HomeMy WebLinkAboutOrdinance 14496ORDINANCE NO ~~~9(Q
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF FORT WORTH, TEXAS WATER AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE BONDS, SERIES 2001,
AND ORDAINING OTHER MATTERS RELATED THERETO "
THE STATE O F TEXAS
COUNTIES OF TARR.ANT AND DENTON
CITY OF FORT WORTH
WHEREAS, the City adopted an ordinance on October 17, 1989 (the "Subordinate Lien
Revenue Bond Ordinance") authorizing the issuance of City of Fort Worth, Texas Water and Sewer
System Subordinate Lien Revenue Bonds, Series 1989, in the aggregate principal amount of $33,300,000
(the "Series 1989 Subordinate Lien Obligations"), and
WHEREAS, the City reserved the right in the Subordinate Lien Revenue Bond Ordinance to
issue obligations payable from a lien on the "Pledged Revenues" of the combined Water and Sewer
System on a panty with the Series 1989 Subordinate Lien Obligations, and
WHEREAS, pursuant to such reservation of authority, the City heretofore has issued rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Serves 1991, in the
aggregate principal amount of $16,155,000 (the "Serves 1991 Subordinate Lien Obligations"), its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1992, in the
aggregate principal amount of $12,000,000 (the "Series 1992 Subordinate Lien Obligations"), its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Serves 1995, in the
aggregate principal amount of $18,880,000 (the "Series 1995 Subordinate Lien Obligations"), its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Serves 1996, in the
aggregate principal amount of $17,120,000 (the "Series 1996 Subordinate Lien Obligations"), rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Serves 1998, in the
aggregate principal amount of $60,980,000 (the "Series 1998 Subordinate Lien Obligations"), rts City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Serves 1999, in the
aggregate principal amount of $38,000,000 (the "Senes 1999 Subordinate Lien Obligations") and its City
of Fort Worth, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Senes 1999A, in the
aggregate principal amount of $61,750,000 (the "Senes 1999A Subordinate Lien Obligations"), and
WHEREAS, the Senes 1989 Subordinate Lien Obligations no longer are outstanding; and
WI~REAS, the Senes 1991 Subordinate Lien Obligations, the Senes 1992 Subordinate Lien
Obligations, the Series 1995 Subordinate Lien Obligations, the Senes 1996 Subordinate I.zen
Obligations, the Series 1998 Subordinate Lien Obligations, the Senes 1999 Subordinate Lien
Obligations and the Senes 1999A Subordinate Lien Obligations are hereinafter referred to as the
"PreviouslyIssued Subordinate Lien Obligations", and
WHEREAS, the lien on and pledge of the Pledged Revenues securing the Previously Issued
Subordntate Lien Obligations >s subordinate to the lien on and pledge of the Pledged Revenues securing
other outstanding obligations of the City similarly secured, and
WHEREAS, the City deems it necessary and advisable to issue bonds on a panty with the
Previously Issued Subordinate Lien Obligations,
WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to
Chapter 1502, Texas Government Code, and other applicable laws, for the purpose of extending and
improving the Cit}~s combined. Water and Sewer System, as further described in this Ordinance; and
WHEREAS, the Texas Water Development Board has committed to purchase the bonds
hereinafter authorized pursuant to Subchapter J of Chapter 15, Texas Water Code.
BE IT ORDAINED BY THE QTY COUNCIL OF THE QTY OF FORT WORTH,
TEXAS:
Section 1 BONDS AUIT-~ORIZED That the Cit}~s bonds (the "Obligations") are hereby
authorized to be issued in the aggregate principal amount of $8,080,000 for the purpose of extending
-2-
and unproving the City's combined water and sewer system, to-wit: extending and unprovuig the Cit}~s
sewer system. The Obligations shall be designated as the "Ciryof Fort Worth, Texas Water and Sewer
System Subordinate Lien Revenue Bonds, Series 2001"
Section 2. DATE AND MATURITIES. That the Obligations shall be dated January 15, 2001,
shall be in the denomination of $5,000 each, or any integral multiple thereof, shall be numbered
consecuuvelyfrom R-:1 upward, and shall mature on the maturirydate, in each of the years, and in the
amounts, respectively, as set forth in the followuig schedule:
MATURITY DATE MARCH 1
yE~$~
2002 Ac7cT F c7
PRTN(3PAT.
AM(~T 1NTS ($1
290,000
yE~
2012 Ac7c7 F c7A .
P TNC.I T.
AMO 1NTS ($)
395,000
2003 300,000 2013 410,000
2004 310,000 2014 425,000
2005. 315,000 2015 445,000
2006 325,000 2016 460,000
2007 335,000 2017 480,000
2008 350,000 2018 500,000
2009 360,000 2019 520,000
2010 370,000 2020 540,000.
2011 385,000 2021 565,000
The Texas Water Development Board ("TWDB") will purchase the Obligations in the manner
described in Section 27 of this Ordinance.
Section 3. RIGHT OF PRIOR REDEMPTION. The City reserves the right to redeem the
Obligations maturing on and after March 1, 2012 on September 1, 2011, or on any date thereafter, in
whole or in part, and if in parr, in inverse order of maturity, for the principal amount thereof and
accrued interest thereon to the date fixed for redemption, and without premium
At least 30 days prior to the date fixed for any such redemption a written nonce of such
redemption shall be given to the regutered owner of each Obligation or a portion thereof being called
for redemption bydeposiung such nonce in the United States mail, postage prepaid, addressed to each
-3-
such registered owner at h>s 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/Registrarfomhe payment of the required redempuon pace for the Obligations or the portions
thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redempuon.
If such wntten notice of redempuon is given, and if due provision for such payment is made, all as
provided above, the Obligations, or the portions thereof which are to be so redeemed, thereby
automaucallyshall be redeemed pnor to their scheduled matunties, and shall not bear interest after the
date fixed for their redemption, and shall not be regarded as being outstanding except for the nght of
the registered owner to receive the redempuon pnce plus accnied interest to the date fixed for
redempuon f rom the Paying Agent/Registrar out of the funds provided f or such payment. The Paying
Agent/Registrar shall record in the Registration Books all such redemptions of pnncipal of the
Obligations or any portion thereof. If a poiuon of any Obligation shall be redeemed a substitute
Obligation or Obligations .having the same matunty date, beanng interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the wntten request of the
registered owner, and in an aggregate pnncipal amount equal to the. unredeemed portion thereof, will
be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the
City, all as provided uz this Ordinance.
Section 4 INTEREST That the Obligations shall bear interest at the following rates per
annum:
_¢
matunues 2002, 2.150% maturities 2012, 3.500%
maturities 2003, 2.750% matunues 2013, 3.b00%
matunues 2004, 2.850% matunues 2014, 3.700%
matunues 2005, 2.950% matunues 2015, 3.800%
matunues 2006, 3.000% maturities 2016, 3 900%
maturities 2007, 3.050% matunues 2017, 3 950%
matunues 2008, 3 100% matunues 2018, 4.000%
matunues 2009, 3.200% matunues 2019, 4.050%
matunues 2010, 3.300% matunues 2020, 4100%
matunues 2011, 3 400% matunties 2021, 4150%
Interest on the Obligations shall be calculated on the base of a 360-dayyear consisting of twelve 30-day
months. Said rnterest shall be payable to the registered owner of anysuch Obligation in the manner
provided and on the dates stated in the FORM OF BOND set forth in this Orciuiance.
Section 5. QiARAGTERISTICS OF THE OBLIGATIONS. (a) The Cityshall keep or cause
to be kept at the designated corporate trust office ui Houston, Texas (the "Designated Trust Office")
of The Chase Manhattan Bank, or such other bank, trust company, financial uisutuuon, or other agency
named in accordance with the prov~srons of (g~ of th>s Section hereof (the "Paying Agent/Regrstrar")
books or records of the registration and transfer of the Obligations (the "Registration Books"),and the
Cityherebyappoints the Paying Agent/Reg~strar as its registrar and transfer agent to keep such books
or records and make such transfers and registrations under such reasonable regulations as the City and
Paying Agent/Regutrar mayprescribe; and the Paying Agent/Regutrar shall make such transfers and
registrations as herein provided. It shall be the dutyof the Paying Agent/Regutrar to obtain from the
registered owner and record rn the Registration Books the address to whuh payments with respect to
the Obligations owned by any such registered owner thereof shall be mailed as herein provided. The
Cityor its designee shall have the nght to inspect the Registration Books during regular business hours
of the Payng Agent/Regutrar at its Designated Trust Office, but otherwise the Paying Agent/Regutrar
shall keep the Registration Books confidential and, unless otherwise required bylaw, shall not perrrut
them inspection byanyother entity. Registration of each Obligation maybe transferred in the Regutra-
-5-
tion Books only upon presentation and surrender thereof to the Paying Agent/Registrar at its
Designated Truut Office for transfer of registration and cancellation, together with proper written
instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing the assignment thereof, or anyportion thereof in anyintegral multiple of
$5,000, to the assignee or assignees thereof, and the tight of such assignee or assignees to have the
Obligation or anysuch portion thereof registered in the name of such assignee or assignees. Upon the
assignment and transfer of anyObligation or anyportion thereof, a newsubstitute bond or bonds shall
be issued in exchange therefor in the manner herein provided..
(b) The entityin whose name any Obligation shall be registered in the Registration Books at
anytime shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether or
not such bond shall be overdue, and the City and the Paying Agent/Registrarshtill not be affected by
any notice to the contrary; and payment of, or on account of, the principal of, premium, if any, and
interest on any such bond shall be made only to such registered owner. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such bond to the extent of the sum or
sums so paid.
(c) The Cityherebyfurthertippoints the Paying Agent/Registrarto act as the paying agent for
paying the principal of and interest on the Obligations, and to act as its agent to exchange or replace
Obligations, all as provided in this Ordinance. The Paying Agent/Registrarshtill keep proper records
of all payments made bythe City and the Paying Agent/Registrarwhh respect to the Obligations, and ,
of all exchanges of such bonds, and all replacements of such bonds, as provided in this Ordinance.
