HomeMy WebLinkAboutOrdinance 10905~ 7
ORDINANCE NO.
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ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM
SUBORDINATE. LIEN REVENUE
BONDS, SERIES 1991
THE STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH
WHEREAS, the City of Fort Worth, Texas (the "City" or the
"Issuer") has heretofore issued and has outstanding its City of
Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds,
Series 1984, City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 1984A, City of Fort Worth, Texas Water and
Sewer System Revenue Bonds, Series 1985, City of Fort Worth, Texas
Water and Sewer System Revenue Bonds, Series 1986, City of Fort
Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series
1986-A, City of Fort Worth, Texas Water and Sewer System Revenue
Bonds, Series 1987 and City of Fort Worth, Texas Water and Sewer
System Revenue Bonds, Series 1988 (together, the "Previously Issued
Parity Bonds"); and
WHEREAS, in the ordinances authorizing the issuance of the
Previously Issued Parity Bonds (together, the "Prior Lien Bond
Ordinance"), the Previously Issued Parity Bonds were secured by a
first lien on and pledge of the "Pledged Revenues" (as defined in
the Prior Lien Bond Ordinance); and
WHEREAS, the City reserved the right in the Prior Lien Bond
Ordinance to issue revenue bonds payable from a subordinate lien on
the Pledged Revenues to that granted to the Previously Issued
Parity Bonds; and
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WHEREAS, the City adopted an ordinance on October 17, 1989
(the "Subordinate Lien Revenue Bond Ordinance") authorizing the
issuance of City of Fort Worth, Texas Water and Sewer System
Subordinate Lien Revenue Bonds, Series 1989, in the aggregate
principal amount of $33,300,000 (the "Previously Issued Subordinate
Lien Obligations"); and
WHEREAS, the City reserved the right in the Subordinate Lien
Revenue Bond Ordinance to issue obligations payable from a lien on
the Pledged Revenues superior to that granted to the Previously
Issued Subordinate Lien Bonds as well as the right to issue bonds
on a party with the Previously Issued Subordinate Lien Obligations;
and
WHEREAS, on March 8, 1990, the City adopted an ordinance
authorizing the establishment of a commercial paper program and the
issuance of commercial paper notes in a principal amount at any
time outstanding not to exceed $75,000,000 (the "Series A Notes");
and
WHEREAS, the Series A Notes are secured in part by a line of
credit with The Mitsui Bank, Limited (the "Bank"); and
WHEREAS, the City has pledged to the Bank as security for said
line of credit a lien on and pledge of the Pledged Revenues
subordinate to that securing the Previously Issued Parity Bonds but
superior to that securing the Previously Issued Subordinate Lien
Obligations; and
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WHEREAS, the City deems it necessary and advisable to issue
bonds on a parity with the Previously Issued Subordinate Lien
Obligations;
WHEREAS, the bonds hereinafter authorized are to be issued and
delivered pursuant to Vernon's Annotated Texas Civil Statutes,
Articles 1111 to 1118, inclusive, as amended, and other applicable
laws, for the purpose of extending and improving the City's
combined Water and Sewer System; and
WHEREAS, a notice of intention to issue the bonds hereinafter
authorized was published in accordance with law, in the Fort Worth
Star-Telegram on August 7, 1991 and August 14, 1991; and
WHEREAS, no petition seeking a referendum on the question of
the issuance of the bonds hereinafter authorized was presented to
the City Secretary; and
WHEREAS, the Texas Water Development Board has committed to
purchase the bonds hereinafter authorized pursuant to Subchapter J
of Chapter 15, Texas Water Code.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH,
TEXAS:
Section 1. BONDS AUTHORIZED. That the City's bonds (the
"Obligations") are hereby authorized to be issued in the aggregate
principal amount of $16,155,000 for the purpose of extending and
improving the City's combined water and sewer system, to-wit:
extending and improving the Village Creek Wastewater Treatment
Plant; and other improvements to the sewer system. The Obligations
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shall be designated as the "City of Fort Worth, Texas Water and
Sewer System Subordinate Lien Revenue Bonds, Series 1991".
Section 2. DATE AND MATURITIES. That the Obligations shall
be dated September 1, 1991, shall be in the denomination of $5,000
each, or any integral multiple thereof, shall be numbered
consecutively from R-1 upward, and shall mature on the maturity
date, in each of the years, and in the amounts, respectively, as
set forth in the following schedule:
MATURITY DATE: MARCH 1
AGGREGATE
LOT A LOT B PRINCIPAL
YEARS AMOUNTS AMOUNTS AMOUNTS
1993 $ 75,000 $380,000 $ 455,000
1994 85,000 415,000 500,000
1995 85,000 415,000 500,000
1996 100,000 500,000 600,000
1997 100,000 500,000 600,000
1998 ~ 100,000 500,000 600,000
1999 120,000 580,000 700,000
2000 120,000 580,000 700,000
2001 135,000 665,000 800,000
2002 135,000 665,000 800,000
2003 150,000 750,000 900,000
2004 150,000 750,000 900,000
2005 165,000 835,000 1,000,000
2006 165,000 835,000 1,000,000
2007 180,000 920,000 1,100,000
2008 200,000 1,000,000 1,200,000
2009 200,000 1,000,000 1,200,000
2010 215,000 1,085,000 1,300,000
2011 215,000 1,085,000 1,300,000
The Texas Water Development Board ("TWDB") will purchase the
Obligations in two lots, "Lot A" and "Lot B", as set forth above.
Upon offers to sell the Obligations by the City, in installments,
TWDB will first purchase Obligations of Lot A, in ascending order
of maturity, until $2,695,000 in principal amount of Obligations of
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Lot A have been so purchased. Thereafter, upon offers to sell the
Obligations by the City, in installments, TWDB will purchase
Obligations of Lot B, in ascending order of maturity, until
$13,460,000 in principal amount of Obligations of Lot B have been
purchased.
Section 3. RIGHT OF PRIOR REDEMPTION. The City reserves the
right to redeem the Obligations on March 1, 2001, or on any date
thereafter, in whole or in part, and if in part, in inverse order
of maturity, for the principal amount thereof and accrued interest
thereon to the date fixed for redemption, and without premium.
At least 30 days prior to the date fixed for any such
redemption a written notice of such redemption shall be given to
the registered owner of each Obligation or a portion thereof being
called for redemption by depositing such notice in the United
States mail, postage prepaid, addressed to each such registered
owner at his address shown on the registration books of the Paying
Agent/Registrar. By the date fixed for any such redemption due
provision shall be made by the City with the Paying Agent/Registrar
for the payment of the required redemption price for the
Obligations or the portions thereof which are to be so redeemed,
plus accrued interest thereon to the date fixed for redemption. If
such written notice of redemption is given, and if due provision
for such payment is made, all as provided above, the Obligations,
or the portions thereof which are to be so redeemed, thereby
automatically shall be redeemed prior to their scheduled
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maturities, and shall not bear interest after the date fixed for
their redemption, and shall not be regarded as being outstanding
except for the right of the registered owner to receive the
redemption price plus accrued interest to the date fixed for
redemption from the Paying Agent/Registrar out of the funds
provided for such payment. The Paying Agent/Registrar shall record
in the Registration Books all such redemptions of principal of the
Obligations or any portion thereof. If a portion of any Obligation
shall be redeemed a substitute Obligation or Obligations 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 an 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 this
Ordinance.
Section 4. INTEREST. That the Obligations shall bear
interest at the rate of 5.50% per annum Said interest shall be
payable to the registered owner of any such Obligation in the
manner provided and on the dates stated in the FORM OF BOND set
forth in this Ordinance.
