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HomeMy WebLinkAboutOrdinance 9586'~ ~ ,. ~. ~~' ,~ ,~ ~~ ' ORDINANCE N0. ~~_ ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 1986. THE STATE OF TEXAS COUNTY OF TARRANT CITY OF FORT WORTH WHEREAS, the City of Fort Worth, Texas (the "City") has heretofore issued 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 and City of Fart Worth, Texas Water and Sewer System Revenue Bonds, Series 1985 (together, the "Previously Issued Parity Bonds"); and WHEREAS, in the ordinance authorizing the issuance of the Previously Issued Parity Bonds the City reserved the right to issue revenue bonds on a parity with such outstand- ing Previously Issued Parity Bonds; and WHEREAS, the City has determined it is appropriate and necessary to issue parity bonds; and WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to Vernon's Ann. Civ. St. of Texas, 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 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS. ~~ ,~ 't ~~ ~i~-' Section 1. BONDS AUTHORIZED. That the City's bonds (the "Series 1986 Bonds") are hereby authorized to be issued in the aggregate principal amount of $16,600,000 for the purpose of providing $4,600,000 for extending and improving the City's water system and $12,000,000 for extending and improving the City's sewer system. The Series 1986 Sonds shall be designated as the "City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1986". The Series 1986 Bonds are "Additional Bonds" as such term is used in the ordinance authorizing the Series 1984 Bonds, and are in all respects on a parity with the Previously Issued Parity Bonds. Section 2. DATE AND MATURITIES. That the Series 1986 Bonds shall be dated March 1, 1986, shall be in the denomi- nation of $5,000 each, or any integral multiple thereof, shall be numbered consecutively from one 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 YEARS AMOUNTS YEARS AMOUNTS 1988 300,000 1998 800,000 1989 400,000 1999 800,000 1990 400,000 2000 900,000 1991 400,000 2001 1,000,000 1992 500,000 2002 1,100,000 1993 500,000 2003 1,200,000 1994 500,000 2004 1,300,000 1995 600,000 2005 1,400,000 1996 700,000 2006 1,500,000 1997 700,000 2007 1,600,000 Section 3. RIGHT OF PRIOR REDEMPTION. The City 2 v ,~ reserves the right to redeem the Series 1986 Bonds maturing on or after March 1, 1998, in whole or in part, on March 1, 1997, or on any interest payment date thereafter, for the principal amount thereof and accrued interest thereon to the date fixed for redemption. The years of maturity of the Series 19$6 Bonds called for redemption at the option of the City prior to stated maturity shall be selected by the City The Series 1986 Bonds or ,portions thereof redeemed within a maturity shall be selected by lot 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 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 City with the Paying AgentjRegistrar for the payment of the required redemption price for the Series 1986 Bonds or the portions thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemp- tion. If such written notice of redemption is given, and if due provision for such payment is made, all as provided above, the Series 1986 Bonds, or the portions thereof which are to be so redeemed, thereby automatically shall be redeemed prior to their scheduled maturities, and shall not 3 .. ~w . , '~~ ~;~ 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 Series 1986 Bonds or any portion thereof. If a portion of any Series 1986 Bond shall be redeemed a substitute Series 1986 Bond or Series 1986 Bonds having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in 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 Series 1986 Bonds scheduled to .mature during the years, respectively, set forth below 'shall bear interest at the following rates per annum Bonds maturing in the year 1988, Bonds maturing in the year 1989, o Bonds maturing in the year 1990, Bonds maturing in the year 1991, Bonds maturing in the year 1992, Bonds maturing in the year 1993, Bonds maturing in the year 1994, a Bonds maturing in the year 1995, ~~% Bonds maturing in the year 1996, ~~~--% Bonds maturing in the year 1997, ~i, ~_% 0 4 ~ ~: Bonds maturing in the year 1998, Bonds maturing in the year 1999, (~, _% Bonds maturing in the year 2000, '" % Bonds maturing in the year 2001, Bonds maturing in the year 2002, o Bonds maturing in the year 2003 , Bonds maturing in the year 2004, 0~% Bonds maturing in the year 2005, ~l'o yU Bonds maturing in the year 2006, Bonds maturing in the year 2007, Said interest shall be payable to the registez~ed owner of any such Series 1986 Bond in the manner provided and on the dates stated in the FORM OF BOND set forth in this Ordi- nance Section 5. (a) The City shall keep or cause to be kept at the principal corporate trust office of Manufacturers Hanover Trust Company, New York, New York, or such other bank, trust company, financial institution, or ether. agency named in accordance with the provisions of (g) of this Section hereof (the "Paying Agent/Registrar") books or records of the registration and transfer of the Series 1986 Bonds (the "Registration Books"), and the City hereby appoints the Paying Agent/Registrar~as its registrar and transfer agent to keep such books or records and make such transfers and registrations under such reasonal~Te regula- tions 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 t:he duty o£ the Paying Agent/Registrar to obtain from the registered owner and record in the Registration Books the address of such registered owner of each bond to which pa}ltnents with 5 ;1 ~ ~e.. + ' "! ~ ~. d? ~~ respect to the Series 1986 Bonds 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 F3ooks confi- dential and, unless otherwise requirecl by law, shall not permit their inspection by any other entity. Registration of each Series 1986 Bond may be transferred in the Registra- tion Books only upon presentation and surrender of such bond to the Paying Agent/Registrar for transfer of registration and cancellation, together with proper written instruments of assignment, in form and with guarantee oi: signatures satisfactory to the Paying Agent/Registrar, evidencing the assignment of the bond, or any portion thereof in any integral multiple of $5,000, to the assignee or assignees thereof, and the right of such assignee or assignees to have the bond or any such .portion thereof registered in the name of such assignee or assignees.. Upon the assignment and transfer of any Series 1986 Bond or any portion thereof, a new substitute bond or bonds shall be issued in exchange therefor in the manner herein provided. (b) The entity in whose name any Serie~~ 1986 Bond shall be registered in the Registration Books at any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or not suclx bond shall be overdue, and the City and the Paying Agerit/Registrar 6 6t. ~ • ., "~Y ~ti.. si$. ~:J,. ~. ~..: 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. (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 Series 1986 Bonds, and to act as its agent to exchange or replace Series 1986 Bonds, all as provided in this Ordinance The Paying Agent/Regis- tear shall keep proper records of all payments made by the City and the Paying Agent/Registrar with respect to the Series 1986 .Bonds, and of all exchanges of such bonds, and all replacements of such bonds, as provided in this Ordi- Hance. (d) Each Series 1986 Bond 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 balance or principal amount thereof, may, upon surrender c>f such bond at the principal corporate trust office of the Paying 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 7 r +~ ~ z., f, or representatives, with guarantee of signatures satis- factory to the Paying Agent/Registrar, at the option of the registered owner or such assignee or assignees, as appro- priate, 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 denomination of $5,000, or any integral multiple of $5,000 (subject to the require- ment 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 balance or principal amount of any Series 1986 Bond or Bonds so surrendered, and payable to the appropriate registered owner, assignee, or assignees, as the case may be If a portion of any Series 1986 Bond 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 princi- pal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon surrender thereof for cancellation If any Series 1986 Bond 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 8 ~~ .. .