HomeMy WebLinkAboutOrdinance 24155-04-2020 ORDINANCE N 04-2020
THIRTY-SIXTH SUPPLEMENTAL ORDINANCE AUTHORIZING THE
ISSUANCE AND SALE OF CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM REVENUE REFUNDING AND IMPROVEMENT BONDS,
SERIES 2020A, IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED
$187,770,000; ESTABLISHING PARAMETERS WITH RESPECT TO
THE SALE OF THE BONDS;
DELEGATING TO THE DESIGNATED CITY OFFICIALS
THE AUTHORITY TO EFFECT THE SALE OF THE BONDS; ENACTING OTHER
PROVISIONS RELATING TO THE SUBJECT;
AND DECLARING AN IMMEDIATE EFFECTIVE DATE
THE STATE OF TEXAS
COUNTIES OF TARRANT, DENTON, WISE, PARKER AND JOHNSON
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 of in excess of
50,000, has established and currently owns and operates a combined waterworks and sanitary
sewer system (the "System"); and
WHEREAS, the City heretofore has 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; and
WHEREAS, said program was established pursuant to the terms of a "Master Ordinance
Establishing the City of Fort Worth, Texas Water and Sewer System Revenue Financing
Program" (the "Master Ordinance"); and
WHEREAS, unless otherwise defined herein, terms used herein shall have the meaning
given in the Master Ordinance; and
WHEREAS, the Master Ordinance authorizes revenue supported indebtedness to be
issued, incurred or assumed pursuant to the terms of supplemental ordinances (any such
ordinance being a "Supplement"); and
WHEREAS, pursuant to the terms of the Master Ordinance, the City has adopted thirty-
five Supplements (designated as the "First Supplement", "Second Supplement", "Third
Supplement", "Fourth Supplement", "Fifth Supplement", "Sixth Supplement", "Seventh
Supplement", "Eighth Supplement", "Ninth Supplement", "Tenth Supplement", "Eleventh
Supplement", "Twelfth Supplement", "Thirteenth Supplement", "Fourteenth Supplement",
"Fifteenth Supplement", "Sixteenth Supplement", "Seventeenth Supplement", "Eighteenth
Supplement", "Nineteenth Supplement", "Twentieth Supplement", "Twenty-First Supplement",
"Twenty-Second Supplement", "Twenty-Third Supplement", "Twenty-Fourth Supplement",
"Twenty-Fifth Supplement", "Twenty-Sixth Supplement", "Twenty-Seventh Supplement",
"Twenty-Eighth Supplement", "Twenty-Ninth Supplement", "Thirtieth Supplement", "Thirty-
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First Supplement", "Thirty-Second Supplement", "Thirty-Third Supplement", "Thirty-Fourth
Supplement" and "Thirty-Fifth Supplement", respectively, and the "Prior Supplements",
collectively) pursuant to which (i) the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding Bonds, Series 1991A and Series 1991B, the City of Fort Worth, Texas
Water and Sewer System Revenue Refunding Bonds, Series 1993, the City of Fort Worth, Texas
Water and Sewer System Revenue Refunding and Improvement Bonds, Series 1996, the City of
Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series
1997, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding and
Improvement Bonds, Series 1998, the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2000, the City of Fort Worth, Texas Water and Sewer System Revenue
Refunding and Improvement Bonds, Series 2000B, the City of Fort Worth, Texas Water and
Sewer System Revenue Bonds, Series 2001, the City of Fort Worth, Texas Water and Sewer
System Revenue Refunding and Improvement Bonds, Series 2003, the City of Fort Worth, Texas
Water and Sewer System Revenue Refunding Bonds, Series 2003A, the City of Fort Worth,
Texas Water and Sewer System Auction Rate Revenue Bonds, Series 2004, the City of Fort
Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series
2005, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series
2005A, the City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 2007, the
City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 2008, the
City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 2009, the City of
Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 2010, the City of
Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 2010A, the City of Fort
Worth, Texas Water and Sewer System Revenue Bonds, Series 2010B, the City of Fort Worth,
Texas Water and Sewer System Revenue Bonds, Series 2010C, the City of Fort Worth, Texas
Water and Sewer System Revenue Refunding and Improvement Bonds, Series 2011, the City of
Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, Series 2012, the City of
Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement Bonds, Series
2014, the City of Fort Worth, Texas Water and Sewer System Revenue Bonds, Series 2015, the
City of Fort Worth, Texas Water and Sewer System Revenue Refunding and Improvement
Bonds, Series 2015A, the City of Fort Worth, Texas Water and Sewer System Revenue Bonds,
Series 2015B, the City of Fort Worth, Texas Water and Sewer System Revenue Refunding and
Improvement Bonds, Series 2016, the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2017, the City of Fort Worth, Texas Water and Sewer System Revenue
Refunding and Improvement Bonds, Series 2017A, the City of Fort Worth, Texas Water and
Sewer System Revenue Bonds, Series 2017B, the City of Fort Worth, Texas Water and Sewer
System Revenue Bonds, Series 2018, the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2019, and the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2020 were issued, (ii) the City of Fort Worth, Texas Water and Sewer
System Revenue Refunding Bonds, with one or more Series designations to be determined, were
authorized to be issued within certain designated parameters set forth in the Thirty-Second
Supplement, as needed in furtherance of the System's Commercial Paper Notes, Callable CP
Series program, and (iii) the City entered into two respective ISDA Master Agreements (referred
to herein as the "Swap Agreements"), one with Lehman Brothers Special Financing Inc., and the
other with GBDP, L.P.; and
WHEREAS, the aforesaid Series 1991A Bonds, Series 1991B Bonds, Series 1993 Bonds,
Series 1996 Bonds, Series 1997 Bonds, Series 1998 Bonds, Series 2000 Bonds, Series 2000B
Bonds, Series 2001 Bonds, Series 2003 Bonds, Series 2003A Bonds, Series 2004 Bonds, Series
2005 Bonds, Series 2005A Bonds, Series 2007 Bonds, Series 2008 and Series 2010 Bonds are no
longer Outstanding, and the aforesaid Series 2009 Bonds, Series 2010A Bonds, Series 2010B
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Bonds, Series 2010C Bonds, Series 2011 Bonds, Series 2012 Bonds, Series 2014 Bonds, Series
2015 Bonds, Series 2015A Bonds, Series 2015B Bonds, Series 2016 Bonds, Series 2017 Bonds,
Series 2017A Bonds, Series 2017B Bonds, Series 2018 Bonds, Series 2019 Bonds and Series
2020 Bonds are hereinafter referred to as the "Previously Issued Parity Bonds"; and
WHEREAS, the Swap Agreements entered into pursuant to the terms of the Fourth
Supplement by their respective terms have expired, and the City has no further obligations
thereunder; and
WHEREAS, no bonds have been issued under the auspices of the Thirty-Second
Supplement; and
WHEREAS, the Previously Issued Parity Bonds are secured by a first lien on and pledge
of the Pledged Revenues of the System; and
WHEREAS, bonds authorized by this Thirty-Sixth Supplement are to be, in part, for the
purpose of extending and improving the City's combined water and sewer system, as further
described in this Thirty-Sixth Supplement; and
WHEREAS, the City Council finds that the outstanding obligations described in
Schedule I attached to this Thirty-Sixth Supplement are eligible to be refunded to achieve a debt
service savings; and
WHEREAS, the City Council finds that the issuance of bonds authorized by this Thirty-
Sixth Supplement, in part, for the purpose of refunding all or a portion of the outstanding
obligations described in Schedule I attached to this Thirty-Sixth Supplement to realize a debt
service savings is a public purpose; and
WHEREAS, because of fluctuating conditions in the municipal bond market, the City
Council delegates to the City Manager and the Chief Financial Officer/Director of Financial
Management Services of the City, individually, but not collectively (each, an "Authorized
Representative") the authority to effect the sale of the bonds authorized by this Thirty-Sixth
Supplement, subject to the parameters described in this Thirty-Sixth Supplement.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF FORT WORTH, TEXAS:
Section 1. DEFINITIONS. That in addition to the definitions set forth in the preamble of
this Thirty-Sixth Supplement, the terms used in this Thirty-Sixth Supplement (except in the
FORM OF BOND) and not otherwise defined shall have the meanings given in the Master
Ordinance, the Prior Supplements or in Exhibit A to this Thirty-Sixth Supplement. Any
references in this Thirty-Sixth Supplement to the "FORM OF BOND" shall be to the form of the
Bonds as set forth in Exhibit B to this Thirty-Sixth Supplement.
Section 2. BONDS AUTHORIZED. That there shall be authorized to be issued, sold,
and delivered hereunder the Bonds, payable to the respective initial registered owners thereof, or
to the registered assignee or assignees of the Bonds or any portion or portions thereof, in an
Authorized Denomination. The Bonds are hereby authorized to be issued in an aggregate
principal amount not to exceed $187,770,000 for the purpose of(i) extending and improving the
System, (ii) refunding the Refunded Obligations and (iii) paying the costs of issuance of the
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Bonds. The Bonds shall be designated as the "City of Fort Worth, Texas Water and Sewer
System Revenue Refunding and Improvement Bonds, Series 2020A". The Bonds are
authorized pursuant to Chapter 1371, Chapter 1502 and other applicable laws of the State of
Texas. The City Council hereby delegates to the Authorized Representative the decision to
conduct the sale of the Bonds through either a competitive sale, a negotiated sale conducted as a
public offering, or a negotiated sale conducted as a private placement, in the manner provided in
this Thirty-Sixth Supplement. By adoption of this Thirty-Sixth Supplement, the Chief Financial
Officer/Director of Financial Management Services of the City, as an Authorized Representative,
is designated as a special Acting Assistant City Manager for the limited purposes of executing
certificates, agreements, notices, instruction letters, requisitions, and other documents on behalf
of the City in accordance with this Thirty-Sixth Supplement. The authority delegated to the
Authorized Representative to effect the sale of the Bonds expires at the close of business on
Thursday, December 31, 2020.
Section 3. DELEGATION OF SALE OF BONDS; PARAMETERS. (a) Maximum
Maturity of Bonds. That the Bonds shall be sold as fully registered bonds, without interest
coupons, numbered consecutively from R-1 upward, payable to the respective initial registered
owners of the Bonds, or to the registered assignee or assignees of the Bonds, in any Authorized
Denomination, maturing not later than February 15, 2050, payable serially or otherwise on the
dates, in the years and in the principal amounts, and dated, all as set forth in the bidding
instructions prepared in connection with the sale of the Bonds (the 'Bidding Instructions") and
the bid form to be submitted by bidders seeking to purchase the Bonds (the "Official Bid Form"),
in the case of a competitive sale, or as set forth in a bond purchase agreement (the "Purchase
Agreement"), for Bonds sold through a negotiated sale. The City Council hereby affirmatively
waives the provision in its "Financial Management Policy Statements — Chapter V - Debt"
specifying that the average life of revenue bonds issued by the City will be no greater than
approximately seventeen to eighteen years. The City Council finds that permitting the Bonds to
have a maturity of not later than February 15, 2050, is consistent with the useful lives of the
facilities authorized to be financed in clause (i) of Section 2 hereof and the revenue-generating
capability of such facilities.
(b) Delegation of Authority. (i) Competitive Sale. Each Authorized Representative,
acting for and on behalf of the City, is hereby authorized to seek competitive bids for the sale of
the Bonds authorized to be sold by this Thirty-Sixth Supplement, and is hereby authorized to
prepare and distribute the Bidding Instructions and the Official Bid Form with respect to seeking
competitive bids for the sale of the Bonds. The Bidding Instructions shall contain the terms and
conditions relating to the sale of the Bonds, including the date bids for the purchase of the Bonds
are to be received, the date of the Bonds, any additional designation or title by which the Bonds
shall be known, the aggregate principal amount of the Bonds to be sold, the price at which the
Bonds will be sold, the years in which the Bonds will mature, the principal amount to mature in
each of such years, the principal amount of the Bonds, if any, to be sold for the purpose of
funding the construction of the improvements described in clause (i) of Section 2 of this Thirty-
Sixth Supplement (in no event, however, shall the principal amount of the Bonds sold for this
purpose exceed the principal limitation set forth in subsection (e) of this Section), the principal
amount of the Bonds, if any, to be sold for the purpose of refunding the Refunded Obligations,
the rate or rates of interest to be borne by each such maturity, the interest payment periods, the
dates, price, and terms upon and at which the Bonds shall be subject to redemption prior to
maturity at the option of the City, as well as any mandatory sinking fund redemption provisions,
and all other matters relating to the issuance, sale and delivery of the Bonds so sold including,
without limitation, whether the Bonds are sold, in whole or in part, as tax-exempt obligations and
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the use of municipal bond insurance for the Bonds. The Bonds shall bear interest at the rates per
annum set forth in the Official Bid Form accepted as the best bid. The interest on the Bonds
shall be payable to the registered owner of any such Bond on the dates and in the manner
provided in the FORM OF BOND set forth in Exhibit B to this Thirty-Sixth Supplement.
Interest shall be calculated on the basis of a 360-day year consisting of twelve 30-day months.
Interest on the Bonds shall be payable on the dates set forth in the Official Bid Form, until
maturity or prior redemption of the Bonds. Each Authorized Representative, acting for and on
behalf of the City, is hereby authorized to receive and accept bids for the sale of Bonds in
accordance with the Bidding Instructions on such date as determined by an Authorized
Representative. The Bonds so sold shall be sold at such price as an Authorized Representative of
the City shall determine to be the most advantageous to the Issuer, which determination shall be
evidenced by the execution thereby of the Official Bid Form submitted by the best and winning
bidder. As a condition to executing the Official Bid Form, the Bonds must bear a rating at a level
such that the Bonds satisfy the requirements of Chapter 1371 to constitute "obligations", as such
term is defined in Chapter 1371. One Bond in the principal amount maturing on each maturity
date as set forth in the Official Bid Form shall be delivered to the Purchasers, and the Purchasers
shall have the right to exchange such bonds as provided in Section 5 hereof without cost. The
FORM OF BOND shall be revised to reflect the terms of the sale of the Bonds as reflected in the
Official Bid Form accepted as the best bid for the Bonds. The Bonds shall initially be registered
in the name as set forth in the Official Bid Form. In case any officer whose signature shall
appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such
signature shall nevertheless be valid and sufficient for all purposes the same as if such officer
had remained in office until such delivery. An Authorized Representative shall not execute the
Official Bid Form unless the best bidder has confirmed to an Authorized Representative that
either it has made disclosure filings to the Texas Ethics Commission in accordance with Section
2252.908, Texas Government Code or is exempt from making such filings under Section
2252.908(c)(4), Texas Government Code. Within thirty (30) days of receipt of any disclosure
filings from the best bidder for the Bonds, the City will acknowledge such disclosure filings in
accordance with the rules of the Texas Ethics Commission. Any finding or determination made
by an Authorized Representative relating to the issuance and sale of the Bonds shall have the
same force and effect as a finding or determination made by the City Council.
