonds relating to such payments shall
remain Outstanding and continue to be due and owing until paid by the Issuer in
accordance with this Ordinance. This Ordinance shall not be discharged unless all
amounts due or to become due to the Insurer have been paid in full or duly
provided for.
(k) Each of the Issuer and Paying Agent covenant and agree to take such action
(including, as applicable, filing of UCC financing statements and continuations
thereof) as is necessary from time to time to preserve the priority of the pledge of
the Net Revenues under applicable law.
(1) Claims Upon the Insurance Policy and Payments by and to the Insurer.
If, on the third Business Day prior to the related scheduled interest payment date
or principal payment date ("Payment Date") there is not on deposit with the
Paying Agent, after making all transfers and deposits required under this
Ordinance, moneys sufficient to pay the principal of and interest on the Bonds due
on such Payment Date, the Paying Agent shall give notice to the Bond Insurer and
to its designated agent (if any) (the "Insurer's Fiscal Agent") by telephone or
telecopy of the amount of such deficiency by 12:00 noon, New York City time, on
such Business Day. If, on the second Business Day prior to the related Payment
Date, there continues to be a deficiency in the amount available to pay the
principal of and interest on the Bonds due on such Payment Date, the Paying
Agent shall make a claim under the Insurance Policy and give notice to the Insurer
and the Insurer's Fiscal Agent (if any) by telephone of the amount of such
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deficiency, and the allocation of such deficiency between the amount required to
pay interest on the Bonds and the amount required to pay principal of the Bonds,
confirmed in writing to the Insurer and the Insurer's Fiscal Agent by 12:00 noon,
New York City time, on such second Business Day by filling in the form of
Notice of Claim and Certificate delivered with the Insurance Policy.
The Paying Agent shall designate any portion of payment of principal on Bonds
paid by the Insurer, whether by virtue of mandatory sinking fund redemption,
maturity or other advancement of maturity, on its books as a reduction in the
principal amount of Bonds registered to the then current Bondholder, whether
DTC or its nominee or otherwise, and shall issue a replacement Bond to the
Insurer, registered in the name of Financial Security Assurance Inc., in a principal
amount equal to the amount of principal so paid (without regard to authorized
denominations); provided that the Paying Agent's failure to so designate any
payment or issue any replacement Bond shall have no effect on the amount of
principal or interest payable by the Issuer on any Bond or the subrogation rights of
the Insurer.
The Paying Agent shall keep a complete and accurate record of all funds
deposited by the Insurer into the Policy Payments Account (defined below) and
the allocation of such funds to payment of interest on and principal of any Bond.
The Insurer shall have the right to inspect such records at reasonable times upon
reasonable notice to the Paying Agent.
Upon payment of a claim under the Insurance Policy, the Paying Agent shall
establish a separate special purpose trust account for the benefit of Bondholders
referred to herein as the "Policy Payments Account" and over which the Paying
Agent shall have exclusive control and sole right of withdrawal. The Paying
Agent shall receive any amount paid under the Insurance Policy in trust on behalf
of Bondholders and shall deposit any such amount in the Policy Payments
Account and distribute such amount only for purposes of making the payments for
which a claim was made. Such amounts shall be disbursed by the Paying Agent to
Bondholders in the same manner as principal and interest payments are to be
made with respect to the Bonds under the sections hereof regarding payment of
Bonds. It shall not be necessary for such payments to be made by checks or wire
transfers separate from the check or wire transfer used to pay debt service with
other funds available to make such payments. Notwithstanding anything herein to
the contrary, the Issuer agrees to pay to the Insurer (i) a sum equal to the total of
all amounts paid by the Insurer under the Insurance Policy (the "Insurer
Advances"); and (ii) to the extent permitted by law and subject to annual
appropriation by the Issuer, interest on expenses paid or incurred by the Insurer in
connection therewith until payment thereof in full, payable to the Insurer at the
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Late Payment Rate per annum (collectively, the "Insurer Reimbursement
Amounts"). "Late Payment Rate" means the lesser of(a) the greater of(i) the per
annum rate of interest, publicly announced from time to time by JPMorgan Chase
Bank at its principal office in The City of New York, as its prime or base lending
rate (any change in such rate of interest to be effective on the date such change is
announced by JPMorgan Chase Bank) plus 3%, and (ii) the then applicable
highest rate of interest on the Bonds and (b) the maximum rate permissible under
applicable usury or similar laws limiting interest rates. The Late Payment Rate
shall be computed on the basis of the actual number of days elapsed over a year of
360 days. The Issuer hereby covenants and agrees that the Insurer Advances are
secured by a lien on and pledge of the Net Revenues and payable from such Net
Revenues on a parity with debt service due on the Bonds.
