HomeMy WebLinkAboutORD 2010-10 - 2010 Series Utility Revenue BondsCERTIFICATE FOR ORDINANCE NO.cp0loor
.THE STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF GEORGETOWN
We, the undersigned officers and members of the City of Georgetown, Texas (the "City"),
hereby certify as follows
is The City Council of the City convened in REGULAR MEETING ON TBE 27TH
DAY OF APRIL, 2010, at Council Chambers, 101 E. 7th Street, Georgetown, Texas (the
"Meeting"), and the roll was called of the duly constituted officers and members of the City, to -wit:
George Garver, Mayor
Gabe Sansing, Mayor Pro Tem, Councilmember District 2
Patty Eason, Councilmember District 1
Keith Brainard, Councilmember District 3
Bill Sattler, Councilmember District 4
Pat Berryman, Councilmember District 5
Dale Ross, Councilmember District 6
Ben Oliver., Councilmember District 7
and all of the persons were present, except the following absentees: thus constituting
a quorum. Whereupon, among other business, the following was transacted at the Meeting: a written
ORDINANCE AUTHORIZING CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM
REVENUE BONDS, SERIES 2010; AUTHORIZING THE PLEDGE OF CERTAIN
REVENUES IN SUPPORT OF THE BONDS; APPROVING A PAYING
AGENT/REGISTRAR AGREEMENT, AN OFFICIAL STATEMENT AND OTHER
RELATED DOCUMENTS; AND AUTHORIZING OTHER MATTERS RELATED TO
THE ISSUANCE OF THE BONDS
was duly introduced for the consideration of the City` Council. It was then duly moved and seconded
that the Ordinance be passed on first reading; and) after due discussion, said motion carrying with it
the passage of the Ordinance, prevailed and carried by the following vote:
AYES: NOES
2. A true, full and correct copy of the Ordinance passed at the Meeting described in the
above and foregoing paragraphs is attached to and follows this Certificate; that the Ordinance has
been duly recorded in the City Council's' minutes of the Meetings that the above and foregoing
paragraphs are a true, full and correct excerpt from the City Council's minutes of the Meeting
pertaining to the passage of the Ordinance; that the persons named in the above and foregoing
paragraphs are the duly chosen, qua11 lified and acting officers and members of the City Council as
GTOWN\Uti1SysRev\2010: Ordinance
ORDINANCE AUTHORIZING CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM
REVENUE BONDS, SERIES 2010; AUTHORIZING THE PLEDGE OF CERTAIN
REVENUES IN SUPPORT OF THE BONDS; APPROVING A PAYING
AGENT/REGISTRAR AGREEMENT, AN OFFICIAL STATEMENT AND OTHER
RELATED DOCUMENTS AND AUTHORIZING OTHER MATTERS RELATED TO
THE ISSUANCE OF THE BONDS
Table of Contents
Recitals
Section 1. DEFINITIONS .. .. 1
Section 2. AMOUNT AND PURPOSE OF THE SERIES 2010 BONDS.. .. 1
Section 3 . DESIGNATION, DATE, DENOMINATIONS,NUMBERS, AND
MATURITIES OF THE SERIES 2010 B OND S :. ... 2
Section 4. INTEREST . .
Section 5. CHARAC TERI S TICS OF THE SERIES 2010 B OND S . .... 3
(a) Registration, Transfer, and Exchanges Authentication . a 0 0 . . . .... a a a 0 a a a a 0 . 3
(b) Payment of Series 2010 Bonds and Interest .. .. ...... 4
(c) In General. . . . .. . . l . . . . . . . . . . . • . .• . .as a. . • . ..• . • . . .. . .• . . . . • . 4
(d) Substitute Pad Agent/Rerar .. ..... 4
(e) Book-Entry-Onlyystern for Series 2010 Bonds .. : 5
(f) Successor Securities Depository; Transfers Outside Book -Entry -Only
Systems 5
(g)6
Payments to Cede & Co. C . . ..... .
(h) DTC Blanket Letter of Representations a 0 a a a a 0 a . 0 a a a as . .
Section 6. FORM OF SERIES 2010 BOND 0 a 0 9 0 a 0 0 a . . . . 6
Section 7. PLEDGE OF PLEDGED REVENUES... . . . . . . 6
Section 8. SPECIAL FUNDS some some seems engage... 7
Section 9. REVENUE FUND ....ass's.
sass.. a 6 0 6 a 0 a gas 0 a .. a ..