Section 5. (a) The City shall keep or cause to be kept at the
principal corporate trust office of Ameritrust Texas National
Association, Austin, Texas, or such other bank, trust company,
financial institution, or other agency named in accordance with the
provisions of (g) of this Section hereof (the "Paying
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Agent/Registrar") books or records of the registration and transfer
of the Obligations (the "Registration Books"), and the City hereby
appoints the Paying Agent/Registrar as its registrar and transfer
agent to keep such books or records and make such transfers and
registrations under such reasonable regulations as the City and
Paying Agent/Registrar may prescribe, and the Paying Agent/
Registrar shall make such transfers and registrations as herein
provided. It shall be the duty of the Paying Agent/ Registrar to
obtain from the registered owner and record in the Registration
Books the address to which payments with respect to the Obligations
owned by any such registered owner thereof shall be mailed as
herein provided. The City or its designee shall have the right to
inspect the Registration Books during regular business hours of the
Paying Agent/Registrar, but otherwise the Paying Agent/Registrar
shall keep the Registration Books confidential and, unless other-
wise required by law, shall not permit their inspection by
any other entity. Registration of each Obligation may be trans-
ferred in the Registration Books only upon presentation and
surrender thereof to the Paying Agent/Registrar for transfer of
registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing the
assignment thereof, or any portion thereof in any integral multiple
of $5,000, to the assignee or assignees thereof, and the right of
such assignee or assignees to have the Obligation or any such
portion thereof registered in the name of such assignee or assign-
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ees. Upon the assignment and transfer of any Obligation or any
portion thereof, a new substitute bond or bonds shall be issued in
exchange therefor in the manner herein provided.
(b) The entity in whose name any Obligation shall be regis-
tered in the Registration Books at any time shall be treated as the
absolute owner thereof for all purposes of this Ordinance, whether
or not such bond shall be overdue, and the City and the Paying
Agent/Registrar shall not be affected by any notice to the
contrary; and payment of, or on account of, the principal of,
premium, if any, and interest on any such bond shall be made only
to such registered owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such bond to
the extent of the sum or sums so paid.
t (c) The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal
of and interest on the Obligations, and to act as its agent to
exchange or replace Obligations, 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 Obligations, and of all exchanges of such bonds, and
all replacements of such bonds, as provided in this Ordinance.
(d) Each Obligation may be exchanged for fully registered
bonds in the manner set forth herein. Each bond issued and
delivered pursuant to this Ordinance, to the extent of the unpaid
or unredeemed principal amount thereof, may, upon surrender of such
bond at the principal corporate trust office of the Paying
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Agent/Registrar, together with a written request therefor duly
executed by the registered owner or the assignee or assignees
thereof, or its or their duly authorized attorneys or representa-
tives, with guarantee of signatures satisfactory to the Paying
Agent/Registrar, at the option of the registered owner or such
assignee or assignees, as appropriate, be exchanged for fully
registered bonds, without interest coupons, in the form prescribed
in the FORM OF BOND set forth in this Ordinance, in the denomina-
tion of $5,000, or any integral multiple of $5,000 (subject to the
requirement hereinafter stated that each substitute bond shall have
a single stated maturity date), as requested in writing by such
registered owner or such assignee or assignees, in an aggregate
principal amount equal to the unpaid or unredeemed principal amount
of any Obligation or Obligations so surrendered, and payable to the
appropriate registered owner, assignee, or assignees, as the case
may be. If a portion of any Obligation shall be redeemed prior to
its scheduled maturity as provided herein, a substitute bond or -
bonds having the same maturity date, bearing interest at the same
rate, in the denomination or denominations of any integral multiple
of $5,000 at the request of the registered owner, and in an
aggregate principal amount equal to the unredeemed portion thereof,
will be issued to the registered owner upon surrender thereof for
cancellation. If any Obligation or portion thereof is assigned and
transferred, each bond issued in exchange therefor shall have the
same principal maturity date and bear interest at the same rate as
the bond for which it is being exchanged. Each substitute bond
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shall bear a letter and/or number to distinguish it from each other
bond. The Paying Agent/Registrar shall exchange or replace
Obligations as provided herein, and each fully registered bond or
bonds delivered in exchange for or replacement of any Obligation or.
portion thereof as permitted or required by any provision of this
Ordinance shall constitute one of the Obligation for all purposes
of this Ordinance, and may again be exchanged or replaced. It is
specifically provided, however, that any Obligation delivered in
exchange for or replacement of another Obligation prior to the
first scheduled interest payment date on the Obligations (as stated
on the face thereof) shall be dated the same date as such
Obligation, but each substitute bond so delivered on or after such
first scheduled interest payment date shall be dated as of the
interest payment date preceding the date on which such substitute
bond is delivered, unless such substitute bond is delivered on an
interest payment date, in which case it shall be dated as of such
date of delivery; provided, however, that if at the time of
delivery of any substitute bond the interest on the Obligation for
which it is being exchanged has not been paid, then such substitute
bond shall be dated as of the date to which such interest has been
paid in full. On each substitute bond issued in exchange for or
replacement of any Obligation issued under this Ordinance there
shall be printed thereon a Paying Agent/Registrar's Authentication
Certificate, in the form hereinafter set forth. An authorized
representative of the Paying Agent/Registrar shall, before the
delivery of any such substitute bond, date such substitute bond in
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the manner set forth above, and manually sign and date such
Certificate, and no such substitute bond shall be deemed to be
issued or outstanding unless such Certificate is so executed. The
Paying Agent/Registrar promptly shall cancel all Obligations
.surrendered for exchange or replacement No additional ordinances,
orders, or resolutions need be passed or adopted by the City
Council or any other body or person so as to accomplish the fore-
going exchange or replacement of any Obligation or portion thereof,
and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute bonds in the manner
prescribed herein, and said bonds shall be of type composition
printed on paper with lithographed or steel engraved borders of
customary weight and strength Pursuant to Article 717k-6,
V.A.T.C.S., and particularly Section 6 thereof, the duty of
exchange or replacement of any Obligations as aforesaid is hereby
imposed upon the Paying Agent/Registrar, and, upon the execution of
the above-described Paying Agent/Registrar's Authentication
Certificate, the exchanged or replaced bond shall be valid,
incontestable, -and enforceable in the same manner and with the same
effect as the Obligations which originally were delivered pursuant
to this Ordinance, approved by the Attorney General, and registered
by the Comptroller of Public Accounts. Neither the City nor the
Paying Agent/Registrar shall be required (1) to issue, transfer, or
exchange any bond during a period beginning at the opening of busi-
ness 30 days before the day of the first mailing of a notice of
redemption of bonds and ending at the close of business on the day
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of such mailing, or (2) to transfer or exchange any bond so
selected for redemption in whole when such redemption is scheduled
to occur within 30 calendar days.
(e) All Obligations issued in exchange or replacement of any
other Obligation or portion thereof (i) shall be issued in fully
registered form, without interest coupons, with the principal of
and interest on such Obligations to be payable only to the regis-
tered owners thereof, (ii) may be redeemed prior to their scheduled
maturities, (iii) may be transferred and assigned, (iv) may be ex-
changed for other Obligations, (v) shall have the characteristics,
(vi) shall be signed and sealed, and (vii) the principal of and
interest on the Obligations shall be payable, all as provided, and
in the manner required or indicated, in the FORM OF BOND set forth
in this Ordinance.
The Paying Agent/Registrar shall complete the "Date of
Delivery" on each installment of Obligations initially delivered to
the Texas Water Development Board, upon the satisfaction of the
` conditions described in Section 27 of this Ordinance.
(f) The City shall pay the Paying Agent/Registrar's
reasonable and customary fees and charges for making transfers of
Obligations, but the registered owner of any Obligation requesting
such transfer shall pay any taxes or other governmental charges
required to be paid with respect thereto. The registered owner of
any Obligation requesting any exchange shall pay the Paying
Agent/Registrar's reasonable and standard or customary fees and
charges for exchanging any such bond or portion thereof, together
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with any taxes or governmental charges required to be paid with
respect thereto, all as a condition precedent to the exercise of
such privilege of exchange, except, however, that in the case of
the exchange of an assigned and transferred bond or bonds or any
portion or portions thereof in any integral multiple of $5,000, and
in the case of the exchange of a portion the unredeemed portion of
an Obligation which has been redeemed in part prior to maturity, as
provided in this Ordinance, such fees and charges will be paid by
the City. In addition, the City hereby covenants with the
registered owners of the Obligations that it will (i) pay the
reasonable and standard or customary fees and charges of the Paying
Agent/Registrar for its services with respect to the payment of the
principal of and interest on the Obligations, when due, and (ii)
pay the fees and charges of the Paying Agent/Registrar for services
with respect to the transfer or registration of Obligations solely
to the extent above provided, and with respect to the exchange of
Obligations solely to the extent above provided.
