HomeMy WebLinkAboutORD 2006-30 - Utility System Rev Refund Bonds2�30
l.11I lipliIIIIIIIIIIIII 1;
CERTAIN1N SUPPORTOF BONDS; APPROVING PAYING
AGENT/REGISTRAR AGREEMENT,OFFICIAL STATEMENT, A PURCHASE
AGREEMENT AND AN ESCROW AGREEMENT; CALLING CERTAIN
OBLIGATIONS FOR REDEMPTION; r AUTHORIZING OTHER MATTERS
RELATED TO THE ISSUANCE OF THE BONDS
GTOWNGO: Ref Bond 2GD6A Ordinance
1 1 ►►i. ii 1 ♦ ►. 1 !a
TABLE OF CONTENTS
Page
RECITALS........... ............................ ................. .......... I
SECTION 1. CENTURY PLAN AND DEFINITIONS .... I .............. 1 ..... 1 ...... 2
SECTION 2. AMOUNT AND PURPOSE OF THE SERIES 2006A BONDS. .........:.... 2
SECTION 3. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF THE SERIES 2006A BONDS ........ I.. I .... I ...... 2
SECTION 4. INTEREST.........................1......................I...1.3
SECTION 5. CHARACTERISTICS OF THE SERIES 2006A BONDS. ................. 3
(a) Registration, Transfer, and Exchange, Authentication ..........:....... 3
(b) Payment of Series 2006A Bonds and Interest ........................ 4
(c) In General. .......... 4
(d) Substitute Paying Agent/Registrar ................................ 4
(e) Book -Entry -Only System for Series 2006A Bonds .............:.... .. 5
(f) Successor Securities Depository; Transfers Outside Book -Entry -Only
Systems....................................1............6
(g) Payments to Cede & Co. ........................... . ........... 6
(h) DTC Blanket Letter of Representations ...................... I ... 1 . 6
SECTION 6. FORM OF SERIES 2006A BOND .......... I ......................... 7
SECTION 7. PLEDGE OF PLEDGED REVENUES.... I ............... 1 ...... I ..... 7
SECTION 8. SPECIAL FUNDS ................................................ 7
SECTION 9. REVENUE FUND ................................................ 8
SECTION 10. FLOW OF FUNDS ............................................... 8
SECTION 11. INTEREST AND SINKING FUND . ................................ 1 . 8
SECTION 12. RESERVE FUND ................................................ 9
SECTION 13. EXCESS BOND PROCEEDS. ............................... 12
SECTION 14. DEFICIENCIES - EXCESS PLEDGED OR NET REVENUES ............ 12
SECTION 15. INVESTMENT OF FUNDS - VALUATION - TRANSFER OF
INVESTMENT INCOME .................................. 1 ...... 12
SECTION 16. PAYMENT OF PARITY OBLIGATIONS. .......... I ...... I ..1........ 13
SECTION 17. RATES AND CHARGES ........................... I .... I ......... 13
SECTION 18. GENERAL COVENANTS ........................................ 14
(a) Performance................................................14
(b) City's Legal Authority ...................................... 1 . 14
GTOWNGO: Ref Bond 2006A Ordinance 1
(c) Title......................................................14
(d) Liens.....................................................14
(e) Operation of System; No Free Service ............................ 15
(f) Further Encumbrance .................. I ...................... 15
(g) Sale or Disposal of Property .................................... 15
(h) Insurance..................................................16
(i) Governmental Agencies ....................................... 17
0) No Competition.............................................17
(k) Disaggregation of System ..................................... 17
SECTION 19. RECORDS AND ACCOUNTS - ANNUAL AUDIT ..................... 17
SECTION 20. COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON THE BONDS .............................................. 18
SECTION 21. CONTINUING DISCLOSURE UNDERTAKING, .................. 1 . 20
(a) Annual Reports ............. ........... I...I............... 120
(b) Material Event Notices .................. I ................. 1 . 1 . 21
(c) Limitations Disclaimers and Amendments .... I ........ I . , ........ 121
SECTION 22. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS ................ 23
SECTION 23. FURTHER REQUIREMENTS FOR ADDITIONAL PARITY
OBLIGATIONS................................................23
SECTION 24. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS ................. 24
SECTION 25. ISSUANCE OF SPECIAL PROJECT OBLIGATIONS ............. I ..... 24
SECTION 26, LMTED OBLIGATIONS OF THE CITY ... 1 .................. I . , ... 24
SECTION 27. SECURITY FOR FUNDS ................................... 1 ..... 25
SECTION 28. REMEDIES IN EVENT OF DEFAULT .................... I ......... 25
SECTION 29. DEFEASANCE OF SERIES 2006A BONDS . I ........................ 25
SECTION 30. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
SERIES 2006A BONDS ......................................... 26
(a) Replacement Bonds .................... I .... I ................ 26
(b) Application for Replacement Bonds ....... I ....... I . . . . .......... 27
(c) No Default Occurred .......... . .......... I ................... 27
(d) Charge for Issuing Replacement Series 2006A Bonds ............ 1. 1. 127
(e) Authority for Issuing Replacement Series 2006A Bonds ............... 27
SECTION 31. AMENDMENT OF ORDINANCE ................. I ....... I ..... 1 .. 27
SECTION 32. SALE AND DELIVERY OF SERIES 2006A BONDS ................... 30
SECTION 33. CUSTODY, APPROVAL AND REGISTRATION OF SERIES 2006A
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE AND
CUSIP NUMBERS ...................... I ...................... 30
SECTION 34, APPROVAL OF OFFICIAL STATEMENT .................... I.. I ... 30
SECTION 35, ADDITIONAL INSURANCE PROVISIONS ................... I ...... 31
SECTION 36. ESTABLISHMENT OF ESCROW FUND .... I ........................ 31
SECTION 37. NOTICE OF REDEMPTION ................................ I .... 1 . 31
SECTION 38. NOTICE TO PAYING AGENT ............................ I ........ 31
SECTION 39. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF FUNDS ... 31
GTOWNGO: Ref Bond 2006A Ordinance 11
W Page
SECTION 40
SECTION 41
SECTION 42
SECTION 43
SECTION 44
SECTION 45
SECTION 46
SECTION 47
SECTION 48
SECTION 49
SECTION 50
NO RECOURSE AGAINST CITY OFFICIALS I ......:.............. 31
FURTHER ACTIONS ............................................ 31
INTERPRETATIONS ................... I .... I . , ..... ...... :. I ... 32
INCONSISTENT PROVISIONS ....... I ............................ 32
INTERESTED PARTIES .................................. 32
INCORPORATION OF RECITALS .. I ...............:.............. 32
SEVERABILITY................................................32
REPEALER.....I ................... ........................1.33
EFFECTIVE DATE.............................1.............. .33
PERFECTION ...... ......... ......... .......................:..33
PAYMENT OF ATTORNEY GENERAL FEE ......................... 33
Exhibit A - Definitions
Exhibit B - Form of Series 2006A Bond
Exhibit C - Description of Annual Financial Information
Exhibit D - Escrow Agreement
Exhibit E - Notice of Redemption
GTOWNGO: Ref Bond 2006A Ordinance
iii
Ordinance No.
ON lop
•WIWI MAIMi • 1
IaRla
STATE OF TEXAS §
COUNTY OF t
CITY OF GEORGETOWN
WHEREAS, the City of Georgetown, Texas (the "City") has duly issued and there is now
outstanding the following obligations:
City of Georgetown, Texas Utility System Revenue Bonds, Series 2000 (the "Series
2000 Bonds"); and
WHEREAS, the City now desires to refund the Series 2000 Bonds described the notice of
redemption attached as Exhibit "E" hereto in the aggregate principal amount of $3,000,000
(collectively, the "Refunded Obligations"); and
WHEREAS, the City Council of the City deems it advisable and in the best interest of the
City to refund the Refunded Obligations in order to achieve a net present value savings of $94,328.89
and the City further finds that the aggregate amount of payments under the Refunded Obligations
exceeds the aggregate amount of payments under the refunding bonds by $127,895.72; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207")
authorizes the City to issue refunding bonds and to deposit the proceeds from the sale thereof, and
any other available funds or resources, directly with an eligible trust company or commercial bank,
and such deposit, if made before such payment dates, shall constitute the making of firm banking and
financial arrangements for the discharge and final payment of the Refunded Obligations; and
WHEREAS, Chapter 1207 further authorizes the City to enter into an escrow agreement
with an eligible trust company or commercial bank with respect to the safekeeping, investment,
reinvestment, administration, and disposition of any such deposit, upon such terms and conditions as
the City and such entity may agree, provided that such deposits may be invested and reinvested in
Defeasance Securities (as defined herein)which shall mature and bear interest payable at such times
and in such amounts as will be sufficient to provide for the scheduled payment or prepayment of the
Refunded Obligations; and
GI'OWNGO: Ref Bond 2006A Ordinance 1
WHEREAS, the Escrow Agreement hereinafter authorized, constitutes an agreement ofthe
kind authorized and permitted by said Chapter 1207; and
WHEREAS, all the Refunded Obligations mature or are subject to redemption prior to
maturity within 20 years of the date of the bonds hereinafter authorized; and
WHEREAS, the City deems it appropriate to call for redemption the Refunded Obligations.
WHEREAS, the City hereby finds that the issuance of the Series 2006A Bonds implements
Finance Policy 12.00 and 14.00 of the Century Plan and further finds that the enactment of this
ordinance is not inconsistent or in conflict with any other Century Plan Policies; and
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was passed was open to the public, and public notice ofthe time, place and purpose of said
meeting was given, all as required by Chapter 551, Texas Government Code.
THEREFORE, BE IT ORDAINED i OF THE CITY t
GEORGETOWN,THAT:
SECTION 1. CENTURY PLAN AND DEFINITIONS. (a) Century Plan. The City hereby
finds that the issuance of the bonds implements Finance Policy 14.00 ofthe Century Plan - Policy Plan
Element, which states: "All municipal operations are conducted in an efficient business -like manner
and different financial resources for both current and future needs are provided," and Utilities Energy
Policy 12.00 which states "City owned, sponsored or managed utilities provide safe, adequate and
reliable services to all customers;" and further finds that the enactment of this Ordinance is not
inconsistent or in conflict with any other Century Plan Policies.
(b) Definitions. For all purposes of this Ordinance, except as otherwise expressly provided
or unless the context otherwise requires, the terms defined in Exhibit "A" to this Ordinance have the
meanings assigned to them in Exhibit "A".
SECTION 2. AMOUNT AND PURPOSE OF THE SERIES 2006A BONDS. The bond
or bonds of the City further described in Section 3 of this Ordinance and herein defined as the Series
2006A Bonds are hereby authorized to be issued and delivered in the aggregate principal amount of
$3,2052000 FOR THE PURPOSE OF (I) REFUNDING THE REFUNDED OBLIGATIONS
AND (H) PAYING THE COSTS ASSOCIATED WITH THE ISSUANCE OF THE BONDS.
SECTION 3. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF THE SERIES 2006A BONDS. Each bond issued pursuant to this Ordinance
for the purpose described in Section 2 of this Ordinance shall be designated: "CITY OF
GEORGETOWN, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS,
SERIES 2006," and initially there shall be issued, sold, and delivered hereunder fully registered
bonds, without interest coupons, dated April 15, 2006, in the respective denominations and principal
amounts hereinafter stated, numbered consecutively from R-1 upward (except the initial Bond
delivered to the Attorney General of the State of Texas which shall be numbered T-1), payable to the
GTOWNGO: Ref Bond 2006A Ordinance 2
respective initial registered owners thereof (as designated in Section 32 hereof), or to the registered
assignee or assignees of said bonds or any portion or portions thereof (in each case, the "Registered
Owner"), and the Series 2006A Bonds shall mature and be payable serially on August 15 in each of
the years and in the principal amounts, respectively, as set forth in the following schedule:
Year
Principal
Year
Principal
2006
$ 45,000
2014
$270,000
2007
157000
2015
280,000
2008
20,000
2016
295,000
2009
20,000
2017
305,000
2010
2252000
2018
3152000
2011
240,000
2019
3307000
2012
2452000
2020
345,000
2013
255,000
SECTION 4. INTEREST. The Series 2006A Bonds scheduled to mature during the years,
respectively, set forth below shall bear interest from the dates specified in the FORM OF BOND set
forth in Exhibit "B" to this Ordinance to their respective dates of maturity or redemption prior to
maturity in the manner and at the following rates per annum:
Year of
Interest
Year of
Interest
MaturLq
Rate
Maturity
Rate
2006
4.000%
2014
4.500%
2007
4.000
2015
4.250
2008
4.000
2016
4.500
2009
4.000
2017
4.300
2010
4.000
2018
4.400
2011
4.250
2019
4.500
2012
4.250
2020
4.500
2013
4.250
Said interest shall be payable in the manner provided and on the dates stated in the FORM OF BOND
set forth in Exhibit "B" to this Ordinance.
SECTION 5. CHARACTERISTICS OF THE SERIES 2006A BONDS. (a) Registration,
Transfer, and Exchange, Authentication. The City shall keep or cause to be kept at the designated
office for payment of The Bank of New York Trust Company, N.A. in Jacksonville, Florida (the
"Paying Agent/Registrar") books or records for the registration of the transfer and exchange of the
Series 2006A Bonds (the "Registration Books"), and the City hereby appoints the Paying
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers and exchanges under such reasonable regulations as the City and Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers and exchanges as herein provided. The Paying Agent/Registrar Agreement between the City
and the Paying Agent/Registrar, in substantially the form presented to the City Council at the meeting
at which this Ordinance was considered, is hereby approved and the Mayor and City Secretary or the
Deputy City Secretary of the City are hereby authorized to execute the Paying Agent/Registrar
Agreement and approve any changes in the final form thereof.
GMWNGO: Ref Bond 2006A Ordinance 3
The Paying Agent/Registrar shall obtain and record in the Registration Books the address of
the registered owner of each Series 2006A Bond to which payments with respect to the Series 2006A
Bonds shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify
the Paying Agent/Registrar in writing of the address to which payments shall be mailed, and such
interest payments shall not be mailed unless such notice has been given. To the extent possible and
under reasonable circumstances, all transfers of the Series 2006A Bonds shall be made within three
business days after request and presentation thereof. The City shall have the right to inspect the
Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the
Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required
by law, shall not permit their inspection by any other entity. The Paying Agent/Registrar's standard
or customary fees and charges for making such registration, transfer, exchange and delivery of a
substitute Series 2006A Bond or Series 2006A Bonds shall be paid as provided in the FORM OF
BOND set forth in Exhibit "B" to this Ordinance. Registration of assignments, transfers and
exchanges of Series 2006A Bonds shall be made in the manner provided and with the effect stated
in the FORM OF BOND set forth in Exhibit "B" to this Ordinance. Each substitute Series 2006A
Bond shall bear a letter and/or number to distinguish it from each other Series 2006A Bond.
Except as provided in (c) below, an authorized representative of the Paying Agent/Registrar
shall, before the delivery of any such Series 2006A Bond, date and manually sign the Paying
Agent/Registrar's Authentication Certificate, and no such Series 2006A Bond shall be deemed to be
issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar promptly
shall cancel all paid Series 2006A Bonds and Series 2006A Bonds surrendered for transfer and
exchange. No additional ordinances, orders or resolutions need be passed or adopted by the
governing body of the City or any other body or person so as to accomplish the foregoing transfer
and exchange of any Series 2006A Bond or portion thereof, and the Paying Agent/Registrar shall
provide for the preparation, execution and delivery of the substitute Series 2006A Bonds in the
manner prescribed herein. Pursuant to Chapter 1201, Texas Government Code, and particularly
Subchapter D thereof, the duty of transfer and exchange of Series 2006A Bonds as aforesaid is hereby
imposed upon the Paying Agent/Registrar, and, upon the execution of said Certificate, the transferred
and exchanged Series 2006A Bond shall be valid, incontestable and enforceable in the same manner
and with the same effect as the Series 2006A Bonds which initially were issued and delivered
pursuant to this Ordinance, approved by the Attorney General and registered by the Comptroller of
Public Accounts.