Funds held in the Policy Payments Account shall not be invested by the Paying
Agent and may not be applied to satisfy any costs, expenses or liabilities of the
Paying Agent. Any funds remaining in the Policy Payments Account following a
Bond payment date shall promptly be remitted to the Insurer.
�I
(m) The Insurer shall, to the extent it makes any payment of principal of or interest on
the Bonds, become subrogated to the rights of the recipients of such payments in
accordance with the terms of the Insurance Policy. Each obligation of the Issuer to
the Insurer under the Related Documents shall survive discharge or termination of
such Related Documents.
(n) The Issuer shall pay or reimburse the Insurer any and all charges, fees, costs and
expenses that the Insurer may reasonably pay or incur in connection with (i) the
administration, enforcement, defense or preservation of any rights or security in
any Related Document; (ii) the pursuit of any remedies under this Ordinance or
any other Related Document or otherwise afforded by law or equity, (iii) any
amendment, waiver or other action with respect to, or related to, this Ordinance or
any other Related Document whether or not executed or completed, or (iv) any
litigation or other dispute in connection with this Ordinance or any other Related
Document or the transactions contemplated thereby, other than costs resulting
from the failure of the Insurer to honor its obligations under the Insurance Policy.
The Insurer reserves the right to charge a reasonable fee as a condition to
executing any amendment, waiver or consent proposed in respect of this
Ordinance or any other Related Document.
(o) After payment of reasonable expenses of the Paying Agent, the application of
funds realized upon default shall be applied to the payment of expenses of the
Issuer or rebate only after the payment of past due and current debt service on the
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II
Bonds and amounts required to restore the Debt Service Reserve Fund to the Debt
Service Reserve Requirement.
(p) The Insurer shall be entitled to pay principal or interest on the Bonds that shall
become Due for Payment but shall be unpaid by reason of Nonpayment by the
Issuer (as such terms are defined in the Insurance Policy) and any amounts due on
the Bonds as a result of acceleration of the maturity thereof in accordance with
this Ordinance, whether or not the Insurer has received a Notice of Nonpayment
(as such terms are defined in the Insurance Policy) or a claim upon the Insurance
Policy.
(q) The notice address of the Insurer is: Financial Security Assurance Inc., 31 West
52nd Street, New York, New York 10019, Attention: Managing Director —
Surveillance, Re: Policy No. ` Telephone: (212) 826-0100;
Telecopier: (212) 339-3556. In each case in which notice or other communication
refers to an Event of Default, then a copy of such notice or other communication
shall also be sent to the attention of the General Counsel and shall be marked to
indicate "URGENT MATERIAL ENCLOSED."
