HomeMy WebLinkAboutORD 2014-25 - Utility Refunding BondsCERTIFICATE FOR ORDINANCE NO. 2014 -25
THE STATE OF TEXAS §
COUNTY OF WILLIAMSON §
CITY OF GEORGETOWN §
We, the undersigned officers and members of the City of Georgetown, Texas (the "City "),
hereby certify as follows:
1. The City Council of the City convened in REGULAR MEETING ON THE 13th
DAY OF MAY, 2014, at Council Chambers, 101 E. 7th Street, Georgetown, Texas (the
"Meeting "), and the roll was called of the duly constituted officers and members of the City,
to -wit:
George Garver, Mayor
Patty Eason, Councilmember District 1
Keith Brainard, Councilmember District 2
John Hesser, Councilmember District 3
Steve Fought, Councilmember District 4
Jerry Hammerlun, Councilmember District 5
Rachael Jonrowe, Councilmember District 6
Tommy Gonzalez, Councilmember District 7
and all of the persons were present, except the following absentees: thus constituting a
quorum. Whereupon, among other business, the following was tr sacted at the Meeting: a
written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2014; AUTHORIZING
THE PLEDGE OF CERTAIN REVENUES IN SUPPORT OF THE BONDS; APPROVING
A PAYING AGENT/REGISTRAR AGREEMENT, AN OFFICIAL STATEMENT, AN
ESCROW AGREEMENT AND A PURCHASE AGREEMENT; ESTABLISHING
PROCEDURES FOR SELLING AND DELIVERY OF THE BONDS; AND
AUTHORIZING OTHER MATTERS RELATED TO THE ISSUANCE OF THE BONDS
was duly introduced for the consideration of the City Council. It was then duly moved and
seconded that the Ordinance be passed on first reading; and, after due discussion, said motion
carrying with it the passage of the Ordinance, prevailed and carried by the following vote:
AYES:
NOES:
2. A true, full and correct copy of the Ordinance passed at the Meeting described in
the above and foregoing paragraphs is attached to and follows this Certificate; that the Ordinance
Georgetown \USRRB\ 14\Del: OrdinanceCert
has been duly recorded in the City Council's minutes of the Meeting; that the above and foregoing
paragraphs are a true, full and correct excerpt from the City Council's minutes of the Meeting
pertaining to the passage of the Ordinance; that the persons named in the above and foregoing
paragraphs are the duly chosen, qualified and acting officers and members of the City Council as
indicated therein; that each of the officers and members of the City Council was duly and
sufficiently notified officially and personally, in advance, of the time, place and purpose of the
Meeting, and that the Ordinance would be introduced and considered for passage at the Meeting,
and each of the officers and members consented, in advance, to the holding of the Meetings for
such purpose, and that the Meeting was open to the public and public notice of the time, place and
purpose of the meeting was given, all as required by Chapter 551, Texas Government Code.
3. The Mayor of the City has approved and hereby approves the Ordinance; that the
Mayor and the City Secretary of the City have duly signed the Ordinance; and that the Mayor and
the City Secretary of the City hereby declare that their signing of this Certificate shall constitute
the signing of the attached and following copy of the Ordinance for all purposes.
Georgetown \USRRB \14\Del: OrdinanceCert
SIGNED AND SEALED the 13th day of May, 2014.
City Secretary
[CITY SEAL]
Georgetown \USRRB\ 14\Del: OrdinanceCer[
Mayor
SIGNED AND SEALED the 13th day of May, 2014.
[CITY SEAL]
Georgetown \USRRB\ 14\Del: OrdinanceCert
`Mayor
ORDINANCE NO. 2014 -25
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2014;
AUTHORIZING THE PLEDGE OF CERTAIN REVENUES IN SUPPORT OF THE
BONDS; APPROVING A PAYING AGENT/REGISTRAR AGREEMENT, AN
OFFICIAL STATEMENT, AN ESCROW AGREEMENT AND A PURCHASE
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERY OF
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATED TO THE
ISSUANCE OF THE BONDS
ADOPTED MAY 13, 2014
GTO WN\UtilSysRevRefg\ 14\Del: Ordinance
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2014;
AUTHORIZING THE PLEDGE OF CERTAIN REVENUES IN SUPPORT OF THE
BONDS; APPROVING A PAYING AGENT/REGISTRAR AGREEMENT, AN
OFFICIAL STATEMENT, AN ESCROW AGREEMENT AND A PURCHASE
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERY OF
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATED TO THE
ISSUANCE OF THE BONDS
Table of Contents
Page
Preamble.............................................................................................. ..............................1
Section1. RECITALS ............................................................................ ..............................2
Section 2. DEFINITIONS AND VISION STATEMENT ....................... ..............................2
Section 3. AMOUNT, NAME AND PURPOSE OF THE BONDS ....... ............................... 2
Section 4. DATE, DENOMINATION, MATURITIES, NUMBERS, INTEREST
ANDREDEMPTION ........................................................... ............................... 2
Section 5. CHARACTERISTICS OF THE BONDS .............................. ............................... 5
Section 6. FORM OF BOND ................................................................ ............................... 9
Section 7. PLEDGE OF PLEDGED REVENUES ................................. ............................... 9
Section 8. SPECIAL FUNDS ................................................................ ............................... 9
Section 9. REVENUE FUND ................................................................ ............................... 9
Section10. FLOW OF FUNDS ............................................................. ............................... 10
Section 11. INTEREST AND SINKING FUND ................................... ............................... 10
Section 12. RESERVE FUND .............................................................. ............................... 11
Section 13. EXCESS BOND PROCEEDS ............................................ ............................... 14
Section 14. DEFICIENCIES - EXCESS PLEDGED OR NET REVENUES ........................ 14
Section 15. INVESTMENT OF FUNDS - VALUATION - TRANSFER OF
INVESTMENT INCOME .................................................. ............................... 14
GTOWN \Uti1SysRevRefg \14\De1: Ordinance 1
Section 16.
PAYMENT OF PARITY OBLIGATIONS ......................... ............................... 15
Section 17.
RATES AND CHARGES ................................................... ...............................
15
Section 18.
GENERAL COVENANTS ................................................. ...............................
16
Section 19.
RECORDS AND ACCOUNTS - ANNUAL AUDIT .......... ...............................
19
Section 20.
COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ONTHE BONDS ............................................................... ...............................
20
Section 21.
CONTINUING DISCLOSURE UNDERTAKING ............. ...............................
22
Section 22.
ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS ...............................
25
Section 23.
FURTHER REQUIREMENTS FOR ADDITIONAL PARITY
OBLIGATIONS................................................................. ...............................
25
Section 24.
ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS .. ...............................
26
Section 25.
ISSUANCE OF SPECIAL PROJECT OBLIGATIONS ...... ...............................
26
Section 26.
LMTED OBLIGATIONS OF THE CITY ........................ ...............................
26
Section 27.
SECURITY FOR FUNDS .................................................. ...............................
27
Section 28.
DEFAULTS AND REMEDIES .......................................... ...............................
27
Section 29.
DEFEASANCE OF BONDS .............................................. ...............................
28
Section 30.
DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS.............................................................................. ...............................
29
Section 31.
AMENDMENT OF ORDINANCE ..................................... ...............................
30
Section 32.
CUSTODY, APPROVAL AND REGISTRATION OF SERIES 2014
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE AND
CUSIPNUMBERS ............................................................. ...............................
32
Section 33.
APPROVAL OF OFFERING DOCUMENTS, PAYING AGNET/
REGISTRAR AGREEMENT AND ESCROW AGREEMENT .........................
33
Section 34.
INSURANCE PROVISIONS ............................................. ...............................
34
Section 35.
NO RECOURSE AGAINST CITY OFFICIALS ................ ...............................
34
GTOWN\UtilSysRevRefg \14\Del: Ordinance ll
Section 36.
PAYMENT OF ATTORNEY GENERAL FEE .................. ............................... 34
Section 37.
FURTHER ACTIONS ........................................................ ...............................
34
Section 38.
INTERPRETATIONS ........................................................ ...............................
35
Section 39.
INCONSISTENT PROVISIONS ........................................ ...............................
35
Section 40.
INTERESTED PARTIES ................................................... ...............................
35
Section 41.
INCORPORATION OF RECITALS .................................. ...............................
35
Section42.
SEVERABILITY ............................................................... ...............................
35
Section43.
EFFECTIVE DATE ........................................................... ...............................
36
Section44.
PERFECTION .................................................................... ...............................
36
Section 45.
PAYMENT OF ATTORNEY GENERAL FEE .................. ...............................
36
Exhibit A
Definitions
Exhibit B
Form of Bond
Exhibit C
Description of Annual Financial Information
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 111
ORDINANCE NO. 2014 -25
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF GEORGETOWN,
TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2014;
AUTHORIZING THE PLEDGE OF CERTAIN REVENUES IN SUPPORT OF THE
BONDS; APPROVING A PAYING AGENT/REGISTRAR AGREEMENT, AN
OFFICIAL STATEMENT, AN ESCROW AGREEMENT AND A PURCHASE
AGREEMENT; ESTABLISHING PROCEDURES FOR SELLING AND DELIVERY OF
THE BONDS; AND AUTHORIZING OTHER MATTERS RELATED TO THE
ISSUANCE OF THE BONDS
STATE OF TEXAS §
COUNTY OF WILLIAMSON §
CITY OF GEORGETOWN §
WHEREAS, the City Council of the City deems it advisable and in the best interest of
the City to refund the Refunded Obligations, as defined in Exhibit "A" attached hereto, in order
to achieve a net present value debt service savings of not less than 3.00% of the principal amount
of the Refunded Obligations net of any City contribution with such savings, among other
information and terms to be included in a pricing certificate to be executed by the Mayor, acting
as the designated pricing officer of the City, or, in the absence of the Mayor, the Mayor Pro Tern,
all in accordance with the provisions of Chapters 1207 and 1371 of the Texas Government Code
thereof, and
WHEREAS, Chapter 1207, Texas Government Code, as amended ( "Chapter 1207 ")
authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof
together with any other available funds or resources, directly with a place of payment (paying
agent) for the Refunded Obligations or with a trust company or commercial bank that does not
act as depository for the City, and such deposit, if made before such payment dates, shall
constitute the making of firm banking and financial arrangements for the discharge and final
payment of the Refunded Obligations; and
WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement
with an eligible trust company or commercial bank with respect to the safekeeping, investment,
reinvestment, administration, and disposition of any such deposit, upon such terms and
conditions as the City and such entity may agree, provided that such deposits may be invested
and reinvested in Defeasance Securities (as defined herein) which shall mature and bear interest
payable at such times and in such amounts as will be sufficient to provide for the scheduled
payment or prepayment of the Refunded Obligations; and
WHEREAS, the Escrow Agreement hereinafter authorized, constitutes an agreement of
the kind authorized and permitted by said Chapter 1207; and
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized; and
GTO WN\Uti1 SysRevRefg \14\De1: Ordinance
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice of the time, place and purpose of
said meeting was given, all as required by Chapter 551, Texas Government Code; and
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS THAT:
Section 1. RECITALS. The recitals set forth in the preamble hereof are
incorporated herein and shall have the same force and effect as if set forth in this Section.
Section 2. DEFINITIONS AND VISION STATEMENT. (a) Definitions. For all
purposes of this Ordinance, except as otherwise expressly provided or unless the context
otherwise requires, the terms defined in Exhibit "A" to this Ordinance have the meanings
assigned to them in Exhibit "A"
(b) Vision Statement. The City Council hereby finds that the enactment of this
Ordinance and issuance of the Bonds complies with the Vision Statement of the City.
Section 3. AMOUNT, NAME AND PURPOSE OF THE BONDS. The Bonds,
each to be designated the "CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM
REVENUE REFUNDING BOND, SERIES 2014," are hereby authorized to be issued and
delivered in accordance with the Constitution and laws of the State of Texas, particularly
Chapters 1207 and 1371, Texas Government Code, as amended, and the Charter of the City. The
Bonds shall be issued in the aggregate principal amount not to exceed $15,335,000 for the
purpose of providing funds for (i) refunding the Refunded Obligations and (ii) paying the costs
of issuing the Bonds.
Section 4. DATE, DENOMINATION, MATURITIES, NUMBERS, INTEREST
AND REDEMPTION. (a) Initially there shall be issued, sold, and delivered hereunder fully
registered Bonds, without interest coupons, which may be in the form of Current Interest Bonds
or Premium Compound Interest Bonds, numbered consecutively from R -1 upward, in the case of
Current Interest Bonds, and from PC -1 upward, in the case of Premium Compound Interest
Bonds (except the Initial Bond delivered to the Attorney General of the State of Texas which
shall be numbered T -1 and TPC -1 respectively) payable to the respective initial Registered
Owners thereof, or to the registered assignee or assignees of said Bonds or any portion or
portions thereof, in Authorized Denominations, maturing not later than August 15, 2029, serially
or otherwise on the dates, in the years and in the principal amounts, respectively, and dated, as
all set forth in the Pricing Certificate to be executed and delivered by the Pricing Officer
pursuant to subsection (b) of this section. The Pricing Certificate is hereby incorporated in and
made a part of this Ordinance. The Bonds shall be designated by the year in which they are
awarded as set forth in the Pricing Certificate. The authority for the Pricing Officer to execute
and deliver the Pricing Certificate for the Bonds shall expire at 5:00 p.m. C.D.T. on May 13,
2015. Bonds priced on or before May 13, 2015 may be delivered to the initial purchaser after
such date.
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(b) As authorized by Chapter 1207, Texas Government Code, as amended, the
Pricing Officer is hereby authorized to act on behalf of the City in selling and delivering the
Bonds, determining which of the Refundable Obligations shall be refunded and constitute
Refunded Obligations under this Ordinance and carrying out the other procedures specified in
this Ordinance, including determining the date of the Bonds, any additional or different
designation or title by which the Bonds shall be known, the price at which the Bonds will be
sold, the years in which the Bonds will mature, the principal amount to mature in each of such
years, the aggregate principal amount of Current Interest Bonds and Premium Compound
Interest Bonds, the rate or rates of interest to be borne by each such maturity, the interest
payment periods, the dates, price, and terms upon and at which the Bonds shall be subject to
redemption prior to maturity at the option of the City, as well as any mandatory sinking fund
redemption provisions, and all other matters relating to the issuance, sale, and delivery of the
Bonds and the refunding of the Refunded Obligations, all of which shall be specified in the
Pricing Certificate; provided that (i) the price to be paid for the Bonds shall not be less than 90%
of the aggregate original principal amount thereof plus accrued interest thereon from its date to
its delivery, (ii) none of the Bonds shall bear interest at a rate, or yield in the case of Premium
Compound Interest Bonds, greater than the maximum authorized by law, and (iii) the refunding
must produce a net present value debt service savings of at least 3.00% of the principal amount
of the Refunded Obligations, net of any City contribution. In establishing the aggregate principal
amount of the Bonds, the Pricing Officer shall establish an amount not to exceed the amount
authorized in Section 3, which shall be sufficient to provide for the purposes for which the Bonds
are authorized and to pay the costs of issuing the Bonds.
To achieve advantageous borrowing costs for the City, the Bonds shall be sold on a
negotiated, placement or competitive basis as determined by the Pricing Officer in the Pricing
Certificate. In determining whether to sell the Bonds by negotiated, placement or competitive
sale, the Pricing Officer shall take into account any material disclosure issues which might exist
at the time, the market conditions expected at the time of the sale and any other matters which, in
the judgment of the Pricing Officer, might affect the net borrowing costs on the Bonds.
If the Pricing Officer determines that the Bonds should be sold at a competitive sale, the
Pricing Officer shall cause to be prepared a notice of sale and official statement in such manner
as the Pricing Officer deems appropriate, to make the notice of sale and official statement
available to those institutions and firms wishing to submit a bid for the Bonds, to receive such
bids, and to award the sale of the Bonds to the bidder submitting the best bid in accordance with
the provisions of the notice of sale.
If the Pricing Officer determines that the Bonds should be sold by a negotiated sale or
placement, the Pricing Officer shall designate the placement purchaser or the senior managing
underwriter for the Bonds and such additional investment banking firms as the Pricing Officer
deems appropriate to assure that the Bonds are sold on the most advantageous terms to the City.
The Pricing Officer, acting for and on behalf of the City, is authorized to enter into and carry out
a purchase agreement or other agreement for the Bonds to be sold by negotiated sale or
placement, with the underwriters or placement purchasers at such price, with and subject to such
terms as determined by the Pricing Officer pursuant to this Section 4(b) above.
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 3
In satisfaction of Section 1201.022(a)(3), Texas Government Code, the City Council
determines that the delegation of the authority to the Pricing Officer to approve the final terms
and conditions of each Series of the Bonds as set forth in this Ordinance is, and the decisions
made by the Pricing Officer pursuant to such delegated authority and incorporated in the Pricing
Certificate will be, in the best interests and shall have the same force and effect as if such
determination were made by the City Council and the Pricing Officer is hereby authorized to
make and include in a Pricing Certificate an appropriate finding to that effect.
