HomeMy WebLinkAboutPACKET APR 12 2005 3
PC
City of Beaumont
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS APRIL 12,2005 1:30 P.M.
AGENDA
CALL TO ORDER
* Invocation Pledge Roll Call
* Presentations and Recognition
* Public Comment: Persons may speak on scheduled agenda item 1/Consent Agenda
* Consent Agenda
GENERAL BUSINESS
1. Consider approving an ordinance authorizing the issuance of City of Beaumont,
Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 2005,
authorizing the execution of a Bond Purchase Agreement; and containing other
matters related thereto
2. Consider adopting the 2005 Action Plan and the Five Year Consolidated Plan
COMMENTS
* Councihnembers/City Manager comment on various matters
* Public Comment (Persons are limited to 3 minutes)
EXECUTIVE SESSION
* Consider matters related to contemplated or pending litigation in
accordance with Section 551.071 of the Government Code:
Cardinal Glass Company v The City of Beaumont
Douglas Manning, et al v City of Beaumont.
Persons with disabilities who plan to attend this meeting and who may need auxiliary aids
or services are requested to contact Pat Buehrle at 880-3725 a day prior to the meeting.
1
April 12,2005
Consider approving an ordinance authorizing the issuance of City of Beaumont, Texas,
Waterworks and Sewer System Revenue Refunding Bonds, Series 2005, authorizing the
execution of a Bond Purchase Agreement; and containing other matters related thereto
. !117Eounc g
Cit y of Beaumont
�• Council Agenda Item
'M c
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Kandy Daniel, Treasurer
MEETING DATE: April 12, 2005
AGENDA MEMO DATE: April 8, 2005
REQUESTED ACTION: Council consider an ordinance authorizing the issuance of City of
Beaumont, Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series 2005,
authorizing the execution of a Bond Purchase Agreement; and containing other matters related
thereto.
RECOMMENDATION
The Administration requests approval of an ordinance authorizing the issuance of approximately
$17,925,000 City of Beaumont,Texas, Waterworks and Sewer System Revenue Refunding Bonds,
Series 2005,authorizing the execution of a Bond Purchase Agreement;and containing other matters
related thereto.
BACKGROUND
Estrada Hinojosa& Company, Inc, First Southwest Company,Morgan Keegan&Company, Inc.,
and Coastal Securities will provide underwriting services on the above mentioned bonds.
The bonds will mature September 1, 2005 through September 1, 2018 with interest payable
semiannually. Wells Fargo Bank N.A., Houston , Texas will serve at paying agent/registrar and
escrow agent on the refunded bonds. Delivery and receipt of the proceeds by the City is expected
to be on May 17, 2005. Proceeds will be used to refund a portion of the 2000 Waterworks and
Sewer System Revenue Bonds and to pay the cost of issuance. The refunding is expected to produce
a net cost savings to the City of approximately$585,000.
BUDGETARY IMPACT
All debt shall be incurred in the Water Utilities Fund which is supported by water revenues.
PREVIOUS ACTION
None.
SUBSEQUENT ACTION
None.
RECOMMENDED BY
City Manager and Finance Officer.
DRAFT
ORDINANCE NO.
ORDINANCE AUTHORIZING THE ISSUANCE OF THE CITY OF
BEAUMONT, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 2005; AUTHORIZING
THE EXECUTION OF A BOND PURCHASE AGREEMENT; 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 Chapter 1502, Texas Government Code, as amended, to issue
bonds payable from the net revenues of its waterworks and sewer system and to
issue such bonds, without an election, for money for acquisitions, extensions,
construction, improvement or repair of such system; and
WHEREAS, the City has also heretofore issued The City of Beaumont,
Texas, Waterworks and Sewer System Revenue and Refunding Bonds,
Series 2000 (the "Refunded Bonds");
WHEREAS, the City now desires to currently refund certain maturities of
the Refunded Bonds in advance of their maturities in order to achieve an interest
cost savings; and
WHEREAS, Chapter 1207, Texas Government Code, as amended,
authorize the City to issue refunding bonds for the purpose of currently refunding
the Refunded Bonds in advance of their maturities, and to accomplish such
refunding by depositing directly with any paying agent for the Refunded Bonds
the proceeds of such refunding bonds, together with other available funds, in an
amount sufficient to provide for the payment or redemption of the Refunded
Bonds, and provides that such deposit shall constitute the making of firm
banking and financial arrangements for the discharge and final payment or
redemption of the Refunded Bonds; and
WHEREAS, the City desires to call all of the outstanding Refunded Bonds
for redemption prior to their maturities; and
1
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
WHEREAS, the City desires to provide for the deposit of proceeds of the
refunding bonds authorized herein to pay and redeem the Refunded Bonds; and
WHEREAS, upon the issuance of the refunding bonds herein authorized
and the deposit of funds referred to above, the Refunded Bonds shall no longer
be regarded as being outstanding, except for the purpose of being paid pursuant
to such deposit, and the pledges, liens, trusts and all other covenants,
provisions, terms and conditions of the ordinances authorizing the issuance of
the Refunded Bonds shall be discharged, terminated and defeased;
Now, Therefore
BE IT ORDAINED BY THE CITY OF BEAUMONT, TEXAS:
1. Findings and Determinations. It is hereby found and determined
that the transactions contemplated in this Ordinance will benefit the City by
providing a savings in debt service, and that such benefit is sufficient
consideration for the refunding of the Refunded Bonds. In addition, the matters
and facts contained in the preamble to this Ordinance are hereby found to be true
and correct.
2. Definitions. Throughout this ordinance the following terms and
expressions as used herein shall have the meanings set forth below:
The term "Act" shall mean Chapters 1502 and 1207, Texas Government
Code, as amended.
The term "Additional Parity Bonds" shall mean the additional parity
revenue bonds permitted to be issued by the City pursuant to Section 20 of this
Ordinance.
The term "Blanket Issuer Letter of Representations" means the Blanket
Issuer Letter of Representations between the City, the Registrar and DTC.
The term "Bond Insurance Policy" shall mean the insurance policy issued
by the Bond Insurer guaranteeing the scheduled payment of principal of and
interest on the Bonds when due.
The term "Bond Insurer" shall mean or
any successor thereto or assignee thereof.
The term "Bond Register" shall mean the books of registration kept by the
Registrar in which are maintained the names and addresses of, and the principal
amounts of the Bonds registered to, each Owner.
2
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
The term "Bonds" shall mean the $17,925,000 The City of Beaumont,
Texas, Waterworks and Sewer System Revenue Refunding Bonds, Series
2005 authorized in this Ordinance, unless the context clearly indicates otherwise.
The term "Business Day" shall mean any day which is not a Saturday,
Sunday, a day on which banking institutions in the city where the principal
corporate trust office of the Registrar is located are authorized by law or
executive order to close, or a legal holiday.
The term "City" shall mean The City of Beaumont, Texas.
The term "Closing Date" means the date of the initial delivery of and
payment for the Bonds.
The term "Code" means the Internal Revenue Code of 1986, as amended.
The term "Comptroller" means the Comptroller of Public Accounts of the
State of Texas.
The term "DTC" means The Depository Trust Company of New York, New
York, or any successor securities depository.
The term "DTC Participant" means brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations on whose
behalf DTC was created to hold securities to facilitate the clearance and
settlement of securities transactions among DTC Participants.
The term "Gross Revenues" shall mean all revenues, income and receipts
of every nature derived or received by the City from the operation and ownership
of the System (but excluding any utility deposits) and the interest income from
the investment or deposit of money in the Revenue Fund, the Interest and
Sinking Fund, and the Reserve Fund.
The term "Interest Payment Date", when used in connection with any
Bond, shall mean September 1, 2005, and each March 1 and September 1
thereafter until maturity or earlier redemption of such Bond.
The term "Maintenance and Operation Expenses" shall mean the
reasonable and necessary expenses of operation and maintenance of the
System, including all salaries, labor, materials, repairs and extensions necessary
to render efficient service, and all payments under contracts now or hereafter
defined as operating expenses by the Legislature of the State of Texas.
Depreciation shall never be considered as a Maintenance and Operation
Expense.
The term "MSRB" shall mean the Municipal Securities Rulemaking Board.
3
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
The term "Net Revenues" shall mean all Gross Revenues remaining after
deducting the Maintenance and Operation Expenses.
The term "NRMSIR" means each person whom the SEC or its staff has
determined to be a nationally recognized municipal securities information
repository within the meaning of the Rule from time to time.
The term "Ordinance" as used herein and in the Bonds shall mean this
ordinance authorizing the Bonds and all amendments and supplements hereto.
The term "Owner" shall mean any person who shall be the registered
owner of any outstanding Bonds.
The term "Parity Bonds" shall mean the Bonds and the City's outstanding
Waterworks and Sewer System Revenue Refunding Bonds, Series 1998,
and the City's outstanding Waterworks and Sewer System Revenue
Refunding Bonds, Series 1999, and the City's outstanding Waterworks and
Sewer System Revenue Bonds, Series 2000, and the City's outstanding
Waterworks and Sewer System Adjustable Rate Revenue Bonds, Series
2002, and the City's outstanding Waterworks and Sewer System Revenue
Bonds, Series 2004, and each series of Additional Parity Bonds from time to
time hereafter issued, but only to the extent such Parity Bonds remain
outstanding within the meaning of this Ordinance.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date" shall mean, for any Interest Payment Date, the
fifteenth (15th) calendar day of the month next preceding each Interest Payment
Date.
The term "Refunded Bonds" shall mean the The City of Beaumont,
Texas, Waterworks and Sewer System Revenue and Refunding Bonds,
Series 2000, maturing on September 1 in the years 2011 through 2018 in the
aggregate principal amount of 17,075,000.
The term "Registrar" shall mean Wells Fargo Bank, N.A., Houston,
Texas, and its successors in that capacity.
The term "Reserve Fund Requirement" shall mean an amount equal to
the average annual principal and interest requirement on the Parity Bonds, which
may be determined and redetermined each year by the City but in no event less
frequently than upon the issuance of each series of Parity Bonds.
tome. The term "Rule" shall mean SEC Rule 15c-12, as amended from time to
4
C:\DOCUME-1\KANDY\LOCALS-11TEMP\BOND ORDINANCE 4-6-05.DOC
The term "SEC' shall mean the United States Securities and Exchange
Commission.