(ii) Negotiated Sale —Public Offering. Each Authorized Representative, acting for and
on behalf of the City, is hereby authorized to sell Bonds authorized to be sold by this Thirty-
Sixth Supplement through a negotiated sale conducted as a public offering, and is hereby
authorized to negotiate a Purchase Agreement with the Underwriters with respect to the sale of
the Bonds. The Purchase Agreement shall contain the terms and conditions relating to the sale of
the Bonds, including the date of the Bonds, any additional designation or title by which the
Bonds shall be known, the aggregate principal amount of the Bonds to be sold,the price at which
the Bonds will be sold, the years in which the Bonds will mature, the principal amount to mature
in each of such years, the principal amount of the Bonds, if any, to be sold for the purpose of
funding the construction of the improvements described in clause (i) of Section 2 of this Thirty-
Sixth Supplement (in no event, however, shall the principal amount of the Bonds sold for this
purpose exceed the principal limitation set forth in subsection (e) of this Section), the principal
amount of the Bonds, if any, to be sold for the purpose of refunding the Refunded Obligations,
the rate or rates of interest to be borne by each such maturity, the interest payment periods, the
dates, price, and terms upon and at which the Bonds shall be subject to redemption prior to
maturity at the option of the City, as well as any mandatory sinking fund redemption provisions,
and all other matters relating to the issuance, sale and delivery of the Bonds so sold including,
without limitation, whether the Bonds are sold, in whole or in part, as tax-exempt obligations and
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the use of municipal bond insurance for the Bonds. The Bonds shall bear interest at the rates per
annum set forth in the Purchase Agreement. The interest on the Bonds shall be payable to the
registered owner of any such Bond on the dates and in the manner provided in the FORM OF
BOND set forth in Exhibit B to this Thirty-Sixth Supplement. Interest shall be calculated on the
basis of a 360-day year consisting of twelve 30-day months. Interest on the Bonds shall be
payable on the dates set forth in the Purchase Agreement, until maturity or prior redemption of
the Bonds. The Bonds so sold shall be sold at such price as an Authorized Representative of the
City shall determine to be the most advantageous to the Issuer, which determination shall be
evidenced by the execution thereby of the Purchase Agreement. As a condition to executing the
Purchase Agreement, the Bonds must bear a rating at a level such that the Bonds satisfy the
requirements of Chapter 1371 to constitute "obligations", as such term is defined in Chapter
1371. One Bond in the principal amount maturing on each maturity date as set forth in the
Official Bid Form shall be delivered to the Underwriters, and the Underwriters shall have the
right to exchange such bonds as provided in Section 5 hereof without cost. The FORM OF
BOND shall be revised to reflect the terms of the sale of the Bonds as reflected in the Purchase
Agreement. The Bonds shall initially be registered in the name as set forth in the Purchase
Agreement. In case any officer whose signature shall appear on the Bonds shall cease to be such
officer before the delivery of the Bonds, such signature shall nevertheless be valid and sufficient
for all purposes the same as if such officer had remained in office until such delivery. An
Authorized Representative shall not execute the Purchase Agreement unless each Underwriter
has confirmed to an Authorized Representative that either it has made disclosure filings to the
Texas Ethics Commission in accordance with Section 2252.908, Texas Government Code or is
exempt from making such filings under Section 2252.908(c)(4), Texas Government Code.
Within thirty (30) days of receipt of any disclosure filings from an Underwriter, the City will
acknowledge such disclosure filings in accordance with the rules of the Texas Ethics
Commission. Any finding or determination made by an Authorized Representative relating to the
issuance and sale of the Bonds shall have the same force and effect as a finding or determination
made by the City Council.
(iii) Negotiated Sale — Private Placement. Each Authorized Representative, acting for
and on behalf of the City, is hereby authorized to sell Bonds authorized to be sold by this Thirty-
Sixth Supplement through a negotiated sale conducted as a private placement, and is hereby
authorized to negotiate a Purchase Agreement with the Private Placement Purchaser with respect
to the sale of the Bonds. The Purchase Agreement shall contain the terms and conditions relating
to the sale of the Bonds, including the date of the Bonds, any additional designation or title by
which the Bonds shall be known, the aggregate principal amount of the Bonds to be sold, the
price at which the Bonds will be sold, the years in which the Bonds will mature, the principal
amount to mature in each of such years, the principal amount of the Bonds, if any, to be sold for
the purpose of funding the construction of the improvements described in clause (i) of Section 2
of this Thirty-Sixth Supplement (in no event, however, shall the principal amount of the Bonds
sold for this purpose exceed the principal limitation set forth in subsection (e) of this Section),
the principal amount of the Bonds, if any, to be sold for the purpose of refunding the Refunded
Obligations, the rate or rates of interest to be borne by each such maturity, the interest payment
periods, the dates, price, and terms upon and at which the Bonds shall be subject to redemption
prior to maturity at the option of the City, as well as any mandatory sinking fund redemption
provisions, and all other matters relating to the issuance, sale and delivery of the Bonds so sold
including, without limitation, whether the Bonds are sold, in whole or in part, as tax-exempt
obligations and the use of municipal bond insurance for the Bonds. The Bonds shall bear interest
at the rates per annum set forth in the Purchase Agreement. The interest on the Bonds shall be
payable to the registered owner of any such Bond on the dates and in the manner provided in the
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FORM OF BOND set forth in Exhibit B to this Thirty-Sixth Supplement. Interest shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the
Bonds shall be payable on the dates set forth in the Purchase Agreement, until maturity or prior
redemption of the Bonds. The Bonds so sold shall be sold at such price as an Authorized
Representative of the City shall determine to be the most advantageous to the Issuer, which
determination shall be evidenced by the execution thereby of the Purchase Agreement. As a
condition to executing the Purchase Agreement, the Bonds must bear a rating at a level such that
the Bonds satisfy the requirements of Chapter 1371 to constitute "obligations", as such term is
defined in Chapter 1371. One Bond in the principal amount maturing on each maturity date as
set forth in the Purchase Agreement shall be delivered to the Private Placement Purchaser, and
the Private Placement Purchaser shall have the right to exchange such bonds as provided in
Section 5 hereof without cost. The FORM OF BOND shall be revised to reflect the terms of the
sale of the Bonds as reflected in the Purchase Agreement. The Bonds shall initially be registered
in the name as set forth in the Purchase Agreement. In case any officer whose signature shall
appear on the Bonds shall cease to be such officer before the delivery of the Bonds, such
signature shall nevertheless be valid and sufficient for all purposes the same as if such officer
had remained in office until such delivery. An Authorized Representative shall not execute the
Purchase Agreement unless the Private Placement Purchaser has confirmed to an Authorized
Representative that either it has made disclosure filings to the Texas Ethics Commission in
accordance with Section 2252.908, Texas Government Code or is exempt from making such
filings under Section 2252.908(c)(4), Texas Government Code. Within thirty (30) days of
receipt of any disclosure filings from the Private Placement Purchaser, the City will acknowledge
such disclosure filings in accordance with the rules of the Texas Ethics Commission. Any
finding or determination made by an Authorized Representative relating to the issuance and sale
of the Bonds shall have the same force and effect as a finding or determination made by the City
Council.
(c) Requirement of Savings. The Bonds shall not be sold for the purpose of refunding
the Refunded Obligations unless the refunding of the Refunded Obligations exceeds the
minimum net present value savings set forth in subsection (d) of this Section. The amount of the
savings to be realized from the refunding of the Refunded Obligations shall be set forth in a
certificate (further described in subsection (d) of this Section) to be executed by the Chief
Financial Officer/Director of Financial Management Services of the City.
(d) Savings Threshold. As a condition to the issuance of the Bonds for the purpose of
refunding the Refunded Obligations, the refunding of the aggregate principal amount of the
Refunded Obligations must produce a net present value savings of at least 3.50%. The principal
amount of Bonds issued to refund Refunded Obligations, and the Refunded Obligations to be
refunded, shall be specifically identified in the certificate described below. An Authorized
Representative may elect not to refund any or all of the obligations listed in Schedule I, but in no
event shall the Bonds be issued for the purpose of refunding the Refunded Obligations if the
refunding of the aggregate principal amount of the obligations selected for refunding does not
meet or exceed the minimum net present value savings established above. The Chief Financial
Officer/Director of Financial Management Services of the City shall execute and deliver to the
City Council prior to the delivery of the Bonds a certificate identifying the Refunded Obligations
to be refunded from proceeds of the Bonds and stating that the net present value savings resulting
from the refunding of the Refunded Obligations is no less than the minimum savings threshold
established above. The certificate shall specifically state the net present value savings realized
by the City as a result of refunding the Refunded Obligations. The determination of an
Authorized Representative relating to the issuance and sale of Bonds to refund all or any of the
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Refunded Obligations shall have the same force and effect as a determination made by the City
Council.
(e) Bonds Issued to Finance Improvements. Notwithstanding anything in this Thirty-
Sixth Supplement to the contrary, the principal amount of Bonds that may be issued for the
purpose described in clause (i) of Section 2 hereof shall not exceed $100,000,000.
(f) General. The City Council authorizes the City Manager and the Chief Financial
Officer/Director of Financial Management Services of the City to provide for and oversee the
preparation of a preliminary official statement and the final official statement (the "Official
Statement") in connection with the issuance of the Bonds, and to approve the preliminary official
statement and the Official Statement and deem the preliminary official statement final, and to
provide the Official Statement to the Purchasers, in compliance with the Rule. The Official
Statement in the form and content approved by an Authorized Representative shall be deemed
approved by the City Council and constitute the Official Statement authorized for distribution to
and use by the initial purchasers of the Bonds. The Bonds shall not have a net effective interest
rate, calculated in accordance with Chapter 1204, Texas Government Code, in excess of 6.00%.
Section 4. REDEMPTION. (a) Optional Redemption. That the Bonds may be subject to
redemption prior to their scheduled maturities at the option of the City, on the dates and in the
manner provided in the Bidding Instructions, in the case of Bonds sold through a competitive
sale, or the Purchase Agreement, in the case of Bonds sold through a negotiated sale. Should the
Bonds be subject to redemption prior to their scheduled maturities, if less than all of the Bonds
are to be redeemed by the City, the City shall determine the maturity or maturities and the
amounts to be redeemed and shall direct the Paying Agent/Registrar to call by lot Bonds, or
portions of Bonds, within a maturity and in the principal amounts for redemption; provided, that
during any period in which ownership of the Bonds is determined only by a book entry at a
securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and
bearing the same interest rate are to be redeemed, the particular Bonds shall be selected in
accordance with the arrangements between the City and the securities depository. The FORM
OF BOND shall be revised to reflect any optional redemption of the Bonds, to the extent
provided in the Bidding Instructions, in the case of Bonds sold through a competitive sale, or the
Purchase Agreement, in the case of Bonds sold through a negotiated sale, and incorporated by
reference into the Official Bid Form accepted by an Authorized Representative as the best bid on
the Bonds, in the case of Bonds sold through a competitive sale. The optional redemption of
Bonds at the option of the City may be made conditional upon the occurrence of certain events,
as may be provided for in the FORM OF BOND.
(b) Mandatory Redemption. Should the Official Bid Form, in the case of Bonds sold
through a competitive sale, or the Purchase Agreement, in the case of Bonds sold through a
negotiated sale, provide for the mandatory sinking fund redemption of the Bonds, the terms and
conditions governing any mandatory sinking fund redemption and the payment of mandatory
sinking fund payments shall be set forth therein, and the FORM OF BOND shall be revised to
reflect any mandatory sinking fund redemption of the Bonds, to the extent provided in the
Official Bid Form accepted by an Authorized Representative as the best bid for the Bonds, in the
case of Bonds sold through a competitive sale, or the Purchase Agreement, in the case of Bonds
sold through a negotiated sale.
(c) General Notice. Notice of any redemption of Bonds shall be given in the following
manner, to-wit, a written notice of such redemption shall be given to the registered owner of each
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Bond or a portion thereof being called for redemption at least thirty (30) days prior to the date
fixed for such redemption by depositing such notice in the United States mail, first-class postage
prepaid, addressed to each such registered owner at the address shown on the Registration Books
of the Paying Agent/Registrar. By the date fixed for any such redemption due provision shall be
made by the City with the Paying Agent/Registrar for the payment of the required redemption
price for the Bonds or the portions thereof which are to be so redeemed. If such notice of
redemption is given, and if due provision for such payment is made, all as provided above, the
Bonds, or the portions thereof which are to be so redeemed, thereby automatically shall be
redeemed prior to their scheduled maturities, and shall not be regarded as being Outstanding
except for the right of the owner to receive the redemption price 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 Bonds or any portion thereof. 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 Authorized Denomination at the written request of
the owner, and in an aggregate principal amount equal to the unredeemed portion thereof, will be
issued to the owner upon the surrender thereof for cancellation, at the expense of the City, all as
provided in this Thirty-Sixth Supplement. The maturities of Bonds to be called for redemption
shall be determined by the City. The Bonds or portions to be redeemed within each such
maturity shall be selected by lot or other customary random method selected by the Paying
Agent/Registrar in accordance with any requirements of a securities depository, if applicable
(provided that a portion of a Bond may be redeemed only in an Authorized Denomination). The
City shall give written notice to the Paying Agent/Registrar of any such redemption of Bonds at
least sixty (60) calendar days (or such shorter period as is acceptable to the Paying
Agent/Registrar) prior to such redemption.
(d) Additional Notice. (i) In addition to the manner of providing notice of redemption of
Bonds as set forth above, the Paying Agent/Registrar shall give notice of redemption of Bonds
by United States mail, first-class postage prepaid, at least thirty (30) days prior to a redemption
date to the MSRB and to any national information service that disseminates redemption notices.
Any notice sent to the MSRB or such national information services shall be sent so that they are
received at least two (2) days prior to the general mailing date of such notice. The Paying
Agent/Registrar shall also send a notice of prepayment or redemption to the owner of any Bond
who has not sent the Bonds in for redemption sixty (60) days after the redemption date.
(ii) Each redemption notice, whether required in the FORM OF BOND or otherwise by
this Thirty-Sixth Supplement, shall contain a description of the Bonds to be redeemed including
the complete name of the Bonds, the series, the date of issue, the interest rate, the maturity date,
the CUSIP number, if any, the amounts called for redemption, the mailing date for the notice, the
date of redemption, the redemption price, the name of the Paying Agent/Registrar and the
address at which the Bond may be redeemed including a contact person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrar to the registered
owners of the Bonds shall include a CUSIP number relating to each amount paid to such
registered owner.
Section 5. CHARACTERISTICS OF THE BONDS. (a) Registration, Transfer,
Conversion and Exchange; Authentication. That the City shall keep or cause to be kept at the
designated corporate trust office of BOKF, NA (the "Paying Agent/Registrar"), books or records
for the registration of the transfer, conversion and exchange of the Bonds (the 'Registration
Books"), and the City hereby appoints the Paying Agent/Registrar as its registrar and transfer
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agent to keep such books or records and make such registrations of transfers, conversions and
exchanges under such reasonable regulations as the City and the Paying Agent/Registrar may
prescribe; and the Paying Agent/Registrar shall make such registrations, transfers, conversions
and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in the
Registration Books the address of the owner of each Bond to which payments with respect to the
Bonds shall be mailed, as herein provided; but it shall be the duty of each owner to notify the
Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such
interest payments shall not be mailed unless such notice has been given. The City shall have the
right to inspect, at the Designated Trust Office of the Paying Agent/Registrar, the Registration
Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity. Except as otherwise provided in the
FORM OF BOND, the owner of each Bond requesting a conversion, transfer, exchange and
delivery of such Bond shall pay the Paying Agent/Registrar's standard or customary fees and
charges for making such registration, transfer, conversion, exchange and delivery of a substitute
Bond or Bonds. Registration of assignments, transfers, conversions and exchanges of Bonds
shall be made in the manner provided and with the effect stated in the FORM OF BOND. Each
substitute Bond shall bear a letter and/or number to distinguish it from each other Bond. An
authorized representative of the Paying Agent/Registrar shall, before the delivery of any such
Bond, date and manually sign the "Paying Agent/Registrar's Authentication Certificate" in the
form set forth in the FORM OF BOND (the "Authentication Certificate"), and, except as
provided below, no such Bond shall be deemed to be issued or Outstanding unless the
Authentication Certificate is so executed; however, the foregoing notwithstanding, the
Authentication Certificate need not be executed if any such Bond is accompanied by an executed
"Comptroller's Registration Certificate" in the form set forth in the FORM OF BOND. The
Paying Agent/Registrar promptly shall cancel all paid Bonds and Bonds surrendered for
conversion and exchange. No additional ordinances, orders, or resolutions need be passed or
adopted by the governing body of the City or any other body or person so as to accomplish the
foregoing conversion and exchange of any 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. Pursuant to Chapter 1206, the duty of conversion and exchange of
Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution
of the Authentication Certificate, the converted and exchanged Bond shall be valid,
incontestable, and enforceable in the same manner and with the same effect as the Bonds which
initially were issued and delivered pursuant to this Thirty-Sixth Supplement, approved by the
Attorney General, and registered by the Comptroller. As of the date this Thirty-Sixth
Supplement is approved by the City, the City has been advised that the Designated Trust Office
of the Paying Agent/Registrar is its Dallas, Texas corporate trust office.
(b) Payment of Bonds and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal of, premium, if any, and
interest on the Bonds, all as provided in this Thirty-Sixth Supplement. The Paying
Agent/Registrar shall keep proper records of all payments made by the City and the Paying
Agent/Registrar with respect to the Bonds.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered
owners thereof, (ii) may be redeemed prior to their scheduled maturities, (iii) may be transferred
and assigned, (iv) may be converted and exchanged for other Bonds, (v) shall have the
characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) shall be payable as
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to principal and interest, and (viii) shall be administered and the Paying Agent/Registrar and the
City shall have certain duties and responsibilities with respect to the Bonds, all as provided, and
in the manner and to the effect as required or indicated, in the FORM OF BOND. The Bonds
initially issued and delivered pursuant to this Thirty-Sixth Supplement are not required to be, and
shall not be, authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in
conversion of and exchange for any Bond or Bonds issued under this Thirty-Sixth Supplement
the Paying Agent/Registrar shall execute the Authentication Certificate.