(c) The Current Interest Bonds shall bear interest calculated on the basis of a 360 -day
year composed of twelve 30 -day months from the dates specified in the FORM OF BONDS set
forth in this Ordinance to their respective dates of maturity or redemption at the rates per annum
set forth in the Pricing Certificate.
The Premium Compound Interest Bonds shall bear interest from the Issuance Date,
calculated on the basis of a 360 -day year composed of twelve 30 -day months (subject to
rounding to the Compounded Amounts thereof), compounded on the Compounding Dates as set
forth in the Pricing Certificate, and payable, together with the principal amount thereof, in the
manner provided in the Form of Bonds at the rates set forth in the Pricing Certificate. Attached
to the Pricing Certificate, if Premium Compound Interest Bonds are to be issued, shall be the
Accretion Table. The Accreted Value with respect to any date other than a Compounding Date
is the amount set forth on the Accretion Table with respect to the last preceding Compounding
Date, plus the portion of the difference between such amount and the amount set forth on the
Accretion Table with respect to the next succeeding Compounding Date that the number of days
(based on 30 -day months) from such last preceding Compounding Date to the date for which
such determination is being calculated bears to the total number of days (based on 30 -day
months) from such last preceding Compounding Date to the next succeeding Compounding
Date.
(d) Right of Redemption. The City reserves the right, at its option, to redeem the
Bonds as set forth in the FORM OF BOND and the Pricing Certificate. The City, at least thirty
(30) days before the date of any optional redemption, shall notify the Paying Agent/Registrar of
such redemption date and of the amount and maturity of the Bonds to be redeemed.
(e) Notice of Redemption to Bondholder. The Paying Agent/Registrar shall give
notice of any redemption of the Bonds by sending notice by first class United States mail,
postage prepaid, not less than twenty (20) days before the date fixed for redemption, to the
Bondholder at the address shown in the Register. The notice shall state among other things, the
redemption date, the redemption price, the place at which the Bonds are to be surrendered for
payment, and that the Bonds so called for redemption shall cease to bear interest after the
redemption date. Any notice given as provided in this Section shall be conclusively presumed to
have been duly given, whether or not the Bondholder receives such notice. With respect to any
optional redemption of the Bonds, unless certain prerequisites to such redemption required by or
this Ordinance have been met and moneys sufficient to pay the principal of and premium, if any,
and interest on the Bonds to be redeemed shall have been received by the Paying Agent/Registrar
prior to the giving of such notice of redemption, such notice shall state that said redemption may,
at the option of the City, be conditional upon the satisfaction of such prerequisites and receipt of
GTOWN\Uti1SysRevRefg \14\Dc1: Ordinance 4
such moneys by the Paying Agent/Registrar on or prior to the date fixed for such redemption, or
upon any prerequisite set forth in such notice of redemption. If a conditional notice of
redemption is given and such prerequisites to the redemption and sufficient moneys are not
received, such notice shall be of no force and effect, the City shall not redeem such Bonds and
the Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption
was given, to the effect that the Bonds have not been redeemed.
(f) Effect of Redemption. Notice of redemption having been given as provided in this
Section, the Bonds called for redemption shall become due and payable on the date fixed for
redemption and, unless the City defaults in the payment of the principal thereof or accrued
interest thereon, such Bonds thereof shall cease to bear interest from and after the date fixed for
redemption, whether or not such Bond is presented and surrendered for payment on such date. If
the Bonds thereof called for redemption are not so paid upon presentation and surrender thereof
for redemption, such Bonds thereof shall continue to bear interest at the rate stated on the Bond
until paid or until due provision is made for the payment of same.
(g) Conditional Notice of Redemption. With respect to any optional redemption of
the Bonds, unless certain prerequisites to such redemption required by this Ordinance have been
met and moneys sufficient to pay the principal of the premium, if any, and interest on the Bonds
to be redeemed shall have been received by the Paying Agent prior to the giving of such notice
of redemption, such notice shall sate that said redemption may, at the option of the City, be
conditional upon the satisfaction of such prerequisites and receipt of such moneys by the Paying
Agent/Registrar on or prior to the date fixed for such redemption, or upon any prerequisite set
forth in such notice of redemption. If a conditional notice of redemption is given and such
prerequisites to the redemption and sufficient moneys are not received, such notice shall be of no
force and effect, the City shall not redeem such Bonds and the Paying Agent/Registrar shall give
notice, in the manner in which the notice of redemption was given, to the effect that the Bonds
have not been redeemed.
Section 5. CHARACTERISTICS OF THE BONDS. (a) Registration, Transfer,
Conversion and Exchange, Authentication. The City shall keep or cause to be kept at The Bank
of New York Mellon Trust Company, National Association in Dallas, Texas (the "Paying
Agent/Registrar ") books or records for the registration of the transfer, conversion and exchange
of the Bonds (the "Registration Books "), and the City hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers, conversions and exchanges under such reasonable regulations as the
City and Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such
registrations, transfers, conversions and exchanges as herein provided within three days of
presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the Registered Owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each
Registered Owner to notify the Paying Agent/Registrar in writing of the address to which
payments shall be mailed, and such interest payments shall not be mailed unless such notice has
been given. The City shall have the right to inspect the Registration Books during regular
business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall
keep the Registration Books confidential and, unless otherwise required by law, shall not permit
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 5
their inspection by any other entity. The Paying Agent/Registrar shall make a copy of the
Registration Books available in the State of Texas. The City shall pay the Paying
Agent/Registrar's standard or customary fees and charges for making such registration, transfer,
conversion, exchange and delivery of a substitute Bond or Bonds. Registration of assignments,
transfers, conversions and exchanges of Bonds shall be made in the manner provided and with
the effect stated in the FORM OF BOND set forth in Exhibit "B" to this Ordinance. Each
substitute Bond shall bear a letter and /or number to distinguish it from each other Bond.
Except as provided in (c) below, an authorized representative of the Paying
Agent/Registrar shall, before the delivery of any such Bond, date and manually sign the Paying
Agent/Registrar's Authentication Certificate, and no such Bond shall be deemed to be issued or
outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall
cancel all paid Bonds and Bonds surrendered for transfer and exchange. No additional
ordinances, orders or resolutions need be passed or adopted by the governing body of the City or
any other body or person so as to accomplish the foregoing transfer and exchange of any Bond or
portion thereof, and the Paying Agent/Registrar shall provide for the preparation, execution and
delivery of the substitute Bonds in the manner prescribed herein. Pursuant to Chapter 1201,
Texas Government Code, and particularly Subchapter D thereof, the duty of transfer and
exchange of Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon
the execution of said Certificate, the transferred and exchanged Bond shall be valid,
incontestable and enforceable in the same manner and with the same effect as the Bonds which
initially were issued and delivered pursuant to this Ordinance, approved by the Attorney General
and registered by the Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of and interest on the Bonds,
all as provided in this Ordinance. The Paying Agent/ Registrar shall keep proper records of all
payments made by the City and the Paying Agent/Registrar with respect to the Bonds.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered
owners thereof, (ii) may and shall be redeemed prior to their scheduled maturities, (iii) may be
transferred and assigned, (iv) may be exchanged for other Bonds of the same Series, (v) shall
have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the
principal of and interest on the Bonds shall be payable, and (viii) shall be administered and the
Paying Agent/Registrar and the City shall have certain duties and responsibilities with respect to
the Bonds, all as provided, and in the manner and to the effect as required or indicated, in the
FORM OF BOND set forth in Exhibit "B" to this Ordinance. The Bonds initially issued and
delivered pursuant to this Ordinance are not required to be, and shall not be, authenticated by the
Paying Agent/ Registrar, but on each substitute Bond issued in exchange for any Bond or Bonds
issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the
FORM OF BOND.
(d) Substitute PayingAAgent/Registrar. The City covenants with the registered
owners of the Bonds that at all times while the Bonds are outstanding the City will provide a
GTOWN\Uti1SysRevRafg \14\De1: Ordinance 6
competent and legally qualified bank, trust company, financial institution or other entity to act as
and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance, and that
the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its
option and to the extent permitted by law, (i) act in the capacity of Paying Agent/Registrar or (ii)
change the Paying Agent/Registrar upon not less than 30 days written notice to the Paying
Agent/Registrar, to be effective at such time which will not disrupt or delay payment on the next
principal or interest payment date after such notice. In the event that the entity at any time acting
as Paying Agent/Registrar (or its successor by merger, acquisition or other method) should resign
or otherwise cease to act as such, the City covenants that promptly it will assume the duties or
will appoint a competent and legally qualified bank, trust company, financial institution or other
agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying
Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating
to the Bonds, to the new Paying Agent/Registrar designated and appointed by the City. Upon
any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof
to be sent by the new Paying Agent/Registrar to each registered owner of the Bonds, by United
States mail, first -class postage prepaid, which notice also shall give the address of the new
Paying Agent/Registrar. By accepting the position and performing as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a
certified copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
(e) Book - Entry -Only System for Bonds. The Bonds issued in exchange for the
Bonds initially issued as provided in Section 5(i) shall be initially issued in the form of a separate
single fully registered Bond for each of the maturities thereof. Upon initial issuance, the
ownership of each such Bond shall be registered in the name of Cede & Co., as nominee of The
Depository Trust Company of New York ( "DTC "), and except as provided in subsection (f)
hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co., as nominee of
DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations
on whose behalf DTC was created ('DTC Participant ") to hold securities to facilitate the
clearance and settlement of securities transactions among DTC Participants or to any person on
behalf of whom such DTC Participant holds an interest in the Bonds. Without limiting the
immediately preceding sentence, the City and the Paying Agent/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 a registered owner of the Bonds, as shown on
the Registration Books, of any notice with respect to the Bonds or (iii) the payment to any DTC
Participant or any other person, other than a registered owner of Bonds, as shown in the
Registration Books of any amount with respect to principal of or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of
payment of principal and interest with respect to such Bond, for the purpose of registering
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transfers with respect to such Bond and for all other purposes whatsoever. The Paying
Agent/Registrar shall pay all principal of and interest on the Bonds only to or upon the order of
the registered owners, as shown in the Registration Books as provided in this Ordinance, or their
respective attorneys duly authorized in writing, and all such payments shall be valid and
effective to fully satisfy and discharge the City's obligations with respect to payment of principal
of and interest on the Bonds to the extent of the sum or sums so paid. No person other than a
registered owner, as shown in the Registration Books, shall receive a Bond certificate evidencing
the obligation of the City to make payments of principal and interest pursuant to this Ordinance.
Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the provisions in
this Ordinance with respect to interest checks being mailed to the registered owner at the close of
business on the Record Date, the words "Cede & Co." in this Ordinance shall refer to such new
nominee of DTC.
(f) Successor Securities Depository: Transfers Outside Book - Entry-Only Systems.
In the event that the City determines to discontinue the use of the Book - Entry-Only System
through DTC, or DTC determines to discontinue providing its services with respect to the Bonds,
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, notify DTC and DTC
Participants 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
of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC
Participants having Bonds credited to their DTC accounts. In such event, the Bonds shall no
longer be restricted to being registered in the Registration Books 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 registered owners transferring or exchanging Bonds
shall designate, in accordance with the provisions of this Ordinance. Whenever a successor
securities depository has been appointed pursuant to this paragraph, the terms DTC and DTC
Participant as used in this Ordinance shall refer to such successor securities depository and its
participants, respectively.
(g) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance
to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee for
DTC, all payments with respect to principal of and interest on such Bond and all notices with
respect to such Bond shall be made and given, respectively, in the manner provided in the
representation letter of the City to DTC.
(h) DTC Blanket Letter of Representations. The City confirms execution of a
Blanket Letter of Representations with DTC establishing the Book - Entry-Only System with
respect to the Bonds.
(i) Cancellation of Initial Bond. On the closing date, one Initial Bond representing the
entire principal amount of the Bonds, payable in stated installments to the order of the initial
purchaser of the Bonds or its designee, executed by manual or facsimile signature of the Mayor
or Mayor Pro -tem and City Secretary, approved by the Attorney General of Texas, and registered
and manually signed by the Comptroller of Public Accounts of the State of Texas, will be
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delivered to such initial purchaser or its designee. Upon payment for the Initial Bond, the Paying
Agent/Registrar shall cancel the Initial Bond and deliver to DTC on behalf of such initial
purchaser one registered definitive Bond for each year of maturity of the Bonds, in the aggregate
principal amount of all the Bonds for such maturity.
Section 6. FORM OF BOND. The form of each Bond, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of
Registration Certificate of the Comptroller of Public Accounts of the State of Texas to be
attached only to the Bonds initially issued and delivered pursuant to this Ordinance, shall be,
respectively, substantially in the form set forth in Exhibit "B" hereto, with such appropriate
variations, omissions or insertions as are permitted or required by this Ordinance.
Section 7. PLEDGE OF PLEDGED REVENUES. The City hereby covenants and
agrees that the Pledged Revenues are hereby irrevocably pledged to the payment and security of
the Parity Obligations including the establishment and maintenance of the special funds created,
established and maintained for the payment and security thereof, all as hereinafter provided; and
it is hereby ordained that the Parity Obligations, and the interest thereon, shall constitute a lien
on and pledge of the Pledged Revenues and be valid and binding without any physical delivery
thereof or further act by the City, and the lien created hereby on the Pledged Revenues for the
payment and security of the Parity Obligations, including the establishment and maintenance of
the special funds created, established and maintained for the payment and security thereof, shall
be superior to the lien on and pledge of the Pledged Revenues securing payment of any
Subordinate Lien Obligations hereafter issued by the City.
Section 8. SPECIAL FUNDS. The City confirms the establishment and
maintenance on the books of the City, so long as any of the Parity Obligations are outstanding
and unpaid, of the below limited Special Funds:
(a) City of Georgetown, Texas Utility System Revenue Fund, hereinafter called the
"Revenue Fund."
(b) City of Georgetown, Texas Utility System Revenue Bonds Interest and Sinking
Fund, hereinafter called the "Interest and Sinking Fund."
Though all of such funds may be subaccounts of the City's General Fund held by the City's
depository, and, as such, not held in separate bank accounts, such treatment shall not constitute a
commingling of the monies in such Funds or of such Funds and the City shall keep full and
complete records indicating the monies and investments credited to each of such Funds.
Section 9. REVENUE FUND. The City hereby covenants, agrees and establishes
that the Gross Revenues shall be deposited and credited to the Revenue Fund immediately as
collected and received. All Maintenance and Operating Expenses are and shall be paid from
such Gross Revenues as a first charge against same.
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Section 10. FLOW OF FUNDS. All Gross Revenues deposited and credited to the
Revenue Fund shall be pledged and appropriated to the extent required for the following uses
and in the order of priority shown:
FIRST: to the payment of all necessary and reasonable Maintenance and Operating
Expenses as defined herein or required by statute, including, but not limited to, Chapter
1502, Texas Government Code, as amended, to be a first charge on and claim against the
Gross Revenues, including a two (2) -month reserve amount based upon the budgeted
amount of Maintenance and Operating Expenses for the current Fiscal Year, which
amount shall be retained in the Revenue Fund.
SECOND: to the payment of the amounts required to be deposited and credited to the
Interest and Sinking Fund created and established for the payment of the Bonds, the
Previously Issued Parity Obligations and any Additional Parity Obligations issued by the
City as the same become due and payable.
THIRD: pro rata to the payment of the amounts required to be deposited and credited (i)
to the Reserve Fund created and established to maintain the Required Reserve Amount in
accordance with the provisions of this Ordinance, including amounts owed with respect
to any Reserve Fund Obligation to restore the Required Reserve Amount and (ii) to each
other reserve fund created and established to maintain a reserve in accordance with the
provisions of the ordinances relating to the issuance of any Additional Parity Obligations
hereafter issued by the City.
FOURTH: to the payment of Subordinate Lien Obligations.
FIFTH: to the payment of the amounts required for any lawful purpose.
Section 11. INTEREST AND SINKING FUND. For purposes of providing funds to
pay the principal of, premium, if any, and interest on the Parity Obligations as the same become
due and payable, including any mandatory sinking fund redemption payments, the City agrees
that it shall maintain the Interest and Sinking Fund. The City covenants to deposit and credit to
the Interest and Sinking Fund prior to each principal, interest payment or redemption date from
the available Pledged Revenues an amount equal to one hundred percent (100 %) of the amount
required to fully pay the interest on and the principal of the Parity Obligations then falling due
and payable. The City shall make such deposits and credits to pay maturing principal, accrued
interest, and mandatory sinking fund redemptions on the Parity Obligations in substantially equal
semi - annual installments on or before each February 15 and August 15.