The term "SID" shall mean the Municipal Advisory Council of Texas, which
has been designated by the State of Texas as, and determined by the SEC staff
to be, a state information depository within the meaning of the Rule.
The term "Special Project" shall mean, to the extent permitted by law, any
property, improvement or facility declared by the City not to be part of the
System and substantially all of the costs of the acquisition, construction and
installation of which is paid from proceeds of a financing transaction other than
the issuance of bonds payable from ad valorem taxes or Net Revenues of the
System, and for which all maintenance and operation expenses are payable
from sources other than revenues of the System, but only to the extent that and
for so long as all or any part of the revenues or proceeds of which are or will be
pledged to secure the payment or repayment of such costs of acquisition,
construction and installation under such financing transaction.
The term "System" shall mean all properties, facilities, improvements,
equipment, interests and rights constituting the waterworks and sewer system of
the City, including all future extensions, replacements, betterments, additions,
improvements, enlargements, acquisitions, purchases and repairs to the System,
but excluding all Special Projects.
The term "Underwriters" shall mean Estrada Hinojosa & Company, Inc.,
Morgan Keegan & Company, Inc., Coastal Securites and First Southwest
Company.
3. Authorization. The Bonds shall be issued in fully registered form in
the total authorized aggregate amount of SEVENTEEN MILLION NINE
HUNDRED TWENTY-FIVE THOUNSAND DOLLARS ($17,925,000) for the
purpose of (i) currently refunding all of the outstanding Refunded Bonds, 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 REVENUE REFUNDING BONDS, SERIES 2005" and shall
be dated May 1, 2005. The Bonds shall bear interest at the rates set forth in
Section 5 below from the later of the initial date of delivery, 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, 2005, and semiannually thereafter on September 1 and March 1 of
each year until maturity or prior redemption.
5. Initial Bonds; Numbers and Denominations. The Bonds shall be
5
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
initially issued bearing the numbers, in the principal amounts, and bearing
interest at the rates set forth in the following schedule, and may be transferred
and exchanged as set out in this Ordinance. The Bonds shall mature, in
accordance with this Ordinance, on September 1 in each of the years and in the
amounts set out in such schedule. Bonds delivered on transfer of or in
exchange for other Bonds shall be numbered (with appropriate prefix) in order of
their authentication by the Registrar, shall be in the denomination of $5,000 or
integral multiples thereof, and shall mature on the same date and bear interest at
the same rate as the Bond or Bonds in lieu of which they are delivered.
BONDS
Bond Principal Interest
Number Year Amount Rate
R-1 2005 $ 150,000
R-2 2006 $ 85,000
R-3 2007 $ 85,000
R-4 2008 $ 90,000
R-5 2009 $ 90,000
R-6 2010 $ 95,000
R-7 2011 $ 300,000
R-8 2012 $ 305,000
R-9 2013 $2,485,000
R-10 2014 $2,580,000
R-11 2015 $2,700,000
R-12 2016 $2,825,000
R-13 2017 $2,985,000
R-14 2018 $3,150,000
6. Execution of Bonds; Seal. The Bonds shall be signed by the Mayor
and countersigned by the City Clerk or Deputy City Clerk, by their manual,
lithographed, or facsimile signatures, and the official seal of the City shall be
impressed or placed in facsimile thereon. Such facsimile signatures on the
Bonds shall have the same effect as if each of the Bonds had been signed
manually and in person by each of said officers, and such facsimile seal on the
Bonds shall have the same effect as if the official seal of the City had been
manually impressed upon each of the Bonds. If any officer of the City whose
manual or facsimile signature shall appear on the Bonds shall cease to be such
officer before the authentication of such Bonds or before the delivery of such
Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
7. Approval by Attorney General; Registration by Comptroller. The
6
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Bonds to be initially issued shall be delivered to the Attorney General of Texas
for approval and shall be registered by the Comptroller of Public Accounts of the
State of Texas. The manually executed registration certificate of the Comptroller
of Public Accounts substantially in the form provided in Section 18 of this
Ordinance shall be attached or affixed to the Bonds to be initially issued.
8. Authentication. Except for the Bonds to be initially issued, which
need not be authenticated by the Registrar, only such Bonds which bear thereon
a certificate of authentication, substantially in the form provided in Section 18 of
this Ordinance, manually executed by an authorized representative of the
Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or
obligatory for any purpose. Such duly executed certificate of authentication shall
be conclusive evidence that the Bonds so authenticated were delivered by the
Registrar hereunder.
9. Payment of Principal and Interest. The Registrar is hereby
appointed as the paying agent for the Bonds. The principal of and premium, if
any, on the Bonds shall be payable, without exchange or collection charges, in
any coin or currency of the United States of America which, on the date of
payment, is legal tender for the payment of debts due the United States of
America, upon their presentation and surrender as they respectively become due
and payable, whether at maturity or by prior redemption, at the principal
corporate trust office of the Registrar. The interest on each Bond shall be
payable by check on the Interest Payment Date, mailed by the Registrar on or
before each Interest Payment Date to the Owner of record as of the Record
Date, to the address of such Owner as shown on the Bond Register. Any
accrued interest payable at maturity on a Bond shall be paid upon presentation
and surrender of such Bond at the principal corporate trust office of the
Registrar.
If the date for payment of the principal of or interest on any Bond is not a
Business Day, then the date for such payment shall be the next succeeding
Business Day, and payment on such date shall have the same force and effect
as if made on the original date such payment was due.
10. Successor Registrars. The City covenants that at all times while
any Bonds are outstanding it will provide a legally qualified bank, trust company,
financial institution or other agency to act as Registrar for the Bonds. The City
reserves the right to change the Registrar for the Bonds on not less than 60 days
written notice to the Registrar, so long as any such notice is effective not less
than 60 days prior to the next succeeding principal or interest payment date on
the Bonds. Promptly upon the appointment of any successor Registrar, the
previous Registrar shall deliver the Bond Register or copies thereof to the new
Registrar, and the new Registrar shall notify each Owner, by United States mail,
first class postage prepaid, of such change and of the address of the new
Registrar. Each Registrar hereunder, by acting in that capacity, shall be deemed
7
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
to have agreed to the provisions of this Section.
11. Special Record Date. If interest on any Bond is not paid on any
Interest Payment Date and continues unpaid for thirty (30) days thereafter, the
Registrar shall establish a new record date for the payment of such interest, to
be known as a Special Record Date. The Registrar shall establish a Special
Record Date when funds to make such interest payment are received from or on
behalf of the City. Such Special Record Date shall be fifteen (15) days prior to
the date fixed for payment of such past due interest, and notice of the date of
payment and the Special. Record Date shall be sent by United States mail, first
class, postage prepaid, not later than five (5) days prior to the Special Record
Date, to each affected Owner of record as of the close of business on the day
prior to the mailing of such notice.
12. Ownership; Unclaimed Principal and Interest. The City, the
Registrar and any other person may treat the person in whose name any Bond is
registered as the absolute owner of such Bond for the purpose of making and
receiving payment of principal of and premium, if any, or interest on such Bond,
and for all other purposes, whether or not such Bond is overdue, and neither the
City nor the Registrar shall be bound by any notice or knowledge to the contrary.
All payments made to the person deemed to be the owner of any Bond in
accordance with this Section 12 shall be valid and effectual and shall discharge
the liability of the City and the Registrar upon such Bond to the extent of the
sums paid.
Amounts held by the Registrar which represent principal of and interest on
the Bonds remaining unclaimed by the Owner after the expiration of three years
from the date such amounts have become due and payable shall be reported
and disposed of by the Registrar in accordance with the applicable provisions of
Texas law, including Title 6 of the Texas Property Code, as amended.
13. Registration, Transfer, and Exchange. So long as any Bonds
remain outstanding, the Registrar shall keep the Bond Register at its principal
corporate trust office and, subject to such reasonable regulations as it may
prescribe, the Registrar shall provide for the registration and transfer of Bonds in
accordance with the terms of this Ordinance. If the Registrar does not maintain
its principal offices in the State of Texas, the City agrees to keep a Bond
Register at its offices which is identical to the Bond Register maintained by the
Registrar and the Registrar will notify the City as to any changes in the Bond
Register within 1 business day.
Each Bond shall be transferable only upon the presentation and surrender
thereof at the principal corporate trust office of the Registrar, duly endorsed for
transfer, or accompanied by an assignment duly executed by the registered
Owner or his authorized representative in form satisfactory to the Registrar.
Upon due presentation of any Bond in proper form for transfer, the Registrar
8
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
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, interest
rate, and principal amount, bearing a number not contemporaneously
outstanding. If any Bond is lost, apparently destroyed, or wrongfully taken, the
City, pursuant to the applicable laws of the State of Texas and in the absence of
notice or knowledge that such Bond has been acquired by a bona fide
purchaser, shall execute and the Registrar shall authenticate and deliver a
replacement Bond of like maturity, interest rate and principal amount or Maturity
Amount, bearing a number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Bond to
pay a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith and any other expenses connected therewith,
including the fees and expenses of the Registrar. The City or the Registrar may
require the Owner of a lost, apparently destroyed or wrongfully taken Bond,
before any replacement Bond is issued, to:
(1) furnish to the City and the Registrar satisfactory evidence of
the ownership of and the circumstances of the loss, destruction or theft of .
such Bond;
(2) furnish such security or indemnity as may be required by the
Registrar and the City to save them harmless;
9
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
(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. Book-Enty System. (a) The Initial Bonds shall be registered in the
name of the Underwriters. Except as provided in subparagraph (c) below, all
other Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as
nominee of DTC, the City and the Registrar shall have no responsibility or
obligation to any DTC Participant or to any person on behalf of whom such a DTC
Participant holds an interest in the Bonds. Without limiting the immediately
preceding sentence, the City and the Registrar shall have no responsibility or
obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or
any DTC Participant with respect to any ownership interest in the Bonds, (ii) the
delivery to any DTC Participant or any other person, other than an Owner of a
10
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Bond, as shown on the Register, of any notice with respect to the Bonds, including
any notice of redemption, or (iii) the payment to any DTC Participant or any other
person, other than an Owner of a Bond, as shown in the Register, of any amount
with respect to principal of, premium, if any, or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the City and
the Registrar shall be entitled to treat and consider the person in whose name
each Bond is registered in the Register as the absolute Owner of such Bond for
the purpose of payment of principal of, premium, if any, and interest on the Bonds,
for the purpose of all matters with respect to such Bond, for the purpose of
registering transfers with respect to such Bond, and for all other purposes
whatsoever. The Registrar shall pay all principal of, premium, if any, and interest
on the Bonds only to or upon the order of the respective Owners, as shown in the
Register as provided in this Order, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and
discharge the City's obligations with respect to payment of principal of, premium, if
any, and interest on the Bonds to the extent of the sum or sums so paid. No
person other than an Owner as shown in the Register, shall receive a Bond
certificate evidencing the obligation of the District to make payments of amounts
due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written
notice to the effect that DTC has determined to substitute a new nominee in place
of Cede & Co., the word "Cede & Co." in this Order shall refer to such new
nominee of DTC.