(b) Payment of Series 2006A Bonds and Interest. The City hereby further appoints the
Paying Agent/Registrar to act as the paying agent for paying the principal of and interest on the Series
2006A Bonds, all as provided in this Ordinance. The Paying Agent/ Registrar shall keep proper
records of all payments made by the City and the Paying Agent/Registrar with respect to the Series
2006A Bonds.
(c) In General. The Series 2006A Bonds (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Series 2006A Bonds to be payable only
to the registered owners thereof, (ii) may and shall be redeemed prior to their scheduled maturities,
(iii) may be transferred and assigned, (iv) may be exchanged for other Series 2006A Bonds of the
GfOWNGO: Ref Bond 2006A Ordinance 4
same Series, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated,
(vii) the principal of and interest on the Series 2006A Bonds shall be payable, and (vin) shall be
administered and the Paying Agent/Registrar and the City shall have certain duties and responsibilities
with respect to the Series 2006A Bonds, all as provided, and in the manner and to the effect as
required or indicated, in the FORM OF BOND set forth in Exhibit "B" to this Ordinance. 4 The Series
2006A Bonds initially issued and delivered pursuant to this Ordinance are not required to be, and shall
not be, authenticated by the Paying Agent/ Registrar, but on each substitute Series 2006A Bond
issued in exchange for any Series 2006A Bond or Series 2006A Bonds issued under this Ordinance
the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTR.A.R'S
AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF BOND.
(d) Substitute Paying Agent/Re isg tray. The City covenants with the registered owners ofthe
Series 2006A Bonds that at all times while the Series 2006A Bonds are outstanding the City will
provide a competent and legally qualified bank, trust company, financial institution or other entity to
act as and perform the services of Paying Agent/Registrar for the Series 2006A Bonds under this
Ordinance, and that the Paying Agent/Registrar will be one entity. The City reserves the right to, and
may, at its option and to the extent permitted by law, (i) act in the capacity of Paying Agent/Registrar
or (ii) change the Paying Agent/Registrar upon not less than 30 days written notice to the Paying
Agent/Registrar, to be effective at such time which will not disrupt or delay payment on the next
principal or interest payment date after such notice. In the event that the entity at any time acting as
Paying Agent/Registrar (or its successor by merger, acquisition or other method) should resign or
otherwise cease to act as such, the City covenants that promptly it will assume the duties or will
appoint a competent and legally qualified bank, trust company, financial institution or other agency
to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying
Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating to
the Series 2006A Bonds, to the new Paying Agent/Registrar designated and appointed by the City.
Upon any change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof
to be sent by the new Paying Agent/Registrar to each registered owner of the Series 2006A Bonds,
by United States mail, first-class postage prepaid, which notice also shall give the address of the new
Paying Agent/Registrar. By accepting the position and performing as such, each Paying
Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified
copy of this Ordinance shall be delivered to each Paying Agent/Registrar.
(e) Book -Entry -Only System for Series 2006A Bonds. The Series 2006A Bonds issued in
exchange for the Series 2006A Bonds initially issued to the purchaser specified in Section 32 herein
shall be initially issued in the form of a separate single fully registered Series 2006A Bond for each
of the maturities thereof. Upon initial issuance, the ownership of each such Series 2006A Bond shall
be registered in the name of Cede & Co., as nominee of The Depository Trust Company of New
York ("DTC"), and except as provided in subsection (f) hereof, all of the outstanding Series 2006A
Bonds shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Series 2006A Bonds registered in the name of Cede & Co., as nominee of
DTC, the City 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
GTOWNGO: Ref Bond 2006A Ordinance 5
organizations on whose behalf DTC was created ("DTC Participant") to hold securities to facilitate
the clearance and settlement of securities transactions among DTC Participants or to any person on
behalf of whom such DTC Participant holds an interest in the Series 2006A Bonds. Without limiting
the immediately preceding sentence, the City 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 any
DTC Participant with respect to any ownership interest in the Series 2006A Bonds, (ii) the delivery
to any DTC Participant or any other person, other than a registered owner of the Series 2006A
Bonds, as shown on the Registration Books, of any notice with respect to the Series 2006A Bonds
or (iii) the payment to any DTC Participant or any other person, other than a registered owner of
Series 2006A Bonds, as shown in the Registration Books of any amount with respect to principal of
or interest on the Series 2006A Bonds. Notwithstanding any other provision of this Ordinance to the
contrary, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person
in whose name each Series 2006A Bond is registered in the Registration Books as the absolute owner
of such Series 2006A Bond for the purpose of payment of principal and interest with respect to such
Series 2006A Bond, for the purpose of registering transfers with respect to such Series 2006A Bond
and for all other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of and
interest on the Series 2006A Bonds only to 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 writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's
obligations with respect to payment of principal of and interest on the Series 2006A Bonds to the
extent of the sum or sums so paid. No person other than a registered owner, as shown in the
Registration Books, shall receive a Series 2006A Bond certificate evidencing the obligation of the
City to make payments of principal and interest pursuant to this Ordinance. Upon delivery by DTC
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 refer to such new nominee of DTC.
(f) Successor Securities Depository Transfers Outside Book-Entry-OnlySystems. In the
event that the City determines to discontinue the use of the Book -Entry -Only System through DTC,
or DTC determines to discontinue providing its services with respect to the Series 2006A Bonds, the
City shall (i) 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 Series 2006A
Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the
availability through DTC of Series 2006A Bonds and transfer one or more separate Series 2006A
Bonds to DTC Participants having Series 2006A Bonds credited to their DTC accounts. In such
event, the Series 2006A Bonds shall no longer be restricted to being registered in the Registration
Books in the name of Cede & Co., as nominee of DTC, but may be registered in the name of the
successor securities depository, or its nominee, or in whatever name or names registered owners
transferring or exchanging Series 2006A Bonds shall designate, in accordance with the provisions of
this Ordinance. Whenever a successor securities depository has been appointed pursuant to this
paragraph, the terms DTC and DTC Participant as used in this Ordinance shall refer to such successor
securities depository and its participants, respectively.
GfOWNGO: Ref Bond 2006A Ordinance 6
(g) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Series 2006A Bond is registered in the name of Cede & Co., as nominee for
DTC, all payments with respect to principal of and interest on such Series 2006ABond and all notices
with respect to such Series 2006A Bond shall be made and given, respectively, in the manner
provided in the representation letter of the City to DTC.
(h) DTC Blanket Letter of Representations. The City confirms execution of a Blanket Letter
of Representations with DTC establishing the Book -Entry -Only System with respect to the Series
2006A Bonds.
SECTION 6. FORM OF SERIES 2006A BOND. The form of each Series 2006A Bond,
including the form of Paying Agent/Registrar's Authentication Certificate, the form of Assignment
and the form of Registration Certificate of the Comptroller of Public Accounts of the State of Texas
to be attached only to the Series 2006A Bonds initially issued and delivered pursuant to this
Ordinance, shall be, respectively, substantially in the form set forth in Exhibit "B" hereto, with such
appropriate variations, omissions or insertions as are permitted or required by this Ordinance.
SECTION 7. PLEDGE OF PLEDGED REVENUES, The City hereby covenants and
agrees that the Pledged Revenues are hereby irrevocably pledged to the payment and security of the
Parity Obligations including the establishment and maintenance of the special funds created,
established and maintained for the payment and security thereof, all as hereinafter provided; and it is
hereby ordained that the Parity Obligations, and the interest thereon, shall constitute a lien on and
pledge of the Pledged Revenues and be valid and binding without any physical delivery thereof or
further act by the City, and the lien created hereby on the Pledged Revenues for the payment and
security of the Parity Obligations, including the establishment and maintenance of the special funds
created, established and maintained for the payment and security thereof, shall be superior to the lien
on and pledge of the Pledged Revenues securing payment of any Subordinate Lien Obligations
hereafter issued by the City.
SECTION 8. SPECIAL FUNDS. The establishment and maintenance on the books of the
City, so long as any of the Series 2006A Bonds are outstanding and unpaid, of the below limited
Special Funds is hereby confirmed:
(a) City of Georgetown, Texas Utility System Revenue Fund, hereinafter called the "Revenue
Fund."
(b) City of Georgetown, Texas Utility System Revenue Bonds Interest and Sinking Fund,
hereinafter called the "Interest and Sinking Fund."
Though all of such funds may be subaccounts of the City's General Fund held by the City's depository,
and, as such, not held in separate bank accounts, such treatment shall not constitute a commingling
of the monies in such Funds or of such Funds and the City shall keep full and complete records
indicating the monies and investments credited to each of such Funds.
GMWNGO: Ref Bond 2006A Ordinance 7
SECTION 9. REVENUE FUND. The City hereby covenants, agrees and establishes that the
Gross Revenues shall be deposited and credited to the Revenue Fund immediately as collected and
received. All Maintenance and Operating Expenses are and shall be paid from such Gross Revenues
as a first charge against same.
SECTION 10. FLOW OF FUNDS. All Gross Revenues deposited and credited to the
Revenue Fund shall be pledged and appropriated to the extent required for the following uses and in
the order of priority shown:
FIRST: to the payment of all necessary and reasonable Maintenance and Operating Expenses
as defined herein or required by statute, including, but not limited to, Chapter 1502, Texas
Government Code, as amended, to be a first charge on and claim against the Gross Revenues,
including a two (2)-month reserve amount based upon the budgeted amount of Maintenance
and Operating Expenses for the current Fiscal Year, which amount shall be retained in the
Revenue Fund.
SECOND: to the payment of the amounts required to be deposited and credited to the
Interest and Sinking Fund created and established for the payment of the Series 2006A
Bonds, the Previously Issued Parity Obligations and any Additional Parity Obligations issued
by the City as the same become due and payable.
THIRD: pro rata to the payment of the amounts required to be deposited and credited (i) to
the Reserve Fund created and established to maintain the Required Reserve Amount in
accordance with the provisions of this Ordinance, including amounts owed with respect to
any Reserve Fund Obligation to restore the Required Reserve Amount and (ii) to each other
reserve fund created and established to maintain a reserve in accordance with the provisions
ofthe ordinances relating to the issuance of any Additional Parity Obligations hereafter issued
by the City.
FOURTH: to the payment of Subordinate Lien Obligations.
FIFTH: to the payment of the amounts required for any lawful purpose.
SECTION 11. INTEREST AND SINKING FUND. For purposes of providing funds to pay
the principal of, premium, if any, and interest on the Parity Obligations as the same become due and
payable, including any mandatory sinking fund redemption payments, the City agrees that it shall
maintain the Interest and Sinking Fund. The City covenants to deposit and credit to the Interest and
Sinking Fund prior to each principal, interest payment or redemption date from the available Pledged
Revenues an amount equal to one hundred percent (100%) of the amount required to fully pay the
interest on and the principal of the Parity Obligations then falling due and payable. The City shall
make such deposits and credits to pay maturing principal, accrued interest, and mandatory sinking
fund redemptions on the Parity Obligations in substantially equal semi-annual installments on or
before each February 15 and August 15.
GMWNGO: Ref Bond 2006A Ordinance 8
The required semi-annual deposits and credits to the Interest and Sinking Fund shall continue
to be made as hereinabove provided until such time as (i) the total amount on deposit in and credited
to the Interest and Sinking Fund and the Reserve Fund (excluding any Reserve Fund Obligation) is
equal to the amount required to fully pay and discharge all Outstanding Parity Obligation's (principal,
premium, if any, and interest) or (ii) the Parity Obligations are no longer outstanding.
Accrued interest and capitalized interest, if any, received from the purchaser of any Parity
Obligation shall be taken into consideration and reduce the amount of the semi-annual deposits and
credits hereinabove required into the Interest and Sinking Fund.
SECTION 12, RESERVE FUND. (a) To accumulate and maintain a reserve for the payment
ofthe Series 2006A Bonds and the Outstanding Parity Obligations equal to the Average Annual Debt
Service Requirements ofthe Series 2006A Bonds and the Outstanding Parity Obligations (calculated
by the City at the beginning of each Fiscal Year) (the "Required Reserve Amount"), the Reserve Fund
has been established and shall be maintained by the City. Earnings and income derived from the
investment of amounts held for the credit of the Reserve Fund shall be retained in the Reserve Fund
until the Reserve Fund contains the Required Reserve Amount; thereafter, such earnings and income
shall be deposited to the credit of the Revenue Fund. As provided in Section 11, the City shall
deposit and credit to the Reserve Fund amounts required to maintain the balance in the Reserve Fund
in an amount equal to the Required Reserve Amount. There shall be deposited into the Reserve Fund
any Reserve Fund Obligations so designated by the City. All funds, investments and Reserve Fund
Obligations on deposit and credited to the Reserve Fund shall be used solely for (i) the payment of
the principal of and interest on the Series 2006A Bonds and the Outstanding Parity Obligations, when
and to the extent other funds available for such purposes are insufficient, (ii) to make Reserve Fund
Obligation Payments and (iii) to retire the last Stated Maturity or Stated Maturities of or interest on
the Series 2006A Bonds and the Outstanding Parity Obligations.
(b) When and for so long as the cash, investments and Reserve Fund Obligations in the
Reserve Fund equal the Required Reserve Amount, no deposits need be made to the credit of the
Reserve Fund; but, if and when the Reserve Fund at any time contains less than the Required Reserve
Amount, the City covenants and agrees that the City shall cure the deficiency in the Reserve Fund by
resuming the Required Reserve Fund Deposits to such Fund from the Pledged Revenues in
accordance with Section 10 by monthly deposits and credits in amounts equal to not less than 1/60th
of the Required Reserve Amount with any such deficiency payments being made on or before each
August 15 and February 15 until the Required Reserve Amount has been fully restored; provided,
however, that no such deposits shall be made into the Reserve Fund during any six month period
beginning on August 15 and February 15 until there has been deposited into the Interest and Sinking
Fund the full amount required to be deposited therein by the next following August 15 and February
15, as the case may be. In addition, in the event that a portion of the Required Reserve Amount is
represented by a Reserve Fund Obligation, the Required Reserve Amount shall be restored as soon
as possible from monthly deposits of Pledged Revenues on deposit in the Revenue Fund in
accordance with Section 10, but subject to making the full deposits and credits to the Interest and
Sinking Fund required to be made by the next following August 15 and February 15, as the case may
be. The City further covenants and agrees that, subject only to the prior deposits and credits to be
GTOWNGO: Ref Bond 2006A Ordinance 9
made to the Interest and Sinking Fund, the Pledged Revenues shall be applied and appropriated and
used to establish and maintain the Required Reserve Amount, including by paying Reserve Fund
Obligation Payments when due, and any reserve established for the benefit of any issue or series of
Additional Parity Obligations and to cure any deficiency in such amounts as required by the terms of
this Ordinance and any other ordinance pertaining to the issuance of Additional Parity Obligations.
During such time as the Reserve Fund contains the Required Reserve Amount, the obligation
to maintain the Required Reserve Amount has been suspended pursuant to subsection (d) below or
any cash is replaced with a Reserve Fund Obligation pursuant to subsection (c) below, the City may,
at its option, withdraw all surplus funds in the Reserve Fund and deposit such surplus in the Interest
and Sinking Fund or otherwise use such amount in any manner permitted by law.
