HomeMy WebLinkAboutORD 92-22 ORDINANCE AUTHORIZING THE ISSUANCE OF
THE CITY OF BEAUMONT, TEXAS, WATERWORKS AND
SEWER SYSTEM JUNIOR LIEN REVENUE BONDS, SERIES 1992;
AND CONTAINING OTHER MATTERS RELATED THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
THE CITY OF BEAUMONT §
WHEREAS, the City of Beaumont, Texas (the "City" ) is
authorized, pursuant to Articles 1111 et seq. , Vernon' s Annotated
Texas Civil Statutes, as amended, to issue junior lien bonds
payable from the net revenues of its waterworks and sewer system
and to issue such junior lien bonds, without an election, for
money for acquisitions, extensions, construction, improvement or
repair of such system; and
WHEREAS, the City now desires to issue junior lien bonds in
order to provide for certain acquisitions, extensions,
construction, improvement or repair of its waterworks and sewer
system and has given notice as required by Chapter 252 of the
Texas Local Government Code, as amended, and Article 2368a,
Vernon' s Annotated Texas Civil Statutes, as amended, of its
intention to issue such junior lien bonds as hereinafter
authorized and has not received any petitions for a referendum
concerning issuance of such junior lien bonds; Now, Therefore,
BE IT ORDAINED BY THE CITY OF BEAUMONT:
1 . Definitions . Throughout this Ordinance, the following
terms and expressions as used herein shall have the meanings set
forth below
The term "Additional Junior Lien Bonds" shall mean the
additional Junior Lien Bonds permitted to be issued by the City
pursuant to Section 20 of this Ordinance, Section 20 of the
Outstanding Prior Lien Bond Ordinance, and Section 6 . 1 of the
Outstanding Junior Lien Bond Ordinance.
The term "Additional Prior Lien Bonds" shall mean the
additional Prior Lien Bonds permitted to be issued by the City
pursuant to Section 20 of this Ordinance, Section 20 of the
Outstanding Prior Lien Bond Ordinance, and Section 6 . 1 of the
Outstanding Junior Lien Bond Ordinance.
The term "Annual Principal and Interest Requirements" shall
mean, with respect to Prior Lien Bonds, Junior Lien Bonds, or any
one or more series thereof, and with respect to any Fiscal Year,
all payments of principal and interest scheduled to become due
during such Fiscal Year by reason of an interest payment date or
a maturity or mandatory redemption date occurring after the date
of calculation.
The term "Average Annual Principal and Interest
Requirements" shall mean, with respect to any series of Prior
Lien Bonds or Junior Lien Bonds (including the Bonds) , an amount
calculated by dividing the total Annual Principal and Interest
Requirements on such bonds by the number of Fiscal Years
remaining until the last maturity of such bonds .
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 Junior Lien Revenue
Bonds, Series 1992, authorized in this Ordinance, unless the
context clearly indicates otherwise. The Bonds constitute
"Additional Junior Lien Bonds" within the meaning of the
Outstanding Prior Lien Bond Ordinance and the Outstanding Junior
Lien Bond Ordinance.
The term "Business Day" shall mean any day which is not a
Saturday, Sunday, a day on which the Registrar is authorized by
law or executive order to close, or a legal holiday.
The term "City" shall mean The City of Beaumont, Texas, and,
where appropriate, the City Council thereof and any successor to
the City as owner of the System.
The term "Code" shall mean the Internal Revenue Code of
1986, as amended.
The term "Construction Fund" shall mean the fund so
designated which is created and established pursuant to Section
19 (e) of this Ordinance.
The term "Escrow Agreement" shall mean that certain Escrow
Agreement dated as of April 1, 1992 , between the City and
Ameritrust Texas, N.A. , Houston, Texas, as Escrow Agent.
The term "Financial Guaranty Agreement" shall mean a
financial guaranty agreement between the City and an Insurer
providing for issuance of a Qualified Surety Bond, payment of any
premiums therefor, and reimbursement of any amounts advanced
thereunder.
The term "Fiscal Year" shall mean the City' s fiscal year
which currently runs from October 1 to September 30, but which
may be changed from time to time by the City.
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 (but excluding any
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utility deposits) , the interest income from the investment or
deposit of money in the Revenue Fund, the Prior Lien Bond
Interest and Sinking Fund, the Prior Lien Bond Reserve Fund, the
Junior Lien Bond Interest and Sinking Fund, the Junior Lien Bond
Reserve Fund and any other revenues hereafter pledged to the
payment of Prior Lien Bonds and Junior Lien Bonds .
The term "Holder" or "holders" shall mean the owner or
owners, as the case may be, of one or more Bonds .
The term "Insurer" shall mean any insurance company which
issues a Qualified Surety Bond and which has been rated in the
highest rating category by A. M. Best & Company, Standard &
Poor' s Corporation or Moody' s Investors Services, Inc.
The term "Interest Payment Date" , when used in connection
with any Bond, shall mean September 1, 1992 , and each March 1 and
September 1 thereafter until maturity or earlier redemption of
such Bond.
The term "Issuance Date" , with respect to the Bonds
initially delivered to TWDB, shall mean the date on which each
such Bond is authenticated by the Registrar and delivered to and
paid for by TWDB. Bonds delivered upon transfer of or in
exchange for other Bonds shall bear the same Issuance Date as the
Bond or Bonds in lieu of or in exchange for which the new Bond or
Bonds may be delivered.
The term "Junior Lien Bonds" shall mean The City of
Beaumont, Texas, Waterworks and Sewer System Revenue Refunding
Bonds, Series 1981, issued in the original principal amount of
$3, 740, 000, The City of Beaumont, Texas, Combination Tax and
Revenue Certificates of Obligation, Series 1990, issued in the
original principal amount of $5,000,000, the Bonds authorized by
this Ordinance, and all Additional Junior Lien Bonds which may be
hereafter issued.
The term "Junior Lien Bond and Interest Sinking Fund" shall
mean the Interest and Sinking Fund which has been established
under the Outstanding Junior Lien Bond Ordinance and which shall
be maintained and accounted for as herein and therein provided.
The term "Junior Lien Bond Reserve Fund" shall mean the
Reserve Fund which has been established under the Outstanding
Junior Lien Bond Ordinance and which shall be maintained and
accounted for as herein and therein provided.
The term "Junior Lien Bond Reserve Fund Requirement" shall
mean, with respect to any series of Junior Lien Bonds, the
Average Annual Principal and Interest Requirements on the
respective series, provided that in no event shall such
requirements exceed 14% of the sum of the following for each
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series of Junior Lien Bonds then outstanding; the original face
amount of such series or, if the original proceeds of such series
(as defined in the Code and the Treasury Regulations promulgated
thereunder) are less than 98% of the original face amount
thereof, then the original proceeds of such series .
