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HomeMy WebLinkAboutOrdinance 10968 THE STATE OF TEXAS ; COUNTIES OF TARRANT AND DENTON CITY OF FORT WORTH ; On the 10th day of December, 1991, the City Council of the City of Fort Worth, Texas met in regular, open, public meeting in the City Council Chamber in the City Hall with the following members present, to-wit: Kay Granger Mayor, Virginia Nell Webber, Mayor Pro-Tem, Carlos Puente, Chuck Silcox, ; Morris Matson, Eugene McCray, Councilmembers, Jewel Woods, ; Bill Meadows, David_ Chappell, David Ivory, City Manager, Wade Adkins, City Attorney, Gloria Pearson, Assistant City Secretary, with more than a quorum present; and after the City Council had transacted certain business, the following business was transacted, to-wit: Councilmember Morris Matson introduced an ordinance and moved its passage. The motion was seconded by Councilmember Jewel Woods. Councilmember Carlos Puente was absent from the meeting, and Councilmember Bill Meadows was absent at the time of voting. The ordinance was read by the Assistant City Secretary. The motion, carrying with it the passage of the ordinance prevailed unanimously. The ordinance as passed is as follows: ORDINANCE NO. 10968 MASTER ORDINANCE ESTABLISHING THE CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE FINANCING PROGRAM THE STATE OF TEXAS COUNTIES OF TARRANT AND DENTON : CITY OF FORT WORTH WHEREAS, the City of Fort Worth, Texas (the "City" or the "Issuer") , a "home-rule" city operating under a home-rule charter adopted pursuant to Section 5 of Article XI of the Texas Constitution, with a population according to the latest federal decennial census in excess of 90,000, has heretofore issued and has outstanding its City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1984, City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1984A, City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1985, City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1986,' City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1986-A, City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1987 and City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 1988 (together, the "Previously Issued Parity Bonds") ; and WHEREAS, in the ordinances authorizing the issuance of the Previously Issued Parity Bonds (together, the "Prior Lien Bond Ordinance") , the Previously Issued Parity Bonds were secured by a first lien on and pledge of the "Pledged Revenues" of the "System" (each as defined in the Prior Lien Bond Ordinance) ; and WHEREAS, the City reserved the right in the Prior Lien Bond Ordinance to issue obligations payable from a subordinate lien on the Pledged Revenues to that granted to the Previously Issued Parity Bonds; and WHEREAS, on March 8, 1990, the City adopted an ordinance authorizing the establishment of a commercial paper program and the issuance of commercial paper notes in a principal amount at any time outstanding not to exceed $75,000,000 (the "Series A Notes") ; and WHEREAS, the Series A Notes are secured in part by a line of _credit with The Mitsui Taiyo Kobe Bank, Limited (the "Bank") ; and WHEREAS, the City has pledged to the Bank as security for said line of credit a lien on and pledge of the Pledged Revenues subordinate to that securing the Previously Issued Parity Bonds; and WHEREAS, in order to reduce costs, increase borrowing capacity, provide additional security to the credit markets, and provide the City with greater financial flexibility to meet the financing needs of the System, the City deems it necessary and desirable to establish a revised financing structure for revenue supported indebtedness of the System; and WHEREAS, the terms used in this Ordinance and not otherwise defined shall have the meaning given Exhibit A to this Ordinance attached hereto and made a part hereof; BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FORT WORTH, TEXAS THAT: -2- Section 1. ESTABLISHMENT OF REVENUE FINANCING PROGRAM AND ISSUANCE OF PARITY OBLIGATIONS. There is hereby established the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program for the purpose of providing a financing structure for revenue supported indebtedness of the System. This Ordinance is intended to establish a master program under which revenue supported indebtedness attributable to the System and payable from Pledged Revenues can be incurred. It is hereby authorized that revenue supported indebtedness may be issued, incurred or assumed pursuant to the terms of a Supplement. Each Supplement shall provide for the authorization, issuance, sale, delivery, form, characteristics, provisions of payment and redemption, and security of each issue or series of Parity Obligations and any other matters related to Parity Obligations not inconsistent with the Constitution and laws of the State of Texas or the provisions of this Ordinance. Section 2. PLEDGE. The Parity Obligations are and shall be secured by and payable from a first lien on and pledge of the Pledged Revenues, including such revenues within the System Fund created by this Ordinance, in accordance with the terms of this Ordinance and any Supplement; and the Pledged Revenues are further pledged to the establishment and maintenance of the Debt Service Fund as provided in accordance with the terms of this Ordinance and the Funds and Accounts as provided in accordance with the terms of any Supplement. The Parity Obligations are and will be secured by and payable only from the Pledged Revenues, and are not secured by -3- or payable from a mortgage or deed of trust on any properties, whether real, personal, or mixed, constituting the System. The owners of the Parity Obligations shall never have the right to demand payment out of funds raised or to be raised by taxation, or from any source other than specified in this Ordinance or any Supplement. Section 3. RATE COVENANT. The City will fix, establish, maintain and collect such rates, charges and fees for the use and availability of the System at all times as are necessary to produce Gross Revenues and other Pledged Revenues sufficient (1) to pay all _current Operating Expenses, (2) to produce Net Revenues for each Fiscal Year at least equal to the Annual Debt Service Requirements during such Fiscal Year of the then Outstanding Parity Obligations, and (3) to pay all other financial obligations of the System reasonably anticipated to be paid from Gross Revenues. Section 4 . GENERAL COVENANTS. While any of the Parity Obligations is Outstanding, 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 any Supplement; it will promptly pay or cause to be paid the principal amount of and interest on every Parity Obligation, on the dates and in the places and manner prescribed in a Supplement and such Parity Obligations; and it will, at the time and in the manner prescribed, deposit or cause to -4- be deposited the amounts required to be deposited into the Funds and Accounts as provided in accordance with this Ordinance and any Supplement; and any owner of any Parity Obligation may require the City, its officials and employees to carry out, respect or enforce the covenants and obligations of this Ordinance, or any Supplement, 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 Parity Obligations; that all action on its part for the issuance of the Parity Obligations has been duly and effectively taken, and that the Parity Obligations in the hands of the owners thereof are and will be valid and enforceable special obligations of the City in accordance with their terms. (c) OPERATION AND MAINTENANCE. It shall at all times use its best efforts to operate or cause to be operated the System properly and in an efficient manner, consistent with Prudent Utility Prac- tice, and shall use its best efforts to maintain, preserve, reconstruct and keep the same or cause the same to be so maintained, preserved, reconstructed and kept, with the appurtenances and every part and parcel thereof, in good repair, working order and condition, and shall from time to time make, or use its best efforts to cause to be made, all necessary and proper -5- repairs, replacements and renewals so that at all times, the operation of the System may be properly