(d) Each Obligation maybe exchanged for fully registered bonds in the manner set forth
herein. Each bond issued and delivered pursuant to this Ordinance, to the extent of the unpaid or
unredeemed principal amount thereof, may, upon surrender of such bond at the Designated Trust
-6-
Office of the Paying A,gent/Registrar, together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactoryto the Payuig Agent/Registrar, at the option
of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully registered
bonds, without uiterest coupons, ul the form prescribed ui the FORM OF BOND set forth ui this
Ordinance, in the denomination of $5,000 or any integral multiple thereof (subject to the requirement
hereinafter stated that each substitute bond shall have a single stated maturity date), as requested ui
writing by such registered owner or such assignee or assignees, in an aggregate principal amount equal
to the unpaid or unredeemed principal amount of any Obligation or Obligations so surrendered, and
payable to the appropriate registered owner, assignee, or assignees, as the case maybe. If a portion of
anyObligation shall be redeemed poor to its scheduled maturityas provided herein, a substitute bond.
or bonds having the same maturity date, bearing iriterest at the same rate, in the denomination or
denominations of any integral multiple of $5,000 at the request of the registered owner, and in an
aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered
owner upon surrender.thereof for cancellation. If any Obligation or portion thereof is assigned and
transferred, each bond issued ui exchange theref or shall have the same principal maturitydate and bear
interest at the same rate as the bond for which it LS being exchanged Each substitute bond shall bear
a letter and/or number to distingwsh it from each other bond. The Paying Agent/Registrar shall
exchange or replace Obligations as provided herein, and each fullyregistered bond or bonds delivered
ui exchange for or replacement of any Obligation or portion thereof as permitted or regwred by any
provision of this Ordinance shall constitute one of the Obligations for all purposes of this Ordnance,
and may again be exchanged or replaced It is specifically provided, however, that any Obligation
delivered ui exchange for or replacement of another Obligation prior to the fast scheduled interest
-~-
payment date on the Obligations (as stated on the face thereof) shall be dated the same date as such
Obligation, but each substitute bond so delivered on or after such first scheduled interest payment date
shall be dated as of the interest payment date preceding the date on which such substitute bond >s de-
livered, unless such substitute bond >s delivered on an interest payment date, m which case it shall be
dated as of such date of delivery; provided, however, that if at the tine of delivery of any substitute
bond the interest on the Obligation for which it is .being exchanged has not been paid, then such
substitute bond shall be dated as of the date to which such interest has been paid ii full On each
substitute bond issued ii exchange for or replacement of any Obligation issued under this Ordinance
there shall be punted thereon a Paying Agent/Registrar's Authentication Certificate, in the form
hereinafter set forth. An authonzed representative of the Paying Agent/Registrarsliall, before the
delivery of any such substitute bond, date such substitute bond in the manner set forth above, and
manually sign and date such Certificate, and no such substitute bond shall be deemed to be issued or
outstanding unless such Ceivficate is so executed. The Paying Agent/Registrarpromptlyshallcancel
all Obligations surrendered for exchange or replacement. No additional ordinances, orders, or
resolutions need be passed or adopted by the City Council or any other body or person so as to
accomplish the foregoing exchange or replacement of any Obligation or portion thereof, and the
Paying AgendRegistrar shall provide for the pnntirig, execution, and delivery of the substitute bonds
in the manner prescnbed herein, and said bonds shall be of type composition panted on paper with
lithographed or steel engraved borders of customaryweight and strength. Pursuant to Chapter 1206,
Texas Government Code, the duty of exchange or replacement of any Obligations as aforesaid is
hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the above-described
Payng AgentlRegistrar's Authentication Certificate, the exchanged or replaced bond shall be valid,
uicontestable, and enforceable in the same manner and with the same effect as the Obligations which
-s-
originallywere delivered pursuant to this Ordinance, approved bythe AttorneyGenenal, and registered
by the Comptroller of Public Accounts. Neither the City nor the Paying Agent/Registrar shall be
required (1) to issue, transfer, or exchange anybond dunrig a penod begiuing at the opening of busi
ness 30 days before the day of the fast mailing of a notice of redemption of bonds and ending at the
close of business on the day of such mailing, or (2) to transfer or exchange anybond so selected for
redemption in whole when such redemption >s scheduled to occur within 30 calendar days.
(e) All Obligations issued in exchange or replacement of anyother Obligation or portion there-
of (i) shall be issued in fullyregistered form,without interest coupons, with the pnncipal of and interest
on such Obligations to be payable only to the registered owners thereof, (u) maybe redeemed pnor
to their scheduled matu.rnies, (iu) maybe transferred and assigned, (iv) maybe exchanged for other
Obligations, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vu) the principal of
and interest on the Obligations shall be payable, all as provided, and in the manner required or
indicated, in the FORM OF BOND set forth in this Ordinance.
The Paying Agent/Registrar shall complete the "Date of Dehver~' on each installment of
Obligations initially delivered to the TWDB, upon the satasfaction of the conditions described in
Section 27 of this Ondiniarice.
(f) The Cityshall paythe Paying AgentlReg>strar's reasonable and customaryfees and charges
f or making transf ers of Obligations, but the registered owner of anyObligation requesting such transf er
shall pay any taxes or other governmental charges required to be paid with respect thereto. The
registered owner of any Obligation requesting any exchange shall pay the Paying Agent/Registrar's
reasonable and standard or customary fees and charges for exchanging any such bond or portion
thereof, together with any taxes or governmental changes regwred to be paid with respect thereto, all
as a condition precedent to the exercise of such privilege of exchange, except, however, that in the case
-9-
of the exchange of an assigned and transferred bond or bonds or anyportion or portions thereof in
any integral multiple of $5,000, and rn the case of the exchange of the unredeemed portion of an
Obligation which has been redeemed uz part prior to maturity, as provided m th>s Ordnance, such fees
and charges will be paid bythe City In addrtion, the Cityherebycovenants with the reg>stered owners
of the Obligations that rt will pay (i) the reasonable and standard or customaryfees and charges of the
Paying Agent/Reg>strarfnr its services with respect to the payment of the principal of and rnterest on
the Obligations, when due, and (u) the fees and charges of the Paying Agent/Reg>strarforservices wrth
respect to the transfer or reg>strauon of Obligations solely to the extent above provided, and wrth
respect to the exchange of Obligations solelyto the extent above provided.
(g) The City covenants with the registered owners of the Obligations that at all times whr7e the.
Obligations are outstanding the City will provide a competent and legally qualified bank or tnut
companyto act as and perform the services of Paying Agent/Reg~strar for the Obligations under th>s
Ordinance, and that the Paying Agent/Regutrar will be one entity. The City reserves the right to, and
may, at its option, change the Paying Agent/Reg~strar upon not less than 60 days written notice to the
Paying Agent/Regutrar. In the event that the entrtyat anytime acting as Paying Agent/Reg>strar (or
its successor by merger, acqursruon, or other method should resign or otherwLSe cease to act as such,
the Citycovenants that promptlyrt will appoint to act as Paying Agent/Reg~strar under th>s Onirrrance
a competent and legally qualified national or state banking nstmruon which shall be a corporation
organized and dourg business under the laws of the United States of America or of anystate, authorized
under such laws to exercise trust powers, subject to supervision or examination by federal or state
authority, and whose qualifications are substantially similar to the previous Paying Agent/Regutrar.
Upon anychange in the Paying Agent/Reg>strar, the previous Paying Agent/Regutrar promptlyshall
transfer and deliver the Reg>strauon Books (or a copy thereof), along with all other pertinent books
-ia
and records relating to the Obligations, to the new Paying Agent/Registrar designated and appointed
by the City Upon any change ui the Paying Agent/Registrar, the City promptly will cause a written
notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the
Obligations, byUmted States mail, postage prepaid, which nonce also shall give the address of the new
Paying Agent/Registrar: Byacceptiiig the position and perforinuig as such, each Paying Agent/Reg
istra.r shall be deemed to have agreed to the provisions of this Ordinance, and a ceivfied copy of this
Ordinance shall be delivered to each Payuig Agent/Registrar.
(h) The Obligations issued in exchange for the Obligations initially issued to the purchaser
specified hereui shall be uiitiallyissued iri the form of a separate suigle fullyregistered Obligation for
each of the maturities thereof. Upon uutial issuance, the ownership of each such Obligation shall be
registered in the name of Cede & Co., as nominee of The Depository Tnut Company of New York
("DTC"), and except as provided in subsection (i) hereof, all of the outstanding Obligations shall be
registered ui the name of Cede & Co., as nominee of DTC.
With respect to Obligations registered ui the name of Cede & Co., as nomnee of DTC, the
Issuer and the Paying Agent/Registrar shall have no responsibility or obligation to any securities
brokers and dealers, banks, trust companies, clearing corporations and certain other organizations on
whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance and
settlement of securities transactions among DTC Participants orto anypeison on behalf of whom such
a DTC Participant holds an interest in the Obligations. Without limiting the unmediately preceding
sentence, the Issuer and the Paying. Agent/Registrar shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co. or anyDTC Participant with respect to
anyownership interest uithe Obligations, (u) the dehveryto anyDTC Participant or anyotherperson,
other than a registered owner of Obligations, as shown on the Regutration Books, of any nonce with
-11-
respect to the Obligations, or (iu) the payment to anyDTC Participant or anyotherperson, otherthan
a registered owner of Obligations, as shown in the Registration Books of any amount with respect to
principal of or interest on the Obligations. Notwithstanding any other provision of this Ordinance to
the contrary, the Issuer and the Paying Agent/Registrar shall be entitled to treat and consider the
person ul whose name each Obligation is registered in the Registration Books as the absolute owner
of such Obligation for the purpose of payment of principal and interest with respect to such
Obligation, for the purpose of registering transfers with respect to such Obligation, and for all other
purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and. interest on the
Obligations onlyto or upon the order of the registered owners, as shown in the Registration Books
as provided in this Ordinance, or their respective attorneys duly authorized in wasting, and all such.
payments shall be valid and effective to fullysatisfyand discharge the Issuer's obligations with respect
to payment of principal of and interest on the Obligations to the extent of the sum or sums so paid.
No person otherthan a registered owner, as shown in the Registration Books, shall receive a Obligation
evidencing the obligation of the Issuer to make payments of principal and interest pursuant to this
Ordinance. Upon deliverybyDTC to the Paying Agent/Registrar of written notice to the effect that
DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the provisions
in this Ordinance with respect to interest checks being mailed to the registered owner at the close of
.~
business on the record date, the words "Cede & Co." in this Ordinance shall ref er to such new nominee
of DTC. In connection with the initial establishment of the foregoing book-entrysystem with DTC,
the Issuer heretofore has executed a "Blanket Letter of Representations" prepared byDTC in order
to unplement the book-entrysystem described above.
() In the event that the Issuer determines that DTC is incapable of discharging its
responsibi7itres described herein and in the representation letter of the Issuer to DTC or that it is in
-12-
the best interest of the beneficial owners of the Obligations that they be able to obtain certificated
Obligations, the Issuer shall () appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants of the appointment of such successor securities depository and transfer one or more
separate Obligations to such successor securities depositoryor (u) notifyDTC and DTC Participants
of the availabilitythroughDTC of Obligations and transfer one or more separate Obligations to DTC
Participants having Obligations credited to their DTC accounts. In such event, the Obligations shall
no longer be restricted to being registered in the Registration Books in the name of Cede & Co., as
nominee of DTC, but maybe registered in the name of the successor securities depository,- or its
nominee, or in whatever name or names registered owners tiaTisferiYng or exchanging Obligations shall
desig>•iate, in accordance with the provisions of this Ordinance.. The foregoing notwithstanding, for
so long as TWDB >s an owner of any outstanding Obligation, the City wi71 not discontinue the DTC
book entrysystem without the consent of TWDB
~~ Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Obligation >s registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of and interest on such Obligation and all notices with respect to such Obligation shall be
made and given, respectively, in the mannerprovided in the representation letter of the Issuerto DTG
Section 6. The form of all Obligations, including the form of the Paying Agent/Registrar's
Certificate, the Form of Assignment, and the form of the Comptroller's Registration Certificate to
accompanythe Obligations on the initial deliverythereof, shall be, respectively, substantiallyas follows,
with such appropriate variations, omissions, or insertions as are permitted or regwred by this
Ordinance:
-13-
NO.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF TA.,RRAN'I' AND DENTON
QTY OF FORT WORTH, TEXAS
WATER AND SEWER SYSTEM
SUBORDINATE LIEN REVENUE BOND
SERIES 2001
I FS RATR ]AIR OF DF.L.TVERY
Registered Owner.