(d) Substitute Paying Agent/Re istrar. The City covenants with the owners of the Bonds
that at all times while the Bonds are Outstanding a competent and legally qualified entity shall
act as and perform the services of Paying Agent/Registrar for the Bonds under this Thirty-Sixth
Supplement, and that the Paying Agent/Registrar will be one entity. Such entity may be the City,
to the extent permitted by law, or a bank, trust company, financial institution, or other agency, as
selected by the City. The City reserves the right to, and may, at its option, change the Paying
Agent/Registrar upon not less than one hundred and twenty (120) days written notice to the
Paying Agent/Registrar, to be effective not later than sixty (60) days prior to the next principal or
interest payment date after such notice. In the event that the entity at any time acting as Paying
Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or
otherwise cease to act as such, the City covenants that promptly it will appoint a competent and
legally qualified entity to act as Paying Agent/Registrar under this Thirty-Sixth Supplement.
Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly
shall transfer and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated
and appointed by the City. Upon any change in the Paying Agent/Registrar, the City promptly
will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each owner of
the Bonds, by United States mail, first-class postage prepaid, which notice also shall give the
address of the new Paying Agent/Registrar. By accepting the position and performing as such,
each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Thirty-
Sixth Supplement, and a certified copy of this Thirty-Sixth Supplement shall be delivered to each
Paying Agent/Registrar.
(e) Reportable Payments. With respect to the Bonds, to the extent required by the Code
and the regulations promulgated thereunder, the Paying Agent/Registrar shall report to each
owner of the Bonds and the Internal Revenue Service (i) the amount of"reportable payments", if
any, subject to backup withholding during each year and the amount of tax withheld, if any, with
respect to payments of the Bonds, and (ii) the amount of interest or amount treated as interest on
the Bonds and required to be included in the gross income of an owner of Bonds.
Section 6. FORM OF BONDS. (a) Form of Bonds. That the form of all Bonds,
including the form of the Authentication Certificate, the form of Assignment, and the form of the
Comptroller's Registration Certificate to be attached only to the Bonds initially issued and
delivered pursuant to this Thirty-Sixth Supplement, shall be, respectively, substantially as set
forth in Exhibit B, with such appropriate variations, omissions, or insertions as are permitted or
required by this Thirty-Sixth Supplement.
(b) Printing Bond Counsel Opinion and Statement of Insurance. The printer of the Bonds
is hereby authorized to print on the Bonds the form of bond counsel's opinion relating to the
Bonds, and is hereby authorized to print on the Bonds an appropriate statement of insurance
furnished by a municipal bond insurance company providing municipal bond insurance, if any,
covering all or any part of the Bonds.
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Section 7. ESTABLISHMENT OF FINANCING PROGRAM AND ISSUANCE OF
PARITY OBLIGATIONS. That by adoption of the Master Ordinance the City has 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.
The Master Ordinance is intended to establish a master plan under which revenue supported debt
of the System can be incurred. This Thirty-Sixth Supplement provides for the authorization,
issuance, sale, delivery, form, characteristics, provisions of payment and redemption, and
security of the Bonds, which are a series of Parity Obligations. The Master Ordinance is
incorporated herein by reference and as such made a part hereof for all purposes, except to the
extent modified and supplemented hereby, and the Bonds are hereby declared to be Parity
Obligations under the Master Ordinance. The City hereby determines that it 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 to meet all financial obligations
of the City relating to the System.
Section 8. PLEDGE. (a) Pledge of Pledged Revenues. That the 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 Debt Service Fund,
and to the Reserve Fund to the extent hereinafter provided. The 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.
(b) Perfection of Lien. Chapter 1208 applies to the issuance of the Bonds and the pledge
of the Pledged Revenues granted by the City under subsection (a) of this Section, and such
pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the
Bonds are Outstanding and unpaid such that the pledge of the Pledged Revenues granted by the
City is to be subject to the filing requirements of Chapter 9, then in order to preserve to the
registered owners of the Bonds the perfection of the security interest in said pledge, the City
agrees to take such measures as it determines are reasonable and necessary under Texas law to
comply with the applicable provisions of Chapter 9 and enable a filing to perfect the security
interest in said pledge to occur.
Section 9. DEBT SERVICE FUND ACCOUNTS. That with respect to the Bonds no
special account need be established to facilitate the payment of debt service on the Bonds.
Section 10. RESERVE FUND. That no deposits shall be made to the credit of the
Reserve Fund, as provided in Section 12(b) of this Thirty-Sixth Supplement.
Section 11. INVESTMENTS. That to the extent a reserve fund for the Bonds is created
after their delivery, money in the Reserve Fund created under this Thirty-Sixth Supplement shall
not be invested in securities with an average aggregate weighted maturity of greater than seven
years. The value of the Reserve Fund, in addition to the annual determination described in the
Master Ordinance, shall be established at the time or times withdrawals are made therefrom.
Investments shall be sold promptly when necessary to prevent any default in connection with the
Bonds. 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.
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Section 12. FLOW OF FUNDS. That all monies in the System Fund not required for
paying Operating Expenses during each month shall be applied by the City, on or before the 1 Oth
day of the following month, commencing during the months and in the order of priority with
respect to the Funds and Accounts that such applications are hereinafter set forth in this Section.
(a) Debt Service Fund- To the credit of the Debt Service Fund, in the following order of
priority, to-wit:
(1) such amounts, deposited in approximately equal monthly installments,
commencing during the month in which the Bonds are delivered, or the month thereafter
if delivery is made after the IOth day thereof, as will be sufficient, together with other
amounts, if any, in the Debt Service Fund available for such purpose, to pay the interest
scheduled to come due on the Bonds on the next succeeding interest payment date; and
(2) such amounts, deposited in approximately equal monthly installments,
commencing during the month which shall be the later to occur of, (i) the twelfth month
before the first maturity date of the Bonds, or (ii) the month in which the Bonds are
delivered, or the month thereafter if delivery is made after the 1 Oth day thereof, as will be
sufficient, together with other amounts, if any, in the Debt Service Fund available for
such purpose, to pay the principal (including mandatory sinking fund redemption
payments, if any) scheduled to mature or come due on the Bonds on the next succeeding
principal payment date or mandatory sinking fund redemption date, as the case may be.
(b) Reserve Fund. Acting in accordance with the provisions of the Master Ordinance,
specifically, without limitation, Section 7 thereof, it is not necessary for the Bonds to be secured
by the Reserve Fund established for the benefit of the owners of Parity Obligations, and therefore
the City may, but shall not be required to, make deposits to the credit of the Reserve Fund with
respect to the Bonds.
Section 13. PAYMENT OF BONDS. That on or before the first scheduled interest
payment date, and on or before each interest payment date and principal payment date thereafter
while any Bond is Outstanding and unpaid, the City shall make available to the Paying
Agent/Registrar, out of the Debt Service Fund (and the Reserve Fund, if necessary) monies
sufficient to pay such interest on and such principal amount of the Bonds, as shall become due on
such dates, respectively, at maturity or by redemption prior to maturity. The Paying
Agent/Registrar shall destroy all paid Bonds and furnish the City with an appropriate certificate
of cancellation or destruction.
Section 14. COVENANTS REGARDING TAX-EXEMPTION. That the Issuer
covenants to refrain from any action which would adversely affect, or to take such action as to
ensure, the treatment of the Bonds as obligations described in section 103 of the Code, the
interest on which is not includable in the "gross income" of the holder for purposes of federal
income taxation. In furtherance thereof,the Issuer covenants as follows:
(a) to take any action to assure that no more than ten percent (10%) of the
proceeds of the Bonds or the projects financed or refinanced therewith (less amounts
deposited to a reserve fund, if any) are used for any "private business use", as defined in
section 141(b)(6) of the Code or, if more than ten percent (10%) of the proceeds are so
used, that amounts, whether or not received by the Issuer, with respect to such private
business use, do not, under the terms of this Thirty-Sixth Supplement or any underlying
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arrangement, directly or indirectly, secure or provide for the payment of more than ten
percent (10%) of the debt service on the Bonds, in contravention of section 141(b)(2) of
the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds five percent(5%) of the proceeds of the Bonds
or the projects financed therewith (less amounts deposited into a reserve fund, if any)
then the amount in excess of five percent (5%) is used for a "private business use" which
is "related" and not "disproportionate", within the meaning of section 141(b)(3) of the
Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or five percent (5%) of the proceeds of the Bonds (less amounts deposited
into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other
than state or local governmental units, in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds
being treated as "specified private activity bonds" within the meaning of section 141(b)
of the Code;
(e) to refrain from taking any action that would result in the Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refrain from using any portion of the proceeds of the Bonds, directly or
indirectly, to acquire or to replace funds which were used, directly or indirectly, to
acquire investment property (as defined in section 148(b)(2) of the Code) which produces
a materially higher yield over the term of the Bonds, other than investment property
acquired with--
(1) proceeds of the Bonds invested for a reasonable temporary period
until such proceeds are needed for the purpose for which the Bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed ten percent of the proceeds of the
Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage);
(h) to refrain from using the proceeds of the Bonds or the proceeds of any prior
bonds to pay debt service on another issue more than 90 days after the date of issue of the
Bonds in contravention of section 149(d) of the Code (relating to advance ref endings);
and
(i) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
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ninety percent (90%) of the "Excess Earnings", within the meaning of section 148(f) of
the Code and to pay to the United States of America, not later than sixty (60) days after
the Bonds have been paid in full, one hundred percent (100%) of the amount then
required to be paid as a result of Excess Earnings under section 148(f) of the Code.
For purposes of the foregoing clauses (a) and (b) above, the Issuer understands that the
term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in
the case of a refunding bond, transferred proceeds (if any) and proceeds of the refunded bonds
expended prior to the date of the issuance of the Bonds. It is the understanding of the Issuer that
the covenants contained herein are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In
the event that regulations or rulings are hereafter promulgated which modify or expand
provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with
any covenant contained herein to the extent that such failure to comply, in the opinion of
nationally-recognized bond counsel, will not adversely affect the exemption from federal income
taxation of interest on the Bonds under section 1.03 of the Code. In the event that regulations or
rulings are hereafter promulgated which impose additional requirements which are applicable to
the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary,
in the opinion of nationally-recognized bond counsel, to preserve the exemption from federal
income taxation of interest on the Bonds under section 103 of the Code. In furtherance of the
foregoing, the Mayor, the City Manager, any Assistant City Manager and the Chief Financial
Officer/Director of Financial Management Services of the City are authorized to execute any
certificates or other reports required by the Code and to make such elections, on behalf of the
City, which may be permitted by the Code as are consistent with the purpose for the issuance of
the Bonds. In order to facilitate compliance with the above clause (i), a "Rebate Fund" may be
established by the City for the sole benefit of the United States of America, and the Rebate Fund
shall not be subject to the claim of any other person, including without limitation the registered
owners of the Bonds. The Rebate Fund would be established for the additional purpose of
compliance with section 148 of the Code.
Section 15. ADDITIONAL FEDERAL INCOME TAX COVENANTS; WRITTEN
PROCEDURES. (a) Allocation of, and Limitation on, Expenditures for the Project. That the
City covenants to account for on its books and records the expenditure of proceeds from the sale
of the Bonds and any investment earnings thereon to be used for the improvement and extension
of the System (referred to herein as a "Project") by allocating proceeds to expenditures within
eighteen (18) months of the later of the date that (a) the expenditure on a Project is made or (b)
each such Project is completed. The foregoing notwithstanding, the City shall not expend such
proceeds or investment earnings more than sixty (60) days after the later of (a) the fifth
anniversary of the date of delivery of the Bonds or (b) the date the Bonds are retired, unless the
City obtains an opinion of nationally-recognized bond counsel substantially to the effect that
such expenditure will not adversely affect the tax-exempt status of the Bonds. For purposes of
this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion
of nationally-recognized bond counsel to the effect that such failure to comply will not adversely
affect the excludability for federal income tax purposes from gross income of the interest.
(b) Disposition of Project. The City covenants that the property financed or refinanced
with the proceeds of the Bonds will not be sold or otherwise disposed in a transaction resulting in
the receipt by the City of cash or other compensation, unless the City obtains an opinion of
nationally-recognized bond counsel substantially to the effect that such sale or other disposition
will not adversely affect the tax-exempt status of the Bonds. For purposes of this Section, the
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portion of the property comprising personal property and disposed of in the ordinary course of
business shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes of this Section, the City shall not be obligated to comply with this
covenant if it obtains an opinion of nationally-recognized bond counsel to the effect that such
failure to comply will not adversely affect the excludability for federal income tax purposes from
gross income of the interest.
(c) Written Procedures. Until superseded by another action of the City, the written
procedures to ensure compliance with the covenants contained herein regarding private business
use, remedial actions, arbitrage and rebate approved by the City on September 11, 2018, apply to
the issuance of the Bonds, and are incorporated by reference into this Thirty-Sixth Supplement.
Section 16. AMENDMENT OF THIRTY-SIXTH SUPPLEMENT. (a) Approval of
Bondholders Required. That the owners of a majority in Outstanding Principal Amount of the
Bonds shall have the right from time to time to approve any amendment to this Thirty-Sixth
Supplement 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 Thirty-Sixth Supplement or in the Bonds so as to:
(1) Make any change in the maturity of any of the Outstanding Bonds;
(2) Reduce the rate of interest borne by any of the Outstanding Bonds;
(3) Reduce the amount of the principal payable on the Outstanding Bonds;
(4) Modify the terms of payment of principal of, premium, if any, or interest on the
Outstanding Bonds or impose any conditions with respect to such payment;
(5) Affect the rights of the owners of less than all of the Bonds then Outstanding;
(6) Amend this clause (a) of this Section; or
(7) Change the minimum percentage of the principal amount of Bonds necessary for
consent to any amendment;
unless such amendment or amendments shall be approved by the owners of all of the Bonds then
Outstanding.
(b) Notice of.Amendment. That if at any time the City shall desire to amend the Thirty-
Sixth Supplement 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 (2) 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 owners of the Bonds. Such publication is not required,
however, if notice in writing is given to each owner of the Bonds.
(c) Effectiveness of Consent and Approval. That whenever at any time not less than
thirty (30) days, and within one (1) 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 Bonds then Outstanding,
which instrument or instruments shall refer to the proposed amendment described in said notice
and which specifically consent to and approve such amendment in substantially the form of the
copy thereof on file with the Paying Agent/Registrar, the City Council of the City may pass such
amendment in substantially the same form.
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(d) Amendment Effective. That upon the passage of any such amendment pursuant to
the provisions of this Section, this Thirty-Sixth Supplement shall be deemed to be amended in
accordance with such amendment, and the respective rights, duties and obligations under this
Thirty-Sixth Supplement of the City and all the owners of then Outstanding Bonds shall
thereafter be determined, exercised and enforced hereunder, subject in all respects to such
amendment.
(e) Revocation of Consent. That any consent given by the owners of a Bond pursuant to
the provisions of this Section shall be irrevocable for a period of six (6) 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 during such period. Such consent may be
revoked at any time after six (6) 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/Registrar and the City, but such revocation shall not be effective if the owners
of at least a majority in Outstanding Principal Amount of the Bonds have, prior to the attempted
revocation, consented to and approved the amendment.