~ .~: being exchanged. Each substitute bond shall bear a letter and/or number to distinguish it from each other bond. The Paying Agent/Registrar shall exchange or replace Series 1986 Bonds as provided herein, and each fully registered bond or bonds delivered in exchange for or replacement of any Series 1986 Bond or portion thereof as permitted or required by any provision of this Ordinance shall constitute one of the Series 1986 Bonds for all purposes of this Ordinance, and may again be exchanged or replaced It is specifically provided, however, that any Series 1986 Bond delivered in exchange for or replacement of another Series 1986 Bond prior to the first scheduled interest payment date on the Series 1986 Bonds (as stated on the face thereof) shall be dated the same date as such Series 1986 Bond, but each substitute bond so delivered on or after such first sched- uled 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 bond 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 substi- tute bond issued in exchange for or replacement of any Series 1986 Bond or Bonds issued under this Ordinance there 9 ~ ~~ shall be printed thereon a Paying Agent/Registrar's Authen- tication 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 the manner set forth above, and manually sign and date such Certificate, and no such substi- tute bond shall be deemed to be issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all Series 1986 Bonds 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 Series 1986 Bond 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 Series 1986 Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above Paying Agent/Registrar's Authen- tication Certificate, the exchanged or replaced bond shall be valid, incontestable, and enforceable in the same manner and with the same effect as the Series 1986 Bonds which 10 a ~.. _ „° ~~ originally were delivered pursuant to this Ordinance,_ ap- proved 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 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 bond so selected for redemption in whole when such redemption is scheduled to occur within 30 calendar days (e) All Series 1986 Bonds issued in exchange or replacement of any other Series 1986 Bond or portion thereof (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Series 1986 Bonds to be payable only to the registered owners thereof, (ii) may be redeemed prior to their sched- uled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for other Series 1986 Bonds, (v) shall have the characteristics, (vi) shall be signed .and sealed, and (vii) the principal of and interest on the Series 1986 Bonds shall be payable, all as provided, and in the manner re- quired or indicated, in the FORM OF BOND set forth in this Ordinance. 11 `~~ (f) The City shall pay the Paying Agent/Registrar's reasonable and customary fees and charges for making trans- fers of Series 1986 Bonds, but the registered owner of any Series 1986 Bond requesting such transfer shall pay any taxes or other governmental charges required to be paid with respect thereto The registered owner of any Series 1986 Bond requesting any exchange shall pay the Paying Agent/Reg- istrar's reasonable and standard or customary ,fees and charges for exchanging any such bond or portion thereof, together 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 a Series 1986 Bond 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 Series 1986 Bonds 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 Series 1986 Bonds, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services with respect to the transfer or registration of Series 1986 Bonds 12 ,~ 'i . solely to the extent above provided, and with respect to the exchange of Series 1986 Bonds solely to the extent above provided (g) The City covenants with the registered owners of the Series 1986 Bonds that at all times while the Series 1986 Bonds 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 Series 1986 Bonds under this Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and may, at its option, 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 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 super- vision or examination by federal or state Authority, and whose qualifications substantially are similar to the previous Paying Agent/Registrar to act as Paying Agent/Reg- istrar under this Ordinance Upon any change in the Paying 13 J u c,.y ~ ,.. ,. d. :~ ~ 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 Series 1986 Bonds, to the new Paying Agent/Registrar designated and appointed by the City Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Series 1986 Bonds, 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 Series 1986 Bonds, includ- ing the form of the Paying Agent/Registrar's Certificate, the Form of Assignment, and the form of the Comptroller's Registration Certificate to accompany the Series 1986 Bonds 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 . 14 ~a .3 ~ .. NO $ UNITED STATES OF AMERICA STATE OF TEXAS COUNTY 'OF TARRANT CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BOND SERIES 1986 MATURITY DATE INTEREST RATE. ORIGINAL ISSUE DATE CUSIP March 1, 1986 ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF FORT WORTH, IN TARRANT COUNTY, 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 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 September 1, 1986, and semi- annually on each March 1 and September 1 thereafter, except that if the Paying Agent/Registrar's Authentication Certif- icate appearing on the face of this Bond is dated later than September 1, -1986, such interest is payable semiannually on each March 1 and September 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 . 15 Y *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 presenta- tion 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 Manufacturers Hanover Trust Company, New York, New York, 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/Registrar for such purpose as hereinafter provided, and such check shall be sent by the Paying Agent/Registrar by United States mail, postage prepaid, on each such interest payment date, to the registered 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 prin- cipal payment date and interest payment date for this Bond it will make available to the Paying Agent/Registrar the amounts required to provide for the payment, in immediately 16 .~ 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 of like tenor and effect except as to number, principal amount, interest rate, maturity and right of prior redemption, aggregating Sixteen Million Six Hundred Thousand Dollars ($16,600,000) (herein sometimes called the "Bonds"), issued for the purpose of providing $4,600,000 for extending and .improving the Issuer's water system and $12,000,000 for improving and extending the Issuer's sewer system. The Bonds are issuabl.e solely as fully registered bonds, without interest coupons, in the denomination of any integral multiple of $5,000. *THE OUTSTANDING BONDS of this Series maturing on or after March 1, 1998 may be redeemed prior to their scheduled maturities, at the option of the Issuer, in whole, or in part, on March 1, 1997, or on any interest payment date 17 r, thereafter, for the principal amount thereof and accrued interest thereon to the date fixed for redemption The years of maturity of the Bonds called far such redemption shall be selected by the Issuer The Bonds or portions thereof redeemed within a maturity shall be selected by Iot. *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 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 of4 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 18 ,, ~~ 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 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 denomina- tion 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 19 ~. 