and advantageously conducted. (d) TITLE. It has or will obtain lawful title, whether such title is in fee or lesser interest, to the lands, buildings, structures and facilities constituting the System, that it warrants that it will defend the title to all the aforesaid lands, buildings, structures and facilities, and every part thereof, for the benefit of the owners of the Parity Obligations, against the claims and demands of all persons whomsoever, that it is lawfully _qualified to pledge the Pledged Revenues to the payment of the Parity Obligations in the manner prescribed herein, and has lawfully exercised such rights. (e) LIENS. It will from time to time and before the same become delinquent pay and discharge all taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it, or the System; it will pay all lawful claims for rents, royalties, labor, materials and supplies which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's, materialman's or other lien or charge which might or could be prior to the liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be impaired; provided however, that no such tax, assessment or -6- 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. (f) NO- FREE SERVICE. No free service of the System shall be allowed, and should the City or any of its agencies or instrumentalities make use of the services and facilities of the System, payment of the reasonable value shall be made by the City out of funds from sources other than the revenues of the System, unless made from surplus or excess Pledged Revenues as permitted in Section 10(b) hereof. (g) FURTHER ENCUMBRANCE. It will not additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance and any Supplement in connection with Parity Obligations, unless said encumbrance is made .junior and subordinate in all respects to the liens, pledges, covenants and agreements of this Ordinance and any Supplement; but the right of the City to issue Subordinated Debt payable in whole or in part from a subordinate lien on the Pledged Revenues is specifically recognized and retained. (h) SALE, LEASE OR DISPOSAL OF PROPERTY. No part of the System shall be sold, leased, mortgaged, demolished, removed or otherwise disposed of, except as follows: (1) To the extent permitted by law, the City may sell or exchange at any time and from time to time any property or facilities constituting part of the System only if (A) it -7- shall determine such property or facilities are not useful in the operation of the System, or (B) the proceeds of such sale are $250,000, or less, or it shall have received a certificate executed by a Designated Financial Officer stating, in the opinion thereof, that the fair market value of the property or facilities exchanged is $250,000 or less, or (C) if such proceeds or fair market value exceeds $250,000 it shall have received a certificate executed by a Designated Financial Officer stating, in the opinion thereof, that the sale or exchange of such property or facilities will not impair the ability of the City to comply during the current or any future Fiscal Year with the covenant of the City set forth in Section 3 of this Ordinance. The proceeds of any such sale or exchange not used to acquire other property necessary or desirable for the safe or efficient operation of the System shall forthwith, at the option of the City, (i) be used to redeem or purchase Parity Obligations, (ii) otherwise be used to provide for the payment of Parity Obligations or (iii) be used for any other lawful purpose. (2) To the extent permitted by law, the City may lease or make contracts or grant licenses for the operation of, or make arrangements for the use of, or grant easements or other rights with respect to, any part of the System, provided that any such lease, contract, license, arrangement, easement or right (A) does not impede the operation of the System by the City and (B) does not in any manner impair or adversely affect -8- the rights or security of the owners of the Parity Obligations under this Ordinance and any Supplement; and provided, further, that if the depreciated cost of the property to be covered by any such lease, contract, license, arrangement, easement or other right is in excess of $500, 000, the City shall have received a certificate executed by a Designated Financial Officer that the action of the City with respect thereto does not result in a breach of the conditions under this clause (2) . Any payments received by the City under or in connection with any such lease, contract, license, arrangement, easement or right in respect of the System or any part thereof shall constitute Gross Revenues. (i) BOOKS, RECORDS AND ACCOUNTS. It shall keep proper books, records and accounts separate and apart from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the System and the City shall cause said books and accounts to be audited annually as of the close of each Fiscal Year by the Accountant. (j) INSURANCE. (1) Except as otherwise permitted in clause (2) below, it shall cause to be insured such parts of the System as would usually be insured by corporations operating like properties, with a responsible insurance company or companies, against risks, accidents or casualties against which and to the extent insurance is usually carried by corporations operating like properties, including, to the extent reasonably obtainable, fire and extended coverage insurance, insurance against damage by floods, and use and -9- occupancy insurance. Public liability and property damage insurance shall also be carried unless the City Attorney gives a written opinion to the effect that the City is not liable for claims which would be protected by such insurance. At any time while any contractor engaged in construction work shall be fully responsible therefor, the City shall not be required to carry insurance on the work being constructed if the contractor is required to carry appropriate insurance. All such policies shall be open to the inspection of the Holders and their representatives at all reasonable times during regular business hours. Upon the happening of any loss or damage covered by insurance from one or more of said causes, the City shall make due proof of loss and shall do all things necessary or desirable to cause the insuring companies to make payment in full directly to the City. The proceeds of insurance covering such property, together with any other funds necessary and available for such purpose, shall be used forthwith by the City for repairing the property damaged or replacing the property destroyed; provided, however, that if said insurance proceeds and other funds are insufficient for such purpose, then said insurance proceeds pertaining to the System shall be used promptly as follows: (i) for the redemption prior to maturity of the Parity Obligations, ratably in the proportion that the Outstanding Principal Amount of each series of Parity Obligations bears to the total Outstanding Principal Amount of all Parity Obligations, provided that if on any such occasion the -10- principal of any such series is not subject to redemption, it shall not be regarded as outstanding in making the foregoing computation; or (ii) if none of the outstanding Parity Obligations is subject to redemption, then for the purchase on the open market and retirement of said Parity Obligations in the same proportion as prescribed in the foregoing clause (i) , to the extent practicable; provided that the purchase price for any Parity Obligation shall not exceed the redemption price of such Parity Obligation on the first date upon which it becomes subject to redemption; or (iii) to the extent that the foregoing clauses (i) and (ii) cannot be complied with at the time, the insurance proceeds, or the remainder thereof, shall be deposited in a special and separate trust fund, at an official depository of the City, to be designated the Insurance Account. The Insurance Account shall be held until such time as the foregoing clauses (i) and/or (ii) can be complied with, or until other funds become available which, together with the Insurance Account, will be sufficient to make the repairs or replacements originally required, whichever of said events occurs