The required semi - annual deposits and credits to the Interest and Sinking Fund shall
continue to be made as hereinabove provided until such time as (i) the total amount on deposit in
and credited to the Interest and Sinking Fund and the Reserve Fund (excluding any Reserve Fund
Obligation) is equal to the amount required to fully pay and discharge all Outstanding Parity
Obligations (principal, premium, if any, and interest) or (ii) the Parity Obligations are no longer
outstanding.
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Accrued interest and capitalized interest, if any, received from the purchaser of any Parity
Obligation shall be taken into consideration and reduce the amount of the semi - annual deposits
and credits hereinabove required into the Interest and Sinking Fund.
Section 12. RESERVE FUND. (a) To accumulate and maintain a reserve for the
payment of the Bonds and the Outstanding Parity Obligations equal to the Average Annual Debt
Service Requirements of the Bonds and the Outstanding Parity Obligations (calculated by the
City at the beginning of each Fiscal Year) (the "Required Reserve Amount "), the Reserve Fund
has been established and shall be maintained by the City. Earnings and income derived from the
investment of amounts held for the credit of the Reserve Fund shall be retained in the Reserve
Fund until the Reserve Fund contains the Required Reserve Amount; thereafter, such earnings
and income shall be deposited to the credit of the Revenue Fund. As provided in this Section,
the City shall deposit and credit to the Reserve Fund amounts required to maintain the balance in
the Reserve Fund in an amount equal to the Required Reserve Amount. There shall be deposited
into the Reserve Fund any Reserve Fund Obligations so designated by the City. All funds,
investments and Reserve Fund Obligations on deposit and credited to the Reserve Fund shall be
used solely for (i) the payment of the principal of and interest on the Bonds and the Outstanding
Parity Obligations, when and to the extent other funds available for such purposes are
insufficient, (ii) to make Reserve Fund Obligation Payments and (iii) to retire the last Stated
Maturity or Stated Maturities of or interest on the Bonds and the Outstanding Parity Obligations.
(b) When and for so long as the cash, investments and Reserve Fund Obligations in
the Reserve Fund equal the Required Reserve Amount, no deposits need be made to the credit of
the Reserve Fund; but, if and when the Reserve Fund at any time contains less than the Required
Reserve Amount, the City covenants and agrees that the City shall cure the deficiency in the
Reserve Fund by resuming the Required Reserve Fund Deposits to such Fund from the Pledged
Revenues by monthly deposits and credits in amounts equal to not less than 1 /60th of the
Required Reserve Amount with any such deficiency payments being made on or before each
August 15 and February 15 until the Required Reserve Amount has been fully restored;
provided, however, that no such deposits shall be made into the Reserve Fund during any six
month period beginning on August 15 and February 15 until there has been deposited into the
Interest and Sinking Fund the full amount required to be deposited therein by the next following
August 15 and February 15, as the case may be. In addition, in the event that a portion of the
Required Reserve Amount is represented by a Reserve Fund Obligation, the Required Reserve
Amount shall be restored as soon as possible from monthly deposits of Pledged Revenues on
deposit in the Revenue Fund, but subject to making the full deposits and credits to the Interest
and Sinking Fund required to be made by the next following August 15 and February 15, as the
case may be. The City further covenants and agrees that, subject only to the prior deposits and
credits to be made to the Interest and Sinking Fund, the Pledged Revenues shall be applied and
appropriated and used to establish and maintain the Required Reserve Amount, including by
paying Reserve Fund Obligation Payments when due, and any reserve established for the benefit
of any issue or series of Additional Parity Obligations and to cure any deficiency in such
amounts as required by the terms of this Ordinance and any other ordinance pertaining to the
issuance of Additional Parity Obligations.
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During such time as the Reserve Fund contains the Required Reserve Amount, the
obligation to maintain the Required Reserve Amount has been suspended pursuant to subsection
(d) below or any cash is replaced with a Reserve Fund Obligation pursuant to subsection (c)
below, the City may, at its option, withdraw all surplus funds in the Reserve Fund and deposit
such surplus in the Interest and Sinking Fund or otherwise use such amount in any manner
permitted by law.
(c) A Reserve Fund Obligation issued in an amount equal to all or part of the
Required Reserve Amount for the Bonds and the Outstanding Parity Obligations may be used in
lieu of depositing cash into the Reserve Fund. In addition, a Reserve Fund Obligation may be
substituted for monies and investments in the Reserve Fund if the substitution of the Reserve
Fund Obligation will not, in and of itself, cause any ratings then assigned to the Bonds and the
Outstanding Parity Obligations by any Rating Agency to be lowered and the ordinance
authorizing the substitution of the Reserve Fund Obligation for all or part of the Required
Reserve Amount contains a finding that such substitution is cost effective.
(d) Notwithstanding anything to the contrary contained herein, the requirement set
forth in subsection (a) above to maintain the Required Reserve Amount in the Reserve Fund
shall be suspended for such time as the Net Revenues for each Fiscal Year are equal to at least
1.35 times the Average Annual Debt Service Requirements. In the event that the Net Revenues
for any Fiscal Year are less than 1.35 times the Average Annual Debt Service Requirements, the
City will be required to commence making Required Reserve Fund Deposits, as provided in
subsection (b) above, and to continue such Required Reserve Fund Deposits until the earlier of
(i) such time as the Reserve Fund contains the Required Reserve Amount or (ii) the Net
Revenues in each of two consecutive years have been equal to not less than 1.35 times the
Average Annual Debt Service Requirements.
(e) A Reserve Fund Obligation permitted under (a) above, must be in the form of a
surety bond or insurance policy meeting the requirements described below.
(1) (i) A surety bond or insurance policy issued to the Paying Agent/Registrar, as agent
of the Holders, by a company licensed to issue an insurance policy guaranteeing the
timely payment of debt service on the Parity Obligations (a "municipal bond insurer ") if
the claims paying ability of the City thereof shall be rated "AAA" or "Aaa ", respectively,
by S &P and Moody's, or (ii) a surety bond or insurance policy issued to the Paying
Agent/Registrar, as agent of the Holders, by an entity other than a municipal bond
insurer, if the form and substance of such instrument and the City thereof shall be
approved in writing by each Bond Insurer of record.
(2) The obligation to reimburse the City of a Reserve Fund Obligation for any claims
or draws upon such Reserve Fund Obligation in accordance with its terms, including
expenses incurred in connection with such claims or draws, to the extent permitted by
law, (a Reserve Fund Obligation Payment) shall be made from the deposits made to the
Reserve Fund as provided in this Section. The Reserve Fund Obligation shall provide for
a revolving feature under which the amount available thereunder will be reinstated to the
extent of any reimbursement of draws or claims paid. If the revolving feature is
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suspended or terminated for any reason, the right of the City of the Reserve Fund
Obligation to reimbursement will be subordinated to the cash replenishment of the
Reserve Fund to an amount equal to the difference between the full original amount
available under the Reserve Fund Obligation and the amount then available for further
draws or claims. In the event (a) the City of a Reserve Fund Obligation becomes
insolvent, or (b) the City of a Reserve Fund Obligation defaults in its payment obligations
thereunder, or (c) the claims paying ability of the City of the insurance policy or surety
bond falls below "AAA" or "Aaa ", by S &P and Moody's, respectively, the obligation to
reimburse the City of the Reserve Fund Obligation shall be subordinated to the cash
replenishment of the Reserve Fund.
(3) In the event (a) the revolving reinstatement feature described in the preceding
paragraph is suspended or terminated, or (b) the rating of the claims paying ability of the
City of the surety bond or insurance policy falls below "AAA" or "Aaa ", by S &P and
Moody's, respectively, the City shall either (i) deposit into the Reserve Fund, in
accordance with this Section, an amount sufficient to cause the cash or investments
credited to the Reserve Fund to accumulate to the Required Reserve Amount, or
(ii) replace such instrument with a surety bond or insurance policy meeting the
requirements of 1 and 2 above, within six months of such occurrence. In the event (a) the
rating of the claims - paying ability of the City of the surety bond or insurance policy falls
below "A" by S &P and Moody's, or (b) the City of the Reserve Fund Obligation defaults
in its payment obligations hereunder, or (c) the City of the Reserve Fund Obligation
becomes insolvent, the City shall either (i) deposit into the Reserve Fund, in accordance
with this Section, amounts sufficient to cause the cash or investments on deposit in the
Reserve Fund to accumulate to the Required Reserve Amount, or (ii) replace such
instrument with a surety bond or insurance policy meeting the requirements of 1 and 2
above within six months of such occurrence.
(4) The Paying Agent/Registrar shall ascertain the necessity for a claim or draw upon
any Reserve Fund Obligation and provide notice to the City of the Reserve Fund
Obligation in accordance with its terms not later than three days (or such appropriate time
period as will, when combined with the timing of required payment under the Reserve
Fund Obligation, ensure payment under the Reserve Fund Obligation on or before the
interest payment date) prior to each date upon which the principal of or interest on the
Parity Obligations will be due.
It is recognized that a Reserve Fund Obligation may be issued which is payable only with
respect to a part of the Bonds and the Outstanding Parity Obligations with the remainder of the
Required Reserve Amount being satisfied by monies and investments and in that case any draws
upon the Reserve Fund will have to be made on a pro -rata basis to ensure that every Parity
Obligation enjoys an equal amount of security. Therefore, (i) draws upon one or more such
Reserve Fund Obligations shall be made on a pro -rata basis with cash and investments available
in the Reserve Fund and (ii) deposits and credits to the Reserve Fund to restore it to the Required
Reserve Amount shall be utilized on a pro -rata basis to pay Reserve Fund Obligation Payments
to reimburse the City of the Reserve Fund Obligations, thus restoring that part of the Required
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Reserve Amount, and to restore with cash and investments the balance of the Required Reserve
Amount.
Section 13. EXCESS BOND PROCEEDS. Any proceeds of Parity Obligations not
required to effectuate the purposes for which such Parity Obligations were issued, as provided in
the respective ordinances authorizing the issuance of such Parity Obligations, or for the payment
of the costs of issuance of such Parity Obligations shall be deposited and credited to the Interest
and Sinking Fund and shall be taken into consideration and shall reduce the amount of semi-
annual deposits and credits to the Interest and Sinking Fund from the Pledged Revenues or used
to redeem or purchase Parity Obligations.
Section 14. DEFICIENCIES - EXCESS PLEDGED OR NET REVENUES. (a) If
on any occasion there shall not be sufficient Pledged Revenues (after making all payments
pertaining to all Parity Obligations) to make the required deposits and credits to the Interest and
Sinking Fund and the Reserve Fund, then such deficiency shall be cured as soon as possible from
the next available unallocated Pledged Revenues, or from any other sources available for such
purpose, and such deposits and credits shall be in addition to the amounts otherwise required to
be deposited and credited to these Funds.
(b) Subject to making the deposits and credits required by this Ordinance, or any
ordinances authorizing the issuance of Additional Parity Obligations, or the payments and credits
required by the provisions of the ordinances authorizing the issuance of Subordinate Lien
Obligations hereafter issued by the City, the excess Net Revenues may be used for any lawful
purpose.
Section 15. INVESTMENT OF FUNDS - VALUATION - TRANSFER OF
INVESTMENT INCOME. (a) Money in the Revenue Fund, the Interest and Sinking Fund and
the Reserve Fund may, at the option of the City, be invested in Permitted Investments; 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. All such investments
shall be valued in terms of current market value no less frequently than the last business day of
the City's Fiscal Year, except that any direct obligations of the United States of America - State
and Local Government Series shall be continuously valued at their par value or principal face
amount. Any obligation in which money is so invested shall be kept and held at the Depository,
except as otherwise permitted by the laws applicable to the City. For purposes of maximizing
investment returns, money in such funds may be invested, together with money in other funds or
with other money of the City, in common investments of the kind described above, or in a
common pool of such investments held by the City .or its designated agent, which shall not be
deemed to be or constitute a commingling of such money or funds provided that safekeeping
receipts or certificates of participation clearly evidencing the investment or investment pool in
which such money is invested and the share thereof purchased with such money or owned by
such fund are held by or on behalf of each such fund. If necessary, such investments shall be
promptly sold to prevent any default.
(b) All interest and income derived from such investments (other than interest and
income derived from amounts credited to the Reserve Fund if the Reserve Fund does not contain
GTOWMUti1SysRevRefg \14\De1: Ordinance 14
the Required Reserve Amount) shall be credited to the Revenue Fund semi - annually and shall
constitute Gross Revenues.
Section 16. PAYMENT OF PARITY OBLIGATIONS. While any of the Parity
Obligations are outstanding, the City shall transfer to the respective paying agent /registrar
therefor, from funds on deposit in and credited to the Interest and Sinking Fund, and, if
necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge promptly the
interest on and principal of the Parity Obligations as shall become due on each interest or
principal payment date, or date of redemption of the Parity Obligations; such transfer of funds
must be made in such manner as will cause immediately available funds to be deposited with
each respective paying agent /registrar for the Parity Obligations not later than the business day
next preceding the date such payment is due on the Parity Obligations. The Paying
Agent/Registrar shall destroy all paid Parity Obligations and furnish the City with an appropriate
certificate of cancellation or destruction.
Section 17. RATES AND CHARGES. For the benefit of the Holders of the Parity
Obligations and in addition to all provisions and covenants in the laws of the State of Texas and
in this Ordinance, the City hereby expressly stipulates and agrees, while any of the Parity
Obligations are outstanding, to establish and maintain rates and charges for facilities and services
afforded by the System that are reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce Gross Revenues in each Fiscal
Year reasonably anticipated to be sufficient:
A. to pay Maintenance and Operating Expenses;
B. to produce Pledged Revenues at least equal to the greater of 1.25 times the
Average Annual Debt Service Requirements or 1.10 times the Maximum Annual Debt Service
Requirements;
C. to produce Pledged Revenues in amounts sufficient to enable the City to make the
deposits and credits, if any, from Pledged Revenues (i) to the Reserve Fund to restore the
Required Reserve Amount in accordance with Section 12 of this Ordinance, including the
payment of any Reserve Fund Obligation Payment then due, and (ii) to other reserve funds to
establish or restore the reserve securing any issue or series of Additional Parity Obligations;
D. to produce Pledged Revenues, together with any other lawfully available funds
(including the proceeds of Debt which the City expects will be utilized to pay all or part of the
principal of and /or interest on any obligations described in this subsection D), sufficient to pay
the principal of and interest on any Subordinate Lien Obligations issued by the City and the
amounts required to be deposited in any reserve or contingency fund created for the payment and
security of the Subordinate Lien Obligations and any other obligations or evidences of
indebtedness issued or incurred that are payable from, in whole or in part, a subordinate lien on
and pledge of the Pledged Revenues; and
E. to pay any other Debt payable from the Pledged Revenues and /or secured by a
lien on the Pledged Revenues.
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Should the annual audit report required by Section 19 hereof reflect that the Pledged
Revenues for the Fiscal Year covered thereby were less than necessary to meet the requirements
of this Section, the City Council will review the operations of the System and the rates and
charges for services provided, and the City Council will make the necessary adjustments or
revisions, if any, in order that the Pledged Revenues for the succeeding year will be sufficient to
satisfy the foregoing coverage requirements.
Section 18. GENERAL COVENANTS. The City further covenants and agrees that
in accordance with and to the extent required or permitted by law:
(a) Performance. It will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in any ordinance authorizing the issuance of
Parity Obligations, including this Ordinance, and in each and every Parity Obligation; it will
promptly pay or cause to be paid the principal of and interest on every Parity Obligation on the
dates and in the places and manner prescribed in such ordinances and obligations; and it will, at
the times and in the manner prescribed, deposit and credit or cause to be deposited and credited
the amounts required to be deposited and credited to the Interest and Sinking Fund and the
Reserve Fund.
(b) City's Legal Authority. It is a duly created and existing home rule city of the
State of Texas, and is duly authorized under the laws of the State of Texas to create and issue the
Bonds; that all action on its part for the creation and issuance of the Bonds has been duly and
effectively taken, and that the Bonds in the hands of the Holders thereof are and will be valid and
enforceable special obligations of the City in accordance with their terms.
(c) Title. It has or will obtain lawful title to the lands, buildings, structures and
facilities constituting the System, that it warrants that it will defend the title to all the aforesaid
lands, buildings, structures and facilities, and every part thereof, for the benefit of the Holders of
the Bonds, the Previously Issued Parity Obligations and Additional Parity Obligations, against
the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the
Pledged Revenues to the payment of the Bonds, the Previously Issued Parity Obligations and
Additional Parity Obligations in the manner prescribed herein, and has lawfully exercised such
rights.