4 u 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/Reg- istrar, together with proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof is or are to be transferred and registered. The form of Assign- ment 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 20 a ~ t a. Agent/Registrar will be paid by the Issuer In any circum- stance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one request- ing 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/Reg- istrar 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 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 replac- ing; 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 21 ,~ ~. 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 additional parity revenue bonds which also may be made payable from, and secured by a first lien on and pledge of, the Pledged Revenues (as defined in the Ordinance). *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 prn- cipal of and interest on this Bond are payable from, and secured by a first lien on and pledge of, the Pledged Revenues, as defined in the Ordinance authorizing this Series of Bonds, and which include the Net Revenues of the Issuer's combined Water and Sewer System. 22 u IN WITNESS WHEREOF, this Bond has been signed with the imprinted or lithocraphed 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, and t:he official seal of said City ];ias been duly affixed to, printed, litho- graphed or impressed on this Bond CITY OF FORT WORTH, TEXA.> By Mayor ATTEST City Secretary (SEAL) APPROVED AS TO FORM LAND LEGALITY City Attorney FORM OF PAYING AGENTI/REGISTRAR'S AUTHENTICATION CIs'RTIFICATE PAYING AGENT/RECD I STRAR' S AUTHENTICATION CERT I ]? I CATE It is hereby certified that this Bond has been issued under the provisions of the Ordinance described on the face of this Bond; and t:~hat this Bond has been issued in exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of an iss Gae which originally was approved by the Attorney General of the State of Texas and regisi:ered by the 23 t t 3, Comptroller of Public Accounts of the State of Texas.. Dated MANFACTURERS HANOVER TRUST COMPANY, Paying Agent/Regi;strar By Authorized Representative * FORM OF ASSIGNMENT: ASSIGNMENT FOR VALUE RECEIVEIJ, 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, inr~luding zip code of Transferee) the within Bond and all rights thereunder, and L~ereby irrevocably constiltutes and appoints attorney to register the transfer of the within Bond on the books kept for regiistration thereof, with full power of substitution in th~~ premises. Dated: Signature Guarante+'d: NOTICE: Signature ;a) must be guaranteed by a member firm of the New Yo:~rk Stock Exchange or a comm+'~rcial bank or trust company. NOTICE: The signal=ure above must correspond with the name of the Registered Owner as it appears upon the front of this Bond in every pari:icular, without alteration or enlarge- ment or any changE~ whatsoever. 24 ., ,. ** (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) NOTE TO PRINTER: Comptroller of Public Accounts of the State of Texas *¶s to be on reverse side of bond * * ¶ not to be on bond Section 7. DEFINITIONS That, as used in this Ordi- nance, the following terms shall have the meanings set forth below, unless the text hereof specifically indicates other- wise: (a) The term "Additional Bonds" shall mean the addi- tional parity revenue bonds which. the City reserves the 25 .+ r_ right to issue in the future, as provided in this Ordinance (b) The term "Amortization Installment", with respect to any Term Bonds of any series of Additional Bonds, shall mean the amount of money which is required to be deposited into the Mandatory Redemption Account for retirement of such Term Bonds (whether at maturity or by mandatory redemption and including redemption premium, if any) provided that the total Amortization Installments for such Term Bonds shall be sufficient to provide for retirement of the aggregate principal amount of such Term Bonds (c) The term "Bonds" shall mean all Previously Issued Parity Bonds and the Series 1986 Bonds. (d) The term "City" shall mean the City of Fort Worth, in Tarrant County, Texas. (d) The term "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. (f) The term "Mandatory Redemption Account" .shall mean that account within the Interest and Sinking Fund described in Section 14 (c ) of this Ordinance . (g) The term "Net Revenues of the City's Combined Water and Sewer System", and "Net Revenues" shall mean all ' 26 h a, Gross Revenues 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 Bonds or Additional Bonds, 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 (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 (2) any additional revenues, income, re- ceipts, or other resources, including, without 27 p. tz 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 Bonds or Additional 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 "Series 1986 Bonds" shall mean the City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1986, authorized by this Ordinance. (1) 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 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 obliga- tions 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 28 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" (m) The term "Term Bonds" means those Additional Bonds so designated in the ordinance or ordinances authorizing such bonds, which shall be subject to retirement by operation of the Mandatory Redemption Account. (n) 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. Section 8. PLEDGE That the Bonds and any Additional .Bonds are and shall be secured by and payable from a first lien on and pledge of the Pledged Revenues; and the Pledged Revenues are further pledged to the establishment and maintenance of the Interest and Sinking Fund and the Reserve Fund as hereinafter provided. The Bonds and any Additional Bonds are and will be secured by and payable only from the Pledged Revenues, 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 29 J ~ ~ Y+ { 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. Section 10 INTEREST AND SINKING FUND (a) That for the sole purpose of paying the principal of and interest on all Bonds and any Additional Bonds, 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 Interest and Sinking Fund" (hereinafter called the "Interest and Sinking Fund") Monies in said Fund shall be maintained at an official depository bank of the City (b) That within the Interest and Sinking Fund there has been established the Mandatory Redemption Account, into which account shall be credited the Amortization Install- ments which shall be used for the payment of the principal of Term Bonds as the same shall come due, whether by maturity thereof or by redemption, through the operation of the Mandatory Redemption Account as herein provided. Section 11. RESERVE FUND. That there has been created, and established and maintained on the books of the 30 ~~ .. • ,. City, a separate fund to be entitled the "City of Fort Worth, Texas Water and Sewer System Revenue Bonds Reserve Fund" (hereinafter called the "Reserve Fund"). Monies in said Fund shall be used solely for the purpose of retiring the last of any Bonds or Additional Bonds