Pnncipal Amount:
ON THE MATURITY DATE SPECIFIED ABOVE, THE QTY OF FORT WORTH,
TEXAS (the "Issuer"), herebypromises to payto the registered owner set forth above, or registered
assigns hereof (hereuiafter called the "registered owner") the pnncipal amount set forth above and to
payinterest thereon, from the Date of Deliveryas set forth above, to the date of its scheduled matunry
or the date of its redemption pnor to scheduled matunry, at the rate of interest per annum specified
above, with said interest being payable on September 1, 2001, and semiannually on each March 1 and
September 1 thereafter, except that if the Paying Agent/Registrar's Authentication Certificate appeanng
on the face of this Bond is dated later than September 1, 2001, such interest is payable semiannually
on each March 1 and September 1 following such date.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable ui lawful money of the
United States of Amenca, without exchange or collection charges. The pnncipal of this Bond shall be
paid to the registered owner hereof upon presentation and surrender of this Bond at matunryor upon
the date fixed fonts redemption pnorto matunry, at the designated corporate tnut office ui Houston,
-14-
Texas (the "Designated Trust Office") of The Chase Manhattan Bank, which >s the "Paying
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the registered owner hereof as shown bythe Registration Books kept bythe Paying
AgenrJRegistrar at the close of business on the 15th day of the month next preceding such interest
payment date (the "record date") bycheck drawn bythe Paying Agent/Registrar on, and payable solely
from, funds of the Issuer required to be on deposit with the Paying Agent/Registrarfnr such purpose
as hereinafter provided, and such check shall be sent by the Paying Agent/Regutrar by United States
mail., postage prepaid, on each such uiterest payment date, to the registered owner hereof at its address
as it appears on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described
In the event of anon-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 bythe Paying
Agent/Registrar, if and when funds for the payment of such interest have been received f rom the City.
Nonce of the Special Record Date and of the scheduled payment date of the past due interest (the
"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 byUruted States mail, fast-class, postage prepaid, to the
address of each registered owner of a Bond appearing on the books of the Paying Agent/Registrar at
the close of busiiess on the last busuiess daynext preceding the date of mailing of such nonce. The
foregoing notwithstanduig, so long as the Texas Water Development Board is the registered owner of
100% ii aggregate principal amount of the Bonds then outstanding, payment of principal and interest
on the Bonds. shall be made thereto bywire transfer, at no expense to the Texas Water Development
Board. The Issuer covenants with the registered owner of this Bond that no later than each principal
payment date and interest payment date for this Bond it will make available to the Paying
-15-
Agent/Registrar the amounu required to provide for the payment, in unmediately available funds, of
all principal of and interest on the Bonds, when due.
IF THE DATE f or the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, a legal holiday, or a dayon which banking institutions in the citywhere the Designated Trust
Office of the Paying Agent/Registrar>s located are authorized bylaw or executive order to close, then
the date for such payment shall be the next succeeding daywhich >s not such a Saturday, Sunday, legal
holiday, or day on which banking uistitutions are authorized to close; and payment on such date shall
have the same force and effect as if made on the original date payment was due.
THIS BOND u one of a series of bonds, dated January 15, 2001 of like tenor and effect except
as to number, principal amount, interest rate, maturity and ngkit of prior redemption, aggregating.
$8,080,000 (herein sometunes called the "Bonds"), issued for the purpose of extending and improving
the Issuer's combined water and sewer system, to-wit: extending and improving the Issuer's sewer
system
THE OUTSTANDING BONDS of this Series maturing on and after March 1, 2012 maybe
redeemed prior to their scheduled maturities, at the option of the Issuer, in whole, or in part, and if in
part, in inverse order of maturity, on September 1, 2011, or on any date thereafter, for the principal
amount thereof and accrued interest thereon to the date fixed for redemption, and without premium.
The foregoing notwithstanding, during anypenod 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
maturityand 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 arrarigemenu between the Issuer
and the secuurities depository
-16-
AT LEAST 30 days pnor to the date fined for anysuch redemption a written nonce of such
redemption shall be given to the reg>stered owner of each Borid or a portion thereof being called for
redemption by depositing such notice in the United States mail, postage prepaid, addressed to each
such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar.
Bythe date fixed for anysuch redemption due provision shall be made bythe Issuerwith the Paying
Agent/Registrarfnr the payment of the required redemption pnce for this Bond or the portion hereof
which >s to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such
written nonce of redemption >s given, and if due provision for such payment is made, all as provided
above, this Bond, or the portion hereof which >s to be so redeemed, thereby automatically shall be
redeemed pnor to its scheduled maturity, and shall not bear interest after the date fixed for its
redemption, and shall not be regarded as being outstanding except forthe right of the registered owner
to receive the redemption pnce plus accrued interest to the date fixed for redemption from the Paying
Agent/Registrarout of the funds provided for such payment. The Paying Agent/Registrarshall record
in the Reg>tration Books all such redemptions of principal of this Bond or any portion hereof. If a
portion of any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date,
bearing interest at the same rate, in any denomination or denomuiations in any integral multiple of
$5,000, at the written request of the registered owner, and in aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for
cancellation, at the expense of the Issuer, all as provided in the ordinance authorizing the Bonds (the
"Ordinance").
ALL BONDS OF THIS SERIES are issuable solelyas fullyreg~stered bonds, without interest
coupons, in the denomination of anyiritegral multiple of $5,000. As provided in the Ordinance, this
Bond, or any unredeemed portion hereof, may, at the request of the registered owner or the assignee
-17-
or assignees hereof, be assigned, transferred, and exchanged for a like aggregate principal amount of
fullyregistered bonds, without interest coupons, payable to the appropriate registered owner, assignee,
or assignees, as the case maybe, haviig the same maturity date, and bearing interest at the same rate,
in anydenomination or denomiiations tin anyintegral multiple of $5,000 as requested in writing bythe
appropriate registered owner, assignee, or assignees, as the case maybe, upon surrender of this Bond
to the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with the
form and procedures set forth in the Ordinance. Among other requirements for such assignment and
transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with
proper instruments of assignment, inform and with guarantee of signatures satisfactoryto the Paying
Agent/Registrar, evidencing assignment of this Bond oranyportion orportions hereof ii anyintegral_
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or anysuch portion
or portions hereof >s or are to be transferred and. registered. The form of Assignment printed or
endorsed on this Bond maybe 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 maybe used to evidence the assignment of this Bond or any portion or portions
hereof from tine to tune by the registered owner. The one requesting such exchange shall pay the
Paying Agent/Registrar's reasonable standard or customaryfees and charges for exchanging anyBond
or portion thereof. The foregoing notwithstanding, in the case of the exchange of a portion of a Bond
which has been redeemed prior to maturity, as provided herein, .and in the -case of the exchange of an
assigned and transferred Bond or Bonds or anyportion or portions thereof, such fees and charges of
the Paying Agent/Registrar w17I bepaid bytheIssuer. In anycircurnstance, anytaxes or governmental
charges required to be paid with respect thereto shall be paid bythe one requesting such assignment,
transfer, or exchange as a condition precedent to the exerc>se of such privilege. In anycircumstance,
-18-
neither the Issuer nor the Paying Agent/Reg~strar shall be requu~ed (1) to make any transfer or
exchange during a period beginnuig at the opening of business 30 days before the day of the fast
mailing of a notice of redemption of bonds and ending at the close of business on the day of such
mailing, or (2) to transfer or exchange any Bonds so selected for redemption in whole when such
redemption ~ scheduled to occur within 30 calendar days.
IN THE EVENT anyPaying Agent/Regtstrar forthe Bonds u changed bythe Issuer, resigns,
or othervv~se ceases to act as such, the Issuer has covenanted in the Ordinance that rt promptly will
appoint a competent and legally qualified substitute therefor, whose qualifications substantially are
similar to the prevrous Paying flgent/Regutrar rt ~ replacing, and promptlywi7l cause written notice
thereof to be mailed to the regutered owners of the Bonds.
WHENEVER the beneficial ownership of th>s Bond ~ determined by a book entry at a
securities depositoryfor the Bonds, the foregoing requirements of holding, delivering or transfernng
thu Bond shall be modrfied to require the appropriate person or entityto meet the requirements of the
securities depository as to registering or tr~nsfernng the book entry to produce the same effect.
BY BECOMING the reg>stered owner of this Bond, the regi$tered owner thereby
acknowledges all of the terms and provrsrons of the Ordinance, agrees to be bound bysuch terms and
provsions, acknowledges that the Ordinance >s dulyrecorded and available for inspection in the official
minutes and records of the Issuer, and agrees that the teens and provisions of this Bond and the
Ordinance constitute a contract between each regutered owner hereof and the Issuer.
THE ISSUER has. reserved the right, subject to the restrictions stated, and adopted by
reference, in the Ordinance, to issue (1) Prior Lien Obligations (as defined in the Ordinance) secured
by a lien on and pledge of the Pledged Revenues (as defined in the Ordinance) superior to such lien
-19-
and pledge securiig the Bonds, and (2) additional panty revenue bonds which also maybe made
payable from, and secured by a lien on and pledge of, the Pledged Revenues securing the Bonds.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of
this obligation out of anyfunds raised orto be raised bytaxation, or from anysource whatsoever other
than the aforesaid Pledged Revenues.
IT I$ HEREBY certified and covenanted that this Bond has been dulyand validlyauthonzed,
issued and delivered; that all acts, conditions and things requrred or proper to be performed, exist and
be done precedent to or n the authorization, issuance and deliveryof this Bond have been performed,
existed and been done n accordance with law; that this Bond u a special obligation, and that the prn-
opal of and nterest on this Bond, together with other bonds of the Issuer now or hereafter
outstanding on a pantytherewith, are payable from, and secured bya lien on and pledge of, the Pledged
Revenues (as defined n the Ordinance), and which include the Net Revenues of the Issuer's combined
Water and Sewer System; however, the lien on and pledge of the Pledged. Revenues shall be~umor and
subordnate to the Prior Lien Obligations (as defined n the Ordnance), winch consist of the Prior I~en
Bonds (as defined n the Ordnance) and any System Obligations (as defined n the Ordnance)
IN WITNESS Wf-~REOF, this Bond has been signed wrth the imprinted or lithographed
facsn~e signature of the Mayor of Bard City, attested by the rmprnted or lithographed facsunile
signature of the CuySecretary, and approved as to form and legalitybythe rmprnnted or lithographed
facsn~e signature of the. City Attorney, and the official seal of said City has been affixed to or
unprnted on this Bond
-Za
QTY OF FORT WORTI-~ TEXAS
By
ATTEST
City Secretary
APPROVED AS TO FORM AND LEGALITY
~~~~~
City Attorney
Mayor
(SEAL)
PAYING AGENT/REGISTRARS AUTHENTICATION CERTIFICATE
It >s hereby certified that th>s. Bond has been >ssued under the provysrons of the Orduiance
described on the face of this Bond, and that th>s Bond has been issued rn exchange for or replacement
of a bond, bonds, or a portion of a bond or bonds of an issue which ongrnally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated THE CHASE MANHATTAN BANK
Paying Agent/Regutrar
By
Authorized Representative
-21-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Please uuert Social Secunty or Taxpayer
Identification Number of Transferee
/ ~
(Please print or typewrite name and address, including
zip code of Transferee)
the withni Bond and all nghts thereunder, and hereby irrevocably constitutes and appoints
----------------------------------------
attorneyto register
the transfer of the within Bond on the books kept for registration thereof, with full power of
substitution ui the premises.