(c) In the event that the City in its sole discretion determines that the
beneficial owners of the Bonds be able to obtain certificated Bonds, or in the event
DTC discontinues the services described herein, the City shall (i) appoint a
successor securities depository, qualified to act as such under Section 17(a) of the
Securities and Exchange Act of 1934, as amended, and notify DTC and DTC
Participants, as identified by DTC, of the appointment of such successor securities
depository and transfer one or more separate Bonds to such successor securities
depository or (ii) notify DTC and DTC Participants, as identified by DTC, of the
availability through DTC of Bonds and transfer one or more separate Bonds to
DTC Participants having Bonds credited to their DTC , as identified by DTC. In
such event, the Bonds shall no longer be restricted to being registered in the
Register in the name of Cede & Co., as nominee of DTC, but may be registered in
the name of the successor securities depository, or its nominee, or in whatever
name or names Owners transferring or exchanging Bonds shall designate, in
accordance with the provisions of this Ordinance.
11
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
(d) The execution and delivery of the Blanket Letter of Representations is
hereby approved with such changes as may be approved by the Mayor or City
Manager of the City and the Mayor is hereby authorized and directed to execute
such Blanket Letter of Representations.
(e) Notwithstanding any other provision of this Ordinance to the contrary,
so long as any Bonds are registered in the name of Cede & Co., as nominee of
DTC, all payments with respect to principal of, premium, if any, and interest on
such Bonds, and all notices with respect to such Bonds, shall be made and given,
respectively, in the manner provided in the Blanket Letter of Representations.
17. Optional Redemption. The City reserves the right, at its option, to
redeem Bonds having stated maturities on and after September 1, 2016, in whole
or in part, on September 1, 2015, or any date thereafter, at a price of par plus
accrued interest to the date fixed for redemption. If less than all of the Bonds are
to be redeemed, the City shall determine the Bonds, or portions thereof, to be
redeemed.
Bonds may be redeemed only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger that $5,000, a portion of such
Bond may be redeemed, but only in integral multiples of $5,000. Upon surrender
of any Bond for redemption in part, the Registrar, in accordance with Section 13
hereof, shall authenticate and deliver in exchange therefor a Bond or Bonds of like
maturity and interest rate in an aggregate principal amount equal to the
unredeemed portion of the Bond so surrendered.
Not less than thirty (30) days prior to a redemption date for the Bonds, the
City shall cause a notice of redemption to be sent by United States mail, first class,
postage prepaid, to each Owner of each Bond to be redeemed in whole or in part,
at the address of the Owner appearing on the Register at the close of business on
the Business Day next preceding the date of the mailing of such notice. Such
notice shall state the redemption date, the redemption price, the place at which
Bonds are to be surrendered for payment and, if less than all the Bonds are to be
redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any
notice of redemption so mailed shall be conclusively presumed to have been duly
given whether or not the Owner receives such notice. By the date fixed for
redemption, due provision shall be made with the Registrar for payment of the
redemption price of the Bonds or portions thereof to be redeemed. When Bonds
have been called for redemption in whole or in part and due provision made to
redeem the same as herein provided, the Bonds or portions thereof so redeemed
shall no longer be regarded as outstanding except for the purpose of being paid
12
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
solely from the funds so provided for redemption, and the rights of the Owners to
collect interest which would otherwise accrue after the redemption date on any
Bond or portion thereof called for redemption shall terminate on the date fixed for
redemption.
18. Form. The form of the Bonds, including the form of the Registrar's
Authentication Certificate, the form of Assignment, the form of Statement of
Insurance, and the form of Registration Certificate of the Comptroller of Public
Accounts of the State of Texas which shall be attached or affixed to the Bonds
initially issued shall be, respectively, substantially as follows, with such additions,
deletions and variations as may be necessary or desirable and not prohibited by
this Ordinance:
FORM OF BOND
United States of America
State of Texas
NUMBER DENOMINATION
R-
REGISTERED REGISTERED
THE CITY OF BEAUMONT, TEXAS,
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 2005
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
May 1, 2005
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Beaumont, Texas (the "City") promises to pay, but solely from
certain Net Revenues as hereinafter provided, to the Registered Owner identified
above, or registered assigns, on the maturity date specified above, upon
presentation and surrender of this bond at the principal corporate trust office of
Wells Fargo Bank, 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, solely from such Net
13
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Revenues, interest thereon at the rate shown above, calculated on the basis of a
360 day year of twelve 30 day months, from the later of the initial date of
delivery, or the most recent interest payment date to which interest has been
paid or duly provided for. Interest on this bond is payable by check on March 1
and September 1, beginning on September 1, 2005, mailed to the registered
owner of record as shown on the books of registration kept by the Registrar as of
the fifteenth day of the month next preceding each interest payment date. Any
accrued interest due at maturity shall be paid upon presentation and surrender of
this Bond at the principal corporate trust office of the Registrar.
THIS BOND is one of a duly authorized issue of Bonds, aggregating
$17,925,000 (the "Bonds"), issued for the purpose of currently refunding a
portion of the City's outstanding Waterworks and Sewer System Revenue and
Refunding Bonds, Series 2000, pursuant to an ordinance adopted by the City
Council on April 12, 2005 (the "Ordinance"), and in accordance with the authority
of Chapters 1207 and 1502, Texas Government Code, as amended, and all
other applicable law.
THIS BOND AND ALL OF THE BONDS OF THIS SERIES are special
obligations of the City, and together with the City's outstanding Waterworks and
Sewer System Revenue Refunding Bonds, Series 1998, the City's outstanding
Waterworks and Sewer System Revenue Refunding Bonds, Series 1999, the
City's outstanding Waterworks and Sewer System Revenue Bonds, Series 2000,
and the City's outstanding Waterworks and Sewer System Adjustable Rate
Revenue Bonds, Series 2002, and the City's outstanding Waterworks and Sewer
System Revenue Bonds, Series 2004, are equally and ratably payable from and
secured by a first lien on the "Net Revenues" collected and received by the City
from the operation and ownership of those properties, facilities, improvements,
equipment, interests, rights and powers constituting the waterworks and sewer
system of the City which are defined in the Ordinance as the "System", which
Net Revenues are required to be set aside for and pledged to the payment of
this series of bonds, the outstanding bonds and all additional bonds issued on a
parity therewith, in the Interest and Sinking Fund and the Reserve Fund required
to be maintained for the payment of all such bonds, all as more fully described
and provided for in and subject to the restrictions and limitations imposed by the
Ordinance. This Bond and the series of which it is a part, together with the
interest thereon, are payable solely from such Net Revenues and do not
constitute an indebtedness or general obligation of the City. THE HOLDER OF
THIS OBLIGATION IS NOT ENTITLED TO DEMAND PAYMENT OF THIS
OBLIGATION OUT OF ANY MONEY RAISED BY TAXATION.
THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL
PARITY REVENUE BONDS, subject to the restrictions and limitations contained
in the Ordinance, which shall be equally and ratably payable from, and secured
by a first lien on and pledge of, the aforesaid Net Revenues in the same manner
and to the same extent as this Bond and the series of which it is a part.
14
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds
having stated maturities on or after September 1, 2016, in whole or in part, on
September 1, 2015, or any date thereafter, in integral multiples of $5,000, at a
price of par plus accrued interest to the date fixed for redemption. Reference is
made to the Ordinance for complete details concerning the manner of redeeming
the Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days
prior to the date fixed for redemption by first class mail, addressed to the
registered owner of each Bond to be redeemed in whole or in part at the address
shown on the books of registration kept by the Registrar. When Bonds or portions
thereof have been called for redemption and due provision has been made to
redeem the same, the principal amounts so redeemed shall be payable solely from
the funds provided for redemption and interest which would otherwise accrue on
the amounts called for redemption shall terminate on the date fixed for redemption.
THIS BOND IS TRANSFERABLE only upon presentation 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.
THE BONDS ARE EXCHANGEABLE at the principal corporate trust office
of the Registrar for bonds in the principal amount of $5,000 or any integral
multiple thereof, subject to the terms and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled
to any benefit under the Ordinance unless this Bond either (i) is registered by the
Comptroller of Public Accounts of the State of Texas by registration certificate
attached or affixed hereto or (ii) is authenticated by the Registrar by due
execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions of the
Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide
a legally qualified registrar for the Bonds and will cause notice of any change of
registrar to be mailed to each registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond has been
duly and validly issued and delivered; that all acts, conditions and things required
or proper to be performed, to exist and to be done precedent to or in the
issuance and delivery of this Bond have been performed, exist and have been
done in accordance with law; that the bonds of this series do not exceed any
15
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
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.
IN WITNESS WHEREOF, this bond has been signed with the manual or
facsimile signature of the Mayor and countersigned with the manual or facsimile
signature of the City Clerk, and the official seal of the City has been duly
impressed, or placed in facsimile, on this bond.
(AUTHENTICATION CERTIFICATE) THE CITY OF BEAUMONT, TEXAS
(SEAL)
Mayor
City Clerk
The following form of Statement of Insurance shall be printed on the back
of or attached to each Bond:
Statement of Insurance
[TO BE INSERTED]
16
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Form of Registration Certificate
of Comptroller of Public Accounts
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this bond has been examined, certified as to validity,
and approved by the Attorney General of the State of Texas, and that this bond
has been registered by the Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
(SEAL) of the State of Texas
Form of Registrar's Authentication Certificate
AUTHENTICATION CERTIFICATE
It is hereby certified that this bond has been delivered pursuant to the
Bond Ordinance described in the text of this Bond.
Wells Fargo Bank, N.A.
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)
17
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
(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, Bond Counsel, and CUSIP Numbers may be printed
on the Bonds, but errors or omissions in the printing of such opinion or such
numbers shall have no effect on the validity of the Bonds.