first. (2) In lieu of obtaining policies for insurance as provided above, the City may self-insure against risks, accidents, claims or casualties described in clause (1) above. -11- (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 the areas of insurance for which the City is self-insuring, all policies carried, and whether or not all insurance premiums upon the insurance policies to which reference is hereinbefore made have been paid. (k) AUDITS. After the close of each Fiscal Year while any of the Parity Obligations is Outstanding, an audit will be made by the Accountant of the books and accounts relating to the System and the Pledged Revenues. As soon as practicable after the close of each such Fiscal Year, and when said audit has been completed and made available to the City, a copy of such audit for the preceding Fiscal Year shall be mailed to the Municipal Advisory Council of Texas and to any owner of the then Outstanding Parity Obligations who shall so request in writing. Such annual audit reports shall be open to the inspection of the owners of the Parity Obligations and their agents and representatives at all reasonable times during regular business hours. (1) GOVERNMENTAL AGENCIES. It will comply with all of the terms and conditions of any and all franchises, permits and authorizations applicable to or necessary with respect to the System, and which have been obtained from any governmental agency; and the City has or will obtain and keep in full force and effect all franchises, permits, authorization and other requirements -12- applicable to or necessary with respect to the acquisition, construction, equipment, operation and maintenance of the System. (m) NO COMPETITION. To the extent it legally may, it will not grant any franchise or permit for the acquisition, construction or operation of any competing facilities which might be used as a material substitute for the System's facilities, and, to the extent that it legally may, the City will prohibit any such competing facilities. (n) RIGHTS OF INSPECTION. The owner of $100, 000 in Outstanding Principal Amount of Parity Obligations shall have the right at all reasonable times during regular business hours to inspect the System and all records, accounts and data of the City relating thereto, and upon request the City shall furnish to such owner, at the cost of such owner, such financial statements, reports and other information relating to the City and the System as such owner may from time to time reasonably request. Section 5. SYSTEM FUND. There is hereby created and there shall be established and maintained on the books of the City, and accounted for separate and apart from all other funds of the City, a separate fund designated as the System Fund. All Gross Revenues shall be credited to the System Fund immediately upon receipt. All Operating Expenses shall be paid from the Gross Revenues credited to the System Fund as a first charge against same. Section 6. DEBT SERVICE FUND. (a) For the sole purpose of paying the principal amount of, premium, if any, and interest on, and other payments (other than Operating Expenses) incurred in -13- connection with Parity Obligations, there is hereby created and there shall be established and maintained on the books of the City, and accounted for separate and apart from all other funds of the City, a separate fund designated as the Debt Service Fund. Moneys in the Debt. Service Fund shall be deposited and maintained in an official depository bank of the City. (b) The terms and conditions with respect to the deposit of moneys into the Debt Service Fund, and the amounts to be deposited from time to time to the credit of the Debt Service Fund, shall be contained in the Supplement. In addition, the City reserves the right in any Supplement to establish within the Debt Service Fund various Accounts to facilitate the timely payment of Parity Obligations as the same become due and owing. Section 7. RESERVE FUND. (a) There is hereby created and there shall be established and maintained on the books of the City a separate fund designated as the Reserve Fund. Except as provided in subsection (g) below, the Reserve Fund shall be maintained for the benefit of the owners of the Parity Obligations. There shall be deposited into the Reserve Fund any Reserve Fund Obligations so designated by the City. Reserve Fund Obligations in the Reserve Fund shall be deposited and maintained in an official depository bank of the City. Reserve Fund Obligations in the Reserve Fund shall be used for the purpose of retiring the last of the Parity Obligations as they become due or paying principal of and interest on the Parity Obligations when and to the extent the amounts in the Debt Service Fund are insufficient for such purpose. The Reserve -14- Fund shall be maintained in an amount equal to the Required Reserve Amount. The City may,�t--it4- q;tion,' withdraw and transfer to the System Fund all surplus in the Reserve Fund over the Required Reserve Amount. (b) The City may replace or substitute a Credit Facility for cash or Eligible Investments on deposit in the Reserve Fund or in substitution for or replacement of any existing Credit Facility. Upon such replacement or substitution, cash or Eligible Investments on deposit in the Reserve Fund which, taken together with the face amount of any existing Credit Facilities, are in excess of the Required Reserve Amount may be withdrawn by the City, at its option, and transferred to the System Fund; provided that the face amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer. (c) If the City is required to make a withdrawal from the Reserve Fund for any of the purposes described in this Section, the City shall promptly notify the issuer of such Credit Facility of the necessity for a withdrawal from the Reserve Fund for any such purposes, and shall make such withdrawal FIRST from available moneys or Eligible Investments then on deposit in the Reserve Fund, and NEXT from a drawing under any Credit Facility to the extent of such deficiency. (d) In the event of a deficiency in the Reserve Fund, or in the event that on the date of termination or expiration of any Credit Facility there is not on deposit in the Reserve Fund sufficient Reserve Fund Obligations, all in an aggregate amount at -15- least equal to the Required Reserve Amount, then the City shall, after making required deposits to the Debt Service Fund in accordance with the terms of this Ordinance and any Supplement, satisfy the Required Reserve Amount by depositing Reserve Fund Obligations• into the Reserve Fund in monthly installments of not less than 1/12 of the Required Reserve Amount on or before the 10th day of each month following such deficiency, termination or expiration. (e) In the event of the redemption or defeasance of any of the Parity Obligations, any Reserve Fund Obligations on deposit in the Reserve Fund in excess of the Required Reserve Amount may be withdrawn and transferred, at the option of the City, to the System Fund, as a result of (i) the redemption of the Parity Obligations, or (ii) funds for the payment of the Parity Obligations having been deposited irrevocably with the paying agent or place of payment therefor in the manner described in this Ordinance and any Supplement, the result of such deposit being that such Parity Obligations no longer are deemed to be Outstanding under the terms of this Ordinance. (f) In the event there is a draw upon the Credit Facility, the City shall reimburse the issuer of such Credit Facility for such draw, in accordance with. the terms of any agreement pursuant to which the Credit Facility is issued, from Pledged Revenues, however, such reimbursement from Pledged Revenues shall be subject to the provisions of Section 7 (d) hereof and shall be subordinate -16- and junior in right of payment to the payment of principal of and premium, if any, and interest on the Parity Obligations. (g) For the purpose of this Section, the Reserve Fund shall not secure Parity Obligations issued in the form of commercial paper, or any Credit Agreement issued in support of such Parity Obligations issued in the form of commercial paper, except as otherwise may be provided in any