(c) A Reserve Fund Obligation issued in an amount equal to all or part of the Required
Reserve Amount for the Series 2006A Bonds and the Outstanding Parity Obligations may be used
in lieu of depositing cash into the Reserve Fund. In addition, a Reserve Fund Obligation may be
substituted for monies and investments in the Reserve Fund if the substitution of the Reserve Fund
Obligation will not, in and of itself, cause any ratings then assigned to the Series 2006A Bonds and
the Outstanding Parity Obligations by any Rating Agency to be lowered and the ordinance authorizing
the substitution of the Reserve Fund Obligation for all or part of the Required Reserve Amount
contains a finding that such substitution is cost effective.
(d) Notwithstanding anything to the contrary contained herein, the requirement set forth in
subsection (a) above to maintain the Required Reserve Amount in the Reserve Fund shall be
suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.35 times the
Average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year
are less than 1.35 times the Average Annual Debt Service Requirements, the City will be required to
commence making Required Reserve Fund Deposits, as provided in subsection (b) above, and to
continue such Required Reserve Fund Deposits until the earlier of (i) such time as the Reserve Fund
contains the Required Reserve Amount or (ii) the Net Revenues in each of two consecutive years
have been equal to not less than 1.35 times the Average Annual Debt Service Requirements.
(e) A Reserve Fund Obligation permitted under (a) above, must be in the form of a surety
bond or insurance policy meeting the requirements described below.
(1) (i) A surety bond or insurance policy issued to the Paying Agent/Registrar, as agent ofthe
Holders, by a company licensed to issue an insurance policy guaranteeing the timely payment
of debt service on the Parity Obligations (a "municipal bond insurer") if the claims paying
ability of the issuer thereof shall be rated "AAA" or "Aaa", respectively, by S&P and
Moody's, or (ii) a surety bond or insurance policy issued to the Paying Agent/Registrar, as
agent of the Holders, by an entity other than a municipal bond insurer, if the form and
substance of such instrument and the issuer thereof shall be approved in writing by each Bond
Insurer of record.
GTOWNGO: Ref Bond 2006A Ordinance
10
(2) The obligation to reimburse the issuer of a Reserve Fund Obligation for any claims or
draws upon such Reserve Fund Obligation in accordance with its terms, including expenses
incurred in connection with such claims or draws, to the extent permitted by law, (a Reserve
Fund Obligation Payment) shall be made from the deposits made to the Reserve Fund as
provided in this Section and in Section 10. The Reserve Fund Obligation shall provide for
a revolving feature under which the amount available thereunder will be reinstated to the
extent of any reimbursement of draws or claims paid. If the revolving feature is suspended
or terminated for any reason, the right of the issuer of the Reserve Fund Obligation to
reimbursement will be subordinated to the cash replenishment of the Reserve Fund to an
amount equal to the difference between the full original amount available under the Reserve
Fund Obligation and the amount then available for further draws or claims. In the event (a)
the issuer of a Reserve Fund Obligation becomes insolvent, or (b) the issuer of a Reserve
Fund Obligation defaults in its payment obligations thereunder, or (c) the claims paying ability
of the issuer of the insurance policy or surety bond falls below "AAA" or "Aaa", by S&P and
Moody's, respectively, the obligation to reimburse the issuer of the Reserve Fund Obligation
shall be subordinated to the cash replenishment of the Reserve Fund.
(3) In the event (a) the revolving reinstatement feature described in the preceding paragraph
is suspended or terminated, or (b) the rating of the claims paying ability of the issuer of the
surety bond or insurance policy falls below "AAA" or "Aaa", by S&P and Moody's,
respectively, the City shall either (i) deposit into the Reserve Fund, in accordance with this
Section and Section 1 I. an amount sufficient to cause the cash or investments credited to the
Reserve Fund to accumulate to the Required Reserve Amount, or (ii) replace such instrument
with a surety bond or insurance policy meeting the requirements of 1 and 2 above, within six
months of such occurrence. In the event (a) the rating of the claims -paying ability of the
issuer of the surety bond or insurance policy falls below "A" by S&P and Moody's, or (b) the
issuer of the Reserve Fund Obligation defaults in its payment obligations hereunder, or (c) the
issuer of the Reserve Fund Obligation becomes insolvent, the City shall either (i) deposit into
the Reserve Fund, in accordance with this Section, amounts sufficient to cause the cash or
investments on deposit in the Reserve Fund to accumulate to the Required Reserve Amount,
or (ii) replace such instrument with a surety bond or insurance policy meeting the
requirements of 1 and 2 above within six months of such occurrence. t
(4) The Paying Agent/Registrar shall ascertain the necessity for a claim or draw upon any
Reserve Fund Obligation and provide notice to the issuer of the Reserve Fund Obligation in
accordance with its terms not later than three days (or such appropriate time period as will,
when combined with the timing of required payment under the Reserve Fund Obligation,
ensure payment under the Reserve Fund Obligation on or before the interest payment date)
prior to each date upon which the principal of or interest on the Parity Obligations will be
due.
It is recognized that a Reserve Fund Obligation may be issued which is payable only with
respect to a part of the Series 2006A Bonds and the Outstanding Parity Obligations with the
remainder ofthe Required Reserve Amount being satisfied by monies and investments and in that case
GTOWNGO: Ref Bond 2006A Ordinance
11
any draws upon the Reserve Fund will have to be made on a pro-rata basis to ensure that every Parity
Obligation enjoys an equal amount of security. Therefore, (i) draws upon one or more such Reserve
Fund Obligations shall be made on a pro-rata basis with cash and investments available in the Reserve
Fund and (ii) deposits and credits to the Reserve Fund to restore it to the Required Reserve Amount
shall be utilized on a pro -rats basis to pay Reserve Fund Obligation Payments to reimburse the issuers
of the Reserve Fund Obligations, thus restoring that part of the Required Reserve Amount, and to
restore with cash and investments the balance of the Required Reserve Amount.
SECTION 13. EXCESS BOND PROCEEDS. Any proceeds of Parity Obligations not
required to effectuate the purposes for which such Parity Obligations were issued, as provided in the
respective ordinances authorizing the issuance of such Parity Obligations, or for the payment of the
costs ofissuance of such Parity Obligations shall be deposited and credited to the Interest and Sinking
Fund and shall be taken into consideration and shall reduce the amount of semi-annual deposits and
credits to the Interest and Sinking Fund from the Pledged Revenues or used to redeem or purchase
Parity Obligations,
SECTION 14. DEFICIENCIES - EXCESS PLEDGED OR NET REVENUES. (a) If on
any occasion there shall not be sufficient Pledged Revenues (after making all payments pertaining to
all Parity Obligations) to make the required deposits and credits to the Interest and Sinking Fund and
the Reserve Fund, then such deficiency shall be cured as soon as possible from the next available
unallocated Pledged Revenues, or from any other sources available for such purpose, and such
deposits and credits shall be in addition to the amounts otherwise required to be deposited and
credited to these Funds.
(b) Subject to making the deposits and credits required by this Ordinance, or any ordinances
authorizing the issuance of Additional Parity Obligations, or the payments and credits required by the
provisions ofthe ordinances authorizing the issuance of Subordinate Lien Obligations hereafter issued
by the City, the excess Net Revenues may be used for any lawful purpose.
SECTION 15. INVESTMENT OF FUNDS - VALUATION - TRANSFER OF
INVESTMENT INCOME. (a) Money in the Revenue Fund, the Interest and Sinking Fund and the
Reserve Fund may, at the option of the City, be invested in Permitted Investments; provided that all
such deposits and investments shall be made in such manner that the money required to be expended
from any fund will be available at the proper time or times. All such investments shall be valued in
terms of current market value no less frequently than the last business day of the City's Fiscal Year,
except that any direct obligations of the United States of America - State and Local Government
Series shall be continuously valued at their par value or principal face amount. Any obligation in
which money is so invested shall be kept and held at the Depository, except as otherwise permitted
by the laws applicable to the City. For purposes of maximizing investment returns, money in such
funds may be invested, together with money in other funds or with other money of the City, in
common investments of the kind described above, or in a common pool of such investments held by
the City or its designated agent, which shall not be deemed to be or constitute a commingling of such
money or funds provided that safekeeping receipts or certificates of participation clearly evidencing
the investment or investment pool in which such money is invested and the share thereof purchased
GTOWNGO: Ref Bond 2MA Ordinance 12
with such money or owned by such fund are held by or on behalf of each such fund. If necessary,
such investments shall be promptly sold to prevent any default.
(b) All interest and income derived from such investments (other than interest and income
derived from amounts credited to the Reserve Fund if the Reserve Fund does not contain the
Required Reserve Amount) shall be credited to the Revenue Fund semi-annually and shall constitute
Gross Revenues.
SECTION lb. PAYMENT OF PARITY OBLIGATIONS. While any of the Parity
Obligations are outstanding, the City shall transfer to the respective paying agent/registrar therefor,
from funds on deposit in and credited to the Interest and Sinking Fund, and, if necessary, in the
Reserve Fund, amounts sufficient to fully pay and discharge promptly the interest on and principal
of the Parity Obligations as shall become due on each interest or principal payment date, or date of
redemption of the Parity Obligations; such transfer of funds must be made in such manner as will
cause immediately available funds to be deposited with each respective paying agent/registrar for the
Parity Obligations not later than the business day next preceding the date such payment is due on the .
Parity Obligations. The Paying Agent/Registrar shall destroy all paid Parity Obligations and furnish
the City with an appropriate certificate of cancellation or destruction.
SECTION 17. RATES AND CHARGES. For the benefit of the Holders of the Parity
Obligations and in addition to all provisions and covenants in the laws of the State of Texas and in
this Ordinance, the City hereby expressly stipulates and agrees, while any of the Parity Obligations
are outstanding, to establish and maintain rates and charges for facilities and services afforded by the
System that are reasonably expected, on the basis of available information and experience and with
due allowance for contingencies, to produce Gross Revenues in each Fiscal Year reasonably
anticipated to be sufficient:
A. to pay Maintenance and Operating Expenses;
B. to produce Pledged Revenues at least equal to the greater of 1.25 times the Average
Annual Debt Service Requirements or 1.10 times the Maximum Annual Debt Service Requirements;
C. to produce Pledged Revenues in amounts sufficient to enable the City to make the deposits
and credits, if any, from Pledged Revenues (i) to the Reserve Fund to restore the Required Reserve
Amount in accordance with Section 12 of this Ordinance, including the payment of any Reserve Fund
Obligation Payment then due, and (ii) to other reserve funds to establish or restore the reserve
securing any issue or series of Additional Parity Obligations;
D. to produce Pledged Revenues, together with any other lawfully available funds (including
the proceeds of Debt which the City expects will be utilized to pay all or part of the principal of
and/or interest on any obligations described in this subsection D), sufficient to pay the principal of
and interest on any Subordinate Lien Obligations issued by the City and the amounts required to be
deposited in any reserve or contingency fund created for the payment and security ofthe Subordinate
GfOWNGO: Ref Bond 2006A Ordinance - 13
Lien Obligations
and any other obligations or evidences
of indebtedness issued or
incurred that are
payable from, in
whole or in part, a subordinate lien on
and pledge of the Pledged
Revenues; and
E. to pay any other Debt payable from the Pledged Revenues and/or secured by a lien on the
Pledged Revenues.
Should the annual audit report required by Section 19 hereof reflect that the Pledged
Revenues for the Fiscal Year covered thereby were less than necessary to meet the requirements of
this Section, the City Council will review the operations of the System and the rates and charges for
services provided, and the City Council will make the necessary adjustments or revisions, if any, in
order that the Pledged Revenues for the succeeding year will be sufficient to satisfy the foregoing
coverage requirements.
SECTION 18. GENERAL COVENANTS. The City further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations and provisions contained in any ordinance authorizing the issuance ofParity Obligations,
including this Ordinance, and in each and every Parity Obligation; it will promptly pay or cause to be
paid the principal of and interest on every Parity Obligation on the dates and in the places and manner
prescribed in such ordinances and obligations; and it will, at the times and in the manner prescribed,
deposit and credit or cause to be deposited and credited the amounts required to be deposited and
credited to the Interest and Sinking Fund and the Reserve Fund.
(b) City's Legal Authority. It is a duly created and existing home rule city of the State of
Texas, and is duly authorized under the laws of the State of Texas to create and issue the
Series 2006A Bonds; that all action on its part for the creation and issuance of the Series 2006A
Bonds has been duly and effectively taken, and that the Series 2006A Bonds in the hands of the
Holders thereof are and will be valid and enforceable special obligations of the City in accordance
with their terms.
(c) Title. It has or will obtain lawful title to the lands, buildings, structures and facilities
constituting the System, that it warrants that it will defend the title to all the aforesaid lands,
buildings, structures and facilities, and every part thereof, for the benefit of the Holders of the
Series 2006A Bonds, the Previously Issued Parity Obligations and Additional Parity Obligations,
against the claims and demands of all persons whomsoever, that it is lawfully qualified to pledge the
Pledged Revenues to the payment of the Series 2006A Bonds, the Previously Issued Parity
Obligations and Additional Parity Obligations in the manner prescribed herein, and has lawfully
exercised such rights.
(d) Liens. It will from time to time and before the same become delinquent pay and discharge
all taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it, or
the System; it will pay all lawful claims for rents, royalties, labor, materials and supplies which if
unpaid might by law become a lien or charge thereon, the lien of which would be prior to or interfere
GTOWNGO: Ref Bond 2W6A Ordinance 14
with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the
manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's,
materialman's or other lien or charge which might or could be prior to the liens hereof, or do or suffer
any matter or thing whereby the liens hereof might or could be impaired; provided, however, that no
such tax, assessment or charge, and that no such claims which might be used as the basis of a
mechanic's, laborer's, materialman's or other lien or charge, shall be required to be paid so Tong as the
validity of the same shall be contested in good faith by the City.
(e) Operation of System, No Free Service. It will, while the Parity Obligations are
outstanding and unpaid, continuously and efficiently operate the System, and shall maintain the
System in good condition, repair and working order, all at reasonable cost. No free service of the
System shall be allowed, and should the City or any of its agencies or instrumentalities make use of
the services and facilities of the System, payment of the reasonable value shall be made by the City
out of funds from sources other than the Gross Revenues of the System, unless made from surplus
or excess Pledged Revenues as permitted in Section 14.
(f) Further Encumbrance. While the Parity Obligations are outstanding and unpaid, it will
not additionally encumber the Pledged Revenues in any manner, except as permitted in this Ordinance
in connection with Additional Parity Obligations, unless said encumbrance is made junior and
subordinate in all respects to the liens, pledges, covenants and agreements of this Ordinance; but the
right of the City to issue or incur obligations payable from a subordinate lien on the Pledged Revenues
is specifically recognized and retained.
(g) Sale or Disposal of Property. While the Parity Obligations are outstanding and unpaid,
it will not sell, convey, mortgage, encumber, lease or in any manner transfer title to, or otherwise
dispose of the System, or any significant or substantial part thereof, provided that whenever the City
deems it necessary to dispose of any other property, machinery, fixtures or equipment, it may sell or
otherwise dispose of such property, machinery, fixtures or equipment when it has made arrangements
to replace the same or provide substitutes therefor, unless it is determined that no such replacement
or substitute is necessary; and, provided further, that the City retains the right to sell, convey,
mortgage, encumber, lease or otherwise dispose of any significant or substantial part of the System
if (i) the City Manager delivers a certificate to the City Council to the effect that, following such
action by the City, the System is expected to produce Gross Revenues in amounts sufficient in each
Fiscal Year while any of the Parity Obligations are to be outstanding to comply with the obligations
of the City contained in this Ordinance and in the ordinances authorizing the issuance of Additional
Parity Obligations; (ii) the City Council makes a finding and determination to the same effect as the
certificate of the City Manager set forth in (i) above and (iii) each Rating Agency then maintaining
a rating on any Parity Obligation delivers a letter to the City to the effect that such sale, conveyance,
mortgage, encumbrance, lease or other disposition will not cause the Rating Agency to withdraw or
lower the rating then in effect. Proceeds from any sale hereunder not used to replace or provide for
substitution of such property sold, shall be used for improvements to the System or to purchase or
redeem Parity Obligations.