19. (a) Pledge and Source of Payment. The City hereby covenants
and agrees that all Gross Revenues of the System shall, as collected and
received by the City, be deposited and paid into the special funds established in
this Ordinance, and shall be applied in the manner hereinafter set forth, in order
to provide for (i) the payment of all Maintenance and Operation Expenses, and
(ii) the payment of principal, interest and any redemption premiums on the Parity
Bonds, and all expenses of paying, securing and insuring the same. The Parity
Bonds shall constitute special obligations of the City that shall be payable solely
from, and shall be equally and ratably secured by a first lien on, the Net
Revenues, as collected and received by the City from the operation and
ownership of the System, which Net Revenues shall, in the manner hereinafter
provided, be set aside for and are hereby pledged by the City to the payment of
the Parity Bonds in the Interest and Sinking Fund and the Reserve Fund as
hereinafter provided, and except as otherwise expressly provided herein, the
Parity Bonds shall be in all respects on a parity with and of equal dignity with one
another. The holders of the Parity Bonds shall never have the right to demand
payment of either the principal of or interest on the Parity Bonds out of any funds
raised or to be raised by taxation.
(b) Rates and Charges. So long as any Parity Bonds remain
outstanding, there shall be fixed, charged and collected rates and charges for
the use and services of the System, which may be fully sufficient at all times:
18
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
(i) to pay all Maintenance and Operation Expenses; and
(ii) to produce Net Revenues in each fiscal year at least equal
to 110 percent of the principal and interest requirements scheduled to
occur in such fiscal year on all Parity Bonds then outstanding plus an
amount equal to the sum of all deposits required to be made to the
Reserve Fund in such fiscal year, but in no event less than the amount
required to establish and maintain the Interest and Sinking Fund, the
Reserve Fund as hereinafter provided, and, to the extent that funds for
such purpose are not otherwise available, to pay all other outstanding
obligations payable from the Net Revenues of the System as and when
the same become due.
The City covenants that it will not grant or permit any free service from the
System except for public buildings and institutions operated by the City.
(c) Special Funds. The following special funds shall be
maintained and accounted for as hereinafter provided so long as any of the
Parity Bonds remain outstanding:
(i) Waterworks and Sewer System Revenue Fund (the
"Revenue Fund");
(ii) Waterworks and Sewer System Revenue Bond Interest and
Sinking Fund (the "Interest and Sinking Fund"); and
(iii) Waterworks and Sewer System Revenue Bond Reserve
Fund (the "Reserve Fund").
The Revenue Fund shall be maintained as a separate account on the books of
the City. The Interest and Sinking Fund and the Reserve Fund shall be
maintained at an official depository bank of the City, separate and apart from all
other funds and accounts of the City, and shall constitute trust funds which shall
be held in trust for the benefit of the holders of the Parity Bonds, and the
proceeds of which (except for interest income, which shall be transferred to the
Revenue Fund) shall be and are hereby pledged to the payment of the Parity
Bonds. All of the Funds named above shall be used solely as provided in this
Ordinance so long as any Parity Bonds remain outstanding.
(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
19
C:\DOCUME-1 WAN DY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
provide by encumbrance for the payment of all obligations incurred by the
City for Maintenance and Operation Expenses which may include an
operating reserve equal to one month's estimated Maintenance and
Operation Expenses.
(ii) Second, to make all deposits into the Interest and Sinking
Fund required by this Ordinance and any ordinance authorizing the
issuance of any outstanding Parity Bonds and any ordinance authorizing
the issuance of Additional Parity Bonds.
(iii) Third, to make all deposits into the Reserve Fund required
by this Ordinance and any ordinance authorizing the issuance of any
outstanding Parity Bonds and any ordinance authorizing the issuance of
Additional Parity Bonds.
(iv) Fourth, to pay any amounts due to any bond insurer of
Parity Bonds not paid pursuant to subsections (ii) or (iii) above.
(v) Fifth, for any lawful purpose, including transfers to the
General Fund as permitted by law.
Whenever the total amounts on deposit to the credit of the Interest and Sinking
Fund and the Reserve Fund shall be equivalent to the sum of the aggregate
principal amount of all outstanding Parity-Bonds plus the aggregate amount of all
interest accrued and to accrue thereon, no further payments need be made into
the Interest and Sinking Fund or the Reserve Fund.
(e) Interest and Sinking Fund. On or before the last Business
Day of each month so long as any Parity Bonds remain outstanding, after
making all required payments and provision for payment of Maintenance and
Operation Expenses, there shall be transferred into the Interest and Sinking
Fund from the Revenue Fund the following amounts:
(i) Such amounts, in approximately equal monthly installments,
as will be sufficient to pay the interest scheduled to become due on the
Parity Bonds on the next interest payment date; and
(ii) Such amounts, in approximately equal monthly installments,
as will be sufficient to pay the next maturing principal of the Parity Bonds,
including the principal amounts of, and any redemption premiums on, any
Parity Bonds payable as a result of the exercise or operation of any
redemption provision contained in this Ordinance or in any ordinance
authorizing the issuance of Parity Bonds.
Moneys deposited to the credit of the Interest and Sinking Fund (except for
interest income, which shall be transferred to the Revenue Fund) shall be used
20
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.130C
solely for the purpose of paying principal (either at maturity or prior redemption or
to purchase Parity Bonds in the open market to be credited against mandatory
redemption requirements), interest and redemption premiums on the Parity
Bonds, plus all bank charges and other costs and expenses relating to such
payment, on a pro rata basis among all series of Parity Bonds. On or before
each principal and/or interest payment date for the Parity Bonds, the City shall
transfer from the Interest and Sinking Fund to the paying agents for the Parity
Bonds an amount equal to the principal, interest and redemption premiums
payable on the Parity Bonds on such date, together with an amount equal to all
bank charges and other costs and expenses relating to such payment. The
paying agents for the Parity Bonds shall totally destroy all paid Parity Bonds and
coupons (if any) and shall provide the City with an appropriate certificate of
destruction.
(f) Reserve Fund. Unless the Reserve Fund is fully funded, on
or before the last Business Day of each month so long as any Parity Bonds
remain outstanding, after making all required payments and provision for
payment of Maintenance and Operation Expenses, and after making the
transfers into the Interest and Sinking Fund required in the preceding Section,
there shall be transferred into the Reserve Fund from the Revenue Fund an
amount at least equal to one-sixtieth (1/60th) of the average annual principal and
interest requirements on the Parity Bonds, so that the Reserve Fund shall
contain, in no more than 60 months after the issuance of each such issue of
Parity Bonds, money and investments in an aggregate amount at least equal to
the average annual principal and interest requirements on all Parity Bonds then
outstanding. After such amount has accumulated in the Reserve Fund and so
long thereafter as such Fund contains such amount, no further deposits shall be
required to be made into the Reserve Fund, and any excess amounts may be
transferred to the Revenue Fund. But if and whenever the balance in the
Reserve Fund is reduced below such amount, monthly deposits into such Fund
shall be resumed and continued in amounts at least equal to one-sixtieth (1/60th)
of the average annual principal and interest requirements on the Parity Bonds
until the Reserve Fund has been restored to such amount; provided however, if a
Reserve Fund Surety Policy has been obtained by the City pursuant to the next
paragraph below, then the provisions of such next paragraph shall govern and
control with respect to replenishment of amounts drawn under the Reserve Fund
Surety Policy. The Reserve Fund shall be used to pay the principal of and
interest on the Parity Bonds at any time when there is not sufficient money
available in the Interest and Sinking Fund for such purpose and it may be used
finally to pay and retire the last Parity Bonds to mature or be redeemed.
To the extent permitted by law, the City expressly reserves the right at any
time to satisfy all or any part of the amounts required to be on deposit in the
Reserve Fund (the "Reserve Fund Requirement") by obtaining for the benefit of
the Reserve Fund one or more Reserve Fund Surety Policies (a "Reserve Fund
Surety Policy"). In the event the city elects to substitute at any time a Reserve
21
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Fund Surety Policy for any funded amounts in the Reserve Fund, it may apply
any bond proceeds thereby released, to the greatest extent permitted by law, to
any purposes for which the bonds were issued, and if all such purposes have
been satisfied, to the payment of debt service on such bonds, and it may apply
any other funds thereby released to any of the purposes for which such funds
may lawfully be applied including the payment of debt service on the Parity
Bonds. A Reserve Fund Surety Policy shall be an insurance policy or other
similar guarantee in a principal amount equal to the portion of the Reserve Fund
Requirement to be satisfied which is issued by a financial institution or insurance
company with a rating for its long term unsecured debt or claims paying ability in
the highest letter category by two major municipal securities evaluation sources.
The premium for any such policy shall be paid from bond proceeds or other
funds of the City lawfully available for such purpose. The City reserves the right
to fund any increase in the Reserve Fund Requirement caused by the issuance
of Additional Parity Bonds by the purchase of a Reserve Fund Surety Policy in
the amount of such increase or by making transfers from the Revenue Fund to
the Reserve Fund, in approximately equal monthly installments, in amounts
sufficient to accumulate the increase in the Reserve Fund Requirement within
sixty (60) months of the issuance of such Additional Parity Bonds. If the Reserve
Fund contains only cash and the balance in the Reserve Fund is reduced below
the Reserve Fund Requirement at any time, the City shall make monthly
transfers from the Revenue Fund to the Reserve Fund, in approximately equal
monthly installments, in amounts sufficient to restore the balance in the Reserve
Fund to the Reserve Fund Requirement within twelve (12) months of the date on
which the balance in the Reserve Fund was so reduced. If the Reserve Fund
contains a Reserve Fund Surety Policy (an no cash) and a draw is made against
such policy, the City shall make monthly transfers from the Revenue Fund, in
approximately equal monthly installments, in amounts sufficient to reimburse the
amount drawn under such policy within twelve (12) months. If the Reserve Fund
contains a combination of cash and a Reserve Fund Surety Policy, and the
balance in the Reserve Fund is reduced below the Reserve Fund Requirement
by a combination of cash withdrawals and draws against the Reserve Fund
Surety Policy, the City shall make monthly transfers from the Revenue Fund, in
approximately equal monthly installments, in amounts sufficient to restore the
cash balance in the Reserve Fund and reimburse the amount drawn under such
policy within twelve (12) months, with reimbursement to be made for all amounts
drawn under such policy before any cash deposits are made into the Reserve
Fund. Any reimbursement of amounts drawn against a Reserve Fund Surety
Policy shall be limited to the amounts actually paid under such policy, and the
City shall have no obligation to make any reimbursement payment with respect
to any such policy except as provided herein.