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 (but only such
repairs and extensions as, in the judgment of the governing body
of the City, are necessary to keep the System in operation and
render adequate service to the City and the inhabitants thereof,
or such as might be necessary to meet some physical accident or
conditions which would otherwise impair the Prior Lien Bonds or
Junior Lien Bonds) , 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 "Net Revenues" shall mean all Gross Revenues
remaining after deducting the Maintenance and Operation Expenses .
The term "Ordinance" as used herein and in the Bonds shall
mean this ordinance authorizing the Bonds .
The term "Outstanding Certificate of Obligation Ordinance"
shall mean the ordinance pursuant to which the City issued its
Combination Tax and Revenue Certificates of Obligation, Series
1990, in the original principal amount of $5,000, 000 .
The term "Outstanding Junior Lien Bond Ordinance" shall mean
the ordinance pursuant to which the City issued its Waterworks
and Sewer System Revenue Refunding Bonds, Series 1981, in the
original principal amount of $3,740,000 .
The term "Outstanding Prior Lien Bond Ordinance" shall mean
the ordinance pursuant to which the City issued its Waterworks
and Sewer System Revenue and Refunding Bonds, Series 1989 , in the
original principal amount of $16,840, 000 .
The term "Owner" shall mean any person who shall be the
registered owner of any outstanding Bonds .
The term "Paying Agent" shall mean the Registrar.
The term "Prior Lien Bonds" shall mean The City of Beaumont,
Texas, Waterworks and Sewer System Revenue and Refunding Bonds,
Series 1989 , issued in the original principal amount of
$16, 840,000, and each series of Additional Prior Lien Bonds from
time to time hereafter issued, but only to the extent such Prior
Lien Bonds remain outstanding within the meaning of this
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Ordinance.
The term "Prior Lien Bond Interest and Sinking Fund" shall
mean the fund which has been established pursuant to Section 19
of the Outstanding Prior Lien Bond Ordinance and which shall be
maintained and accounted for as therein provided.
The term "Prior Lien Bond Reserve Fund" shall mean the fund
which has been established pursuant to Section 19 of the
Outstanding Prior Lien Bond Ordinance and which shall be
maintained and accounted for as therein provided.
The term "Prior Lien Bond Reserve Fund Requirement" shall
mean, with respect to any series of Prior Lien Bonds, an amount
equal to the Average Annual Principal and Interest Requirement on
the respective series .
The term "Qualified Surety Bond" shall mean any surety bond
which is issued by an Insurer and which provides that if
insufficient amounts are on deposit in the Junior Lien Bond
Reserve Fund for transfer to the Junior Lien Bond Interest and
Sinking Fund in order to pay when due principal of and interest
on the Bonds issued pursuant to this Ordinance, the Insurer shall
deposit in the Junior Lien Bond Reserve Fund an amount equal to
the face amount of the surety bond less any unreimbursed deposits
previously made by the Insurer thereunder.
The term "Record Date" shall mean the fifteenth ( 15th)
calendar day of the month next preceding each Interest Payment
Date.
The term "Registrar" shall mean Ameritrust Texas, N.A. ,
Houston, Texas, and its successors in that capacity.
The term "Revenue Fund" shall mean the Revenue Fund which
has been established under the Outstanding Prior Lien Bond
Ordinance and the Outstanding Junior Lien Bond Ordinance and
which shall be maintained and accounted for as herein and therein
provided.
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 Prior Lien Bonds, Junior Lien Bonds or other
bonds payable from ad valorem taxes or revenues of the System and
for which all maintenance and operation expenses are payable from
sources other than ad valorem taxes or 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,
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construction and installation under such financing transaction.
The term "System" shall mean all properties, facilities,
improvements, equipment, interest, rights and powers 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 "TWDB" shall mean the Texas Water Development
Board.
2 . Interpretations . All definitions of terms used 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 the terms
and provisions hereof shall be liberally construed to effectuate
the purposes set forth herein and to sustain the validity of the
Bonds and the validity of the lien on and pledge of the Net
Revenues to secure the payment of the Bonds .
3 . Authorization. The Bonds shall be issued in fully
registered form in the total authorized aggregate amount of
TWENTY MILLION AND N01100 DOLLARS ($20,000, 000 . 00) for the
purposes of ( i) providing money for acquisitions, extensions,
construction, improvement, or repair of the System, and
( ii) paying all costs of issuance of the Bonds .
4 . Designation, Date, and Interest Payment Dates. The
Bonds shall be designated as "THE CITY OF BEAUMONT, TEXAS,
WATERWORKS AND SEWER SYSTEM JUNIOR LIEN REVENUE BONDS, SERIES
1992" and shall be dated April 1, 1992 . The Bonds shall bear
interest at the rates set forth in Section 5 below from the later
of the Issuance Date, 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 September 1, 1992, 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 to
be initially delivered to the TWDB shall bear the numbers, be 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 in transfer of or in exchange for other Bonds shall be
numbered (with appropriate prefix) in order of their
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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.
BONDS
Bond Principal Interest
Number Year Amount Rate
R- 1 1993 $ 180,000 5 .50%
R- 2 1994 190,000 5.50%
R- 3 1995 200,000 5 .50%
R- 4 1996 215,000 5 .50%
R- 5 1997 225,000 5 .50%
R- 6 1998 235,000 5 .50%
R- 7 1999 255,000 5 . 50%
R- 8 2000 270, 000 5 . 50%
R- 9 2001 285, 000 5 . 50%
R-10 2002 295 , 000 5 .50%
R-11 2003 315, 000 5 .50%
R-12 2004 335, 000 5 .50%
R-13 2005 1, 750, 000 5 .50%
R-14 2006 1,845, 000 5 .50%
R-15 2007 1,945, 000 5 .50%
R-16 2008 2 ,055, 000 5 .50%
R-17 2009 2, 165, 000 5 .50%
R-18 2010 2,285, 000 5 . 50%
R-19 2011 2,410,000 5 . 50%
R-20 2012 2,545,000 5 .50%
6 . Execution of Bonds; Seal . The Bonds shall be signed by
the Mayor and countersigned by the 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
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in Section 17 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 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 Bonds so authenticated were delivered by the
Registrar hereunder.
The Registrar, when it authenticates a Bond, shall cause the
Issuance Date to be stamped or imprinted on such Bond. Bonds
delivered on transfer of or in exchange for other Bonds shall
bear the same Issuance Date as the Bond or Bonds in lieu of or in
exchange for which the new Bond or Bonds may be delivered.