(r) The Insurer shall be provided with the following information by the Issuer or
Paying Agent, as the case may be:
(i) Annual audited financial statements within 150 days after the
end of the Issuer's fiscal year (together with a certification of
the Issuer that it is not aware of any default or Event of Default
under this Ordinance), and the Issuer's annual budget within 30
days after the approval thereof together with such other
information, data or reports as the Insurer shall reasonably
request from time to time;
(ii) Notice of any draw upon the Debt Service Reserve Fund within
two Business Days after knowledge thereof other than (i)
withdrawals of amounts in excess of the Debt Service Reserve
Requirement and (ii) withdrawals in connection with a
refunding of Bonds;
(iii) Notice of any default known to the Paying Agent or Issuer
within five Business Days after knowledge thereof,
(iv) Prior notice of the advance refunding or redemption of any of
the Bonds, including the principal amount, maturities and
CUSIP numbers thereof,
39
(v) Notice of the resignation or removal of the Paying Agent and
Bond Registrar and the appointment of, and acceptance of
duties by, any successor thereto;
(vi) Notice of the commencement of any proceeding by or against
the Issuer commenced under the United States Bankruptcy
Code or any other applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (an "Insolvency
Proceeding");
(vii) Notice of the making of any claim in connection with any
Insolvency Proceeding seeking the avoidance as a preferential
transfer of any payment of principal of, or interest on, the
Bonds;
(viii) A full original transcript of all proceedings relating to the
execution of any amendment, supplement, or waiver to the
Related Documents; and
(ix) All reports, notices and correspondence to be delivered to
Bondholders under the terms of the Related Documents.
(s) Notwithstanding satisfaction of the other conditions to the issuance of Additional
Bonds set forth in this Ordinance, no such issuance may occur (1) if an Event of
Default (or any event which, once all notice or grace periods have passed, would
constitute an Event of Default) exists unless such default shall be cured upon such
issuance and (2) unless the Debt Service Reserve Fund is fully funded at the Debt
Service Reserve Requirement (including the proposed issue) upon the issuance of
such Additional Bonds, in either case unless otherwise permitted by the Insurer.
(t) In determining whether any amendment, consent, waiver or other action to be
taken, or any failure to take action, under this Ordinance would adversely affect
the security for the Bonds or the rights of the Bondholders, the Paying Agent shall
consider the effect of any such amendment, consent, waiver, action or inaction as
if there were no Insurance Policy.
(u) No contract shall be entered into or any action taken by which the rights of the
Insurer or security for or sources of payment of the Bonds may be impaired or
prejudiced in any material respect except upon obtaining the prior written consent
of the Insurer.
40
(v) If the Bonds are issued for refunding purposes, there shall be delivered an opinion
of Bond Counsel addressed to the Insurer(or a reliance letter relating thereto), or a
certificate of discharge of the Paying Agent for the Refunded Bonds, to the effect
that, upon the making of the required deposit to the escrow, the legal defeasance
of the Refunded Bonds shall have occurred. If the Refunded Bonds are FSA-
insured, at least three business days prior to the proposed date for delivery of the
Policy with respect to the Refunding Bonds, the Insurer shall also receive (i) the
verification letter, of which Financial Security shall be an addressee, by an
independent firm of certified public accountants which is either nationally
recognized or otherwise acceptable to the Insurer, of the adequacy of the escrow
established to provide for the payment of the Refunded Bonds in accordance with
the terms and provisions of the Escrow Deposit Agreement, and (ii)the form of an
opinion of Bond Counsel addressed to the Insurer (or a reliance letter relating
thereto) to the effect that the Escrow Deposit Agreement is a valid and binding
obligation of the parties thereto, enforceable in accordance with its terms (such
Escrow Deposit Agreement shall provide that no amendments are permitted
without the prior written consent of the Insurer). An executed copy of each of
such opinion and reliance letter, if applicable, or Paying Agent's discharge
certificate, as the case may be, shall be forwarded to the Insurer prior to delivery
of the Bonds.]