Dated:
Signature Guaranteed:
NOTICE Signature(s) must
be guaranteed by a member
firm of the New York Stock.
Exchange or a commercial
bank or bust company.
NOTICE The signature above
must correspond with the name
of the Registered Owner as it
appears upon the front of this
Bond in everypaxticular,
without alteration or enlarge-
ment or any change whatsoever.
-22-
FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
1"T-iF BONDS i 1P(~N iNITTAT . DR .T .RY RF O :
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO
I hereby certify that there >s on file and of record rn my office a certificate of the Attorney
General of the State of Texas to the effect that th>s Bond has been examined byhin as required bylaw,
and that he finds that rt has been >ssued rn conforrnrtywrth the Constitution and laws of the State of
Texas, and that rt rs a-valid and binding special obligation of the Cityof Fort Worth, Texas, payable ul
the manner provided by and ii the ordinance authonzurg same, and sand Bond has this day been
reg>stered by me.
WITNESS MY HAND and seal of office at Austin, Texas
(SEAL)
Comptroller of Public Accounts of
the State of Texas
Section 7 DEFINITIONS. That the definitions set forth rn the Master Ordinance are hereby
incorporated byreference and made a part hereof for all purposes. In addition, as used rn this Ordi
Hance, the following terms shall have the meanings set forth below, unless the text hereof specifically
indicates otherwise:
(a) The term "Additional Obligations" shall mean the revenue bonds, notes or other obligations
which the City reserves the nght to >ssue rn the future on a panty with the Previously Issued
Subordinate Lien. Obligations and the Obligations, as provided rn th>s Ordinance.
(b) The term "Master Ordinance" shall mean the Orduiance establishing the City's Water and
Sewer System Revenue Financing Program, adopted on December 10, 1991.
(c) The teen "MSRB" means the Municipal Secuntres Rulemakrng Board.
-23-
(d) The term "NRMSIR" means each person whom the SEC or its staff has determined to be
a nauonallyrecognized municipalsecunties uif ormauon repositoryvvithm the meaning of the Rule from
tune to tune.
(e) The term "Obligations" shall mean the Cityof Fort Worth, Texas Water and Sewer System
Subordinate Lien Revenue Bonds, Senes 2001, authonzed bythis Orduiance.
(f) The term "Previously Issued Subordinate Lien Obligations" shall have the same meaning
given said. team in the preamble to this Ondnriance.
(g) The term "Pnor Lien Bonds" shall mean the PreviouslyIssued PantyBonds and anybonds
hereafter issued on a panty therewith pursuant to the terms of the Master Ordinance.
(h) The term "Pnor Lien Obligations" shall mean the Pnor Lien Bonds and any System
Obligations.
(~ The term "Required Reserve Amount" shall mean, with respect to Subordinate Lien
Obligations, an amount equal to the greater of () 50% of the average Annual Debt Service
Requirements of the Subordinate Lien Obligations then Outstanding or (u~ 37.5% of the Annual Debt
Service Requirements of the Subordinate Lien Obligations to be Outstanding in the Year dunng which
such Annual Debt Service Requuiements are scheduled to be the greatest.
(~~ The team "Rule" means SEC Rule 15c2-12, as amended from tune to tune.
(l~ The term "SEC" means the United States Securities and Exchange Commission.
(1) The term "SID" means any pennon designated by the. State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEG or its staff to be, a state
uifon7lauon depositorywithin the meaning of the Rule from tune to time.
(m) The term "Subordinate Lien Obligations" shallmean the Obligations, the PreviouslyIssued
Subordinate Lien Obligations, and any Additional Obligations.
-24
(n) The term "Subordinate Lien Revenue Bond Ordinance" shall have the same meaning given
said term in the preamble to the Ordiniance.
(o) The term "System" shall mean and include the Cit~s combined existing water and sewer
system, together with all future extensions, unprovements, enlargements, and additions thereto, and
all replacements thereof; provided that, notwithstanding the foregouig, and to the extent now or
hereafter authorized or permitted bylaw, the term System shall not include anywater or sewer facilities
which are declared by the City not to be a pact of the System and which are acquired or constricted
bythe Citywith the proceeds from the issuance of "Special Faci7iues Bonds", which are herebydefined
as being special revenue obligations of the Citywhich are not secured byor payable from the Pledged
Revenues as defined herein, but which are secured byand payable solelyfrom special contract revenues
or payments received from any other legal entity in connection with such f acilities, and such revenues
or payments shall not be considered as or constnute Gross Revenues of the System, unless and to the
extent otherwise provided ui the ordinance or ordinances authonzirig the issuance of such "Special
Facilities Bonds"
(p) The term "System Obligations" shall mean (a) two respective ISDA Master Agreements
(referred to herein as the "Swap Agreements"),one with Lehman Brothers Special Financuig Inc., and
the otherwith GBDP, L.P., forthe purpose of enhancing the securityfor orprovidirig forthe payment
of the principal of and interest on the Pror Lien Bonds by providing for the receipt of fixed rate
payments which were estimated to exceed the variable rate payments to be made bythe Cityunder the
Swap Agreements, (b)-the line of credit securing the Water and Sewer System Commercial Paper Notes,
Series A, and (c) any obligations of the City hereafter issued or incurred by the City secured by a lien
on and pledge of the Pledged Revenues superior to the PreviouslyIssued Subordinate Lien Obligations
and the Obligations but subontiinate to the Prior Lien Bonds.
-25-
(q) The term "TWDB" shall mean the Texas Water Development Board, or any successor
agency thereto.
(r) The terrri "year" shall mean the regular fiscal year used bythe Cityin connection with the
operation of the System, which maybe anytwelve consecutive months penod established bythe City
Section 8. MASTER ORDINANCE That the provisions of the Master Ordinance are hereby
incorporated by reference; and by approvuig this Ordinance and by issuing the commitment to
purchase the Obligations as described in the preamble to this Ordinance, TWDB shall 6e deemed to
have accepted such provisions and such provisions shall apply and govern the Previously Issued
Subordinate Lien Obligations, the Obligations, and any Additional Obligations hereafter issued on a
pantytherewith, including, without limitation, the use of Reserve Fund Obligations (as defined in the
Master Ordinance) to provide for the Required Reserve Amount.
Section 9 PLEDGE That the Subordinate Lren Obligations are and shall be secured by and
payable from a lien on and pledge of the Pledged Revenues, provided, however, that sand lien on and
pledge of the Pledged Revenues shall be humor and subordinate to the lien on and pledge of the
Pledged Revenues to the Pnor Lien Obligations. In addition, the Pledged Revenues are furtlierpledged
to the establishment and maintenance of the Debt Service Fund and the Subordinate Lien Reserve
Fund as hereinafter provided The Subordinate Lien Obligations are and will be secured byand payable
only from the Pledged Revenues in the manner descnbed above, and are not secured by or payable
from a mortgage or deed of tivst on anyproperties, whether real, personal, or mixed, constituting the
System
Section 10. DEBT SERVICE FUND That for the sole purpose of paying the pnncipal of
and interest on all Subordinate Lien Obligations, as the same come due, there has been created, and
-26-
established and maintained on the books of the City, the Debt Service Fund. Monies in said Fund shall
be maintained at an official depository bank of the City
Section 11. RESERVE FUND That there has been created, and established and maintained
on the books of the City, a separate fund to be entitled the "City of Fort Worth, Texas Water and
Sewer System Revenue Bonds Subordinate Lien Reserve Fund" (hereinafter called the "Subordinate
Lien Reserve Fund") Reserve Fund Obligations shall be maintained in the Subordinate Lien Reserve
Fund in amounts equal to the Required Reserve Amount.
Section 12. PROJECT FUND (a) That there is herebycreated, established and maintained
on the books of the City, a separate fund to be entitled the. "City of Fort Worth, Texas Water and
Sewer System Series 2001 Subordinate Lien Revenue Bonds Project Fund" (hereinafter called the
"Project Fund") Monies in said Fund shall be maintained at an official depository bank of the City
(b) Except as otherwise provided in Section 15(a) hereof, the proceeds of the Obligations shall
be deposited. into the Project Fund and used by the City for payment of the costs of extending and
improving the System, and the payment of costs associated therewith, including any costs for engi
neenng, financing, financial consultation, administrative, auditing and legal expenses.
(c) Anysurplus proceeds, including the investment earnings derived from the investment of
monies on deposit in the Project Fund, from the Obligations rem Ong on deposit in the Project Fund
after completing the improvements and extensions to the System and upon the completion of the final
accounting as described in Section 22(c) hereof, shall be transferred to the Debt Service Fund to
redeem, in inverse order of maturity, the Obligations owned byTWDB. The foregoing notwithstand-
ing, it LS furcherprovided, however, that anyinterest earnings on monies on deposit in the I'ro~ect Fund
which are required to be rebated to the United States of America pursuant to Section 25 hereof in
-27-
orderto prevent the Obligations from being arbitrage bonds shall be transferred to the "Rebate Fund"
hereinafter established and shall not be considered as interest eariungs for purposes of this subsection.
(d) If required by TWDB as a condition to the purchase of the Obligations, the City
Manager or the designee thereof may approve, execute and deliver an appropriate escrow agreement
or establish an appropriate trust and agencyfund on the books of the City In either case, proceeds
of the Obligations requued to be deposited under an escrow agreement or mto a trust and agencyfund
shall be disbursed in accordance with the TWDB Rules Relating to Financial Programs or as otherwise
authorized and directed by TWDB.
Section 13 DEPOSITS OF PLEDGED REVENUES, INVESTMENTS. (a) That the ,
Pledged Revenues shall be deposrted in the Debt Service Fund and the Subordinate Lien Reserve Fund
when and as requrred by this Ordinance. '
(b) That money in either the Debt Service Fund, the Subordinate Lren Reserve Fund or the
Project Fund may, at the option of the City, be invested in Eligible Investments, provided that all such
deposits and uivestments shall have a par value (or market value when less than par) exclusive of
accrued unterest at all tunes at least equal to the amount of moneycredited to such Funds, and shall be
made in such manner that the money required to be expended from any Fund will be available at the
proper tune or tunes, and provided, further, that Eligible Investments shall consist of only those
uivestments permitted bythe Public Funds Investment Act (Chapter2256, Texas Government Code)
and the Cit}~s uivestment polity. Money in the Subordinate Lien Reserve Fund shall not be invested
ui securities maturing laterthan the final maturityof the Subordinate Lien Obligations secured thereby.