GTOWNGO: Ref Bond 2006A Ordinance
15
(h) Insurance. (1) It shall cause to be insured such parts of the System as would usually be
insured by municipal corporations operating like properties, with a responsible insurance company
or companies, against risks, accidents or casualties against which and to the extent insurance is
usually carried by municipal corporations operating like properties, including, to the extent reasonably
obtainable, fire and extended coverage insurance, insurance against damage by floods, and use and
occupancy insurance. Public liability and property damage insurance shall also be carried unless the
City Attorney of the City gives a written opinion to the effect that the City is not liable for claims
which would be protected by such insurance. At any time while any contractor engaged in
construction work shall be fully responsible therefor, the City shall not be required to carry insurance
on the work being constructed if the contractor is required to carry appropriate insurance. All such
policies shall be open to the inspection ofthe Holders and their representatives at all reasonable times.
Upon the happening of any loss or damage covered by insurance from one or more of said causes,
the City shall make due proof of loss and shall do all things necessary or desirable to cause the
insuring companies to make payment in full directly to the City. The proceeds of insurance covering
such property are hereby pledged as security for the Parity Obligations and, together with any other
funds necessary and available for such purpose, shall be used forthwith by the City for repairing the
property damaged or replacing the property destroyed; provided, however, that if said insurance
proceeds and other funds are insufficient for such purpose, then said insurance proceeds pertaining
to the System shall be used promptly as follows:
(i) for the redemption prior to maturity of the Parity Obligations, ratably in the
proportion that the Outstanding principal of each series ofParity Obligations bears to the total
Outstanding principal of all Parity Obligations, provided that if on any such occasion the
principal of any such series is not subject to redemption, it shall not be regarded as
Outstanding in making the foregoing computation; or
(ii) if none of the Outstanding Parity Obligations is subject to redemption, then for
the purchase on the open market and retirement of said Parity Obligations in the same
proportion as prescribed in the foregoing clause (i), to the extent practicable; provided that
the purchase price for any Parity Obligation shall not exceed the redemption price of such
Parity Obligation on the first date upon which it becomes subject to redemption; or
(iii) to the extent that the foregoing clauses (i) and (ii) cannot be complied with at the
time, the insurance proceeds, or the remainder thereof, shall be deposited in a special and
separate trust fund, at an official depository of the City, to be designated the Insurance
Account. The Insurance Account shall be held until such time as the foregoing clauses (i)
and/or (ii) can be complied with, or until other funds become available which, together with
the Insurance Account, will be sufficient to make the repairs or replacements originally
required, whichever of said events occurs first.
(2) The foregoing provisions of (1) above notwithstanding, the City shall have authority
to enter into coinsurance or similar plans where risk of loss is shared in whole or in part by
the City.
GMWNGO: Ref Bond 2006A Ordinance 16
(3) The annual audit hereinafter required shall contain a section commenting on whether
or not the City has complied with the requirements of this Section with respect to the
maintenance of insurance, and listing all policies carried, and whether or not all insurance
premiums upon the insurance policies to which reference is hereinbefore made have been paid.
(4) The payment of premiums for all insurance policies required under the provisions
hereof and the costs associated with the maintenance of any self-insurance program shall be
considered Maintenance and Operating Expenses. Nothing in this Ordinance shall be
construed as requiring the City to expend any funds which are derived from sources other
than the operation of the System, but nothing herein shall be construed as preventing the City
from doing so.
(i) Governmental Agencies. It will comply with all of the terms and conditions of any and
all franchises, permits and authorizations applicable to or necessary with respect to the System, and
which have been obtained from any governmental agency; and the City has or will obtain and keep
in full force and effect all franchises, permits, authorization and other requirements applicable to or
necessary with respect to the acquisition, construction, equipment, operation and maintenance ofthe
System.
0) No Competition. It will not grant any franchise or permit for the acquisition, construction
or operation of any competing facilities which might be used as a substitute for the System's facilities
and, to the extent that it legally may, the City will prohibit any such competing facilities.
Notwithstanding the foregoing, the City retains the right, however, to "opt in" to electric competition
in accordance with State law if "opting in" will not materially adversely impact the Net Revenues of
the System as evidenced by a certification of the City Manager.
(k) Disaggregation of System. The City retains the right to disaggregate the System into one
or more independent resulting systems if (i) the City Manager delivers a certificate to the City Council
to the effect that, following such action by the City, the remaining System is expected to produce
Gross Revenues in amounts sufficient in each Fiscal Year while any of the Parity Obligations are to
be outstanding to comply with the obligations of the City contained in this Ordinance and in the
ordinances authorizing the Previously Issued Parity Obligations and the issuance of Additional Parity
Obligations; (ii) the City Council makes a finding and determination to the same effect as the
certificate of the City Manager set forth in (i) above and (iii) each Rating Agency then maintaining
a rating on any Parity Obligation delivers a letter to the City to the effect that such disaggregation will
not cause the Rating Agency to withdraw or lower the rating then in effect on the Outstanding Parity
Obligations.
SECTION 19, RECORDS AND ACCOUNTS - ANNUAL AUDIT. The City covenants
and agrees that so long as any of the Parity Obligations remain Outstanding, the City will keep and
maintain a separate and complete system of records and accounts pertaining to the operations of the
System in which full, complete, true, proper, and correct entries shall be made of all dealings,
transactions, business and affairs relating thereto, or which in any way affect or pertain to the System
or the Gross Revenues or the Net Revenues thereof, as provided by generally accepted accounting
GfOWNGO: Ref Bond 2006A Ordinance 17
principles, consistently applied, and by Sections 1502.067 and 1502.068, Texas Government Code,
as amended, or other applicable law. The Holders of the Parity Obligations or any duly authorized
agent or agents of such Holders shall have the right to inspect the System and all properties
comprising the same. The City further agrees that, following the close of each Fiscal Year, the City
will cause an audit report of such records and accounts to be made by an Accountant. Copies of each
annual audit shall be made available for public inspection during normal business hours at the City's
principal office and the City Secretary's office and may be furnished to, upon written request, any
Holder upon payment of the reasonable copying and mailing charges. Expenses incurred in making
the annual audit of the operations of the System shall be considered as Maintenance and Operating
Expenses.
SECTION 20. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON
THE BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or refrain
from any action which would adversely affect, the treatment ofthe Series 2006A Bonds as obligations
described in section 103 ofthe Internal Revenue Code of 1986, as amended (the "Code"), the interest
on which is not includable in the "gross income" of the holder for purposes of federal income
taxation. In furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10 percent of the proceeds of the
Series 2006A Bonds or the Refunded Obligations or the projects financed or refinanced
therewith (less amounts deposited to a reserve fund, if any) are used for any "private business
use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the proceeds
ofthe Series 2006A Bonds or the Refunded Obligations or the projects financed or refinanced
therewith are so used, such amounts, whether or not received by the City, with respect to
such private business use, do not, under the terms of this Ordinance or any underlying
arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent
of the debt service on the Series 2006A Bonds, in contravention of section 141(b)(2) of the
Code;
(2) to take any action to assure that in the event that the "private business use" described
in subsection (1) hereof exceeds 5 percent of the proceeds of the Series 2006A Bonds or the
Refunded Obligations or the projects financed or refinanced therewith (less amounts
deposited into a reserve fund, if any) then the amount in excess of 5 percent is used for a
"private business use" which is "related" and not "disproportionate," within the meaning of
section 141(b)(3) of the Code, to the governmental use;
(3) 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 Series 2006A Bonds (less amounts deposited
into a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Series 2006A
Bonds being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
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(5) to refrain from taking any action that would result in the Series 2006A Bonds being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Series 2006A Bonds, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in section 148(b)(2) ofthe Code) which produces a materially
higher yield over the term of the Series 2006A Bonds, other than investment property
acquired with --
(A) proceeds of the Series 2006A Bonds invested for a reasonable temporary period
of 3 years or less or, in the case of a refunding bond, for a period of 30 days,'
(B) amounts invested in a bona fide debt service fund, within the meaning of section
1.148-1(b) of the Treasury Regulations, and
(C) 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 Series 2006A
Bonds;
(7) to otherwise restrict the use of the proceeds of the Series 2006A Bonds or amounts
treated as proceeds of the Series 2006A Bonds, as may be necessary, so that the Series
2006A Bonds do not otherwise contravene the requirements of section 148 of the Code
(relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to
advance refundings); and
(8) to pay to the United States of America at least once during each five-year period
(beginning on the date of delivery ofthe Series 2006A Bonds) an amount that is at least equal
to 90 percent of the "Excess Earnings," within the meaning of section 148(f) of the Code and
to pay to the United States of America, not later than 60 days after the Series 2006A Bonds
have been paid in full, 100 percent of the amount then required to be paid as a result of
Excess Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a "Rebate
Fund" is hereby established by the City for the sole benefit of the United States of America, and such
fund shall not be subject to the claim of any other person, including without limitation the owners of
the Series 2006A Bonds. The Rebate Fund is established for the additional purpose of compliance
with section 148 of the Code.
(c) Proceeds. The City understands that the term "proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if
any) and proceeds of the refunded bonds expended prior to the date of issuance of the Series 2006A
Bonds. It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U. S. Department of the
Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which
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modify or expand provisions of the Code, as applicable to the Series 2006A Bonds, the City will not
be required to comply with any covenant contained herein to the extent that such failure to comply,
in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from
federal income taxation of interest on the Series 2006A Bonds under section 103 of the Code. In the
event that regulations or rulings are hereafter promulgated which impose additional requirements
which are applicable to the Series 2006A Bonds, the City 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 Series 2006A Bonds under
section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the
City Manager or the Director of Finance to execute any documents, certificates or reports required
by the Code and to make such elections, on behalf of the City, which may be permitted by the Code
as are consistent with the purpose for the issuance of the Series 2006A Bonds.
(d) Disposition ofProject. The City covenants that the property constituting the Project will
not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other
compensation, unless the City obtains an opinion ofnationally-recognized bond counsel that such sale
or other disposition will not adversely affect the tax-exempt status of the Series 2006A Bonds. For
purposes of this subsection, the portion of the property comprising personal property and disposed
in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other
compensation. For purposes of this subsection, the City shall not be obligated to comply with this
covenant if it obtains an opinion of nationally -recognized bond counsel to the effect that such failure
to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
SECTION 21. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports.
The City shall provide annually to each NRMSIR and any SID, within six months after the end of any
Fiscal Year, financial information and operating data with respect to the System of the general type
included in the final Official Statement authorized by this Ordinance being the information described
in Exhibit "C" hereto. Any financial statements so to be provided shall be (1) prepared in accordance
with the accounting principles described in Exhibit "C" hereto, or such other accounting principles
as the City may be required to employ from time to time pursuant to state law or regulation, and
(2) audited, if the City commissions an audit of such statements and the audit is completed within the
period during which they must be provided. If the audit of such financial statements is not complete
within such period, then the City shall provide unaudited financial statements within the required time
period and audited financial statements for the applicable fiscal year to each NRMSIR and any SID,
when and if the audit report on such statements become available.
If the City changes its Fiscal Year, it will notify each NRMSIR and any SID of the change
(and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would
be required to provide financial information and operating data pursuant to this paragraph (a).
The financial information and operating data to be provided pursuant to this paragraph (a)
may be set forth in full in one or more documents or may be included by specific reference to any
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document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Series 2006A Bonds,
if such event is material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit enhancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers, or their failure to perform,
F. Adverse tax opinions or events affecting the tax exempt status of the Series 2006A
Bonds;
G. Modifications to rights of holders of the Series 2006A Bonds;
H. Bond calls;
I. Defeasances;
I Release, substitution or sale of property securing repayment of the Series 2006A
Bonds; and
K. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of
any failure by the City to provide financial information or operating data in accordance with
paragraph (a) of this Section by the time required by such paragraph.
(c) Limitations Disclaimers and Amendments. The City shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an if person" with respect to the Series 2006A Bonds within the meaning of the
Rule, except that the City in any event will give notice of any deposit made in accordance with
Section 29 of this Ordinance that causes Series 2006A Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the Holders and beneficial owners
of the Series 2006A Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy or claim hereunder to any other person. The City undertakes to
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provide only the financial information, operating data, financial statements and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the System's financial
results, condition or prospects or hereby undertake to update any information provided in accordance
with this Section or otherwise, except as expressly provided herein. The City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest in or
sell Series 2006A Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY SERIES 2006A BOND OR -ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive or otherwise limit the duties
of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law or a change
in the identity, nature, status or type of operations of the System, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriterto purchase or sell Series 2006ABonds
in the primary offering of the Series 2006A Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule since such offering as well as such changed
circumstances and (2) either (a) the Holders of a majority in aggregate principal amount (or any
greater amount required by any other provision ofthis Ordinance that authorizes such an amendment)
of the Outstanding Series 2006A Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determined that such
amendment will not materially impair the interest of the Holders and beneficial owners of the Series
2006A Bonds. The City may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final
jurisdiction 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 underwriter from lawfully purchasing or
selling Series 2006A Bonds in the primary offering of the Series 2006A Bonds. If the City so amends
the provisions of this Section, it shall include with any amended financial information or operating
data next provided in accordance with paragraph (a) of this Section an explanation, in narrative form,
of the reason for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
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The filing of such continuing disclosure information with a central post office approved for
such purposes by the SEC, such as Disclosure USA, for submission to the NRMSIRs and SID
(without also separately submitting such filings to the NRMSIRs and SID by some other means) will
satisfy the Commission's obligation to file such information with the NRMSIRs and SID so long as
such filing is acceptable to the SEC.
SECTION 22. ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS. (a) The City
shall have the right and power at any time and from time to time and in one or more series or issues,
to authorize, issue and deliver additional parity revenue bonds or other obligations (herein called
"Additional Parity Obligations"), in accordance with law, in any amounts, for purposes of extending,
improving or repairing the System or for the purpose of refunding of any Parity Obligations,
Subordinate Lien Obligations or other obligations of the City incurred in connection with the
ownership or operation of the System. Such Additional Parity Obligations, if and when authorized,
issued and delivered in accordance with this Ordinance, shall be secured by and made payable equally
and ratably on a parity with all other Outstanding Parity Obligations, from the lien on and pledge of
the Pledged Revenues herein granted.
(b) The Interest and Sinking Fund shall secure and be used to pay all Parity Obligations.
Each ordinance under which Additional Parity Obligations are issued shall provide and require that,
in addition to the amounts required by the provisions of this Ordinance and the provisions of any
other ordinance or ordinances authorizing the Previously Issued Parity Obligations and Additional
Parity Obligations to be deposited to the credit ofthe Interest and Sinking Fund, the City shall deposit
to the credit of the Interest and Sinking Fund at least such amounts as are required for the payment
of all principal of and interest on said Additional Parity Obligations then being issued, as the same
come due.
(c) The City may create and establish a reserve fund pursuant to the provisions of any
ordinance authorizing the issuance of Additional Parity Obligations for the purpose of securing that
particular issue or series of Parity Obligations or any specific group of issues or series of Parity
Obligations and the amounts once deposited or credited to said reserve funds shall no longer
constitute Net Revenues and shall be held solely for the benefit of the Holders of the particular Parity
Obligations for which such reserve fund was established. Each such reserve fund shall be designated
in such manner as is necessary to identify the Parity Obligations it secures and to distinguish such
reserve fund from the Reserve Fund and the reserve funds created for the benefit of other Parity
Obligations.