as they become due or paying principal of and interest on any Bonds or Addi- tional Bonds when and to the extent the amounts in the Interest and Sinking Fund are insufficient for such purpose Monies in said Fund shall be initially placed in the Inter- First Bank Fort Worth, N A., Fort Worth, Texas and shall be maintained at an official depository bank of the City Section 12 DEPOSITS OF PLEDGED REVENUES; INVESTMENTS (a) That the Pledged Revenues shall be deposited in the Interest and Sinking Fund and the Reserve Fund when and as required by this Ordinance (b) That money in any such Fund may, at the option of the City, be (A) placed in time deposits or certificates of deposit which (to the extent not insured by the Federal Deposit Insurance Corporation) are secured by obligations of the type described in (.B) hereinbelow, or (B) invested, including investments held in book-entry form, in (i) direct obligations of the United States of America, (ii) obliga- tions guaranteed or insured by the United States of America, which, in the opinion of the Attorney General of the United States, are backed by its full faith and credit or represent its general obligations, or, (iii) to the extent permitted 31 by law, evidences of indebtedness and repurchase agreements issued, insured or guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, United States Postal Service, Farmers Home Administration, Federal Home Loan Mortgage Association; 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 Reserve Fund shall not be invested in securities maturing later than the final matur- ity of the Bonds and Additional Bonds 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 Bonds or Additional Bonds Section 13. 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 14 DEBT SERVICE REQUIREMENTS (a) That 32 ~. :. ,, promptly after the delivery of the Series 1986 Bonds the City shall cause to be deposited to the credit of the Interest and Sinking Fund any accrued interest received from the sale and delivery of the Series 1986 Bonds, and any such deposit shall be used to pay part of the interest next coming due on the Series 1986 Bonds (b) That in addition to all amounts heretofore re- quired to be deposited to the credit of the Interest and Sinking Fund, the City shall transfer from the Pledged Revenues and deposit to the credit of the Interest and Sinking 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 Series 1986 Bonds 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 Interest and Sinking Fund and available for such purpose, to pay the interest scheduled to accrue and come due on the Series 1986 Bonds on the next succeeding interest payment date; (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 Series 1986 Bonds are delivered, or the month 33 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 Interest and Sinking Fund and available for such purpose, to pay the principal scheduled to mature and come due on the Series 1986 Bonds on the next succeeding principal payment date, and (3) such amounts, deposited in monthly install- ments on or before the 25th day of each month as may hereafter be required, as Amortization Installments for Term Bonds (c) OPERATION OF MANDATORY REDEMPTION ACCOUNT. The City shall apply the monies in the Mandatory Redemption Account to the retirement of the Term Bonds required to be retired by mandatory redemption under the provisions of ordinances hereafter passed authorizing Term Bonds, by either redemption or prior purchase in the open market, all in the manner as shall be provided in such ordinances. SECTION 15. Reserve Requirements. That, concurrently with the delivery of the Series 1984 Bonds to the purchasers thereof the City deposited to the credit of the Reserve. Fund, from the proceeds of the Series 1984 Bonds, $5,000,000. The Reserve Fund was considered intact, for the purposes of the Ordinance, during the period ending February 28, 1986, so long as the Reserve Fund contained in cash or 34 ;~ "~ i investments an amount no less than the greater of $5,000,000 or the average annual principal and interest requirements, including Amortization Installments, of the outstanding Bonds and Additional Bonds. Thereafter the City covenanted that the Reserve Fund shall be maintained in an amount equal to the average annual principal and interest requirements (including Amortization Installments) of the outstanding Bonds and Additional Bonds (the "Required Amount"). When and so long as the money and investments in the Reserve Fund are not less than the Required Amount, no deposits need be made to the credit of the Reserve Fund When and if the Reserve Fund at any time contains less than the Required Amount due to any cause or condition other than the issuance of Additional Bonds, then, subject and subordinate to making the required deposits to the credit of the Interest and Sinking 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 Reserve Fund over the Required Amount. The City hereby covenants that from available moneys it shall deposit to the credit of the Reserve Fund such as is neces- sary to maintain the Reserve Fund in an amount equal to the Required Amount Section 16. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a) That if on any occasion there shall not be sufficient 35 ~c~ Pledged Revenues to make the required deposits into the Interest and Sinking Fund and the 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 Interest and Sinking Fund and the Reserve Fund when and as required by this Ordinance, or any ordi- nance authorizing the issuance of Additional Bonds, the excess Pledged Revenues may be used by the City for any lawful purpose not inconsistent with the City's Charter Section I7 PAYMENT OF BONDS AND ADDITIONAL BONDS That on or before September 1, 1986, and semiannually on or before each March 1 and September 1 thereafter while any of the Bonds or Additional Bonds are outstanding and unpaid, the City shall make available to the Paying Agent/Registrar therefor, out of the Interest and Sinking Fund (and the Reserve Fund if necessary) money sufficient to pay such interest on and such principal of the Bonds and Additional Bonds 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 Bonds and Additional Bonds and furnish the City with an appropriate certificate of cancellation or destruction. Section 18 FINAL DEPOSITS; GOVERNMENT OBLIGATIONS (a) That any Bond or Additional Bond shall be deemed to be 36 ~~ paid, retired and no longer outstanding within the meaning. of this Ordinance when payment of the principal of, redemption premium, if any, on such Bond or Additional Bond, 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 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 Bonds and Additional Bonds 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 Bond or Additional Bond 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 37 i w 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 Bonds and Additional Bonds, the redemption premium, if any, and interest thereon, with respect to which such money has been so deposited, shall be remitted to the City. (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 Bonds or any Additional Bonds to be treated as arbitrage bonds within the meaning of Section 103(c)(2) of the Internal Revenue Code of 1954, as amended (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 T .Ordinance, all money or Government Obligations set aside and held in trust pursuant to the provisions of this Section for the payment of Bonds and Additional Bonds, the redemption 38 + f ~ ~ •, ,.r ~ premium, if any, and interest thereon, shall be applied to and used for the payment of such Bonds and Additional Bonds, the redemption premium, if any, and interest thereon Section 19. ADDITIONAL BONDS. (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 additional parity revenue bonds, in accordance with law, in any amounts, for purposes of extending, improving or repairing the System or for the purpose of refunding of any Bonds, Additional Bonds or other obligations of the City incurred in connection with the ownership or operation of the System Such Additional Bonds, 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 Bonds, and all other outstanding Additional Bonds, from a first lien on and pledge of the Pledged Revenues (b) That the Interest and Sinking Fund and the Reserve Fund established by this Ordinance shall secure and be used to pay all Additional Bonds as well as the. Bonds However, each ordinance under which Additional Bonds are issued shall provide and require that, in addition to the amounts re- quired by the provisions of this Ordinance and the provi- sions of any other ordinance or ordinances authorizing Additional Bonds to be deposited to the credit of the Interest and Sinking Fund, the City shall deposit to the 39 .