(g) The City covenants with the registered owners of the
Obligations that at all times while the Obligations are outstanding
the City will provide a competent and legally qualified bank or
trust company to act as and perform the services of Paying
Agent/Registrar for the Obligations under this Ordinance, and that
the Paying Agent/Registrar will be one entity. The City reserves
the right to, and may, at its option, change the Paying
Agent/Registrar upon .not less than 60 days written notice to the
Paying Agent/Registrar. In the event that the entity at any time
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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 appoint a
competent and legally qualified national or state banking
institution which shall be a corporation organized and doing
business under the laws of the United States of America or of any
state, authorized under such laws to exercise trust powers, subject
to supervision or examination by federal or state Authority, and
whose qualifications substantially are similar to the previous
Paying Agent/Registrar to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar, the
previous Paying Agent/Registrar promptly shall transfer and deliver
the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Obligations, 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 Obligations, by
United States mail, postage prepaid, which notice also shall give
the address of the new Paying Agent/Registrar. By accepting the
position and performing as such, each Paying Agent/Registrar shall
be deemed to have agreed to the provisions of this Ordinance, and
a certified copy of this Ordinance shall be delivered to each
Paying Agent/Registrar.
Section 6. The form of all Obligations, including the form of
the Paying Agent/Registrar's Certificate, the Form of Assignment,
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and the form of the Comptroller's Registration Certificate to
accompany the Obligations on the initial delivery thereof, shall
be, respectively, substantially as follows, with such appropriate
variations, omissions, or insertions as are permitted or required.
by this Ordinance:
FORM OF BOND•
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE BOND
SERIES 1991
MATURITY DATE INTEREST RATE DATE OF DELIVERY CUSIP
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF FORT WORTH,
TEXAS
(the "Issuer"), hereby promises to pay to
or to the registered assignee hereof
(either being hereinafter called the "registered owner") the
principal amount of
and to pay interest thereon, from the date of delivery of this Bond
specified above, to the date of its scheduled maturity or the date
of its redemption prior to scheduled maturity, at the rate of
interest per annum specified above, with said interest being
payable on March 1, 1992, and semiannually on each September 1 and
March 1 thereafter, except that if the Paying Agent/Registrar's
Authentication Certificate appearing on the face of this Bond is
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dated later than March 1, 1992, such interest is payable
semiannually on each September 1 and March 1 following such date.
THE TERMS AND PROVISIONS of this Bond are continued on the
reverse side hereof and shall for all purposes have the same effect
as though fully set forth at this place.
*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 principal corporate trust office of Ameritrust
Texas National Association, Austin, Texas, which is the "Paying
Agent/Registrar" for this Bond. The payment of interest on this
Bond shall be made by the Paying Agent/Registrar to the registered
owner hereof as shown by the Registration Books kept by the Paying
Agent/Registrar at the close of business on the 15th day of the
month next preceding such interest payment date by check drawn by
the Paying Agent/Registrar on, and payable solely from, funds of
the Issuer required to be on deposit with the Paying Agent/Reg-
istrar for such purpose as hereinafter provided; and such cheek
shall be sent by the Paying Agent/ Registrar by United States mail,
postage prepaid, on each such interest payment date, to the regis-
tered owner hereof at its address as it appears on the Registration
Books kept by the Paying Agent/Registrar, as hereinafter described.
The Issuer covenants with the registered owner of this Bond that no
later than each principal payment date and interest payment date
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for this Bond it will make available to the Paying Agent/Registrar
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 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 September 1,
1991, of like tenor and effect except as to number, principal
amount, interest rate, maturity and right of prior redemption,
aggregating Sixteen Million One Hundred Fifty Five Thousand Dollars
($16,155,000) (herein sometimes called the "Bonds"), issued for the
purpose of extending and improving the Issuer's combined water and
sewer system, to-wit: extending and improving the Village Creek
Wastewater Treatment Plant, and other improvements to the sewer
system.
*THE OUTSTANDING BONDS of this Series may be redeemed prior
to their scheduled maturities, at the option of the Issuer, in
whole, or in part, and if in part, in inverse order of maturity, on
March 1, 2001, or on any date thereafter, for the principal amount
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thereof and accrued interest thereon to the date fixed for
redemption, and without premium.
*AT LEAST 30 days prior to the date fixed for any such redemp-
tion a written notice of such redemption shall be given to the
registered owner of each Bond or a portion thereof being called for
redemption by depositing such notice in the United States mail,
postage prepaid, addressed to each such registered owner at his
address shown on the Registration Books of the Paying
Agent/Registrar. By the date fixed for any such redemption due
provision shall be made by the Issuer with the Paying
Agent/Registrar for the payment of the required redemption price
for this Bond or the portion hereof which is to be ,so redeemed,
plus accrued interest thereon to the date fixed for redemption. If
such written notice of redemption is given, and if due provision
for such payment is made, all as provided above, this Bond, or the
portion hereof which is to be so redeemed, thereby automatically
shall be redeemed prior to its scheduled maturity, and shall not
bear interest after the date fixed for its redemption, and shall
not be regarded as being outstanding except for the right of the
registered owner to receive the redemption price plus accrued
interest to the date fixed for redemption from the Paying
Agent/Registrar out of the funds provided for such payment. The
Paying Agent/Registrar shall record in the Registration Books all
such redemptions of principal of this Bond or any portion hereof.
If a portion of any Bond shall be redeemed a substitute Bond or
Bonds having the same maturity date, bearing interest at the same
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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 Issuer, all as provided in
the ordinance authorizing the Bonds (the "Ordinance").
*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, and exchanged for a like aggregate principal
amount of fully registered bonds, without interest coupons, payable
to the appropriate registered owner, assignee, or assignees, as the
case may be, having the same maturity date, and bearing interest at
the same rate, in any 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
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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 transferred and registered. The form of Assignment printed or
endorsed on this Bond may be executed by the registered owner to
evidence the assignment hereof, but such method is not exclusive,
and other instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Bond
or any portion or portions hereof from time to time by the
registered owner. The one requesting such exchange shall pay the
Paying Agent/Registrar's reasonable standard or customary fees and
charges for exchanging any Bond. or portion thereof. The foregoing
notwithstanding, in the case of the exchange of a portion of a Bond
which has been redeemed prior to maturity, as provided herein, and
in the case of the exchange of an assigned and transferred Bond or
Bonds or any portion or portions thereof, such fees and charges of
the Paying Agent/Registrar will be paid by the Issuer. In any
circumstance, any taxes or governmental charges required to be paid
with respect thereto shall be paid by the one requesting such
assignment, transfer, or exchange as a condition precedent to the
exercise of such privilege. In any circumstance, neither the
Issuer nor the Paying Agent/Registrar shall be required (1) to make
any transfer or exchange during a period beginning at the opening
of business 30 days before the day of the first mailing of a notice
of redemption of bonds and ending at the close of business on the
day of such mailing, or (2) to transfer or exchange any Bonds so
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selected for redemption when such redemption is scheduled to occur
within 30 calendar days.
*IN THE EVENT any Paying Agent/Registrar for the Bonds is
changed by the Issuer, resigns, or otherwise ceases to act as such,
the Issuer has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor,
whose qualifications substantially are similar to the previous
Paying Agent/Registrar it is replacing, and promptly will cause
written notice thereof to be mailed to the registered owners of the
Bonds.
*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 Issuer, and
agrees that the terms and provisions of this Bond and the Ordinance
constitute a contract between each registered owner hereof and the
Issuer.
*THE ISSUER has reserved the right, subject to the
restrictions stated, and adopted by reference, in the Ordinance, to
issue (1) Prior Lien Obligations secured by a lien on and pledge of
the Pledged Revenues (as defined in the Ordinance) superior to such
lien and pledge securing the Bonds, and (2) additional parity
revenue bonds which also may be made payable from, and secured by
a lien on and pledge of, the Pledged Revenues securing the Bonds.
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*THE REGISTERED OWNER HEREOF shall never have the right to
demand payment of this obligation out of any funds raised or to be
raised by taxation, or from any source whatsoever other than the
aforesaid Pledged Revenues.