(d) Liens. It will from time to time and before the same become delinquent pay and
discharge all taxes, assessments and governmental charges, if any, which shall be lawfully
imposed upon it, or the System; it will pay all lawful claims for rents, royalties, labor, materials
and supplies which if unpaid might by law become a lien or charge thereon, the lien of which
would be prior to or interfere with the liens hereof, so that the priority of the liens granted
hereunder shall be fully preserved in the manner provided herein, and it will not create or suffer
to be created any mechanic's, laborer's, materialman's or other lien or charge which might or
could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof
might or could be impaired; provided, however, that no such tax, assessment or charge, and that
no such claims which might be used as the basis of a mechanic's, laborer's, materialman's or
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 16
other lien or charge, shall be required to be paid so long as the validity of the same shall be
contested in good faith by the City.
(e) Operation of System; No Free Service. It will, while the Parity Obligations are
outstanding and unpaid, continuously and efficiently operate the System, and shall maintain the
System in good condition, repair and working order, all at reasonable cost. No free service of the
System shall be allowed, and should the City or any of its agencies or instrumentalities make use
of the services and facilities of the System, payment of the reasonable value shall be made by the
City out of funds from sources other than the Gross Revenues of the System, unless made from
surplus or excess Pledged Revenues as permitted in Section 14.
(f) Further Encumbrance. While the Parity Obligations are outstanding and unpaid,
it will not additionally encumber the Pledged Revenues in any manner, except as permitted in
this Ordinance in connection with Additional Parity Obligations, unless said encumbrance is
made junior and subordinate in all respects to the liens, pledges, covenants and agreements of
this Ordinance; but the right of the City to issue or incur obligations payable from a subordinate
lien on the Pledged Revenues is specifically recognized and retained.
(g) Sale or Disposal of Property. While the Parity Obligations are outstanding and
unpaid, it will not sell, convey, mortgage, encumber, lease or in any manner transfer title to, or
otherwise dispose of the System, or any significant or substantial part thereof, provided that
whenever the City deems it necessary to dispose of any other property, machinery, fixtures or
equipment, it may sell or otherwise dispose of such property, machinery, fixtures or equipment
when it has made arrangements to replace the same or provide substitutes therefor, unless it is
determined that no such replacement or substitute is necessary; and, provided further, that the
City retains the right to sell, convey, mortgage, encumber, lease or otherwise dispose of any
significant or substantial part of the System if (i) the City Manager delivers a certificate to the
City Council to the effect that, following such action by the City, the System is expected to
produce Gross Revenues in amounts sufficient in each Fiscal Year while any of the Parity
Obligations are to be outstanding to comply with the obligations of the City contained in this
Ordinance and in the ordinances authorizing the issuance of Additional Parity Obligations;
(ii) the City Council makes a finding and determination to the same effect as the certificate of the
City Manager set forth in (i) above and (iii) each Rating Agency then maintaining a rating on any
Parity Obligation delivers a letter to the City to the effect that such sale, conveyance, mortgage,
encumbrance, lease or other disposition will not cause the Rating Agency to withdraw or lower
the rating then in effect. Proceeds from any sale hereunder not used to replace or provide for
substitution of such property sold, shall be used for improvements to the System or to purchase
or redeem Parity Obligations.
(h) Insurance. (1) It shall cause to be insured such parts of the System as would
usually be insured by municipal corporations operating like properties, with a responsible
insurance company or companies, against risks, accidents or casualties against which and to the
extent insurance is usually carried by municipal corporations operating like properties, including,
to the extent reasonably obtainable, fire and extended coverage insurance, insurance against
damage by floods, and use and occupancy insurance. Public liability and property damage
insurance shall also be carried unless the City Attorney of the City gives a written opinion to the
GTOWN \UtilSysRevRefg \14\Del: Ordinance 17
effect that the City is not liable for claims which would be protected by such insurance. At any
time while any contractor engaged in construction work shall be fully responsible therefor, the
City shall not be required to carry insurance on the work being constructed if the contractor is
required to carry appropriate insurance. All such policies shall be open to the inspection of the
Holders and their representatives at all reasonable times. Upon the happening of any loss or
damage covered by insurance from one or more of said causes, the City shall make due proof of
loss and shall do all things necessary or desirable to cause the insuring companies to make
payment in full directly to the City. The proceeds of insurance covering such property are
hereby pledged as security for the Parity Obligations and, together with any other funds
necessary and available for such purpose, shall be used forthwith by the City for repairing the
property damaged or replacing the property destroyed; provided, however, that if said insurance
proceeds and other funds are insufficient for such purpose, then said insurance proceeds
pertaining to the System shall be used promptly as follows:
(i) for the redemption prior to maturity of the Parity Obligations, ratably in
the proportion that the Outstanding principal of each series of Parity Obligations bears to
the total Outstanding principal of all Parity Obligations, provided that if on any such
occasion the principal of any such series is not subject to redemption, it shall not be
regarded as Outstanding in making the foregoing computation; or
(ii) if none of the Outstanding Parity Obligations is subject to redemption,
then for the purchase on the open market and retirement of said Parity Obligations in the
same proportion as prescribed in the foregoing clause (i), to the extent practicable;
provided that the purchase price for any Parity Obligation shall not exceed the
redemption price of such Parity Obligation on the first date upon which it becomes
subject to redemption; or
(iii) to the extent that the foregoing clauses (i) and (ii) cannot be complied with
at the time, the insurance proceeds, or the remainder thereof, shall be deposited in a
special and separate trust fund, at an official depository of the City, to be designated the
Insurance Account. The Insurance Account shall be held until such time as the foregoing
clauses (i) and /or (ii) can be complied with, or until other funds become available which,
together with the Insurance Account, will be sufficient to make the repairs or
replacements originally required, whichever of said events occurs first.
(2) The foregoing provisions of (1) above notwithstanding, the City shall have
authority to enter into coinsurance or similar plans where risk of loss is shared in whole
or in part by the City.
(3) The annual audit hereinafter required shall contain a section commenting on
whether or not the City has complied with the requirements of this Section with respect to
the maintenance of insurance, and listing all policies carried, and whether or not all
insurance premiums upon the insurance policies to which reference is hereinbefore made
have been paid.
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(4) The payment of premiums for all insurance policies required under the provisions
hereof and the costs associated with the maintenance of any self - insurance program shall
be considered Maintenance and Operating Expenses. Nothing in this Ordinance shall be
construed as requiring the City to expend any funds which are derived from sources other
than the operation of the System, but nothing herein shall be construed as preventing the
City from doing so.
(i) Governmental Agencies. It will comply with all of the terms and conditions of any
and all franchises, permits and authorizations applicable to or necessary with respect to the
System, and which have been obtained from any governmental agency; and the City has or will
obtain and keep in full force and effect all franchises, permits, authorization and other
requirements applicable to or necessary with respect to the acquisition, construction, equipment,
operation and maintenance of the System.
0) No Competition. It will not grant any franchise or permit for the acquisition,
construction or operation of any competing facilities which might be used as a substitute for the
System's facilities and, to the extent that it legally may, the City will prohibit any such
competing facilities. Notwithstanding the foregoing, the City retains the right, however, to "opt
in" to electric competition in accordance with State law if "opting in" will not materially
adversely impact the Net Revenues of the System as evidenced by a certification of the City
Manager.
(k) Disaggregation of System. The City retains the right to disaggregate the System into
one or more independent resulting systems if (i) the City Manager delivers a certificate to the
City Council to the effect that, following such action by the City, the remaining System is
expected to produce Gross Revenues in amounts sufficient in each Fiscal Year while any of the
Parity Obligations are to be outstanding to comply with the obligations of the City contained in
this Ordinance and in the ordinances authorizing the Previously Issued Parity Obligations and the
issuance of Additional Parity Obligations; (ii) the City Council makes a finding and
determination to the same effect as the certificate of the City Manager set forth in (i) above and
(iii) each Rating Agency then maintaining a rating on any Parity Obligation delivers a letter to
the City to the effect that such disaggregation will not cause the Rating Agency to withdraw or
lower the rating then in effect on the Outstanding Parity Obligations.
Section 19. RECORDS AND ACCOUNTS - ANNUAL AUDIT. The City
covenants and agrees that so long as any of the Parity Obligations remain Outstanding, the City
will keep and maintain a separate and complete system of records and accounts pertaining to the
operations of the System in which full, complete, true, proper, and correct entries shall be made
of all dealings, transactions, business and affairs relating thereto, or which in any way affect or
pertain to the System or the Gross Revenues or the Net Revenues thereof, as provided by
generally accepted accounting principles, consistently applied, and by Sections 1502.067 and
1502.068, Texas Government Code, as amended, or other applicable law. The Holders of the
Parity Obligations or any duly authorized agent or agents of such Holders shall have the right to
inspect the System and all properties comprising the same. The City further agrees that,
following the close of each Fiscal Year, the City will cause an audit report of such records and
accounts to be made by an Accountant. Copies of each annual audit shall be made available for
GTOWMUti1SysRevRefg \14\De1: Ordinance 19
public inspection during normal business hours at the City's principal office and the City
Secretary's office and may be furnished to, upon written request, any Holder upon payment of
the reasonable copying and mailing charges. Expenses incurred in making the annual audit of
the operations of the System shall be considered as Maintenance and Operating Expenses.
Section 20. COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON THE BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code "), the
interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of
the Bonds or the projects financed therewith (less amounts deposited to a reserve fund, if
any) are used for any "private business use," as defined in section 141(b)(6) of the Code
or, if more than 10 percent of the proceeds or the projects financed therewith are so used,
such amounts, whether or not received by the City, with respect to such private business
use, do not, under the terms of this Ordinance or any underlying arrangement, directly or
indirectly, secure or provide for the payment of more than 10 percent of the debt service
on the Bonds, in contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed therewith (less amounts deposited into a reserve fund, if any) then the
amount in excess of 5 percent is used for a "private business use" which is "related" and
not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the
governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Bonds (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Bonds
being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
(5) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2) of the Code) which produces
a materially higher yield over the term of the Bonds, other than investment property
acquired with --
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 20
(A) proceeds of the Bonds invested for a reasonable temporary period of
3 years or less or, in the case of a refunding bond, for a period of 30 days or less
until such proceeds are needed for the purpose for which the Bonds are issued,
(B) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148 -1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Bonds;
(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code (relating to advance refundings); and
(8) to pay to the United States of America at least once during each five -year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the "Excess Earnings," within the meaning of section 148(0 of the Code
and to pay to the United States of America, not later than 60 days after the Bonds have
been paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(0 of the Code
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and
such fund shall not be subject to the claim of any other person, including without limitation the
bondholders. The Rebate Fund is established for the additional purpose of compliance with
section 148 of the Code.
(c) Proceeds. The City understands that the term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds (if any) and proceeds of the refunded bonds not expended prior to the date of issuance
of the Bonds. It is the understanding of the City that the covenants contained herein are intended
to assure compliance with the Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are
hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Bonds, the City will not be required to comply with any covenant contained herein to the extent
that such failure to comply, in the opinion of nationally recognized bond counsel, will not
adversely affect the exemption from federal income taxation of interest on the Bonds under
section 103 of the Code. In the event that regulations or rulings are hereafter promulgated which
impose additional requirements which are applicable to the Bonds, the City agrees to comply
with the additional requirements to the extent necessary, in the opinion of nationally recognized
bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds
under section 103 of the Code. In furtherance of such intention, the City hereby authorizes and
directs the City Manager or Chief Financial Officer of the City to execute any documents,
certificates or reports required by the Code and to make such elections, on behalf of the City,
GTOWN\Uti1SysRevRefg \14\Dc1: Ordinance 21
which may be permitted by the Code as are consistent with the purpose for the issuance of the
Bonds. This Ordinance is intended to satisfy the official intent requirements set forth in Section
1.150 -2 of the Treasury Regulations.
(e) Disposition of Project. The City covenants that the property constituting the project
financed by the Refunded Obligations will not be sold or otherwise disposed in a transaction
resulting in the receipt by the City of cash or other compensation, unless the City obtains an
opinion of nationally- recognized bond counsel that such sale or other disposition will not
adversely affect the tax - exempt status of the Bonds. For purposes of this subsection, the portion
of the property comprising personal property and disposed in the ordinary course shall not be
treated as a transaction resulting in the receipt of cash or other compensation. For purposes of
this subsection, the City shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the interest.
Section 21. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual
Reports. The City shall provide annually to the MSRB, in an electronic format as prescribed by
the MSRB, within six months after the end of any fiscal year, financial information and
operating data with respect to the City as determined by the Pricing Officer at the time the Bonds
are sold. The Pricing Certificate shall specify such financial and operating data of the general
type included in the final Official Statement authorized by Section 33 of this Ordinance. Any
financial statements to be so provided shall be (1) prepared in accordance with the accounting
principles described in Exhibit "C" hereto, or such other accounting principles as the City may be
required to employ from time to time pursuant to state law or regulation, and (2) audited, if the
City commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If the audit of such financial statements is not complete within
such period, then the City shall provide unaudited financial statements within such period, and
audited financial statements for the applicable fiscal year to the MSRB, when and if the audit
report on such statements become available.
If the City changes its fiscal year, it will notify the MSRB of the change (and of the date
of the new fiscal year end) prior to the next date by which the City otherwise would be required
to provide financial information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document that is available to the public on the MSRB's internet web site or filed with the SEC.
All documents provided to the MSRB pursuant to this Section shall be accompanied by
identifying information as prescribed by the MSRB.
(b) Certain Event Notices. The City shall notify the MSRB, in an electronic format
as prescribed by the MSRB, in a timely manner not in excess of ten business days after the
occurrence of the event, of any of the following events with respect to the Bonds:
A. Principal and interest payment delinquencies;
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 22
B. Non - payment related defaults, if material within the meaning of the federal
securities laws;
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit enhancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers, or their failure to perform;
F. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 —TEB) or
other material notices or determinations with respect to the tax - exempt status of the
Bonds, or other events affecting the tax - exempt status of the Bonds.
G. Modifications to rights of holders of the Bonds, if material within the meaning of
the federal securities laws;
H. Bond calls, if material within the meaning of the federal securities laws and tender
offers;
Defeasances;
J. Release, substitution, or sale of property securing repayment of the Bonds, if
material within the meaning of the federal securities laws;
K. Rating changes;
L. Bankruptcy, insolvency, receivership or similar event of the City;
M. The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the ordinary
course of business, the entry into a definitive agreement to undertake such an action or
the termination of a definitive agreement relating to any such actions, other than pursuant
to its terms, if material within the meaning of the federal securities laws; and
N. Appointment of a successor or additional trustee or the change of name of a
trustee, if material within the meaning of the federal securities laws.
The City shall notify the MSRB, in an electronic format as prescribed by the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating data in
accordance with subsection (a) of this Section by the time required by such subsection. All
documents provided to the MSRB pursuant to this Section shall be accompanied by identifying
information as prescribed by the MSRB.
(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
GTOWN\Uti1SysRevRefg \14\Dc1: Ordinance 23
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
Section 9 of this Ordinance that causes the Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY
COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Should the Rule be amended to obligate the City to make filings with or provide notices
to entities other than the MSRB, the City hereby agrees to undertake such obligation with respect
to the Bonds in accordance with the Rule as amended.
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, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the holders of a majority in aggregate principal amount (or any
greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the outstanding Bonds consents to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the holders and beneficial owners of the
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 24
Bonds. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with paragraph (a) of this
Section an explanation, in narrative form, of the reason for the amendment and of the impact of
any change in the type of financial information or operating data so provided. The City may also
amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or
repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the
primary offering of the Bonds.
Section 22. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. (a) The
City shall have the right and power at any time and from time to time and in one or more series
or issues, to authorize, issue and deliver additional parity revenue bonds or other obligations
(herein called "Additional Parity Obligations "), in accordance with law, in any amounts, for
purposes of extending, improving or repairing the System or for the purpose of refunding of any
Parity Obligations, Subordinate Lien Obligations or other obligations of the City incurred in
connection with the ownership or operation of the System. Such Additional Parity Obligations,
if and when authorized, issued and delivered in accordance with this Ordinance, shall be secured
by and made payable equally and ratably on a parity with all other Outstanding Parity
Obligations, from the lien on and pledge of the Pledged Revenues herein granted.
(b) The Interest and Sinking Fund shall secure and be used to pay all Parity Obligations.
Each ordinance under which Additional Parity Obligations are issued shall provide and require
that, in addition to the amounts required by the provisions of this Ordinance and the provisions
of any other ordinance or ordinances authorizing the Previously Issued Parity Obligations and
Additional Parity Obligations to be deposited to the credit of the Interest and Sinking Fund, the
City shall deposit to the credit of the Interest and Sinking Fund at least such amounts as are
required for the payment of all principal of and interest on said Additional Parity Obligations
then being issued, as the same come due.
(c) The City may create and establish a reserve fund pursuant to the provisions of any
ordinance authorizing the issuance of Additional Parity Obligations for the purpose of securing
that particular issue or series of Parity Obligations or any specific group of issues or series of
Parity Obligations and the amounts once deposited or credited to said reserve funds shall no
longer constitute Net Revenues and shall be held solely for the benefit of the Holders of the
particular Parity Obligations for which such reserve fund was established. Each such reserve
fund shall be designated in such manner as is necessary to identify the Parity Obligations it
secures and to distinguish such reserve fund from the Reserve Fund and the reserve funds created
for the benefit of other Parity Obligations.