(f) Amendments Not Requiring Bondholder Consent. The foregoing provisions of this
Section notwithstanding, the City by action of the City Council may amend this Thirty-Sixth
Supplement without the consent of any owner of the Bonds or any other Parity Obligations,
solely for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Thirty-Sixth
Supplement contained, other covenants and agreements thereafter to be observed, grant
additional rights or remedies to the owners of the Bonds 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 Thirty-Sixth
Supplement, or in regard to clarifying matters or questions arising under this Thirty-Sixth
Supplement, as are necessary or desirable and not contrary to or inconsistent with this
Thirty-Sixth Supplement and which shall not adversely affect the interests of the owners
of the Bonds then Outstanding;
(3) To modify any of the provisions of this Thirty-Sixth Supplement in any other
respect whatsoever, provided that such modification shall be, and be expressed to be,
effective only after the Bonds Outstanding at the date of the adoption of such
modification shall cease to be Outstanding;
(4) To make such amendments to this Thirty-Sixth Supplement 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 Bonds to thereafter avail themselves of a
book-entry system for payments, transfers and other matters relating to the Bonds, which
changes, modifications or amendments are not contrary to or inconsistent with other
provisions of this Thirty-Sixth Supplement and which shall not adversely affect the
interests of the owners of the Bonds;
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(6) To make such changes, modifications or amendments as are permitted by
Section 18(c)(vi) of this Thirty-Sixth Supplement;
(7) 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 Bonds by a Rating
Agency or to obtain or maintain a Credit Agreement or a Credit Facility issued in support
of the Bonds; and
(8) 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 Bonds, 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 type of
agreements with respect to the Bonds.
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) Eligibility to Approve Amendment. Ownership of the Bonds shall be established
by the Registration Books maintained by the Paying Agent/Registrar, in its capacity as registrar
and transfer agent for the Bonds.
Section 17. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) Delivery of Substitute Bonds. That in the event any Outstanding Bond is damaged,
mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new Bond of the same principal amount, maturity, and interest rate, as
the damaged, mutilated, lost, stolen, or destroyed Bond, in replacement for such Bond in the
manner hereinafter provided.
(b) Application. Application for replacement of damaged, mutilated, lost, stolen, or
destroyed Bonds shall be made to the Paying Agent/Registrar. In every case of loss, theft, or
destruction of a Bond, the applicant for a replacement bond shall furnish to the City and to the
Paying Agent/Registrar such security or indemnity as may be required by them to save each of
them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or
destruction of a 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 Bond, as the case may be.
In every case of damage or mutilation of a Bond, the applicant shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or mutilated.
(c) Payment without Replacement Bond. Notwithstanding the foregoing provisions of
this Section, in the event any such Bond shall have matured, and no default has occurred which
is then continuing in the payment of the principal of, premium, if any, or interest on the Bond,
the City may authorize the payment of the same (without surrender thereof except in the case of
a damaged or mutilated Bond) instead of issuing a replacement Bond, provided security or
indemnity is furnished as above provided in this Section.
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(d) Costs of Replacement Bond. Prior to the issuance of any replacement bond, the
Paying Agent/Registrar shall charge the owner of such Bond with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of
this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall constitute a
contractual obligation of the City whether the lost, stolen, or destroyed Bond shall be found at
any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Thirty-Sixth
Supplement equally and proportionately with any and all other Bonds duly issued under this
Thirty-Sixth Supplement.
(e) Statutory Authority. In accordance with Chapter 1206, this Section of this Thirty-
Sixth Supplement shall constitute authority for the issuance of any such replacement bond
without necessity of further action by the City Council of the City or any other body or person,
and the duty of the replacement of such bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such bonds in the
form and manner and with the effect, as provided in Section 5(a) of this Thirty-Sixth Supplement
for Bonds issued in exchange for other Bonds.
Section 18. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports. (i)
That the City shall provide annually to the MSRB (1) within six months after the end of each
fiscal year ending in or after 2020, financial information and operating data with respect to the
City of the general type described in Exhibit C hereto, and (2) if not provided as part of the
financial information and operating data, annual financial statements of the City, when and if
available. Any financial statements so to be provided shall be (1) prepared in accordance with
the accounting principles described in Exhibit C hereto, or such other accounting principles as
the City may be required to employ from time to time pursuant to state law or regulation, and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within twelve (12) months after the end of each fiscal year ending in or after 2020. If audited
financial statements are not available by the end of the twelve (12) month period, then the City
shall provide notice that the audited financial statements are not available, shall provide
unaudited financial information containing the information described in the tables referenced in
Exhibit C hereto under the heading "Annual Financial Statements and Operating Data" by the
required time, and shall provide audited financial statements for the applicable fiscal year to the
MSRB, when and if the audited financial statements become available.
(ii) If the City changes its Fiscal Year, it will notify the MSRB of the change (and of the
date of the new Fiscal Year end) prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section. The
financial information and operating data to be provided pursuant to this Section may be set forth
in full in one or more documents or may be included by specific reference to any document
(including an official statement or other offering document, if it is available from the MSRB)
that theretofore has been provided to the MSRB or filed with the SEC. Filings shall be made
electronically, in such format as is prescribed by the MSRB.
(b) Disclosure Event Notices. The City shall notify the MSRB of any of the following
events with respect to the Bonds, in a timely manner not in excess of ten Business Days after the
occurrence of the event:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
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3. Unscheduled draws on debt service reserves reflecting financial
difficulties;
4. Unscheduled draws on credit enhancements reflecting financial
difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
respect to the tax status of the Bonds, or other material events affecting the
tax status of the Bonds;
7. Modifications to rights of holders of the Bonds, if material;
8. Bond calls, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds,
if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the City;
13. The consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, other
than in the ordinary course of business, the entry into a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material;
14. Appointment of a successor Paying Agent/Registrar or change in the name
of the Paying Agent/Registrar, if material;
15. Incurrence of a Financial Obligation of the Obligated Person, if material,
or agreement to covenants, events of default, remedies, priority rights, or
other similar terms of a Financial Obligation of the Obligated Person, any
of which affect security holders, if material; and
16. Default, event of acceleration, termination event, modification of terms, or
other similar event under the terms of a Financial Obligation of the
Obligated Person, and which reflect financial difficulties.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with subsection (b) of this Section by the
time required by subsection (a).
As used in clause 12 above, the phrase "bankruptcy, insolvency, receivership or similar
event" means the appointment of a receiver, fiscal agent or similar officer for the City in a
proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law
in which a court or governmental authority has assumed jurisdiction over substantially all of the
assets or business of the City, or if jurisdiction has been assumed by leaving the City Council and
official or officers of the City in possession but subject to the supervision and orders of a court or
governmental authority, or the entry of an order confirming a plan of reorganization,
arrangement or liquidation by a court or governmental authority having supervision or
jurisdiction over substantially all of the assets or business of the City.
As used in clauses 15 and 16 above, the term "Financial Obligation" means: (i) a debt
obligation; (ii) a derivative instrument entered into in connection with, or pledged as security or a
source of payment for, an existing or planned debt obligation; or (iii) a guarantee of(i) or (ii),
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however, the term Financial Obligation shall not include Municipal Securities as to which a final
official statement has been provided to the MSRB consistent with the Rule; the term "Municipal
Securities" means securities which are direct obligations of, or obligations guaranteed as to
principal or interest by, a state or any political subdivision thereof, or any agency or
instrumentality of a state or any political subdivision thereof, or any municipal corporate
instrumentality of one or more states and any other Municipal Securities described by Section
3(a)(29) of the Securities Exchange Act of 1934, as the same may be amended from time to time;
and the term "Obligated Person" means the City.
(c) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the City in any event will give notice of any deposit made in accordance with
this Thirty-Sixth Supplement or applicable law that causes Bonds no longer to be Outstanding.
(ii) The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or to update any information
provided in accordance with this Section or otherwise, except as expressly provided herein. The
City does not make any representation or warranty concerning such information or its usefulness
to a decision to invest in or sell Bonds at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT
OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under this Section
shall comprise a breach of or default under this Thirty-Sixth Supplement for purposes of any
other provision of this Thirty-Sixth Supplement. Nothing in this Section is intended or shall act
to disclaim, waive, or otherwise limit the duties of the City under federal and state securities
laws.
(v) Should the Rule be amended to obligate the City to make filings with or provide
notices to entities other than the MSRB, the City agrees to undertake such obligation in
accordance with the Rule as amended.
(vi) The provisions of this Section may be amended by the City from time to time to
adapt to changed circumstances that arise from a change in legal requirements, a change in law,
or a change in the identity, nature, status, or type of operations of the City, but only if(1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
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any amendments or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the Holders of a majority in aggregate principal amount (or any
greater amount required by any other provision of this Thirty-Sixth Supplement that authorizes
such an amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interest of the holders and beneficial owners of the
Bonds. If the City so amends the provisions of this Section, it shall include with any amended
financial information or operating data next provided in accordance with subsection (a) of this
Section an explanation, in narrative form, of the reason for the amendment and of the impact of
any change in the type of financial information or operating data so provided.
(d) Private Placement of Bonds. Notwithstanding anything to the contrary in this
Section, in the event that the Bonds are sold in a negotiated sale conducted as a private
placement, the City shall not be required to make the foregoing undertaking pursuant to the Rule
and the Authorized Representative is authorized in the alternative to agree to such disclosure as
may be provided in the Purchase Agreement with the Private Placement Purchaser.
Section 19. THIRTY-SIXTH SUPPLEMENT TO CONSTITUTE A CONTRACT;
EQUAL SECURITY. That in consideration of the acceptance of the Bonds, the issuance of
which is authorized hereunder, by those who shall hold the same from time to time, this Thirty-
Sixth Supplement shall be deemed to be and shall constitute a contract between the City and the
Holders from time to time of the Bonds, and the pledge made in this Thirty-Sixth Supplement by
the City and the covenants and agreements set forth in this Thirty-Sixth Supplement to be
performed by the City shall be for the equal and proportionate benefit, security, and protection of
all Holders, without preference, priority, or distinction as to security or otherwise of any of the
Bonds authorized hereunder over any of the others by reason of time of issuance, sale, or
maturity thereof or otherwise for any cause whatsoever, except as expressly provided in or
permitted by this Thirty-Sixth Supplement.
Section 20. SEVERABILITY OF INVALID PROVISIONS. That if any one or more of
the covenants, agreements, or provisions herein contained shall be held contrary to any express
provisions of law or contrary to the policy of express law, though not expressly prohibited, or
against public policy, or shall for any reason whatsoever be held invalid, then such covenants,
agreements, or provisions shall be null and void and shall be deemed separable from the
remaining covenants, agreements, or provisions and shall in no way affect the validity of any of
the other provisions hereof or of the Bonds issued hereunder.
Section 21. PAYMENT AND PERFORMANCE ON BUSINESS DAYS. That, except
as provided to the contrary in the FORM OF BOND, whenever under the terms of this Thirty-
Sixth Supplement or the Bonds, the performance date of any provision hereof or thereof,
including the payment of principal of or interest on the Bonds, shall occur on a day other than a
Business Day, then the performance thereof, including the payment of principal of and interest
on the Bonds, need not be made on such day but may be performed or paid, as the case may be,
on the next succeeding Business Day with the same force and effect as if made on the date of
performance or payment.
Section 22. LIMITATION OF BENEFITS WITH RESPECT TO THE THIRTY-SIXTH
SUPPLEMENT. That with the exception of the rights or benefits herein expressly conferred,
nothing expressed or contained herein or implied from the provisions of this Thirty-Sixth
Supplement or the Bonds is intended or should be construed to confer upon or give to any person
22
other than the City, the Holders, and the Paying Agent/Registrar, any legal or equitable right,
remedy, or claim under or by reason of or in respect to this Thirty-Sixth Supplement or any
covenant, condition, stipulation, promise, agreement, or provision herein contained. This Thirty-
Sixth Supplement and all of the covenants, conditions, stipulations, promises, agreements, and
provisions hereof are intended to be and shall be for and inure to the sole and exclusive benefit of
the City, the Holders, and the Paying Agent/Registrar as herein and therein provided.
Section 23. ESCROW AGREEMENT. That if Bonds are issued to refund Refunded
Obligations in the manner provided for in this Thirty-Sixth Supplement, concurrently with the
delivery of the Bonds the City shall cause to be deposited with the Escrow Agent, from the
proceeds from the sale of the Bonds and other available moneys of the City, all as described in
the letter of instructions referred to in Section 29 of this Thirty-Sixth Supplement, an amount
sufficient to provide for the refunding of the Refunded Obligations in accordance with Chapter
1207. For this purpose, the City Council authorizes the City Manager or any Assistant City
Manager and the City Secretary to execute the Escrow Agreement, in substantially the form and
substance attached to this Thirty-Sixth Supplement. If required by law, the City shall not
execute the Escrow Agreement unless the Escrow Agent has confirmed to the Chief Financial
Officer of the City that either it has made disclosure filings to the Texas Ethics Commission in
accordance with Section 2252.908, Texas Government Code, or is exempt from making such
filings under Section 2252.908(c)(4), Texas Government Code. Within thirty (30) days of
receipt of the disclosure filings from the Escrow Agent, the City will acknowledge such
disclosure filings in accordance with the rules of the Texas Ethics Commission.
Section 24. REDEMPTION OF REFUNDED OBLIGATIONS. That the City Council
determines that, subject to the delivery of Bonds for the purpose of refunding Refunded
Obligations, the Refunded Obligations to be refunded shall be called for redemption at the
redemption price of par plus accrued interest to the date fixed for redemption, on the redemption
date set forth in the Official Statement, all in accordance with the applicable provisions of the
proceedings authorizing the issuance of the Refunded Obligations. The City Manager or his
designee shall take such actions necessary to cause the required notice of redemption to be given
in accordance with the terms of the proceedings for the Refunded Obligations so called for
redemption.
Section 25. FURTHER PROCEDURES. That the Mayor, the City Manager, any
Assistant City Manager, the Chief Financial Officer/Director of Financial Management Services
of the City, the City Secretary or any Assistant City Secretary, and all other officers, employees,
and agents of the City, and each of them, shall be and they are hereby expressly authorized,
empowered and directed from time to time and at any time to do and perform all such acts and
things and to execute, acknowledge and deliver in the name and under the corporate seal and on
behalf of the City all such instruments, whether herein mentioned, as may be necessary or
desirable in order to carry out the terms and provisions of this Thirty-Sixth Supplement and the
Bonds, including, but not limited to, conforming documents to receive the approval of the
Attorney General and to receive ratings from municipal bond rating agencies. The City Council
authorizes the payment of the fee of the Office of the Attorney General of the State of Texas for
the examination of the proceedings relating to the issuance of the Bonds, in the amount
determined in accordance with the provisions of Section 1202.004, Texas Government Code.
Section 26. APPROVAL AND REGISTRATION OF BONDS. That the City Manager
of the City is hereby authorized to have control of the Bonds and all necessary records and
proceedings pertaining to the Bonds pending their delivery and their investigation, examination
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and approval by the Attorney General, and their registration by the Comptroller. Upon
registration of the Bonds, the Comptroller (or a deputy designated in writing to act for the
Comptroller) shall manually sign the Comptroller's Registration Certificate accompanying the
Bonds, and the seal of the Comptroller shall be impressed, or placed in facsimile, on each such
certificate.
Section 27. DTC REGISTRATION. That the Bonds initially shall be issued and
delivered in such manner that no physical distribution of the Bonds will be made to the public,
and The Depository Trust Company ("DTC"), New York, New York, initially will act as
depository for the Bonds. DTC has represented that it is a limited purpose trust company
incorporated under the laws of the State of New York, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered under Section 17A of the Securities Exchange Act of 1934, as
amended, and the City accepts, but in no way verifies, such representations. The Bonds initially
authorized by this Thirty-Sixth Supplement shall be delivered to and registered in the name of
CEDE & CO., the nominee of DTC. So long as each Bond is registered in the name of CEDE &
CO., the Paying Agent/Registrar shall treat and deal with DTC the same in all respects as if it
were the actual and beneficial owner thereof. It is expected that DTC will maintain a book-entry
system which will identify ownership of the Bonds in integral amounts of$5,000, with transfers
of ownership being effected on the records of DTC and its participants pursuant to rules and
regulations established by them, and that the Bonds initially deposited with DTC shall be
immobilized and not be further exchanged for substitute Bonds except as hereinafter provided.
The City is not responsible or liable for any functions of DTC, will not be responsible for paying
any fees or charges with respect to its services, will not be responsible or liable for maintaining,
supervising, or reviewing the records of DTC or its participants, or protecting any interests or
rights of the beneficial owners of the Bonds. It shall be the duty of the DTC Participants, as
defined in the Official Statement herein approved, to make all arrangements with DTC to
establish this book-entry system, the beneficial ownership of the Bonds, and the method of
paying the fees and charges of DTC. The City does not represent nor covenant that the initial
book-entry system established with DTC will be maintained in the future. Notwithstanding the
initial establishment of the foregoing book-entry system with DTC, if for any reason any of the
originally delivered Bonds is duly filed with the Paying Agent/Registrar with proper request for
transfer and substitution, as provided for in this Thirty-Sixth Supplement, substitute Bonds will
be duly delivered as provided in this Thirty-Sixth Supplement, and there will be no assurance or
representation that any book-entry system will be maintained for such Bonds. To effect the
establishment of the foregoing book-entry system, the City has executed and filed with DTC the
"Blanket DTC Letter of Representations" in the form provided by DTC to evidence the City's
intent to establish said book-entry system. The foregoing notwithstanding, Bonds sold to the
Private Placement Purchaser in a negotiated sale conducted as a private placement shall be
registered in book-entry-only form only to the extent so provided for in the Purchase Agreement
with the Private Placement Purchaser.