IT IS HEREBY certified and covenanted that this Bond has been
duly and validly authorized, issued and delivered; that all acts,
conditions and things required or proper to be performed, exist and
be done precedent to or in the authorization, issuance and delivery
of this Bond have been performed, existed and been done in
accordance with law; that this Bond is a special obligation; and
that the principal of and interest on this Bond, together with
other bonds of the Issuer now or hereafter outstanding on a parity
therewith, are payable from, and secured by a lien on and pledge
of, the Pledged Revenues (as defined in the Ordinance), and which
include the Net Revenues of the Issuer's combined Water and Sewer
System; however, the lien on and pledge of the Pledged Revenues
shall be junior and subordinate to the Prior Lien Obligations (as
defined in the Ordinance), which consist of the Prior Lien Bonds
(as defined in the Ordinance) and any System Obligations (as
defined in the Ordinance).
IN WITNESS WHEREOF, this Bond has been signed with the
imprinted or lithographed facsimile signature of the Mayor of said
City, attested by the imprinted or lithographed facsimile signature
of the City Secretary, and approved as to form and legality by the
imprinted or lithographed facsimile signature of the City Attorney,
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and the official seal of said City has been duly affixed to,
printed, lithographed or impressed on this Bond.
CITY OF FORT WORTH, TEXAS
By
Mayor
ATTEST:
City Secretary
(SEAL)
APPROVED AS TO FORM AND LEGALITY:
City Attorney
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FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued
under the provisions of the Ordinance described on the face
of this Bond; and that this Bond has been issued in exchange
for or replacement of a bond, bonds, or a portion of a bond
or bonds of an issue which originally was approved by the
Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated
Paying Agent/Registrar
By
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
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kept for registration thereof, with full power of substitution in
the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must NOTICE: The signature above
be guaranteed by a member must correspond with the name
firm of the New York Stock of the Registered Owner as it
Exchange or a commercial appears upon the front of this
bank or trust company. Bond in every particular,
without alteration or enlarge-
ment or any change whatsoever.
** (FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE BONDS UPON INITIAL DELIVERY THEREOF)
OFFICE OF COMPTROLLER
STATE OF TEXAS .
REGISTER NO
I hereby certify that there is on file and of record in my
office a certificate of the Attorney General of the State of Texas
to the effect that this Bond has been examined by him as required
by law, and that he finds that it has been issued in conformity
with the Constitution and laws of the State of Texas, and that it
is a valid and binding special obligation of the City of Fort
Worth, Texas, payable in the manner provided by and in the
ordinance authorizing same, and said Bond has this day been
registered by me.
WITNESS MY HAND and seal of office at Austin, Texas
(SEAL)
Comptroller of Public Accounts of
the State of Texas
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NOTE TO PRINTER:
*~[s to be on reverse side of bond
**~[ not to be on bond
Section 7. DEFINITIONS That, as used in this Ordinance, the
following terms shall have the meanings set forth below, unless the
text hereof specifically indicates otherwise:
(a) The term "Additional Obligations" shall mean the revenue
bonds, notes or other obligations which the City reserves the right
to issue in the future on a parity with the Obligations, as
provided in this Ordinance
(b) The terms "City" and "Issuer" shall mean the City of Fort
Worth, Texas.
(c) The term "Code" shall mean the Internal Revenue Code of
1986, as amended.
(d) The terms "Gross Revenues of the City's Combined Water
and Sewer System" and "Gross Revenues" shall mean all revenues,
income, and receipts of every nature derived or received by the
City from the operation and ownership of the System, including the
interest income from the investment or deposit of money in any Fund
created by this Ordinance, or maintained by the City in connection
with the System (other than the monies on deposit in the Rebate
Fund created pursuant to Section 25 of this Ordinance).
(e) The term "Investment Act" shall mean the "Public Funds
Investment Act of 1987", Vernon's Annotated Texas Civil Statutes,
Article 842a-2, and any amendments thereto.
(f) The terms "Net Revenues of the City's Combined Water and
Sewer System" and "Net Revenues" shall mean all Gross Revenues
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after deducting and paying the current expenses of operation and
maintenance of the System (the "Current Expenses"), as required by
Vernon's Annotated Texas Civil Statutes, Article 1113., including
all salaries, labor, materials, repairs and extensions necessary to
render efficient service; provided, however, that only such repairs
and extensions as in the judgment of the City Council, reasonably
and fairly exercised and evidenced by the passage of the
appropriate ordinance, are necessary to keep the System in
operation and render adequate service to said City and the
inhabitants thereof, or such as might be necessary to meet some
physical accident or condition which would otherwise impair the
Prior Lien Obligations, the Obligations or Additional Obligations,
shall be deducted in determining "Net Revenues". Payments made by
the City for water supply or treatment of sewage which under the
law constitute operation and maintenance expenses shall be
considered herein as expenses incurred in the operation and
maintenance of the System. Depreciation shall never be considered
as an expense of operation and maintenance
(g) The term "Obligations" shall mean the City of Fort Worth,
Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series
1991, authorized by this Ordinance
(h) The term "Paying Agent/Registrar" shall mean the
financial institution specified in Section 5(a) hereof, or its
herein permitted successors and assigns.
(i) The term "Pledged Revenues" shall mean
(1) the Net Revenues, plus
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(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 may be pledged to the payment
of the Prior Lien Bonds.
(j) The term "Previously Issued Parity Bonds" shall have the
same meaning given said term in the preamble to this Ordinance.
(k) The term "Previously Issued Subordinate Lien Obligations"
shall have the same meaning given said term in the preamble to this
Ordinance.
(1) The term "Prior Lien Bond Ordinance" shall have the same
meaning given said term in the preamble to this Ordinance.
(m) The term "Prior Lien Bonds" shall mean the Previously
Issued Parity Bonds and any bonds hereafter issued on a parity
therewith pursuant to the terms of the Prior Lien Bond Ordinance.
(n) The term "Prior Lien Obligations" shall mean the Prior
Lien Bonds and any System Obligations.
(o) The term "Subordinate Lien Revenue Bond Ordinance" shall
have the same meaning given said term in the preamble to the
Ordinance.
(p) The term "System" shall mean and include the City's
combined existing water and sewer system, together with all future
extensions, improvements, enlargements, and additions thereto, and
all replacements thereof; provided that, notwithstanding the
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foregoing, and to the extent now or hereafter authorized or
permitted by law, the term System shall not include any water or
sewer facilities which are declared by the City not to be a part of
the System and which are acquired or constructed by the City with
the proceeds from the issuance of "Special Facilities Bonds", which
are hereby defined as being special revenue obligations of the City
which are not secured by or payable from the Pledged Revenues as
defined herein, but which are secured by and payable solely from
special contract revenues or payments received from any other legal
entity in connection with such facilities; and such revenues or
payments shall not be considered as or constitute Gross Revenues of
the System, unless and to the extent otherwise provided in the
ordinance or ordinances authorizing the issuance of such "Special
Facilities Bonds".
(q) The term "System Obligations" shall mean the line of
credit securing the Series A Notes (as defined in the preamble to
this Ordinance); and any obligations of the City hereafter issued
or incurred by the City secured by a lien on and pledge of the
Pledged Revenues superior to the Obligations but subordinate to the
Prior Lien Bonds.
(r) The term "TWDB" shall mean the Texas Water Development
Board, or any successor agency thereto.
(s) The term "year" shall mean the regular fiscal year used
by the City in connection with the operation of the System, which
may be any twelve consecutive months period established by the
City.
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Section 8. PLEDGE. That the Previously Issued Subordinate
Lien Obligations, the Obligations and any Additional Obligations
are and shall be secured by and payable from a lien on and pledge
of the Pledged Revenues; provided, however, that said lien on and-
pledge of the Pledged Revenues shall be junior and subordinate to
the lien on and pledge of the Pledged Revenues to the Prior Lien
Obligations. In addition, the Pledged Revenues are further pledged
to the establishment and maintenance of the Debt Service Fund and
the Subordinate Lien Reserve Fund as hereinafter provided. The
Previously Issued Subordinate Lien Obligations, the Obligations and
any Additional Obligations are and will be secured by and payable
only from the Pledged Revenues in the manner described above, and
are not secured by or payable from a mortgage or deed of trust on
any properties, whether real, personal, or mixed, constituting the
System.