(g) Deficiencies in Funds. If in any month there shall not be
deposited into any Fund maintained pursuant to this Section 19 the full amounts
required herein, amounts equivalent to such deficiency shall be set apart and
paid into such Fund or Funds from the first available and unallocated money in
22
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
the Revenue Fund, and such payment shall be in addition to the amounts
otherwise required to be paid into such Funds during the succeeding month or
months. To the extent necessary, the rates and charges for the System shall be
increased to make up for any such deficiencies.
(h) Investment of Funds; Transfer of Investment Income.
Money in each Fund maintained pursuant to this Section of this Ordinance may,
at the option of the City, be invested as permitted by law, provided that all such
deposits and investments shall be made in such manner that the money required
to be expended from any Fund will be available at the proper time or times, and
provided further that in no event shall deposits or investment of money in the
Reserve Fund mature later than the final maturity date of the Parity Bonds. Any
obligation in which money is so invested shall be kept and held in the Fund from
which the investment was made. All such investments shall be promptly sold
when necessary to prevent any default in connection with the Parity Bonds. All
interest and income derived from such deposits and investments shall be
transferred or credited as received to the Revenue Fund, and shall constitute
Gross Revenues of the System; provided, however, to the extent such interest
and income is derived from bond proceeds, such interest and income shall not
constitute Gross Revenues of the System and shall only be used for the
purposes for which the bond proceeds may be used.
20. Additional Bonds.
(a) Additional Parity Bonds. The City reserves the right to issue,
for any lawful purpose, including the refunding of any previously issued Parity
Bonds or any other bonds or obligations of the City issued in connection with the
System, one or more series of Additional Parity Bonds payable from, and
secured by a first lien on and pledge of, the Net Revenues of the System, on a
parity with the Bonds and any other Additional Parity Bonds then outstanding;
provided, however, that no Additional Parity Bonds may be issued unless:
(i) The Additional Parity Bonds mature on September 1, and
interest is payable on March 1 and September 1;
(ii) The Interest and Sinking Fund and the Reserve Fund each
contain the amount of money then required to be on deposit therein;
(iii) For either the preceding Fiscal Year or any consecutive 12-
month calendar period ending no more than 90 days prior to adoption of
the ordinance authorizing such Additional Parity Bonds, Net Revenues
were equal to at least 125% of the average annual principal and interest
requirements on all Parity Bonds that will be outstanding after the
issuance of the series of Additional Parity Bonds then proposed to be
issued, as certified by the City's Finance Officer or by an independent
certified public accountant or firm of independent certified public
23
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
accountants; or
(iv) If the City cannot meet the test described in (iii) above, but a
change in the rates and charges applicable to the System becomes
effective at least sixty (60) days prior to the adoption of the ordinance
authorizing Additional Parity Bonds and the City's Finance Officer certifies
that, had such change in rates and charges been effective for the
preceding fiscal year or 12 consecutive calendar month period ending no
more than 90 days prior to adoption of said ordinance, the Net Revenues
for such period would have met the test described in (iii) above.
(b) Subordinate Lien Obligations. The City reserves the right to
issue, for any lawful purpose, bonds, notes or other obligations secured in whole
or in part by liens on and pledges of the Net Revenues that are junior and
subordinate to the lien on and pledge of Net Revenues securing payment of the
Parity Bonds. Such subordinate lien obligations may be further secured by any
other source of payment lawfully available for such purposes.
(c) Special Proiect Bonds. The City reserves the right to issue
revenue bonds secured by liens on and pledges of revenues and proceeds
derived from Special Projects.
21. Covenants and Provisions Relating to all Parity Bonds.
(a) Punctual Payment of Parity Bonds. The City will punctually
pay or cause to be paid the interest on and principal of all Parity Bonds
according to the terms thereof and will faithfully do and perform, and at all times
fully observe, any and all covenants, undertakings, stipulations and provisions
contained in this Ordinance and in any ordinance authorizing the issuance of
Additional Parity Bonds.
(b) Maintenance of System. So long as any Parity Bonds
remain outstanding, the City covenants that it will at all times maintain the
System, or within the limits of its authority cause the same to be maintained, in
good condition and working order and will operate the same, or cause the same
to be operated, in an efficient and economical manner at a reasonable cost and
in accordance with sound business principles. In operating and maintaining the
System, the City will comply with all contractual provisions and agreements
entered into by it and with all valid rules, regulations, directions or order of any
governmental, administrative or judicial body promulgating same, noncompliance
with which would materially an adversely affect the operation of the System.
(c) Sale or Encumbrance of System. So long as any Parity
Bond remain outstanding, the City will not sell, dispose of or, except as permitted
24
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
in this Ordinance, further encumber the System; provided, however, that this
provision shall not prevent the City from disposing of any portion of the System
which is being replaced or is deemed by the City to be obsolete, worn out,
surplus or no longer needed for the proper operation of the System. Any
agreement pursuant to which the City contracts with a person, corporation,
municipal corporation or political subdivision to operate the System or to lease
and/or operate all or part of the System shall not be considered as an
encumbrance of the System.
(d) Insurance. The City further covenants and agrees that it will
keep the System insured with insurers of good standing against risks, accidents
or casualties against which and to the extent insurance is customarily carried by
political subdivisions of the State of Texas operating similar properties, to the
extent that such insurance is available. The cost of all such insurance, together
with any additional insurance, shall be a part of the Maintenance and Operation
Expenses. All net proceeds of such insurance shall be applied to repair or
replace the insured property that is damaged or destroyed, or to make other
capital improvements to the System, or to redeem Parity Bonds.
(e) Accounts, Records and Audits. So long as any Parity Bonds
remain outstanding, the City covenants and agrees that it will maintain a proper
and complete system of records and accounts pertaining to the operation of the
System in which full, true and proper entries will be made of all dealings,
transactions, business and affairs which in any way affect or pertain to the
System or the Gross Revenues or the Net Revenues thereof. The City shall
after the close of each of its Fiscal Years cause an audit report of such records
and accounts to be prepared by an independent certified public accountant or
independent firm of certified public accountants. Each year promptly after such
audit report is prepared, the City shall furnish a copy thereof without cost to the
Municipal Advisory Council of Texas and any holders of Parity Bonds who shall
request same. All expenses incurred in preparing such audits shall be
Maintenance and Operation Expenses.
(f) Competition. To the extent it legally may, the City will not
grant any franchise or allow for the acquisition, construction or operation of any
competing facilities which might be used as a substitute for the System and will
prohibit the operation of any such competing facilities.
(g) Pledge and Encumbrance of Net Revenues. The City
covenants and represents that it has the lawful power to pledge the Net
Revenues to the payment of the Parity Bonds and has lawfully exercised such
power under the Constitution and laws of the State of Texas. The City further
covenants and represents that, other than to the payment of the Parity Bonds,
the Net Revenues are not and will not be pledged to the payment of any debt or
obligation of the City, or in any other manner encumbered unless such pledge or
encumbrance is junior and subordinate to the lien and pledge securing payment
25
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
of the Parity Bonds.
(h) Remedies. This Ordinance shall constitute a contract
between the City and the holders of the Parity Bonds from time to time
outstanding, and the Bond Insurers, and shall remain in effect until the Parity
Bonds and the interest thereon and all amounts owing to the Bond Insurers
under any Bond Insurance Policy shall be fully paid or discharged or provision
therefor shall have been made as provided herein. In the event of a default in
the payment of the principal of or interest on any of the Parity Bonds or a default
in the performance of any duty or covenant provided by law or in this Ordinance
or a default in respect of any Bond Insurance Policy, the holder or holders of any
of the Parity Bonds or any Bond Insurer, as appropriate, may pursue all legal
remedies afforded by the Constitution and laws of the State of Texas to compel
the City to remedy such default and to prevent further default or defaults.
Without in any way limiting the generality of the foregoing, it is expressly
provided that any holder of any of the Parity Bonds or any Bond Insurer may at
law or in equity, by suit, action, mandamus, or other proceedings, enforce and
compel performance of all duties required to be performed by the City under this
Ordinance, including the making and collection of reasonable and sufficient rates
and charges for the use and services of the System, the deposit of the Gross
Revenues thereof into the special funds as herein provided, and the application
of such Gross Revenues and Net Revenues in the manner required in this
Ordinance.
(i) Defeasance. The City may defease the provisions of this
Ordinance and discharge its obligation to the holders of any or all of the Parity
Bonds to pay principal, interest and redemption premium (if any) thereon in any
manner permitted by law, including, without limitation, by depositing with any
paying agent for such Parity Bonds or with the State Treasurer of the State of
Texas either: (i) cash in an amount equal to the principal amount and
redemption premium, if any, of such Parity Bonds plus interest thereon to the
date of maturity or redemption, or (ii) pursuant to an escrow or trust agreement,
direct obligations of, or obligations the principal and interest of which are
guaranteed by, the United States of America, in principal amounts and maturities
and bearing interest at rates sufficient to provide for the timely payment of the
principal amount and redemption premium, if any, of such Parity Bonds plus
interest thereon to the date of maturity or redemption; provided, however, that if
any of such Parity Bonds are to be redeemed prior to their respective dates of
maturity, provision shall have been made for giving notice of redemption as
provided in the ordinance authorizing such Parity Bonds. Upon such deposit,
such Parity Bonds and coupons appertaining thereto shall no longer be regarded
to be outstanding or unpaid, and the lien on and pledge of Net Revenues
securing such Parity Bonds shall thereupon cease and terminate.
(j) Legal Holidays. In any case where the date fixed for
payment of interest on or principal of the Parity Bonds or the date fixed for
26
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
redemption of any Parity Bonds shall be a legal holiday or a day on which a
paying agent for the Parity Bonds is authorized by law to close, then payment of
interest or principal by such paying agent need not be made on such date but
may be made on the next succeeding business day with the same force and
effect as if made on the date fixed for such payment and no interest shall accrue
for the period from such date to the date of actual payment.