Section 10. FLOW OF FUNDS .. .. .. ... . . . .a 000007
Section' 11. INTEREST AND SINKING FUND. . . . . 4 some& 000 0 a a 0 a a a 8
Section 12. RESERVE FUND a & a 0 a 9 0 0 . .a 0 0 0 a a 0 a a a 0 0 a a 0 0 8 8 8 a. `. a a . a 0 agoss..... 8
Section 13, EXCESS BOND PROCEEDS . . **me . ... . . as . .... l 1
Section 14. DEFICIENCIES seem EXCESS PLEDGED OR NET REVENUES a 0 0 0 . 0 a . .9 011
Section 15. INVESTMENT OF FUNDS moms VALUATION - TRANSFER OF
INVESTMENT INCOME. an some . Does go as of. gas . a gooses 0 a 0 0 a.12
Section 16. PAYMENT OF PARITY OBLIGATIONS. sass... 12
Section 17. RATES AND CHARGES ... ..* Deafsass.. sass .. . . . . . 12
Section 18. GENERAL COVENANTS a .. 0 0 . . . . agoss. . 13
(a) Performance . . .a 0 a a a 0 a. . . . . .8 a 0 a a me . a . .so13
(b) City's Legal Authority . .. ... 13
(c) Title . sass. a a 4 .. 9 A 0 0 a 0 6 0 a 0 8 0 a.. 0 a a a a a of 0060 a 0 14
(d) Liens .. ..a 00 a a 9 a 0 0 14
GTOV1N\Uti1SysRev&Refg2008: Ordinance 1
(e) Operation of System, No Free Service .. a a a 9 .. 0 0 14
(f) Further Encumbrance . was *Seaga *@&a 0 a a a a a 0 0 9 14
(g) Sale or Disposal of Property 8,0 0 0 one mass . . . .. a 6 a a a ... a 14
(h) Insurance .. ... ... .. , . 15
(i) Governmental Agencies . . . . . 16
iJ) No Competition , . 16
(k) Disaagremation of S sy tem as of @ONso assee
woos a . . , . . , 16
Section 19, RECORDS AND ACCOUNTS - ANNUAL AUDIT .. . ... 17
Section 20. COVENANTS REGARDING TAX EXEMPTION OF INTEREST
ON:.: T1 1.E B OND S . . : . . . 00 was as to *sea @so* ego 6806*0668 090.064 Pao* 17
(a) Covenants . . . . . . .0 0. . . . . . . . . . . . . . . . . . ..:. . . . . , ... . • • • , 1
(b) Rebate Fund .. evesseaessom 19
(c) Proceeds ..a 0 a a 4 0 0 a 9 a a 0 a a 0 a 0 0 a a a a 0 a a 0 a a a19
(d) Allocation Of, and Limitation On, Expenditures for the Proiect . 19
(e) Disposition of Projectmosesee20
(f) Designation as Qualified Tax-Exem t Bonds .. 20
Section 21. CONTINUING DISCLOSURE UNDERTAKING . .
.. 20
(a) Annual Reports .. . .a 0.. a .. . .a a a. .a 0 0.. 0 a a a a a 20
(b) Material Event Notices
(c) Limitations, Disclaimers, and Amendments . .. .. .. 21
Section 22, ISSUANCE OF ADDITIONAL PARITY OBLIGATIONS .. 23
Section 23 . FURTHER REQUIREMENTS F 11 OR ADDITIONAL PARITY
OBLIGATIONS, .
Section 24. ISSUANCE OF SUBORDINATE LIEN OBLIGATIONS 0 a a 8 a 0 8 0 0 a a a 0 a a 24
Section 25. ISSUANCE OF SPECIAL PROJECT OBLIGATIONS 0 a 0 . .0 8 a 4 a 0 0 a a a 224
Section 26, LIMITED OBLIGATIONS OF THE CITY a .. 8 0 a a 6 a a a a a 0 a 0 a a a a a 0 0 a 0 a 24
Section 27. SECURITY FOR FUNDS. .................................. .
25
Section 28. REMEDIES IN EVENT OF DEFAULT a 0 .
Section 29. DEFEASANCE OF SERIES 2010 B OND S
26
Section 30. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
SERIES 2010 BONDS .. .. .
(a) Replacement Bonds . *as ease L .. .. .. 27
(b) Application for Replacement. Bonds ................ ... .....
27
(c) No Default Occurred 0 a 0 0 a a a a 6 0 0 0 0 0 9 a a . 28
(d) Cie for Issulnu Replacement Series 2010 Bonds .. .. 28
(e) Authority for Issuing Replacement Series 2010 Bonds .. , . .002 Geneva be28
Section 31. AMENDMENT OF ORDINANCEat .. .. 2 8
Section 32, SALE AND DELIVERY OF SERIES 2010 B OND S .
.....30
Section 33. CUSTODY, APPROVAL AND REGISTRATION OF SERIES 2010
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE AND
CUSIP NUMBERS .. 0 a a 0 0 a a a .. a a 6 0 a a 0 a a a a a 0 a a a 0 a a 0 a 0 0 0 0 0 a 9 a a 0
31
Section 34, APPROVAL OF OFFICIAL STATEMENT 9 0 9 0 a a 0 0 0 0 a 0 a 0 0 0 1 0 a 0 a ..:. a a 31
Section 3 5 . ADDITIONAL INSURANCE PROVISIONS . . . . 31
GTOWN\UfdSysRev&Refg2008: Ordinance 11
Section 3 8 . INTERPRETATIONS .......... . . . . .. 32
(%�\J. . INCONSISTENT PR
Section 3 / OVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . as . 32
Section 40, INTERE S TED PARTIES . as No...... ...a sawassoom amasses . .... 32
Section 41. INCORPORATION OF RECITALS ...3 2
Section 42. SEVERABILITY : . . 32
Section 43. REPEALER .. . C . .. .. , 33
Section 44, EFFECTIVE DATE .. .. ,ease , 33
Section 45. PERFECTION a.