Supplement. Section S. ISSUANCE OF ADDITIONAL OBLIGATIONS. (a) Parity Obligations. The City reserves and shall have the right and power to issue or incur Parity Obligations for any purpose authorized by law pursuant to the provisions of this Ordinance and a Supplement (other than the Supplement adopted concurrently with this Ordinance) to be hereafter authorized. The City may issue, incur, or otherwise become liable in respect of any Parity Obligations if (i) a Designated Financial officer shall deliver to the City a certificate stating that, to the best of his or her knowledge, the City is in compliance with all covenants contained in this Ordinance and any Supplement, is not in default in the performance and observance of any of the terms, provisions and conditions hereof and thereof, and the Funds and Accounts securing the Parity Obligations then Outstanding as established in accordance with the terms of this Ordinance and any Supplement contain the amount then required to be therein; and (ii) an Accountant signs a written certificate to the effect that, in the opinion thereof, during either the next preceding Fiscal Year, or any twelve consecutive calendar month period ending not more than ninety days prior to the -17- date of the then proposed Parity Obligations, the Net Revenues were at least equal to (A) 1.25 times the average Annual Debt Service Requirements of the Parity Obligations to be Outstanding and (B) 1.10 times the Annual Debt Service Requirements of the Parity Obligations to be Outstanding in the- Fiscal Year during which such Annual Debt Service Requirements are scheduled to be the greatest, after the issuance of the then proposed Parity Obligations. For purposes of this subsection (a) , if Parity Obligations are issued to refund less than all of the Parity Obligations then Outstanding, the Accountant's certificate required by clause (ii) above shall give effect to the issuance of the proposed refunding Parity Obligations (and shall not give effect to the Parity Obligations being refunded following their cancellation or provision being made for their payment) . (b) Short-Term Parity Obligations. The City may not issue or incur Parity Obligations issued in the form of commercial paper in an amount in excess of the greater of (i) 25% of the Outstanding Funded Debt secured by the Pledged Revenues of the System or (ii) $75, 000, 000. For purposes of this subsection, the term "Outstanding Funded Debt" shall include Subordinated Debt that matures by its terms, or that is renewable at the option of the City to a date, more than one year after the original creation thereof by the City. The terms and conditions pertaining to the issuance of Parity Obligations in the form of commercial paper, including, without limitation, the security and reserves which may be necessary to support such issuance, shall be set forth in the -18- Supplement authorizing the issuance of -Parity Obligations in the form of commercial paper. (c) Special Facilities Debt and Subordinated Debt. Special Facilities Debt and Subordinated Debt may be incurred by the City without limitation. (d) Credit Agreements. Payments to be made under a Credit Agreement may be treated as Parity Obligations if the governing body of the City makes a finding in the Supplement authorizing the treatment of the obligations of the City incurred under a Credit Agreement as a Parity Obligation that, based upon the findings _contained in a certificate executed and delivered by a Designated Financial Officer, the City will have sufficient funds to meet the financial obligations of the System, including sufficient Pledged Revenues to satisfy the Annual Debt Service Requirements of the System and the financial obligations of the City relating to the System after giving effect to the treatment of the Credit Agreement as a Parity Obligation. (e) Determination of Net Revenues. In making a determination of Net Revenues for any of the purposes described in this Section, the Accountant may take into consideration a change in the rates and charges for services and facilities afforded by the System that became effective at least 30 days prior to the last day of the period for which Net Revenues are determined and, for purposes of satisfying the Net Revenues test described above, make a pro forma determination of the Net Revenues of the System for the period of time covered by the Accountant's certification or opinion based on -19- such change in rates and charges being in effect for the entire period covered by the Accountant's certificate or opinion. Section 9. FINAL DEPOSITS; GOVERNMENT OBLIGATIONS. (a) Any Parity Obligation shall be deemed to be paid, retired and no longer Outstanding. within the meaning of this Ordinance, and the Supplement pursuant to which it was issued, when payment of the principal amount of, redemption premium, if any, on such Parity Obligation, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, upon redemption, or other- wise) either shall have been (i) made in accordance with the terms thereof or- (ii) 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, in accordance with the terms and conditions of an agreement between the City and said Paying Agent . (or escrow agent) , (1) money sufficient to make such payment or (2) Government Obligations, 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 rein- vestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of such Paying Agent pertaining to the Parity Obligation with respect to which such deposit is made shall have been paid or the payment thereof provided for (and irrevocable instructions shall have been given by the City to such Paying Agent to give notice of such redemption in the manner required by the Supplement authorizing the -20- issuance of such Parity Obligation) to the satisfaction of such Paying Agent. Such Paying Agent shall give notice to each owner of any Parity Obligation that such deposit as described above has been made, in the same manner as required with respect to the redemption of such Parity Obligation, all in accordance with the terms of the Supplement pursuant to which such Parity Obligation was issued. In addition, in connection with a defeasance, such Paying Agent shall give notice of redemption, if necessary, to the owners of any Parity Obligation in the manner described in such Parity Obligation and as directed in the redemption instructions delivered by the ,City to such Paying Agent. At such time as a Parity Obligation shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance or the Supplement pursuant to which it was issued or a lien on and pledge of the Pledged Revenues, and shall be entitled to payment solely from such money or Government Obligations. (b) That any moneys so deposited with a Paying Agent (or escrow 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 principal of the Parity Obligations, the redemption premium, if any, and interest thereon, with respect to which such money has been so deposited, shall be remitted to the City for deposit to the credit of the System Fund. -21- (c) Except as provided in clause (b) of this Section, all money or Government Obligations set aside and held in trust pursuant to the provisions of this Section for the payment of Parity Obligations, the redemption premium, if any, and interest thereon, shall be applied solely to and used solely for the payment of such Parity Obligations, the redemption premium, if any, and interest thereon. Section 10. AMENDMENT OF ORDINANCE. (a) The owners of a majority in Outstanding Principal Amount of the Parity Obligations shall have the right from time to time to approve any amendment to ,this Ordinance which may be deemed necessary or desirable by the City, provided, however, that nothing herein contained shall permit or be construed to permit the amendment of the terms and conditions in this Ordinance or in the Parity Obligations so as to: (1) Make any change in the maturity of any of the Outstanding Parity Obligations; (2) Reduce the rate of interest borne by any of the Outstanding Parity Obligations; (3) Reduce the amount of the principal payable on the Outstanding Parity Obligations; (4) Modify the terms of payment of principal of, premium, if any, or