Section 23. FURTHER REQUIREMENTS FOR ADDITIONAL PARITY
OBLIGATIONS. That Additional Parity Obligations shall be issued only in accordance with
this Ordinance, but notwithstanding any provisions of this Ordinance to the contrary, no
installment, Series or issue of Additional Parity Obligations shall be issued or delivered unless:
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 25
(a) The City Manager and the City Secretary of the City sign a written certificate to the
effect that the City is not in default as to any covenant, condition or obligation in connection with
all Outstanding Parity Obligations, and the ordinances authorizing same, and that the Interest and
Sinking Fund, the Reserve Fund and any reserve fund securing any other series or issue of Parity
Obligations each contains the amount then required to be therein.
(b) An Accountant signs and delivers to the City a written certificate to the effect that,
during either the next preceding Fiscal Year, or any twelve consecutive calendar month period
ending not more than ninety days prior to the date of the then proposed Additional Parity
Obligations, the Net Earnings were, in the opinion thereof, at least equal to the sum of 1.25 times
the Average Annual Debt Service Requirements (computed on a Fiscal Year basis), including
Amortization Installments, of the Parity Obligations and the Additional Parity Obligations to be
outstanding after the issuance of the then proposed Additional Parity Obligations and 1.10 times
the average annual debt service requirement (computed in the same manner as for Parity
Obligations) of the Subordinate Lien Obligations to be outstanding after the issuance of the then
proposed Additional Parity Obligations.
(c) In making a determination of Net Earnings for any of the purposes described in this
Section, the Accountant may take into consideration a change in the rates and charges for
services and facilities afforded by the System that became effective at least 60 days prior to the
last day of the period for which Net Earnings are determined and, for purposes of satisfying the
Net Earnings tests described above, make a pro forma determination of the Net Earnings of the
System for the period of time covered by said Accountant's certification or opinion based on
such change in rates and charges being in effect for the entire period covered by said
Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean the Gross Revenues of the
System after deducting the Maintenance and Operating Expenses of the System but not
expenditures which, under standard accounting practice, should be charged to capital
expenditures.
Section 24. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS. The City
hereby reserves the right to issue, at any time, obligations including, but not limited to,
Subordinate Lien Obligations, payable from and equally and ratably secured, in whole or in part,
by a lien on and pledge of the Net Revenues, subordinate and inferior in rank and dignity to the
lien on and pledge of such Net Revenues securing the payment of the Parity Obligations, as may
be authorized by the laws of the State of Texas.
Section 25. ISSUANCE OF SPECIAL PROJECT OBLIGATIONS. Nothing in
this Ordinance shall be construed to deny the City the right and it shall retain, and hereby
reserves unto itself, the right to issue Special Project obligations secured by liens on and pledges
of revenues and proceeds derived from Special Projects.
Section 26. LIMITED OBLIGATIONS OF THE CITY. The Parity Obligations are
limited, special obligations of the City payable from and equally and ratably secured solely by a
first lien on and pledge of the Pledged Revenues, and the Holders thereof shall never have the
GTOWN \Uti18ysRevRefg \14\De1: Ordinance 26
right to demand payment of the principal or interest on the Parity Obligations from any funds
raised or to be raised through taxation by the City.
Section 27. SECURITY FOR FUNDS. All money on deposit in the Funds for which
this Ordinance makes provision (except any portion thereof as may be at any time properly
invested as provided herein) shall be secured in the manner and to the fullest extent required by
the laws of Texas for the security of public funds, and money on deposit in such Funds shall be
used only for the purposes permitted by this Ordinance.
Section 28. DEFAULT AND REMEDIES. (a) Events of Default. Each of the
following occurrences or events for the purpose of this Ordinance is hereby declared to be an
Event of Default:
(i) the failure to make payment of the principal of or interest on any of the Bonds
when the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the City, the failure to perform which materially, adversely affects the rights
of the Registered Owners of the Bonds, including, but not limited to, their prospect or
ability to be repaid in accordance with this Ordinance, and the continuation thereof for a
period of 60 days after notice of such default is given by any Registered Owner to the
City.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any
Registered Owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the City, or any official, officer or
employee of the City in their official capacity, for the purpose of protecting and enforcing
the rights of the Registered Owners under this Ordinance, by mandamus or other suit,
action or special proceeding in equity or at law, in any court of competent jurisdiction,
for any relief permitted by law, including the specific performance of any covenant or
agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or
in violation of any right of the Registered Owners hereunder or any combination of such
remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or under the Bonds or
now or hereafter existing at law or in equity; provided, however, that notwithstanding any
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other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds
shall not be available as a remedy under this Ordinance.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed
a waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise
to a personal or pecuniary liability or charge against the officers, employees or trustees of
the City or the City Council.
(iv) None of the members of the City Council, nor any other official or officer,
agent, or employee of the City, shall be charged personally by the Registered Owners
with any liability, or be held personally liable to the Registered Owners under any term or
provision of this Ordinance, or because of any Event of Default or alleged Event of
Default under this Ordinance.
Section 29. DEFEASANCE OF BONDS. (a) Any Bond and the interest thereon
shall be deemed to be paid, retired and no longer outstanding (a " Defeased Bond ") within the
meaning of this Ordinance, except to the extent provided in subsections (c) and (e) of this
Section, when payment of the principal of such Bond, plus interest thereon to the due date or
dates (whether such due date or dates be by reason of maturity, upon redemption, or otherwise)
either (i) shall have been made or caused to be made in accordance with the terms thereof
(including the giving of any required notice of redemption or the establishment of irrevocable
provisions for the giving of such notice) or (ii) shall have been provided for on or before such
due date by irrevocably depositing with or making available to the Paying Agent/Registrar or an
eligible trust company or commercial bank for such payment (1) lawful money of the United
States of America sufficient to make such payment, (2) Defeasance Securities, certified by an
independent public accounting firm of national reputation to mature as to principal and interest in
such amounts and at such times as will ensure the availability, without reinvestment, of sufficient
money to provide for such payment and when proper arrangements have been made by the City
with the Paying Agent/Registrar or an eligible trust company or commercial bank for the
payment of its services until all Defeased Bonds shall have become due and payable or (3) any
combination of (1) and (2). At such time as a Bond shall be deemed to be a Defeased Bond
hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by,
payable from, or entitled to the benefits of, the revenues herein pledged as provided in this
Ordinance, and such principal and interest shall be payable solely from such money or
Defeasance Securities and thereafter the City will have no further responsibility with respect to
amounts available to such Paying Agent/Registrar (or other financial institution permitted by
applicable law) for the payment of such Defeased Bond, including any insufficiency therein
caused by the failure of the Paying Agent/Registrar (or other financial institution permitted by
law) to receive payment when due on the Defeasance Securities.
(b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of a Bond
as aforesaid when proper notice of redemption of such Bonds shall have been given or upon the
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establishment of irrevocable provisions for the giving of such notice, in accordance with this
Ordinance. Any money so deposited with the Paying Agent/Registrar or an eligible trust
company or commercial bank as provided in this Section may at the discretion of the City also be
invested in Defeasance Securities, maturing in the amounts and at the times as hereinbefore set
forth, and all income from all Defeasance Securities in possession of the Paying Agent/Registrar
or an eligible trust company or commercial bank pursuant to this Section which is not required
for the payment of such Bond and premium, if any, and interest thereon with respect to which
such money has been so deposited, shall be remitted to the City.
(c) Notwithstanding any provision of any other Section of this Ordinance which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held
in trust pursuant to the provisions of this Section for the payment of principal of the Bonds and
premium, if any, and interest thereon, shall be applied to and used solely for the payment of the
particular Bonds and premium, if any, and interest thereon, with respect to which such money or
Defeasance Securities have been so set aside in trust. Until all Defeased Bonds shall have
become due and payable, the Paying Agent/Registrar shall perform the services of Paying
Agent/Registrar for such Defeased Bonds the same as if they had not been defeased, and the City
shall make proper arrangements to provide and pay for such services as required by this
Ordinance.
(d) Notwithstanding anything elsewhere in this Ordinance, if money or Defeasance
Securities have been deposited or set aside with the Paying Agent/Registrar or an eligible trust
company or commercial bank pursuant to this Section for the payment of Bonds and such Bonds
shall not have in fact been actually paid in full, no amendment of the provisions of this Section
shall be made without the consent of the registered owner of each Bond affected thereby.
(e) Notwithstanding the provisions of subsection (a) immediately above, to the extent
that, upon the defeasance of any Defeased Bond to be paid at its maturity, the City retains the
right under Texas law to later call that Defeased Bond for redemption in accordance with the
provisions of this Ordinance, the City may call such Defeased Bond for redemption upon
complying with the provisions of Texas law and upon the satisfaction of the provisions of
subsection (a) immediately above with respect to such Defeased Bond as though it was being
defeased at the time of the exercise of the option to redeem the Defeased Bond and the effect of
the redemption is taken into account in determining the sufficiency of the provisions made for
the payment of the Defeased Bond.
Section 30. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any outstanding Bond is damaged, mutilated,
lost, stolen or destroyed, the Paying Agent/Registrar shall cause to be printed, executed and
delivered, a new bond of the same principal amount, maturity and interest rate, as the damaged,
mutilated, lost, stolen or destroyed Bond, in replacement for such Bond in the manner hereinafter
provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen or destroyed Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Bond, the registered
GTOWN\Uti1SysRevRefg \140e1: Ordinance 29
owner applying for a replacement bond shall furnish to the City and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them
harmless from any loss or damage with respect thereto. Also, in every case of loss, theft or
destruction of a Bond, the registered owner shall furnish to the City and to the Paying
Agent/Registrar evidence to their satisfaction of the loss, theft or destruction of such Bond, as the
case may be. In every case of damage or mutilation of a Bond, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the
Bond, the City may authorize the payment of the same (without surrender thereof except in the
case of a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security
or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement
bond, the Paying Agent/Registrar shall charge the registered owner of such Bond with all legal,
printing and other expenses in connection therewith. Every replacement bond issued pursuant to
the provisions of this Section by virtue of the fact that any Bond is lost, stolen or destroyed shall
constitute a contractual obligation of the City whether or not the lost, stolen or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds. In accordance with Subchapter D of
Chapter 1201, Texas Government Code, this Section of this Ordinance shall constitute authority
for the issuance of any such replacement bond without necessity of further action by the
governing body of the City or any other body or person, and the duty of the replacement of such
bonds is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying
Agent/Registrar shall authenticate and deliver such Bonds in the form and manner and with the
effect, as provided in Section 5(a) of this Ordinance for Bonds issued in exchange for other
Bonds.
Section 31. AMENDMENT OF ORDINANCE. (a) The Bond Insurer and the
holders of the Parity Obligations aggregating a majority in principal amount of the aggregate
principal amount of then Outstanding Parity Obligations shall have the right from time to time to
approve any amendment to this Ordinance which may be deemed necessary or desirable by the
City, provided, however, that without the consent of the Bond Insurer and the holders of all of
the effected Parity Obligations at the time outstanding, nothing herein contained shall permit or
be construed to permit the amendment of the terms and conditions in this Ordinance or in the
Parity Obligations so as to:
(1) Make any change in the maturity of the Outstanding Parity Obligations;
(2) Reduce the rate of interest borne by any of the outstanding Parity Obligations;
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 30
(3) Reduce the amount of the principal payable on the outstanding Parity Obligations;
(4) Modify the terms of payment of principal of or interest on the outstanding Parity
Obligations or impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Parity Obligations then
outstanding;
(6) Change the minimum percentage of the principal amount of Parity Obligations
necessary for consent to such amendment.
(b) If at any time the City shall desire to amend this Ordinance under this Section, the
City shall cause notice of the proposed amendment to be delivered to the Bond Insurer and
published in a financial newspaper or journal of general circulation in The City of New York,
New York, once during each calendar week for at least two successive calendar weeks. Such
notice shall briefly set forth the nature of the proposed amendment and shall state that a copy
thereof is on file for inspection by all registered owners of Parity Obligations at the designated
trust office of the registrar for the Parity Obligations. Such publication is not required, however,
if notice in writing is given to each registered owner of the Parity Obligations.
(c) Whenever at any time not less than thirty days, and within one year, from the date of
the first publication of said notice or other service of written notice the City shall receive an
instrument or instruments executed by the holders of at least a majority in aggregate principal
amount of all Parity Obligations then outstanding, which instrument or instruments shall refer to
the proposed amendment described in said notice and which specifically consent to and approve
such amendment in substantially the form of the copy thereof on file with the Paying
Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the same
form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties and obligations under this Ordinance of the City and
all the holders of then outstanding Parity Obligations shall thereafter be determined, exercised
and enforced hereunder, subject in all respects to such amendments.
(e) Any consent given by the registered owner of a Parity Obligation pursuant to the
provisions of this Section shall be irrevocable for a period of six months from the date of the first
publication of the notice provided for in this Section, and shall be conclusive and binding upon
all future holders of the same Parity Obligation during such period. Such consent may be
revoked at any time after six months from the date of the first publication of such notice by the
holder who gave such consent, or by a successor in title, by filing notice thereof with the Paying
Agent and the City, but such revocation shall not be effective if the registered owners of at least
a majority in aggregate principal amount of the then outstanding Parity Obligations as in this
Section defined have, prior to the attempted revocation, consented to and approve the
amendment.
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 31
(f) For the purpose of this Section, the fact of the holding of Parity Obligations issued in
registered form without coupons and the amounts and numbers of such Parity Obligations and
the date of their holding same shall be proved by the Registration Books of the Paying
Agent/Registrar. For purposes of this Section, the holder of a Parity Obligation in such
registered form shall be the owner thereof as shown on such Registration Books. The City may
conclusively assume that such ownership continues until written notice to the contrary is served
upon the City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the
City Council may amend this Ordinance for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or
remedies to bondholders or to surrender, restrict or limit any right or power herein
reserved to or conferred upon the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in
regard to clarifying matters or questions arising under this Ordinance, as are necessary or
desirable and not contrary to or inconsistent with this Ordinance and which shall not
adversely affect the interests of the holders of the Parity Obligations;
(3) To make any changes or amendments requested by any Rating Agency, as a
condition to the issuance or maintenance of a rating, which changes or amendments do
not, in the judgment of the City, materially adversely affect the interests of the owners of
the outstanding Parity Obligations;
(4) To make such changes, modifications or amendments as may be necessary or
desirable, which shall not adversely affect the interests of the owners of the outstanding
Parity Obligations, in order, to the extent permitted by law, to facilitate the economic and
practical utilization of credit agreements with respect to the Parity Obligations including,
without limitation, supplementing the definition of "Annual Debt Service Requirements"
to address the amortization of payments due and owing under a credit agreement;
(5) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (i) such modification shall be, and be expressed to be, effective only after
all Parity Obligations outstanding at the date of the adoption of such modification shall
cease to be outstanding, and (ii) such modification shall be specifically referred to in the
text of all Additional Parity Obligations issued after the date of the adoption of such
modification.
Notice of any such amendment may be published or given by the City in the manner described in
subsection (b) of this Section; provided, however, that the publication of such notice shall not
constitute a condition precedent to the adoption of such amendatory ordinance and the failure to
publish such notice shall not adversely affect the implementation of such amendment as adopted
pursuant to such amendatory ordinance.
GTOWN\UtilSysRevRefg \14\Del: Ordinance 32
Section 32. CUSTODY, APPROVAL AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION, BOND INSURANCE AND CUSIP NUMBERS. The Mayor of the
City is hereby authorized to have control of the Bonds initially issued and delivered hereunder
and all necessary records and proceedings pertaining to the Bonds pending their delivery and
their investigation, examination and approval by the Attorney General of the State of Texas, and
their registration by the Comptroller of Public Accounts of the State of Texas. Upon registration
of the Bonds said Comptroller of Public Accounts (or a deputy designated in writing to act for
said Comptroller) shall manually sign the Comptroller's Registration Certificate attached to such
Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on such
Certificate. The approving legal opinion of the City's Bond Counsel (with an appropriate
certificate pertaining thereto executed by facsimile signature of the City Secretary or the Deputy
City Secretary of the City), a statement regarding any insurance policy and the assigned CUSIP
numbers may, at the option of the City, be printed on or attached to the Bonds issued and
delivered under this Ordinance, but such additions or attachments shall not have any legal effect,
and shall be solely for the convenience and information of the registered owners of the Bonds.