Such uivestments shall be valued in terms of current market value as of the last dayof each year, except
that direct obligations of the United States (State and Local Government Serves) in book: entryfonn
-28-
shall be continuously valued at their par or face principal amount. Such investments shall be sold
promptlywhen necessaryto prevent anydefault in connection with anySubordinate Lien Obligations.
Section 14 FUNDS SECURED That moneyin all such Funds, to the extent not invested,
shall be secured in the manner prescribed bylaw for securYrig funds of the City
Section 15 DEBT SERVICE REQUIREMENTS. (a) That promptly after the delivery of
anyinstallment of the Obligations the Cityshall cause to be deposited to the credit of the Debt Service
Fund any accrued interest received from the sale and delivery thereof, and any such deposit shall be
used to paypart of the interest next coming due on the Obligations.
(b) That in addition to all amounts heretofore required to be deposited to the credit of the
Debt Service Fund, the Cityshall transfer from the Pledged Revenues and deposit to the credit of the
Debt Service Fund the amounts, at the tunes, as follows:
(1) such amounts, deposited in approxunatelyequal monthlyinstallments on or before
the 25th day of each month hereafter, commencing with the month during which the
Obligations are delivered, orthe month thereafterif deliveryis made afterthe 25th daythereof,
as will be sufficient, together with other amounts, if any, then on hand in the Debt Service
Fund and available for such purpose, to paythe interest scheduled to accrue and come due on
the Obligations on the next succeeding interest payment date; and
(2) such amounts, deposited in approximatelyequal monthlyuistallments on or before
the 25th day of each month hereafter, commencing with the month during which the
Obligations are delivered, orthe month thereafter if deliveryis made afterthe 25th daythereof,
as will be sufficient, together with other amounts, if any, then on hand in the Debt Service
Fund and available for such purpose, to paythe principal scheduled to mature and come due
on the Obligations on the next succeeding principal payment date.
-29-
SECTION 16. RESERVE REQUIREMENTS. That. the City covenants, subject to the
covenants set forth in Section 25 hereof relating to the tax-exempt status of the Obligations, that the
Subordinate Lren Reserve Fund shall be maintained in an amount no less than the Required Reserve
Amount applicable to the outstanding PreviouslyIssued Subordinate Lien Obligations, Obligations and
Additional Obligations, to be funded in the manner described below, if not fully funded on the date
of delivery of the Obligations. On or before the 25th day of each month hereafter, commencing on
the 25th day of the month of the urinal delivery of the Obligations, or, if the initial delivery of any of
the Obligations occurs on or after the 25th day of such month, on the 25th day of the month next
succeeding such uutial delivery, there shall be deposited unto the Subordinate Lren Reserve Fund,
1/6Qth of the Required Reserve Amount, until the Subordinate. Lien Reserve Fund contauis the Re-
quired Reserve Amount. When and so long as the money and investments in the Subordinate Lien
Reserve Fund are not less than the Required Reserve Amount, no deposits need be made to the credit
of the Subordinate Lien Reserve Fund. When and if the Subordinate Lien Reserve Fund at anytime
contauis less than the Required Reserve Amount due to any cause or condition other than the issuance
of Additional Obligations, then, subject and subordinate to making the required deposits to the credit
of the Debt Service Fund, such deficiencyshall be made up as soon as possible from the next available
Pledged Revenues, or from anyother sources available for such purpose. The Citymay, at its option,
withdraw and use for any lawful purpose, all surplus in the Suborduiate Lien Reserve Fund over the
Required Reserve Amount. The Cityherebycovenants that from available moneys rt shall deposit to
the credit of the Subordinate Lien Reserve Fund such amounts as shall be necessary to maintain the
Subordinate Lien Reserve Fund in an amount equal to the Required Reserve Amount. For purposes
of this Section 16, "Required Reserve Amount" shall have the same meaning given said term in the
-3a
Master Ordinance, substituting "Subordinate Lien Obligations" for "Panty Obligations", and the
Reserve Fund maybe funded with Reserve Fund Obligations, as recited in Section 8 of this Ordinance.
Section 17 DEFIQENQES, EXCESS PLEDGED REVENUES. (a) That if on any
occasion there shall not be sufficient Pledged Revenues to make the required deposits into the Debt
Service Fund and the Subordinate Lien Reserve Fund, then such deficiencyshall be made up as soon
as possible from the next available Pledged Revenues, or from any other sources available for such
purpose.
(b) That, subject to making the required deposits to the credit of the Debt Service Fund and
the Subordinate Lien Reserve Fund when and as required by this Ordinance, or any ordinance
authonzing the issuance of Additional Obligations, the excess Pledged Revenues maybe used bythe
City for any lawful purpose not inconsistent with the City's Charter.
Section 18. PAYMENT That on orbefore September 1, 2001, and sem~annuallyon orbefore
each March 1 and September 1 thereafter while any of the Previously Issued Subordinate Lien
Obligations, the Obligations or Additional Obligations are outstanding and unpaid, the Cityshall make
available to the Paying Agent/Regutrar therefor, out of the Debt Service Fund (and the Subordinate
Lien Reserve Fund, if necessary) money sufficient to pay such interest on and such pnncipal of the
Previously Issued Subordinate Lien Obligations, the Obligations (if necessary) and Additional
Obligations as shall become due and mature on such dates, respectively, at matunty or by redemption
poor to matiinty. The Paying Agent/Registrarsliall destroy all paid Obligations and furiish the City
with an appropnate certificate of cancellation or destruction.
Section 19 FINAL DEPOSITS; DEFEASANCE OBLIGATIONS. (a) That any
Subordinate Lien Obligation shall be deemed to be paid, retired and no longer outstanding within the
meaning of this Ordinance when payment of the pnncipal of, redemption premium, if any, on such
-31-
Subordinate Lien Obligation, plus interest thereon to the due date. thereof (whether such due date
be by reason of matunry, upon redemption, or otherwise) either () shall have been made or caused to
be made in accordance with the terms thereof (including the giving of any required notice of
redemption), or (u) shall have been provided for by u~evocably depositing with, or making available
to, a paying agent (or escrow agent) therefor, in trust and irrevocablyset aside exclusivelyfor such pays
merit, (1) moneysufficient tomake such payment or (2) Defeasance Obligations, as hereinafterdefined
in this Section, certified by an independent public accounvng firm of national reputation, to mature
as to prYncipal and interest in such amounts and at such tunes as will insure the availability, without rein-
vestment, of sufficientmoneytomake suchpayment, and allnecessaryandproperfees,compensation,
and expenses of such paying agent pertainuig to the Subordinate Lien Obligations with respect to
which such deposit is made shall have been paid or the payment thereof provided forto the satisfaction
of such paying agent. At such tune as a Subordinate Lien Obligation shall be deemed to be paid
hereunder, as aforesaid, it shall no longer be secured byor entitled to the benefit of .this Ordinance or
a lien on and pledge of the Pledged Revenues, and shall be entitled to payment solelyf rom such money
or Defeasance Obligations.
(b) That any moneys so deposited with a paying agent may, at the direction of the City, also
be invested in Defeasance Obligations, maturing in the amounts and times as hereinbefore set forth,
and all income from all Defeasance Obligations in the hands- of the paying agent pursuant to this
Section which is not required for the payment of the Subordinate Lien Obligations, the redemption
premium, if any, and uiterest thereon, with respect to which such moneyhas been so deposited, shall
be remitted to the City.
-32-
(c) That the Citycovenants that no deposit will be made or accepted under clause (a) (u) of this
Section and no use made of any such deposit which would cause such Subordinate Lien Obligations
to be treated as arbitrage bonds within the meaning of section 148 of the Code.
(d) That for the purpose of this Section, the term "Defeasance Obligations" shall mean (i)
direct, noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America, (u) noncallable obligations of an agency
or instrumentality of the United States ~of America, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the City adopts or
approves proceedings authorizing the issuance of refunding bonds or, if such defeasance >s not in
connection with the issuance of refunding bonds, on the date the Cityprovides for the funding of an
escrow to effect the defeasance of the Obligations, are rated as to investment quality by a nationally
recognized investment rating firm not less than AAA or its equivalent, and (iu) noncallable obligations
of a state or an agencyor a county, municipality, or otherpolitical subdivision of a state that have been
refunded and that, on the date the City adopts or approves proceedings authorizing the issuance of
refunding bonds or, if such defeasance >s not in connection with the issuance. of refunding bonds, on
the date the Cityprovides for the funding of an escrowto effect the defeasance of the Obligations, are
rated as to investment quality by a nationally recognized investment rating firm not less than AAA or
its equivalent.
(e) That notwithstanding anyotherprovisions of this Ordinance, all moneyor eligible securities
set aside and held in trust pursuant to the provisions of this Section for the payment of Previously
Issued Subordinate Lien Obligations, Obligations and Additional Obligations, the redemption premium,
of any, and interest thereon, shall be applied to and used for the payment of such Previously Issued
-33-
Subordinate Lien Obligations, Obligations and Additional Obligations, the redemption premium, if any,
and interest thereon. `
Section 20. ADDITIONAL OBLIGATIONS. (a) That the City shall have the nght and
power at anytune and from tune to tune and in one or more senes or issues, to authonze, issue, and
deliver Pnor Lien Obligations, in the manner and for the purposes described in the Master Ordunance.
(b) That the Cityshall have the nght and power at anytune and from tune to tune and in one
or more senes or issues, to authonze, issue and deliver Additional Obligations, in accordance with law,
in any amounts, for purposes of extending, unproving or repaunng the System or for the purpose of
refunding anyof the PreviouslyIssued Subordinate Lien Obligations, Obligations, Additional Obliga-
tions or other obligations of the City incurred in connection with the ownership or operation of the
System. Such Additional Obligations, if and when authonzed, issued and delivered in accordance with
th>s Ordnnance, shall be secured byand made payable equallyand ratablyon a pantywith the Previously
Issued Subordinate Lien Obligations, and the Obligations, and all other outstanding Additional
Obligations, from a lien on and pledge of the Pledged Revenues.