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 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 and premium, if
any, or interest on any Bond is not a Business Day, then the date
for such payment shall be the next succeeding Business Day, with
the same force and effect as if made on the original date that
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
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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 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 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 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, 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 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 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. The Issuance Date
of each Bond originally delivered to and paid for by TWDB shall
be recorded in the Bond Register. 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
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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 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, Issuance Date, 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,
Issuance Date, 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
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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;
(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 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 . Optional Redemption. The City reserves the right, at
its option, to redeem Bonds maturing September 1, 2003, and
thereafter prior to maturity, in whole or in part, in inverse
order of maturity, on September 1, 2002, or on any date
thereafter, at a price of par plus accrued interest on the
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amounts called for redemption to the date fixed for redemption.
Principal amounts may be redeemed only in integral multiples
of $5 , 000 . If a Bond subject to redemption is in a denomination
larger than $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 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.
Notice of any redemption identifying the Bonds to be
redeemed in whole or in part shall be given by the Registrar at
least 30 days prior to the date fixed for redemption by sending
written notice by first class mail to the Owner of each Bond to
be redeemed in whole or in part at the address shown on the
Register. Such notices shall state the redemption date, the
redemption price, the place at which Bonds are to be surrendered
for payment and, if less than all Bonds outstanding are to be
redeemed, the numbers of the Bonds or portions thereof to be
redeemed. Any notice given as provided in this Section 16 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, plus accrued interest to the date fixed for
redemption. When the Bonds have been called for redemption in
whole or in part and due provision has been 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 receiving payment 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.
17 . Form. The form of the Bonds, 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 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:
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FORM OF BOND
(Face of Bond)
United States of America
State of Texas
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS,
WATERWORKS AND SEWER SYSTEM
JUNIOR LIEN REVENUE BOND, SERIES 1992
INTEREST RATE : MATURITY DATE: ISSUANCE DATE: CUSIP:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Beaumont, Texas (the "City" ) promises to pay to
the Registered Owner identified above, or registered assigns,
solely from the revenues described herein, on the date specified
above, upon presentation and surrender of this Bond at the
principal corporate trust office of Ameritrust Texas, N.A. ,
Houston, 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 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 Issuance Date identified above, or the most recent
interest payment date to which interest has been paid or duly
provided for. The date of this Bond is April 1, 1992 , but
interest shall accrue on the principal amount hereof from the
Issuance Date. Interest on this bond is payable by check on
September 1 and March 1, beginning on September 1, 1992, mailed
to the registered owner of record as shown on the books of
registration kept by the Registrar as of the 15th calendar 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.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
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
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facsimile, on this Bond.
(AUTHENTICATION CERTIFICATE) THE CITY OF BEAUMONT
(SEAL)
Mayor
City Clerk
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
aggregating $20,000,000 (the "Bonds" ) , issued for the purpose of
providing money for acquisitions, extensions, construction,
improvement, or repair of its waterworks and sewer system (the
"System" ) , pursuant to an ordinance adopted by the City Council
on March 3, 1992 (the "Ordinance" ) , and in accordance with the
authority of Article 1111 et seq. , Vernon' s Annotated Texas Civil
Statutes, as amended, and all other applicable law, including
Chapter 252 of the Texas Local Government Code, as amended. ,
THIS BOND AND ALL OF THE BONDS OF THIS SERIES are special
obligations of the City that, together with (i) the City' s
outstanding Waterworks and Sewer System Revenue Refunding Bonds,
Series 1981 and ( ii) to the extent of $10,000 per annum, the
City' s outstanding Combination Tax and Revenue Certificates of
Obligation, Series 1990, are equally and ratably payable from and
secured by a 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 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. THE LIEN
ON NET REVENUES SECURING THE BONDS OF THIS SERIES AND ALL BONDS
ISSUED ON A PARITY THEREWITH SHALL BE IN ALL RESPECTS JUNIOR AND
SUBORDINATE TO THE PRIOR AND SUPERIOR LIEN ON NET REVENUES THAT
SHALL SECURE THE PAYMENT OF PRIOR LIEN WATERWORKS AND SEWER
SYSTEM REVENUE BONDS WHICH THE CITY ISSUED IN 1989 AND WHICH THE
CITY HAS RESERVED THE RIGHT TO ISSUE FROM TIME TO TIME IN THE
FUTURE SUBJECT TO THE RESTRICTIONS CONTAINED IN THE ORDINANCES
AUTHORIZING ISSUANCE OF SUCH PRIOR LIEN BONDS. 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.
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THE CITY HAS RESERVED THE RIGHT TO ISSUE prior lien bonds,
additional junior lien bonds, and subordinate lien bonds and
obligations, subject to the restrictions and limitations
contained in the Ordinance, which may be secured by a lien and
pledge prior and superior to, on a parity with, or subordinate
and inferior to, the lien on and pledge of the aforesaid Net
Revenues securing this Bond and the series of which it is a part.
THE OWNER HEREOF shall never have the right to demand
payment of this Bond out of any funds raised or to be raised by
taxation.
THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds
maturing September 1, 2003 and thereafter prior to their
scheduled maturities, in whole or from time to time in part, in
integral multiples of $5, 000, but in inverse order of maturity,
on September 1, 2002 , or on any date thereafter, at a price equal
to par plus accrued interest on the principal amounts called for
redemption to the date fixed for redemption. Reference is made
to the Ordinance for complete details concerning the manner of
redeeming Bonds .
NOTICE OF ANY REDEMPTION shall be given at least 30 -days
prior to the date fixed for redemption by first class mail,
addressed to the registered owners 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 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.
THIS BOND IS 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.
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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.
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER' S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that there is on file and of record in my
office a certificate of the Attorney General of the State of
Texas to the effect that this Bond and the proceedings for the
issuance hereof have been examined by him as required by law,
that he finds that it has been issued in conformity with the
Constitution and laws of the State of Texas and that it is a
valid and binding special obligation of the City of Beaumont,
Texas, payable from the revenues pledged to its payment by and in
the proceedings authorizing the same, and I do further certify
that this Bond has this day been registered by me.
WITNESS MY SIGNATURE AND SEAL this , 1992 .
xxxxxxxxxx
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 Ordinance described in the text of this Bond, in
exchange for or in replacement of a Bond, Bonds or a portion of a
Bond or Bonds of a Series which was originally approved by the
Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas .
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Ameritrust Texas, N.A. ,
Houston, Texas
By:
Authorized Signature
Date of Authentication:
Form of Assignment
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 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.
18 . Legal Opinion; Cusip. The approving opinion of Orgain,
Bell & Tucker, Beaumont, Texas, 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 .