interest on the Outstanding Parity Obligations or impose any conditions with respect to such payment; (5) Affect the rights of the owners of less than all of the Parity Obligations then Outstanding; (6) Amend this subsection (a) of this Section; or -22- (7) Change the minimum percentage of the principal amount of Parity Obligations necessary for consent to any amendment; unless such amendment or amendments be approved by the owners of all of the Parity Obligations then Outstanding. (b) That if at any time the City shall desire to amend the Ordinance under this Section, the City shall cause notice of the proposed amendment to be published in a financial newspaper or journal published in The City of New York, New York, and a newspaper of general circulation in the City, 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 each Paying Agent or Registrar, as the case may be, for the Parity Obligations for inspection by all Holders of Parity Obligations. Such publication is not required, however, if notice in writing is given to each owner of Parity Obligations. (c) That whenever at any time not less than 30 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 a majority in Outstanding Principal Amount of the Parity Obligations then Outstanding, which instrument or instruments shall refer to the proposed amendment described in said notice and which specifically consent to and approve such amendment in substantially the form of the copy thereof on file with each Paying Agent or Reg- -23- istrar, as the case may be, for the Parity Obligations, the governing body of the City may pass the amendatory ordinance in substantially the same form. (d) That upon the passage of any amendatory ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and the respective rights, duties and obligations under this Ordinance of the City and all the owners of then Outstanding Parity Obligations and all future Parity Obligations 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 Parity Obligation pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of the first publication of the notice provided for in this Section, and shall be conclusive and binding upon all future owners of the same Parity Obligation during such period. Such consent may be revoked at any time after six months from the date of the first publication of such notice by the owner who gave such consent, or by a successor in title, by filing written notice thereof with the Paying Agent or Registrar, as the case may be, for such Parity Obligation and the City, but such revocation shall not be effective if the owners of at least a majority in Outstanding Principal Amount of the then Outstanding Parity Obligations as determined in accordance with this Section have, prior to the attempted revocation, consented to and approved the amendment. -24- (f) The foregoing provisions of this Section notwithstanding, the City by action of its governing body may amend this Ordinance for any one or more of the following purposes: (1) To add to the covenants and agreements of the City in this Ordinance contained, other covenants and agreements thereafter to be observed, grant additional rights or remedies to the owners of the Parity Obligations or to surrender, restrict or limit any right or power herein reserved to or conferred upon the City; (2) To make such provisions for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained in this Ordinance, or in regard to clarifying matters or questions arising under this Ordinance, as are necessary or desirable and not contrary to or inconsistent with this Ordinance and which shall not adversely affect the interests of the owners of the Parity Obligations then outstanding; (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 Parity Obligations outstanding at the date of the adoption of such modification shall cease to be outstanding, and (ii) such modification shall be specifically referred to in the text of all Parity Obligations issued after the date of the adoption of such modification; -25- (4) To make such amendments to this Ordinance as may be required, in the opinion of Bond Counsel, to ensure compliance with sections 103 and 141 through 150 of the Code and the regulations promulgated thereunder and applicable thereto; (5) To make such changes, modifications or amendments as may be necessary or desirable in order to allow the owners of the Parity Obligations to thereafter avail themselves of a book-entry system for payments, transfers and other matters relating to the Parity Obligations, which changes, modifications or amendments are not contrary to or inconsistent with other provisions of this Ordinance and which shall not adversely affect the interests of the owners of the Parity Obligations; (6) To make such changes, modifications or amendments as may be necessary or desirable in order to obtain or maintain the granting of a rating on the Parity Obligations by a Rating Agency or to obtain or maintain a Credit Agreement or a Credit Facility; and (7) To make such changes, modifications or amendments as may be necessary or desirable, which shall not adversely affect the interests of the owners of the Parity Obligations, in order, to the extent permitted by law, to facilitate the economic and practical utilization of interest rate swap agreements, foreign currency exchange agreements, or similar types of agreements with respect to the Parity Obligations. -26- Notice of any such amendment may be published by the City in the manner described in clause (b) of this Section; provided, however, that the publication of such notice shall not constitute a condition precedent to the adoption of such amendatory ordinance and the failure to publish such notice shall not adversely affect the implementation of such amendment as adopted pursuant to such amendatory ordinance. (g) Ownership. For the purpose of this Section, the ownership and other matters relating to all Parity Obligations shall be determined as provided in each Supplement. (h) Amendments of Supplements. Each Supplement shall contain provisions governing the ability of the City to amend such Supplement; provided, however, that no amendment may be made to any Supplement for the purpose of granting to the owners of Outstanding Parity Obligations under such Supplement a priority over the owners of any other Outstanding Parity Obligations. Section 11. DEFICIENCIES; EXCESS PLEDGED REVENUES. (a) If on any occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Funds and Accounts established in accordance with this Ordinance and any Supplement, then such deficiency shall be made up as soon as possible from the next available Pledged Revenues, or from any other source available for such purpose. (b) Subject to making the required deposits to the credit of the Funds and Accounts established in accordance with this Ordinance and any Supplement, when and as required by this -27- Ordinance and any Supplement, the excess Pledged Revenues may be used by the City for any lawful purpose. Section 12. FUNDS SECURED. Moneys in all Funds and Accounts created in accordance with this Ordinance and any Supplement shall be secured in the manner prescribed by law for securing funds of the City. Section 13. INVESTMENTS. Moneys in any Fund or Account established pursuant to this Ordinance and any Supplement may, at the option of the City, be placed or invested in Eligible Investments. The value of any such Fund or Account shall be :established by adding any money therein to the Value of Investment Securities. The value of each such Fund or Account shall be established no less frequently than annually during the last month of each Fiscal Year. Earnings derived from the investment of moneys on deposit in the various Funds and Accounts shall be credited to the Fund or Account from which moneys used to acquire such investment shall have come. Section 14. IMMEDIATE EFFECT. 