(c) That the Debt Service Fund and the Subordinate Lien Reserve Fund establLShed by this
Ordinance shall secure and be used to pay all Additional Obligations as well as the Previously Issued
Subordinate Lien Obligations and the Obligations. However, each ordinance under which Additional
Obligations are issued shall provide and requu-e that, in addition to the amounts required by the
provisions of this Ordinance and the provisions of any other ordinance or oniunances authonzing
Additional Obligations to be deposited to the credit of the Debt Service Fund, the City shall deposit
to the credit of the Debt Service Fund at least such amounts as are required for the payment of all
pnncipal of and interest on said Additional Obligations then being~issued, as the same come due; and
that the aggregate amount to be accumulated and maintained in the Subordinate Lien Reserve Fund
-34
shall be increased (if and to the extent necessary to an amount not less than the Required Reserve
Amount of all PreviouslyIssued Subordinate Lien Obligations, Obligations and Additional Obligations
which will be outstanding after the issuance and deliveryof the then proposed Additional Obligations,
and that the required additional amount shall be so accumulated bythe deposit in the Subordinate Lien
Reserve Fund of all or anypart of said required additional amount in cash immediatelyafterthe delivery
of the then proposed Additional Obligations, or, at the option of the City, by the deposit of sazd
required additional amount (or anybalance of said required additional amount not deposited is cash
as permitted above) ui monthlyuistallments, made on or before the 25th dayof each month following
the delivery of the then proposed Additional Obligations, of not less than 1/60 of said required
additional amount (or 1/60 of the balance of said required additional amount not deposited in cash as
permuted above)
(d) That all calculations of the Required Reserved Amount made pui~uant to this Section shall
be made as of and from the date of the Additional Obligations then proposed to be issued.
Section 21. FURTHER REQUIREMENTS FOR ADDITIONAL OBLIGATIONS. That
Additional Obligations shall be issued onlyui accordance with this Ordinance, but notwithstanding any
provisions of this Oidduiance to the contrary, no installment, Series or issue of Additional Obligations
shall be issued or delivered unless:
(a) The Mayer and the CitySecretaryof the Citysign a wmten certificate to the effect that the
City >s not in default as to any covenant, condition or obligation in connection with all outstanding
Prior Lien Obligations, Previously Issued Subordinate Lien Obligations, Obligations and Additional
Obligations, and the ordinances authorizing same, and that the Debt Service Fund and the Subordinate
Lien Reserve Fund each contains the amount then required to be therein.
-35-
(b) An independent certified public accountant, or independent firm of certified public
accountants, signs a wntten certificate to the effect that, dunng either the next preceding year, or any
twelve consecutive calendar month penod ending not more than ninety days pnor to the date of the
then proposed Additional Obligations, the Net Revenues were, in the opuuon thereof, at least equal
to (1) 1.25 tunes the average annual pnncipal and interest requirements and (2) 1.10 tunes the pnncipal
and interest requirements forthe year dunng which such requirements are scheduled to be the greatest
(each computed on a fiscal year basis), of all Pnor Lien Obligations, PreviouslyIssued Subordinate Iaen
Obligations, Obligations and Additional Obligations to be outstanding after the issuance of the then
proposed Additional Obligations, reasonably anticipated to be paid from the Pledged Revenues.
Section 22. GENERAL COVENANTS. That the Cityfurther covenants and agrees that in
accordance with and to the extent required or permitted by law•
(a) Furtl~r Erxz~rihrra~ac~ It, while the Previously Issued Subordinate Lien Obligations, the
Obligations or anyAdditional Obligations are outstanding and unpaid, will not additionally encumber
the Pledged Revenues in any manner, except in the manner permitted by the Master Ordinance with
respect to obligations of the Citywith a lien on and pledge of the Pledged Revenues supenor to that
secunng the Subordinate Lien Obligations and except as permitted in this Orduiance in connection
with Additional Obligations, unless said encumbrance >s made junior and subordinate in all respects to
the hens, pledges, covenants and agreements of this Ordinance; but the right of the City to issue
revenue bonds payable from a lien on the Pledged Revenues humor and subordinate in all respects to
the Previously Issued Subordinate Lien Obligations, the Obligations and any Additional Obligations
>s specifically recognized and retained.
(b) Auc~ts. For so long as the State of Texas owns any of the Suborduiate Lien Obligations,
the City shall mail a copy of the audit required by the Master Ordinance to the TWDB. In addition,
-36-
monthly operating statements for the System shall be delivered to the TWDB as long as the State of
Texas owns any of the Subordinate Lien Obligations, and the monthly operating statement shall be iri
such detail as requested by the Development Fund Manager of the TWDB until this regwrement >s
waived thereby
(c) FmxlAatxmtmg. The Cityshall render a final accounting to the TWDB m reference to the
total cost incurred by the City for unprovements and extensions to the System which were financed
bythe issuance of the Obligations, togetherwith a copyof "as built" plans of such unprovements and
extensions upon completion.
(d) Covr}nlianr~ z~th tlae Texas Water L~ezEitt Bct~rd's Rules awl Regulatra~a. The City covenants
to complywrth the rules and regulations of the TWDB, and to maintain insurance on the System in
such amount as maybe required by TWDB. ,
(e) Rates arrt ~ to Mgt 1~& Seruc~ Consistent wrth the provisions of the Master
Ordinance, the City, iri connection with the issuance of the Obligations, hereby covenants and agrees
that it will at all times maintain rates and charges for the services funvshed, provided, and supplied by
the System which shall complywrrh the provisions of the Master Ordinance, be reasonable and non-
d>scnminatoryand produce uicome and revenues sufficient to pay.
(a) all current Operating Expenses;
(b) to produce Net Revenues for each Fiscal Year at least equal to the Annual Debt Service
Requirements during such Fiscal Year of the then Outstanduig Pnor Lien Obligations and Subordinate
Lien Obligations, and
(c) to payall otherfinancial obligations of the System and reasonablyanticipated to be paid
from Gross Revenues.
-37-
Section 23 AMENDMENT OF ORDINANCE (a) That.the owners of Previously Issued
Subordinate Lien Obligations, the Obligations and Additional Obligations aggregating in pnncipal
amount 51% of the aggregate pnncipal amount of then outstanding PreviouslyIssued Subordinate Iaen
Obligations, the Obligations and Additional Obligations shall have the nght from tine to tine to
approve any amendment to thu Ordunance which maybe deemed necessary or desirable by the City,
provided, however, that without the consent of the owners of all of the PreviouslyIssued Subordinate
Lien Obligations, the Obligations and Additional Obligations at the tune outstanding, nothing hereon
contained shall permit or be conttined to permit the amendment of the terms and conditions in th>s
Ordinance or in the Previously Issued Subordinate Lien Obligations, the Obligations or Additional
Obligations so as to:
(1) Make anychange in the matuntyof the outstanding PreviouslyIssued Subordinate Lien
Obligations, the Obligations or Additional Obligations,
(2) Reduce the rate of interest borne by any of the outstanding Previously Issued
Subordinate Lren Obligations, Obligations or Additional Obligations,
(3) Reduce the amount of the pnncipal payable on the outstanding Previously Issued
Subordinate Laen Obligations, Obligations or Addaronal Obligations,
(4) Modifythe terms of payment of principal of or interest on the outstanding Previously
Issued Subordinate Lien Obligations, Obligations orAddaronal Obligations, or inpose
anyconditions with respect to such payment;
_ (5) Affect the rights of the owners of less than all of the Previously Issued Subordinate
Lien Obligations, Obligations and Additional Obligations then outstanding;
(6) Affect the rights of the owners of the Prior Lien Obligations;
-38-
(7) Change the +r~n~mum percentage of the principal amount of Previously Issued
Subordinate Lien Obligations, Obligations and Additional Obligations necessary for
consent to such amendment.
(b) That if at anytime the Cityshall desire to amend the On3lriance underthis Section, the City
shall cause notice of the proposed amendment to be published in a financial newspaper or ~oumal
published in The City of New York, New York, once during each calendar week for at least two
successive calendar weeks. Such nonce shall bneflyset forth the nature of the proposed amendment
and shall state that a copythereof is on file at the principal office of the Paying Agent/Regutrar for
inspection by all holders of Prior Lien Obligations, Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations. Such publication is not required, however, if notice in writing
is given to each holder of Pnor Lien Obligations, Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations.
(c) That whenever at anytime not less than thirty days, and within one year, from the date of
the fast publication of said notice or other service of written notice the Cityshall receive an instniment
or instruments executed bythe owners of at least 51% in aggregate principal amount of all Previously
Issued Subordinate Lien Obligations, Obligations and Additional Obligations then outstanding, which
instrument or instruments shall refer to the proposed amendment described 1Ti sazd notice and which
specificallyconsent to and approve such amendment in substantiallythe form of the copythereof on
file with the Paying Agent/Registr~r, the City Council may pass the amendatory ordinance in
substantiallythe same form
(d) That upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, this Ordinance shallbe deemed to be amended m accordance wrth such amendatoryordinance,
and the respective rights, duties and obligations under this Ordinance of the City and all the owners
-39-
of then outstanding Previously Issued Subordinate Lien Obhgations, Obligations and Additional
Obligations and allfuture AdditionalObhgations shallthereafterbe deteririned,exercised and enforced
hereunder, subject in all respects to such amendments. -
(e) That anyconsent graven bythe owner of a PreviouslyIssued Subordinate Lien Obligation,
Obligation or Additional Obligation pursuant to the provisions of this Section shall be irrevocable for
a penod of six months from the date of the fast publication of the nonce provided for in this Section,
and shall be conclusive and binding upon all future owners of the same PreviouslyIssuedStibordinate
Lien Obligation, Obligation or Additional Obligation dunng such penod Such consent may be
revoked at anytime after six months from the date of the first publication of such nonce bythe owner
who gave such consent, or by a successor thereto in title, by filing nonce thereof with the Paying
Agent/Registrar and the Ciry, but such revocation shall not be effective if the owner of 51% in
aggregate pnncipal amount of the then outstanding Previously Issued Subordinate Lien Obligations,
Obligations and Additional Obligations as in this Section defined have, pnor to the attempted revoca-
tion, consented to and approved the amendment. -
(f) That forthe purpose of this Section, the ownership of PreviouslyIssuedStibordinate Lien
Obligations, Obligations or Additional Obligations shall be as shown bythe registration books of the
registrar therefor.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in th>s Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies
to bondholders or to surrender, restnct or limit any nght or power herein reserved to or
conferred upon the City;
-ao-
(2) To make such provysions for the purpose of curing any ambigtuty, or curing,
correcting or supplementing anydefective provision contained irn this Ordirnance, or in regard
to clanfymg matters or questions arising under this Ordunance, as are necessaryor desirable and
not contraryto or inconsistent with this Ordinance and which shall not adversely affect the
iriterests of the owners of the Prior Lien Obligations, the Obligations or Additional
Obligations,
(3) To modifyanyof the provisions of this Ordinance in anyother respect whatever,
provided that (i) such modnficauon shall be, and be expressed to be, effective only after all
Obligations and each series of Additional Obligations outstanding at the date of the adoption
of such modnfication shall cease to be outstanding, and (u) such modnficauon shall be spec~fi-
cally ref erred to in the text of all Additional Obligations issued after the date of the adoption
of such mod~ficauon.
Section 24 DAMAGED, MUITLATED, -LOST, STOLEN, OR DESTROYED BONDS.
(a) Replace~rer~t Baas. In the event any outstanding Obligation is damaged, mutated, lost, stolen, or
destroyed, the Paying Agent/Registrarshnll cause to be prnted, executed, and delivered, a new bond
of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or
destroyed Obligation, in replacement for such Obligation ui the manner hereinafter provided.