Section 9. REVENUE FUND That there has been created, and
established and maintained on the books of the City, and accounted
for separate and apart from all other funds of the City, a special
fund to be entitled the "City of Fort Worth, Texas Water and Sewer
Operating Fund" (hereinafter called the "Revenue Fund"). All Gross
Revenues shall be credited to the Revenue Fund immediately upon
receipt. All current expenses of operation and maintenance of the
System shall be paid from such Gross Revenues as a first charge
against same. Thereafter, amounts required to pay the principal of
and interest on the Prior Lien Obligations by the terms of the
ordinances authorizing the issuance of Prior Lien Obligations,
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together with payments to reserve funds established therein and
other payments required under the ordinances authorizing Prior Lien
Obligations shall have priority over transfers from the Revenue
Fund to the Debt Service Fund and the Subordinate Lien Reserve Fund
in accordance with this Ordinance.
Section 10. DEBT SERVICE FUND That for the sole purpose of
paying the principal of and interest on all Previously Issued
Subordinate Lien Obligations, the Obligations and any Additional
Obligations, as the same come due, there has been created, and
established and maintained on the books of the City, a separate
fund to be entitled the "City of Fort Worth, Texas Water and Sewer
System Revenue Bonds Debt Service Fund" (hereinafter called the
"Debt Service Fund"). Monies in said Fund shall be maintained at
an official depository bank of the City.
Section 11. RESERVE FUND. That there has been created, and
established and maintained on the books of the City, a separate
fund to be entitled the "City of Fort Worth, Texas Water and Sewer
System Revenue Bonds Subordinate Lien Reserve Fund" (hereinafter
called the "Subordinate Lien Reserve Fund"). Monies in said Fund
shall be used solely for the purpose of retiring the last of any
Previously Issued Subordinate Lien Obligations, Obligations or
Additional Obligations as they become due or paying principal of
and interest on any Previously Issued Subordinate Lien Obligations,
Obligations or Additional Obligations when and to the extent the
amounts in the Debt Service Fund are insufficient for such purpose.
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Monies in said Fund shall be maintained at an official depository
bank of the City.
Section 12. PROJECT FUND. (a) That there is hereby created,
established and maintained on the books of the City, a separate
fund to be entitled the "City of Fort Worth, Texas Water and Sewer
System Series 1991 Subordinate Lien Revenue Bonds Project Fund"
(hereinafter called the "Project Fund"). Monies in said Fund shall
be maintained at an official depository bank of the City.
(b) Except as otherwise provided in Section 15 hereof, the
proceeds of each installment delivery of the Obligations to the
purchaser shall be deposited into the Project Fund and used by the
City for payment of the costs of extending and improving the
System, and the payment of costs associated therewith, including
any costs for engineering, financing, financial consultation,
administrative, auditing and legal expenses.
(c) Any surplus proceeds, including the investment earnings
derived from the investment of monies on deposit in the Project
Fund, from the Obligations remaining on deposit in the Project Fund
after completing the improvements and extensions to the System and
upon the completion of the final accounting as described in Section
22(n) hereof, shall be transferred to the Debt Service Fund to
redeem, in inverse order of maturity, the Obligations owned by
TWDB. The foregoing notwithstanding, it is further provided,
however, that any interest earnings on monies on deposit in the
Project Fund which are required to be rebated to the United States
of America pursuant to Section 25 hereof in order to prevent the
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Obligations from being arbitrage bonds shall be transferred to the
"Rebate Fund" hereinafter established and shall not be considered
as interest earnings for purposes of this subsection.
Section 13. DEPOSITS OF PLEDGED REVENUES; INVESTMENTS. (a)
That the Pledged Revenues shall be deposited in the Debt Service
Fund and the Subordinate Lien Reserve Fund when and as required by
this Ordinance.
(b) That money in either the Debt Service Fund, the
Subordinate Lien Reserve Fund or the Project Fund may, at the
option of the City, be invested in authorized investments as set
forth in the Investment Act; provided that all such deposits and
investments shall have a par value (or market value when less than
par) exclusive of accrued interest at all times at least equal to
the amount of money credited to such Funds, and 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. Money in the Subor-
dinate Lien Reserve Fund shall not be invested in securities
maturing later than the final maturity of the Obligations and
Additional Obligations. Such investments shall be valued in terms
of current market value as of the last day of each year, except
that direct obligations of the United States (State and Local
Government Series) in book-entry form shall be continuously valued
at their par or face principal amount Such investments shall be
sold promptly when necessary to prevent any default in connection
with the Previously Issued Subordinate Lien Obligations, the
Obligations or Additional Obligations
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Section 14. FUNDS SECURED. That money in all such Funds, to
the extent not invested, shall be secured in the manner prescribed
by law for securing funds of the City.
Section 15. DEBT SERVICE REQUIREMENTS. (a) That promptly
after the delivery of any installment of the Obligations the City
shall cause to be deposited to the credit of the Debt Service Fund
any accrued interest received from the sale and delivery thereof,
and any such deposit shall be used to pay part of the interest next
coming due on the Obligations.
(b) That in addition to all amounts heretofore required to be
deposited to the credit of the Debt Service Fund, the City shall
transfer from the Pledged Revenues and deposit to the credit of the
Debt Service Fund the amounts, at the times, as follows:
(1) such amounts, deposited in approximately equal
monthly installments on or before the 25th day of each month
hereafter, commencing with the month during which the
Obligations are delivered, or the month thereafter if delivery
is made after the 25th day thereof, as will be sufficient,
together with other amounts, if any, then on hand in the Debt
Service Fund and available for such purpose, to pay the
interest scheduled to accrue and come due on the Obligations
on the next succeeding interest payment date; and
(2) such amounts, deposited in approximately equal
monthly installments on or before the 25th day of each month
hereafter, commencing with the month during which the
Obligations are delivered, or the month thereafter if delivery
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is made after the 25th day thereof, as will be sufficient,
together with other amounts, if any, then on hand in the Debt
Service Fund and available for such purpose, to pay the
principal scheduled to mature and come due on the Obligations,
on the next succeeding principal payment date.
SECTION 16. RESERVE REQUIREMENTS That the City covenants,
subject to the covenants set forth in Section 25 hereof relating to
the tax-exempt status of the Obligations, that the Subordinate Lien
Reserve Fund shall be maintained in an amount no less than the
average annual principal and interest requirements of the
outstanding Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations (the "Required Amount"), to
be funded in the manner described below. On or before the 25th day
of each month hereafter, commencing on the 25th day of the month of
the initial delivery of the Obligations, or, if the initial
delivery of any of the Obligations occurs on or after the 25th day
of such month, on the 25th day of the month next succeeding such
initial delivery, there shall be deposited into the Subordinate
Lien Reserve Fund, 1/60th of the Required Amount, until the
Subordinate Lien Reserve Fund contains the Required Amount. When
and so long as the money and investments in the Subordinate Lien
Reserve Fund are not less than the Required Amount, no deposits
need be made to the credit of the Subordinate Lien Reserve Fund.
When and if the Subordinate Lien Reserve Fund at any time contains
less than the Required Amount due to any cause or condition other
than the issuance of Additional Obligations, then, subject and
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subordinate to making the required deposits to the credit of the
Debt Service Fund, such deficiency shall be made up as soon as
possible from the next available Pledged Revenues, or from any
other sources available for such purpose The City may, at its
option, withdraw and use for any lawful purpose, all surplus in the
Subordinate Lien Reserve Fund over the Required Amount. The City
hereby covenants that from available moneys it shall deposit to the
credit of the Subordinate Lien Reserve Fund such as is necessary to
maintain the Subordinate Lien Reserve Fund in an amount equal to
the Required Amount.
Section 17. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a) That
if on any occasion there shall not be sufficient Pledged Revenues
to make the required deposits into the Debt Service Fund and the
Subordinate Lien Reserve Fund, then such deficiency shall be made
up as soon as possible from the next available Pledged Revenues, or
from any other sources available for such purpose.
(b) That, subject to making the required deposits to the
credit of the Debt Service Fund and the Subordinate Lien Reserve
Fund when and as required by this Ordinance, or any ordinance
authorizing the issuance of Additional Obligations, the excess
Pledged Revenues may be used by the City for any lawful purpose not
inconsistent with the City's Charter.