~ , credit of the Interest and Sinking Fund at least such amounts as are required for the payment of all principal of and interest on said Additional Bonds then being issued., as the same come due, and that the aggregate amount to be accumulated and maintained in the Reserve Fund shall be increased (if and to the extent necessary) to an amount not less than the average annual principal and interest require- ments (including Amortization Installments) of ali Bonds and Additional Bonds which will be outstanding after the issu- ance and delivery of the then proposed Additional Bonds; and that the required additional amount shall be so accumulated by the deposit in the Reserve Fund of all or any part of said required additional amount in cash immediately after the delivery of the then proposed Additional Bonds, or, at the option of the City, by the deposit of said required additional amount (or any balance of said required addi- tional 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 Bonds, 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). (c) That all calculations of average annual principal and interest requirements (including Amortization Install- ments) made pursuant to this Section shall be made as of and 40 s from the date of the Additional Bonds then proposed to be i s sued (d) That the principal of all Additional Bonds must be scheduled to be paid or mature on March 1 or September 1 (or both) of the years in which such principal is scheduled to be paid or mature; and all interest thereon must be payable on March 1 and September 1. Section 20 FURTHER REQUIREMENTS FOR ADDITIONAL .BONDS That Additional Bonds shall be issued only in accordance with this Ordinance, but notwithstanding any provisions of this Ordinance to the contrary, no installment, Series or issue of Additional Bonds 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 Bonds and Additional Bonds, and the ordinances authorizing same, and that the Interest and Sinking Fund and the 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 Bonds, the Net Revenues 41 were, in his or its opinion, 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 and including Amortization Installments), of all Bonds and Additional Bonds to be outstanding after the issuance of the then proposed Additional Bonds. Section 21. 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 Bonds, and in each and every Bond and Additional Bond; it will promptly pay or cause to be paid the principal of and interest on every Bond and Additional Bond, on the dates and in the places and manner prescribed in such ordinances and Bonds or Additional Bonds; and it will, at the time and in the manner pre- scribed, deposit or cause to be deposited the amounts required to be deposited into the Interest and Sinking Fund and the Reserve Fund, and any owner of the Bonds or Addi- tional Bonds 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 42 i ~ the issuance of Additional Bonds, 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 Series 1986 Bonds; that all action on its part for the issuance of the Series 1986 Bonds has been duly and effec- tively taken, and that the Series 1986 Bonds 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 facili- ties, and every part thereof, for the benefit of the owners of the Bonds and Additional Bonds, against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the Pledged Revenues to the payment of the Bonds and Additional Bonds 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, 43 r b assessments and governmental charges, if any, which shall be lawfully imposed upon it, or the System; it will pay all lawful claims for rents, royalties, labor, materials and supplies which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's, materialman's or other lien or charge which might or could be prior to the .liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided however, that no such tax, assessment or charge, and that no such claims which might be used as the basis of a mechanic's, laborer's, materialman's or 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 Bonds or any Additional Bonds 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 44 ~ , 1 other than the revenues of the System, unless made from surplus or excess Pledged Revenues as permitted in Section 16(b) (f) FURTHER ENCUMBRANCE it, while the Bonds or any Additional Bonds are outstanding and unpaid, will not additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance in connection with Additional Bonds, unless said encumbrance is made junior and subordinate in all respects to the liens, pledges, covenants and agreements of this Ordinance; but the right of the City to issue revenue bonds payable from a subordinate lien on the Pledged Revenues is specifically recognized and retained (g) SALE OR DISPOSAL OF PROPERTY. It, while the Bonds or any Additional Bonds 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 property, machinery, fixtures or equipment, it may sell or otherwise dispose of such property, machinery, fixtures or .equipment when it has made arrangements to replace the same or provide substitutes therefor, unless it is determined that no such replacement or substitute is necessary Proceeds from any sale hereunder not used to replace or provide for substitution of such property sold, 45 , .. 7" ~ .~ shall be used for improvements to the System or to purchase or redeem Bonds and Additional Bonds. (h) INSURANCE. (1) It shall cause to be insured such parts of the System as would usually be insured by corpora- tions operating like properties, with a responsible nsur- ance 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 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 con- tractor 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 con- tractor 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 46 - ., r t .r 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 Bonds and Additional Bonds, ratably in the proportion that the outstanding principal of each series of Bonds or Additional Bonds bear to the total outstanding principal of all Bonds and Additional Bonds, 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 com- putation, or (ii) if none of the outstanding Bonds or Addi- tional Bonds is subject to redemption, then for the purchase on the open market and retirement of said Bonds and Additional Bonds in the same proportion as prescribed in the foregoing clause (i), to the extent practicable; provided that the purchase price for any Bond or Additional Bond shall not exceed the redemption price of such Bond or Additional Bond on the first date upon which it becomes subject to redemption; or 47 y (iii) to the extent that the foregoing clauses (i) and (ii) cannot be complied with at the time, the insurance proceeds, or the remainder thereof, shall be deposited in a special and separate trust fund, at an official depository of the City, to be designated the Insurance Account The