[34. Special Provisions Relating to Reserve Policy. The purchase of and
payment of the premium for a Surety Policy to be issued by the Insurer to fund the
Reserve Fund requirement under Section 19(g) of this Ordinance in accordance with the
terms of a commitment for such policy presented to and hereby approved by the City
Council is hereby authorized. Hereinafter such Surety Policy shall be referred to as the
"Reserve Policy". So long as the Reserve Policy is in effect, the following provisions
shall apply and be applicable:
(a) The Issuer shall repay any draws under the Reserve Policy and pay all
related reasonable expenses incurred by Financial Security. Interest shall accrue
and be payable on such draws and expenses from the date of payment by Financial
Security at the Late Payment Rate. "Late Payment Rate" means the lesser of(a) the
greater of(i) the per annum rate of interest, publicly announced from time to time
by JPMorgan Chase Bank at its principal office in the City of New York, as its
prime or base lending rate ("Prime Rate") (any change in such Prime Rate to be
effective on the date such change is announced by JPMorgan Chase Bank) plus 3%,
and (ii) the then applicable highest rate of interest on the Bonds and (b) the
maximum rate permissible under applicable usury or similar laws limiting interest
rates. The Late Payment Rate shall be computed on the basis of the actual number
of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases
to announce its Prime Rate publicly, Prime Rate shall be the publicly announced
41
prime or base lending rate of such national bank as Financial Security shall specify.
(b) Repayment of draws and payment of expenses and accrued interest
thereon at the Late Payment Rate (collectively, "Policy Costs") shall commence in
the first month following each draw, and each such monthly payment shall be in an
amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
The Issuer hereby covenants and agrees that Policy Costs are secured by a lien on
and pledge of the Net Revenues of the System and payable from such Net Revenues
on a parity with the transfers into the Reserve Fund set forth in Section 19 (d)(iii) of
this Ordinance.
(c) Amounts in respect of Policy Costs paid to Financial Security shall be
credited first to interest due, then to the expenses due and then to principal due. As
and to the extent that payments are made to Financial Security on account of
principal due, the coverage under the Reserve Policy will be increased by a like
amount, subject to the terms of the Reserve Policy.
(d) All cash and investments in the debt service reserve fund established for
the Bonds (the "Reserve Fund") shall be transferred to the debt service fund for
payment of debt service on Bonds before any drawing may be made on the Reserve
Policy or any other credit facility credited to the Reserve Fund in lieu of cash
("Credit Facility"). Payment of any Policy Costs shall be made prior to
replenishment of any such cash amounts. Draws on all Credit Facilities (including
the Reserve Policy) on which there is available coverage shall be made on a pro-rata
basis (calculated by reference to the coverage then available thereunder) after
applying all available cash and investments in the Reserve Fund. Payment of Policy
Costs and reimbursement of amounts with respect to other Credit Facilities shall be
made on a pro-rata basis prior to replenishment of any cash drawn from the Reserve
Fund.
(e) If the Issuer shall fail to pay any Policy Costs in accordance with the
requirements of Paragraph 38(a) hereof, Financial Security shall be entitled to
exercise any and all legal and equitable remedies available to it, including those
provided under this Ordinance other than (i) acceleration of the maturity of the
Bonds or (ii) remedies which would adversely affect owners of the Bonds.
(f) This Ordinance shall not be discharged until all Policy Costs owing to
Financial Security shall have been paid in full. The Issuer's obligation to pay such
amounts shall expressly survive payment in full of the Bonds.
42
(g) The additional bonds test and the rate covenant in this Ordinance shall
expressly provide for at least one times coverage of the Policy Costs then due and
owing.
(h) This Ordinance shall require the Trustee to ascertain the necessity for a
claim upon the Reserve Policy and to provide notice to Financial Security in
accordance with the terms of the Reserve Policy at least five business days prior to
each date upon which interest or principal is due on the Bonds. Where deposits are
required to be made by the Issuer with the Trustee to the debt service fund for the
Bonds more often than semi-annually, the Trustee shall be instructed to give notice
to Financial Security of any failure of the Issuer to make timely payment in full of
such deposits within two business days of the date due.]
PASSED AND APPROVED this 1st day of July, 2008.