Section 18. PAYMENT That on or before September 1, 1991,
and semiannually on or before each March 1 and September 1
thereafter while any of the Previously Issued Subordinate Lien
Obligations, the Obligations or Additional Obligations are
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outstanding and unpaid, the City shall make available to the Paying
Agent/Registrar therefor, out of the Debt Service Fund (and the
Subordinate Lien Reserve Fund, if necessary) money sufficient to
pay such interest on and such principal of the Previously Issued
Subordinate Lien Obligations, the Obligations and Additional
Obligations as shall become due and mature on such dates, respec-
tively, at maturity or by redemption prior to maturity. The Paying
Agent/Registrar shall destroy all paid Obligations and furnish the
City with an appropriate certificate of cancellation or destruc-
tion.
Section 19. FINAL DEPOSITS; GOVERNMENT OBLIGATIONS (a)
That any Previously Issued Subordinate Lien Obligation, Obligation
or Additional Obligation shall be deemed to be paid, retired and no
longer outstanding within the meaning of this Ordinance when
payment of the principal of, redemption premium, if any, on such
Previously Issued Subordinate Lien Obligation, Obligation or
Additional Obligation, plus interest thereon to the due date
thereof (whether such due• date 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 (ii) shall have
been provided for by irrevocably depositing with, or making
available to, a paying agent (or escrow agent) therefor, in trust
and irrevocably set aside exclusively for such payment, (1) money
sufficient to make such payment or (2) Government Obligations, as
hereinafter defined in this Section, certified by an independent
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public accounting firm of national reputation, to mature as to
principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient money
to make such payment, and all necessary and proper fees,
compensation, and expenses of such paying agent pertaining to the
Previously Issued Subordinate Lien Obligations, Obligations or
Additional Obligations with respect to which such deposit is made
shall have been paid or the payment thereof provided for to the
satisfaction of such paying agent. At such time as a Previously
Issued Subordinate Lien Obligation, an Obligation or any Additional
Obligation shall be deemed to be paid hereunder, as aforesaid, it
shall no longer be secured by or entitled to the benefit of this
Ordinance or a lien on and pledge of the Pledged Revenues, and
shall be entitled to payment solely from such money or Government
Obligations.
(b) That any moneys so deposited with a paying agent may, at
the direction of the City, also be invested in Government
Obligations, maturing in the amounts and times as hereinbefore set
forth, and all income from all Government Obligations in the hands
of the paying agent pursuant to this Section which is not required
for the payment of the Previously Issued Subordinate Lien
Obligations, the Obligations and Additional Obligations, the
redemption premium, if any, and interest thereon, with respect to
which such money has been so deposited, shall be remitted to the
City.
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(c) That the City covenants that no deposit will be made or
accepted under clause (a)(ii) of this Section and no use made of
any such deposit which would cause the Previously Issued
Subordinate Lien Obligations, the Obligations or any Additional
Obligations to be treated as arbitrage bonds within the meaning of
section 148 of the Code.
(d) That for the purpose of this Section, the term
"Government Obligations" shall mean direct obligations of the
United States of America, including obligations the principal of
and interest on which are unconditionally guaranteed by the United
States of America.
(e) That notwithstanding any other provisions of this
Ordinance, all money or Government Obligations set aside and held
in trust pursuant to the provisions of this Section for the payment
of Previously Issued Subordinate Lien Obligations, Obligations and
Additional Obligations, the redemption premium, if any, and
interest thereon, shall be applied to and used for the payment of
such Previously Issued Subordinate Lien Obligations, Obligations
and Additional Obligations, the redemption premium, if any, and
interest thereon.
Section 20. ADDITIONAL OBLIGATIONS. (a) That 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
Prior Lien Obligations, in the manner and for the purposes
described in the ordinances authorizing the issuance thereof.
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(b) That 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 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
Previously Issued Subordinate Lien Obligations, Obligations,
Additional Obligations or other obligations of the City incurred in
connection with the ownership or operation of the System. Such
Additional 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 the
Previously Issued Subordinate Lien Obligations, and the Obliga-
tions, and all other outstanding Additional Obligations, from a
lien on and pledge of the Pledged Revenues.
(c) That the Debt Service Fund and the Subordinate Lien
Reserve Fund established by this Ordinance shall secure and be used
to pay all Additional Obligations as well as the Previously Issued
Subordinate Lien Obligations and the Obligations. However, each
ordinance under which Additional 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 Additional Obligations to be
deposited to the credit of the Debt Service Fund, the City shall
deposit to the credit of the Debt Service Fund at least such
amounts as are required for the payment of all principal of and
interest on said Additional Obligations then being issued, as the
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same come due; and that the aggregate amount to be accumulated and
maintained in the Subordinate Lien Reserve Fund shall be increased
(if and to the extent necessary) to an amount not less than the
average annual principal and interest requirements of all
Previously Issued Subordinate Lien Obligations, Obligations and
Additional Obligations which will be outstanding after the issuance
and delivery of the then proposed Additional Obligations; and that
the required additional amount shall be so accumulated by the
deposit in the Subordinate Lien Reserve Fund of all or any part of
said required additional amount in cash immediately after the
delivery of the then proposed Additional Obligations, or, at the
option of the City, by the deposit of said required additional
amount (or any balance of said required additional amount not
deposited in cash as permitted above) in monthly installments, made
on or before the 25th day of each month following the delivery of
the then proposed Additional Obligations, of not less than 1/60 of
said required additional amount (or 1/60 of the balance of said
required additional amount not deposited in cash as permitted
above).
(d) That all calculations of average annual principal and
interest requirements made pursuant to this Section shall be made
as of and from the date of the Additional Obligations then proposed
to be issued.
Section 21. FURTHER REQUIREMENTS FOR ADDITIONAL OBLIGATIONS.
That Additional Obligations shall be issued only in accordance with
this Ordinance, but notwithstanding any provisions of this
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Ordinance to the contrary, no installment, Series or issue of
Additional Obligations shall be issued or delivered unless:
(a) The Mayor 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 Prior Lien Obligations, Previously Issued Subordinate
Lien Obligations, Obligations and Additional Obligations, and the
ordinances authorizing same, and that the Debt Service Fund and the
Subordinate Lien Reserve Fund each contains the amount then
required to be therein.
(b) An independent certified public accountant, or
independent firm of certified public accountants, signs a written
certificate to the effect that, during either the next preceding
year, or any twelve consecutive calendar month period ending not
more than ninety days prior to the date of the then proposed
Additional Obligations, the Net Revenues were, in the opinion
thereof, at least equal to (1) 1.25 times the average annual
principal and interest requirements and (2) 1.1 times the principal
and interest requirements for the year during which such
requirements are scheduled to be the greatest (each computed on a
fiscal year basis), of all Prior Lien Obligations, Previously
Issued Subordinate Lien Obligations, Obligations and Additional
Obligations to be outstanding after the issuance of the then
proposed Additional Obligations, reasonably anticipated to be paid
from the Pledged Revenues.
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Section 22. GENERAL COVENANTS. That 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 this Ordinance, and each ordinance authorizing the
issuance of Additional Obligations, and in each and every
Obligation and Additional Obligation, it will promptly pay or cause
to be paid the principal of and interest on every Obligation and
Additional Obligation, on the dates and in the places and manner
prescribed in such ordinances and Obligations or Additional
Obligations; and it will, at the time and in the manner prescribed,
deposit or cause to be deposited the amounts required to be
deposited into the Debt Service Fund and the Subordinate Lien
Reserve Fund; and any owner of the Obligations or Additional
Obligations may require the City, its officials and employees to
carry out, respect or enforce the covenants and obligations of this
Ordinance, or any ordinance authorizing the issuance of Additional
Obligations, by all legal and equitable means, including`
specifically, but without limitation, the use and filing of
mandamus proceedings, in any court of competent jurisdiction,
against the City, its officials and employees.