SECTION 23. FURTHER REQUIREMENTS FOR ADDITIONAL PARITY
OBLIGATIONS. That Additional Parity Obligations shall be issued only in accordance with this
Ordinance, but notwithstanding any provisions of this Ordinance to the contrary, no installment,
Series or issue of Additional Parity Obligations shall be issued or delivered unless:
(a) The City Manager and the City Secretary ofthe City sign a written certificate to the effect
that the City is not in default as to any covenant, condition or obligation in connection with all
Outstanding Parity Obligations, and the ordinances authorizing same, and that the Interest and
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Sinking Fund, the Reserve Fund and any reserve fund securing any other series or issue of Parity
Obligations each contains the amount then required to be therein.
(b) An Accountant signs and delivers to the City a written certificate to the effect that, during
either the next preceding Fiscal Year, or any twelve consecutive calendar month period ending not
more than ninety days prior to the date of the then proposed Additional Parity Obligations, the Net
Earnings were, in the opinion thereof, at least equal to the sum of 1.25 times the Average Annual
Debt Service Requirements (computed on a Fiscal Year basis), including Amortization Installments,
of the Parity Obligations and the Additional Parity Obligations to be outstanding after the issuance
of the then proposed Additional Parity Obligations and 1.10 times the average annual debt service
requirement (computed in the same manner as for Parity Obligations) of the Subordinate Lien
Obligations to be outstanding after the issuance of the then proposed Additional Parity Obligations.
(c) In making a determination of Net Earnings for any of the purposes described in this
Section, the Accountant may take into consideration a change in the rates and charges for services
and facilities afforded by the System that became effective at least 60 days prior to the last day of the
period for which Net Earnings are determined and, for purposes of satisfying the Net Earnings tests
described above, make a pro forma determination of the Net Earnings of the System for the period
of time covered by said Accountant's certification or opinion based on such change in rates and
charges being in effect for the entire period covered by said Accountant's certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean the Gross Revenues ofthe System
after deducting the Maintenance and Operating Expenses of the System but not expenditures which,
under standard accounting practice, should be charged to capital expenditures.
SECTION 24. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS. The City hereby
reserves the right to issue, at any time, obligations including, but not limited to, Subordinate Lien
Obligations, payable from and equally and ratably secured, in whole or in part, by a lien on and pledge
of the Net Revenues, subordinate and inferior in rank and dignity to the lien on and pledge of such
Net Revenues securing the payment of the Parity Obligations, as may be authorized by the laws of
the State of Texas.
SECTION 25. ISSUANCE OF SPECIAL PROJECT OBLIGATIONS. Nothing in this
Ordinance shall be construed to deny the City the right and it shall retain, and hereby reserves unto
itself, the right to issue Special Project obligations secured by liens on and pledges of revenues and
proceeds derived from Special Projects.
SECTION 26. LIMITED OBLIGATIONS OF THE CITY. The Parity Obligations are
limited, special obligations of the City payable from and equally and ratably secured solely by a first
lien on and pledge of the Pledged Revenues, and the Holders thereof shall never have the right to
demand payment of the principal or interest on the Parity Obligations from any funds raised or to be
raised through taxation by the City.
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SECTION 27. SECURITY FOR FUNDS. All money on deposit in the Funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly invested as
provided herein) shall be secured in the manner and to the fullest extent required by the laws of Texas
for the security of public funds, and money on deposit in such Funds shall be used only for the
purposes permitted by this Ordinance.
SECTION 28. REMEDIES IN EVENT OF DEFAULT. In addition to all the rights and
remedies provided by the laws of the State of Texas, it is specifically covenanted and agreed
particularly that in the event the City (i) defaults in the payment of the principal, premium, if any, or
interest on the Series 2006A Bonds, (ii) defaults in the deposits and credits required to be made to
the Interest and Sinking Fund or Reserve Fund, (iii) declares bankruptcy, or (iv) defaults in the
observance or performance of any other of the covenants, conditions, or obligations set forth in this
Ordinance, the following remedies shall be available:
(a) the Holders of any of the Series 2006A Bonds shall be entitled to seek a writ of
mandamus issued by a court of proper jurisdiction compelling and requiring the governing body of
the City and other officers of the City to observe and perform any covenant, condition or obligation
prescribed in this Ordinance; and
(b) no delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised from time to time and as often as may be
deemed expedient. The specific remedy herein provided shall be cumulative of all other existing
remedies, and the specification of such remedy shall not be deemed to be exclusive.
SECTION 29. DEFEASANCE OF SERIES 2006A BONDS. (a) Any Series 2006A Bond
and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a "Defeased
Bond") within the meaning of this Ordinance, except to the extent provided in subsections (c) and
(e) of this Section, when payment of the principal of such Series 2006A Bond, plus interest thereon
to the due date or dates (whether such due date or dates be by reason of maturity, upon redemption,
or otherwise) either (i) shall have been made or caused to be made in accordance with the terms
thereof (including the giving of any required notice of redemption or the establishment of irrevokable
provisions for the giving of such notice) or (ii) shall have been provided for on or before such due
date by irrevocably depositing with or making available to the Paying Agent/Registrar or an eligible
trust company or commercial bank for such payment (1) lawful money of the United States of
America sufficient to make such payment, (2) Defeasance Securities, certified by an independent
public accounting firm of national reputation to mature as to principal and interest in such amounts
and at such times as will ensure the availability, without reinvestment, of sufficient money to provide
for such payment and when proper arrangements have been made by the City with the Paying
Agent/Registrar or an eligible trust company or commercial bank for the payment of its services until
all Defeased Bonds shall have become due and payable or (3) any combination of (1) and (2). At
such time as a Series 2006A Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid,
such Series 2006A Bond and the interest thereon shall no longer be secured by, payable from, or
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entitled to the benefits of, the Pledged Revenues as provided in this Ordinance, and such principal and
interest shall be payable solely from such money or Defeasance Securities.
(b) The deposit under clause (ii) of subsection (a) shall be deemed a payment of a Series
2006A Bond as aforesaid when proper notice of redemption of such Series 2006A Bonds shall have
been given or upon the establishment of irrevokable provisions for the giving of such notice, in
accordance with this Ordinance. Any money so deposited with the Paying Agent/Registrar or an
eligible trust company or commercial bank as provided in this Section may at the discretion of the
City also be invested in Defeasance Securities, maturing in the amounts and at the times as
hereinbefore set forth, and all income from all Defeasance Securities in possession of the Paying
Agent/Registrar or an eligible trust company or commercial bank pursuant to this Section which is
not required for the payment of such Series 2006A Bond and premium, if any, and interest thereon
with respect to which such money has been so deposited, shall be remitted to the City.
(c) Notwithstanding any provision of any other Section of this Ordinance which may be
contrary to the provisions of this Section, all money or Defeasance Securities set aside and held in
trust pursuant to the provisions of this Section for the payment of principal of the Series 2006A
Bonds and premium, if any, and interest thereon, shall be applied to and used solely for the payment
of the particular Series 2006A Bonds and premium, if any, and interest thereon, with respect to which
such money or Defeasance Securities have been so set aside in trust. Until all Defeased Bonds shall
have become due and payable, the Paying Agent/Registrar shall perform the services of Paying
Agent/Registrar for such Defeased Bonds the same as if they had not been defeased, and the City shall
make proper arrangements to provide and pay for such services as required by this Ordinance.
(d) Notwithstanding anything elsewhere in this Ordinance, if money or Defeasance Securities
have been deposited or set aside with the Paying Agent/Registrar or an eligible trust company or
commercial bank pursuant to this Section for the payment of Series 2006A Bonds and such Series
2006A Bonds shall not have in fact been actually paid in full, no amendment of the provisions of this
Section shall be made without the consent of the registered owner of each Series 2006A Bond
affected thereby.
(e) Notwithstanding the provisions of subsection (a) immediately above, to the extent that,
upon the defeasance of any Defeased Bond to be paid at its maturity, the City retains the right under
Texas law to later call that Defeased Bond for redemption in accordance with the provisions of this
Ordinance, the City may call such Defeased Bond for redemption upon complying with the provisions
of Texas law and upon the satisfaction of the provisions of subsection (a) immediately above with
respect to such Defeased Bond as though it was being defeased at the time of the exercise of the
option to redeem the Defeased Bond and the effect of the redemption is taken into account in
determining the sufficiency of the provisions made for the payment of the Defeased Bond.
SECTION 30. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
SERIES 2006A BONDS. (a) Replacement Bonds. In the event any outstanding Series 2006A
Bond is damaged, mutilated, lost, stolen or destroyed, the Paying Agent/Registrar shall cause to be
printed, executed and delivered, a new bond of the same principal amount, maturity and interest rate,
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as the damaged, mutilated, lost, stolen or destroyed Series 2006A Bond, in replacement for such
Series 2006A Bond in the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Series 2006A Bonds shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft or destruction of a Series 2006A Bond, the
registered owner applying for a replacement bond shall furnish to the City and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each ofthem harmless
from any loss or damage with respect thereto. Also, in every case of loss, theft or destruction of a
Series 2006A Bond, the registered owner shall furnish to the City and to the Paying Agent/Registrar
evidence to their satisfaction of the loss, theft or destruction of such Series 2006A Bond, as the case
may be. In every case of damage or mutilation of a Series 2006A Bond, the registered owner shall
surrender to the Paying Agent/Registrar for cancellation the Series 2006A Bond so damaged or
mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Series 2006A Bond shall have matured, and no default has occurred which is then
continuing in the payment of the principal of, redemption premium, if any, or interest on the Series
2006A Bond, the City may authorize the payment of the same (without surrender thereof except in
the case of a damaged or mutilated Series 2006A Bond) instead of issuing a replacement Series
2006A Bond, provided security or indemnity is furnished as above provided in this Section.
(d) Charge for Issuing Replacement Series 2006A Bonds. Prior to the issuance of any
replacement bond, the Paying Agent/Registrar shall charge the registered owner of such Series 2006A
Bond with all legal, printing and other expenses in connection therewith. Every replacement bond
issued pursuant to the provisions of this Section by virtue of the fact that any Series 2006A Bond is
lost, stolen or destroyed shall constitute a contractual obligation of the City whether or not the lost,
stolen or destroyed Series 2006A Bond shall be found at any time, or be enforceable by anyone, and
shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other
Series 2006A Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Series 2006A Bonds. In accordance with Subchapter
D of Chapter 1201, Texas Government Code, this Section ofthis Ordinance shall constitute authority
for the issuance of any such replacement bond without necessity of further action by the governing
body of the City or any other body or person, and the duty of the replacement of such bonds is hereby
authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall
authenticate and deliver such Series 2006A Bonds in the form and manner and with the effect, as
provided in Section 5(a) of this Ordinance for Series 2006A Bonds issued in exchange for other
Series 2006A Bonds.
SECTION 31. AMENDMENT OF ORDINANCE. (a) The Bond Insurer and the holders
ofthe Parity Obligations aggregating a majority in principal amount of the aggregate principal amount
of then Outstanding Parity Obligations shall have the right from time to time to approve any
amendment to this Ordinance which may be deemed necessary or desirable by the City, provided,
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however, that without the consent of the Bond Insurer and the holders of all of the effected Parity
Obligations at the time outstanding, nothing herein contained shall permit or be construed to permit
the amendment of the terms and conditions in this Ordinance or in the Parity Obligations so as to:
(1) Make any change in the maturity of the Outstanding Parity Obligations;
(2) Reduce the rate of interest borne by any of the outstanding Parity Obligations;
(3) Reduce the amount of the principal payable on the outstanding Parity Obligations;
(4) Modify the terms of payment of principal of or interest on the outstanding Parity
Obligations or impose any conditions with respect to such payment;
(5) Affect the rights of the holders of less than all of the Parity Obligations then outstanding;
(6) Change the minimum percentage of the principal amount of Parity Obligations necessary
for consent to such amendment.
(b) If at any time the City shall desire to amend this Ordinance under this Section, the City
shall cause notice of the proposed amendment to be delivered to the Insurer and published in a
financial newspaper or journal of general circulation in The City of New York, New York, once
during each calendar week for at least two successive calendar weeks. Such notice shall briefly set
forth the nature of the proposed amendment and shall state that a copy thereof is on file for inspection
by all registered owners of Parity Obligations at the designated trust office of the registrar for the
Parity Obligations. Such publication is not required, however, if notice in writing is given to each
registered owner of the Parity Obligations.
(c) Whenever at any time not less than thirty days, and within one year, from the date of the
first publication of said notice or other service of written notice the City shall receive an instrument
or instruments executed by the holders of at least a majority in aggregate principal amount of all
Parity Obligations then outstanding, which instrument or instruments shall refer to the proposed
amendment described in said notice and which specifically consent to and approve such amendment
in substantially the form of the copy thereof on file with the Paying Agent/Registrar, the City Council
may pass the amendatory ordinance in substantially the same form.
(d) Upon the passage of any amendatory ordinance pursuant to the provisions ofthis Section,
this Ordinance shall be deemed to be amended in accordance with such amendatory ordinance, and
the respective rights, duties and obligations under this Ordinance of the City and all the holders of
then outstanding Parity Obligations shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such amendments.
(e) Any consent given by the registered owner of a Parity Obligation pursuant to the
provisions of this Section shall be irrevocable for a period of six months from the date of the first
publication of the notice provided for in this Section, and shall be conclusive and binding upon all
GTOWI4GO: Ref Bond 2006A Ordinance 28
future holders ofthe same Parity Obligation during such period. Such consent may be revoked at any
time after six months from the date of the first publication of such notice by the holder who gave such
consent, or by a successor in title, by filing notice thereof with the Paying Agent and the City, but
such revocation shall not be effective if the registered owners of at least a majority in aggregate
principal amount of the then outstanding Parity Obligations as in this Section defined have, prior to
the attempted revocation, consented to and approve the amendment.
(f) For the purpose of this Section, the fact of the holding of Parity Obligations issued in
registered form without coupons and the amounts and numbers of such Parity Obligations and the
date of their holding same shall be proved by the Registration Books of the Paying Agent/Registrar.
For purposes of this Section, the holder of a Parity Obligation in such registered form shall be the
owner thereof as shown on such Registration Books. The City may conclusively assume that such
ownership continues until written notice to the contrary is served upon the City.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance contained, other
covenants and agreements thereafter to be observed, grant additional rights or remedies to
bondholders or to surrender, restrict or limit any right or power herein reserved to or
conferred upon the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, as are necessary or desirable
and not contrary to or inconsistent with this Ordinance and which shall not adversely affect
the interests of the holders of the Parity Obligations;
(3) To make any changes or amendments requested by any Rating Agency, as a condition
to the issuance or maintenance of a rating, which changes or amendments do not, in the
judgment of the City, materially adversely affect the interests ofthe owners ofthe outstanding
Parity Obligations;
(4) To make such changes, modifications or amendments as may be necessary or
desirable, which shall not adversely affect the interests ofthe owners of the outstanding Parity
Obligations, in order, to the extent permitted by law, to facilitate the economic and practical
utilization of credit agreements with respect to the Parity Obligations including, without
limitation, supplementing the definition of "Annual Debt Service Requirements" to address
the amortization of payments due and owing under a credit agreement;
(5) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (i) such modification shall be, and be expressed to be, effective only after all
Parity Obligations outstanding at the date of the adoption of such modification shall cease to
GTOWNGO: Ref Bond 2006A Ordinance 29
be outstanding, and (ii) such modification shall be specifically referred to in the text of all
Additional Parity Obligations issued after the date of the adoption of such modification.