(b) Appliraaazfa-Replac~rernBarls. Application for replacement of damaged, mutilated, lost,
stolen, or destroyed Obligations shall be made to the Paying Agent/Regutrar. In every case of loss,
theft, or destruction of an Obligation, the applicant for a replacement bond shall furnish to the City
and to the Paying AgentlRegistrar such security or indemnity as maybe requued bythem to save each
of them harmless from anyloss or damage with respect thereto. Also, in everycase of loss, theft, or
destruction of an Obligation, the applicant shall furnish to the City and to the Paying Agent/Registrar
-41-
evidence to their.satisfaction of the loss, theft, or destruction of such Obligation, as the case maybe.
In every case of damage or mutilation of an Obligation, the applicant shall surrender to the Payng
Agent/Registrar for cancellation the Obligation so damaged or mutilated.
(c) NoDe~ault ~ Notwithstanding the foregoing provisions of this Section, in the event
anysuch damaged, mutilated, lost, stolen or destroyed Obligation shall have matured, and no default
has occurred which is then continuing in the payment of the principal of, redemption premium, if any,
or interest on the Obligation, the City may authorize the payment of the same (without surrender
thereof except in the case of a damaged or mutilated Obligation) instead of issuing a replacement
Obligation, provided security or indemnity is furnished as above provided in this Section.
(d) Oixtr~e for Issr~rtg Replact~r~rn Borz~s. Prior to the >ssuance of any replacement bond, the
Paying Agent/Registrarsliall charge the owner of such Obligation with all legal, printing, and other
expenses in connection therewith. Every replacement bond issued pursuant to the provisions of this
Section by vutue of the fact that any Obligation is lost, stolen, or destroyed shall constitute a
contractual obligation. of the City whether or not the lost, stolen, or destroyed Obligation shall be
found at any tune, or be enforceable by anyone, and shall be entitled to all the benefits of this
Ordinance equallyand proporuonatelywith anyand all other Obligations dulyissued under this Ordi
Hance.
(e) Ar~hontyforlsszungReplact~rernBavzi!S. In accordance with Chapter 1206, Texas Government
Code, this Section of this Ordinance shall constitute authontyfor the issuance of anysuch replacement
bond without necessity ~of further action by the governing body of the City or any other body or
person, and the duty of the replacement of such bonds is hereby authorized and unposed upon the
Paying Agent/Regutrar, and the Paying Agent/Registrarsliall authenticate and deliver such bonds in
-42-
the form and manner and with the eff ect, as provided ui Section 5 (d) .of this Orduiance for Obligations
issued in exchange for other Obligations.
Section 25 TAX COVENANTS. The Issuer covenants to take anyaction to assure, or refrain
from anyacuon which would adverselyaffect,the treatment of the Obligations as obligations described
iii section 103 of the Code, the interest on which is not includable in the "gross uicome" of the holder
for purposes of federal uicome taxation. In furtherance thereof, the Issuer covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Obligations (less amounts deposited to a reserve fund, if any) are used for any "pnvate
busuiess use", as defined in section 141(6)(6) of the Code or, if more than 10 percent of the
proceeds are so used, that amounts, whether or not received bythe Issuer, with respect to such
pnvate business use, do not, under the teams of this Ordinance or anyunderlying arrangement,
duectly or indirectly, secure or provide for the payment of more than 10 percent of the debt
service on the Obligations, in contravention of section 141(6)(2) of the Code;
(b) to take any action to assure that in the event that the "pnvate business use"
described ui subsection (a) hereof exceeds 5 percent of the proceeds of the Obligations (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent >s used
fora "pnvate business use" which >s "related" and not "disproportionate", within the meaning
of section 141(6)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or 5 percent of the proceeds of the Obligations (less amounts deposited into a
reserve fund, if any) is directly or indirectly used to finance loans to persons, other than state
or local governmental units, ui contravention of section 141(c) of the Code;
-43-
(d) to refrain from taking any actnon which would otherav~se result in the
Obligations being treated as "pnvate acuvntybonds" within the meaning of section 141(b) of
the Code;
(e) to refrain from taking any action that would result in the Obingauons being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(f) to refra.ui from using anyportnon of the proceeds of the Obligations, directly
or indirectly, to acquie or to replace funds which were used, directly or indiectly, to acquire
investment property (as defined in section 148(b) (2) of the Code) which produces a materially
hngher yield over the term of the Obligations, other than investment propertyacgwred wrath --
(1) proceeds of the Obligations invested fora reasonable temporarypenod
of 3 years or less until such proceeds are needed for the purpose for which the
Obligations are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of section 1.148-1(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 10 percent of the proceeds of the
Obligations,
(g) to othenw~se restrict the use of the proceeds of the Obligations or amounts
treated as proceeds of the Obligations, as may be necessary, so that the Obligations do not
othenwLSe contravene the requirements of section 148 of the Code (relating to arbitrage) and,
to the extent applicable, section 149(d) of the Code (relating to advance refundings), and
(h) to payto the United States of America at least once during each five-y~arpenod
(beguiung on the date of delivery of the Obligations) an amount that >s at least equal to 90
percent of the "Excess Earnings", within the meaning of section 148(f) of the Code and to pay
-44-
to the United States of Amenca, not later than 60 days after the Obligations have been paid in
full, 100 percent of the amount then required to be pazd 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 TreasuryRegulations and, in the case of
a refunding bond, transferred proceeds (if anyj and proceeds of the refunded bonds expended pnor
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 nilirigs
promulgated bythe US. Department of the Treasurypursuant thereto. In the event that regulations
or pilings are hereafter promulgated which modify or expand provisions of the Code, as applicable to
the Bonds, the Issuer will not be required to complywith any covenant contained herein to the extent
that such failure to comply, in the opuuon of nationallyrecognizedbopd counsel, will not adversely
affect the exemption from federal income taxation of interest on the Bonds under section 103 of the
Code. In the event that regulations or rulings are hereafter promulgated which oppose additional
regwrements 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
Du~ector of Finance may execute any certificates or other reports required by the Code and to make
such elections, on behalf of the City, which maybe permitted bythe Code as are consistent with the
purpose for the issuance of the Bonds. In order to facilitate compliance with the above clause (h), a
"Rebate Fund" u herebyestablished bythe Ciryforthe sole benefit of the United States of Amenca,
and such Rebate Fund shall not be subject to the claim of any other person, including without
-45-
limitation the registered owners of the Bonds. The Rebate Fund is established for the additional
purpose of compliance with section 148 of the Code.
Furthermore, the Issuer will take all reasonable actions specified m anywntten instructions
provided to the Issuer by TWDB to assure that the interest on said bonds, or any bonds issued to
refund said bonds, shall be excludable from the gross uicome of the holders thereof for federal income
tax purposes.
Section 26. APPROVAL AND REGISTRATION OF BONDS. That the proper officials of
the City are hereby authonzed to have control of the Obligations and all necessary records and
proceedings pertaining to the Obligations pending their delivery and their investigation, exarniiation
and approval bythe AttorneyGeneral of the State of Texas, and their registration bythe Comptroller
of Public Accounts of the State of Texas. Upon registration of the Obligations, said Comptroller of
Public Accounts (or a deputydesignated in venting to act for said Comptroller) shall manuallysign the
Comptroller's Registration Certificate accompanying the Obligations, and the seal of said Comptroller
shall be impressed, or placed in facsimile, on each such certificate.
Section 27 SALE (a) The Obligations are herebysold to TWDB for the pace of par, less
an ongination fee payable to TWDB of $146,765.00. The Obligations maybe delivered to TWDB in
accordance with the schedule set forth in Section 2 of this Ordinance, and pazd for in whole, or ii
installments at such tines as shall be approved bythe CityManager, provided none of the Obligations
shall be so delivered without the City's receiving full payment therefor. The Obligations iutially
delivered shall be registered in the name of the Texas Water Development Board
(b) The Cityherebyauthonzes the CityManagerto approve and execute such documents
necessaryto effect the deliveiyof the Obligations.
-46-
(c) The Paying Agent/Registrar shall complete the "Date of Dehver~' on each Obligation
delivered to TWDB as provided n Section 5(e) of this Ordnance, and interest on the Obligations so
delivered shall commence from such date. -
(d) It is the intent of the parties to the sale of the Obligations that if TWDB ever
determnes to sell all or a part of the Obligations, it shall notifythe Cityat least 60 days prior to the sale
of the Obligations of the decision to so sell the Obligations.
(e) In connection with the >ssuance of the Obligations, the Cityherebydeclares iu ntenuon
to fund the Reserve Fund with a municipal bond debt service reserve policy (the "Reserve Polic}~') to
be provided by Ambac Assurance Corporation (the "Provider"), so that upon the issuance of the
Obligations the aggregate amount of the Reserve Fund Obligations on deposit nn the Reserve Fund
shall be no less than the Required Reserve Amount, as calculated nn accordance with the provisnons of
Section 16 hereof. The Reserve Policyshall be deposited to the credit of the Reserve Fund at the tune
of the issuance and deliveryof the Obligations. The CityManager and anyAssistant CityManagershall
have the authority to execute any documents to effect the issuance of the Reserve Policy by the
Provider including, without lirrutauon, an Insurance Agreement between the City and the Provider, n
substantnallythe form attached to the commntment issued bythe Provnderwnth respect to the Reserve
Policy (the "Reserve PolicyComzYUtment") In addition, the conditions applicable to the issuance of
the Reserve Policy, as set forth n the Reserve Policy Commntmentissued bythe Provider, are hereby ,
incorporated by reference into this Ordinance.
(f) To the extent that the provisions of this Ordinance are inconsistent or conflict with the
provisions of the ordinances authonzng the Previously Issued Subordinate Lien Obligations, the
provisions of this Ordnance shall control, ncluding, vnthout limntauon, that the City shall have the
ability to fund the Required Reserve Amount for the Obligations over a 24 month period, and by
-47-
issuing iu commitment to purchase the Obligations, TWDB shall be deemed to have consented to the
applicability of such provisions set forth in this Ordinance to the Subordunate Lien Obligations.
(g) The purchase of a municipal bond insurance policy (the "Bond Insurance Policy')
from the Provider as additional secunty for the Obligations u hereby approved. The pnnting of a
legend on the Obligations describing the Bond Insurance Policy is hereby authorized The payment
of the premium to the Provider in consideration for the issuance of the Bond Insurance Policy >s
herebyapproved. In addition, the conditions applicable to the issuance of the Bond Insurance Policy,
as set forth in the Insurance Commitment issued bythe Provider with respect to the Bond Insurance
Policy attached to this Ordinance, are hereby incorporated by reference into this Ordinance.