Section 33. APPROVAL OF OFFERING DOCUMENTS, PAYING
AGENT/REGISTRAR AGREEMENT AND ESCROW AGREEMENT. The Pricing
Officer is hereby authorized to approve the Preliminary Official Statement, the Official
Statement relating to the Bonds and any addenda, supplement or amendment thereto and to deem
such documents final in accordance with Rule 15c2 -12. The City further approves the
distribution of such Official Statement in the reoffering of the Bonds by the underwriters or
initial purchasers in final form, with such changes therein or additions thereto as the Pricing
Officer executing the same may deem advisable, such determination to be conclusively
evidenced by his execution thereof.
The Paying Agent/Registrar Agreement by and between the City and the Paying
Agent/Registrar ( "Paying Agent Agreement ") in substantially the form and substance previously
approved by the City Council in connection with previous transactions is hereby approved and
the Pricing Officer is hereby authorized and directed to complete, amend, modify and execute the
Paying Agent Agreement as necessary.
The discharge and defeasance of Refunded Obligations shall be effectuated pursuant to
the terms and provisions of an Escrow Agreement, in the form and containing the terms and
provisions as shall be approved by a Pricing Officer, including any insertions, additions,
deletions, and modifications as may be necessary (a) to carry out the program designed for the
City by the underwriters or purchaser, (b) to maximize the City's present value savings and /or to
minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations
relating to the refunding of the Refunded Obligations and (d) to carry out the other intents and
purposes of this Ordinance; and, the Pricing Officer is hereby authorized to execute and deliver
such Escrow Agreement, on behalf of the City, in multiple counterparts.
To maximize the City's present value savings and to minimize the City's costs of
refunding, the City hereby authorizes and directs that certain of the Refunded Obligations shall
be called for redemption prior to maturity in the amounts, at the dates and at the redemption
GTOWN\Uti1SysRevRefg \14\De1: Ordinance 33
prices set forth in the Pricing Certificate, and the Pricing Officer is hereby authorized and
directed to take all necessary and appropriate action to give or cause to be given a notice of
redemption to the holders or paying agent /registrars, as appropriate, of such Refunded
Obligations, in the manner required by the documents authorizing the issuance of such Refunded
Obligations.
The Pricing Officer and the Escrow Agent are each hereby authorized (a) to subscribe
for, agree to purchase, and purchase Defeasance Securities that are permitted investments for a
defeasance escrow established to defease Refunded Obligations, and to execute any and all
subscriptions, purchase agreements, commitments, letters of authorization and other documents
necessary to effectuate the foregoing, and any actions heretofore taken for such purpose are
hereby ratified and approved, and (b) to authorize such contributions to the escrow fund as are
provided in the Escrow Agreement.
Section 34. INSURANCE PROVISIONS. In connection with the sale of the Bonds,
the City may obtain municipal bond insurance policies from one or more recognized municipal
bond insurance organizations (the "Bond Insurer" or "Bond Insurers ") to guarantee the full and
complete payment required to be made by or on behalf of the City on the Bonds. The Pricing
Officer is hereby authorized to sign a commitment letter or insurance agreement with the Bond
Insurer or Bond Insurers and to pay the premium for the bond insurance policies at the time of
the delivery of the Bonds to the underwriter out of the proceeds of sale of the Bonds or from
other available funds and to execute such other documents and certificates as necessary in
connection with the bond insurance policies as the Pricing Officer may deem appropriate.
Printing on the Bonds covered by the bond insurance policies a statement describing such
insurance, in form and substance satisfactory to the Bond Insurer and the Pricing Officer, is
hereby approved and authorized. The Pricing Certificate may contain provisions related to the
bond insurance policies, including payment provisions thereunder, and the rights of the Bond
Insurer or Insurers, and any such provisions shall be read and interpreted as an integral part of
this Ordinance.
Section 35. NO RECOURSE AGAINST CITY OFFICIALS. No recourse shall be
had for the payment of principal of or interest on any Parity Bonds or for any claim based
thereon or on this Ordinance against any official of the City or any person executing any Parity
Bonds.
Section 36. PAYMENT OF ATTORNEY GENERAL FEE. The City hereby
authorizes the disbursement of a fee equal to the lesser of (i) one -tenth of one percent of the
principal amount of the Bonds or (ii) $9,500, provided that such fee shall not be less than $750,
to the Attorney General of Texas Public Finance Division for payment of the examination fee
charged by the State of Texas for the Attorney General's review and approval of public securities
and credit agreements, as required by Section 1202.004 of the Texas Government Code. The
appropriate member of the City's staff is hereby instructed to take the necessary measures to
make this payment. The City is also authorized to reimburse the appropriate City funds for such
payment from proceeds of the Bonds.
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Section 37. FURTHER ACTIONS. The officers and employees of the City are
hereby authorized, empowered and directed from time to time and at any time to do and perform
all such acts and things and to execute, acknowledge and deliver in the name and under the
corporate seal and on behalf of the City all such instruments, whether or not herein mentioned, as
may be necessary or desirable in order to carry out the terms and provisions of this Ordinance,
the Bonds, the initial sale and delivery of the Bonds, the Paying Agent/Registrar Agreement, any
insurance commitment letter or insurance policy and the Official Statement. In addition, prior to
the initial delivery of the Bonds, the Mayor, the City Manager or Assistant City Manager, the
City Attorney and Bond Counsel are hereby authorized and directed to approve any technical
changes or corrections to this Ordinance or to any of the instruments authorized and approved by
this Ordinance necessary in order to (i) correct any ambiguity or mistake or properly or more
completely document the transactions contemplated and approved by this Ordinance and as
described in the Official Statement, (ii) obtain a rating from any of the national bond rating
agencies or satisfy requirements of the Bond Insurer, or (iii) obtain the approval of the Bonds by
the Texas Attorney General's office.
In case any officer of the City whose signature shall appear on any Bond shall cease to be
such officer before the delivery of such Bond, such signature shall nevertheless be valid and
sufficient for all purposes the same as if such officer had remained in office until such delivery.
Section 38. 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 articles and sections of this Ordinance and the Table of Contents of this
Ordinance have been inserted for convenience of reference only and are not to be considered a
part hereof and shall not in any way modify or restrict any of the terms or provisions hereof.
This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate
the purposes set forth herein and to sustain the validity of the Bonds and the validity of the lien
on and pledge of the Pledged Revenues to secure the payment of the Bonds.
Section 39. INCONSISTENT PROVISIONS. All ordinances, orders or resolutions, or
parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are
hereby repealed to the extent of such conflict and the provisions of this Ordinance shall be and
remain controlling as to the matters contained herein.
Section 40. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City and the registered owners of the Bonds, any right, remedy or claim under or by reason of
this Ordinance or any covenant, condition or stipulation hereof, and all covenants, stipulations,
promises and agreements in this Ordinance contained by and on behalf of the City shall be for
the sole and exclusive benefit of the City and the registered owners of the Bonds.
Section 41. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
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Section 42. SEVERABILITY. If any provision of this Ordinance or the application
thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
Section 43. EFFECTIVE DATE. This Ordinance shall become effect immediately
from and after its passage on first and final reading in accordance with Section 1201.028, Texas
Government Code, as amended.
Section 44. PERFECTION. Chapter 1208, Government Code, applies to the
issuance of the Bonds and the pledge of revenues granted by the City under Section 7 of this
Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is amended
at any time while the Bonds are outstanding and unpaid such that the pledge of revenues granted
by the City under Section 7 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge, the City agrees to take such measures
as it determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
Section 45. PAYMENT OF ATTORNEY GENERAL FEE. The City hereby
authorizes the disbursement of a fee equal to the lesser of (i) one -tenth of one percent of the
principal amount of the Bonds or (ii) $9,500, provided that such fee shall not be less than $750,
to the Attorney General of Texas Public Finance Division for payment of the examination fee
charged by the State of Texas for the Attorney General's review and approval of public securities
and credit agreements, as required by Section 1202.004 of the Texas Government Code. The
appropriate member of the City's staff is hereby instructed to take the necessary measures to
make this payment. The City is also authorized to reimburse the appropriate City funds for such
payment from proceeds of the Bonds.
GTOWN\Uti18ysRevRefg \14\De1: Ordinance 36
IN ACCORDANCE WITH SECTION 1201.028, Texas Government Code, passed and
approved on the first and final reading on the 13th day of May, 2014.
George Garver, Mayor
City of Georgetown, Texas
ATTEST:
Jessica Brettle, City Secretary
APPROVED AS TO FORM:
Bridget Chapman
City Attorney
GTOWN\Uti1SysRevRefg \14: Ordinance SigPgOrd
EXHIBIT A
As used in this Ordinance, the following terms and expressions shall have the meanings
set forth below, unless the text hereof specifically indicates otherwise:
"Accountant" means an independent certified public accountant or accountants or a firm
of an independent certified public accountants, in either case, with demonstrated expertise and
competence in public accountancy.
"Accreted Value" means, with respect to a Premium Compound Interest Bond, as of any
particular date of calculation, the original principal amount thereof, plus all interest accrued and
compounded to the particular date of calculation, as determined in accordance with the Pricing
Certificate and the Accretion Table attached as an exhibit to the Pricing Certificate relating to the
respective Bonds that shows the Accreted Value per $5,000 maturity amount on the calculation
date of maturity to its maturity.
"Accretion Table" means the exhibit attached to the Pricing Certificate that sets forth the
rounded original principal amounts at the Issuance Date for the Premium Compound Interest
Bonds and the Accreted Values and maturity amounts thereof as of each Compounding Date
until final maturity.
"Additional Parity Obligations" means bonds, notes, warrants, certificates of obligation,
contractual obligations or other Debt which the City reserves the right to issue or enter into, as
the case may be, in the future under the terms and conditions provided in Sections 22 and 23 of
this Ordinance and which obligations are equally and ratably secured solely by a first lien on and
pledge of the Pledged Revenues on a parity with the outstanding Parity Obligations and the
Bonds.
"Amortization Installment" means, with respect to any Term Bonds of any series of Parity
Obligations, the amount of money which is required to be deposited into a mandatory
redemption account for retirement of such Term Bonds (whether at maturity or by mandatory
redemption and including redemption premium, if any) provided that the total Amortization
Installments for such Term Bonds shall be sufficient to provide for retirement of the aggregate
principal amount of such Term Bonds.
"Annual Debt Service Requirements" means, as of the date of calculation, the principal of
and interest on all Parity Obligations coming due at Maturity or Stated Maturity (or that could
come due on demand of the owner thereof other than by acceleration or other demand
conditioned upon default by the City on such Debt, or be payable in respect of any required
purchase of such Debt by the City) in such Fiscal Year, and, for such purposes, any one or more
of the following rules shall apply at the election of the City:
(1) Balloon Debt. If the principal (including the accretion of interest resulting from
original issue discount or compounding of interest) of any series or issue of Funded Debt
due (or payable in respect of any required purchase of such Funded Debt by the City) in
any Fiscal Year either is equal to at least 25% of the total principal (including the
GTOWN\Uti1SysRevRefg \12: Ordinance A -1
accretion of interest resulting from original issue discount or compounding of interest) of
such Funded Debt or exceeds by more than 50% the greatest amount of principal of such
series or issue of Funded Debt due in any preceding or succeeding Fiscal Year (such
principal due in such Fiscal Year for such series or issue of Funded Debt being referred to
herein and throughout this Ordinance as "Balloon Debt "), the amount of principal of such
Balloon Debt taken into account during any Fiscal Year shall be equal to the debt service
calculated using the original principal amount of such Balloon Debt amortized over the
Term of Issue on a level debt service basis at an assumed interest rate equal to the rate
borne by such Balloon Debt on the date of calculation;
(2) Consent Sinking Fund. In the case of Balloon Debt, if a Designated Financial
Officer shall deliver to the City a certificate providing for the retirement of (and the
instrument creating such Balloon Debt shall permit the retirement of), or for the
accumulation of a sinking fund for (and the instrument creating such Balloon Debt shall
permit the accumulation of a sinking fund for), such Balloon Debt according to a fixed
schedule stated in such certificate ending on or before the Fiscal Year in which such
principal (and premium, if any) is due, then the principal of (and, in the case of
retirement, or to the extent provided for by the sinking fund accumulation, the premium,
if any, and interest and other debt service charges on) such Balloon Debt shall be
computed as if the same were due in accordance with such schedule, provided that this
clause (2) shall apply only to Balloon Debt for which the installments previously
scheduled have been paid or deposited to the sinking fund established with respect to
such Debt on or before the times required by such schedule; and provided further that this
clause (2) shall not apply where the City has elected to apply the rule set forth in clause
(1) above;
(3) Prepaid Debt. Principal of and interest on Bonds and Additional Parity
Obligations, or portions thereof, shall not be included in the computation of the Annual
Debt Service Requirements for any Fiscal Year for which such principal or interest are
payable from funds on deposit or set aside in trust for the payment thereof at the time of
such calculations (including without limitation capitalized interest and accrued interest so
deposited or set aside in trust) with a financial institution acting as fiduciary with respect
to the payment of such Debt; and
(4) Variable Rate. As to any Parity Obligations that bear interest at a variable interest
rate which cannot be ascertained at the time of calculation of the Annual Debt Service
Requirement then, at the option of the City, either (A) an interest rate equal to the average
rate borne by such Parity Obligations (or by comparable debt in the event that such Parity
Obligations has not been outstanding during the preceding 24 months) for any 24 month
period ending within 30 days prior to the date of calculation, or (B) an interest rate equal
to the 30 -year Revenue Bond Index (as most recently published in The Bond Buyer),
shall be presumed to apply for all future dates, unless such index is no longer published
in The Bond Buyer, in which case an index of revenue bonds with maturities of at least
20 years which is published in a financial newspaper or journal with national circulation
may be used for this purpose (if two Series of Parity Obligations which bear interest at
variable interest rate, or one or more maturities within a Series, of equal par amounts, are
GTOWN\Uti1SysRevRefg \14: Ordinance A -2
issued simultaneously with inverse floating interest rates providing a composite fixed
interest rate for such Parity Obligations taken as a whole, such composite fixed rate shall
be used in determining the Annual Debt Service Requirement with respect to such Parity
Obligations);
With respect to any calculation of historic data, only those payments actually made in the subject
period shall be taken into account in making such calculation and, with respect to prospective
calculations, only those payments reasonably expected to be made in the subject period shall be
taken into account in making the calculation.
"Average Annual Debt Service Requirements" means that average amount which, at the
time of computation, will be required to pay the Annual Debt Service Requirements when due
(either at Stated Maturity or mandatory redemption) and derived by dividing the total of such
Annual Debt Service Requirements by the number of Fiscal Years then remaining before Stated
Maturity of such Parity Obligations. For the purposes of this definition, a fractional period of a
Fiscal Year shall be treated as an entire Fiscal Year. Capitalized interest payments provided
from bond proceeds, accrued interest on any Debt, and interest earnings thereon shall be
excluded in making such computation.
"Authorized Denominations" means the denomination of $5,000 or any integral multiple
thereof with respect to the Current Interest Bonds and in the denomination of $5,000 in maturity
amount or any integral multiple thereof with respect to the Premium Compound Interest Bonds.
"Bond Insurer" means any entity that insures or guarantees the payment of principal and
interest on any Bonds or the provider of a Reserve Fund Obligation.
"Bonds" means the Bonds and includes collectively the Premium Compound Interest
Bonds and Current Interest Bonds initially issued and delivered pursuant to this Bond order and
the Pricing Certificate and all substitute Bonds exchanged therefor, as well as all other substitute
bonds and replacement bonds issued pursuant hereto, and the term 'Bond" shall mean any of the
Bonds.
"Book -Entry -Only System" means the book -entry system of bond registration provided in
Section 5, or any successor system of book -entry registration.
"Cede & Co. " means the designated nominee and its successors and assigns of The
Depository Trust Company, New York.
"City" means the City of Georgetown, Texas, and where appropriate, the City Council.
"City Council" means the governing body of the City.
"Compounded Amount" means, with respect to a Premium Compound Interest Bond, as
of any particular date of calculation, the original principal amount thereof plus all interest
accrued and compounded to the particular date of calculation.
GTOWN\Uti1SysRevRefg \14: Ordinance A -3
"Compounding Dates" means the dates on which interest is compounded on the Premium
Compound Interest Bonds as set forth in the Accretion Table attached to the Pricing Certificate.
"Current Interest Bonds" means the Bonds paying current interest and maturing in each
of the years and in the aggregate principal amounts set forth in the Pricing Certificate.