Notice of any such amendment may be published or given by the City in the manner described in
subsection (b) of this Section; provided, however, that the publication of such notice shall not
constitute a condition precedent to the adoption of such amendatory ordinance and the failure to
publish such notice shall not adversely affect the implementation of such amendment as adopted
pursuant to such amendatory ordinance.
SECTION 32. SALE AND DELIVERY OF SERIES 2006A BONDS. The Series 2006A
Bonds are hereby sold and shall be delivered to RBC Dain Rauscher, Inc. (the "Underwriter") in
accordance with the terms and provisions of a Purchase Contract in substantially the form presented
to the City Council at the meeting to consider this Ordinance which the Mayor of the City is hereby
authorized to execute and deliver and which the City Secretary or the Deputy'City Secretary of the
City is hereby authorized to attest. The City will initially deliver to the Underwriter one bond for each
maturity of the Series 2006A Bonds authorized under this Ordinance. The Series 2006A Bonds shall
initially be registered in the name of the Underwriter.
SECTION 33. CUSTODY, APPROVAL AND REGISTRATION OF SERIES 2006A
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE AND CUSIP NUMBERS. The
Mayor of the City is hereby authorized to have control of the Series 2006A Bonds initially issued and
delivered hereunder and all necessary records and proceedings pertaining to the Series 2006A Bonds
pending their delivery and their investigation, examination and approval by the Attorney General of
the State of Texas, and their registration by the Comptroller of Public Accounts of the State of Texas.
Upon registration of the Series 2006A Bonds said Comptroller of Public Accounts (or a deputy
designated in writing to act for said Comptroller) shall manually sign the Comptrollers Registration
Certificate attached to such Series 2006A Bonds, and the seal of said Comptroller shall be impressed,
or placed in facsimile, on such Certificate. The approving legal opinion of the City's Bond Counsel
(with an appropriate certificate pertaining thereto executed by facsimile signature of the City
Secretary or the Deputy City Secretary of the City), a statement regarding any insurance policy and
the assigned CUSIP numbers may, at the option of the City, be printed on or attached to the Series
2006A Bonds issued and delivered under this Ordinance, but such additions or attachments shall not
have any legal effect, and shall be solely for the convenience and information of the registered owners
of the Series 2006A Bonds.
SECTION 34. APPROVAL OF OFFICIAL STATEMENT. The City hereby approves the
form and content of the Official Statement relating to the Series 2006A Bonds and any addenda,
supplement or amendment thereto, and approves the distribution of such Official Statement in the
reoffering of the Series 2006A Bonds by the Underwriter in final form, with such changes therein or
additions thereto as the officer executing the same may deem advisable, such determination to be
conclusively evidenced by his execution thereof. The distribution and use of the Preliminary Official
Statement dated April 12, 2006, prior to the date hereof is ratified and confirmed. The City Council
of the City hereby finds and determines that the Preliminary Official Statement and the Official
GTO"GO: Ref Bond 2006A Ordinance 30
Statement were and are "deemed final" (as that term is defined in 17 C.F.R. Section 240.15c-12) as
of their respective dates.
SECTION 35. ADDITIONAL INSURANCE PROVISIONS. Bond Counsel is authorized
to insert any necessary provisions required by the Bond Insurer and agreed to by the City and its
general counsel.
SECTION 36. ESTABLISHMENT OF ESCROW FUND. A portion of the proceeds of
the 2006A Bonds, together with any cash contribution, in an amount necessary to refund the
Refunded Obligations shall be deposited in the Escrow Fund created and governed by the terms of
the Escrow Agreement dated April 15, 2006 attached hereto as Exhibit "D."
SECTION 37, NOTICE OF REDEMPTION. Attached to this Ordinance, as Exhibit "E",
and made a part hereof for all purposes, are copies of notice of deposit and prior redemption for the
Refunded Obligations in substantially final form and such Refunded Obligations described in said
notice of prior redemption are hereby called for redemption and shall be redeemed prior to maturity
on the dates, places, and at the prices set forth therein. The Mayor and Director of Finance are each
hereby authorized to amend, complete or modify such notices as necessary to call such Refunded
Obligations for redemption.
SECTION 38. NOTICE TO PAYING AGENT. The Refunded Obligations described in
Exhibit "E" attached hereto are so called for redemption, and the paying agent for the Refunded
Obligations is hereby directed to make appropriate arrangements so that such Refunded Obligations
may be redeemed on their redemption dates. A copy of such notice of redemption shall be delivered
to the paying agent so mentioned in the notice.
SECTION 39. APPROVAL OF ESCROW AGREEMENT AND TRANSFER OF
FUNDS. The Mayor or Mayor Pro-tem of the City is hereby authorized and directed to execute and
deliver and the City Secretary of the City is hereby authorized and directed to attest an Escrow
Agreement in substantially the form attached hereto as Exhibit "D". In addition, the Mayor and
Director ofFinance are each hereby authorized to execute such subscriptions or other documentation
for the purchase of United States Treasury Securities, and to authorize the transfer of such funds of
the City, as may be necessary for the Escrow Fund.
SECTION 40. NO RECOURSE AGAINST CITY OFFICIALS. No recourse shall be had
for the payment of principal of or interest on any Parity Bonds or for any claim based thereon or on
this Ordinance against any official of the City or any person executing any Parity Bonds.
SECTION 41. FURTHER ACTIONS. The officers and employees of the City are hereby
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and
on behalf of the City all such instruments, whether or not herein mentioned, as may be necessary or
desirable in order to carry out the terms and provisions of this Ordinance, the Series 2006A Bonds,
the initial sale and delivery of the Series 2006A Bonds, the Paying Agent/Registrar Agreement, any
GfOWNGO: Ref Bond 2006A Ordinance 31
insurance commitment letter or insurance policy and the Official Statement. In addition, prior to the
initial delivery of the Series 2006A Bonds, the Mayor, the City Manager or Assistant City Manager,
the City Attorney and Bond Counsel are hereby authorized and directed to approve any technical
changes or corrections to this Ordinance or to any ofthe instruments authorized and approved by this
Ordinance necessary in order to (i) correct any ambiguity or mistake or properly or more completely
document the transactions contemplated and approved by this Ordinance and as described in the
Official Statement, (ii) obtain a rating from any of the national bond rating agencies or satisfy
requirements of the Bond Insurer, or (iii) obtain the approval of the Series 2006A Bonds by the Texas
Attorney General's office.
In case any officer of the City whose signature shall appear on any Series 2006A Bond shall
cease to be such officer before the delivery of such Series 2006A Bond, such signature shall
nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office
until such delivery.
SECTION 42. INTERPRETATIONS. All terms defined herein and all pronouns used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. ` The titles and
headings of the articles and sections of this Ordinance and the Table of Contents of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof and
shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all
the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein
and to sustain the validity of the Series 2006A Bonds and the validity of the lien on and pledge of the
Pledged Revenues to secure the payment of the Series 2006A Bonds.
SECTION 43. INCONSISTENT PROVISIONS. All ordinances, orders or resolutions, or
parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 44. INTERESTED PARTIES. Nothing in this Ordinance expressed or implied
is intended or shall be construed to confer upon, or to give to, any person or entity, other than the
City and the registered owners of the Series 2006A Bonds, any right, remedy or claim under or by
reason of this Ordinance or any covenant, condition or stipulation hereof, and all covenants,
stipulations, promises and agreements in this Ordinance contained by and on behalf of the City shall
be for the sole and exclusive benefit of the City and the registered owners ofthe Series 2006A Bonds.
SECTION 45. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
SECTION 46, SEVERABILITY. If any provision of this Ordinance or the application
thereof to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body hereby
declares that this Ordinance would have been enacted without such invalid provision.
=WNGO: Ref Bond 2006A Ordinance 32
SECTION 47. REPEALER. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
SECTION 48, EFFECTIVE DATE. This Ordinance shall become effect immediately from
and after its passage on first and final reading in accordance with Section 1201.028, Texas
Government Code, as amended.
SECTION 49, PERFECTION. Chapter 1208, Government Code, applies to the issuance of
the Series 2006A Bonds and the pledge of revenues granted by the City under Section 7 of this
Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is amended at
any time while the Series 2006A Bonds are outstanding and unpaid such that the pledge of revenues
granted by the City under Section 7 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Series 2006A Bonds the perfection of the security interest in said pledge, the City agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security
interest in said pledge to occur.
SECTION50. PAYMENT OF ATTORNEY GENERAL FEE. The City hereby authorizes
the disbursement of a fee equal to the lesser of (i) one -tenth of one percent of the principal amount
of the Series 2006A Bonds or (ii) $9,500, provided that such fee shall not be less than $750, to the
Attorney General of Texas Public Finance Division for payment of the examination fee charged by
the State of Texas for the Attorney General's review and approval of public securities and credit
agreements, as required by Section 1202.004 of the Texas Government Code. The appropriate
member of the City's staff is hereby instructed to take the necessary measures to make this payment.
The City is also authorized to reimburse the appropriate City funds for such payment from proceeds
of the Series 2006A Bonds.
GTOWNGO: Ref Bond 2006A Ordinance 33
IN ACCORDANCE WITH SECTION 1201.028, Texas Government Code, passed and
approved on the first and final reading on the 25th day of April, 2006.
Gary Nelon, Mayor
City of Georgetown, Texas
ATTEST:
Sandra D. Lee, City Secretary
(CITY SEAL)
APPROVED AS TO FORM:
By:
Patricia Carls
City Attorney
GTOWNGO: Ref Bond 2006A Ordinance
0
As used in this Ordinance, the following terms and expressions shall have the meanings set
forth below, unless the text hereof specifically indicates otherwise:
"Accountant" means an independent certified public accountant or accountants or a firm of
an independent certified public accountants, in either case, with demonstrated expertise and
competence in public accountancy.
"Additional Parity obligations" means bonds, notes, warrants, certificates of obligation,
contractual obligations or other Debt which the City reserves the right to issue or enter into, as the
case may be, in the future under the terms and conditions provided in Sections 22 and 23 of this
Ordinance and which obligations are equally and ratably secured solely by a first lien on and pledge
of the Pledged Revenues on a parity with the outstanding Parity Obligations and the Series 2006A
Bonds.
"Amortization Installment" means, with respect to any Term Bonds of any series of Parity
Obligations, the amount of money which is required to be deposited into a mandatory redemption
account for retirement of such Term Bonds (whether at maturity or by mandatory redemption and
including redemption premium, if any) provided that the total Amortization Installments for such
Term Bonds shall be sufficient to provide for retirement of the aggregate principal amount of such
Term Bonds.
"Annual Debt Service Requirements" means, as of the date of calculation, the principal of and
interest on all Parity Obligations coming due at Maturity or Stated Maturity (or that could come due
on demand ofthe owner thereof other than by acceleration or other demand conditioned upon default
by the City on such Debt, or be payable in respect of any required purchase of such Debt by the City)
in such Fiscal Year, and, for such purposes, any one or more of the following rules shall apply at the
election of the City:
(1) Balloon Debt. If the principal (including the accretion of interest resulting from
original issue discount or compounding of interest) of any series or issue of Funded Debt due
(or payable in respect of any required purchase of such Funded Debt by the City) in any Fiscal
Year either is equal to at least 25% of the total principal (including the accretion of interest
resulting from original issue discount or compounding of interest) of such Funded Debt or
exceeds by more than 50% the greatest amount of principal of such series or issue of Funded
Debt due in any preceding or succeeding Fiscal Year (such principal due in such Fiscal Year
for such series or issue of Funded Debt being referred to herein and throughout this
Ordinance as 'Balloon Debt"), the amount of principal of such Balloon Debt taken into
account during any Fiscal Year shall be equal to the debt service calculated using the original
principal amount of such Balloon Debt amortized over the Term of Issue on a level debt
service basis at an assumed interest rate equal to the rate borne by such Balloon Debt on the
date of calculation;
GTOWNGO: Ref Bond 2006A Ordinance A-1
(2) Consent Sinking Fund. In the case of Balloon Debt, if a Designated Financial Officer
shall deliver to the City a certificate providing for the retirement of (and the instrument
creating such Balloon Debt shall permit the retirement of), or for the accumulation of a
sinking fund for (and the instrument creating such Balloon Debt shall permit the accumulation
of a sinking fund for), such Balloon Debt according to a fixed schedule stated in such
certificate ending on or before the Fiscal Year in which such principal (and premium, if any)
is due, then the principal of (and, in the case of retirement, or to the extent provided for by
the sinking fund accumulation, the premium, if any, and interest and other debt service
charges on) such Balloon Debt shall be computed as if the same were due in accordance with
such schedule, provided that this clause (2) shall apply only to Balloon Debt for which the
installments previously scheduled have been paid or deposited to the sinking fund established
with respect to such Debt on or before the times required by such schedule and provided
further that this clause (2) shall not apply where the City has elected to apply the rule set forth
in clause (1) above;
(3) Prepaid Debt. Principal of and interest on Series 2006A Bonds and Additional Parity
Obligations, or portions thereof, shall not be included in the computation ofthe Annual Debt
Service Requirements for any Fiscal Year for which such principal or interest are payable
from funds on deposit or set aside in trust for the payment thereof at the time of such
calculations (including without limitation capitalized interest and accrued interest so deposited
or set aside in trust) with a financial institution acting as fiduciary with respect to the payment
of such Debt; and
(4) Variable Rate. As to any Parity Obligations that bear interest at a variable interest rate
which cannot be ascertained at the time of calculation of the Annual Debt Service
Requirement then, at the option of the City, either (A) an interest rate equal to the average
rate borne by such Parity Obligations (or by comparable debt in the event that such Parity
Obligations has not been outstanding during the preceding 24 months) for any 24 month
period ending within 30 days prior to the date of calculation, or (B) an interest rate equal to
the 30-year Revenue Bond Index (as most recently published in The Bond Buyer), shall be
presumed to apply for all future dates, unless such index is no longer published in The Bond
Buyer, in which case an index of revenue bonds with maturities of at least 20 years which is
published in a financial newspaper or journal with national circulation may be used for this
purpose (if two Series of Parity Obligations which bear interest at variable interest rate, or
one or more maturities within a Series, of equal par amounts, are issued simultaneously with
inverse floating interest rates providing a composite fixed interest rate for such Parity
Obligations taken as a whole, such composite fixed rate shall be used in determining the
Annual Debt Service Requirement with respect to such Parity Obligations);
With respect to any calculation of historic data, only those payments actually made in the subject
period shall be taken into account in making such calculation and, with respect to prospective
calculations, only those payments reasonably expected to be made in the subject period shall be taken
into account in making the calculation.
GTOWNGO: Ref Band 2006A Ordinance
A-2
"Average Annual Debt Service Requirements" means that average amount which, at the time
of computation, will be required to pay the Annual Debt Service Requirements when due (either at
Stated Maturity or mandatory redemption) and derived by dividing the total of such Annual Debt
Service Requirements by the number of Fiscal Years then remaining before Stated Maturity of such
Parity Obligations. For the purposes of this definition, a fractional period of a Fiscal Year shall be
treated as an entire Fiscal Year. Capitalized interest payments provided from bond proceeds, accrued
interest on any Debt, and interest earnings thereon shall be excluded in making such computation.
"Bondlnsurer" means Financial Guaranty Insurance Company or any other entity that insures
or guarantees the payment of principal and interest on any Bonds or the provider of a Reserve Fund
Obligation.
'Book -Entry -Only System" means the book -entry system of bond registration provided in
Section 5, or any successor system of book -entry registration.
"Cede & Co. "means the designated nominee and its successors and assigns ofThe Depository
Trust Company, New York.