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 hereinbelow described, and shall be applied in
the manner hereinafter set forth, in order to provide for ( i) the
payment of all Maintenance and Operation Expenses, ( ii) the
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payment of principal, interest and any redemption premiums (if
any) on the Prior Lien Bonds and all expenses of paying same
( including premiums for any Qualified Surety Bond and any amounts
to be reimbursed under a Financial Guaranty Agreement in respect
thereof) , and ( iii) the payment of principal, interest and any
redemption premiums (if any) on the Junior Lien Bonds and all
expenses of paying same ( including premiums for any Qualified
Surety Bond and any amounts to be reimbursed under a Financial
Guaranty Agreement in respect thereof) . The Junior Lien Bonds
shall constitute special obligations of the City that shall be
payable solely from and, subject to the prior and superior lien
of the Prior Lien Bonds, shall be equally and ratably secured by
a 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 pledged to the payment of the Junior Lien Bonds in the
Junior Lien Bond Interest and Sinking Fund and the Junior Lien
Bond Reserve Fund as hereinafter provided, and except as
otherwise expressly provided herein, the Junior Lien Bonds shall
be in all respects on a parity with and of equal dignity with one
another. Notwithstanding any provision herein to the contrary,
it is expressly stipulated and provided that the Certificates of
Obligation which were issued as Junior Lien Bonds pursuant to the
Outstanding Certificate of Obligation Ordinance are secured by a
pledge of Net Revenues of the System only to the extent of
$10,000 per annum, and accordingly for all purposes of this
Ordinance ( including without limitation deposits into the Junior
Lien Bond Interest and Sinking Fund and the Junior Lien Bond
Reserve Fund and calculations of Annual and Average Annual
Principal and Interest Requirements) the Certificates of
Obligations shall be considered to be Junior Lien Bonds only to
the extent of such limited annual pledge of Net Revenues . The
holders of the Junior Lien Bonds shall never have the right to
demand payment of the principal of or premium, if any, or
interest on the Junior Lien Bonds out of any funds raised or to
be raised by taxation.
(b) Rates and Charges . So long as any Junior Lien
Bonds remain outstanding, there shall be fixed, charged and
collected by the City rates and charges for the use and services
of the System, which shall 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 125% of the Average Annual
Principal and Interest Requirements on all Prior
Lien Bonds and Junior Lien Bonds, but in no event
less than the amount required to establish and
maintain the Prior Lien Bond Interest and Sinking
Fund, the Prior Lien Bond Reserve Fund, the Junior
Lien Bond Interest and Sinking Fund, and the
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Junior Lien Bond Reserve Fund as hereinafter
provided, and to pay all outstanding obligations
payable from the Net Revenues of the System, other
than Prior Lien Bonds and Junior Lien Bonds, as
and when the same become due, and to pay all
premiums for any Qualified Surety Bonds and any
amounts to be reimbursed under any Financial
Guaranty Agreement in respect thereof.
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.
(c) Special Funds . The following special funds shall
be maintained and accounted for as hereinafter provided so long
as any of the Junior Lien Bonds remain outstanding:
( i) the Revenue Fund;
( ii) the Prior Lien Bond Interest and Sinking Fund;
( iii ) the Prior Lien Bond Reserve Fund;
( iv) the Junior Lien Bond Interest and Sinking Fund;
and
(v) the Junior Lien Bond Reserve Fund.
Pursuant to this Ordinance, the Outstanding Prior Lien Bond
Ordinance, and the Outstanding Junior Lien Bond Ordinance, the
Revenue Fund shall be maintained as a separate account on the
books of the City. In accordance with the applicable provisions
of this Ordinance, the Outstanding Prior Lien Bond Ordinance and
the Outstanding Junior Lien Bond Ordinance, the Prior Lien Bond
Interest and Sinking Fund, the Prior Lien Bond Reserve Fund, the
Junior Lien Bond Interest and Sinking Fund and the Junior Lien
Bond 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. The Prior Lien Bond Interest and Sinking
Fund and the Prior Lien Bond Reserve Fund shall constitute trust
funds which shall be held in trust for the benefit of the holders
of the Prior Lien Bond and the proceeds of which (except for
interest income, which shall be transferred to the Revenue Fund)
shall be pledged to the payment of the Prior Lien Bonds . The
Junior Lien Bond Interest and Sinking Fund and the Junior Lien
Bond Reserve Fund shall constitute trust funds which shall be
held in trust for the benefit of the holders of the Junior Lien
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 Junior Lien Bonds .
Notwithstanding the foregoing, it is expressly stipulated that a
separate subaccount shall be established and maintained in the
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Prior Lien Bond Reserve Fund for each affected series of Prior
Lien Bonds pursuant to Subsection (g) below, and each subaccount
shall provide a separate source of payment solely for the
respective series of Prior Lien Bonds as to which the subaccount
has been established and maintained. All of the Funds named
above shall be used solely as provided herein so long as any
Junior Lien Bonds remain outstanding.
(d) 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 Prior Lien
Bond Interest and Sinking Fund required by this
Ordinance and any ordinance authorizing , the
issuance of Prior Lien Bonds .
( iii) Third, to reimburse Insurers for any amounts
advanced from time to time under any Qualified
Surety Bonds and any accompanying Financial
Guaranty Agreements in respect of Prior Lien
Bonds .
( iv) Fourth, to make all deposits into the Prior Lien
Bond Reserve Fund required by this Ordinance and
any ordinance authorizing the issuance of Prior
Lien Bonds as provided in Subsection (g) hereof.
(v) Fifth, to pay Insurers interest on amounts
advanced from time to time under any Qualified
Surety Bonds and any accompanying Financial
Guaranty Agreements in respect of Prior Lien
Bonds .
(vi) Sixth, to make all deposits into the Junior Lien
Bond Interest and Sinking Fund required by this
Ordinance and any ordinance authorizing the
issuance of Junior Lien Bonds .
(vii) Seventh, to reimburse Insurers for any amounts
advanced from time to time under any Qualified
Surety Bonds and any accompanying Financial
Guaranty Agreements in respect of Junior Lien
Bonds .
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(viii) Eighth, to make all deposits into the Junior Lien
Bond Reserve Fund required by this Ordinance and
any ordinance authorizing the issuance of Junior
Lien Bonds as provided in Subsection ( i) hereof.
( ix) Ninth, to pay Insurers interest on amounts
advanced from time to time under any Qualified
Surety Bonds and any accompanying Financial
Guaranty Agreements in respect of Prior Lien
Bonds .
(x) Tenth, to make all deposits required by any
ordinances authorizing the issuance of obligations
subordinate to the Junior Lien Bonds .
(xi) Eleventh, for any lawful purpose.