(k) Unavailability of Authorized Publication. If, because of the
temporary or permanent suspension of any newspaper, journal or other
publication, or, for any reason, publication of notice cannot be made meeting any
requirements herein established, any notice required to be published by the
provisions of this Ordinance shall be given in such other manner and at such
time or times as in the judgment of the City shall most effectively approximate
such required publication and the giving of such notice in such manner shall for
all purposes of this Ordinance be deemed to be in compliance with the
requirements for publication thereof.
(1) Obligations Owing to Insurers. The City stipulates and
agrees that it shall make full and timely payment of all amounts owing to any
Insurer under any Financial Guaranty Agreements and there shall be no
termination of this Ordinance or redemption, refunding or defeasance of the
Parity Bonds unless and until all of such amounts owing under the Financial
Guaranty Agreement in respect of those Bonds shall have been paid in full.
22. Further Proceedings. After the Bonds to be initially issued shall
have been executed, it shall be the duty of the Mayor and other appropriate
officials and agents of the City to deliver the Bonds to be initially issued and all
pertinent records and proceedings to the Attorney General of the State of Texas,
for examination and approval. After the Bonds to be initially issued shall have
been approved by the Attorney General, they shall be delivered to the
Comptroller of Public Accounts of the State of Texas for registration. Upon
registration of the Bonds to be initially issued, the Comptroller of Public Accounts
(or the Comptroller's bond clerk or an assistant bond clerk lawfully designated in
writing to act for the Comptroller) shall manually sign the Comptroller's
Registration Certificate prescribed herein and the seal of said Comptroller shall
be impressed or placed in facsimile, thereon.
23. Sale; Bond Purchase Agreement; Bond Insurance. The Bonds
are hereby sold and shall be delivered to the Underwriters at a price of
$ , which represents the par amount of the Bonds of
$17,925,000.00, plus a premium of $ , and less and
underwriting discount of $ ' all in accordance with the
terms of a bond purchase agreement of even date herewith, presented to and
hereby approved by the City Council, which price and terms are hereby found
and determined to be the most advantageous reasonably obtainable by the City.
The Mayor and other appropriate officials of the City are hereby authorized and
27
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
directed to execute such bond purchase agreement on behalf of the City, and
the Mayor and all other officers, agents and representatives of the City are
hereby authorized to do any and all things necessary or desirable to satisfy the
conditions set out therein and to provide for the issuance and delivery of the
Bonds.
The purchase of and payment of the premium for the Bond Insurance
Policy by the City, in accordance with the terms of a commitment for such
insurance presented to and hereby approved by the City Council is hereby
authorized. All officials and representatives of the City are authorized and
directed to execute such documents and to do any and all things necessary or
desirable to obtain such insurance, and the printing on the Bonds of an
appropriate legend regarding such insurance is hereby approved.
24. Tax Exemption.
(a) General Tax Covenant. The City intends that the interest on
the Bonds shall be excludable from gross income for purposes of federal income
taxation pursuant to Sections 103 and 141 through 150 of the Code, and the
applicable Income Tax Regulations (the "Regulations"). The City covenants and
agrees not to take any action, or knowingly omit to take any action within its
control, that if taken or omitted, respectively, would cause the interest on the
Bonds to be includable in gross income, as defined in Section 61 of the Code, of
the holders thereof for purposes of federal income taxation. In particular, the
City covenants and agrees to comply with each requirement of this Section;
provided, however, that the City shall not be required to comply with any
particular requirement of this Section if the City has received an opinion of
nationally recognized bond counsel ("Counsel's Opinion") that such
noncompliance will not adversely affect the exclusion from gross income for
federal income tax purposes of interest on the Bonds or if the City has received
Counsel's Opinion to the effect that compliance with some other requirement set
forth in this Section will satisfy the applicable requirements of the Code, in which
case compliance with such other requirement specified in such Counsel's
Opinion shall constitute compliance with the corresponding requirement specified
in this Section. The City represents and warrants that the City shall realize
present value debt service savings (determined without regard to administrative
expenses) in connection with issuance of the Bonds to the extent that the
proceeds thereof are used to refund the Refunded Bonds.
(b) No Private Use or Payment and No Private Loan Financing.
The City shall certify, through an authorized officer, employee or agent that
based upon all facts and circumstances known or reasonably expected to be in
existence on the date the Bonds are delivered, that the proceeds of the
Refunded Bonds have not been used, and that proceeds of the Refunded Bonds
and the Bonds will not be used in a manner that would cause the Bonds to be
"private activity bonds" within the meaning of Section 141 of the Code and the
28
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
Regulations promulgated thereunder. Moreover, the City covenants and agrees
that it will make such use of the proceeds of the Refunded Bonds and the Bonds
including interest or other investment income derived from Bond proceeds,
regulate the use of property financed, directly or indirectly, with such proceeds,
and take such other and further action as may be required so that the Bonds will
not be "private activity bonds"within the meaning of Section 141 of the Code and
the Regulations promulgated thereunder.
(c) No Federal Guaranty. The City covenants and agrees not to
take any action, or knowingly omit to take any action within its control, that, if
taken or omitted, respectively, would cause the Bonds to be "federally
guaranteed" within the meaning of Section 149(b) of the Code and applicable
regulations thereunder, except as permitted by Section 149(b)(3) of the Code
and such Regulations.
(d) No-Arbitrage Covenant. The City shall certify, through an
authorized officer, employee or agent, that based upon all facts and estimates
known or reasonably expected to be in existence on the date the Bonds are
delivered, the City will reasonably expect that the proceeds of the Bonds and the
amounts transferred from the Reserve Fund for the Refunded Bonds pursuant to
Section 26 of this Ordinance will not be used in a manner that would cause the
Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code
and applicable Regulations thereunder. Moreover, the City covenants and
agrees that it will make such use of the proceeds of the Bonds and the amounts
so transferred from said Reserve Fund (including interest or other investment
income derived therefrom), regulate investments of such proceeds and amounts,
and take such other and further action as may be required so that the Bonds will
not be "arbitrage bonds" within the meaning of Section 148(a) of the Code and
applicable Regulations thereunder.
(e) Arbitrage Rebate. If the City does not qualify for an
exception to the requirements of Section 148(f) of the Code relating to rebate to
the United States, the City will take all necessary steps to comply with the
requirement that certain amounts earned by the City on the investment of the
"gross proceeds" of the Bonds (within the meaning of Section 148(f)(6)(B) of the
Code), be rebated to the federal government. Specifically, the City will
(i) maintain records regarding the investment of the gross proceeds of the Bonds
as may be required to calculate the amount earned on the investment of the
gross proceeds of the Bonds separately from records of amounts on deposit in
the funds and accounts of the City allocable to other bond issues of the City or
moneys which do not represent gross proceeds of any bonds of the City,
(ii) calculate at such times as are required by applicable regulations, the amount
earned from the investment of the gross proceeds of the Bonds which is required
to be rebated to the federal government, and (iii) pay, not less often than every
fifth anniversary date of the delivery of the Bonds, and within sixty days after the
retirement of the Bonds, or on such other date as may be permitted under
29
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
applicable regulations with respect to "gross proceeds" in the Escrow Fund, all
amounts required to be rebated to the federal government. Further, the City will
not indirectly pay any amount otherwise payable to the federal government
pursuant to the foregoing requirements to any person other than the federal
government by entering into an investment arrangement with respect to the
gross proceeds of the Bonds that might result in a reduction in the amount
required to be paid to the federal government because such arrangement results
in a smaller profit or a larger loss than would have resulted if the arrangment had
been at arm's length and had the yield on the issue not been relevant to either
party.
(f) Information Reporting. The City covenants and agrees to
file or cause to be filed with the Secretary of the Treasury, not later than the 15th
day of the second calendar month after the close of the calendar quarter in
which the Bonds are issued, an information statement concerning the Bonds, all
under and in accordance with Section 149(e) of the Code and applicable
regulations thereunder.
(g) Continuing Obligation. Notwithstanding any other provision of
this Ordinance, the City's obligations under the covenants and provisions of this
Section shall survive the defeasance and discharge of the Bonds.
25. Application of Proceeds. Proceeds from the sale of the Bonds
shall, promptly upon receipt by the City, be applied as follows:
(i) Accrued interest, if any, shall be deposited into the Interest
and Sinking Fund;
(ii) $ from the sale of the Bonds shall be
deposited with the paying agent of the Refunded Bonds to provide for the
refunding of the Refunded Bonds;
(iii) $ from the sale of the Bonds shall be
used to pay the costs of issuing the Bonds not otherwise paid pursuant to
clause (b) above; and
(iv) The sum of $ from the sale of the
Bonds shall be used as a rounding amount and shall be deposited in the
Interest and Sinking Fund for the Bonds; and
(v) Any proceeds from the Bonds remaining after making all such
deposits and payments shall be deposited into the Interest and Sinking
Fund.
30
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
26. Transfer of Money in Reserve Fund and Interest and Sinking Fund
Maintained for Refunded Bonds. On the date of issuance and delivery of the
Bonds, amounts contained in the Reserve Fund for the Refunded Bonds shall be
transferred to the Reserve Fund for the Bonds and amounts contained in the
Interest and Sinking Fund for the Refunded Bonds shall be transferred to the
Interest and Sinking Fund for the Bonds and shall be applied as herein provided.
27. Redemption of Refunded Bonds. The City hereby irrevocably calls
the following bonds of the City for redemption prior to maturity on the date set
forth below, and authorizes and directs notice of such redemption to be given as
provided in substantially the form attached hereto as Exhibit "A" (with such
changes to this form as any official of the City may approve):
Bonds To Be Redeemed Redemption Date
The City of Beaumont, Texas,
Waterworks and Sewer System
Revenue and Refunding Bonds,
Series 2000, maturing on
September 1 in the years
2011 through 2018 September 1, 2010
28. Deposit. The discharge and defeasance of the Refunded Bonds
shall be effectuated by depositing with Wells Fargo Bank, N.A., (and its
successors), the paying agent for the Refunded Bonds, $
of the proceeds of the Bonds, (a) to carry out the program designed for the City
by RBC Dain Rauscher Inc., (b) to maximize the City's present value savings
and/or to minimize the City's costs of refunding, and (c) to comply with all
applicable laws and regulations relating to the refunding of the Refunded Bonds.
29. Source of City Funds Used in Refunding. No money of the City
other than proceeds of the Bonds shall be used to refund the Refunded Bonds.