Mesa 4 seem a assesses@ Possess **no 0 0 33
Section 46. PAYMENT OF ATTORNEY GENERAL FEE 6 0 0 2 0 0 a a 0 8 8 a 0 a . .a 8 a a 0 a 0 033
Exhibit A Definitions
Exhibit B Form of Series 2010 Band
Exhibit C Description of Annual Financial Information
a**
GTOWN\Uti1SysRev&Refg2008: Ordinance 111
n
ORDINANCE NO, 2010m
ORDINANCE AUTHORIZING CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM
REVENUE BONDS, SERIES 2010; AUTHORIZING THE PLEDGE OF CERTAIN
REVENUES IN SUPPORT OF THE BONDS; APPROVING A PAYING
AGENTIREGISTRAR AGREEMENT, AN OFFICIAL STATEMENT AND OTHER
RELATED DOCUMENTS; AND AUTHORIZING OTHER MATTERS RELATED TO
THE ISSUANCE OF THE BONDS
STATE OF TEXAS
COUNTY OF WILLIAMSON
CITY OF GEORGETOWN
WHEREAS, the City of Georgetown, Texas (the "City") has determined to issue
$10,120,000 of revenue bonds for the purpose of improvements and extensions to the City's System
(hereinafter defined) and for the payment of professional services including legal, fiscal, architectural,
engineer and any costs of issuance, and the City Council deems it necessary and desirable to issue
such bonds at this time; and
WHEREAS, the Series 2010 Bonds (hereinafter defined) authorized by this Ordinance are
being issued and delivered pursuant to the City Charter and Chapter 1502, Texas Government Code,
as amended, and any other applicable laws; 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 of the time, place and purpose of said
meeting was given, all as required by Chapter 551, Texas Government Code; and
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS THAT:
Section 1. 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 2010 BONDS. (a) The bond
or bonds of the City further described in Section 3 of this Ordinance and herein defined as the Series
2010 Bonds are hereby authorized to be issued and delivered in the aggregate principal amount of
$1091209000 FOR THE PURPOSE OF (I) CONSTRUCTING IMPROVEMENTS AND
EXTENSION TO THE CITY' S UTILITY SYSTEM (HEREINAFTER DEFINED) AND (11)
PAYING THE COSTS ASSOCIATED WITH THE ISSUANCE OF THE BONDS,
GTOWN\Uti1SysRev&Refg2008: Ordinance l
(b) Vision Statement. The City Council hereby finds that the enactment of this Ordinance
and issuance of the Bonds complies with the Vision Statement of the City.
Section 3. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND
MATURITIES OF THE SERIES 2010 BUNDS. 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 BOND, SERIES 2010,' and initially
there shall be issued, sold, and delivered hereunder fully registered bonds, without interest coupons,
dated April 15, 2010, 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 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 2010 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
2011 $195)000 2021 $5451000
2012 350,000 2022 5751000
2013 370P0 000 2023 6051000
2014 3901000 2024 63 5, 000
2015 4101000 2025 665,000
2016 43 0, 000 2026 7001000
2017 450,000 2027 735,000
2018 470, 000 2028 770, 000
2019 495P0 2029 810, 000
2020 520, 000
Section 4. INTEREST. The Series 2010 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 Rate Year Rate
2011 3.000% 2021 30500%
2012 3.000 2022 4.000
2013 3.000 2023 40000
2014 3 000 2024 4.000
2015 3.000 2025 4.000
2016 3.000 2026 4.000
2017 3.000 2027 40000
2018 3.000 2028 40000
2019 3.150 2029 4.000
2020 3.400
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.
GTOWN\Uti1SysRev&Refg2008: Ordinance 2
Section 5. CHARACTERISTICS OF THE SERIES 2010 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 Mellon Trust Company, N.A. in Dallas, Texas(the
"Paying Agent/Registrar") books or records for the registration of the transfer and exchange of the
Series 2010 Bonds (the "Registration Books"), and the City hereby appoints the Paying
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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 Cit and Paying
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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 Cit Secreta or the
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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.
The Paying Agent/Registrar shall obtain and record in the Registration Books the address of
the registered owner of each Series 2010 Bond to which payments with respect to the Series 2010
Bonds shall be mailed, as herein provided; but it shall be the duty of each registered owner to notify
fy
the Paying Agent/Registrar in writing of the address to whichpay ments 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 2010 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 Payin A gent/Registrar but otherwise th
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Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required
by law, shall not permit their inspection by any other entitY Paying g g . The Pa in A ent/Re istrar's standard
or customary fees and charges for making such registration, transfer, exchane and delivery of a
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substitute Series 2010 Bond or Series 2010 Bonds shall be
aid as provided in the FORM OF BOND
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set forth in Exhibit "B" to this Ordinance. Registration of assignments, transfers and exchanges of
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Series 2010 Bonds shall be made in the manner provided and with the effect stated in the FOS OF
BOND set forth in Exhibit "B" to this Ordinance. Each substitute Serres 2010 Bond shall bear a letter
and/or number to distinguish it from each other Series 2010 Bond.