Whenever the total amounts on deposit to the credit of the Prior
Lien Bond Interest and Sinking Fund and the Prior Lien Bond
Reserve Fund shall be equivalent to the sum of the aggregate
principal amount of all outstanding Prior Lien Bonds plus the
aggregate amount of all interest accrued and to accrue thereon,
no further payments need be made into the Prior Lien Bond
Interest and Sinking Fund or the Prior Lien Bond Reserve Fund,
and such Prior Lien Bonds shall not be regarded as being
outstanding except for the purpose of being paid with the moneys
on deposit in such Funds . Whenever the total amounts on deposit
to the credit of the Junior Lien Bond Interest and Sinking Fund
and the Junior Lien Bond Reserve Fund shall be equivalent to the
sum of the aggregate principal amount of all outstanding Junior
Lien Bonds plus the aggregate amount of all interest accrued and
to accrue thereon, no further payments need be made into the
Junior Lien Bond Interest and Sinking Fund or the Junior Lien
Bond Reserve Fund, and such Junior Lien Bonds shall not be
regarded as being outstanding except for the purpose of being
paid with the moneys on deposit in such funds .
(e) Construction Fund. There is hereby created and
established a special fund of the City, to be known as "The City
of Beaumont, Texas, Waterworks and Sewer System Junior Lien
Revenue Bonds, Series 1992 Construction Fund" , which shall be
established at an official depository of the City and kept
separate and apart from the other funds of the City. The
proceeds of the Bonds, as received, shall be deposited into the
Construction Fund. Money on deposit in the Construction Fund
shall be used only for the purposes set forth in Sections 3 and
25 of this Ordinance. Money on deposit in the Construction Fund
may, at the option of the City, be invested as permitted by Texas
law; provided that all such deposits and investments shall be
made in such manner that the money required to be expended from
the Construction Fund will be available at the proper time or
times . So long as any Bonds remain outstanding, all uninvested
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moneys on deposit in, or credited to, the Construction Fund shall
be secured by the pledge of security, as provided by law for
cities in the State of Texas . All interest and income derived
from such deposits and investments shall remain in the
Construction Fund, and shall be used for the purposes set forth
in Sections 3 and 25 of this Ordinance.
( f) Prior Lien Bond Interest and Sinking Fund. After
making all required payments and provision for payment of
Maintenance and Operation Expenses, there shall be transferred in
approximately equal monthly deposits into the Prior Lien Bond
Interest and Sinking Fund from the Revenue Fund such amounts on
such dates as may be provided in the ordinances authorizing the
issuance of the Prior Lien Bonds in order to provide for the full
and timely payment of all principal of and premium, if any, and
interest on all such Prior Lien Bonds and all expenses of paying
same.
(g) Prior Lien Bond Reserve Fund. After making the
transfers into the Prior Lien Bond Interest and Sinking Fund
required by this Ordinance and any ordinance authorizing the
issuance of Prior Lien Bonds pursuant to Subsection ( f) above,
the City shall deposit and maintain, or cause to be deposited and
maintained, either in the form of cash, a Qualified Surety Bond,
or any combination thereof, into a separate subaccount of the
Prior Lien Bond Reserve Fund established for each respective
series of Prior Lien Bonds, either ( i) an amount equal to the
Reserve Fund Requirement for that respective series or ( ii) a
Qualified Surety Bond issued by an Insurer in an amount which,
when added to the sums on deposit pursuant to clause ( i) above,
equals the Reserve Fund Requirement for that respective series .
After the Reserve Fund Requirement has been satisfied in the
Prior Lien Bond Reserve Fund as provided in the immediately
preceding sentence for a series of Prior Lien Bonds, and so long
thereafter as such requirement remains satisfied, no further
deposits into the subaccount of the Prior Lien Bond Reserve Fund
for that series shall be required; but if and whenever the
Reserve Fund Requirement is not satisfied for any reason with
respect to that series , then the City shall deposit or cause to
be deposited into the subaccount of the Prior Lien Bond Reserve
Fund for that series either ( i) amounts on a monthly basis at
least equal to 1/60th of the Reserve Fund Requirement for that
series until such requirement is satisfied, or ( ii) a Qualified
Surety Bond issued by an Insurer in an amount which, when added
to the sums on deposit in the subaccount of the Prior Lien Bond
Reserve Fund for that series, equals the Reserve Fund Requirement
for that series . Whenever the subaccount of the Prior Lien Bond
Reserve Fund for a series of Prior Lien Bonds contains more than
the Reserve Fund Requirement with respect to that series, the
City may transfer any excess cash amounts to the Prior Interest
and Sinking Fund for payment of that series of Prior Lien Bonds
and all other series of Prior Lien Bonds on a prorata basis . The
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subaccount of the Prior Lien Bond Reserve Fund for a series of
Prior Lien Bonds shall be used to pay the principal of and
premium, if any, and interest on that series at any time when
there is not sufficient money available in the Prior Lien Bond
Interest and Sinking Fund for such purpose, and it may be used
finally to pay and retire the last Prior Lien Bonds of that
series to mature or be redeemed; provided that all cash and other
amounts on deposit in the Prior Lien Bond Reserve Fund for that
series shall first be transferred to the Prior Lien Bond Interest
and Sinking Fund for the purpose of making such payments prior to
making any demand for payment under any Qualified Surety Bond.
(h) Junior Lien Bond Interest and Sinking Fund. On or
before the last Business Day of each month so long as any Junior
Lien Bonds remain outstanding and after making all payments
required pursuant to clauses first through fifth (inclusive) of
Subsection (d) above, there shall be transferred into the Junior
Lien Bond 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 Junior
Lien 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 Junior Lien Bonds,
including the principal amounts of and any
redemption premiums on any Junior Lien 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 Junior Lien Bonds .
Moneys deposited to the credit of the Junior Lien Bond 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 Junior Lien Bonds in the open market to
be credited against mandatory redemption requirements) , interest
and redemption premiums on the Junior Lien Bonds, plus all bank
charges and other costs and expenses relating to such payment, on
a pro rata basis among all series of Junior Lien Bonds . On or
before each principal and/or interest payment date for the Junior
Lien Bonds, the City shall transfer from the Junior Lien Bond
Interest and Sinking Fund to the paying agents for the Junior
Lien Bonds, an amount equal to the principal, interest and
redemption premiums payable on the Junior Lien 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 Junior Lien Bonds shall totally destroy all paid Junior
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Lien Bonds and coupons ( if any) and shall provide the City with
an appropriate certificate of destruction.