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. -28- ADOPTED this %� ay of : % L!i 'rYl,���[�tr , 1991. Mayor ATTEST: ity -secre-taVy APPROVED AS TO FORM AND LEGALITY: r. city Attorney (SEAL) -29- EXHIBIT "A" DEFINITIONS As used in the Ordinance, the following terms and expressions shall have the meanings set forth below, unless the text hereof specifically indicates otherwise: "Account" means any account created, established and maintained under the terms of any Supplement. "Accountant" means a nationally recognized independent certified public accountant, or an independent firm of certified public accountants. "Annual Debt Service Requirements" means, for any Fiscal Year, the principal of and interest on all Parity Obligations coming due at Maturity or Stated Maturity (or that could come due on demand of the owner thereof other than by acceleration or other demand conditioned upon default by the City on such Debt, or be payable in _respect of-any required purchase of such Debt by the City) in such Fiscal Year, and, for such purposes, any one or more of the following rules shall apply at the election of the City: (1) Committed Take Out. If the City has entered into a Credit Agreement constituting a binding commitment within normal commercial practice, from any bank, savings and loan association, insurance company, or similar institution to discharge any of its Funded Debt at its Stated Maturity (or, if due on demand, at any date on which demand may be made) or to purchase any of its Funded Debt at any date on which such Debt is subject to required purchase, all under arrangements whereby the City's obligation to repay the amounts advanced for such discharge or purchase constitutes Funded Debt, then the portion of the Funded Debt committed to be discharged or purchased shall be excluded from such calculation and the principal of and interest on the Funded Debt incurred for such discharging or purchase that would be due in the Fiscal Year for which the calculation is being made, if incurred at the Stated Maturity or purchase date of the Funded Debt to be discharged or' purchased, shall be added; (2) Balloon Debt. If the principal (including the accretion of interest resulting from original issue discount or compounding of interest) of any series or issue of Funded Debt due (or payable in respect of any required purchase of such Funded Debt by the City) in any Fiscal Year either is equal to at least 25% of the total principal (including the accretion of interest resulting from original issue discount or compounding of interest) of such Funded Debt or exceeds by more than 50% the greatest amount of principal of such series or issue of Funded Debt due in any preceding or succeeding A-1 Fiscal Year (such principal due in such Fiscal Year for such series or issue of Funded Debt being referred to herein and throughout this Exhibit A as "Balloon Debt") , the amount of principal of such Balloon Debt taken into account during any Fiscal Year shall be equal to the debt service calculated using the original principal amount of such Balloon Debt amortized over the Term of Issue on a level debt service basis at an assumed interest rate equal to the rate borne by such Balloon Debt on the date of calculation; (3) Consent Sinking Fund. In the case of Balloon Debt, if a Designated Financial Officer shall deliver to the City a certificate providing for the retirement of (and the instrument creating such Balloon Debt shall permit the retirement of) , or for the accumulation of a sinking fund for (and the instrument creating such Balloon Debt shall permit the accumulation of a sinking fund for) , such Balloon Debt according to a fixed schedule stated in such certificate ending on or before the Fiscal Year in which such principal (and premium, if any) is due, then the principal of (and, in the case of retirement, or to the extent provided for by the sinking fund accumulation, the premium, if any, and interest and other debt service charges on) such Balloon Debt shall be computed as if the same were due in accordance with such schedule, provided that this clause (3) shall apply only to Balloon Debt for which the installments previously scheduled have been paid or deposited to the sinking fund established with respect to such Debt on or before the times required by such schedule; and provided further that this clause (3) shall not apply where the City has elected to apply the rule set forth in clause (2) above; (4) Prepaid Debt. Principal of and interest on Parity Obligations, or portions thereof, shall not be included in the computation of the Annual Debt Service Requirements for any Fiscal Year for which such principal or interest are payable from funds on deposit or set aside in trust for the payment thereof at the time of such calculations (including without limitation capitalized interest and accrued interest so deposited or set aside in trust) with a financial institution acting as fiduciary with respect to the payment of such Debt; (5) Variable Rate. As to any Parity Obligation that bears interest at a variable interest rate which cannot be ascertained at the time of calculation of the Annual Debt Service Requirement then, at the option of the City, either (1) an interest rate equal to the average rate borne by such Parity Obligations (or by comparable debt in the event that such Parity Obligations has not been outstanding during the preceding 24 months) for any 24 month period ending within 30 days prior to the date of calculation, or (2) an interest rate equal to the 30-year Tax-Exempt Revenue Bond Index (as most A-2 recently published in The Bond Buyer) , shall be presumed to apply for all future dates, unless such index is no longer published in The Bond Buyer, in which case an index of tax-exempt revenue bonds with maturities of at least 20 years which is published in a financial newspaper or journal with national circulation may be used for this purpose; (6) Commercial Pater. With respect to any Parity Obligations issued in the form of commercial paper, the interest on such Parity Obligations shall be calculated in the manner provided in clause (5) of this definition and the maturity schedule shall be calculated in the manner provided in clause (2) of this definition; and (7) Credit Agreement Payments. If the City has entered into a Credit Agreement in connection with an issue of Debt, payments due under the Credit Agreement, from either the City or the Credit Provider, shall be included in such calculation except to the extent that the payments are already taken into account under (1) through (6) above and any payments otherwise included above under (1) through (6) which are to be replaced by payments under a Credit Agreement, from either the City or the Credit Provider, shall be excluded from such calculation. With respect to any calculation of historic data, only those payments actually made in the subject period shall be taken into account in making such calculation and, with respect to prospective calculations, only those payments reasonably expected to be made in the subject period shall be taken into account in making the calculation. "Bond Counsel" means Messrs. McCall, Parkhurst & Horton and Messrs. Kelly, Hart & Hallman. "City" and "Issuer" mean the City of Fort Worth, Texas. "Code" means the Internal Revenue Code of 1986, as amended. "Credit Agreement" means, collectively, a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitments to purchase Parity Obligations, purchase or sale agreements, interest rate swap agreements, or commitments or other contracts or agreements authorized, recognized and approved by the City as a Credit Agreement in connection with the authorization, issuance, security, or payment of Parity Obligations and on a parity therewith. "Credit Facility" means (i) a policy of insurance or a surety bond, issued by an issuer of policies of insurance insuring the timely payment of debt service on governmental obligations, provided that a Rating Agency having an outstanding rating on Parity Obligations would rate the Parity Obligations fully insured A-3 by a standard policy issued by the issuer in its highest generic rating category for such obligations; and (ii) a letter or line of credit issued by any financial institution, provided that a Rating Agency having an outstanding rating on the Parity Obligations would rate the Parity Obligations in its two highest generic rating categories for such obligations if the letter or line of credit proposed to be issued by such financial institution secured the