Except as provided in (c) below, an authorized representative of the g g Paying Agent/Registrar
istrar
_ _
shall, before the delivery of any such Series 2010 Bond, date and manuallysin the Paying
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Agent/Registrar's Authentication Certificate, and no such Series 2010 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 2010 Bonds and Series 2010 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 an
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Series 2010 Bond or portion thereof, and the Paying Agent/Registrar shall provide for the
preparation, execution and delivery of the substitute Series 2010 Bonds in the mannerp rescribed
herein. Pursuant to Chapter 1201, Texas Government Code, and particularly articular) Subchapter D thereof,
___
the duty of transfer and exchange of Series 2010 Bonds as aforesaid is hereby p p imposed a on the
Paying Agent/Registrar, and, upon the execution of said Certificate, the transferred and exchanged
Series 2010 Bond shall be valid, incontestable and enforceable in the same manner and with the same
GTOWN\Uti1SysRev&Refg2008: Ordinance 3
effect as the Series 2010 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 2010 Bonds and Interest. The City hereby further appoints the Paying
Agent A egi strar to act as the paying agent for paying the principal of and interest on the Series 2010
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 2010 Bonds.
(c) In General. The Series 2010 Bonds (i) shall be issued in fully registered form, without
interest coupons, with the principal of and interest on such Series 2010 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 2010 Bonds of the same
Series, (v) shall have the characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii)
the principal of and interest on the Series 2010 Bonds shall be payable, and (viii) shall be administered
and the Paying Agent/Registrar and the City shall have certain duties and responsibilities with respect
to the Series 2010 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. The Series 2010 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 2010 Bond issued in exchange for any
Series 2010 Bond or Series 2010 Bonds issued under this Ordinance the Paying Agent/Registrar shall
execute the PAYING AGENUREGISTRAR'S AUTBENTICATION CERTIFICATE, in the form
set forth in the FORM OF BOND.
(d) Substitute Pgy ng Aent/Re istrar. The City covenants with the registered owners of the
Series 2010 Bonds that at all times while the Series 2010 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 2010 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 Tess 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 2010 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 2010 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
GTOWN\UtdSysRev&Refg2008: Ordinance 4
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/Re 9istrar.
(e) Book-Entry-Only System for Series 2010 Bonds. The Series 2010 Bonds issued in
exchange for the Series 2010 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 2010 Bond for each of
the maturities thereof. Upon initial issuance, the ownership of each such Series 2010 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 2010 Bonds
shall be registered in the name of Cede & Co., as nominee of DTC.
With respect to Series 2010 Bonds registered in the name of Cede & Co., as nominee ofDTC
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 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 2010 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 2010 Bonds, (ii) the delivery to any DTC Participant
or any other person, other than a registered owner of the Series 2010 Bonds, as shown on the
Registration Books, of any notice with respect to the Series 2010 Bonds or (iii) the payment to any
DTC Participant or any other person, other than a registered owner of Ser1es 2010 Bonds, as shown
in the Registration Books of any amount with respect to principal of or interest on the Series 2010
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
2010 Bond is registered in the Registration Books as the absolute owner of such Series 2010 Bond
for the purpose of payment of principal and interest with respect to such Series 2010 Bond, for the
purpose of registering transfers with respect to such Series 2010 Bond and for all other purposes
whatsoever. The Paying Agent/Re 9istrar shall pay all principal of and interest on the Series 2010
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 res ect
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to payment of principal of and interest on the Series 2010 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 2010 Bond certificate evidencing the obligation of the City to make payments ofrinci al and
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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-Only Systems. In the
event that the City determines to discontinue the use of the Book-Entry-Only System through DTC,
GTOWN\Uti1SysRev&Refg2008: Ordinance 5
or DTC determines to discontinue providing its services with respect to the Series'2010 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 2010
Bonds to such successor securities depository or (ii) notify DTC and DTC Participants of the
availability through DTC of Series 2010 Bonds and transfer one or more separate Series 2010 Bonds
to DTC Participants having Series 2010 Bonds credited to their DTC accounts. In such event, the
Series 2010 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 2010 Bonds shall designate, in accordance with the provisions of this Ordinance.
Whenever a successor securities depository has been appointed pursuant to thisara ra h, the terms
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DTC and DTC Participant as used in this Ordinance shall refer to such successor securities depositor
and its participants', respectively.
(g) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Series 2010 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 2010 Bond and all notices
with respect to such Series 2010 Bond shall be made and given, respectively, in the mannerp rovided
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
2010 Bonds,
Section 6. FORM OF SERIES 2010 BOND. The form of each Series 2010 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 2010 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 securityof the Parity
Y
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 andledg e of the
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binding without any physical delivery thereof or further act by the
Pledged Revenues and be valid and bind
City, and the lien' created hereby on the Pledged Revenues for the payment and securityof the Parity
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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 andg
pled e of the
_
Pledged Revenues securing payment of any Subordinate Lien Obligations hereafter issued by y the City.