( i) Junior Lien Bond Reserve Fund. On or before the last
Business Day of each month so long as any Junior Lien Bonds
remain outstanding and after making all payments required
pursuant to clauses first through seventh ( inclusive of
Subsection (d) above, the City shall deposit and maintain, or
cause to be deposited and maintained, in the Junior Lien Bond
Reserve Fund either ( i) an amount equal to at least one-sixtieth
( 1/60th) of the Junior Lien Bond Reserve Fund Requirement unless
or until there has been accumulated in the Junior Lien Bond
Reserve Fund money and property in the aggregate amount at least
equal to the Junior Lien Bond Reserve Fund Requirement or ( ii) in
the case of Junior Lien Bonds other than the outstanding Series
1981 Junior Lien Bonds, a Qualified Surety Bond issued by an
Issuer in an amount which, when added to the sums on deposit in
the Junior Lien Bond Reserve Fund, equals to the Junior Lien Bond
Reserve Fund Requirement with respect to Junior Lien Bonds of the
affected series . After such amount has accumulated in the Junior
Lien Bond Reserve Fund to satisfy the Junior Lien Bond Reserve
Fund Requirement and so long thereafter as such amount remains in
the Junior Lien Bond Reserve Fund, no further deposits shall be
required to be made into the Junior Lien Bond Reserve Fund and
any excess amounts in the Fund may be transferred to the Revenue
Fund. But if and whenever the balance in the Junior Lien Bond
Reserve Fund is reduced below the Junior Lien Bond Reserve Fund
Requirement, then the City shall deposit or cause to be deposited
into the Junior Lien Bond Reserve Fund either ( i) amounts on a
monthly basis at least equal to one-sixtieth ( 1/60th) of the
Junior Lien Bond Reserve Fund Requirement until the Junior Lien
Bond Reserve Fund has been restored to such required amount or
( ii) in the case of Junior Lien Bonds other than the outstanding
Series 1981 Junior Lien Bonds, a Qualified Surety Bond issued by
an Insurer in an amount which, when added to sums on deposit in
the Junior Lien Bond Reserve Fund, equals the Junior Lien Bond
Reserve Fund Requirement with respect to Junior Lien Bonds of the
affected series . The Junior Lien Bond Reserve Fund shall be used
to pay the principal of and premium, if any, and interest on the
Junior Lien Bonds at any time when there is not sufficient money
available in the Junior Lien Bond Interest and Bond Fund for such
purpose and it may be used finally to pay and retire the last
Junior Lien Bonds to mature or be redeemed; provided that all
cash and other amounts on deposit in the Junior Lien Bond Reserve
Fund shall first be transferred to the Junior Lien Bond Interest
and Sinking Fund for the purpose of making payments prior to
making any demand for payment under any Qualified Surety Bond.
( j ) Deficiencies in Funds . If in any month there
shall not be deposited into any Fund the full amounts required
herein, amounts equivalent to such deficiency shall be set apart
and paid into such Fund or Funds on a pro rata basis first for
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P
each series of Prior Lien Bonds and second for each series of
Junior Lien Bonds from the first available and unallocated moneys
in the Revenue Fund, and such payment shall be in addition to the
amounts otherwise required to be paid into such Funds during any
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 .
(k) 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 in
time deposits or certificates of deposit secured in the manner
required by law for public funds, or be invested in direct
obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of
America or any of its agencies or instrumentalities, or in any
other obligations permitted by law but only if such obligations
are rated "AA" or better by Moody' s Investors Services, Inc. or
Standard & Poor' s Corporation; provided that all such deposits
and investments shall be made in such manner that the money
required to be expended from any such Fund shall be available at
the proper time or times, and provided further that in no event
shall such deposits or investments of moneys in the Prior , Lien
Bond Reserve Fund or the Junior Lien Bond Reserve Fund mature
later than the final maturity date of the then outstanding Prior
Lien Bonds or Junior Lien Bonds, whichever may be the case. All
such investments shall be valued in terms of current market value
no less frequently than the last Business Day of the Fiscal Year,
except that any direct obligations of the United States of
America-State and Local Government Series shall be continuously
valued at their par value or principal face amount. Any
obligation in which money is so invested shall be kept and held
in the official depository bank of the City at which the Fund is
maintained from which such investment was made. All such
investments shall be promptly sold when necessary to prevent any
default in connection with the Prior Lien Bonds or the Junior
Lien 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 the Gross Revenues of the
System.
( 1) Security for Uninvested Funds . So long as any
Junior Lien Bonds remain outstanding, all uninvested moneys on
deposit in, or credited to, Funds maintained pursuant to this
Ordinance shall be secured by a pledge of security, as provided
by law in the State of Texas, in a principal amount not less than
the amount of such uninvested funds .
20 . Additional Bonds .
(a) Additional Prior Lien Bonds and Additional Junior
Lien Bonds . The City reserves the right to issue, for any lawful
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purpose, including the refunding of any previously issued Prior
Lien Bonds or Junior Lien Bonds or any other bonds or obligations
of the City issued in connection with the System, one or more
series of ( 1) Additional Prior Lien Bonds payable from, and
secured by a first lien on and pledge of, the Net Revenues of the
System prior and superior to the lien and pledge securing the
Junior Lien Bonds, and (2 ) Additional Junior Lien Bonds on a
parity with the Junior Lien Bonds then outstanding; provided,
however, that no Additional Prior Lien Bonds or Additional Junior
Lien Bonds may be issued unless :
( i) The Additional Prior Lien Bonds or the Additional
Junior Lien Bonds shall mature only on September 1
and interest thereon shall be payable only on
March 1 and September 1;
( ii) The Prior Lien Bond Interest and Sinking Fund and
the Prior Lien Bond Reserve Fund and, for the
issuance of Additional Junior Lien Bonds, the
Junior Lien Bond Interest and Sinking Fund and the
Junior Lien Bond Reserve Fund, each contain the
amount of money or property then required to be on
deposit therein or the fraction thereof then
required to have been accumulated therein;
(iii) For either the preceding Fiscal Year or any
consecutive 12-month period out of the 18-month
period immediately preceding the month in which
the ordinance authorizing such Prior Lien Bonds or
Junior Lien Bonds is adopted (the "Base Period" ) ,
either:
( 1) Net Earnings (as defined below) are certified
by the Finance Officer of the City to have
been equal to at least (a) 140% of the
Average Annual Principal and Interest
Requirements on all Prior Lien Bonds and
(b) 125% of the Average Annual Principal and
Interest Requirements on all Prior Lien Bonds
and Junior Lien Bonds, in each case after
giving effect to the issuance of the
Additional Prior Lien Bonds or Additional
Junior Lien Bonds to be issued; or
(2) Net Earnings, adjusted to give effect to any
rate increase placed into effect at least 60
days prior to the adoption of the ordinance
authorizing the Additional Prior Lien Bonds
or the Additional Junior Lien Bonds, as the
case may be, as if such rate increase had
been placed into effect prior to the
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commencement of the Base Period, would have
been equal to at least the amounts required
in paragraph ( 1) above, as certified by an
independent firm of consulting engineers or
independent firm of certified public
accountants; provided, however, that the
requirements of this paragraph ( iii) shall
not apply to the issuance of any series of
refunding bonds that will not have the result
of increasing the Average Annual Principal
and Interest Requirements on either the Prior
Lien Bonds or the Junior Lien Bonds; and
( iv) Provision is made in the ordinance authorizing the
Additional Prior Lien Bonds or the Additional
Junior Lien Bonds then proposed to be issued for
additional payments into the Prior Lien Bond
Interest and Sinking Fund or the Junior Lien Bond
Interest and Sinking Fund, whichever may be the
case, sufficient to provide for the payment of ( i)
the increased principal of and interest on the
Prior Lien Bonds or Junior Lien Bonds resulting
from issuance thereof and (ii) the increased
payments into the Prior Lien Bond Reserve Fund or
the Junior Lien Bond Reserve Fund, as the case may
be, for such Bonds so that the affected Fund will
in not later than 5 years from the date of
issuance of such Bonds contain a balance of not
less than the Reserve Fund Requirement for such
Additional Prior Lien Bonds or Additional Junior
Lien Bonds, whichever may be the case.