Insurance Account shall be-held until such time as the foregoing clauses (i) and/or (ii) can be complied with, or until other funds become available which, together with the Insurance Account, will be sufficient to make the repairs or replacements originally required, whichever of said events occurs first (2) The foregoing provisions of (1) above notwith- standing, the City shall have authority either to seif- insure or enter into co-insurance or similar plans where risk of loss is shared in whole or i.n 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 48 as are 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 (including Amortization Requirements) of all then outstanding Bonds and Additional Bonds, and (3) to pay all other obligations of the System (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. After the close of each year while any of the Bonds or any Additional Bonds are outstanding, 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 preced- ing 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 Bonds and Additional Bonds who shall so request in writing Such annual audit 49 e 4 reports shall be open to the inspection of the bondowners and their agents and representatives at all reasonable times. (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 govern- mental 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, opera- tion 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) NO ARBITRAGE (1) It will make no use of the proceeds of the Series 1986 Bonds at any time throughout the term of this issue of Series 1986 Bonds which, if such use had been reasonably expected on the date of delivery of the Series 1986 Bonds to and payment for the Series 1986 Bonds by the purchasers, would have caused the Series 1986 Bonds to be arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code of 1954, as amended, or any 50 n regulations or rulings pertaining thereto; and by this covenant the City is obligated to comply with the requirements of the aforesaid Section 103(c) and all applicable and pertinent Department of the Treasury regulations relating to arbitrage bonds The City further covenants that the proceeds of the Series 1986 Bonds will not otherwise be used directly or indirectly so as to cause all or any part of the Series 1986 Bonds to be or become arbitrage bonds within the meaning of the aforesaid Section 103(c), or any regulations pertaining thereto (2) The Mayor is hereby authorized and directed to execute a No Arbitrage and Facilities Certificate substan- tially in the form attached hereto as Exhibit A, with such changes thereto as shall be approved by the City's Bond Counsel and the Mayor, and the execution by the Mayor of said No Arbitrage and Facilities Certificate shall evidence the acceptance of any such changes on behalf of the City After execution and delivery, the provisions of said Certif- icate shall constitute covenants of the City to the extent set forth therein, and shall evidence the expectations of the City the same as if set forth at this place Section 22 AMENDMENT OF ORDINANCE (a) That the owners of Bonds and Additional Bonds aggregating in prin- cipal amount 51% of the aggregate principal amount of then outstanding Bonds and Additional Bonds shall have the right from time to time to approve any amendment to this Ordinance 51 which may be deemed necessary or desirable by the City, provided, however, that without the consent of the owners of all of the Bonds and Additional Bonds at the time out- standing, nothing herein contained shall permit or be construed to permit the amendment of the terms and condi- tions in this Ordinance or in the Bonds or Additional Bonds so as to: (1) Make any change in the maturity of the outstanding Bonds or Additional Bonds; (2) Reduce the rate of interest borne by any of the outstanding Bonds or Additional Bonds; (3) Reduce the amount of the principal payable on the outstanding Bonds or Additional Bonds; (4) Modify the terms of payment of principal of or interest on the outstanding Bonds or Additional Bonds, or impose any conditions with respect to such payment; (5) Affect the rights of the owners of less than all of the Bonds and Additional Bonds then outstand- ing; (6) Change the minimum percentage of the principal amount of Bonds and Additional Bonds 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 52 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 Bonds and Additional Bonds Such publication is not required, however, if notice in writing is given to each holder of Bonds and Additional Bonds (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 prin- cipal amount of all Bonds and Additional Bonds 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 farm. (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 53 ®~ owners of then outstanding Bonds and Additional Bonds and all future Additional Bonds shall thereafter be determined, exercised and enforced hereunder, subject in all respects to such amendments. (e) That any consent given by the owner of a Bond or Additional Bond 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 Bond or Additional Bond 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 Bonds and Additional Bonds as in this Section defined have, prior to the attempted revoca- tion, consented to and approved the amendment. (f) That for the purpose of this Section, the owner- ship of Bonds or Additional Bonds shall be as shown by the registration books of the Faying Agent/Registrar. (g) The foregoing provisions of this Section notwith- standing, the City by action of the City Council may amend this Ordinance for any one or more of the following pur- poses 54 9 0+ (1) To add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to bondholders or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City; (2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting or supple- menting any defective provision contained in this Ordinance, or in regard to clarifying matters or questions arising under this Ordinance, as are neces- sary or desirable and not contrary to or inconsistent with this Ordinance and which shall not adversely affect the interests of the owners of the Bonds or Additional Bonds, (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 Bonds and each series of Additional Bonds outstanding at the date of the adop- tion of such modification shall cease to be outstand- ing, and (ii) such modification shall be specifically referred to in the text of all Additional Bonds issued after the date of the adoption of such modification Section 23. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS (a) REPLACEMENT BONDS In the event any 55 ;~° r ~; ~ ~ 4 f outstanding Series 1986 Bond is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Series 1986 Bond, in replacement for such Series 1986 Bond in the manner hereinafter provided. (b) APPLICATION FOR REPLACEMENT BONDS Application for replacement of damaged, mutilated, lost, stolen, or destroyed Series 1986 Bonds shall be made to the Paying Agent/Registrar In every case of loss, theft, or destruc- tion of a Series 1986 Bond, the applicant for a replacement bond shall furnish to the City and to the Paying Agent/Reg- istrar such security or indemnity as may be required by them to save each of them harmless from any loss ar damage with respect thereto Also, in every case of loss, theft, or destruction of a Series 1986 Bond, the applicant shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Series 1986 Bond, as the case may be In every case of damage or mutilation of a Series 1986 Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the Series 1986 Bond so damaged or muti- lated (c) NO DEFAULT OCCURRED Notwithstanding the fore- going provisions of this Section, in the event any such 56 Yi'r .~ y ! 