30. Related Matters. To satisfy in a timely manner all of the City's
obligations under this Ordinance, the Mayor or Mayor Pro Tem, the City Clerk or
any Deputy 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 provide for the refunding of the Refunded 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 this Ordinance and to direct the application of
funds of the City consistent with the provisions of this Ordinance.
31
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\13OND ORDINANCE 4-6-05.DOC
31. Re istrar. 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.
32. Official Statement. The City Council of the City hereby ratifies,
authorizes and approves, in connection with the sale of the Bonds, the
preparation and distribution of the Preliminary Official Statement dated April 1,
2005, and an Official Statement dated April , 2005, and any further
supplement thereto, containing such information as may be necessary to
conform to the terms of the Bonds, this Ordinance, and the purchase contract for
the Bonds. The appropriate officials of the City are hereby authorized to sign
such Official Statement and/or to deliver a certificate pertaining to such Official
Statement as prescribed therein, dated as of the date of payment for and
delivery of the Bonds.
33. No Personal Liability. No recourse shall be had for payment of the
principal of or interest on any Bonds or for any claim based thereon, or on this
Ordinance, against any official or employee of the City or any person executing
any Bonds.
34. Continuing Disclosure Undertaking. (a) Annual Reports. The City
shall provide annually to each NRMSIR and the SID, within six months after the
end of each fiscal year, financial information and operating data with respect to the
City of the general type included in the final Official Statement authorized in this
Ordinance (i) under the headings "SELECTED FINANCIAL INFORMATION",
"DEBT STATEMENT", "TAX DATA", "SELECTED FINANCIAL DATA",
"ADMINISTRATION OF THE CITY", and in APPENDIX B. The information to be
provided shall include the financial statements of the City prepared in accordance
with the accounting principles the City may be required to employ from time to time
pursuant to State law or regulation and audited, if the audit is completed within the
period during which they must be provided. If the audit of such financial
statements is not completed within such period, then the City shall provide
unaudited financial statements for the applicable fiscal year to each NRMSI and
the SID within such six month period, and audited financial statements when the
audit report on such statement becomes available.
If the City changes its fiscal year, it will notify each NMSIR and the SID of
the change (and of the date of the new fiscal year end) prior to the next date by
which the City otherwise would be required to provide financial information and
operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by
specific reference to any document (including an official statement or other offering
document, if it is available from the MSRB) that theretofore has been provided to
32
CADOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
each NRMSIR and the SID or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each
NRMSIR or the MSRB, in a timely manner, of any of the following events with
respect to the Bonds, if such event is material within the meaning of the federal
securities laws:
i. Principal and interest payment delinquencies;
ii. Non-payment related defaults;
iii. Unscheduled draws on debt service reserves
reflecting financial difficulties;
iv. Unscheduled draws on credit enhancements
reflecting financial difficulties;
V. Substitution of credit or liquidity providers,
or their failure to perform;
vi. Adverse tax opinions or events affecting the
tax-exempt status of the Bonds;
vii. Modifications to rights of Bondholders;
viii. Bond calls;
ix. Defeasances;
X. Release, substitution or sale of property
securing repayment of the securities; and
A. Rating changes.
The City shall notify the SID and either each NRMSIR or the MSRB, in a
timely manner, of any failure by the City to provide financial information or
operating data in accordance with section (a) above..
(c) Limitations, Disclaimers and Amendments. The City shall be obligated
to observe and perform the covenants specified in this Section for so long as, but
only for so long as, the City remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the City in any event will give
notice of any deposit made in accordance with Texas law that causes Bonds no
longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and
beneficial owners of the Bonds, and nothing in this Section, express or implied,
shall give any benefit or any legal or equitable right, remedy, or claim hereunder to
any other person. The City undertakes to provide only the financial information,
operating data, financial statements, and notices which it has expressly agreed to
33
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of
the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty
concerning such information or its usefulness to a decision to invest in or sell
Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON,
IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN
PART FROM ANY BREACH, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION. HOLDERS OR
BENEFICIAL OWNERS OF BONDS MAY SEEK AS THEIR SOLE REMEDY A
WRIT OF MANDAMUS TO COMPEL THE CITY TO COMPLY WITH ITS
AGREEMENT.
No default by the City with respect to its continuing disclosure agreement
shall constitute a breach of or default under this Ordinance for purposes of any
other provision of this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to
time to adapt to changed circumstances that arise from a change in legal
requirements, a change in law, or a change in the identity, nature, status or type of
operations of the City, if (i) the agreement, as amended, would have permitted the
Underwriter to purchase or sell the Bonds in the initial primary offering in
compliance with the Rule, taking into account any amendments or interpretations
of such rule to the date of such amendment, as well as such changed
circumstances, and (ii) either (a) the holders of a majority in aggregate principal
amount of the outstanding Bonds consent to such amendment, or (b) any person
unaffiliated with the City (such as nationally recognized bond counsel) determines
the amendment will not materially impair the interests of the holders and beneficial
owners of the Bonds. The City may also amend or repeal the obligations and
agreement in this Section if the SEC amends or repeals the applicable provisions
of the Rule or a court of final jurisdiction determines that such provisions are
invalid, and the City may amend the agreement in its discretion in any other
circumstance or manner, but in either case only to the extent that its right to do so
34
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
would not prevent an underwriters from lawfully purchasing or reselling the Bonds
in the primary offering of the Bonds in compliance with the Rule. If the City
amends its agreement, it must include with the next financial information and
operating data provided in accordance with its agreement an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change
in the type of information and operating data so provided.
35. Open Meeting. It is hereby officially found and determined that the
meeting at which this Ordinance was adopted was open to the public, and public
notice of the time, place and purpose of said meeting was given, all as required
by Chapter 551 of the Texas Government Code.
36. Interpretations. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all
genders. The titles and headings of the sections of this Ordinance have been
inserted for convenience of reference only and are not to be considered a part
hereof and shall not in any way modify or restrict any of the terms or provisions
hereof. This Ordinance and all of the terms and provisions hereof shall be
liberally construed to effectuate the purposes set forth herein and to sustain the
validity of the Parity Bonds and the validity of the lien on and pledge of the Net
Revenues to secure the payment of the Parity Bonds.
37. Provisions Relating to Bond Insurance. Notwithstanding any
provision in this Ordinance to the contrary, as long as the Bond Insurance Policy
shall be in full force and effect, the City and the Registrar agree to comply with
the following provisions:
[To be inserted.]
[The remainder of this page has intentionally been left blank.]
35
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
PASSED AND APPROVED this 12th day of April, 2005.
Mayor
The City of Beaumont
ATTEST:
City Clerk
The City of Beaumont
(SEAL)
36
C:\DOCUME-1\KANDY\LOCALS-1\TEMP\BOND ORDINANCE 4-6-05.DOC
PRELIMINARY OFFICIAL STA'T'EMENT DATED APRIL 1,2005
IT IS ANTICIPATED THAT ON THE DELIVERY DATE FOR THE BONDS, BOND COUNSEL WILL RENDER AN
0 . OPINION THAT INTEREST ON THE BONDS IS EXCLUDABLE FROM GROSS INCOME FOR FEDERAL INCOME TAX
– PURPOSES UNDER EXISTING LAW AND THE BONDS ARE NOT PRIVATE ACTIVITY BONDS. SEE "LEGAL
v MATTERS - TAX EXEMPTION" HEREIN FOR A DISCUSSION OF BOND COUNSEL'S OPINION, INCLUDING A
J DESCRIPTION OF ALTERNATIVE MINIMUM TAX CONSEQUENCES FOR CORPORATIONS.
The City will not designate the Bonds as qualified tax-exempt obligations for financial institutions.
NEW ISSUE RATINGS: Moody's Investors Service,Inc....................."—"
Standard&Poor's Ratings Services............" "
$17,9259000*
CITY OF BEAUMONT, TEXAS
(A political subdivision of the State of Texas located within Jefferson County)
r „
WATERWORKS AND SEWER SYSTEM
REVENUE REFUNDING BONDS, SERIES 2005
Dated: May 1,2005
Principal of and interest on City of Beaumont,Texas$17,925,000 Waterworks and Sewer System Revenue Refunding Bonds,Series 2005
(the`Bonds")are payable by Wells Farg o Bank N.A.,the paying agent/registrar(the"Registrar"). Interest on the Bonds will accrue from
May 1, 2005 and be payable on March 1 and September 1 of each year, commencing September 1, 2005, to the registered owners
appearing on the registration books of the Registrar on the 15th day of the month preceding each interest payment date (the "Record
Date"). See "THE BONDS -Description." The Bonds are initially registered and delivered only to Cede & Co., the nominee of The
r.c '' Depository Trust Company("DTC")pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may
r :s be acquired in denominations of$5,000 or integral multiples thereof. No physical delivery of the Bonds will be made to the beneficial
c owners thereof. Principal of and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede&Co.,which will make
0 3 distribution of the amounts so paid to the beneficial owners of the Bonds. See"THE BONDS-Book-Entry-Only System"herein. The
T - Bonds are subject to redemption prior to their scheduled maturities on September 1,2015 or any date thereafter, at a price equal to the
o principal amount thereof plus accrued interest to the date of redemption.
The Bonds are special obligations of City of Beaumont,Texas(the"City")and are payable solely from a first lien on and pledge of the Net
o r Revenues (hereinafter defined) of the City's waterworks and sanitary sewer system. THE BONDS DO NOT CONSTITUTE AN
v
INDEBTEDNESS OR GENERAL OBLIGATION OF THE CITY AND ARE NOT PAYABLE FROM FUNDS RAISED OR TO BE
RAISED BY TAXATION. The lien on Net Revenues securing the Bonds is on a parity with the liens securing the City's outstanding Prior
f Lien Bonds(as defined in the Ordinance)and any additional first lien bonds hereafter issued by the City. See"THE BONDS-Source of
o U Payment." The proceeds of the Bonds will be used to refund certain of the City's outstanding bonds(the "Refunded Bonds")and pay
Y certain costs incurred in connection with the issuance of the Bonds. (See"THE BONDS-Use of Proceeds"and"APPENDIX E—The
Refunded Bonds.")
The City has made application to insurance providers for a municipal bond insurance policy on the Bonds.
c PRINCIPAL AMOUNTS,MATURITIES,INTEREST RATES AND PRICES
c (Due: September 1)
O r Initial CUSIP Initial CUSIP
Principal* Interest Reoffering Nos. Principal* Interest Reoffering Nos.