(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 issue the
Obligations; that all action on its part for the issuance of the
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e
A
Obligations has been duly and effectively taken, and that the
Obligations in the hands of the owners 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 owners of Prior Lien Obligations,
Previously Issued Subordinate Lien Obligations, Obligations and
Additional 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 Previously Issued
Subordinate Lien Obligations, Obligations and Additional
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
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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 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
Previously Issued Subordinate Lien Obligations, the Obligations or
any Additional 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 revenues of the System, unless made from
surplus or excess Pledged Revenues as permitted in Section 17(b)
(f) FURTHER ENCUMBRANCE. It, while the Previously Issued
Subordinate Lien Obligations, the Obligations or any Additional
Obligations are outstanding and unpaid, will not additionally
encumber the Pledged Revenues in any manner, except with respect to
the Prior Lien Obligations and except as permitted in this
Ordinance in connection with Additional Obligations, unless said
encumbrance is made junior and subordinate in all respects to the
liens, pledges, covenants and agreements of this Ordinance; but the
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right of the~City to issue revenue bonds payable from a lien on the
Pledged Revenues junior and subordinate in all respects to the
Previously Issued Subordinate Lien Obligations, the Obligations and
any Additional Obligations is specifically recognized and retained.
(g) SALE OR DISPOSAL OF PROPERTY It, while the Prior Lien
Obligations, the Previously Issued Subordinate Lien Obligations,
the Obligations or any Additional Obligations are outstanding and
unpaid, 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 further that
whenever the City deems it necessary to dispose of any other pro-
perty, 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. 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
Prior Lien Obligations, Previously Issued Subordinate Lien
Obligations, Obligations and Additional Obligations.
(h) INSURANCE. (1) It shall cause to be insured such parts
of the System as would usually be insured by 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 corporations operating like
properties, including, to the extent reasonably obtainable, fire
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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 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 bondholders 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, 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 Prior
Lien Obligations, the Previously Issued Subordinate Lien
Obligations, the Obligations and Additional Obligations,
ratably in the proportion that the outstanding principal of
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each series of Prior Lien Obligations, the Previously Issued
Subordinate Lien Obligations, Obligations or Additional
Obligations bear to the total outstanding principal of all
Prior Lien Obligations, the Previously Issued Subordinate Lien
Obligations, the Obligations and Additional 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 Prior Lien Obligations,
Previously Issued Subordinate Lien Obligations, Obligations or
Additional Obligations is subject to redemption, then for the
purchase on the open market and retirement of said Prior Lien
Obligations, Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations in the same proportion
as prescribed in the foregoing clause (i), to the extent
practicable; provided that the purchase price for any Prior
Lien Obligation, Previously Issued Subordinate Lien
Obligations, Obligation or Additional Obligation shall not
exceed the redemption price of such Prior Lien Obligation,
Previously Issued Subordinate Lien Obligations, Obligation or
Additional 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
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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 either to self-insure or enter into
co-insurance 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.
(i) RATE COVENANT. The City Council of the City will fix,
establish, maintain and collect such rates, charges and fees for
the use and availability of the System at all times as are
F
necessary to produce Gross Revenues sufficient (1) to pay all
current operation and maintenance expenses of the System, (2) to
produce Net Revenues for each year at least equal to the principal
and interest requirements of all then outstanding Prior Lien
Obligations, Previously Issued Subordinate Lien Bonds, the
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Obligations and Additional Obligations reasonably anticipated to be
paid from the Pledged Revenues, and (3) to pay all other
f
obligations of the System reasonably anticipated to be paid from
the Pledged Revenues.
(j) RECORDS. It will keep proper books of record and account
in which full, true and correct entries will be made of all
dealings, activities and transactions relating to the System, the
Pledged Revenues and the Funds created pursuant to this Ordinance,
and all books, documents and vouchers relating thereto shall at all
reasonable times be made available for inspection upon request of
any bondholder.
(k) AUDITS. (1) After the close of each year while any of
the Prior Lien Obligations, the Previously Issued Subordinate Lien
Bonds, the Obligations or any Additional Obligations are outstand-
ing, an audit will be made of the books and accounts relating to
the System and the Pledged Revenues by an independent certified
public accountant or an independent firm of certified public
accountants. As soon as practicable after the close of each such
year, and when said audit has been completed and made available to
the City, a copy of such audit for the preceding year shall be
mailed to the Municipal Advisory Council of Texas and to any holder
of 5% or more in aggregate principal amount of then outstanding
Prior Lien Obligations, Previously Issued Subordinate Lien
Obligations, Obligations and Additional Obligations who shall so
request in writing. Such annual audit reports shall be open to the
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inspection of the bondowners and their agents and representatives
at all reasonable times.
(2) For so long as the State of Texas owns any of the
Obligations, the City shall mail a copy of the audit provided for
in subsection (k)(1) of this Section to the TWDB. In addition,
monthly operating statements for the System shall be delivered to
the TWDB as long as the State of Texas owns any of the Obligations,
and the monthly operating statement shall be in such detail as
requested by the Development Fund Manager of the TWDB until this
requirement is waived by said Development Fund Manager
(1) 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.
(m) 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.
(n) FINAL ACCOUNTING. The City shall render a final
accounting to the TWDB in reference to the total cost incurred by
the City for improvements and extensions to the System which were
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financed by the issuance of the Obligations, together with a copy
of "as built" plans of such improvements and extensions upon
completion.
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(o) COMPLIANCE WITH THE TEXAS WATER DEVELOPMENT BOARD'S RULES
AND REGULATIONS. The City covenants to comply with the rules and
regulations of the TWDB, and to maintain insurance on the System in
such amount as may be required by TWDB.
Section 23. AMENDMENT OF ORDINANCE. (a) That the owners of
Previously Issued Subordinate Lien Obligations, the Obligations and
Additional Obligations aggregating in principal amount 51% of the
aggregate principal amount of then outstanding Previously Issued
Subordinate Lien Obligations, the Obligations and Additional
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 owners of all of the Previously Issued Subordinate Lien
Obligations, the Obligations and Additional 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 Previously Issued Subordinate Lien Obligations,
the Obligations or Additional Obligations so as to•
(1) Make any change in the maturity of the outstanding
Previously Issued Subordinate Lien Obligations, the
Obligations or Additional Obligations;
(2) Reduce the rate of interest borne by any of the
outstanding Previously Issued Subordinate Lien
Obligations, Obligations or Additional Obligations;
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(3) Reduce the amount of the principal payable on the
outstanding Previously Issued Subordinate Lien
Obligations, Obligations or Additional Obligations;
(4) Modify the terms of payment of principal of or interest
on the outstanding Previously Issued Subordinate Lien
Obligations, Obligations or Additional Obligations, or
impose any conditions with respect to such payment;
(5) Affect the rights of the owners of less than all of the
Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations then outstanding;
(6) Affect the rights of the owners of the Prior Lien
Obligations;
(7) Change the minimum percentage of the principal amount of
Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations necessary for
consent to such amendment.
(b) That if at any time the City shall desire to amend the
Ordinance under this Section, the City shall cause notice of the
proposed amendment to be published in a financial newspaper or
journal published 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 at the
principal office of the Paying Agent/Registrar for inspection by
all holders of Prior Lien Obligations, Previously Issued
Subordinate Lien Obligations, Obligations and .Additional
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Obligations. Such publication is not required, however, if notice
in writing is given to each holder of Prior Lien Obligations,
Previously Issued Subordinate Lien Obligations, Obligations and
Additional Obligations.
(c) That 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 owners of at least 51% in
aggregate principal amount of all Previously Issued Subordinate
Lien Obligations, Obligations and Additional Obligations then out-
standing, 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) That 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 owners of then outstanding
Previously Issued Subordinate Lien Obligations, Obligations and
Additional Obligations and all future Additional Obligations shall
thereafter be determined, exercised and enforced hereunder, subject
in all respects to such amendments.
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(e) That any consent given by the owner of a Previously
Issued Subordinate Lien Obligation, Obligation or Additional
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 owners of the same
Previously Issued Subordinate Lien Obligation, Obligation or
Additional 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 owner who gave such consent, or
by a successor in title, by filing notice thereof with the Paying
Agent/Registrar and the City, but such revocation shall not be
effective if the owners of 51% in aggregate principal amount of the
then outstanding Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations as in this Section defined
have, prior to the attempted revocation, consented to and approved
the amendment.
(f) That for the purpose of this Section, the ownership of
Previously Issued Subordinate Lien Obligations, Obligations or
Additional Obligations shall be as shown by the registration books
of the registrar therefor.
(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
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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 owners of the Prior Lien
Obligations, the Obligations or Additional Obligations;
(3) 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 Obligations and each series of Additional
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 Obligations issued after the date of the
adoption of such modification.