GTOWN\UtilSysRev&Refg2008: Ordinance 6
Section 8. SPECIAL FUNDS. The City confirms the establishment and maintenance on the
books of the City, so long as any of the Parity Obligations are outstanding and unpaid, of the below
limited Special Funds:
(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 maybe 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.
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
theorderof 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 2010 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
of the ordinances relating to the issuance of any Additional Parity Obligations hereafter issued
by the City.
GTOWN\Uti1SysRev&Refg2008: Ordinance %
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.
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 Obligations (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
of the Series 2010 Bonds and the Outstanding Parity Obligations equal to the Average Annual Debt
Service Requirements of the Series 2010 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 10, 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 2010 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 2010 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
GTOWN\Uti1SysRev&Refg2008: Ordinance 8
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
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 2010 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 2010 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 1.3 5 times the
Average Annual Debt Service Requirements. In the event that the Net Revenues for any Fiscal Year
are less than 1.3 5 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
GT0WN\Ufi1SysRev&Refg2008: Ordinance 9
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 of the
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 or Moody's,
or (ii)d 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.
(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 10, 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 I 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,
GTOWN\Uti1SysRev&Refg2008: Ordinance 10
or (ii) replace such instrument with a surety bond or insurance policy meeting the
requirements of I and 2 above within six months of such occurrence.
(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 toa part of the Series 2010 Bonds and the Outstanding Parity Obligations with the remainder
of the Required Reserve Amount being satisfied by monies and investments and in that case 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-rata 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 of issuance 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
the Parity Obligations from which such excess proceeds are related.
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.
GTOVJN\Uti1SysRev&Refg2008: Ordinance 11
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;p rovided 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 Y 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. An obligation in
p Y g
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
� Y
funds may be invested, together with money in other funds or with other money Yof the Cit, in
common investments of the kind described above, or in a commonool of such investments held b
p Y
the City or its designated agent, which shall not be deemed to be or constitute a commingling of such
g g
money or funds provided that safekeeping receipts or certificates of participation clearly evidencing
the investment or investment pool in which such moneyis invested and the share thereof purchased
_
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 AY
mount) shall be credited to the Revenue Fund semi-annuall and shall constitute
Gross Revenues,
Section 16. PAYMENT OF PARITY OBLIGATIONS. While an of the Parity
Y
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
� � Y�
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 orrinci al payment date, or date of
p p p Y _
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 _res ective paying agent/registrar for the
Parity Obligations not later than the business day next preceding the date such payment is due on the
p g _ _p Y
Parity Obligations. The Paying Agent/Registrar shall destroy all paid Parity Obligations ations 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 Pant
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;
GTOWN\UtdSysRev&Refg2008: Ordinance 12
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 of the Subordinate
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 sut iclent 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 of Parity 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 2010
Bonds; that all action on its part for the creation and issuance of the Series 2010 Bonds has been duly
and effectively taken, and that the Series 2010 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.
GTOWN\Uti1SysRev&Refg2008: Ordinance 13
(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 2010 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 2010 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
with the liens hereof, so that the priority of the liens granted hereunder shall be fully preserved in the
manner provided herein, and it will not create or suffer to be created any `mechanic's, laborer's,
materialman's or other lien or charge which might or could be prior to the liens hereof, or do or suffer
any matter or thing whereby the liens hereof might or could be impaired; provided, however, that no
such tax, assessment or, charge, and that no such claims which might be used as the basis of a
mechanic's, laborer's, materialman's or other lien or charge, shall be required to be paid so long as the
validity of the same shall be contested in good faith by the City.
(e) Operation of System; No Free Service. It will, while the 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 regained.
(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
GTOWN\Uti1SysRev&Refg2008 Ordinance 14
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.
(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 of the 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
GTOWN\Uti1SysRev&Refg2008: Ordinance 15
(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:
(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` of the
System.
(j) 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 Iaccordance 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 Sy tem. 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
GTOWN\Uti1SysRev&Refg2008: Ordinance 16
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
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 of the Series 2010 Bonds as obligations
described in section 103 of the 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 2010 Bonds or the projects financed or refinanced therewith (less amounts deposited
to a reserve fund, if any) are used for any "private business use, if as defined in section
141(b)(6) of the Code or, if more than 10 percent of the proceeds of the Series 2010 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
2010 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 2010 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
GT0WN\Uti1SysRev&Refg2008: Ordinance 17
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 2010 Bondsless amounts deposited
( p
into a reserve fund, if any) is directly or indirectly used to finance loans top ersons, 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 2010
Bonds being treated as "private activity bonds" within the meaning of section 141 b of the
Code;
(5) to refrain from taking any action that would result in the Series 2010 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 2010 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 2010 Bonds, other than investment property acquired
with --
(A) proceeds of the Series 2010 Bonds invested for a reasonable temporary period
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of 3 years or less or, in the case of a refunding bond, for a period of 90 days or less until
such proceeds are needed for the purpose for which the Series 2010 Bonds are issued,
(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 2010 Bonds;
(7) to otherwise restrict the use of the proceeds of the Series 2010 Bonds or amounts
treated as proceeds of the Series 2010 Bonds, as may be necessary, so that the Series 2010
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 of the Bonds) an amount that is at least equal to 90p ercent
of the "Excess Earnings," within the meaning of section 148(0 of the Code and top ay to the
United States of America, not later than 60 days after the 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; and
GTOWN\Uti1SysRev&Refg2008: Ordinance 18
(9) to assure that the proceeds of the Bonds will be used solely for new money projects.