"Debt" and 'Debt of the City payable from Pledged Revenues" mean:
(1) all indebtedness payable from Pledged Revenues and /or Net Revenues incurred
or assumed by the City for borrowed money and all other financing obligations of the
System payable from Pledged Revenues and /or Net Revenues that, in accordance with
generally accepted accounting principles, are shown on the liability side of a balance
sheet; and
(2) all other indebtedness payable from Pledged Revenues and /or Net Revenues
(other than indebtedness otherwise treated as Debt hereunder) for borrowed money or for
the acquisition, construction or improvement of property or capitalized lease obligations
pertaining to the System that is guaranteed, directly or indirectly, in any manner by the
City, or that is in effect guaranteed, directly or indirectly, by the City through an
agreement, contingent or otherwise, to purchase any such indebtedness or to advance or
supply funds for the payment or purchase of any such indebtedness or to purchase
property or services primarily for the purpose of enabling the debtor or seller to make
payment of such indebtedness, or to assure the owner of the indebtedness against loss, or
to supply funds to or in any other manner invest in the debtor (including any agreement to
pay for property or services irrespective of whether or not such property is delivered or
such services are rendered), or otherwise.
For the purpose of determining Debt, there shall be excluded any particular Debt if, upon or prior
to the Maturity thereof, there shall have been deposited with the proper depository (a) in trust the
necessary funds (or investments that will provide sufficient funds, if permitted by the instrument
creating such Debt) for the payment, redemption, or satisfaction of such Debt or (b) evidence of
such Debt deposited for cancellation; and thereafter it shall not be considered Debt. No item
shall be considered Debt unless such item constitutes indebtedness under generally accepted
accounting principles applied on a basis consistent with the financial statements of the System in
prior Fiscal Years.
" Defeasance Securities" means (i) Federal Securities, (ii) noncallable obligations of an
agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the
City adopts or approves proceedings authorizing the issuance of refunding bonds or otherwise
provide for the funding of an escrow to effect the defeasance of the Bonds are rated as to
investment quality by a nationally recognized investment rating firm not less than "AAA" or its
equivalent, (iii) noncallable obligations of a state or an agency or a county, municipality, or other
political subdivision of a state that have been refunded and that, on the date the City adopts or
approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the
funding of an escrow to effect the defeasance of the Bonds, are rated as to investment quality by
GTOWN\Uti1SysRevRefg \14: Ordinance A -4
a nationally recognized investment rating firm no less than "AAA" or its equivalent and (iv) any
other then authorized securities or obligations under applicable State law that may be used to
defease obligations such as the Bonds.
"Depository" means one or more official depository banks of the City.
"DTC" means The Depository Trust Company, New York, New York and its successors
and assigns.
"DTC Participant" means securities 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.
"Designated Financial Officer" means the chief financial officer of the City, or such
other financial or accounting official of the City so designated by the City Council.
"Escrow Agent" means The Bank of New York Mellon Trust Company, National
Association, Dallas, Texas or any successor escrow agent under the Escrow Agreement.
"Escrow Agreement" means the agreements by and between the City and the Escrow
Agent relating to refunding the Refunded Obligations and the cash defeasance, respectively.
"Federal Securities" as used herein means direct, noncallable obligations of the United
States of America, including obligations that are unconditionally guaranteed by the United States
of America (including Interest Strips of the Resolution Funding Corporation).
"Fiscal Year" means the twelve -month accounting period used by the City in connection
with the operation of the System, currently ending on September 30 of each year, which may be
any twelve consecutive month period established by the City, but in no event may the Fiscal
Year be changed more than one time in any three calendar year period.
"Funded Debt" means all Parity Obligations created or assumed by the City that mature
by their terms (in the absence of the exercise of any earlier right of demand), or that are
renewable at the option of the City to a date, more than one year after the original creation or
assumption of such Debt by the City.
"Gross Revenues" and "Gross Revenues of the City's System" mean all revenues, income
and receipts of every nature derived or received by the City from the operation and ownership of
the System; including the interest income from investment or deposit of money in any Fund
created by this Ordinance or maintained by the City in connection with the System; and any
other revenues hereafter pledged to the payment of all Parity Obligations.
"Holder" or "Holders" means the registered owner, whose name appears in the Security
Register, for any Parity Obligation.
GTOWN\Uti1SysRevRefg \14: Ordinance A -5
"Independent Engineer" means an individual, firm or corporation engaged in the
engineering profession, being a registered professional engineer under the laws of the State of
Texas, having specific experience with respect to electric, water, wastewater, reuse water and /or
stormwater drainage systems similar to the System.
"Initial Bonds" means the Bonds authorized, issued, and initially delivered as provided in
Section 4 of this Ordinance.
"Interest and Sinking Fund' means the special Fund maintained by the provisions of
Sections 8 and 11 of this Ordinance.
"Issuance Date" means the date of delivery of the related Series of the Bonds.
"Maintenance and Operating Expenses" means the reasonable and necessary expenses of
operation and maintenance of the System as required by Section 1502.058, Texas Government
Code, as amended, including all salaries, labor, materials, repairs and extensions necessary to
render efficient service (but only such repairs and extensions as, in the judgment of the
governing body of the City, are necessary to keep the System in operation and render adequate
service to the City and the inhabitants thereof, or such as might be necessary to meet some
physical accident or conditions which would otherwise impair the Parity Obligations), and all
payments under contracts now or hereafter defined as operating expenses by the Legislature of
Texas. Depreciation shall never be considered as a Maintenance and Operating Expense.
"Maturity" means, when used with respect to any Debt, the date on which the principal of
such Debt or any installment thereof becomes due and payable as therein provided, whether at
the Stated Maturity thereof or by declaration of acceleration, call for redemption, or otherwise.
"Maximum Annual Debt Service Requirements" means the greatest requirements of
Annual Debt Service Requirements (taking into account all mandatory principal redemption
requirements) scheduled to occur in any future Fiscal Year or in the then current Fiscal Year for
the particular obligations for which such calculation is made. Capitalized interest payments
provided from Debt proceeds, accrued interest on any Debt, and interest earnings thereon shall
be excluded in making such computation.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" and "Net Revenues of the City's System" mean all Gross Revenues
remaining after deducting the Maintenance and Operating Expenses.
"Ordinance" means this ordinance finally adopted by the City Council on May 24, 2014.
"Outstanding ", when used with respect to Parity Obligations, means, as of the date of
determination, all Parity Obligations theretofore delivered under this Ordinance and any
ordinance authorizing Additional Parity Obligations, except:
GTOWN\Uti1SysRevRefg \14: Ordinance A -6
(1) Parity Obligations theretofore cancelled and delivered to the City or delivered to
the Paying Agent/Registrar for cancellation;
(2) Parity Obligations deemed paid pursuant to the provisions of Section 29 of this
Ordinance or any comparable section of any ordinance authorizing Additional Parity
Obligations;
(3) Parity Obligations upon transfer of or in exchange for and in lieu of which other
Parity Obligations have been authenticated and delivered pursuant to this Ordinance and
any ordinance authorizing Additional Parity Obligations; and
(4) Parity Obligations under which the obligations of the City have been released,
discharged or extinguished in accordance with the terms thereof.
"Paying Agent /Registrar" shall have the meaning set forth in Section 5(a) hereof.
"Parity Obligations" means the Bonds, the Previously Issued Parity Obligations and any
Additional Parity Obligations hereafter issued by the City or obligations issued to refund any of
the foregoing (as determined within the sole discretion of the City Council in accordance with
applicable law) if issued in a manner that provides that the refunding bonds are payable from and
equally and ratably secured by a first lien on and pledge of the Pledged Revenues.
"Permitted Investments" means any security or obligation or combination thereof
permitted under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as
amended or other applicable law.
"Pledged Revenues" means (1) the Net Revenues, plus (2) any additional revenues,
income, receipts, or other resources, including, without limitation, any grants, donations or
income received or to be received from the United States Government, or any other public or
private source, whether pursuant to an agreement or otherwise, which hereafter are pledged by
the City to the payment of the Parity Obligations, and excluding those revenues excluded from
Gross Revenues.
"Premium Compound Interest Bonds" means the Bonds on which no interest is paid prior
to maturity, maturing in various amounts and in the aggregate principal amount as set forth in the
Pricing Certificate.
"Previously Issued Parity Obligations" means the Outstanding Parity Obligations of the
City entitled "City of Georgetown, Texas Utility System Revenue Refunding Bonds, Taxable
Series 1998B," "City of Georgetown, Texas Utility System Revenue Bonds, Series 2003," "City
of Georgetown, Texas Utility System Revenue Bonds, Series 2005," "City of Georgetown, Texas
Utility System Revenue Bonds, Series 2006," "City of Georgetown, Texas Utility System
Revenue Refunding Bonds, Series 2006A," "City of Georgetown, Texas Utility System Revenue
and Refunding Bonds, Series 2007," "City of Georgetown, Texas Utility System Revenue and
Refunding Bonds, Series 2008," "City of Georgetown, Texas Utility System Revenue Bonds,
GTOWN\Uti1SysRevRefg \14: Ordinance A -7
Series 2010," "City of Georgetown, Texas Utility System Revenue Refunding Bonds, Series
2012" and "City of Georgetown, Texas Utility System Revenue Bonds, Series 2014."
"Pricing Certificate" means the Pricing Certificate of the City's Pricing Officer to be
executed and delivered pursuant to Section 3 hereof in connection with the issuance of the
Bonds.
"Pricing Officer" means the Mayor, acting as the designated pricing officer of the City to
execute the Pricing Certificate. In the absence of the Mayor, the Mayor Pro Tem may act as the
designated pricing officer of the City to execute the Pricing Certificate.
"Prudent Utility Practice" means any of the practices, methods and acts, in the exercise
of reasonable judgment, in the light of the facts, including but not limited to the practices,
methods and acts engaged in or previously approved by a significant portion of the public utility
industry, known at the time the decision was made, that would have been expected to accomplish
the desired result at the lowest reasonable cost consistent with reliability, safety and expedition.
It is recognized that Prudent Utility Practice is not intended to be limited to the optimum
practice, method or act to the exclusion of all others, but rather is a spectrum of possible
practices, methods or acts which could have been expected to accomplish the desired result at the
lowest reasonable cost consistent with reliability, safety and expedition. In the case of any
facility included in the System which is operated in common with one or more other entities, the
term Prudent Utility Practice, as applied to such facility, shall have the meaning set forth in the
agreement governing the operation of such facility.
"Rating Agency" means any nationally recognized securities rating agency which has
assigned, at the request of the City, a rating to the Parity Obligations.
"Record Date" means Record Date as defined in the Form of Bonds in Exhibit "B" to this
Ordinance and the Pricing Certificate.
"Refunded Obligations" means those Refundable Obligations designated by the Pricing
Officer in the Pricing Certificate to be refunded.
"Refundable Obligations" means all or a portion of the City's outstanding utility system
bonds.
"Required Reserve Amount" means the amount required to be maintained in the Reserve
Fund pursuant to the provisions of Section 12 of this Ordinance.
"Required Reserve Fund Deposits" means the deposits and credits, if any, required to be
made to the Reserve Fund pursuant to the provisions of Section 12 of this Ordinance.
"Reserve Fund" means the special fund created, established and maintained by the
provisions of Section 12 of this Ordinance.
GTOWN\Uti1SysRevRefg \14: Ordinance A -8
"Reserve Fund Obligation" means, to the extent permitted by law, as evidenced by an
opinion of nationally recognized bond counsel, a surety bond or insurance policy deposited in the
Reserve Fund to satisfy the Required Reserve Amount whereby the City is obligated to provide
funds up to and including the maximum amount and under the conditions specified in such
agreement or instrument.
"Reserve Fund Obligation Payment" means any subrogation payment the City is
obligated to make from Pledged Revenues deposited in the Reserve Fund with respect to a
Reserve Fund Obligation.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Special Project" means, to the extent permitted by law, any electric, waterworks,
sanitary sewer, wastewater reuse or municipal drainage system property, improvement or facility
declared by the City not to be part of the System, for which the costs of acquisition, construction
and installation are paid from proceeds of a financing transaction other than the issuance of
bonds payable from ad valorem taxes, Pledged Revenues or Net Revenues and for which all
maintenance and operation expenses are payable from sources other than ad valorem taxes,
Pledged Revenues or Net Revenues, 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.
"Stated Maturity" means the annual principal payments of the Parity Obligations payable
on the respective dates set forth in the ordinances which authorized the issuance of such Parity
Obligations.
"Subordinate Lien Obligations" means (i) any bonds, notes, warrants, certificates of
obligation, contractual obligations or other Debt issued by the City that are payable, in whole or
in part, from and equally and ratably secured by a lien on and pledge of the Net Revenues, such
pledge being subordinate and inferior to the lien on and pledge of the Net Revenues that are or
will be pledged to the payment of any Parity Obligations issued by the City, and (ii) obligations
hereafter issued to refund any of the foregoing if issued in a manner that provides that the
refunding bonds are payable from and equally and ratably secured, in whole or in part, by a lien
on and pledge of the Net Revenues on a parity with the Subordinate Lien Obligations.
"System" means as currently comprised, the City's combined electric, waterworks and
sewer system, which includes all properties, facilities, plants, improvements, equipment, interests
and rights currently owned, operated and maintained by the City for the (i) generation,
transmission, distribution or sale of electric power and energy, (ii) supply, treatment, and
transmission and distribution of treated potable water and (iii) collection and treatment of
wastewater, and for water reuse, together with all future extensions, improvements, purchases,
repairs, replacements and additions thereto, whether situated within or without the limits of the
City, and all water (in any form) owned by the City; provided, however, that the City expressly
retains the right to (i) sale or disaggregate the System as set forth in Section 18 of this Ordinance
GTOWN\UtilSysRcvRefg \14: Ordinance A -9
and (ii) incorporate any other utility system as provided by the laws of the State of Texas as a
part of the System. The System shall not include any Special Project or any disaggregated part
of the System as provided in Section 18 of this Ordinance.
"Term Bonds" means those Parity Obligations so designated in the ordinances authorizing
such bonds which shall be subject to retirement by operation of a mandatory redemption account.
"Term of Issue" means with respect to any Balloon Debt, a period of time equal to the
greater of (i) the period of time commencing on the date of issuance of such Balloon Debt and
ending on the final maturity date of such Balloon Debt or (ii) twenty -five years.
GTOWN\Uti1SysRevRefg \14: Ordinance A -10
EXHIBIT B
All blanks and anv appropriate or necessary insertions or deletions, to be completed as
determined by the Pricing Officer in the Pricing Certificate.)
NO. R- UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
WILLIAMSON COUNTY $
CITY OF GEORGETOWN, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BOND,
SERIES 2014
[FORM OF FIRST PARAGRAPHS OF CURRENT INTEREST BONDS]
INTEREST RATE DATE OF BOND MATURITY DATE CUSIP NO.
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, GEORGETOWN, TEXAS (the
"City "), being a political subdivision of the State of Texas, hereby promises to pay to the
Registered Owner set forth above, or registered assigns (hereinafter called the "Registered
Owner ") the principal amount set forth above, and to pay interest thereon from ,
20 *, on , 20 * and semiannually thereafter on each * and
* to the maturity date specified above, or the date of redemption prior to maturity,
at the interest rate per annum specified above calculated on the basis of a 360 -day year of twelve
30 -day months; except that if this Bond is required to be authenticated and the date of its
authentication is later than the first Record Date (hereinafter defined), such principal amount
shall bear interest from the interest payment date next preceding the date of authentication,
unless such date of authentication is after any Record Date but on or before the next following
interest payment date, in which case such principal amount shall bear interest from such next
following interest payment date; provided, however, that if on the date of authentication hereof
the interest on the Bond or Bonds, if any, for which this Bond is being exchanged or converted
from is due but has not been paid, then this Bond shall bear interest from the date to which such
interest has been paid in full. Notwithstanding the foregoing, during any period in which
ownership of the Bonds is determined only by a book entry at a securities depository for the
*To be completed as determined by the Pricing Officer in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds
is inconsistent with any provisions in the Form of Bond or contains information to complete missing information in this Form of Bond, the
language in the Pricing Certificate shall be used in the executed Bonds.
GTOWN\UtilSysRevRefg \14: Ordinance B -1
Bonds, any payment to the securities depository, or its nominee or registered assigns, shall be
made in accordance with existing arrangements between the City and the securities depository.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this
Bond shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond
at maturity or upon the date fixed for its redemption prior to maturity, at The Bank of New York
Mellon Trust Company, National Association, (the "Paying Agent/Registrar ") at their office for
payment in Dallas, Texas (the 'Designated Payment /Transfer Office "). The payment of interest
on this Bond shall be made by the Paying Agent/Registrar to the Registered Owner hereof on
each interest payment date by check or draft, dated as of such interest payment date, drawn by
the Paying Agent/Registrar on, and payable solely from, funds of the City required by the
ordinance authorizing the issuance of this Bond (the "Ordinance ") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be
sent by the Paying Agent/Registrar by United States mail, first -class postage prepaid, on each
such interest payment date, to the Registered Owner hereof, at its address as it appeared on the
close of business on the * business day of the month next preceding each such date (the
"Record Date ") on the registration books kept by the Paying Agent/Registrar (the "Registration
Books "). In addition, interest may be paid by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the Registered Owner. In the
event of a non - payment of interest on a scheduled payment date, and for 30 days thereafter, a
new record date for such interest payment (a "Special Record Date ") will be established by the
Paying Agent/Registrar, if and when funds for the payment of such interest have been received
from the City. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (which shall be 15 days after the Special Record Date) shall be sent at least five
business days prior to the Special Record Date by United States mail, first -class postage prepaid,
to the address of each owner of a Bond appearing on the Registration Books at the close of
business on the last business day next preceding the date of mailing of such notice.