"City" means the City of Georgetown, Texas, and where appropriate, the City Council.
"Debt" and "Debt of the City payable from Pledged Revenues" mean:
(1) all indebtedness payable from Pledged Revenues and/or Net Revenues incurred or
assumed by the City for borrowed money and all other financing obligations of the System
payable from Pledged Revenues and/or Net Revenues that, in accordance with generally
accepted accounting principles, are shown on the liability side of a balance sheet; and
(2) all other indebtedness payable from Pledged Revenues and/or Net Revenues (other
than indebtedness otherwise treated as Debt hereunder) for borrowed money or for the
acquisition, construction or improvement of property or capitalized lease obligations
pertaining to the System that is guaranteed, directly or indirectly, in any manner by the City,
or that is in effect guaranteed, directly or indirectly, by the City through an agreement,
contingent or otherwise, to purchase any such indebtedness or to advance or supply funds for
the payment or purchase of any such indebtedness or to purchase property or services
primarily for the purpose of enabling the debtor or seller to make payment of such
indebtedness, or to assure the owner of the indebtedness against loss, or to supply funds to
or in any other manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether or not such property is delivered or such services are
rendered), or otherwise.
For the purpose of determining Debt, there shall be excluded any particular Debt if, upon or prior to
the Maturity thereof, there shall have been deposited with the proper depository (a) in trust the
necessary funds (or investments that will provide sufficient funds, if permitted by the instrument
creating such Debt) for the payment, redemption, or satisfaction of such Debt or (b) evidence of such
GTOWNGO: Ref Bond 2006A Ordinance A-3
Debt deposited for cancellation; and thereafter it shall not be considered Debt. No item shall be
considered Debt unless such item constitutes indebtedness under generally accepted accounting
principles applied on a basis consistent with the financial statements of the System in prior Fiscal
Years.
"Defeasance Securities" means (i) Federal Securities, (ii) noncallable obligations ofan 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 Council adopts
or approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the
funding of an escrow to effect the defeasance of the Series 2006A Bonds are rated as to investment
quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent, and
(iii) noncallable obligations of a state or an agency or a county, municipality, -or`other political
subdivision of a state that have been refunded and that, on the date the City Council adopts or
approves proceedings authorizing the issuance of refunding bonds or otherwise provide for the
funding of an escrow to effect the defeasance of the Series 2006A Bonds, are rated as to investment
quality by a nationally recognized investment rating firm no less than "AAA" or its equivalent.
"Depository" means one or more official depository banks of the City.
"DTC" means The Depository Trust Company, New York, New York and its successors and
assigns.
"DTC Participant" means securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Designated Financial Officer" means the chief financial officer of the City, or such other
financial or accounting official of the City so designated by the City Council.
"Federal Securities" as used herein means direct, noncallable obligations ofthe United States
ofAmerica, including obligations that are unconditionally guaranteed by the United States ofAmerica
(including Interest Strips of the Resolution Funding Corporation). $
"Fiscal Year" means the twelve-month accounting period used by the City in connection with
the operation ofthe System, currently ending on September 30 of each year, which may be any twelve
consecutive month period established by the City, but in no event may the Fiscal Year be changed
more than one time in any three calendar year period.
"Funded Debt" means all Parity Obligations created or assumed by the City that mature by
their terms (in the absence of the exercise of any earlier right of demand), or that are renewable at the
option of the City to a date, more than one year after the original creation or assumption of such Debt
by the City.
"Gross Revenues" and "Gross Revenues of the City's System" mean all revenues, income and
receipts of every nature derived or received by the City from the operation and ownership of the
GTOWNGO: Ref Bond 2006A Ordinance A-4
System; including the interest income from investment or deposit of money in any Fund created by
this Ordinance or maintained by the City in connection with the System; and any other revenues
hereafter pledged to the payment of all Parity Obligations.
"Holder" or "Holders" means the registered owner, whose name appears in the Security
Register, for any Parity Obligation.
"Independent Engineer" means an individual, firm or corporation engaged in the engineering
profession, being a registered professional engineer under the laws of the State of Texas, having
specific experience with respect to electric, water, wastewater, reuse water and/or stormwater
drainage systems similar to the System.
"Interest and Sinking Fund" means the special Fund maintained by the provisions of Sections
8 and 11 of this Ordinance.
"MSRB" means the Municipal Securities Rulemaking Board.
"Maintenance and Operating Expenses" means the reasonable and necessary expenses of
operation and maintenance ofthe System as required by Section 1502.058, Texas Government Code,
as amended, including all salaries, labor, materials, repairs and extensions necessary to render efficient
service (but only such repairs and extensions as, in the judgment of the governing body of the City,
are necessary to keep the System in operation and render adequate service to the City and the
inhabitants thereof, or such as might be necessary to meet some physical accident or conditions which
would otherwise impair the Parity Obligations), and all payments under contracts now or hereafter
defined as operating expenses by the Legislature of Texas. Depreciation shall never be considered
as a Maintenance and Operating Expense.
"Maturity" means, when used with respect to any Debt, the date on which the principal of
such Debt or any installment thereof becomes due and payable as therein provided, whether at the
Stated Maturity thereof or by declaration of acceleration, call for redemption, or otherwise.
"Maximum Annual Debt Service Requirements" means the greatest requirements of Annual
Debt Service Requirements (taking into account all mandatory principal redemption requirements)
scheduled to occur in any future Fiscal Year or in the then current Fiscal Year for the particular
obligations for which such calculation is made. Capitalized interest payments provided from Debt
proceeds, accrued interest on any Debt, and interest earnings thereon shall be excluded in making
such computation.
"Net Revenues" and "Net Revenues of the City's System" mean all Gross Revenues remaining
after deducting the Maintenance and Operating Expenses.
"NRAIISIR" means each person whom the SEC or its staff has determined to be a nationally
recognized municipal securities information repository within the meaning of the Rule from time to
time.
GTOWNGO: Ref Bond 2006A Ordinance A-5
"Ordinance" means this ordinance finally adopted by the City Council on April 25, 2006.
"Outstanding", when used with respect to Parity Obligations, means, as of the .date of
determination, all Parity Obligations theretofore delivered under this Ordinance and any ordinance
authorizing Additional Parity Obligations, except:
(1) Parity Obligations theretofore cancelled and delivered to the City or delivered to the
Paying Agent/Registrar for cancellation;
(2) Parity Obligations deemed paid pursuant to the provisions of Section 29 of this
Ordinance or any comparable section of any ordinance authorizing Additional Parity
Obligations;
(3) Parity Obligations upon transfer of or in exchange for and in lieu of which other
Parity Obligations have been authenticated and delivered pursuant to this Ordinance and any
ordinance authorizing Additional Parity Obligations; and
(4) Parity Obligations under which the obligations of the City have been released,
discharged or extinguished in accordance with the terms thereof.
"Paying Agent/Registrar" shall have the meaning set forth in Section 5(a) hereof.
"Parity Obligations" means the Series 2006A Bonds, the Previously Issued Parity Obligations
and any Additional Parity Obligations hereafter issued by the City or obligations issued to refund any
of the foregoing (as determined within the sole discretion of the City Council in accordance with
applicable law) if issued in a manner that provides that the refunding bonds are payable from and
equally and ratably secured by a first lien on and pledge of the Pledged Revenues.
"Permitted Investments" means any security or obligation or combination thereof permitted
under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as amended or
other applicable law.
"Pledged Revenues" means (1) the Net Revenues, plus (2) any additional revenues, income,
receipts, or other resources, including, without limitation, any grants, donations or income received
or to be received from the United States Government, or any other public or private source, whether
pursuant to an agreement or otherwise, which hereafter are pledged by the City to the payment of the
Parity Obligations, and excluding those revenues excluded from Gross Revenues.
"Previously Issued Parity Obligations" means the Outstanding Parity Obligations of the City
entitled "City of Georgetown, Texas Utility System Revenue and Refunding Bonds, Series 1998A,"
"City of Georgetown, Texas Utility System Revenue Refunding Bonds, Taxable Series 1998B," "City
of Georgetown, Texas Utility System Revenue Bonds, Series 2000," "City of Georgetown, Texas
Utility System Revenue Bonds, Series 2001," "City of Georgetown, Texas Utility System Revenue
GTOWNGO: Ref Bond 2006A Ordinance A-6
Bonds, Series 2002," "City of Georgetown, Texas Utility System Revenue Bonds, Series 2003" and
"City of Georgetown, Texas Utility System Revenue Bonds, Series 2005". The term "Previously
Issued Parity Obligations" shall also include the "City of Georgetown, Texas Utility System Revenue
Bonds, Series 2006" being issued along with the Series 2006A Bonds.
"Prudent Utility Practice" means any of the practices, methods and acts, in the exercise of
reasonable judgment, in the light of the facts, including but not limited to the practices, methods and
acts engaged in or previously approved by a significant portion of the public utility industry, known
at the time the decision was made, that would have been expected to accomplish the desired result
at the lowest reasonable cost consistent with reliability, safety and expedition. It is recognized that
Prudent Utility Practice is not intended to be limited to the optimum practice, method or act to the
exclusion of all others, but rather is a spectrum of possible practices, methods or acts which could
have been expected to accomplish the desired result at the lowest reasonable cost consistent with
reliability, safety and expedition. In the case of any facility included in the System which is operated
in common with one or more other entities, the term Prudent Utility Practice, as applied to such
facility, shall have the meaning set forth in the agreement governing the operation of such facility.
"RatingAgency" means any nationally recognized securities rating agency which has assigned,
at the request of the City, a rating to the Parity Obligations.
"Record Date" means Record Date as defined in the Form of Bonds in Exhibit 'B" to this
Ordinance.
"Required Reserve Amount" means the amount required to be maintained in the Reserve Fund
pursuant to the provisions of Section 12 of this Ordinance.
"Required Reserve FundDeposits" means the deposits and credits, if any, required to be made
to the Reserve Fund pursuant to the provisions of Section 12 of this Ordinance.
"Reserve Fund" means the special fund created, established and maintained by the provisions
of Sections 8 and 12 of this Ordinance.
"Reserve Fund Obligation" means, to the extent permitted by law, as evidenced by an opinion
of nationally recognized bond counsel, a surety bond or insurance policy deposited in the Reserve
Fund to satisfy the Required Reserve Amount whereby the issuer is obligated to provide funds up to
and including the maximum amount and under the conditions specified in such agreement or
instrument.
"Reserve Fund Obligation Payment" means any subrogation payment the City is obligated
to make from Pledged Revenues deposited in the Reserve Fund with respect to a Reserve Fund
Obligation.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
GMWNGO: Ref Bond 2006A Ordinance A'7
"SEC" means the United States Securities and Exchange Commission.
"Series 2006A Bands" means, the City of Georgetown, Texas Utility System Revenue
Refunding Bonds, Series 2006A authorized by this Ordinance.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
"Special Project" means, to the extent permitted by law, any electric, waterworks, sanitary
sewer, wastewater reuse or municipal drainage system property, improvement or facility declared by
the City not to be part of the System, for which the costs of acquisition, construction and installation
are paid from proceeds of a financing transaction other than the issuance of bonds payable from ad
valorem taxes, Pledged Revenues or Net Revenues and for which all maintenance and operation
expenses are payable from sources other than ad valorem taxes, Pledged Revenues or Net Revenues,
but only to the extent that and for so long as all or any part of the revenues or proceeds of which are
or will be pledged to secure the payment or repayment of such costs of acquisition, construction and
installation under such financing transaction.
"StatedMaturity "means the annual principal payments of the Parity Obligations payable on
the respective dates set forth in the Ordinances which authorized the issuance of such Parity
Obligations.
"Subordinate Lien Obligations" means (i) any bonds, notes, warrants, certificates of
obligation, contractual obligations or other Debt issued by the City that are payable, in whole or in
part, from and equally and ratably secured by a lien on and pledge of the Net Revenues, such pledge
being subordinate and inferior to the lien on and pledge of the Net Revenues that are or will be
pledged to the payment of any Parity Obligations issued by the City, and (ii) obligations hereafter
issued to refund any of the foregoing if issued in a manner that provides that the refunding bonds are
payable from and equally and ratably secured, in whole or in part, by a lien on and pledge of the Net
Revenues on a parity with the Subordinate Lien Obligations.
"System" means as currently comprised, the City's combined electric, waterworks and sewer
system, which includes all properties, facilities, plants, improvements, equipment, interests and rights
currently owned, operated and maintained by the City for the (i) generation, transmission, distribution
or sale of electric power and energy, (ii) supply, treatment, and transmission and distribution of
treated potable water and (iii) collection and treatment of wastewater, and for water reuse, together
with all future extensions, improvements, purchases, repairs, replacements and additions thereto,
whether situated within or without the limits of the City, and all water (in any form) owned by the
City; provided, however, that the City expressly retains the right to (i) sale or disaggregate the System
as set forth in Section 18 of this Ordinance and (ii) incorporate any other utility system as provided
by the laws of the State of Texas as a part of the System. The System shall not include any Special
Project or any disaggregated part of the System as provided in Section 18 of this Ordinance.
GfOWNGO: Ref Bond 2006A Ordinance A'8
"Term Bonds" means those Parity Obligations so designated in the ordinances authorizing
such bonds which shall be subject to retirement by operation of a mandatory redemption account.
"Term of Issue" means with respect to any Balloon Debt, a period oftime equal to the greater
of (i) the period of time commencing on the date of issuance of such Balloon Debt and ending on the
final maturity date of such Balloon Debt or (ii) twenty-five years.
GTOWNGO: Ref Bond 2006A Ordinance
A-9
I AN go I 1.
17i� ci► -[lam: i7►17
NXII UNITED STATES OF AMERICA
PRINCIPAL
STATE O TEXAS AMOUNT
CITY OF GEORGE 03YN.,TEXAS
UTILITY SYSTEM REVENUE REFUNDING BOND, SERIES 2006A
1► l/ : : / : a�17.Ti11J[!]W*1al �I�f iliflo► T`.�� i
April 15, 2006
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
ON THE MATURITY DATE specified above, the CITY OF GEORGETOWN, TEXAS
(the "City"), being a political subdivision and municipal corporation of the State of Texas, hereby
promises to pay to the Registered Owner specified above, or registered assigns (hereinafter called the
"Registered Owner"), the Principal Amount specified above, and to pay interest thereon (calculated
on the basis of a 360-day year of twelve 30-day months) from April 15, 2006 at the Interest Rate per
annum specified above, payable on August 15, 2006, and semiannually on each February 15 and
August 15 thereafter to the Maturity Date specified above, or the date of redemption prior to
maturity; except that if this Bond is required to be authenticated and the date of its authentication is
later than the first Record Date (hereinafter defined), such Principal Amount shall bear interest from
the interest payment date next preceding the date of authentication, unless such date of authentication
is after any Record Date but on or before the next following interest payment date, in which case such
principal amount shall bear interest from such next following interest payment date; provided,
however, that if on the date of authentication hereof the interest on the Bond or Bonds, if any, for
which this Bond is being exchanged is due but has not been paid, then this Bond shall bear interest
from the date to which such interest has been paid in full. Notwithstanding the foregoing, during any
period in which ownership of the Bonds is determined only by a book entry at a securities depository
for the Bonds, any payment to the securities depository, or its nominee or registered assigns, shall
be made in accordance with existing arrangements between the City and the securities depository.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money ofthe
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the Registered Owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the designated office for payment of The
Bank ofNew York Trust Company, N.A., Jacksonville, Florida which is the "Paying Agent/Registrar"
GTOWNGO: Ref Bond 2006A Ordinance B3 l
for this Bond. The payment of interest on this Bond shall be made by the Paying Agent/Registrar to
the Registered Owner hereof on each interest payment date by check, dated as of such interest
payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the City
required by the Ordinance authorizing the issuance of this Bond (the "Bond Ordinance") to be on
deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check
shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each
such interest payment date, to the Registered Owner hereof, at its address as it appeared on the last
business day of the month next preceding each such date (the "Record Date") on the Registration.