Section 28. DEFAULT AND REMEDIES. (a) Events of Default. That each of the
following occurrences or events for the purpose of this Thirty-Sixth Supplement is hereby
declared to be an Event of Default:
(i) the failure to make payment of the principal of any Bond when the same
becomes due and payable; or
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(ii) except as provided in Section 18(c)(iv) of this Thirty-Sixth Supplement,
default in the performance or observance of any other covenant, agreement or obligation
of the City, the failure to perform which materially, adversely affects the rights of the
registered owners of the Bonds, including, but not limited to, their prospect or ability to
be repaid in accordance with this Thirty-Sixth Supplement, and the continuation thereof
for a period of sixty (60) days after notice of such default is given by any registered
owner to the City.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any
registered owner or an authorized representative thereof, including, but not limited to, a
trustee or trustees therefor, may proceed against the City, or any official, officer or
employee of the City in their official capacity, for the purpose of protecting and enforcing
the rights of the registered owners under this Thirty-Sixth Supplement, by mandamus or
other suit, action or special proceeding in equity or at law, in any court of competent
jurisdiction, for any relief permitted by law, including the specific performance of any
covenant or agreement contained herein, or thereby to enjoin any act or thing that may be
unlawful or in violation of any right of the registered owners hereunder or any
combination of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for
the equal benefit of all registered owners of Bonds then Outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or under the Bonds or
now or hereafter existing at law or in equity; provided, however, that notwithstanding any
other provision of this Thirty-Sixth Supplement, the right to accelerate the debt evidenced
by the Bonds shall not be available as a remedy under this Thirty-Sixth Supplement.
(ii) The exercise of any remedy herein conferred or reserved shall not be deemed
a waiver of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Thirty-Sixth
Supplement, such registered owner agrees that the certifications required to effectuate
any covenants or representations contained in this Thirty-Sixth Supplement do not and
shall never constitute or give rise to a personal or pecuniary liability or charge against the
officers, employees or members of the City or the City Council.
(iv) None of the members of the City Council, nor any other official or officer,
agent, or employee of the City, shall be charged personally by the registered owners with
any liability, or be held personally liable to the registered owners under any term or
provision of this Thirty-Sixth Supplement, or because of any Event of Default or alleged
Event of Default under this Thirty-Sixth Supplement.
Section 29. USE OF BOND PROCEEDS. That the proceeds from the sale of the Bonds
shall be used in the manner described in a letter of instructions executed by or on behalf of the
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City, provided, that proceeds representing accrued interest on the Bonds shall be deposited to the
credit of the Debt Service Fund and proceeds representing premium on the Bonds shall be used
in a manner consistent with the provisions of Section 1201.042(d), Texas Government Code.
Section 30. TAXABLE OBLIGATIONS. That the provisions of Section 14 of this
Thirty-Sixth Supplement notwithstanding, the Authorized Representative may execute the sale of
the Bonds in a manner that the interest on the Bonds is included in gross income under the
provisions of the Code, as provided in this Thirty-Sixth Supplement.
Section 31. PREAMBLE. That the preamble to this Thirty-Sixth Supplement is hereby
incorporated by reference, and is to be considered a part of the operative text of this Thirty-Sixth
Supplement.
Section 32. RULES OF CONSTRUCTION. That for all purposes of this Thirty-Sixth
Supplement, unless the context requires otherwise, all references to designated Sections and
other subdivisions are to the Sections and other subdivisions of this Thirty-Sixth Supplement.
The words "herein", "hereof' and "hereunder" and other words of similar import refer to this
Thirty-Sixth Supplement as a whole and not to any particular Section or other subdivision.
Except where the context otherwise requires, terms defined in this Thirty-Sixth Supplement to
impart the singular number shall be considered to include the plural number and vice versa.
References to any named person means that party and its successors and assigns. References to
an officer or designated position (e.g., City Manager) include any person acting in the capacity of
such officer or designated position, whether on an acting, interim or permanent basis.
References to any constitutional, statutory or regulatory provision means such provision as it
exists on the date this Thirty-Sixth Supplement is adopted by the City and any future
amendments thereto or successor provisions thereof. All ordinances and resolutions or parts
thereof in conflict herewith are hereby repealed.
[Execution Page Follows]
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Section 33. IMMEDIATE EFFECT. That this Thirty-Sixth Supplement shall be
effective immediately from and after its passage in accordance with the provisions of Section
1201.028, Texas Government Code, and it is accordingly so ordained.
ADOPTED AND EFFECTIVE April 7,2020.
M r,
City of Fort W s
f 0
FORT
City cretary
APPROVED AS TO FORM AND LEGALITY: TEj(p�S
City Att rney
Signature Page—Ordinance Authorizing Issuance of Series 2020A
Water and Sewer System Revenue Refunding and Improvement Bonds
27
SCHEDULE I
CITY OF FORT WORTH, TEXAS WATERWORKS AND SEWER SYSTEM SUBORDINATE LIEN
REVENUE BONDS, SERIES 2007A, bonds maturing on March 1 in each of the years 2021 through 2027, in the
aggregate principal amount of$14,040,000. Redemption Price: par plus accrued interest to the date of redemption;
Redemption Date:within ninety days of the date of delivery of the Bonds.
CITY OF FORT WORTH, TEXAS WATERWORKS AND SEWER SYSTEM SUBORDINATE LIEN
REVENUE BONDS, SERIES 2007B, bonds maturing on March 1 in each of the years 2021 through 2027, in the
aggregate principal amount of$21,375,000. Redemption Price: par plus accrued interest to the date of redemption;
Redemption Date:within ninety days of the date of delivery of the Bonds.
CITY OF FORT WORTH, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 2010A,bonds maturing on February 15 in each of the years 2021 through 2030, in the aggregate principal
amount of$21,620,000. Redemption Price: par plus accrued interest to the date of redemption; Redemption Date:
August 15,2020.
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BONDS, SERIES
2010B,bonds maturing on February 15 in each of the years 2021 through 2030,in the aggregate principal amount of
$15,175,000. Redemption Price: par plus accrued interest to the date of redemption; Redemption Date: August 15,
2020.
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE BONDS, SERIES
2010C,bonds maturing on February 15 in each of the years 2021 through 2027,in the aggregate principal amount of
$15,560,000.Redemption Price:par plus accrued interest to the date of redemption;Redemption Date:within ninety
days of the date of delivery of the Bonds.
Schedule I
EXHIBIT A
That, as used in this Thirty-Sixth Supplement, the following terms shall have the
meanings set forth below, unless the text hereof specifically indicates otherwise:
"Attorney General" means the Attorney General of the State of Texas.
"Authentication Certificate" shall have the meaning given said term in Section 5(a) of the
Thirty-Sixth Supplement.
"Authorized Denomination" means Bonds in a denomination of $5,000 or any integral
multiple thereof.
"Authorized Representative" means the City Manager and the Chief Financial
Officer/Director of Financial Management Services of the City, acting individually but not
collectively.
"Bidding Instructions" shall have the meaning given said term in Section 3(a) of the
Thirty-Sixth Supplement.
"Bonds" means the Series 2020A Bonds.
"Business Day" means a day other than a Sunday, Saturday, a legal holiday, or a day on
which banking institutions in the City of Fort Worth or the city where the Designated Trust
Office of the Paying Agent/Registrar is located are authorized by law or executive order to close.
"Chapter 9" means Chapter 9, Texas Business & Commerce Code.
"Chapter 1206" means Chapter 1206, Texas Government Code.
"Chapter 1208" means Chapter 1208, Texas Government Code.
"Chapter 1371" means Chapter 1371, Texas Government Code.
"Chapter 1502" means Chapter 1502, Texas Government Code.
"Commercial Paper Notes" means the City of Fort Worth, Texas Water and Sewer
System Commercial Paper Notes, Callable CP Series,to be outstanding at any one time and from
time to time in an aggregate principal amount not to exceed $150,000,000, as authorized by
Ordinance 23 028-12-2017.
"Comptroller" means the Comptroller of Public Accounts of the State of Texas.
"Designated Trust Office of the Paying Agent/Registrar" means the city so designated in
Section 5(a) of the Thirty-Sixth Supplement.
"DTC" shall have the meaning given said term in Section 27 of the Thirty-Sixth
Supplement.
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"Escrow Agent" means the financial institution acting as the depository of funds under
the terms of the Escrow Agreement.
"Escrow Agreement" means the escrow agreement between the City and the Escrow
Agent, in respect to the refunding of the Refunded Obligations.
"Master Ordinance" means the "Master Ordinance establishing the City of Fort Worth
Texas Water and Sewer System Revenue Financing Program", passed by the City on December
10, 1991.
"MSRB" means the Municipal Securities Rulemaking Board.
"Nineteenth Supplement" means the ordinance authorizing the issuance of the Series
2010A Bonds.
"Official Bid Form" shall have the meaning given said term in Section 3(a) of the Thirty-
Sixth Supplement.
"Official Statement" shall have the meaning given said term in Section 3(c) of the Thirty-
Sixth Supplement.
"Paying Agent/Registrar" means the financial institution specified in Section 5(a) of the
Thirty-Sixth Supplement.
"Previously Issued Parity Bonds" means the Series 2009 Bonds, the Series 2010A Bonds,
the Series 2010B Bonds, the Series 2010C Bonds,the Series 2011 Bonds, the Series 2012 Bonds,
the Series 2014 Bonds, the Series 2015 Bonds, the Series 2015A Bonds, the Series 2015B
Bonds, the Series 2016 Bonds, the Series 2017 Bonds, the Series 2017A Bonds, the Series
2017B Bonds, the Series 2018 Bonds,the Series 2019 Bonds and the Series 2020 Bonds.
"Private Placement Purchaser" means the bank or other financial institution listed in a
Purchase Agreement executed in connection with a negotiated sale conducted as a private
placement of Bonds.
"Purchase Agreement" shall have the meaning given said term in Section 3(a) of the
Thirty-Sixth Supplement.
"Purchasers" means the entity or entities listed in the Official Bid Form accepted by the
City as the best bid for the Bonds.
"Refunded Obligations" means those obligations listed in Schedule I to the Thirty-Sixth
Supplement to be refunded with the proceeds of the Bonds in accordance with the provisions of
the Bidding Instructions.
"Registration Books" shall have the meaning given said term in Section 5(a) of the
Thirty-Sixth Supplement.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
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"Series 2009 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2009, authorized by the Seventeenth Supplement.
"Series 2010A Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2010A, authorized by the Nineteenth Supplement.
"Series 2010B Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2010B, authorized by the Twentieth Supplement.
"Series 2010C Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2010C, authorized by the Twenty-First Supplement.
"Series 2011 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2011, authorized by the Twenty-Second
Supplement.
"Series 2012 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding Bonds, Series 2012, authorized by the Twenty-Third Supplement.
"Series 2014 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2014, authorized by the Twenty-Fourth
Supplement.
"Series 2015 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2015, authorized by the Twenty-Fifth Supplement.
"Series 2015A Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2015A, authorized by the Twenty-Sixth
Supplement.
"Series 2015B Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2015B,authorized by the Twenty-Seventh Supplement.
"Series 2016 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2016, authorized by the Twenty-Eighth
Supplement.
"Series 2017 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2017, authorized by the Twenty-Ninth Supplement.
"Series 2017A Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2017A, authorized by the Thirtieth
Supplement.
"Series 2017B Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2017B, authorized by the Thirty-First Supplement.
"Series 2018 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2018, authorized by the Thirty-Third Supplement.
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"Series 2019 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2019, authorized by the Thirty-Fourth Supplement.
"Series 2020 Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Bonds, Series 2020, authorized by the Thirty-Fifth Supplement.
"Series 2020A Bonds" means the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2020A, authorized by the Thirty-Sixth
Supplement.
"Seventeenth Supplement" means the ordinance authorizing the issuance of the Series
2009 Bonds.
"Term Bonds" means those Bonds, if any, identified in the Official Bid Form as "term
bonds".
"Thirtieth Supplement" means the ordinance authorizing the issuance of the Series 2017A
Bonds.
"Thirty-First Supplement" means the ordinance authorizing the issuance of the Series
2017B Bonds.
"Thirty-Second Supplement" means the ordinance authorizing the issuance of City of
Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds, within certain
designated parameters and in one or more Series designations to be determined, as needed to
effect the refunding of Commercial Paper Notes.
"Thirty-Third Supplement" means the ordinance authorizing the issuance of the Series
2018 Bonds.
"Thirty-Fourth Supplement" means the ordinance authorizing the issuance of the Series
2019 Bonds.
"Thirty-Fifth Supplement" means the ordinance authorizing the issuance of the Series
2020 Bonds.
"Thirty-Sixth Supplement" means the ordinance authorizing the issuance of the Bonds.
"Treasury Regulations" means all applicable temporary, proposed and final regulations
and procedures promulgated under the Code or promulgated under the Internal Revenue Code of
1954, to the extent applicable to the Code.
"Twentieth Supplement" means the ordinance authorizing the issuance of the Series
2010B Bonds.
"Twenty-First Supplement" means the ordinance authorizing the issuance of the Series
2010C Bonds.
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"Twenty-Second Supplement" means the ordinance authorizing the issuance of the Series
2011 Bonds.
"Twenty-Third Supplement" means the ordinance authorizing the issuance of the Series
2012 Bonds.
"Twenty-Fourth Supplement" means the ordinance authorizing the issuance of the Series
2014 Bonds.
"Twenty-Fifth Supplement" means the ordinance authorizing the issuance of the Series
2015 Bonds.
"Twenty-Sixth Supplement" means the ordinance authorizing the issuance of the Series
2015A Bonds.
"Twenty-Seventh Supplement" means the ordinance authorizing the issuance of the
Series 2015B Bonds.
"Twenty-Eighth Supplement" means the ordinance authorizing the issuance of the Series
2016 Bonds.
"Twenty-Ninth Supplement" means the ordinance authorizing the issuance of the Series
2017 Bonds.
"Underwriters" means the investment banking firms listed in a Purchase Agreement
executed in connection with a negotiated sale conducted as a public offering of Bonds.
A-5
EXHIBIT B
FORM OF BOND:
NO. R- $
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF TARRANT, DENTON, PARKER, WISE AND JOHNSON
CITY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM REVENUE
REFUNDING AND IMPROVEMENT BOND, SERIES 2020A
MATURITY DATE INTEREST RATE DELIVERY DATE CUSIP
% May 19, 2020
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF FORT WORTH, IN
TARRANT, DENTON, PARKER, WISE AND JOHNSON COUNTIES, 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
DOLLARS
and to pay interest thereon from the Delivery Date specified above, on February 15, 2021, and
semiannually on each August 15 and February 15 thereafter to the maturity date specified above,
or to the date of redemption prior to maturity, at the interest rate per annum specified above;
except that if the Paying Agent/Registrar's Authentication Certificate appearing on the face of
this Bond is dated later than February 15, 2021, such interest is payable semiannually on each
August 15 and February 15 following such date. Interest shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of
the United States of America, without exchange or collection charges. The principal of this
Bond shall be paid to the registered owner hereof upon presentation and surrender of this Bond at
maturity, or at redemption prior to maturity, at the designated corporate trust office in Dallas,
Texas (the "Designated Trust Office"), of BOKF, NA, 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 on each interest payment date by check or draft, dated as of such
interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds
of the Issuer required by the ordinance authorizing the issuance of this Bond (the "Bond
Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter
provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States
mail, first-class postage prepaid, on each such interest payment date, to the registered owner
hereof, at its address as it appeared on the last Business Day of the month next preceding each
such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as
hereinafter described. Any accrued interest due at maturity or upon the redemption of this Bond
prior to maturity as provided herein shall be paid to the registered owner upon presentation and
surrender of this Bond for redemption and payment at the Designated Trust Office of the Paying
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Agent/Registrar. The Issuer has covenanted in the Bond Ordinance that on or before each
principal payment date, interest payment date, and accrued interest payment date for this Bond it
will make available to the Paying Agent/Registrar, from the "Debt Service Fund" created by the
ordinance establishing the City of Fort Worth, Texas Water and Sewer System Revenue
Financing Program (the "Master Ordinance"), the amounts required to provide for the payment,
in immediately available funds, of all principal of and interest on the Bonds, when due.