Mayor
The City of Beaumont
ATTEST:
City Clerk
The City of Beaumont
(SEAL)
43
3
July 1, 2008
Consider approving a resolution accepting the Hayes Gully Drainage Improvements Project
RICH WITH OPPORTUNITY
[I r A,11 1�1 C1 11 T City Council Agenda Item
T • E • % • A • 3
TO: City Council
FROM: Kyle Hayes, City Manager
`t,lam
PREPARED BY: Tom Warner, Director of Public Works
MEETING DATE: July 1, 2008
REQUESTED ACTION: Council consider a resolution accepting the Hayes Gully
Drainage Improvements Project.
RECOMMENDATION
The Administration recommends acceptance of the Hayes Gully Drainage Improvement Project,
approval of Change Order No. 2 in the amount of$94,567.56 and final payment in the amount of
$128,070.38 to Excavators and Constructors, LTD.
BACKGROUND
On June 19, 2007, City Council awarded Excavators and Constructors LTD the contract for the
Hayes Gully Drainage Improvements Project. for an amount of$3,668,172.00.
This project has been inspected and completed in accordance with the Terms and Conditions set
out in the contract documents. Change Order No. 1 was approved by City Council on June 19,
2007 and reduced the contract amount to $2,460,840.10. Due to an increase in construction item
quantities, Change Order No. 2 in the amount of$94,567.56 is required to adjust the quantities
actually used during the performance of the project, increasing the contract amount to
$2,555,407.66.
The MBE goal was met by subcontracting with the MBE firms of American Remediation, L.D.
Construction, Rural Pipe & Supply and W & S Mire Trucking in the amount of$265,152.10
representing 10.4% of the final contract amount.
BUDGETARY IMPACT
Funds are available in the Capital Program.
0
CITY OF BEAUMONT
DATE: June 16,2008
PROJECT: Hayes Gully Drainage Improvement Project
OWNER: City of Beaumont
CONTRACTOR: Excavators and Constructors,LTD
CHANGE ORDER NO. 2
� 1
Adjusting the estimated quantities to match final quantities used during the performance of the project.
. .`rnvl��vQT;E�'�c�R�Y�xrs CH.�N�E ORDER r. ,
GINAL CONTRACT AMOUNT: $3.668.175.00
FROM CHANGE ORDER NO.1 $ 460.840.10
TOTAL AMOUNT OF THIS CHANGE ORDER: $ 94,567 56
PERCENT OF THIS CHANGE ORDER: $ 2.6%
TOTAL PERCENT CHANGE TO DATE: $ (30.3%)
NEW CONTRACT AMOUNT: $$ 55555.407 66
ACCEPTED BY:
CONTRACTOR
APPROVED BY:
JORIS P.COLBERT,CITY ENGINEER
TOM WARNER,DIRECTOR OF PUBLIC WORKS
KYLE HAVES,CITY MANAGER
OSTED BY:
TINA BROUSSARD,CITY CLERK
RESOLUTION NO.
WHEREAS, on June 19, 2007, the City Council of the City of Beaumont, Texas,
passed Resolution No. 07-192 awarding a contract in the amount of $3,668,172 to
Excavators and Construction, LTD for a contract for the Hayes Gully Drainage
Improvement Project; and,
WHEREAS, Change Order No. 1 was required to remove a portion of the work in
the amount of$1,207,331.90, thereby decreasing the amount to $2,460,840.10; and,
WHEREAS, Change Order No. 2 is required to adjust the quantities actually used
during the performance of the project in the amount $94,567.56 thereby increasing the
contract to $2,555,407.66; and,
WHEREAS, the project has been inspected and completed in accordance with the
terms and conditions of the contract and should be accepted.
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the Hayes Gully Drainage Improvement Project be and the same is hereby
accepted.
BE IT FURTHER RESOLVED thatthe City Manager is hereby authorized to execute
Change Order No. 2 in the amount $94,567.56 thereby increasing the contract to
$2,555,407.66.
BE IT ALSO RESOLVED that the City Manager is hereby authorized to make final
payment in the amount of$128,070.38 to Excavators and Constructors, LTD.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 1st day of
July, 2008.
- Mayor Becky Ames -