4~. d ,. ',. u w ! /) Series 1986 Bond shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on the Series 1986 Bond, the City may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Series 1986 Bond) instead of issuing a replacement Series 19$6 Bond, .provided security or indemnity is furnished as above provided. in this Section (d) CHARGE FOR ISSUING REPLACEMENT BONDS. Prior to the issuance of any replacement bond, the Paying Agent/Reg- istrar shall charge the owner of such Series 1986 Bond with all legal, printing, and other expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Series 1986 Bond is lost, stolen, or destroyed shall consti- tute a contractual obligation of the City whether or not the lost, stolen, or destroyed Series 1986 Bond shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Series 1986 Bonds 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 57 " . ,~ « w . ., -r :~ 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 Series 1986 Bonds issued in exchange for other Series 1986 Bonds Section 24. APPROVAL AND REGISTRATION OF BONDS That the Mayor of the City is hereby authorized to have control of the Series 1986 Bonds and all necessary records and proceedings pertaining to the Series 1986 Bonds pending their delivery and their investigation, examination and approval by the Attorney General of the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas Upon registration of the Series 1986 Bonds, said Comptroller of Public Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration Certificate accompanying the Series 1986 Bonds, and the seal of said Comptroller shall be impressed, or placed in facsimile, on each such certificate Section 25 SALE OF SERIES 1986 BONDS. That the sale of the Series 1986 Bonds to PMa ~LtV~ ~t,~ ~CI,C-~-(,'ll'e,~;~(mC (the "Purchaser"), at a price of par and accrued interest to date of delivery, ol.~tc6c,,.~- p3~ss a prem-i~m of $~2 3`~1 is hereby authorized, 58 ,~ M ~ ~ P ~ ~ 1, V ,~ ~ / ratified and confirmed One Series 1986 Bond in the principal amount maturing on each maturity date as set forth in Section 2 hereof shall be delivered to the Purchaser, and the Purchaser shall have the right to exchange such Bonds as provided in Section 5 hereof without cost. Section 26. 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 5th day of M c ~ 86 yor ATTEST City Secretary / A P OVED AS TO O ~ ALZT'Y ~~Cty..Attorney .- .~. ~ ~ ~ ^~ %j~ (SEAL ~ `} ti ,~ ~~~Y r,;~ ,,,,^ ~~,rw„ 7 .~ '~ •~-~ '^- ~~ e.~ 59 x ~, :,. EXHIBIT A h NO ARBITRAGE AND FACILITIE'S CERTIFICATE 1. In General. 1.1. The undersigned is the Mayor of the City of Fort Worth, Texas -(the "Issuer"). 1.2. This Certificate is executed for the purpose of (a) establ ping the reasonable expectations of the Issuer as to future events regarding $16,60q,00~0 :principal amount of the Issuer's 'Water and Sewer System Revenue Bonds, Series 1985 (the '"Bonds") and ('b) providing covenants relating to arbitrage, the use and expenditure of the :proceeds of the Bonds and the use of the facilities financed with the ,proceeds of the Bonds. T.he Bonds are being issued pursuant to an ordinance adopted by -the City Council of the Issuer on March 5, :198.5 (the "Ordinance"). The Issuer has not been .notified of any listing or proposed listing of the Issuer by the Internal Revenue Service as an issuer that may not certify its bonds. 1.3. To the best of the undersigned's knowledge, nforma- tion and belief, the expectations contained in this Certificate are reasonable. 1.4. The undersigned is an officer of the Issuer delegated with the responsibility of issuing and~del:ivering the Bonds. 1.5. The Issuer is making the covenants contained in Section 3 of this Certificate in consideration for the purchase of the Bonds by [name of purchaser] (the "Purchaser"). 1.6. The representations and covenants in this Certificate will only be amended to the extent that the Issuer receives. an opinion from McCall, Parkhurst & Horton to the effect that such :amendment will not result i,n the interest on the .Bonds being includable in gross income within the meaning of Section 103(a) ~of the Internal Revenue Code of 1954, as amended the "Code"). 2. The Purpose of the Bonds. The Bonds are issued for the purpose of providing funds to make improvements and extensions to the Issuer's water and sewer system (the "Project"). 3. Covenants. The Issuer .hereby covenants to and with the .Purchasers--and .all registered owners of the Bonds as follows: 3.1, No more. than $1 million of the proceeds of the Bonds swill be used directly or indirectly (a) to make or finance loans to persons or (b) in any trade or business carried on by any person (other than the use as a member of the general public). For purposes of the preceding sentence: i ~ r t {i) th:e term "person" does not include a governmental unit other than the United States or any agency ~or instrumentality thereof, (ii) the term "trade or business" means any activity carried on by a person other than a natural person., (iii) a person may be treated as the user of bond proceeds or bond financed property as the result of (1) ownership or (2) actual or beneficial use of the property .pursuant to a lease, a management or incentive payment cont.ra~ct, or an arrangement such as a take or pay or other type of output contract, (iv) use by all nongovernmental persons that use bond-financed property on a basis unlike that of the general public is aggregated in determining whether the $i million limit is exceeded, and (v) 'the fact that some customers of a utility may purchase more output or use more of the capacity of facilities than others or that rates charged to customers may reflect volume discounts does not necessarily indicate that the facility is not made available to members of the public on the same basis, as long as :such transactions in substance do not approximate an output contract or a take- or-pay contract or otherwise constitute use of the bond proceeds of the issue by such customer. 3.2. The Issuer will comply with the requirements of Section 147 of the Internal Revenue Code of 1'985 contained in H.R. .3838, passed by the U. S. House of Representatives on December 17, 1985 (and with any substantially similar provisions in any amendment thereto or other bill introduced in either house of the U. S. Congress in the current session) (the "Tax Reform Act of 1985"), including the requirements of Section 147(d)(3) relating to the limitation on investments i.n nonpurpos~e obligations and the requirements of Section 147 (e) relating to the required rebate to the United States. 3.3. The Issuer will make no use of the proceeds of the :Bonds or the facilities financed or refinanced with such proceeds that would result in the interest on the Bonds not being excluded from gross income within the meaning of Section 103(a) of the Internal Revenue Gode of 1954, as amended,. or the Tax Reform Act of 1985. 2 ~;~ ,~ s ~f 4. Temporary Period. 4.1,. Within six months after the date of this Certificate the Lssuer will enter into a contract with a third party for construction of the Project obligating an .expenditure in excess o,f $100., 000 . 4.2. Upon entering into such contract;, construction will commence and proceed with -due diligence to completion. 4.3. The proceeds expended for payment of the costs of acquiring, constructing,, equipping, and installing the :Project together with all investment earnings thereon are expected to be completely expended on the Project within three years :after the date of this Certificate. 5. Limitation on Temporary ;Period. 