IN THE EVENT of a non-payment of interest on a scheduled payment date, and for 30
days thereafter, a new record date for such interest payment (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the Issuer. Notice of the Special Record Date and of the scheduled
payment date of the past due interest ("Special Payment Date", which shall be 15 days after the
Special Record Date) shall be sent at least five business days prior to the Special Record Date by
United States mail, first class postage prepaid, to the address of each registered owner appearing
on the registration books of the Paying Agent/Registrar at the close of business on the last
business day next preceding the date of mailing of such notice.
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 of Fort
Worth or the city where the Designated Trust Office of the Paying Agent/Registrar is located are
authorized by law or executive order to close, then the date for such payment shall be the next
succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking
institutions are authorized to close; and payment on such date shall have the same force and
effect as if made on the original date payment was due. Notwithstanding the foregoing, during
any period in which ownership of the Bonds is determined only by a book entry at a securities
depository for the Bonds, any payment to the securities depository, or its nominee or registered
assigns, shall be made in accordance with existing arrangements between the Issuer and the
securities depository.
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, dated , 2020,
aggregating $ (herein sometimes called the 'Bonds"), issued for the purpose of(i)
extending and improving the System (as defined in the Master Ordinance), (ii) refunding the
Refunded Obligations (as defined in the Bond Ordinance) and (iii) paying the costs of issuance
associated with the Bonds. The Bonds shall be issued in any denomination or denominations in
any integral multiple of $5,000 (an "Authorized Denomination"). All capitalized terms not
defined herein shall have the same meaning as given said terms in the Master Ordinance or the
Bond Ordinance.
THE OUTSTANDING BONDS maturing on and after February 15, 20_, may be
redeemed prior to their scheduled maturities, at the option of the Issuer, in whole, or in part, on
February 15, 20_, or on any date thereafter, at the redemption price of the principal amount of
the Bonds called for redemption, and without premium; provided, that during any period in
which ownership of the Bonds is determined only by a book entry at a securities depository for
the Bonds, if fewer than all of the Bonds of the same maturity and bearing the same interest rate
are to be redeemed, the particular Bonds of such maturity and bearing such interest rate shall be
selected in accordance with the arrangements between the Issuer and the securities depository.
THE BONDS are also subject to mandatory redemption in part by lot pursuant to the
terms of the Bond Ordinance on February 15 in each of the years 20_ through 20_, with
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respect to Bonds maturing February 15, 20_, in the following years and in the following
amounts, at a price equal to the principal amount thereof and accrued and unpaid interest to the
date of redemption, without premium:
Year Principal Amount($)
* Final Maturity
To the extent, however, that Bonds subject to sinking fund redemption have been previously
purchased or called for redemption in part and otherwise than from a sinking fund redemption
payment, each annual sinking fund payment for such Bond shall be reduced by the amount
obtained by multiplying the principal amount of Bonds so purchased or redeemed by the ratio
which each remaining annual sinking fund redemption payment for such Bonds bears to the total
remaining sinking fund payments, and by rounding each such payment to the nearest $5,000
integral;provided, that during any period in which ownership of the Bonds is determined only by
a book entry at a securities depository for the Bonds, the particular Bonds to be called for
mandatory redemption shall be selected in accordance with the arrangements between the City
and the securities depository.
NOTICE OF any such redemption of Bonds shall be given in the following manner, to-
wit, a written notice of such redemption shall be given to the registered owner of each Bond or a
portion thereof being called for redemption not less than 30 days prior to the date fixed for such
redemption by depositing such notice in the United States mail, first-class postage prepaid,
addressed to each such registered owner at his address shown on the Registration Books of the
Paying Agent/Registrar. Any notice so mailed shall be conclusively presumed to have been duly
given notwithstanding whether one or more registered owners may have failed to have received
such notice. 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. If such notice of redemption is given, and if
due provision for such payment is made, all as provided above, this Bond or the portion hereof
which is to be so redeemed, thereby automatically shall be redeemed prior to its scheduled
maturity, and shall not be regarded as being Outstanding except for the right of the registered
owner to receive the redemption price from the Paying Agent/Registrar out of the funds provided
for such payment. The Paying Agent/Registrar shall record in the Registration Books all such
redemptions of principal amount 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 Authorized Denomination 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 Issuer, all as provided in the Bond Ordinance. The years of
maturity of the Bonds called for such redemption shall be selected by the Issuer. The Bonds or
portions thereof redeemed within a maturity shall be selected by lot or other customary random
method selected by the Paying Agent/Registrar in accordance with any requirements of a
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securities depository, if applicable (provided that a portion of a Bond may be redeemed only in
an Authorized Denomination).
THE FOREGOING PARAGRAPH NOTWITHSTANDING, with respect to any optional
redemption of the Bonds, unless certain prerequisites to such optional redemption required by the
Bond Ordinance have been met and money sufficient to pay the principal of, premium, if any,
and interest on the Bonds to be redeemed will have been received by the Paying Agent/Registrar
prior to giving such notice, such notice may state that the optional redemption will, at the option
of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money
by the Paying Agent/Registrar on or prior to the date fixed for such redemption or upon any
prerequisite set forth in the notice of redemption. If a conditional notice of redemption is given
and such prerequisites to the redemption are not satisfied, such notice will be of no force and
effect, the City will not redeem such Bonds and the Paying Agent/Registrar will give notice in
the manner in which the notice of redemption was given,to the effect that such Bonds will not be
redeemed.
ALL BONDS OF THIS SERIES are issuable solely as fully registered bonds, without
interest coupons, in the denomination of any Authorized Denomination. As provided in the Bond
Ordinance, this Bond may, at the request of the registered owner or the assignee or assignees
hereof, be assigned, transferred, converted into and exchanged for a like aggregate amount of
fully registered Bonds, without interest coupons, payable to the appropriate registered owner,
assignee or assignees, as the case may be, having any authorized denomination or denominations
as requested in writing by the appropriate registered owner, assignee or assignees, as the case
may be, upon surrender of this Bond to the Paying Agent/Registrar for cancellation, all in
accordance with the form and procedures set forth in the Bond Ordinance. Among other
requirements for such assignment and transfer, this Bond must be presented and surrendered to
the Paying Agent/Registrar at the Designated Trust Office, 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 authorized
denomination to the assignee or assignees in whose name or names this Bond or any such portion
or portions hereof is or are to be registered. The form of Assignment printed or endorsed on this
Bond may be executed by the registered owner to evidence the assignment hereof, but such
method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions
hereof from time to time by the registered owner. The one requesting such conversion and
exchange shall pay the Paying Agent/Registrar's reasonable standard or customary fees and
charges for converting and exchanging any Bond or portion thereof. In any circumstance, any
taxes or governmental charges required to be paid with respect thereto shall be paid by the one
requesting such assignment, transfer, conversion or exchange, as a condition precedent to the
exercise of such privilege. The foregoing notwithstanding, in the case of the conversion and
exchange of an assigned and transferred Bond or Bonds or any portion or portions thereof, such
fees and charges of the Paying Agent/Registrar will be paid by the Issuer. The Paying
Agent/Registrar shall not be required (i) to make any such transfer, conversion or exchange
during the period beginning at the opening of business 30 days before the day of the first mailing
of a notice of redemption and ending at the close of business on the day of such mailing, or(ii)to
transfer, convert or exchange any Bonds so selected for redemption when such redemption is
scheduled to occur within 30 calendar days; provided, however, such limitation of transfer shall
not be applicable to an exchange by the registered owner of an unredeemed balance of a Bond
called for redemption in part.
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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 Bond Ordinance that
it promptly will appoint a competent and legally qualified substitute therefor, whose
qualifications are substantially similar to the previous Paying Agent/Registrar it is replacing, and
promptly will cause written notice thereof to be mailed to the registered owners of the Bonds.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of providing notice, holding,
delivering or transferring this Bond shall be modified to require the appropriate person or entity
to meet the requirements of the securities depository as to registering or transferring the book
entry to produce the same effect.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Master Ordinance and the Bond Ordinance,
agrees to be bound by such terms and provisions, acknowledges that the Master Ordinance and
the Bond Ordinance are duly recorded and available for inspection in the official minutes and
records of the Issuer, and agrees that the terms and provisions of this Bond, the Master
Ordinance and the Bond Ordinance constitute a contract between each registered owner hereof
and the Issuer.
THE BONDS are special obligations of the Issuer payable solely from and equally
secured by a first lien on and pledge of the Pledged Revenues of the System. The Issuer has
reserved the right, subject to the restrictions stated, and adopted by reference, in the Master
Ordinance, to issue additional parity revenue obligations which also may be made payable from,
and secured by a first lien on and pledge of, the Pledged Revenues. For a more complete
description and identification of the revenues and funds pledged to the payment of the Bonds,
and other obligations of the Issuer secured by and payable from the same source or sources as the
Bonds, reference is hereby made to the Master Ordinance and the Bond Ordinance.
THE ISSUER has reserved the right, subject to the restrictions stated, and adopted by
reference, in the Bond Ordinance, to amend the Bond Ordinance; and under some (but not all)
circumstances amendments must be approved by the owners of a majority in Outstanding
Principal Amount of the Bonds.
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.
IT IS HEREBY certified and covenanted that this Bond has been duly and validly
authorized, issued and delivered; and 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.
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IN WITNESS WHEREOF, this Bond has been signed with the imprinted or lithographed
manual or facsimile signature of the Mayor, 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 the official seal of the Issuer has been
duly affixed to,printed, lithographed or impressed on this Bond.
CITY OF FORT WORTH, TEXAS
By
Mayor, City of Fort Worth, Texas
ATTEST:
City Secretary,
City of Fort Worth, Texas
APPROVED AS TO FORM AND LEGALITY: (SEAL)
City Attorney, City of Fort Worth, Texas
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OFFICE OF COMPTROLLER
REGISTER NO.
STATE OF TEXAS
I hereby certify that this Bond has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
Comptroller of Public Accounts of the State of Texas
(SEAL)
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed
Registration Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the
proceedings adopted by the Issuer as described in the text of this Bond; and that this Bond has
been issued in exchange for or replacement of a bond, bonds, or a portion of a bond or bonds of
an issue which originally was approved by the Attorney General of the State of Texas and
registered by the Comptroller of Public Accounts of the State of Texas.
Dated BOKF,NA,
Paying Agent/Registrar
By
Authorized Signatory
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer Identification Number of Transferee
(Please print or typewrite name and address, including zip code of Transferee)
the within Bond and,all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within Bond on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by NOTICE: The signature(s) above must
a member firm of the New York Stock correspond with the name of the Registered
Exchange or a commercial bank or trust Owner as it appears upon the front of this Bond
company. in every particular, without alteration or
enlargement or any change whatsoever.
B-8
Exhibit C
to Thirty-Sixth
Supplemental Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 18 of this Thirty-Sixth Supplement.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
Tables 1 through 15 contained in the Official Statement; and
"Excerpts from the Annual Financial Report", as set forth in Appendix B to the
Official Statement
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to above.
C-1
ESCROW AGREEMENT
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM REVENUE
REFUNDING AND IMPROVEMENT BONDS SERIES 2020A ESCROW
THIS ESCROW AGREEMENT, dated as of , 2020 (herein, together with any
amendments or supplements hereto,called the "Agreement")is entered into by and between the City
of Fort Worth,Texas(herein called the "Issuer")and BOKF,NA, as escrow agent(herein,together
with any successor in such capacity,called the"Escrow Agent"). The addresses of the Issuer and the
Escrow Agent are shown on Exhibit "A" attached hereto and made a part hereof.
WITNESSETH:
WHEREAS, the Issuer heretofore issued and there presently remain outstanding the
obligations (the "Refunded Bonds") described in the Verification Report of , a true
and correct copy of which is attached hereto as Exhibit "B" and made a part hereof(the "Report"),
relating to the Refunded Bonds; and
WHEREAS,the Refunded Bonds are scheduled to mature on such dates,bear interest at such
rates, and be payable at such times and in such amounts as are set forth in the Report; and
WHEREAS,when firm banking arrangements have been made for the payment of principal
and interest to the maturity or redemption date of the Refunded Bonds, then the Refunded Bonds
shall no longer be regarded as outstanding except for the purpose of receiving payment from the
funds provided for such purpose; and
WHEREAS,Chapter 1207,Texas Government Code("Chapter 1207"),authorizes the Issuer
to issue refunding bonds and to deposit the proceeds from the sale thereof, and any other available
funds or resources,directly with any place of payment(paying agent)for any of the Refunded Bonds,
and such deposit, if made before such payment dates and in sufficient amounts, shall constitute the
making of firm banking and financial arrangements for the discharge and final payment of the
Refunded Bonds; and
WHEREAS, Chapter 1207 further authorizes the Issuer to enter into an escrow agreement
with any such paying agent for any of the Refunded Bonds with respect to the safekeeping,
investment, administration and disposition of any such deposit,upon such terms and conditions as
the Issuer and such paying agent may agree,provided that such deposits may be invested only in(1)
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,and which may be in book
entry form, (2) noncallable obligations of an agency or instrumentality of the United States of
America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA.or its equivalent,and(3)noncallable
obligations of a state or an agency or a county,municipality,or other political subdivision of a state
that have been refunded and that,on the date the governing body of the Issuer adopts or approves the
proceedings authorizing the financial arrangements are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA.or its equivalent,and which shall mature and/or
bear interest payable at such times and in such amounts as will be sufficient to provide for the
scheduled payment of principal and interest on the Refunded Bonds when due; and
WHEREAS, the Escrow Agent is the paying agent for the Refunded Bonds, and this
Agreement constitutes an escrow agreement of the kind authorized and required by said
Chapter 1207; and
WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms
of this Agreement and timely make available the amounts required to provide for the payment of the
principal of and interest on such obligations when due,and in accordance with their terms,but solely
from the funds, in the manner, and to the extent provided in this Agreement; and
WHEREAS, the issuance, sale, and delivery of the City of Fort Worth, Texas Water and
Sewer System Revenue Refunding and Improvement Bonds,Series 2020A(the"Refunding Bonds")
have been issued, sold and delivered for the purpose,among others,of obtaining the funds required
to provide for the payment of the principal of the Refunded Bonds at their maturity or date of
redemption and the interest thereon to such dates; and
WHEREAS,the Issuer desires that,concurrently with the delivery of the Refunding Bonds to
the purchasers thereof,certain proceeds of the Refunding Bonds,together with certain other available
funds of the Issuer,if applicable,shall be applied to purchase certain direct obligations of the United
States of America hereinafter defined as the 'Escrowed Securities" for deposit to the credit of the
Escrow Fund created pursuant to the terms of this Agreement and to establish a beginning cash
balance (if needed) in such Escrow Fund; and
WHEREAS,the Escrowed Securities shall mature and the interest thereon shall be payable at
such times and in such amounts so as to provide moneys which,together with cash balances from
time to time on deposit in the Escrow Fund,will be sufficient to pay interest on the Refunded Bonds
as it accrues and becomes payable and the principal of the Refunded Bonds on their maturity or date
of redemption; and
WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed Securities,
particularly those in book entry form, the Issuer desires to establish the Escrow Fund at the
designated corporate trust office of the Escrow Agent; and
WHEREAS,the Escrow Agent is herein also referred to as the "Paying Agent", and in such
capacity as paying agent for the Refunded Bonds,acting through the Escrow Agent,is also a party to
this Agreement,as the sole Paying Agent for the Refunded Bonds,to acknowledge its acceptance of
the terms and provisions of this Agreement in such capacity.
NOW,THEREFORE,in consideration of the mutual undertakings,promises and agreements
herein contained,the sufficiency of which hereby are acknowledged,and to secure the full and timely
payment of principal of and the interest on the Refunded Bonds, the Issuer and the Escrow Agent
mutually undertake, promise, and agree for themselves and their respective representatives and
successors, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. Unless the context clearly indicates otherwise, the following
terms shall have the meanings assigned to them below when they are used in this Agreement:
"Code"means the Internal Revenue Code of 1986,as amended,or to the extent applicable the
Internal Revenue Code of 1954, together with any other applicable provisions of any successor
federal income tax laws.