Section 28. COMPLIANCE WITH RULE 15c2-12. (a) Ayrrnral Repom. (i) The City shall
provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year,
financial inforiziation and operating data with respect to the City of the general type included in the
final Application submitted to TWDB and submitted to the NRMSIRs and the SID with respect to the
Pnor Lien Bonds. Anyfinancial statemenu to be so provided shall be (1) prepared in accordance with
the accountung principles generally applicable to cities such as the City, or such other accounting
principles as the Citymaybe required to employfrom time to tune thereafter pursuant to state law or
regulation, and (2) audited, if the City commissions an audit of such statements and the audit u
completed within the penod during which they must be provided If the audit of such financial
statemenu >s not complete within such penod, then the City shall provide unaudited financial
statemenu within such penod and shall provide audited financial statemenu for the applicable fiscal
year to each NRMSIR and anySID, when and if the audit report on such statemenu become available.
(u) If the City changes iu fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) Pnor to the next date by which the City otherwise would
be required to provide financial uifoimation and operating data pursuant to this Section. The City
-48-
agrees to provide financial information and operating data of a nature consistent with that provided
bythe Ciryin connection with the issuance of Additional ProrryObligations to which the Rule applies.
The financial information and operating data to be provided pursuant to this Section maybe set forth
in full in one or more documents or maybe included byspecific reference to anydocument (including
an official statement or other offerng document, if it is available f rom the MSRB) that theretofore has
been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Ezern Natus. The City shall notify any SID and either each NMIR or the
MSRB, in a tunelymanner, of anyof the following events with respect to the Obligations, if such event
is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies,
2. Non-payment related defaults,
3 Unscheduled draws on debt service reserves reflecting financial difficulties,
4 Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or hgiudityproviders, or their failure to perform;
6. Adverse tax opuuons or events affecting the tax-exempt status of the
Obligations,
7 Modifications to rights of holders of the Obligations;
8. Obligation calls,
9 Defeasances; -
10. Release, substitution, orsale of properrysecuririg repayment of the Obligations,
and
11. Ratuig changes.
The Ciryshall notifyanySID and either each NRMSIRorthe NISRB, in a tunely manner, of anyfailure
bythe Ciryto provide financial inforniation or operating data in accordance with subsection (a) of thss
Section bythe time required bysuch subsection.
(c) Lryraatra-a, Ucsclavrers, a~rl Ar~n1s. (i) The City shall be obligated to observe and
perform the covenants specified in this Article for so long as, but onlyfor so long as, the City remains
an "obligated person" with respect to the Obligations within the meaning of the Rule, except that the
Ciryin anyevent will give nonce of anydeposit made in accordance with this Or~dinarice or applicable
law that causes Obligations no longer to be outstanding.
-49-
(u~ The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Obligations and the beneficial owners of TWDB's bonds under the Rule, and
nothing m this Section, express orunplied, shall give anybenefit or anylegal or equitable nght, remedy,
or claim hereunderto anyotherperson. The Cityunciertakes to provide onlythe financial ufoimation,
operating data, financial statemenu, and notices which it has expressly agreed to provide pursuant to
this Section and does not herebyundertake to provide any other uifom:iation that maybe relevant or
material to a complete presentation of the Cites financial resulu, condition, or prospects or hereby
undertake to update anyuiformation provided in accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or wairarity concerning such
information or iu usefulness to a decision to invest in or sell Obligations at any future date..
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICSAL OWNER OF ANY BOND OR ANY OTHER
PERSON, IN CONTRACT ORTORT, FORDAMAGE S RESULTING IN WHOLE ORINPART
FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON
ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANYSUCHBREACHSHALLBE LIMITED TOANACTIONFORMANDAML~-ORSPECIFIC
PERFORMANCE.
(iv) No default bythe Cityin observing or performing iu obligations under this Section shall
compose a breach of or defauh under this Ordinance for purposes of any other provision of this
Ordinance: Nothing in this Secaon >s intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
(v) The provisions of this Section maybe amended bythe Cityfromtune to tune to adapt to
changed cin+c>.unstances that arise from a change in legal requiremenu, a change in law, or a change in
-s0-
the identity, nature, status, or type of operations of the City, but only ~ (1) the provisions of this
Section, as so amended, would have permitted an underwater to purchase or sell Obligations in the
prinaryoffeang of the Obligations in compliance with the Rule, talung into account anyamendments
or interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the registered owners of a ma~oatyin aggregate prnncipal amount (or anygreater amount required
by any other provision of this Ordinance that authonzes such an amendment) of the outstanding
Obligations consent to such amendment or (b) a person that u unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment will not materially unparr the
interest of the registered owners and beneficial owners of the Obligations. If the Cityso amends the
prov~srons of this Section, rt 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 forthe amendment and of the inpact of anychange in the type of financial rnfoanauon or
operating data so provided. The City may also amend or repeal the prov~srons of this continuing
disclosure agreement if the SEC amends or repeals the applicable provysron of the Rule or a court of
final ~unsdiction enters judgment that such provisions of the Rule are invalid, but only if and to the
extent that the provisions of this sentence would not prevent an underwater from lawfullypurchasing
or selling Obligations in the prnmary offerung of the Obligations.
Section 29 ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR THE
PROJECT That the. City covenants to account for on its boobs and records the expenditure of
proceeds from the sale of the Obligations and any investment earnings thereon to be used for the
unprovement and extension of the System (referred to herein and Section 30 hereof as a "Project") by
allocating proceeds to expenditures within 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 invesunent earnings more than 60 days after the later of (a) the fifth
-51-
anruversaryof the date of dehveryof the Obligations or (b) the date the Obligations are reared, unless
the Cityobtaiis an opiuon of nationall}~recognized bond counsel substanaallyto the effect that such
expenditure will not adversely affect the tax-exempt status of the Obligations. For purposes of this
Section, the City shall not be obligated to comply with this covenant if it obtains an opiuon of
nationally~recognized bond counsel to the effect that such failure to complywill not adversely affect
the excludabilityforfedertil income tax purposes from gross income of the interest.
Section 30. DISPOSITION OF PROJECT That the City covenants that the properly
constituting a Project will not be sold or otherwise deposed nn a transaction resulting in the receipt by
the City of cash or other compensation, unless the City obtans an opiuon of nationall~recogmzed
bond counsel substant>allyto the effect that such sale or other disposition will not adverselyaffect the
tax-exempt status of the Obligations. For purposes of the Section, the portion of the properly
compnsnng personal property and disposed of in the ordinary course of business shall not be treated
as a transaction resulting nn the receipt of cash or other compensation: For purposes of the Section,
the Issuer shall not be obligated to comply with the covenant of nt obtains an opiuon of nationally
recognized bond counsel to the effect that such failure to comply will not adversely affect the
excludabilityforfedertil nncome tax purposes from gross income of the interest...
Section 31. INIIVIEDIAT~ EFFECT That this Ordinance shall be effective nmmediatelyfrom
and after its passage nn accordance month the provisions of Section 2 of Chapter 25 of the Charter of the
City, and nt ns accorduigly so ordained.
[EXECUTION PAGE FOLLOWS]
-52-
ADOPTED this 23rd day of January, 2001
ATTEST
Secretary
APPROVED AS TO FORM AND LEGALITY
~~~
City Attorney
f ~. ~.~,..~~
Mayor
~~
~`
}
-.(SEAL) ~ ~ -
~~
.~...
-53-
THE STATE OF TEXAS
COUNTIES OF TA.~RRANT AND DENTON
QTY OF FORT WORTH
I, the undersigned, City Secretary of the City of Fort Worrh, in the State of Texas, do hereby
certify that I have compared the attached and foregoing excerpt from the minutes of the regular
meeting of the CiryCouncd of the Ciryof Port Worth, Texas which was held on January23, 2001, and
of an ordinance which was dulypassed at said meeting, and that said copyis a true and correct copy
of said excerpt and the whole of said ordinance. Said meeting was open to the public, and public nonce
of the tune, place and purpose of said meeting was given, all in accordance with Chapter 551, Texas
Government Code.
In testimony whereof, I have set my hand and have hereunto affixed the seal of said City of
Fort Worth, tlu~ day of January, 2001.
w~= .~ `~ ' ' City ecretary of the City of ±
~• ' ~~
vw. ,.~ ; - ~+,, Fort Worth, Texas
~y - ;~ ~,- ~`~
_ ~,
(SEAI;)~ ''~
~ , - -- - ~'
c
M ~4
J ~ ~ ~ _
{ 4_
~~ ~~ /~ ~ r
~l
•'w YW';~M"'~S
City of Fort Worth, Texas
M,~A~oe and Council CommunicAtion
DATE REFERENCE NUMBER LOG NAME PAGE
1/23/01 G-13137 13BONDS 1 of 2
SUBJECT ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF $8,080,000 CITY OF
FORT WORTH, TEXAS, WATER AND SEWER SYSTEM SUBORDINATE LIEN
REVENUE BONDS, SERIES 2001, AND ORDAINING OTHER MATTERS RELATED
THERETO
RECOMMENDATION
It is recommended that the City Council adopt an ordinance authorizing the issuance and sale of
$8,080,000 in Water and Sewer System Subordinate Lien Revenue bonds to the Texas Water
Development Board
DISCUSSION
On May 23, 2000 (Resolution No 2635), the City Council authorized the filing of an application with the
Texas Water Development Board for loans up to $8 5 million under the State Revolving Loan Program
Proceeds of the sale will be used to provide permanent funding for the installation and purchase of the
Village Creek Gas Turbine Energy Reuse project. The interest rate on this loan will be approximately
0 55% lower than market rates, resulting in annual savings of $40,000 per year
The City currently has seven loans outstanding to the Texas Water Development Board
Issue Original Amount Outstanding (as of 1/01/01)
Series 1991 $16,155,000 $ 12,200,000
Series 1992 $12,000,000 $ 8,400,000
Series 1995 $18,880,000 $ 16,360,000
Series 1996 $17,120,000 $ 14,965,000
Series 1998 $60,980,000 $ 56,745,000
Series 1999 $38,000,000 $ 36,805,000
Series 1999A $61,750,000 $ 61,750,000
TOTAL
$207,225,000
The bonds will be sold at the City Council meeting on January 23, 2001
City of Fort Worth, Texas
~1-~A~a~ And Caunc~l o~ninun~cAt~an
C
DATE
1./23/01 REFERENCE NUMBER
G-13137 LOG NAME
13BONDS PAGE
2 of 2
SUBJECT ORDINANCE AUTHORIZING THE
FORT WORTH, TEXAS, WATER
REVENUE BONDS, SERIES 2001,
THERETO ISSUANCE AND SALE OF $8,080,000 CITY OF
AND SEWER SYSTEM SUBORDINATE LIEN
AND ORDAINING OTHER MATTERS RELATED
FISCAL INFORMATION/CERTIFICATION
The Finance Director certifies that funding for the annual debt service payments will be available from
the current operating budget, as appropriated, of the Water and Sewer Operating Fund
CS k
Submitted for City Manager's FUND ACCOUNT CENTER AMOUNT CITY SECRETARY
Office by: (to)
APPROVED
Charles Boswell 8511 CITY C0~(~CIL
Originating Department Head:
JAN 23 2001
Jim Keyes 8517 (from)
(((~(!~
Additional Information Contact:
Cit
S
y
ecretary of the
Oity of Fort ~/orth,'fexa4
Robert Shook 8519
Ad~pt~d artli~~nce Nip ~ 6