(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 2010 Bonds. The Rebate Fundis 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 2010
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
modify or expand provisions of the Code, as applicable to the Series 2010 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 2010 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 2010 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 2010 Bonds under
section 103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the
City Manager or the Chief Financial Officer 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 2010 Bonds. This Ordinance is
intended to satisfy the official intent requirements set forth in Section 1.150-2 of the Treasury
Regulations.
(d) Allocation Of, and Limitation On Expenditures for the Project. The City covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 2 of this Ordinance (the "Project") on its books and records in accordance with
the requirements of the Code. The City recognizes that in order for the proceeds to be considered
used for the reimbursement of costs, the proceeds must be allocated to expenditures within 18 months
of the later of the date that (1) the expenditure is made, or (2) the Project is completed; but in no
event later than three years after the date on which the original expenditure is paid. The foregoing
notwithstanding, the City recognizes that in order for proceeds to be expended under the Code, the
sale proceeds or investment earnings must be expended no more than 60 days after the earlier of (1)
the fifth anniversary of the delivery of the Series 2010 Bonds, or (2) the date the Series 2010 Bonds
are retired. The City agrees to obtain the advice of nationally -recognized bond counsel if such
expenditure fails to comply with the foregoing to assure that such expenditure will not adversely
affect the tax-exempt status of the Series 2010 Bonds. 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
GTOWN\Uti1SysRev&Refg2008: Ordinance 19
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.
(e) Disposition of Project. 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 of nationally -recognized bond counsel that such sale
or other disposition will not adversely affect the tax-exempt status of the Series 2010 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 1
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 fromg ross
income of the interest.
(f) Designation as Qualified Tax -Exempt Bonds. The City hereby designates the Bonds as
"qualified tax-exempt bonds" as defined in section 265(b)(3) of the Code. In furtherance of such
designation, the City represents, covenants and warrants the following:a that duringthe calendar
year in which the Bonds are issued, the City (including any subordinate entities) has not designated
nor will designate bonds, which when aggregated with the Bonds, will result in more than
$10, 000, 000 ($30,000,000 for taxable years beginning after December 31, 2008 and ending prior to
January 1, 2011) of "qualified tax-exempt bonds" being issued; (b) that the City reasonably anticipates
that the amount of tax-exempt obligations issued, during the calendar year in which the Bonds are
issued, by the City (or any subordinate entities) will not exceed $10,000,000($30,000,000 for taxable
years beginning after December 31, 2008 and ending prior to January 1, 2011); and (c) that the City
will take such action or refrain from such action as necessary, and as morearticularl set forth in this
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Section, in order that the Bonds will not be considered "private activity bonds" within the meaning
of section 141 of the Code.
Section 21. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual ReTorts. The
City shall provide annually to the MSRB, in an electronic format asrescribed b the MSRB within
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six months after the end of any fiscal year, financial information and operating data with respect to
the City of the general type included in the final Official Statement authorized by Section 34 of this
Ordinance, being the information described in Exhibit "C" hereto. Any financial statements to be so
provided shall be (1) prepared in accordance with the accounting principles described in Exhibit "C''
hereto, or such other accountingq employ principles as the City may be required to em to 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 bep rovided. If the
audit of such financial statements is not complete within sucheriod, then the City shall provide
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unaudited financial statements within such period, and audited financial statements for the applicable
fiscal year to the MSRB, when and if the audit report on such statements become available.
If the City changes its fiscal year, it will notify the MSRB of the chang e (and of the date of
the new fiscal year end) prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this Section.
GT0WN\Uti1SysRev&Refg2008: Ordinance 20
The financial information and operating data to be provided pursuant to this Section may be
set forth in full in one or more documents or may be included by specific reference to any document
that is available to the public on the MSRB's internet web site or filed with the SEC. All documents
provided to the MSRB pursuant to this Section shall be accompanied by identifying information as
prescribed by the MSRB.
(b) Material Event Notices. The City shall notify the MSRB, in an electronic format as
prescribed by the MSRB, in a timely manner, of any of the following events with respect to the
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 Bonds;
G. Modifications to rights of holders of the Bonds;
H. Certificate calls;
I. Defeasances;
J. Release, substitution, or sale of property securing repayment of the Bonds; and
K. Rating changes.
The City shall notify the MSRB, in an electronic format as prescribed by the MSRB, in a
timely manner, of any failure by the City to provide financial information or operating data in
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accordance with subsection (a) of this Section by the time required by such subsection. All
documents provided to the MSRB pursuant to this Section shall be accompanied b identi
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information as prescribed by the MSRB.
(c) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and
perform the covenants specified in this Section for so Tong as, but only for so` long as, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that
the City in any event will give notice of any deposit made in accordance with Section S of this
Ordinance that causes the Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of
the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide only
the financial information, operating data, financial statements, and notices which it has expressly
agreed to provide pursuant to this Section and does not hereby undertake to provide any other
information that may be relevant or material to a complete presentation of the City's financial results,
condition, or prospects or 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 Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE 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 this Ordinance for purposes of any other provision of this
Ordinance.