"Escrow Fund"means the fund created by this Agreement to be administered by the Escrow
Agent pursuant to the provisions of this Agreement.
"Escrowed Securities" means the direct noncallable,non-prepayable United States Treasury
obligations and obligations the due timely payment of which is unconditionally guaranteed by the
United States of America described in the Report or cash or other direct obligations of the United
States of America substituted therefor pursuant to Article IV of this Agreement.
Section 1.02. Other Definitions. The terms "Agreement", "Issuer", 'Escrow Agent",
"Refunded Bonds", 'Refunding Bonds", "Report" and "Paying Agent",when they are used in this
Agreement, shall have the meanings assigned to them in the preamble to this Agreement.
Section 1.03. Interpretations. The titles and headings of the articles and sections of this
Agreement have been inserted for convenience and reference only and are not to be considered a part
hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the
terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein
and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in
accordance with applicable law.
ARTICLE II
DEPOSIT OF FUNDS AND
ESCROWED SECURITIES
Concurrently with the sale and delivery of the Refunding Bonds the Issuer shall deposit,or
cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund, the funds and
Escrowed Securities described in the Report,and the Escrow Agent shall,upon the receipt thereof,
acknowledge such receipt to the Issuer in writing.
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ARTICLE III
CREATION AND OPERATION OF ESCROW FUND
Section 3.01. Escrow Fund. The Escrow Agent has created on its books a special trust fund
and irrevocable escrow to be known as the City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds Series 2020A Escrow Fund(the"Escrow Fund"). The
Escrow Agent hereby agrees that upon receipt thereof it will irrevocably deposit to the credit of the
Escrow Fund the funds and the Escrowed Securities described in the Report. Such deposit, all
proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the
property of the Escrow Fund, (b) shall be applied only in strict conformity with the terms and
conditions of this Agreement,and(c)are hereby irrevocably pledged to the payment of the principal
of and interest on the Refunded Bonds, which payment shall be made by timely transfers of such
amounts at such times as are provided for in Section 3.02 hereof. When the final transfers have been
made for the payment of such principal of and interest on the Refunded Bonds, any balance then
remaining in the Escrow Fund shall be transferred to the Issuer, and the Escrow Agent shall
thereupon be discharged from any further duties hereunder.
Section 3.02. Payment of Principal and Interest. The Escrow Agent is hereby irrevocably
instructed to transfer from the cash balances from time to time on deposit in the Escrow Fund,the
amounts required to pay the principal of the Refunded Bonds and interest thereon in the amounts and
on the date shown in the Report.
Section 3.03. Sufficiency of Escrow Fund. The Issuer represents that the successive receipts
of the principal of and interest on the Escrowed Securities will assure that the cash balances on
deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys for
transfer to the Paying Agent at the times and in the amounts required to pay the interest on the
Refunded Bonds as such interest comes due and the principal of the Refunded Bonds as the
Refunded Bonds mature,all as more fully set forth in the Report. If,for any reason,at any time,the
cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to
transfer the amounts required by each place of payment (paying agent) for the Refunded Bonds to
make the payments set forth in Section 3.02 hereof, the Issuer shall timely deposit in the Escrow
Fund,from any funds that are lawfully available therefor,additional funds in the amounts required to
make such payments. Notice of any such insufficiency shall be given as promptly as practicable as
hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any
insufficiency of funds in the Escrow Fund or the Issuer's failure to make additional deposits thereto.
Section 3.04. Trust Fund. The Escrow Agent shall hold at all times the Escrow Fund, the
Escrowed Securities and all other assets of the Escrow Fund,wholly segregated from all other funds
and securities on deposit with the Escrow Agent;it shall never allow the Escrowed Securities or any
other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow
Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The
Escrowed Securities and other assets of the Escrow Fund shall always be maintained by the Escrow
Agent as trust funds for the benefit of the owners of the Refunded Bonds; and a special account
thereof shall at all times be maintained on the books of the Escrow Agent. The owners of the
Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed
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Securities,the proceeds thereof,and all other assets of the Escrow Fund to which they are entitled as
owners of the Refunded Bonds. The amounts received by the Escrow Agent under this Agreement
shall not be considered as a banking deposit by the Issuer,and the Escrow Agent shall have no right
to title with respect thereto except as a constructive trustee and Escrow Agent under the terms of this
Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to
warrants,drafts or checks drawn by the Issuer or,except to the extent expressly herein provided,by
the Paying Agent.
Section 3.05. Security for Cash Balances. Cash balances from time to time on deposit in the
Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its
successor, be continuously secured by a pledge of direct obligations of, or obligations
unconditionally guaranteed by,the United States of America,having a market value at least equal to
such cash balances.
ARTICLE IV
LIMITATION ON INVESTMENTS
Section 4.01. Duty of Escrow Agent to Investment Funds. Except as provided in Sections
3.02, 4.02, 4.03 and 4.04 hereof, the Escrow Agent shall not have any power or duty to invest or
reinvest any money held hereunder, or to make substitutions of the Escrowed Securities, or to sell,
transfer or otherwise dispose of the Escrowed Securities.
Section 4.02. Reinvestment of Certain Cash Balances in Escrow by Escrow Agent. In
addition to the Escrowed Securities listed in the Report, the Escrow Agent shall reinvest cash
balances shown in the Report in United States Treasury Obligations- State and Local Government
Series with an interest rate equal to zero percent(0%)to the extent(i)such Treasury Obligations are
available from the Department of the Treasury and (ii) such reinvestments are called for in the
Report. All such reinvestments shall be made,if and to the extent so required,only from the portion
of cash balances derived from the maturing principal of and interest on Escrowed Securities that are
United States Treasury Certificates of Indebtedness,Notes or Bonds- State and Local Government
Series. All such reinvestments shall be acquired on and shall mature on the dates shown on the
Report.
Section 4.03. Substitutions and Reinvestments. At the direction of the Issuer, the Escrow
Agent shall reinvest cash balances representing receipts from the Escrowed Securities, make
substitutions of the Escrowed Securities or redeem the Escrowed Securities and reinvest the proceeds
thereof in other Escrowed Securities or hold such proceeds as cash,together with other moneys or
securities held in the Escrow Fund, provided that the Issuer delivers to the Escrow Agent the
following:
(1) an opinion by an independent certified public accountant that after such
substitution or reinvestment the principal amount of the securities in the Escrow Fund,
together with the interest thereon and other available moneys, will be sufficient to pay,
without further investment or reinvestment,as the same become due in accordance with the
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Report,the principal of,interest on and premium,if any,on the Refunded Bonds which have
not previously been paid, and
(2) an unqualified opinion of nationally recognized municipal bond counsel to the
effect that (a) such substitution or reinvestment will not cause the Refunded Bonds to be
"arbitrage bonds" within the meaning of section 103 of the Code or the regulations
thereunder in effect on the date of such substitution or reinvestment,or otherwise make the
interest on the Refunded Bonds subject to federal income taxation,and(b)such substitution
or reinvestment complies with the Constitution and laws of the State of Texas and with all
relevant documents relating to the issuance of the Refunded Bonds.
The Escrow Agent shall have no responsibility or liability for loss or otherwise with respect
to investments made at the direction of the Issuer.
Section 4.04. Substitution for Escrowed Securities. Concurrently with the initial deposit by
the Issuer with the Escrow Agent,but not thereafter,the Issuer, at its option,may substitute cash or
non-interest bearing direct noncallable, non-prepayable obligations of the United States Treasury
(i.e., Treasury obligations which mature and are payable in a stated amount on the maturity date
thereof,and for which there are no payments other than the payment made on the maturity date) (the
"Substitute Obligations") for non-interest bearing Escrowed Securities, if any, but only if such
Substitute Obligations
(a) are in an amount, and/or mature in an amount, which is equal to or greater than the
amount payable on the maturity date of the obligation listed in the Report for which
such Substitute Obligation is substituted,
(b) mature on or before the maturity date of the obligation listed in the Report for which
such Substitute Obligation is substituted, and
(c) produce the amount necessary to pay the interest on and principal of the Refunded
Bonds,as set forth in the Report,as verified by a certified public accountant or a firm
of certified public accountants.
If, concurrently with the initial deposit by the Issuer with the Escrow Agent, any such Substitute
Obligations are so substituted for any Escrowed Securities, the Issuer may, at any time thereafter,
substitute for such Substitute Obligations the same Escrowed Securities for which such Substitute
Obligations originally were substituted.
Section 4.05. Arbitrage. The Issuer hereby covenants and agrees that it shall never request
the Escrow Agent to exercise any power hereunder or permit any part of the money in the Escrow
Fund or proceeds from the sale of Escrowed Securities to be used directly or indirectly to acquire any
securities or obligations if the exercise of such power or the acquisition of such securities or
obligations would cause any Refunding Bonds or Refunded Bonds to be an"arbitrage bond"within
the meaning of the Code.
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ARTICLE V
APPLICATION OF CASH BALANCES
No withdrawals, transfers, or reinvestment shall be made of cash balances in the Escrow
Fund, except as,provided in Sections 3.01, 3.02, 4.02, 4.03 and 4.04 hereof.
ARTICLE VI
RECORDS AND REPORTS
Section 6.01. Records. The Escrow Agent will keep books of record and account in which
complete and correct entries shall be made of all transactions relating to the receipts,disbursements,
allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and
all proceeds thereof,and such books shall be available for inspection at reasonable hours and under
reasonable conditions by the Issuer and the owners of the Refunded Bonds.
Section 6.02. Reports. While this Agreement remains in effect,the Escrow Agent annually
shall prepare and send to the Issuer a written report summarizing all transactions relating to the
Escrow Fund during the preceding year,including,without limitation,credits to the Escrow Fund as
a result of interest payments on or maturities of the Escrowed Securities and transfers from the
Escrow Fund for payments on the Refunded Bonds or otherwise,together with a detailed statement
of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such
period.
ARTICLE VII
CONCERNING THE PAYING AGENTS AND ESCROW AGENT
Section 7.01. Representations. The Escrow Agent hereby represents that it is the duly acting
Paying Agent for the Refunded Bonds, it has all necessary power and authority to enter into this
Agreement and undertake the obligations and responsibilities imposed upon it herein, and it will
carry out all of its obligations hereunder.
Section 7.02. Limitation on Liability. The liability of the Escrow Agent to transfer funds for
the payment of the principal of and interest on the Refunded Bonds shall be limited to the proceeds
of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund.
Notwithstanding any provision contained herein to the contrary,neither the Escrow Agent nor the
Paying Agent shall have any liability whatsoever for the insufficiency of funds from time to time in
the Escrow Fund or any failure of the obligors of the Escrowed Securities to make timely payment
thereon, except for the obligation to notify the Issuer as promptly as practicable of any such
occurrence.
7
The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as
the statements of the Issuer and shall not be considered as made by, or imposing any obligation or
liability upon,the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the
Refunding Bonds or the Refunded Bonds and is not responsible for and is not bound by any of the
provisions thereof(except as a place of payment and paying agent and/or a Paying Agent/Registrar
therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the
terms and provisions of this Agreement.
The Escrow Agent makes no representations as to the value,conditions or sufficiency of the
Escrow Fund,or any part thereof,or as to the title of the Issuer thereto, or as to the security afforded
thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to
any of such matters.
It is the intention of the parties hereto that the Escrow Agent shall never be required to use or
advance its own funds or otherwise incur personal financial liability in the performance of any of its
duties or the exercise of any of its rights and powers hereunder.
The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in
good faith in any exercise of reasonable care and believed by it to be within the discretion or power
conferred upon it by this Agreement,nor shall the Escrow Agent be responsible for the consequences
of any error of judgment; and the Escrow Agent shall not be answerable except for its own action,
neglect or default,nor for any loss unless the same shall have been through its negligence or willful
misconduct.
Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to
determine or inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of the Issuer with respect to arrangements or contracts with
others,with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund,to dispose
of and deliver the same in accordance with this Agreement. If,however,the Escrow Agent is called
upon by the terms of this Agreement to determine the occurrence of any event or contingency, the
Escrow Agent shall be obligated,in making such determination,only to exercise reasonable care and
diligence,and in event of error in making such determination the Escrow Agent shall be liable only
for its own willful misconduct or its negligence. In determining the occurrence of any such event or
contingency the Escrow Agent may request from the Issuer or any other person such reasonable
additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact
relating to the occurrence of such event or contingency, and in this connection may make inquiries
of, and consult with, among others,the Issuer at any time.
Section 7.03. Compensation. (a)Concurrently with the sale and delivery of the Refunding
Bonds,the Issuer shall pay to the Escrow Agent,as a fee for performing the services hereunder and
for all expenses incurred or to be incurred by the Escrow Agent in the administration of this
Agreement, and for all future paying agency services as Paying Agent for the Refunded Bonds,the
sum of$ ,the sufficiency of which is hereby acknowledged by the Escrow Agent. In the event
that the Escrow Agent is requested to perform any extraordinary services hereunder, the Issuer
8
hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to re-
imburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extra-
ordinary services,and the Escrow Agent hereby agrees to look only to the Issuer for the payment of
such fees and reimbursement of such expenses. The Escrow Agent hereby agrees that in no event
shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether
regular or extraordinary,as Escrow Agent,or in any other capacity,or for reimbursement for any of
its expenses.
(b) Upon receipt of the aforesaid specific sums stated in subsection(a) of this Section
7.03 for Escrow Agent and paying agency fees, expenses, and services, the Escrow Agent shall
acknowledge such receipt to the Issuer in writing.
Section 7.04. Successor Escrow Agents. If at any time the Escrow Agent or its legal
successor or successors should become unable, through operation or law or otherwise, to act as
escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or
federal court or administrative body because of insolvency or bankruptcy or for any other reason,a
vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Issuer,by
appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor
Escrow Agent shall have been appointed by the Issuer within 60 days,a successor may be appointed
by the owners of a majority in principal amount of the Refunded Bonds then outstanding by an
instrument or instruments in writing filed with the Issuer, signed by such owners or by their duly
authorized attorneys-in-fact. If,in a proper case,no appointment of a successor Escrow Agent shall
be made pursuant to the foregoing provisions of this section within three months after a vacancy
shall have occurred, the owner of any Refunded Bond may apply to any court of competent
jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if
any, as it may deem proper,prescribe and appoint a successor Escrow Agent.
Any successor Escrow Agent shall be a corporation organized and doing business under the
laws of the United States or the State of Texas,authorized under such laws to exercise corporate trust
powers,authorized under Texas law to act as an escrow agent,having its principal office and place
of business in the State of Texas,having a combined capital and surplus of at least$50,000,000 and
subject to the supervision or examination by Federal or State authority.
Any successor Escrow Agent shall execute, acknowledge and deliver to the Issuer and the
Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall
execute and deliver an instrument transferring to such successor Escrow Agent,subject to the terms
of this Agreement,all the rights,powers and trusts of the Escrow Agent hereunder. Upon the request
of any such successor Escrow Agent,the Issuer shall execute any and all instruments in writing for
more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights,
powers and duties.
The Escrow Agent at the time acting hereunder may at any time resign and be discharged
from the trust hereby created by giving not less than sixty(60)days'written notice to the Issuer and
publishing notice thereof,specifying the date when such resignation will take effect,in a newspaper
9
printed in the English language and with general circulation in New York, New York, such
publication to be made once at least three(3)weeks prior to the date when the resignation is to take
effect. No such resignation shall take effect unless a successor Escrow Agent shall have been
appointed by the owners of the Refunded Bonds or by the Issuer as herein provided and such
successor Escrow Agent shall be a paying agent for the Refunded Bonds and shall have accepted
such appointment, in which event such resignation shall take effect immediately upon the
appointment and acceptance of a successor Escrow Agent. If the sixty(60)day notice period expires
and no successor has been appointed,the Escrow Agent,at the expense of the Issuer,has the right to
petition a court of competent jurisdiction to appoint a successor under this Agreement.
Under any circumstances, the Escrow Agent shall pay over to its successor Escrow Agent
proportional parts of the Escrow Agent's fee and, if applicable, its Paying Agent's fee hereunder.