5.1. Except as provided in Sections 5.2, 5.3 and 5..4 of this Certificate, none of the proceeds of the Bonds will be invested in any security, any obligation, any annuity contract or any investment type property (collectively referred to herein as the "Acquired Obligations") that bears a yield that exceeds the yield of the Bonds by more than one-eighth of one percentage point. The term "yield'" means that yield which when used in computing the present worth of all payments of :principal and interest to be paid in the obligation produces an amount equal to the purchase price of such obligation. The yield on both the Bonds and the Acquired Obligations shall be calculated by the same frequency interval of compounding interest. In the case of the Bonds, the term "purchase price" means the initial offering .price of the Bonds to the public.. Any underwriters discount, issuance costs or costs of carrying or repaying the Bonds shall not be taken into account as an adjustment to the purchase price. Ln the case of the Acquired Obligations, the .term "purchase price" means the mean of the bid and offered prices on an estab- lished market where such Acquired Obligations are traded on the date of a binding contract to acquire such Acquired Obligations. 5.2. The first exception is for proceeds of the Bonds that are used in connection with the acquisition of tangible personal property and that are invested fo:r a period not in excess of a 30 day period beginning on the date of delivery of the Bonds in Acquired Obligations bearing a yield that exceeds the yield described in 'Section 5.1. of this Certificate. 5.3. The second exception is for proceeds of the Bonds that are used for construction expenditures .and that are .invested in Acquired Obligations bearing a yield that exceeds the- yield described in Section 5.1 of this Certificate for a period begin- ning on the date of delivery of the Bonds and ending on the earlier •of - 3 Lt ~ . a "y. ~ ,~ (a) the date on which construction is substantially (i.e. 90 percent) completed or is abandoned; (b) the date on which an amount equal to the bond proceeds has been expended on the Project; or (c) the date which is three years after the earlier of (i) the date of delivery of the Bonds or (ii) the date construction begins.. Fo.r purposes of this Section 5,3, the term "construction" in- cludes reconstruction and rehabilitation. 5.4. The third exception is for proceeds of the Bonds that are used to finance general government operations (e.g., salaries of government employees, etc.) and that are invested for a period not in excess of a 3-year :period beginning on the date of deliv- ery of the Bonds in Acquired Obligations bearing a yield that exceeds the yield described in Section 5.1, of this Certificate. 6. Invested Sinking Fund Proceeds, Replacement Proceeds. 6.1. The Is-suer, in addition to 'the moneys received from the sale of the Bonds, has certain other moneys that are invested in various funds which are p edged for various municipal purposes. These other funds are not available to accomp ish the purposes described in Section 2. 6.2. There are no funds or accounts other than the funds and accounts described in Sections 8 of this Certificate which the Issuer reasonably expects to be available to pay the principal of or interest on the Bonds.. 7. Interest and Sinking Fund. '7.1. The Ordinance reaffirms the creation and existence o'f the Interest and Sinking Fund. Money deposited in the Interest and Sinking Fund will be used to pay the principal of and inter- est on the Bonds and the Issuer reasonably expects that there will be no other funds {other than the Reserve Fund and moneys on deposit in the Revenue Fund that are transferred to the Interest and Sinking Fund] that will be so used. 7.2. All amounts deposited in the Interest and Sinking Fund will be spent within a thirteen-month period beginning on the date of deposit, and any amount received from the investment of money held .in the Interest .and Sinking Fund will be spent within a one-year period beginning on the date of receipt.. 7.3. The Interest and Sinking Fund is a fund that is used primarily to achieve a proper matching of revenues and debt service within each bond year. The Interest and Sinking Fund will be comp3.etely depleted at least once each year except for an 4 w amount not in excess of the greater of (a) one-twelfth of the debt service on the Bonds for the previous year, or (b) the previous year's earnings on the Interest and Sinking Fund. The total earnings from amounts on deposit in the portion of the Interest and Sinking Fund attributable to the .Bonds will not in any bond .year exceed $100,000.. 8. Reserve Fund.. 8.i. The Ordinance provides for a reasonably .required -debt service reserve fund (the "Reserve Fund"). None of the proceeds of the Bonds will be deposited to the credit of the Reserve Fund. Funds on deposit in the Reserve Fund are held in trust for the benefit of the holders of the Bonds. If on any interest payment or maturity date, the Interest and .Sinking Fund does not contain an amount sufficient to make debt service payments on the Bonds, the Issuer is required to transfer money from the Reserve Fund to 'the Interest and Sinking Fund in an amount sufficient to make such payments.. 8.2. Moneys on deposit in the Reserve Fund and the greater of the cost or the face amount of investments in the Reserve Fund will not at any time exceed the lesser of (a) 15 percent of the face amount of the Bonds (b') 1.25 times average annual debt service on the Bonds, or (c) maximum annum. debt service on the Bonds. 9,. Revenue Fund. 9.1. The Ordinance reaffirms the creation and existence of a Revenue Fund into which certain revenues of the Issuer are deposited. Amounts on deposit in the .Revenue Fund are trans- ferred and used in the manner required by t'he Ordinance. 9.2. Other than moneys in the Revenue Fund that are trans- ferred to the Interest and Sinking Fund, the moneys in the Revenue Fund are not reasonably expected to be used to pay the principal of and interest on the Bonds. There will be no as ur- ance that such moneys will be available to meet debt service if the Issuer encounters financial difficulty. Amounts in the Revenue Fund will be .invested without yield restriction. DATED: CITY OF FORT WORTH, TEXAS By Mayor, City of Fort Worth 5 ti r 4~ ~~ M THE STATE OF TEXAS COUNTY OF TARRANT CITY OF FORT WORTH ~- ~ . ^,:,\ I, Ruth Howard, City Secretary of the City of Fort Worth, Texas, do hereby certify that I have compared the attached and foregoing excerpt from the minutes of the special, open, public meeting of the City Council of the City of Fort Worth, Texas held on March 5, 1986, and of Ordinance No. ~$~ 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. In testimony whereof, I have set my hand and have hereunto affixed the seal of said City of Fort Worth, this 5th day of March, 1986. ~~ -~~ ~ ~ ~ ~~ ~.~ Cit Secretary of the City of ., ~.~'' L.; Fort Worth, Texas `V ~ . Y 1j a ~'. (SEAL)S ~~ -, .. A F. ~ Off. ^+n.V \ ' 4^l~~+J #~ .yy„jsYF+.xe pity ®f ' 1F®rt ~®rth, ~e.~~~ DATE REFERENCE SuB~EC,pLE OF $16,600,000 WATER AND PAGE 3/4/86 NUMBER G-6595 SEWER SYSTEM REVENUE BONDS Hof 1 Recommendation It is recommended that• 1) The bonds be sold to the bidder offering the lowest interest cost, Prudential Bache Securities, at an average net effective rate of 6.723909, and, 2) The City Council adopt an Ordinance authorizing the issuance of $16,600,000 in Water and Sewer System Revenue Bonds. Background Bids for $16,600,000 Water and Sewer System Revenue Bonds Series 1986 were received Wednesday, March 5, 1986, at 1 30 p.m. A summary of the average annual effective interest rates for the bids received is shown below Company Rate 1. Prudential Bache Securities 6.723909 2. Morgan Stanley and Co. 6.7495 3. First Boston Corporation 6.8448 4. Underwood Neuhaus and Co. 6.894558 5. Salomon Brothers 6.9485 6. Kidder Peabody and Co. 6.9857 7. Dean Witter Reynolds, Inc. 7.032.7 8. Paine Webber, Inc. 7.046060 9. Goldman Sachs and Co. 7.079017 AJB kcq SUBMITTED FOR THE ~ CITY MANAGER'S DISPOSITION BY COUNCIL. PROCESSED BY (1FFICE BY APPROVED ORIGINATING OTHER (DESCRIBE) DEPARTMENT HEAD: A Judson Bai 1 i ff CITY SECRETARY FOR ADDITIONAL INFORMA ION CONTACT d Judson Bai 1 i ff Ext 818 ~5~~ (~~c~i 3~~y DATE