timely payment of the entire principal amount of the Parity Obligations -and the interest thereon. "Credit Provider" means any bank, financial institution, insurance company, surety bond provider, or other institution which provides, executes, issues, or otherwise is a party to or provider of a Credit Agreement. "Debt" of the City payable from Pledged Revenues means all: (1) indebtedness incurred or assumed by the City for borrowed money (including indebtedness arising under Credit Agreements) and all other financing obligations .of the System that,- in accordance with generally accepted accounting principles, are shown on the liability side of a balance sheet; and (2) all other indebtedness (other than indebtedness otherwise treated as Debt hereunder) for borrowed money or for the acquisition, construction, or improvement of property or capitalized lease obligations that is guaranteed, directly or indirectly, in any manner by the City, or that is in effect guaranteed, directly or indirectly, by the City through an agreement, contingent or .otherwise, to purchase any such indebtedness or to advance or supply funds for the payment or purchase of any such indebtedness or to purchase property or services primarily for the purpose of enabling the debtor or seller to make payment of such indebtedness, or to assure the owner of the indebtedness against loss, or to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether or not such property is delivered or such services are rendered) , or otherwise. For the purpose of determining the "Debt" payable from the Pledged Revenues of the System, there shall be excluded any particular Debt if, upon or prior to the Maturity thereof, there shall have been deposited with the proper depository (a) in trust the necessary funds (or investments that will provide sufficient funds, if permitted by the instrument creating such Debt) for the payment, redemption, or satisfaction of such Debt or (b) evidence of such Debt deposited for cancellation; and thereafter it shall not be considered Debt. No item shall be considered Debt unless such item constitutes indebtedness under generally accepted accounting A-4 principles applied on a basis consistent with the financial statements of the City in prior Fiscal Years. "Debt Service Fund" means the "City of Fort Worth, Texas Water and Sewer System Parity Obligations Debt Service Fund" established pursuant to Section 6 of the Ordinance. "Designated Financial Officer" shall mean the City Manager, the Director of Fiscal Services, or such other financial or accounting official of the City so designated by the governing body of the City. "Eligible Investments" means those investments in which the City is now or hereafter authorized by law, including, but not limited to, the Public Funds Investment Act of 1987 (Article 842a- 2, Texas Revised Civil Statutes) , as amended, to purchase, sell and invest its funds and funds under its control. "Fiscal Year" means the fiscal year of the City which currently ends on September 30 of each calendar year. "Fund" means any fund created, established and maintained under the terms of the Ordinance and any Supplement. "Funded Debt" of the System means all Parity Obligations (and, for purposes of Section 8 (b) of the Ordinance, all Subordinated Debt) created or assumed by the City and payable from Pledged Revenues that mature by their terms (in the absence of the exercise of any earlier right of demand) , or that are renewable at the option of the City to a date, more than one year after the original creation or assumption of such Debt by the City. "Government Obligations" means 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. "Gross Revenues" means all revenues, income, and receipts 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 the Ordinance or a Supplement or maintained by the City in connection with the System, other than those amounts subject to payment to the United States of America as rebate pursuant to section 148 of the Code. The term "Gross Revenues", however, does not include impact fees charged by the System under authority of Chapter 395, Texas Local Government Code, for the construction of capital improvements or facility expansions pursuant to a capital improvement plan prepared in accordance with the provisions of Chapter 395, Texas Local Government Code. A-5 "Holder" or "Bondholder" or "owner" means the registered owner of any Parity Obligation registered as to ownership and the holder of any Parity Obligation payable to bearer. "Maturity" when used with respect to any Debt means the date on which the principal of such Debt or any installment thereof becomes due and payable as therein provided, whether at the Stated Maturity thereof or by declaration of acceleration, call for redemption, -or otherwise. "Net Revenues" and "Net Revenues of the System" means all Gross Revenues less Operating Expenses. "Operating Expenses" means the expenses of operation and maintenance of the System, 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, reasonably and fairly exercised by the passage of appropriate ordinances, are necessary to render adequate service, or such as might be necessary to meet some physical accident or condition which would otherwise impair any Parity Obligations. Operating Expenses shall include the purchase of water, sewer, and, to the extent permitted by law, drainage services as received from other entities and the expenses related thereto, and, to the extent permitted by law, Operating Expenses may include payments made on or in respect of obtaining and maintaining any Credit Agreement or Credit Facility. Depreciation shall never be considered as expenses of operation and maintenance. "Opinion of Counsel" means a written opinion of counsel which shall be acceptable to the City. "Ordinance" means this master ordinance establishing the Water and Sewer System Revenue Financing Program. "Outstanding" when used with respect to Parity Obligations means, as of the date of determination, all Parity Obligations theretofore delivered under this Ordinance and any Supplement, except: (1) Parity Obligations theretofore cancelled and delivered to the City or delivered to the Paying Agent or the Registrar for cancellation; (2) Parity Obligations deemed _ paid pursuant to the provisions of Section 9 of the Ordinance or any comparable section of any Supplement; (3) Parity Obligations upon transfer of or in exchange for and in lieu of which other Parity Obligations have been authenticated and delivered pursuant to the Ordinance and any Supplement; and A-6 (4) Parity Obligations under which the obligations of the City have been released, discharged, or extinguished in accordance with the terms thereof; provided, that, unless the same is acquired for purposes of . cancellation, Parity Obligations owned by the City shall be deemed to be Outstanding as though it was owned by any other owner. "Outstanding Principal Amount" means, with respect to all Parity Obligations or to a series of Parity Obligations, the outstanding and unpaid principal amount of such Parity Obligations paying interest on a current basis and the outstanding and unpaid principal and compounded interest on such Parity Obligations paying accrued, accreted, or compounded interest only at maturity as of any Record Date established by a Registrar in connection with a proposed amendment of the Ordinance or any Supplement. "Parity Obligations" means all Debt of the City which may be issued or assumed in accordance with the terms of the Ordinance and a Supplement, and secured by a first lien on and pledge of the .Pledged Revenues. "Paying Agent" means each entity designated in a Supplement as the place of payment of a series or issue of Parity Obligations. "Pledged Revenues" means (1) the Net Revenues, plus (2) any additional revenues, income, receipts, or other resources, including, without limitation, any grants, donations, or income received or to be received from the United States Government, or any other public or private source, whether pursuant to an agreement or otherwise, which hereafter are pledged to the payment of the Parity Obligations. "Prudent Utility Practice" means any of the practices, methods and