LE—
f Maturity Amount Rate Yield(a) (c) Maturity Amount Rate Yield(a) (c)
P .2= 2005 $150,000 % o 2012 $ 305,000 % %
�
2006 85,000 2013 2,485,000
c I; 2007 85,000 2014 2,580,000
2008 90,000 2015 2,700,000
r 2009 90,000 2016(b) 2,825,000
r 2010 95,000 2017(b) 2,985,000
2011 300,000 2018(b) 3,150,000
F- P (a) The initial yields will be established by and are the sole responsibility of the Underwriters,and may subsequently be changed.
s (b) The Bonds maturing on or after September 1,2016 are subject to redemption,at the option of the City,at the par value thereof plus
accrued interest,in whole or in part,on September 1,2015,or any date thereafter.
o . (c) CUSIP numbers have been assigned to the Bonds by Standard and Poor's CUSIP Service Bureau, A Division of the McGraw-Hill
Companies, Inc., and are included solely for the convenience of the registered owners of the Bonds_ Neither the City, the Financial
Advisor,nor the Underwriters are responsible for the selection or correctness of the CUSIP numbers set forth herein.
E12 The Bonds are being issued pursuant to the Constitution and laws of the State of Texas and provisions of an ordinance(the"Ordinance")
adopted by the City Council(the"City Council")of the City on April 12,2005. The Bonds are offered when,as and if issued,subject to
the approving opinion of the Attorney General of the State of Texas and the opinion of Orgain,Bell&Tucker,L.L.P.,Beaumont,Texas,
Bond Counsel for the City,as to the validity of the issuance of the Bonds under the Constitution and laws of the State of Texas. Certain
Ylegal matters will be passed upon for the Underwriters by Andrews Kurth LLP. See"LEGAL MATTERS." The Bonds are expected to be
E available for delivery through the facilities of DTC on or about May 12,2005.
r . ESTRADA HINOJOSA&COMPANY,INC.
o COASTAL SECURITIES FIRST SOUTHWEST COMPANY
MORGAN KEEGAN&COMPANY,INC.
J T
Preliminary,subject to change.
USE OF INFORMATION IN OFFICIAL STATEMENT
For purposes of compliance with Rule 15c2-12 of the Securities and Exchange Commission (the "Rule"), this
document constitutes an Official Statement of the District with respect to the Bonds that has been"deemed final"by
the City as of its date except for the omission of no more than the information permitted by the Rule.
No dealer,broker,salesman or other person has been authorized by the City to give any information or to make any
representation other than those contained in this Official Statement,and,if given or made, such other information or
representations must not be relied upon as having been authorized by the City.
This Official Statement is not to be used in an offer to sell or the solicitation of an offer to buy in any state in which
such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to
do so or to any person to whom it is unlawful to make such offer or solicitation.
This Official Statement contains, in part, estimates, assumptions and matters of opinion which are not intended as
statements of fact, and no representation is made as to the correctness of such estimates, assumptions or matters of
opinion or as to the likelihood that they will be realized. Any information and expressions of opinion herein
contained are subject to change without notice,and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the condition of
the City or other matters described herein since the date hereof.
The Underwriters have provided the following sentence for inclusion in this Official Statement. The Underwriters
have reviewed the information in this Official Statement in accordance with, and as part of,their responsibilities to
investors under Federal Securities Laws as applied to the facts and circumstances of this transaction, but the
Underwriters do not guarantee the accuracy or completeness of such information.
2
April 12,2005
Consider adopting the 2005 Action Plan and the Five Year Consolidated Plan
N too~ City of Beaumont
ead
~ Council A
� M Agenda Item
g
TO: City Council
FROM: Kyle Hayes, City Manager
PREPARED BY: Johnny Beatty, Community Development
MEETING DATE: April 12, 2005
AGENDA MEMO DATE: March 18, 2005
REQUESTED ACTION: Council approve a resolution adopting the 2005 Action Plan and the Five
Year Consolidated Plan.
RECOMMENDATION
The Administration recommends that Council approve a resolution adopting the 2005 Action Plan and the
Five Year Consolidated Plan.
BACKGROUND
As mandated by the United States Department of Housing and Urban Development,City Council has
conducted such Public Hearings in previous years prior to adopting the City's Final Annual Action Plan.
Community Development Advisory Committee and Administration recommendations have been forwarded
to Council for consideration.
BUDGETARY IMPACT
The 2005 federal allocation of$2,976,495 is comprised of$2,016,696 in Community Development Block
Grant funds,$809,799 in HOME funds and an estimated$150,000 in Program Income. During the
February 22,2005 Council meeting,Council allocated$100,000 to the Public Services/Public Facilities
and Improvements and $85,000 to the Public Services/Emergency Shelter Set-Aside line items.
PREVIOUS ACTION
Council conducted a Public Hearing to receive public comments related to the Public Services and the
Public Facilities and Improvements line items of the 2005 Annual Action Plan Budget,Tuesday,April 5,
2005. Council adopted the 2005 Preliminary Budget on Tuesday,February 22, 2005.
SUBSEQUENT ACTION
None.
RECOMMENDED BY
City Manager, Public Works Director, Planning Manager, Grants Administrator
CDBGHousing.ai.wpd
April 8,2005
2005 CONSOLIDATED BLOCK GRANT PROGRAM APPLICATIONS
Public Services/Public Facilities &.Improvements/Emergency Shelter Set-Aside
AMOUNT CDAC ADMINISTRATION CITY COQ€:
ORGANIZATION REQUESTED RECOMMENDATIONS RECOMMENDATIONS RECOTVjj%4E-N �' <.
PUBLIC SERVICES
1. Angel Express Outreach $20,000.00
2. Beaumont Housing Authority $8,515.00
3. Briggs-Cannon Community Empowerment Center $15,000.00 $5,000.00 $5,000.00
4. Child Abuse and Forensic Services $8,054.00
5. Communities In Schools,SE Texas Inc. $11,400.00 $5,000.00 $5,000.00
6. Girls Haven $20,000.00
7. IEA-Inspire,Encourage,Achieve(music&art supplies) $6,140.00 $4,000.00 $4,000.00
8. Lamar University-Community Outreach Program $19,490.00
9. Life Training Institute $11,500.00
10. Mama Hagers Christian Home,Inc. $19,331.00
11. Nutrition and Services for Seniors $16,524.00 $15,000.00 $15,000.00
12. Praise Christian Center $20,000.00
13. Richard Milburn Academy-Beaumont $20,000.00
14. Texas Recyclers Assoc. $20,000.00
15. YMCA-L.L.Melton Family Branch $17,280.00 $17,000.00 $17,000.00
PUBLIC FACILITIES AND IMPROVEMENTS
16. Anayat House,Inc. $20,000.00 $10,000.00 $10,000.00
17. Beaumont Housing Authority(2 bus shelters) $19,880.00 $9,000.00 $9,000.00
18. Buckner Children and Farpily Services $8,998.00 $5,000.00 $5,000.00
19. Operation Restoration $20,000.00
20. Shorkey Center $18,749.00 $10,000.00 $10,000.00
21. Spindletop MHMR $12,160.00
22. YWCA(to complete repairs) $20,000.00 $20,000.00 $20,000.00
TOTAL PUBLIC SERVICES/PUBLIC FACILITIES&IMPROVEMENTS $100,000.00 $100,000.00 $0.00
PUBLIC SERVICES(EMERGENCY SHELTER SET-ASIDE)
23. Family Services of Southeast Texas $25,000.00 $24,000.00 $24,000.00
24. The Salvation Army $20,000,00 $10,000.00 $10,000.00
25. Some Other Place/Hennfs Place $47,800.00 $34,000.00 $34,000.00
26. Watts Home Inc. $17,910.00 $17,000.00 $17,000.00
TOTAL PUBLIC SERVICES(EMERGENCY SHELTER SET-ASIDE) $85,000.00 $85,000.00 $0.00
TOTAL REQUESTED $463,731.00 $185,000.00 $185,000.00 $0.00
FIVE YEAR CONSOLIDATED GRANT PROGRAM
DRAFT Current Projected 2006 2007 2008 2009
Funding 2005
2004
HOUSING
Minor Repair 371.,000 360,000 200,000 200,000 200,000 200,000
Lead Based Paint 50,000 50,000 50,000 50,000 50,004 50,000
100,000 75,000 75,000 75,000 75,000 75,000
Infrastructure
CI,EARANC
E/DEMOLITION 355,000 370,000 300,000 300,000 300,000 300,000
Downtown Clearance 60,000 60,000 60,000 60,000 60,000 60,000
PUBLIC FACILITIES/IMPROVEMENTS
530,000 * 530,000 818,555 818,555 818,555 818,555
Section 108 Repayments
Economic Development 50,000
PUBLIC SERVICES/EMERGENCY SHELTER SET-ASIDE 185,000 185,000 185,000 185,000 185,000 185,000
ADMINISTRATION 425,000 386,696 328,141 328,141 328,141 328,141
TOTAL CDBG 2,126,000 2,016,696 2,016,696 2,016,696 2,016,696 2,016,696
REVOLVING FUNDS(Funded with Program Income) 150,000 150,000 150,000 150,000 150,000 150,000
Program Income is Estimated
DRAFT Current Projected 2006 2007 2008 2009
Funding 2005
2004
HOME 755,396 728,819 765;000 765,000 810,000 832,500
HOME Administration 83,932 80,980 85,000 85,000 90,000 92,500
Total HOME 839,328 809,799 850,000 850,000 900,000 925,000
TOTAL 3,115,328 2,976,495 3,016,696 3,01S,69b 3,OSS,S96 3,09I,69b
* The Section 108 debt repayment is$812,259. $530,000 allocated from 2005 grant year and $282,259 from the 2003 and 2004 grant years
plus interest income.
$114,698.00 Interest Income
104,656.64 2004 -Administration
50,000.00 2004-Economic Development, BUILD, Inc.
5,359.00 2004-Public Facilities/Improvements
39.00 2003 -Public Services-John Jay French Museum
7,506.36 2004 -Public Services-Ubi Caritas Welcome Learning Center
$282,259.00
City of Beaumont
REGULAR MEETING OF THE CITY COUNCIL
COUNCIL CHAMBERS APRIL 12,2005 1:30 P.M.
CONSENT AGENDA
* Approval of minutes
* Confirmation of committee appointments