Section 24. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) REPLACEMENT BONDS. In the event any outstanding
Obligation 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
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destroyed Obligation, in replacement for such Obligation in the
manner hereinafter provided
(b) APPLICATION FOR REPLACEMENT BONDS. Application for
replacement of damaged, mutilated, lost, stolen, or destroyed
Obligations shall be made to the Paying Agent/Registrar. In every
case of loss, theft, or destruction of an Obligation, the applicant
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 an Obligation, the applicant shall furnish to the
City and to the Paying Agent/Registrar evidence to their satis-
faction of the loss, theft, or destruction of such Obligation, as
the case may be. In every case of damage or mutilation of an
Obligation, the applicant shall surrender to the Paying
Agent/Registrar for cancellation the Obligation so damaged or muti-
lated.
(c) NO DEFAULT OCCURRED. Notwithstanding the foregoing
provisions of this Section, in the event any such 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 Obligation, the City may authorize the payment of
the same (without surrender thereof except in the case of a damaged
or mutilated Obligation) instead of issuing a replacement
Obligation, provided security or indemnity is furnished as above
provided in this Section.
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(d) CHARGE FOR ISSUING REPLACEMENT BONDS. Prior to the
issuance of any replacement bond, the Paying Agent/Registrar shall
charge the owner of such Obligation 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 Obligation is lost, stolen, or destroyed shall
constitute a contractual obligation of the City whether or not the
lost, stolen, or destroyed Obligation 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 Obligations duly issued under this Ordinance.
(e) AUTHORITY FOR ISSUING REPLACEMENT BONDS. In accordance
with Section 6 of Art. 717k-6, V.A.T.C.S., 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(d) of
this Ordinance for Obligations issued in exchange for other Obliga-
tions.
Section 25. TAX COVENANTS. The Issuer covenants to take any
action to assure, or refrain from any action which would adversely
affect, the treatment of the Obligations as obligations described
in section 103 of the Code, the interest on which is not includable
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in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10
percent of the proceeds of the Obligations (less amounts
deposited to a reserve fund, if any) are used for any "private
business use", as defined in section 141(b) (6) of the Code or,
if more than 10 percent of the proceeds are so used, that
amounts, whether or not received by the Issuer, 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 Obligations, in
contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that
the "private business use" described in subsection (a) hereof
exceeds 5 percent of the proceeds of the Obligations (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;
(c) 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 Obligations (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to
finance loans to persons, other than state or local
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governmental units, in contravention of section 141(c) of the
Code;
(d) to refrain from taking any action which would
otherwise result in the Obligations being treated as "private
activity bonds" within the meaning of section 141(b) of the
Code;
(e) to refrain from taking any action that would result
in the Obligations being "federally guaranteed" within the
meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of
the Obligations, 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 Obligations, other than investment property
acquired with --
(1) proceeds of the Obligations invested for a
reasonable temporary period of 3 years or less until such
proceeds are needed for the purpose for which the
Obligations are issued,
(2) amounts invested in a bona fide debt service
fund, within the meaning of section 1.103-13(b)(12) of
the Treasury Regulations, and
(3) amounts deposited in any reasonably required
reserve or replacement fund to the extent such amounts do
not exceed 10 percent of the proceeds of the Obligations;
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(g) to otherwise restrict the use of the proceeds of the
Obligations or amounts treated as proceeds of the Obligations,
as may be necessary, so that the Obligations 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);
(h) to pay to the United States of America at least once
during each five-year period (beginning on the date of
delivery of the Obligations) an amount that is at least equal
to 90 percent of the "Excess Earnings", within the meaning of
section 148 (f) of the Code and to pay to the United States of
America, not later than 60 days after the Obligations have
been paid in full, 100 percent of the amount then required to
be paid as a result of Excess Earnings under section 148 (f) of
the Code; and
(i) to maintain such records as will enable the Issuer
to fulfill its responsibilities under this section and section
148 of the Code and to retain such records for at least six
years following the final payment of principal and interest on
the Obligations.
It is the understanding of the Issuer 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 Obligations, the
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Issuer will not be required to comply with any covenant contained
herein to the extent that such modification or expansion, in the
opinion of nationally-recognized bond counsel, will not adversely
affect the exemption from federal income taxation of interest on
the Obligations 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 Obligations,
the Issuer 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 Obligations under section 103 of the Code.
In addition, TWDB has informed the City that approximately
five-sixths of the amount of the purchase price of each installment
of the Obligations will be derived from amounts provided by the
United States Government under the Water Quality Act of 1987 and
the one-sixth of the amount of the purchase price of each
installment of the Obligations will be provided from amounts which
are or will be transferred proceeds of bonds to be issued by TWDB.
The City will take all reasonable actions specified in any written
instructions provided to the City by TWDB to assure that the
interest on said bonds, or any bonds issued to refund said bonds,
shall be excludable from the gross income of the holders there for
federal income tax purposes.
Section 26. APPROVAL AND REGISTRATION OF BONDS. That the
proper officials of the City are hereby authorized to have control
of the Obligations and all necessary records and proceedings
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t
pertaining to the Obligations 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
Obligations, said Comptroller of Public Accounts (or a deputy
designated in writing to act for said Comptroller) shall manually
sign the Comptroller's Registration Certificate accompanying the
Obligations, and the seal of said Comptroller shall be impressed,
or placed in facsimile, on each such certificate.
Section 27. SALE. (a) The Obligations are hereby sold to
TWDB for the price of par. The Obligations may be delivered to
TWDB in accordance with the schedule set forth in Section 2 of this
Ordinance, and paid for in installments and at such times as shall
be approved by the City Manager, provided none of the Obligations
shall be so delivered without the City's receiving full payment
therefor. The Obligations initially delivered shall be registered
in the manner described in subsection (c) below.
(b) The City hereby authorizes the City Manager to approve
the form and content of an Offering Memorandum to be filed with the
TWDB, such Offering Memorandum to fully describe the Obligations,
the security therefor and the financial condition of the City.
(c) To facilitate the delivery of the Obligations in
installments to TWDB, the City hereby instructs the Paying
Agent/Registrar to hold the Obligations in escrow, and therefore
the Obligations shall be initially registered in the name of the
Paying Agent/Registrar. To evidence such escrow arrangement, the
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City Manager is hereby authorized to execute and deliver, and cause
to be attested and sealed, such instruments as may be necessary to
memorialize such escrow arrangement. Upon receipt of advice from
the City from time to time that money is available from TWDB, the
Paying Agent/Registrar shall deliver Obligations to the TWDB in
accordance with the instructions of the City. The Paying
Agent/Registrar shall complete the "Date of Delivery" on each
installment of Obligations so delivered to TWDB as provided in
Section 5(e) of this Ordinance, and interest on each such
installment of Obligations so delivered shall commence from such
date.
(d) It is the intent of the parties to the sale of the
Obligations that if TWDB ever determines to sell all or a part of
the Obligations, it shall notify the City at least 60 days prior to
the sale of the Obligations of the decision to so sell the
Obligations.
Section 28. IMMEDIATE EFFECT. That this Ordinance shall be
effective immediately from and after its passage in accordance with
the provisions of Section 2 of Chapter 25 of the Charter of the
City, and it is accordingly so ordained.
ADOPTED this 27th day of August, 1991.
Mayor
ATTEST: .,
City -Secretary
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APPROVED AS TO FORM AN.D LEGALITY:
City ,Attorney 'r,.
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THE STATE OF TEXAS ,
COUNTIES OF TARRANT AND DENTON
CITY OF FORT WORTH ,
I, the undersigned, City Secretary of the City of Fort Worth,
in the State of Texas, do hereby certify that I have compared the
attached and foregoing excerpt from the minutes of the regular
meeting of the City Council of the City of Fort Worth, Texas which
was held on August 27, 1991, and of an ordinance which was duly
passed at said meeting, and that said copy is a true and correct
copy of said excerpt and the whole of said ordinance. Said meeting
was open to the public, and public notice of the time, place and
purpose of said meeting was given, all in accordance with Vernon's
Annotated Civil Statutes, Article 6252-17, as amended.
In testimony whereof, I have set my hand and have hereunto
affixed the seal of said City of Fort Worth, this 27th day of
August, 1991.
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