Should the Rule be amended to obligate the City to make filings with or provide notices to
entities other than the MSRB, the City hereby agrees to undertake such obligation with respect to the
Bonds in accordance with the Rule as amended.
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 City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
primary offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the holders of a ma* ority in aggregate principal amount (or any greater amount required by any
other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds
consents to such amendment or (b) a person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interest of
the holders and beneficial owners of the Bonds. If the City so amends the provisions of this Section,
it shall include with any amended financial information or operating data next provided in accordance
with 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.
GTOWN\Uti1SysRev&Refg2008: Ordinance 22
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 Bonds in the primary
offering of the Bonds.
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 an and Additional
Parity Obligations to be deposited to the credit of the 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 of the City sign a written certificate to the effect
that the City is not in default as to any covenant, condition or obligation in connection with all
Outstanding Parity Obligations, and the ordinances authorizing same, and that the Interest and
GTOWN\UfaSysRev&Refg2008: Ordinance 23
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 montheriod ending not
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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.
ations.
(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 thep eriod
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 op inion.
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 andled e
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of the Net Revenues, subordinate and inferior in rank and dignity to the lien on andled e of such
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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
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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 y
b a first
lien on and pledge of the Pledged Revenues, and the Holders thereof shall never have the ri h
right to
demand payment of the principal or interest on the Parity Obligations from any funds raised or to be
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 an time properly invested as
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provided herein) shall be secured in the manner and to the fullest extent required b the laws of Texas
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for the security of public funds, and money on deposit in such Funds shall I be used only for the
purposes permitted by this Ordinance.
Section 28. REMEDIES IN EVENT OF DEFAULT. (a) Events of Default. Each of the
following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event
of Default
(i) the failure to make payment of the principal of or interest on any of the Bonds when
the same becomes due and payable; or
(ii) default in the performance or observance of any other covenant, agreement or
obligation of the City, the failure to perform which materially, adversely affects the rights of
the Registered Owners of the Bonds, including, but not limited to, theirros ect or ability to
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be repaid in accordance with this Ordinance, and the continuation thereof for ap eriod of 30
days after notice of such default is given by any Registered Owner to the City and not to be
extended for more than 60 days, without prior written consent of the Insurer.
(b) Remedies for Default.
(i) Upon the happening of any Event of Default, then and in every case, any g Re istered
Owner or an authorized representative thereof, including, but not limited to, a trustee or
trustees therefor, may proceed against the City, or any official, officer or employee ofthe City
in their official capacity, for the purpose of protecting and enforcing the rights of the
Registered Owners under this Ordinance, by mandamus or other suit, action or special
proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted
by law, including the specific performance of any covenant or agreement contained herein,
or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the
Registered Owners hereunder or any combination of such remedies.
(ii) It is provided that all such proceedings shall be instituted and maintained for the equal
benefit of all Registered Owners of Bonds then outstanding.
(c) Remedies Not Exclusive.
(i) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given hereunder or under the Bonds or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of
this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available
as a remedy under this Ordinance.
GTOWN\Uti1SysRev&Refg2008: Ordinance 25
The exercise of any remedy herein conferred or reserved shall not be deemed a waiver
of any other available remedy.
(iii) By accepting the delivery of a Bond authorized under this Ordinance, such
Registered Owner agrees that the certifications required to effectuate any covenants or
representations contained in this Ordinance do not and shall never constitute or give rise to
a personal or pecuniary liability or charge against the officers, employees or trustees of the
City or the City Council
(iv) None of the members of the City Council, nor any other official or officer, agent, or
employee of the City, shall be charged personally by the Registered Owners with any liability,
or be held personally liable to the Registered Owners under any term or provision of this
Ordinance, or because of any Event of Default or alleged Event. of Default under this
Ordinance.
Section 29. DEFEASANCE OF SERIES 2010 BONDS. (a) Any Series 2010 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 event provided in subsections (c) and
(e) of this Section, when payment of the principal of such Series 2010 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 2010 Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such
Series 2010 Bond and the interest thereon shall no longer be secured by, payable from, or 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 2010
Bond as aforesaid when proper notice of redemption of such Series 2010 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 2010 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 2010 Bonds
and premium, if any, and interest thereon, shall be applied to and used solely for the payment of the
particular Series 2010 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 shallerform the services of Paying
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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 b this Ordinance.
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(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
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commercial bank pursuant to this Section for the payment of Series 2010 Bonds and such Series 2010
Bonds shall not have in fact been actually paid in full, no amendment of thep rovisions of this. Section
shall be made without the consent of the registered owner of each Series 2010 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 thep rovisions of this
Ordinance, the City may call such Defeased Bond for redemption upon com plying with the provisions
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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, ORDESTROYED SERIES
2010 BONDS. (a) Replacement Bonds. In the event any outstanding Series 2010 Bond is damaged,
mutilated, lost, stolen or destroyed, the Paying Agent/Registrar shall cause to bep rinted, executed
and delivered, a new bond of the same principal amount, maturity and interest rate, as the damaged,
mutilated, lost, stolen or destroyed Series 2010 Bond, in replacement for such Series 2010 Bond in
the manner hereinafter provided.