Books kept by the Paying Agent/Registrar, as hereinafter described. In the event of a non-payment
of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such
interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar if and
when funds for the payment of such interest have been received from the City. Notice 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 by United States mail, first class, postage prepaid, to the address of each
Registered Owner appearing on the Registration Books of the Paying Agent/Registrar at the close
of business on the last business day next preceding the date of mailing of such notice. Any accrued
interest due upon the redemption of this Bond prior to maturity as provided herein shall be paid to
the Registered Owner upon presentation and surrender of this Bond for redemption and payment at
the principal office for payment of the Paying Agent/Registrar (unless the redemption date is a
regularly scheduled interest payment date, in which case accrued interest on such redeemed Bonds
shall be payable in the regular manner described above). The City covenants with the Registered
Owner ofthis Bond that on or before each principal payment date, interest payment date, and accrued
interest payment date for this Bond it will make available to the Paying Agent/Registrar, from the
"Interest and Sinking Fund" referred to in and maintained by the Bond Ordinance, the amounts
required to provide for the payment, in immediately available funds, of all principal of and interest on
the Bonds, when due. Terms used in this Bond and not otherwise defined shall have the meaning
given in the Bond Ordinance.
IF THE DATE for the payment of the principal of or interest on this Bond shall be a
Saturday, Sunday, legal holiday, or day on which banking institutions in the city where the principal
office for payment of the Paying Agent/Registrar is located are authorized by law or executive order
to close, or the United States Postal Service is not open for business (each a "Non -Business Day"),
then the date for such payment shall be the next succeeding day which is not a Non -Business Day,
and payment on such date shall have the same force and effect as if made on the original date payment
was due.
THIS BOND is one of series ofBonds dated April 15, 2006, authorized in accordance with
the Constitution and laws of the State of Texas in the principal amount of $3,205,000 FOR THE
PURPOSE OF (I) REFUNDING THE REFUNDED OBLIGATIONS AND (II) PAYING THE
COSTS ASSOCIATED WITH THE ISSUANCE OF THE BONDS.
ON AUGUST 15, 2016 OR ON ANY DATE THEREAFTER, the Bonds maturing on and
after August 15, 2017 may be redeemed prior to their scheduled maturities, at the option of the City,
GfOWNGO: Ref Bond 2006A Ord r=ce B-2
with funds derived from any available and lawful source, at a redemption price equal to the principal
amount to be redeemed plus accrued interest to the date fixed for redemption as a whole, or from
time to time in part, and, if in part, the particular Bonds, or portions thereof, to be redeemed shall be
selected and designated by the City, and if less than all of a maturity is to be redeemed the Paying
Agent/Registrar shall determine by lot the Bonds, or portions thereof within such maturity to be
redeemed (provided that a portion of a Bond may be redeemed only in integral multiples of $5,000
of principal amount).
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity, a written notice of such redemption shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, at least 30 days prior to the date fixed for any such
redemption to the Registered Owner of each Bond to be redeemed at its address as it appeared on
the Registration Books maintained by the Paying Agent/Registrar on the day such notice of
redemption is mailed. By the date fixed for any such redemption, due provision shall be made with
the Paying Agent/Registrar for the payment of the required redemption price for the Bonds or
portions thereof which are to be so redeemed. If such written notice of redemption is mailed and if
due provision for such payment is made, all as provided above, the Bonds or portions thereof which
are to be so redeemed thereby automatically shall be treated as redeemed prior to their scheduled
maturities, and they shall not bear interest after the date fixed for redemption, and they shall not be
regarded as being outstanding except for the right of the Registered Owner to receive the redemption
price from the Paying Agent/Registrar out of the funds provided for such payment. If a portion of
any Bond shall be redeemed a substitute Bond or Bonds having the same maturity date, bearing
interest at the same rate, in any denomination or denominations in any integral multiple of $5,000,
at the written request of the Registered Owner, and in an aggregate principal amount equal to the
unredeemed portion thereof, will be issued to the Registered Owner upon the surrender thereof for
cancellation, at the expense of the City, all as provided in the Bond Ordinance.
WITH RESPECT TO any optional redemption of the Bonds, unless certain prerequisites
to such redemption required by the Bond Ordinance have been met and moneys sufficient to pay the
principal of and premium, if any, and interest on the Bonds to be redeemed shall have been received
by the Paying Agent/Registrar prior to the giving of such notice of redemption, such notice shall state
that said redemption may, at the option of the City, be conditional upon the satisfaction of such
prerequisites and receipt of such moneys by the Paying Agent/Registrar on or prior to the date fixed
for such redemption, or upon any prerequisite set forth in such notice of redemption. If a conditional
notice of redemption is given and such prerequisites to the redemption and sufficient moneys are not
received, such notice shall be of no force and effect, the City shall not redeem such Bonds and the
Paying Agent/Registrar shall give notice, in the manner in which the notice of redemption was given,
to the effect that the Bonds have not been redeemed.
DURING ANY PERIOD in which ownership of the Bonds is determined only by a book
entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same maturity and
bearing the same interest rate are to be redeemed, the particular Bonds of such maturity and bearing
such interest rate shall be selected in accordance with the arrangements between the City and the
securities depository.
GTOWNGO: Ref Bond 2006A Ordinance
c
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without
interest coupons, in the denomination of any integral multiple of $5,000 (an "Authorized
Denomination"). As provided in the Bond Ordinance, this Bond, or any unredeemed portion hereof,
may, at the request of the Registered Owner or the assignee or assignees hereof, be assigned,
transferred and exchanged for a like aggregate principal amount of fully registered Bonds, without
interest coupons, payable to the appropriate Registered Owner, assignee or assignees, as the case may
be, having the same denomination or denominations in any integral multiple of $5,000 as requested
in writing by the appropriate Registered Owner, assignee or assignees, as the case may be, upon
surrender of this Bond to the Paying Agent/Registrar for cancellation, all in accordance with the form
and procedures set forth in the Bond Ordinance. Among other requirements for such assignment and
transfer, this Bond must be presented and surrendered to the Paying Agent/Registrar, together with
proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying
Agent/Registrar, evidencing assignment ofthis Bond or any portion or portions hereofin any integral
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such
portion or portions hereof is or are to be registered. The form of Assignment printed or endorsed
on this Bond may be executed by the Registered Owner to evidence the assignment hereof, but such
method is not exclusive, and other instruments of assignment satisfactory to the Paying
Agent/Registrar may be used to evidence the assignment of this Bond or any portion or portions
hereof from time to time by the Registered Owner. The Paying Agent/Registrar's reasonable standard
or customary fees and charges for transferring and exchanging any Bond or portion thereof shall be
paid by the City, but any taxes or governmental charges required to be paid with respect thereto shall
be paid by the one requesting such assignment, transfer or exchange as a condition precedent to the
exercise of such privilege. The Paying Agent/Registrar shall not be required to make any such
transfer or exchange (i) during the period commencing with the close ofbusiness on any Record Date
and ending with the opening of business on the next following principal or interest payment date, or,
(ii) with respect to any Bond or any portion thereof called for redemption prior to maturity, within
45 days prior to its redemption date; provided, however, such limitation of transfer shall not be
applicable to an exchange by the Registered Owner of an unredeemed balance of a Bond called for
redemption in part.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering'or transferring
this Bond shall be modified to require the appropriate person or entity to meet the requirements of
the securities depository as to registering or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the City, resigns
or otherwise ceases to act as such, the City has covenanted in the Bond Ordinance that it promptly
will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to
be mailed to the Registered Owners of the Bonds.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
authorized, issued and delivered; that all acts, conditions and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance and delivery of this Bond
have been performed, existed and been done in accordance with law; that this Bond is a special
GTOWNGO: Ref Bond 2006A Ordinance B-4
obligation ofthe City, and that the interest on and principal ofthis Bond, together with the Previously
Issued Parity Obligations and all other outstanding "Parity Obligations" (as defined in the Bond
Ordinance), as such interest comes due, and as such principal matures, are payable from and secured
by a lien on and pledge of the "Pledged Revenues" of the "System" (which is generally described as
the City's combined electric, waterworks and sewer system), all as provided in the Bond Ordinance,
THE CITY also has reserved the right, subject to restrictions stated in the Ordinance, to issue
Additional Parity Obligations which also may be made payable from and equally and ratably secured
by a first lien on and pledge of, the Pledged Revenues of the System in the same manner and to the
same extent as this Series of Bonds.
THE CITY also has reserved the right, subject to restrictions stated in the Bond Ordinance
to issue Subordinate Lien Obligations payable from and equally and ratably secured, in whole or in
part, by alien on and pledge of the Net Revenues (as defined in the Bond Ordinance), subordinate
and inferior in rank and dignity to the lien on and pledge of such Net Revenues securing payment of
the Bonds, the Previously Issued Parity Obligations or any Additional Parity Obligations.
THE OWNER HEREOF shall never have the right to demand payment of this Bond out of
any funds raised or to be raised by taxation.
BY BECOMING the Registered Owner of this Bond, the Registered Owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the City and agrees that the
terms and provisions of this Bond and the Bond Ordinance constitute a contract between each
Registered Owner hereof and the City.
IN WITNESS WHEREOF, the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City, and countersigned with the manual or facsimile signature
of the City Secretary of the City and the official seal of the City has been duly impressed, or placed
in facsimile, on this Bond.
(facsimile signature)
City Secretary
[CITY SEAL]
GfOWNGO: Ref Bond 2006A Ordinance
_facsimile signature)
Mayor
FORMOF i
OF THE COMPTROLLER OF
i ' ' iREGISTRATION
REGISTER i
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
Witness my signature and seal this
(CONIPTROLLER'S SEAL)
Comptroller of Public Accounts
of the State of Texas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration
Certificate of the Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described in the text of this Bond; and that this Bond has been issued in exchange for a
bond or bonds, or a portion of a bond or bonds of a series which originally was approved by the
Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the
State of Texas.
Dated:
GTOWNGO: Ref Bond 2006A Ordinance B-b
The Bank of New York Trust Company, N.A.
Paying Agent/Registrar
LM
Authorized Representative
a
FORM OF ASSIGNMENT:
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned Registered Owner of this Bond, or duly
authorized representative or attorney thereof, hereby sells, assigns and transfers this Bond and all
rights hereunder unto
(Assignee's Social Security or (Please print or typewrite Assignee's name and address,
Taxpayer Identification Number) including zip code)
and hereby irrevocably constitutes and appoints
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in 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 trust
company.
NOTICE: The signature above must
correspond with the name of the Registered
Owner as it appears upon the front of this
Bond in every particular, without alteration or
enlargement or any change whatsoever.
INSERTIONS FOR THE INITIAL BOND
The initial Bond shall be in the form set forth in this Exhibit, except that:
A. immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As shown below" and
"CUSIP NO." shall be deleted.
B. the first paragraph shall be deleted and the following will be inserted:
"ON THE MATURITY DATE SPECIFIED ABOVE, the City ofGeorgetown, Texas (the
"City"), being a political subdivision, hereby promises to pay to the Registered Owner specified
above, or registered assigns (hereinafter called the "Registered Owner"), on August 15 in each ofthe
years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
Years Principal Installments Interest Rates
GfOWNGO: Ref Bond 2006A Ordinance B-7
V
(Information from Sections 3 and 4 to be inserted)
The City promises to pay interest on the unpaid principal amount hereof (calculated on the basis of
a 360-day year of twelve 30-day months) from April 15, 2006 at the respective Interest Rate per
annum specified above. Interest is payable on August 15, 2006 and semiannually on each February
15 and August 15 thereafter to the date of payment of the principal installment specified above;
except, that if this Bond is required to be authenticated and the date of its authentication is later than
the first Record Date (hereinafter defined), such principal amount shall bear interest from the interest
payment date next preceding the date of authentication, unless such date of authentication is after any
Record Date but on or before the next following interest payment date, in which case such principal
amount shall bear interest from such next following interest payment date; provided, however, that
if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond
is being exchanged is due but has not been paid, then this Bond shall bear interest from the date to
which such interest has been paid in full."
C. The initial Bond shall be numbered "T-P'
GTOWNGO: Ref Bond 2006A Ordinance
is ;
104106110910
The following information is referred to in Section 21 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided annually
in accordance with such Section are as specified (and included in the Appendix or under the headings
of the Official Statement referred to) below:
1. The annual audited financial statements of the City of Georgetown, Texas or the unaudited
financial statements of the City of Georgetown, Texas in the event audited financial statements are
not completed within six months after the end of any Fiscal Year.
2. All quantitative financial information and operating data with respect to the City ofthe general
type included in the Official Statement under Tables 1 through 11 and Table 13 and the section
entitled "INVESTMENTS - Current Investments."
Accounting Principles
The accounting principles referred to in such Section are the accounting principles described
in the notes to the financial statements referred to in paragraph 1 above.
GTOWNGO: Ref Bond 2006A Ordinance
C-1
GTOWNGO: Ref Bond 2006A Ordinance
[See Separate Tab in this Transcript]
D-1
EXHIBIT E
NOTICE IS HEREBY GIVEN that Georgetown, Texas (the "City") has deposited cash and United
States government securities in escrow to defease, and has further called for redemption, the following
obligations of the City (the "Obligations"):
CITY OF GEORGETOWN, UTILITY SYSTEM REVENUE BONDS, SERIES 2000, all
outstanding obligations maturing on August15 in each of the years 2010 through 2020, inclusive,
aggregating $3,000,000 in principal amount:
Maturity
Principal
Interest
Redemption
CUSIP
Au ug stl5
Amount
Rate
Date
Number*
2010
$20500
5.200%
August
15,
2009
373064LC6
2011
220,000
5.250
August
15,
2009
373064LD4
2012
230,000
5.250
August
15,
2009
373064LE2
2014
495,000
5.375
August
15,
2009
373064LG7
2015
2707000
5.400
August
15,
2009
373064MG6
2016
285,000
5.450
August
15,
2009
373064LH5
2017
300,000
5.550
August
15,
2009
373064LJ1
2018
315,000
5.600
August
15,
2009
373064LK8
2019
330,000
5.625
August
15,
2009
373064LL6
2020
350,000
5.625
August
15,
2009
373064LM4
*The CUSIP
Numbers have
been assigned to this issue by the CUSIP Service Bureau and are included solely for the convenience of the owners of the
Obligations.
The City shall
not be responsible for the
selection or the correctness of the CUSIP numbers set forth herein.
The redemption price for the above Obligations is par plus accrued interest to the date fixed for
redemption. Such Obligations shall be redeemed and shall not longer bear interest after the redemption date.
Due provision for the payment of the obligations described above has been made with The Bank of New York
Trust Company, N.A. (the "Bank"), and said obligations shall be presented for payment either in person or by
mail, at the following address:
BY MAIL:
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, NY 13057
Attn: Helen Scanlon
HAND DELIVERY:
The Bank of New York
111 Sanders Creek Parkway
East Syracuse, NY 13057
Attn: Helen Scanlon
In compliance with section 3406 of the Internal Revenue Code of 1986, as amended, payors making
certain payments due on debt securities may be obligated to deduct and withhold a portion of such payment
from the remittance to any payee who has failed to provide such payor with a valid taxpayer identification
number. To avoid the imposition of this withholding tax, such payees should submit a certified taxpayer
identification number when surrendering the Obligations for redemption.
GTOWNGO: Ref Bond 2006A Ordinance E-1