For purposes of this Subsection, the term "Net Earnings"
shall mean all of the Net Revenues, except that in calculating
Net Revenues there shall not be deducted as Maintenance and
Operation Expenses any charge, disbursement or expenditure for
repairs, extensions or otherwise which, under standard accounting
practice, should be charged to capital expenditures .
(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 Prior Lien
Bonds and the Junior Lien 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 .
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21 . Covenants and Provisions Relating to all Junior Lien
Bonds .
(a) Punctual Payment of Prior Lien Bonds and Junior
Lien Bonds . The City will punctually pay or cause to be paid the
principal of and premium, if any, and interest on all Prior Lien
Bonds and Junior Lien 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 such Bonds .
(b) Power to Own and Operate System; Rate Making
Power. The City hereby covenants and represents that it has all
necessary power and authority to own and operate the System as
herein described and provided and that it possesses, and shall
exercise, all necessary power and authority to establish, fix,
increase, impose and collect rates and charges for the use and
services of the System in the amounts required to comply with the
covenants and provisions contained herein.
(c) Maintenance of System. So long as any Junior Lien
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 and adversely affect
the operation of the System.
(d) Sale or Encumbrance of System. So long as any
Junior Lien Bonds 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 has been declared surplus or is 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.
(e) 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,
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to the extent that such insurance is available. All net proceeds
of such insurance shall be applied to repair or replace the
insured property that is damaged or destroyed or shall be used to
redeem outstanding Prior Lien Bonds, Junior Lien Bonds, or other
obligations payable from revenues of the System. The cost of all
such insurance, together with any additional insurance, shall be
a part of the Maintenance and Operation Expenses, and such
insurance shall be carried for the benefit of the City and
holders of the Prior Lien Bonds and the Junior Lien Bonds, as
their interests may appear.
( f) Accounts, Records and Audits . So long as any
Junior Lien 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, the major municipal rating agencies and any
holders of Junior Lien Bonds who shall request same. All
expenses incurred in preparing such audits shall be Maintenance
and Operation Expenses .
(g) 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 .
(h) 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 Junior Lien 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 Prior Lien Bonds and the
Junior Lien 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 Prior Lien Bonds and the Junior Lien Bonds .
( i) Remedies . This Ordinance shall constitute a
contract between the City, the holders of the Junior Lien Bonds
from time to time outstanding, and the Insurers ( if applicable) ,
and this Ordinance shall be and remain irrepealable until the
Junior Lien Bonds and the interest thereon and all amounts owing
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to the Insurers under any Financial Guaranty Agreements 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 premium ( if any) or interest on
any of the Junior Lien 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 Financial Guaranty Agreement in effect
from time to time, the holder or holders of any of the Junior
Lien Bonds or any 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 Junior Lien Bonds or any Insurer, as
appropriate, 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.
( j ) Defeasance. The City may defease the provisions
of this Ordinance and discharge its obligation to the holders of
any or all of the Junior Lien 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 Junior Lien 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 Junior Lien 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 Junior
Lien Bonds plus interest thereon to the date of maturity or
redemption; provided, however, that if any of such Junior Lien
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 Junior
Lien Bonds . Upon such deposit, such Junior Lien 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 Junior Lien Bonds shall thereupon cease and
terminate.
(k) Unavailability of Authorized Publication. If,
because of the temporary or permanent suspension of any
newspaper, journal or other publication, or, for any reason,
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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 Junior Lien 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 .
(m) Paring Agent May Own Bonds . The paying agent for
the Junior Lien Bonds, in its individual or any other capacity,
may become a holder or pledgee of the Junior Lien Bonds with the
same rights it would have if it were not the paying agent.
22 . Further Proceedings . After the Bonds to be initially
delivered to the TWDB 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 delivered to the TWDB 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 delivered to the TWDB,
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 to be attached or
affixed to the Bonds to be initially delivered to the TWDB, and
the seal of said Comptroller shall be impressed or placed in
facsimile, thereon.
23 . Sale. The sale of the Bonds to TWDB on an installment
basis at a price of par is hereby authorized, approved, ratified
and confirmed, subject to the unqualified approving opinion as to
the legality of the Bonds of the Attorney General of the State of
Texas and of Orgain, Bell & Tucker, Bond Counsel .
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
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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 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 24; provided, however, that
the City shall not be required to comply with any particular
requirement of this Section 24 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 24 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 24 .
(b) Use of Proceeds . The City covenants and agrees
that its use of the Net Proceeds of the Bonds will at all times
satisfy the following requirements :
( i) The City will limit the amount of original or
investment proceeds of the Bonds 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 Refunded Bonds ( "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;
( ii) The City will not permit more than 5% of the
Net Proceeds of the Bonds to be used in the trade or
business of any person other than a governmental unit
if such use is unrelated to the governmental purposes
of the Bonds . Further, the amount of private-use
proceeds of the Bonds in excess of 5% of the Net
Proceeds thereof ( "excess private-use proceeds" ) did
not and will not exceed the proceeds of the Bonds
expended for the governmental purpose of the Bonds to
which such excess private-use proceeds relate;
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( iii) No person using more than 10% of the Net
Proceeds of the Bonds in a trade or business, other
than a governmental unit, shall make payments (other
than as a member of the general public) , directly or
indirectly accounting for more than 10% of the
principal of and interest on the Bonds ; and
( iv) The City will not permit an amount of
proceeds of the Bonds exceeding the lesser of
(a) $5,000,000 or (b) 5% of the Net Proceeds of the
Bonds, to be used, directly or indirectly, to finance
loans to persons other than governmental units;
When used in this Section 24 , the term "Net Proceeds" of the
Bonds shall mean the proceeds from the sale of the Bonds,
including investment earnings on such proceeds, less accrued
interest, if any.