DURING ANY PERIOD in which ownership of the Bonds is determined only by a book
entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity
and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and
bearing such interest rate shall be selected in accordance with the arrangements between the City
and the securities depository.
[FORM OF FIRST PARAGRAPHS
OF PREMIUM COMPOUND INTEREST BOND]
NO. PC-
MATURITY
AMOUNT
*To be completed as determined by the Pricing Officer in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds
is inconsistent with any provisions in the Form of Bond or contains information to complete missing information in this Form of Bond, the
language in the Pricing Certificate shall be used in the executed Bonds.
GTOWN\UtilSysRevRefg \14: Ordinance B -2
INTEREST RATE ISSUANCE DATE DATE OF BONDS MATURITY DATE
REGISTERED OWNER:
MATURITY AMOUNT:
ON THE MATURITY DATE SPECIFIED ABOVE, CITY OF GEORGETOWN,
TEXAS (the "City "), being a political subdivision and municipal corporation of the State of
Texas, hereby promises to pay to the Registered Owner set forth above, or registered assigns
(hereinafter called the "Registered Owner ") the Maturity Amount set forth above, representing
the principal amount hereof and accrued and compounded interest hereon. Interest shall accrue
on the principal amount hereof from the Issuance Date at the interest rate per annum specified
above, calculated on the basis of a 360 day year comprised of twelve 30 day months,
compounded semiannually on * and * of each year commencing
20 *. For convenience of reference a table of the "Accreted Value" per $5,000
Maturity Amount is printed on the reverse side of this Bond. The term "Accreted Value" as set
forth in the table on the reverse side hereof shall mean the original principal amount plus initial
premium per $5,000 Maturity Amount compounded semiannually on * and
* at the yield shown on such table.
THE MATURITY AMOUNT of this Bond is payable in lawful money of the United
States of America, without exchange or collection charges. The Maturity Amount of this Bond
shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond at
maturity, at the designated office for payment of The Bank of New York Mellon Trust Company,
National Association, Dallas, Texas, which is the "Paying Agent/Registrar" for this Bond, and
shall be drawn by the Paying Agent/Registrar on, and solely from, funds of the City required by
the order authorizing the issuance of the Bonds (the "Ordinance ") to be on deposit with the
Paying Agent/Registrar for such purpose as hereinafter provided, payable to the Registered
Owner hereof, as it appears on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described. The City covenants with the Registered Owner of this Bond that on or
before the Maturity Date for this Bond it will make available to the Paying Agent/Registrar, from
the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for
the payment, in immediately available funds of the Maturity Amount, when due.
Notwithstanding the foregoing, during any period in which ownership of the Bonds is
determined only by a book entry at a securities depository for the Bonds, any payment to the
securities depository, or its nominee or registered assigns, shall be made in accordance with
existing arrangements between the City and the securities depository.
[FORM OF REMAINDER OF EACH BOND]
*To be completed as determined by the Pricing Officer in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds
is inconsistent with any provisions in the Form of Bond or contains information to complete missing information in this Form of Bond, the
language in the Pricing Certificate shall be used in the executed Bonds.
GTOWN\UtilSysRevRefg \14: Ordinance B -3
ANY ACCRUED INTEREST due at maturity as provided herein shall be paid to the
Registered Owner upon presentation and surrender of this Bond for payment at the Designated
Payment /Transfer Office of the Paying Agent/Registrar. The City covenants with the Registered
Owner of this Bond that on or before each payment date for this Bond it will make available to
the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of
and interest on the Bonds, when due.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the
principal corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close, then the date for such payment shall be the next succeeding day which
is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same force and effect as if made on
the original date payment was due.
THIS BOND is one of a series of Bonds dated 20 *, authorized in
accordance with the Constitution and laws of the State of Texas in the principal amount of
$ *, TO PROVIDE FUNDS FOR REFUNDING THE REFUNDED
OBLIGATIONS; AND PAYING THE COSTS ASSOCIATED WITH THE ISSUANCE
OF THE BONDS.
ON , 20_ *, or on any date thereafter, the Bonds of this Series maturing
on and after 120 * may be redeemed prior to their scheduled maturities, at the
option of the City, with funds derived from any available and lawful source, at par plus accrued
interest to the date fixed for redemption as a whole, or from time to time in part, and, if in part,
the particular maturities to be redeemed shall be selected and designated by the City and if less
than all of a maturity is to be redeemed, the Paying Agent/Registrar shall determine by lot the
Bonds, or a portion thereof, within such maturity to be redeemed (provided that a portion of a
Bond may be redeemed only in an integral multiple of $5,000).
[THE BONDS MATURING ON _ - are subject to mandatory sinking fund
redemption by lot prior to maturity in the following amounts on the following dates and at a
price of par plus accrued interest to the redemption date ( "Term Bonds ").
Term Bonds Maturing on , 20
Redemption Date—* Principal Amount
120 $
, 20 t $ t
Final Maturity
*To be completed as determined by the Pricing Officer in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds
is inconsistent with any provisions in the Form of Bond or contains information to complete missing information in this Form of Bond, the
language in the Pricing Certificate shall be used in the executed Bonds.
GTOWN\UtilSysRevRefg \14: Ordinance B -4
THE PRINCIPAL AMOUNT of the Term Bonds required to be redeemed pursuant to
the operation of the mandatory sinking fund redemption provisions shall be reduced, at the
option of the City by the principal amount of any Term Bonds of the stated maturity which, at
least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City at a
price not exceeding the principal amount of such Term Bonds plus accrued interest to the date of
purchase thereof, and delivered to the Paying Agent/Registrar for cancellation, (2) shall have
been purchased and canceled by the Paying Agent/Registrar at the request of the City with
monies in the Interest and Sinking Fund at a price not exceeding the principal amount of the
Term Bonds plus accrued interest to the date of purchase thereof, or (3) shall have been
redeemed pursuant to the optional redemption provisions and not theretofore credited against a
mandatory sinking fund redemption requirement.] **
NO LESS THAN 30 days prior to the date fixed for any such redemption, the City shall
cause the Paying Agent/Registrar to send notice by United States mail, first -class postage prepaid
to the Registered Owner of each Bond to be redeemed at its address as it appeared on the
Registration Books of the Paying Agent/Registrar at the close of business on the 45th day prior
to the redemption date and to major securities depositories, national bond rating agencies and
bond information services; provided, however, that the failure to send, mail or receive such
notice, or any defect therein or in the sending or mailing thereof, shall not affect the validity or
effectiveness of the proceedings for the redemption of any Bonds. By the date fixed for any such
redemption due provision shall be made with the Paying Agent/Registrar for the payment of the
required redemption price for the Bonds or portions thereof which are to be so redeemed. If due
provision for such payment is made, all as provided above, the Bonds or portions thereof which
are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not
be regarded as being outstanding except for the right of the Registered Owner to receive the
redemption price from the Paying Agent/Registrar out of the funds provided for such payment.
If a portion of any Bonds shall be redeemed a substitute Bond or Bonds having the same
maturity date, bearing interest at the same rate, in any denomination or denominations in any
integral multiple of $5,000, at the written request of the Registered Owner, and in aggregate
principal amount equal to the unredeemed portion thereof, will be issued to the Registered
Owner upon the surrender thereof for cancellation, at the expense of the City, all as provided in
the Ordinance.
WITH RESPECT TO any optional redemption of the Bonds, unless certain
prerequisites to such redemption required by the Ordinance have been met and moneys sufficient
to pay the principal of and premium, if any, and interest on the Bonds to be redeemed shall have
been received by the Paying Agent/Registrar prior to the giving of such notice of redemption,
such notice shall state that said redemption may, at the option of the City, be conditional upon
the satisfaction of such prerequisites and receipt of such moneys by the Paying Agent/Registrar
on or prior to the date fixed for such redemption, or upon any prerequisite set forth in such notice
of redemption. If a conditional notice of redemption is given and such prerequisites to the
redemption and sufficient moneys are not received, such notice shall be of no force and effect,
* *Use of Term Bonds, if any, to be determined by the Pricing Officer.
GTOWN\Uti1SysRevRefg \14: Ordinance B -5
the City shall not redeem such Bonds and the Paying Agent/Registrar shall give notice, in the
manner in which the notice of redemption was given, to the effect that the Bonds have not been
redeemed.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000. As provided in the
Ordinance, this Bond, or any unredeemed portion hereof, may, at the request of the Registered
Owner or the assignee or assignees hereof, be assigned, transferred, converted into and
exchanged for a like aggregate principal amount of fully registered Bonds, without interest
coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case may be,
having the same denomination or denominations in any integral multiple of $5,000 as requested
in writing by the appropriate Registered Owner, assignee or assignees, as the case may be, upon
surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the
form and procedures set forth in the Ordinance. Among other requirements for such assignment
and transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar,
together with proper instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or
portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or
names this Bond or any such portion or portions hereof is or are to be registered. The form of
Assignment printed or endorsed on this Bond may be executed by the Registered Owner to
evidence the assignment hereof, but such method is not exclusive, and other instruments of
assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of
this Bond or any portion or portions hereof from time to time by the Registered Owner. The
Paying Agent/Registrar's reasonable standard or customary fees and charges for assigning,
transferring, converting and exchanging any Bond or portion thereof will be paid by the City. In
any circumstance, any taxes or governmental charges required to be paid with respect thereto
shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a
condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be
required to make any such transfer, conversion, or exchange during the period commencing on
the close of business on any Record Date and ending with the opening of business on the next
following principal or interest payment date.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering or
transferring this Bond shall be modified to require the appropriate person or entity to meet the
requirements of the securities depository as to registering or transferring the book entry to
produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City,
resigns, or otherwise ceases to act as such, the City has covenanted in the Ordinance that it
promptly will appoint a competent and legally qualified substitute therefor, and cause written
notice thereof to be mailed to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper
to be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
GTOWN\Uti1SysRevRcfg \14: Ordinance B -6
this Bond have been performed, existed, and been done in accordance with law; that this Bond is
a special obligation of the City, and that the interest on and principal of this Bond, together with
the Previously Issued Parity Obligations and all other outstanding "Parity Obligations" (as
defined in the Bond Ordinance), as such interest comes due, and as such principal matures, are
payable from and secured by a lien on and pledge of the "Pledged Revenues" of the "System"
(which is generally described as the City's combined electric, waterworks and sewer system), all
as provided in the Bond Ordinance.
THE CITY also has reserved the right, subject to restrictions stated in the Ordinance, to
issue Additional Parity Obligations which also may be made payable from and equally and
ratably secured by a first lien on and pledge of, the Pledged Revenues of the System in the same
manner and to the same extent as this Series of Bonds.
THE CITY also has reserved the right, subject to restrictions stated in the Bond
Ordinance to issue Subordinate Lien Obligations payable from and equally and ratably secured,
in whole or in part, by a lien on and pledge of the Net Revenues (as defined in the Bond
Ordinance), subordinate and inferior in rank and dignity to the lien on and pledge of such Net
Revenues securing payment of the Bonds, the Previously Issued Parity Obligations or any
Additional Parity Obligations.
THE OWNER HEREOF shall never have the right to demand payment of this Bond out
of any funds raised or to be raised by taxation.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Ordinance, agrees to be bound by such terms
and provisions, acknowledges that the Ordinance is duly recorded and available for inspection in
the official minutes and records of the governing body of the City, and agrees that the terms and
provisions of this Bond and the Ordinance constitute a contract between each Registered Owner
hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual
or facsimile signature of the Mayor of the City and countersigned with the manual or facsimile
signature of the City Secretary and has caused the official seal of the City to be duly impressed,
or placed in facsimile, on this Bond.
City Secretary
[CITY SEAL]
Mayor
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
GTOWN\Uti1SysRcvRefg \14: Ordinance B -7
(To be executed if this Bond is not accompanied by an
executed Registration Certificate of the Comptroller
of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described in the text of this Bond; and that this Bond has been issued in conversion or
replacement of, or in exchange for, a Bond, Bonds, or a portion of a Bond or Bonds of a Series
which originally was approved by the Attorney General of the State of Texas and registered by
the Comptroller of Public Accounts of the State of Texas.
Dated
THE BANK OF NEW YORK
MELLON TRUST COMPANY,
NATIONAL ASSOCIATION
Paying Agent/Registrar
LIZ
Authorized Representative
FORM OF ASSIGNMENT
ASSIGNMENT
For value received, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer
Identification Number of Transferee
(Please print or typewrite name and address,
including zip code, of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney, to register the transfer of the
within Bond on the books kept for registration thereof, with full power of substitution in the
premises.
GTOWN\Uti1SysRevRefg \14: Ordinance B -8
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be
guaranteed by a member firm of
the New York Stock Exchange or
a commercial bank or trust company.
NOTICE: The signature above
must correspond with the name
of the Registered Owner as it
appears upon the front of this
Bond in every particular, with-
out alteration or enlargement
or any change whatsoever.
FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS FOR THE INITIAL BOND ONLY:
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
of the State of Texas
[COMPTROLLER'S SEAL]
INSERTIONS FOR THE INITIAL BONDS
(i) The initial Current Interest Bonds shall be in the form set forth in this Exhibit, except
that:
A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO." shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"ON THE MATURITY DATE SPECIFIED ABOVE, the City of Georgetown, Texas
(the "City "), being a political subdivision, hereby promises to pay to the Registered Owner
specified above, or registered assigns (hereinafter called the "Registered Owner "), on
GTOWN\Uti1SysRevRefg \14: Ordinance B -9
, 20_* in each of the years, in the principal installments and bearing interest at the
per annum rates set forth in the following schedule:
Principal Maturity Date* Interest
Amount ( ) Rate
(Information for the Current Interest Bonds from the Pricing Certificate to be inserted)
The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis
of a 360 -day year of twelve 30 -day months) from , 20* at the respective Interest
Rate per annum specified above. Interest is payable on 120 * and semiannually on
each * and * thereafter to the date of payment of the principal
installment specified above; except, that if this Bond is required to be authenticated and the date
of its authentication is later than the first Record Date (hereinafter defined), such principal
amount shall bear interest from the interest payment date next preceding the date of
authentication, unless such date of authentication is after any Record Date but on or before the
next following interest payment date, in which case such principal amount shall bear interest
from such next following interest payment date; provided, however, that if on the date of
authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is being
exchanged is due but has not been paid, then this Bond shall bear interest from the date to which
such interest has been paid in full."
C. The initial Bond shall be numbered "T -1."
(ii) The Initial Compound Interest Bond shall be in the form set forth in this Section, except
that:
A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO. " shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"THE CITY OF GEORGETOWN, TEXAS (the "City "), being a political subdivision
of the State of Texas, hereby promises to pay to the Registered Owner set forth above, or
registered assigns (hereinafter called the "Registered Owner ") the Payment at Maturity on
* in each of the years and in installments of the respective Maturity Amounts set
forth in the following schedule:
Maturity Maturity Date* Interest
Amount Rate
*To be completed as determined by the Pricing Officer in the Pricing Certificate. To the extent that the Pricing Certificate relating to the Bonds
is inconsistent with any provisions in the Form of Bond or contains information to complete missing information in this Form of Bond, the
language in the Pricing Certificate shall be used in the executed Bonds.
GTOWN\UtilSysRevRefg \14: Ordinance B -10
(Information for the Premium Compound Interest Bonds from the
Pricing Certificate to be inserted)
The amount shown above as the respective Maturity Amounts represent the principal amount
hereof and accrued and compounded interest hereon. Interest shall accrue on the principal
amount hereof from the Issuance Date at the interest rate per annum specified above,
compounded semiannually on * and * of each year commencing
20 * For convenience of reference, a table appears on the back of this Bond showing the
"Compounded Amount" of the original principal amount plus initial premium, if any, per $5,000
Maturity Amount compounded semiannually at the yield shown on such table."
C. the Initial Premium Compound Interest Bond shall be numbered "TPC -1."
GTOWN\Uti1SysRevRefg \14: Ordinance B -11
EXHIBIT C
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 21 of this Ordinance.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the City's annual financial statements.
GTOWN \UtilSysRevRefg \14: Ordinance C -1
IN ACCORDANCE WITH SECTION 1201.028, Texas Government Code, passed and
approved on the first and final reading on the 13th day of May, 2014.
George rver, Mayor
City of Georgetown, Texas
ATTEST:
APPROVED AS TO FORM:
Bridget Chap ' and;
City Attorney
GTOWN\Uti1SysRevRefg114: Ordinance SigPgOrd