acts, in the exercise of reasonable judgment, in the light of the facts, including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the public utility industry prior thereto, known at the time the decision was made, would have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum practice, method or act at the exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could have been expected to accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and expedition. In the case of any facility included in the System which is owned in common with one or more other entities, the term "Prudent Utility Practice", as A-7 s applied to such facility, shall have the meaning set forth in the agreement governing the operation of such facility. "Rating Agency" means any nationally recognized securities rating agency which has assigned a rating to the Parity Obligations. "Registrar" means each entity designated in a Supplement as the registrar of a series or issue of Parity Obligations. "Required Reserve Amount" means an amount equal to the greater of (a) 50% of the average Annual Debt Service Requirements of the Parity Obligations then Outstanding or (b) 37k% of the Annual Debt Service Requirements of the Parity Obligations to be Outstanding in the Fiscal Year during which such Annual Debt Service Requirements are scheduled to be the greatest, to the extent such Parity Obligations are to be secured by the Reserve Fund in accordance with the terms and provisions of Section 7 of the Ordinance and any Supplement. "Reserve Fund" means the "City of Fort Worth, Texas Water and Sewer System Parity Obligations Reserve Fund" established pursuant to Section 7 of the Ordinance. "Reserve Fund Obligations" means cash, Eligible Investments, any Credit Facility, or any combination of the foregoing. "Stated Maturity" when used with respect to any Debt or any installment of interest thereon means any date specified in the instrument evidencing or authorizing such Debt or such installment of interest as a fixed date on which the principal of such Debt or any installment thereof or the fixed date on which such installment of interest is due and payable. "Subordinated Debt" means any Debt which expressly provides that all payments thereon shall be subordinated to the timely payment of all Parity Obligations then Outstanding or subsequently issued. "Supplement" or "Supplemental Ordinance" means an ordinance supplemental to, and authorized and executed pursuant to the terms of, the Ordinance. "System" means and includes the City's existing combined water and sewer system, together with all future extensions, improve- ments, enlargements, and additions thereto, including, to the extent permitted by law, storm sewer and 'drainage, and all re- placements 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, sewer, or, if applicable, drainage facilities which are declared by the City not to be a part of the System and which are hereafter acquired or con- A-8 structed by the City with the proceeds from the issuance of "Special Facilities Debt", which term is hereby defined as being special revenue obligations of the City which are not secured by or payable from the Pledged Revenues, but which are secured by and payable solely from special contract revenues, or payments received from the City or any other legal entity, or any combination thereof, 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 Debt" . "System Fund" means the "City of Fort Worth, Texas Water and Sewer System Revenue Fund" established pursuant to Section 5 of the ordinance. "Term of Issue" means with respect to any Balloon Debt, a period of time equal to the greater of (i) the period of time commencing on the date of issuance of such Balloon Debt and ending on the final maturity date of such Balloon Debt or the "maximum ,maturity date" in the case of commercial paper ("maximum maturity date" having the meaning given to said term in any Supplement authorizing the issuance of commercial paper) or (ii) twenty-five years. "Value of Investment Securities" and words of like import shall mean the amortized value thereof, provided, however, that all United States of America, United States Treasury Obligations--State and Local Government Series shall be valued at par and those obligations which are redeemable at the option of the holder shall be valued at the price at which such obligations are then redeemable. The computations made under this paragraph shall include accrued interest on the investment securities paid as a part of the purchase price thereof and not collected. For the purposes of this definition "amortized value" , when used with respect to a security purchased at par means the purchase price of such security. A-9 I, the undersigned, Assistant City Secretary of the City of Fort Worth, in the State of Texas, do hereby certify that I have compared the attached and foregoing excerpt from the minutes of the regular meeting of the City Council of the City of Fort Worth, Texas which was held on December 10, 1991, and of an ordinance which was duly passed at said meeting, and that said, copy is a true and correct copy of said excerpt and the whole of said ordinance. Said meeting was open to the public, and public notice of the time, place and purpose of said meeting was given, all in accordance with Vernon's Annotated Civil Statutes, Article 6252-17, as amended. In testimony whereof, I have set my hand and have hereunto affixed the seal of said City of Fort Worth, this 10th day of December, 1991. AmfBistant C' y Secretary of the City of For& Worth, Texas (SEAL) r MASTER FILE-1 ACCOUNTING-2 TRANSPORTATIONIPUBLIC WORK-S-6 City of Fort worth, Texas v.ATER AOrt•. FINANC E�1 Mayor and CouncilComniunication FIN ---] LA%S REFERENCE UMB R G-9423 LOG AM 13BONDS PAGE 1 of 1 t/ 12/10/91 SUBJECT SALE OF WATER AND SEWER SYSTEM REVENUE REFUNDING BONDS, SERIES 1991A AND 19918 RECOMMENDATION: It is recommended that the City Council approve: 1. Master Ordinance No. 10968 establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing Program, and 2. The First Supplemental Ordinance No. 10969 authorizing the Issuance and Sale of City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1991A and City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 1991B and other matters related thereto. DISCUSSION: On December 3, 1991, the City Council authorized the staff to proceed with establishing a master ordinance for the Revenue Financing Program of the Water and Sewer System. The Master Ordinance is intended to establish a master program under which revenue supported indebtedness attributable to the system and payable from pledged revenues can be incurred. Revenue debt may be issued, incurred or assumed pursuant to the terms of a Supplement. The supplement will provide the authorization, issuance, sale, delivery, form ,characteristics, provisions of payment and redemption, and security of each issue or Parity Obligation and any other matters related to Parity Obligation not inconsistent with the Constitution and laws of the State of Texas or the provisions of the ordinance. The City entered into a negotiated sale to complete the refunding of Water and Sewer Revenue Debt. The process concluded with the refunding of $150,630,000 Water and Sewer Revenue Bonds and $50,000,000 in Commercial Paper for Water and Sewer. The refunding of Water and Sewer Revenue Bonds had a present value saving of $2, 108,020. The principal debt was reduced by $9,080,000. The total new debt for revenue and commercial paper is $192,825,000 verses the refunded debt of $200,630,000. Today, the Council is being asked to approve the master ordinance and the first supplement for the refunding. The proceeds from the refunding will be used to provide funds which with other available funds of the City Water and Sewer Fund will be sufficient to refund the outstanding revenue bonds and the Commercial Paper debt. CB:t Submitted or City Manager's I ACCOUK-T CENTER 11 AMOUNT CITY SECRETARY Office by: to rsi r .,,. . &-.d i3 ti. Charles Boswell 8500 CITY COUNCIL �/ a� ,�upted Ordinance NO e- Originating Department Hea �y��,�. � Judson Bailiff 8185 rom For Additional Information Contact: - Judson Bailiff 8185 Prr,ew on r.«ycwd paw