Section 7.05. Indemni . To the extent permitted by law,the Issuer agrees to indemnify and
save harmless the Escrow Agent from all losses,liabilities,costs and expenses,including reasonable
attorney's fees and expenses, which may be incurred by the Escrow Agent as a result of its
acceptance of the Escrow Fund or arising from the performance of its duties hereunder,unless such
losses, liabilities, costs and expenses have resulted from the bad faith or negligence of the Escrow
Agent,and such indemnification'shall survive the resignation by or removal of the Escrow Agent,or
the termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01. Notice. Any notice,authorization,request,or demand required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by
registered or certified mail, postage prepaid addressed to the Issuer or the Escrow Agent at the
address shown on Exhibit"A"attached hereto. The United States Post Office registered or certified
mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of
delivery. Any party hereto may change the address to which notices are to be delivered by giving to
the other parties not less than ten (10) days prior notice thereof. Prior written notice of any
amendment to this Agreement contemplated pursuant to Section 8.08 and immediate written notice
of any incidence of a severance pursuant to Section 8.04 shall be sent to Moody's Investors Service,
Attn: Public Finance Rating Desk/Refunded Bonds,99 Church Street,New York,New York 10007;
Standard&Poor's Corporation,Attn: Municipal Bond Department,25 Broadway,New York,New
York 10004; and Fitch Ratings, Attn: Municipal Structured Finance, One State Street Plaza,New
York,New York 10004.
Section 8.02. Termination of Responsibilities. Upon the taking of all the actions as
described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or
responsibilities hereunder to the Issuer,the owners of the Refunded Bonds or to any other person or
persons in connection with this Agreement.
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Section 8.03. Binding Agreement. This Agreement shall be binding upon the Issuer and the
Escrow Agent and their respective successors and legal representatives,and shall inure solely to the
benefit of the owners of the Refunded Bonds, the Issuer, the Escrow Agent and their respective
successors and legal representatives.
Section 8.04. Severability. In case any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement,but
this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
Section 8.05. Texas Law Governs. This Agreement shall be governed exclusively by the
provisions hereof and by the applicable laws of the State of Texas.
Section 8.06. Time of the Essence. Time shall be of the essence in the performance of
obligations from time to time imposed upon the Escrow Agent by this Agreement.
Section 8.07. Effective Date of Agreement. This Agreement shall be effective upon receipt
by the Escrow Agent of the funds described in the Report and the Escrowed Securities,together with
the specific sums stated in subsection(a)of Section 7.03 for Escrow Agent and paying agency fees,
expenses, and services.
Section 8.08. Amendments. This Agreement shall not be amended except to cure any
ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless
the same shall be in writing and signed by the parties thereto. No such amendment shall adversely
affect the rights of the holders of the Refunded Bonds.
Section 8.09. Counterparts. This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which counterparts, taken
together, shall constitute one and the same Agreement. The delivery of copies of this Agreement as
executed by Adobe Acrobat PDF or similar electronic form of execution, or by electronic
reproduction of a manual signature transmitted via electronic mail or facsimile, shall constitute
effective execution and delivery as to the parties and may be used in lieu of originals for all purposes.
[Execution Page Follows]
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EXECUTED as of the date first written above.
CITY OF FORT WORTH, TEXAS
By
City Manager
ATTEST:
(SEAL)
City Secretary
APPROVED AS TO FORM:
City Attorney
BOKF,NA
By
Title:
Signature Page—Water and Sewer System Revenue Refunding and Improvement Bonds Escrow Agreement
12
INDEX TO EXHIBITS
Exhibit "A" Addresses of the Issuer and the Escrow Agent
Exhibit "B" Verification Report of
EXHIBIT "A"
ADDRESSES OF THE ISSUER
AND ESCROW AGENT
ISSUER
City of Fort Worth, Texas
1000 Throckmorton
Third Floor
Fort Worth, Texas 76102
Attention: City Manager
ESCROW AGENT
BOKF,NA
100 Congress Avenue, Suite 250
Austin, Texas 78701
Attention: Financial Services
EXHIBIT "B"
VERIFICATION REPORT OF
GRANT THORNTON LLP
THE STATE OF TEXAS
COUNTIES OF TARRANT, DENTON, PARKER, WISE AND JOHNSON
CITY OF FORT WORTH
On the 7th day of April, 2020, the City Council of the City of Fort Worth, Texas, met in
regular, open, public meeting, and roll was called of the duly constituted members of the City
Council,to-wit:
Betsy Price, Mayor
Carlos Flores,
Brian Byrd
Cary Moon,
Gyna Bivens,
Jungus Jordan, Councilmembers,
Dennis Shingleton,
Kelly Allen Gray,
Ann Zadeh,
David Cooke, City Manager,
Sarah J. Fullenwider, City Attorney,
Mary J. Kayser City Secretary,
and a quorum was confirmed; and after the City Council had transacted certain business, the
following business was transacted,to-wit:
Councilmembe introduced an ordinance and moved its passage. The motion
was seconded by Councilmember`"�The ordinance was read by the City Secretary. The
motion, carrying with it the passage of the ordinance prevailed by a vote oq YEAS NAYS.
The ordinance as passed is as follows:
THE STATE OF TEXAS
COUNTIES OF TAR.RANT, DENTON, WISE, PARKER AND JOHNSON
CITY OF FORT WORTH
I, Mary J. Kayser, 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, open, public meeting of the City Council of the City of Fort Worth, Texas held on April
7, 2020, and of the ordinance authorizing the issuance of Water and Sewer System Revenue
Refunding and Improvement Bonds, Series 2020A, 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 as required by Chapter 551,Texas Government Code, as amended.
In testimon4 whereof, I have set my hand and have hereunto affixed the seal of said City
of Fort Worth, this lay of April, 2020.
SORT t'!i0 City Secret t
City of Fort North, Texas
.TEXP
City of Fort Worth, Texas
Mayor and Council Communication
DATE: 04/07/20 M&C FILE NUMBER: M&C 20-0224
LOG NAME: 13SERIES 2020A WSS REV REF BOND AND CP APPROPRIATION
SUBJECT
Adopt Thirty-Sixth Supplemental Ordinance Authorizing Issuance of City of Fort Worth, Texas Water and Sewer System Revenue Refunding and
Improvement Bonds, Series 2020A, in an Aggregate Principal Amount Not to Exceed$187,770,000.00, Establishing Parameters with Respect to
the Sale of the Bonds, Delegating to Designated City Officials Authority to Effect the Sale of Bonds by Competitive Bid or Negotiated Sale,
Enacting Other Provisions Relating to the Subject and Declaring an Immediate Effective Date; Adopt Amended and Restated Thirty-Second
Supplemental Ordinance,which Mirrors the Prior Thirty-Second Supplement but Extends the Term of Delegated Authority and Makes Minor
Conforming Changes; and Adopt Appropriation Ordinances(ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council:
1. Adopt the attached Thirty-Sixth Supplemental Ordinance(i)authorizing the issuance of City of Fort Worth, Texas Water and Sewer System
Revenue Refunding and Improvement Bonds, Series 2020A, in an aggregate principal amount not to exceed$187,770,000.00, (ii)approving the
sale of the bonds by competitive bid or negotiated sale as determined most advantageous based on current market conditions and subject to
meeting certain parameters, as set forth in the ordinance, (iii)approving execution of an Agreement for the retirement of the refunded obligations,
if any, and other instruments related to the issuance of the bonds, and(iv) providing for the establishment of rates and collection of revenues
sufficient to pay the principal and interest on said bonds;
2. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water and Sewer Bond 2020A Fund in the
amount of$101,000,000.00 for the purpose of funding capital improvements and paying the costs of issuance, subject to the sale of the bonds and
receipt of proceeds, with such amount subject to reduction to conform to final figures reflected in bond closing documents and with any excess cost
of issuance funds remaining after closing being transferred to the debt service fund;
3. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water&Sewer Senior Lien Debt Service
Fund in the amount of$53,000,000.00, subject to the sale of the bonds and receipt of proceeds, for the purpose of funding the required escrow to
refund existing debt, with such amount subject to reduction to conform to final figures reflected in bond closing documents;
4. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water&Sewer Subordinate Lien Debt
Service Fund in the amount of$36,000,000.00, subject to the sale of the bonds and receipt of proceeds, for the purpose of funding the required
escrow to refund existing debt,with such amount subject to reduction to conform to final figures reflected in bond closing documents;
5. Adopt the attached appropriation ordinance increasing estimated receipts and appropriations in the Water&Sewer Operating Fund in the
amount of$650,000.00, subject to the sale of the bonds and receipt of proceeds, for the purpose of paying cost of issuance related to the
Refunding Bonds,with such amount subject to reduction to conform to final figures reflected in bond closing documents and with any excess cost of
issuance funds remaining after closing being transferred to the debt service fund; and
6. Adopt the attached amended and restated Thirty-Second Supplemental Ordinance,which mirrors the prior Thirty-Second Supplement in(i)
authorizing issuance and sale of City of Fort Worth, Texas Water and Sewer System Revenue Refunding Bonds in an aggregate principal amount
not to exceed$150,000,000.00 to allow outstanding commercial paper to be refunded/refinanced if needed, (ii)approving the sale of the bonds
subject to certain parameters, as set forth in the ordinance, being met, (iii)authorizing instruments related to the issuance of the bonds, (iv)
providing for the establishment of rates and collection of revenues sufficient to pay the principal and interest on said bonds, (v)waiving the
provision in the Financial Management Policy Statements that outlines the revenue debt of the City shall generally have an average life of
approximately seventeen-to-eighteen years, and(vi)extending delegated authority to effect sale of refunding bonds through May 31, 2021.
DISCUSSION:
The purpose of this Mayor and Council Communication(M&C)is to adopt ordinances associated with revenue-based debt financing of
infrastructure for the City's Water and Sewer System.
The actions include authorizing bonds for system improvements and to refinance existing Water and Sewer debt obligations to achieve a
net savings(Thirty-Sixth Supplement), extending standby refunding authority to facilitate the System's Commercial Paper(CP) program(Amended
and Restated Thirty-Second Supplement), and adopting associated appropriation ordinances.
Thirty-Sixth Supplement
The first five recommendations relate to the Thirty-Sixth Supplemental Ordinance(Ordinance),which authorizes issuance and sale of up
to$187,770,000.00 in Water and Sewer revenue and refunding bonds, in one or more series, for the purpose of(i)extending and improving the
System(ii)refinancing existing Water and Sewer debt obligations to achieve net savings, and(iii) paying the costs of issuance of the bonds, and
to the appropriation of the bond proceeds.
The proposed debt transaction includes$100,000,000.00 in new money to fund capital projects in alignment with the Water Department's Capital
Improvement Plan with the balance of the debt proceeds to be used to refund other debt to achieve savings.
It is the City of Fort Worth's practice to achieve positive debt service savings through refinancing when the opportunity presents itself. Staff and the
City's Co-Financial Advisors HilltopSecurities and Estrada Hinojosa, are recommending the callable portions of the Series 2007A, Series 2007B,
Series 2010A, Series 2010B, and Series 2010C Water and Sewer System Revenue Bonds be refunded, with a par amount outstanding of
$87,770,000.00.
The actual savings amount will not be determined until the time bids are received. However, in accordance with the City's Financial Management
Policy Statements,the ordinance provides that the refunding debt shall not be sold unless the sale will result in net present value savings of at least
3.5 percent of the par amount being refunded.
In 1991, the City adopted a Master Ordinance establishing a Water and Sewer System Revenue Financing Program for the Water Department.
Each time the Water Department issues debt, a supplemental ordinance must be adopted which contains details specific to the debt being issued.
This issuance would be the thirty-sixth supplemental ordinance since the Master Ordinance was adopted.
Due to current market conditions, public issuers are struggling to price favorably in the competitive market due to a lack of liquidity with investors.
In an effort to mitigate this downside risk,the ordinance provides delegated authority to the City Manager and Chief Financial Officer, individually,
to effect the sale of the bonds. This includes authority to seek not only competitive bids for the sale of the bonds authorized, but also a negotiated
sale conducted as either a public or private offering negotiated through a purchase agreement with Underwriters. Staff is recommending that these
bonds be sold with the City Manager or the Chief Financial Officer having authority to approve the terms of the sale so long as those terms
come within the parameters set forth in the Council-adopted ordinance. Key parameters include: Bonds must be rated in one of the four highest
generic rating categories(BBB or higher);the delegated authority expires on December 31. 2020; the maximum maturity is February 15, 2050;
the maximum net effective interest rate is 6.00%, and debt may only be refunded if doing so achieves a net present value savings of at least
3.50%.
Rating agency calls with Moody's, Fitch, and Standard&Poor's will be conducted prior to the sale of the bonds with the bonds expected to be
offered for sale approximately two weeks after ratings are received. Subsequent to the pricing and awarding the sale of the bonds,the City will
seek approval of the debt transactions from the Texas Attorney General with an estimated closing date approximately one month after the award of
sale.
The attached appropriation ordinances reflect the maximum appropriation amount for bond proceeds for each of the identified purposes. The
ordinances'structure accommodates variables associated with sale of debt under delegated authority such as the uncertain final interest rate to be
achieved and the possibility of a premium or discount being associated with the sale of the bonds. To the extent numbers at closing are less than
those reflected in each of the ordinances,the available appropriation amount will be reduced as needed to reflect final figures based on the
closing documents to ensure appropriations do not exceed actuals. Similarly,to the extent there are any remaining proceeds after paying cost of
issuance expense,those funds are to be moved to the Water and Sewer debt service fund.
Amended and Restated Thirty-Second Supplement
This M&C also adopts an amended and restated Thirty-Second Supplemental Ordinance,which provides the officials identified and designated
as pricing officers with the authority to issue up to$150,000,000.00 in Water and Sewer revenue refunding bonds if needed to facilitate the
System's CP program.
As approved by the City Council in December 2017, the CP program authorizes up to$150,000,000.00 in short-term commercial paper for the
Water and Sewer System to be outstanding at any time(M&C C-28496). Although it is not anticipated that commercial paper would actually be
issued very regularly,the program authority provides the Water Department with liquidity and contracting authority so that it can efficiently design
and commence capital projects that are ultimately planned to be financed out of longer term debt to be issued at a later date.
As the program is structured, an issue of commercial paper cannot have a maturity that is later than the 270th day after the date on which the paper
is initially issued. The Thirty-Second Supplement is an integral part of the CP program because it provides delegated authority that allows
refunding bonds to be issued, within certain parameters, in the unlikely event that commercial paper is actually issued and cannot otherwise be
retired or defeased by the 270th day.
The Thirty-Second Supplemental Ordinance was initially adopted by M&C C-28496 and previously amended and restated(M&Cs G-19266, G-
19531). Among the parameters the ordinance sets for issuance of Water and Sewer revenue refunding bonds is that the bonds bear a"net
effective interest rate"(as defined in and calculated in accordance with the provisions of Chapter 1204, Texas Government Code)that is no
greater than 10%. In accordance with the practice of the Texas Attorney General,the prior versions of the Thirty-Second Supplemental Ordinance
provided delegated authority that would expire a year after the ordinance(original or restated)was adopted.
Adoption of the attached amended and restated version of the Thirty-Second Supplemental Ordinance extends the delegated authority of the
pricing officers to effect sale of all or any portion of up to$150,000,000.00 in revenue refunding bonds through May 31, 2021. Prior restated
versions of the Thirty-Second Supplemental Ordinance incorporated minor changes reflecting the impact of federal tax law changes on advance
refunding, and to add to the list of events that require disclosure under federal securities regulations.
Because ongoing authority to issue refunding bonds is needed for proper operation of the CP program, a newly amended and restated Thirty-
Second Supplemental Ordinance will be needed on an annual basis to extend the period of delegated authority. Staff anticipates bringing forward
an amended and restated Thirty-Second Supplemental Ordinance each year as part of the City's annual debt issuance process.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION/CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations and adoption of the attached ordinance, the sale of the 2020A
Water and Sewer System Revenue and Refunding Bonds will occur as required under the parameters set forth therein and that funds will be
available in the Water Debt Service Funds,Water Debt Reserve Fund, and in the Water and Sewer Bond 2020A Fund to record the appropriate
and necessary transactions. Pursuant to the recommended actions, appropriation authority up to$150,000,000.00 will be restored in the Water
and Sewer Commercial Paper(W&S Commercial Paper) Fund.
Submitted for City Manager's Office W. Reggie Zeno 8500
Originating Business Unit Head: John Samford 2318
Additional Information Contact: Alex Laufer 2268