(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-Private Activity Bonds . The City covenants and
agrees to refrain from taking any action which would otherwise
result in the Bonds being treated as "private activity bonds"
within the meaning of Section 141(b) of the Code.
(e) 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 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, 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 Sections 148(a) and
149 (d) of the Code and applicable regulations thereunder.
( f) Arbitrage Rebate. 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) , will be rebated to the federal
government. Specifically, the City will ( i) maintain records
regarding the investment of the gross proceeds of the Bonds as
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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 60 days after the
retirement of the Bonds, 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 an arrangement with
respect to the gross proceeds of the Bonds that might result in a
"prohibited payment" within the meaning of Temp. Treas . Reg. S
1 . 103-15AT. In order to facilitate compliance with the covenant
set forth in this Subsection ( f) , a "Rebate Fund" is hereby
established by the City for the sole benefit of the United States
of America, and such fund shall not be subject to any claim of
any other person, including without limitation the Holders of the
Bonds . The Rebate Fund is established for the additional purpose
of compliance with Section 148 of the Code.
(g) 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.
25 . Application of Proceeds . Proceeds from the sale of the
Bonds shall, promptly upon receipt by the City, be applied as
follows :
(a) Accrued interest, if any, shall be deposited into the
Junior Lien Bond Interest and Sinking Fund;
(b) As and when received, proceeds from the sale of the
Bonds shall be deposited in the Junior Lien Bond Construction
Fund; and all amounts so deposited in the Construction Fund shall
be used solely to provide for acquisitions, extensions,
construction, improvement or repair of the System as described in
Section 3 of this Ordinance on or prior to February 28, 1995, and
to pay the costs of issuing the Bonds; and
(c) Any remaining investment earnings from the Bonds shall
be deposited into the Junior Lien Bond Interest and Sinking Fund.
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26 . Special Covenants of the City.
(a) TWDB Rules . In compliance with the published rules and
regulations of the TWDB, the City covenants and agrees that upon
final completion of the project to be financed with the proceeds
of the Bonds, and if all or any portion of the Bonds shall be
held by or on account of the TWDB or the State of Texas, the
proper officials of the City shall render due and final
accounting to the TWDB of the total cost of the project. If,
following completion of the project, funds remain on hand in the
Construction Fund, or if the Development Fund Manager from the
TWDB disapproves construction of any portion of the project as
not being in accordance with the plans and specifications, the
City shall , immediately after filing the final accounting, return
to the TWDB the amount of such excess and/or the cost as
determined by the Development Fund Manager for the TWDB relating
to the parts of the project not constructed in accordance with
the plans and specifications, to the nearest multiple of $5, 000,
and the TWDB shall thereupon cancel and deliver to the City, in
inverse numerical order, a like amount of Bonds held by the TWDB.
Any further amounts remaining in the Construction Fund thereafter
shall be promptly deposited by the City in the Junior Lien Bond
Interest and Sinking Fund and applied to the payment of the
principal of and interest on the Bonds . Unless otherwise stated
in the loan commitment of the TWDB with respect to purchase of
the Bonds, in determining the amount of available funds for
constructing the project to be financed, the City shall account
for all moneys in the Construction Fund, including all loan funds
extended by the TWDB, all other funds available from the project
as described in the project engineer' s sufficiency of funds
statement required for closing the TWDB' s loan, and all interest
earned by the City on money in the Construction Fund. This
requirement shall not be interpreted as prohibiting the TWDB from
enforcing such other rights as it may have under law.
(b) Audit. So long as any of the Bonds are held by the
TWDB, the City shall provide to the TWDB' s Development Fund
Manager a copy of an annual audit of the City' s finances .
(c) Plans . The City covenants that "as built" plans shall
be provided to the TWDB, and that so long as any Bonds are held
by the TWDB, the City will abide by the TWDB' s rules and the
relevant statutes of the State of Texas, including Chapters 15,
16 and 17 of the Texas Water Code.
(d) Escrow Agreement. To facilitate delivery of the Bonds
in installments, as required by the TWDB' s procedures for
purchase under the State Revolving Fund Program, the delivery of
and payment for the Bonds shall be accomplished pursuant to an
Escrow Agreement to be entered into by and between the City and
Ameritrust Texas, N.A. , Houston, Texas, as Escrow Agent, which
shall be substantially in the form presented at this meeting, the
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terms and conditions of which are hereby approved, subject to
such insertions, additions and modifications as shall be
necessary to comply with all applicable laws, regulations and
procedures and to carry out the intent and purposes of this
Ordinance. The Mayor or Mayor Pro Tem and the City Clerk or
Assistant City Clerk are hereby authorized to execute and deliver
the Escrow Agreement in multiple counterparts on behalf of the
City and such execution and delivery shall be conclusive evidence
of the City' s approval of the terms and provisions of the Escrow
Agreement.
27 . Related Matters . To satisfy in a timely manner all of
the City' s obligations under this Ordinance and the Escrow
Agreement, the Mayor or Mayor Pro Tem, the City Clerk or an
Assistant City Clerk, 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 effectuate the
terms of this Ordinance and the Escrow Agreement and to provide
for issuance of the Bonds, 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 the
Escrow Agreement and this Ordinance and to direct the application
of funds of the City consistent with the provisions of the Escrow
Agreement and this Ordinance.
28 . Registrar. 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.
29 . No Personal Liability. No recourse shall be had for
payment of the principal of or premium ( if any) 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 the Bonds .
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 Article
6252-17, Vernon' s Annotated Texas Civil Statutes, as amended.
31 . Severability. If any section, subsection, 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, subsection, paragraph, clause
or provision shall not affect any of the remaining provisions of
this Ordinance.
32 . Effect of Ordinance. This Ordinance shall be in full
force and effect from and after its passage, and it is so
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ordered.
33 . Repealer. All order, resolutions and ordinances, or
parts thereof, inconsistent herewith are hereby repealed to the
extent of such inconsistency.
PASSED AND APPROVED this 3rd day of March, 1992 .
Mayor
The City of Beaumont
ATTEST:
A� I City C1 rk
The City of Beaumont
j
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