(b) Application for Replacement Bonds. Application for replacement of damaged, mutilated,
lost, stolen or destroyed Series 2010 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 2010 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 2010 Bond, the registered owner shall furnish to the City and to the Paying A ent/Re istrar
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evidence to their satisfaction of the loss, theft or destruction of such Series 2010 Bond, as the case
may be. In every case of damage or mutilation of a Series 2010 Bond, the registered owner shall
GT0WN\Uti1SysRev&Refg2008: Ordinance 27
surrender to the Paying Agent/Registrar for cancellation the Series 2010 Bond so damaged or
mutilated.
(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in the
event any such Series 2010 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
2010 Bond, the City may authorize the payment of the same (without surrender thereof except in the
case of a damaged or mutilated Series 2010 Bond) instead ofissuing a replacement Series 2010 Bond,
provided security or indemnity is furnished as above provided in this Section.
(d) Charge for, Issuing Replacement Series 2010 Bonds. Prior to the issuance of any
replacement bond, the Paying Agent/Registrar shall charge the registered owner of such Series 2010
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 2010 Bond is
lost, stolen or destroyed shall constitute a contractual obligation of the City whether or not the lost,
stolen or destroyed Series 2010 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 2010 Bonds duly issued under this Ordinance.
(e) Authority for Issuing Replacement Series 2010 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 2010 Bonds in the form and manner and with the effect, as
provided in Section 5(a) of this Ordinance for Series 2010 Bonds issued in exchange for other Series
2010 Bonds.
Section 31. AMENDMENT OF ORDINANCE. (a) The Bond Insurer and the holders
ofthe Parity Obligations aggregating a majority in principal amount ofthe 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,
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;
GTOWN\Uti1SysRev&Refg2008: Ordinance 28
(5) effect 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 Bond 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
future holders of the same Parity Obligation during such period. Such consent may be revoked at any
time after six months from the date of the first publication of such notice by the 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.
GTOWN\Uti1SysRev&Refg2008: Ordinance 29
(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 orp ower 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 b any Rating Agency, 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 of the owners of the outstanding
Parity Obligations;
(4) To make such changes, modifications or amendments as may necessary be necessa or
desirable, which shall not adversely affect the interests of the owners of the outstandingParity
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Obligations, in order, to the extent permitted by law, to facilitate the economic andp ractical
utilization of credit agreements with respect to the Parity g Obli ations including, without
limitation, supplementing the definition of "Annual Debt Service Req uirements 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 p other respect whatever,
provided that (i) such modification shall be, and be expressed to be, effective only after all
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Parity Obligations outstanding at the date of the adoption of such modification shall cease to
be outstanding, and '(ii) such modification shall be specifically referred to in the text of all
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Additional Parity Obligations issued after the date of the adoption of such modification.
Notice of any such amendment may be published or given by Y the Cit in the manner described in
subsection (b) of this Section; provided, however, that thep ublication 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
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pursuant to such amendatory ordinance.
Section 32. SALE AND DELIVERY OF SERIES 2010 BONDS, OFFICIAL
STATEMENT. The Bonds are hereby sold to the bidder whose bidp roduced the lowest net
effective interest rate, pursuant to the taking ofp ublic bids therefor, on this date and shall be
delivered to Southwest Securities, Inc. (the "Purchaser") at a rice of $10 155 398.37(representingp � �
the paramount of the Bonds of $10,120,000 plus accrued interest of $35,398,37). The B onds shall
initially be registered in the name of Cede & Co.
GTOWN\Uti1SysRev&Refg2008: Ordinance 30
Section 33, CUSTODY, APPROVAL AND REGISTRATION OF SERIES 2010
BONDS; BOND COUNSEL'S OPINION, BOND INSURANCE AND CUSIP NUMBERS. The
Mayor of the City is hereby authorized to have control of the Series 2010 Bonds initially issued and
delivered hereunder and all necessary records and proceedings pertaining to the Series 2010 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 2010 Bonds said Comptroller of Public Accounts (or a deputy
designated in writing to act for said Comptroller) shall manually sign the Comptroller's Registration
Certificate attached to such Series 2010 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
2010 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 2010 Bonds.
Section 34 APPROVAL OF OFFICIAL STATEMENT. The City hereby approves the
form and content of the Notice of Sale and Preliminary Official Statement and Official Statement
relating to the Series 2010 Bonds and any addenda, supplement or amendment thereto, and approves
the distribution of such Official Statement in the reoffering of the Series 2010 Bonds by the Initial
Purchaser 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 l2, 2010, 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 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 the City
Attorney.
Section 36 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 37. 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 maybe necessary or
desirable in order to carry out the terms and provisions of this Ordinance, the Series 2010 Bonds, the
initial sale and delivery of the Series ZOlO Bonds, the Paying Agent/Registrar Agreement, any
insurance commitment letter or insurance policy and the Official Statement. In addition, prior to the
GTOWN\Uti1SysRev&Refg2008: Ordinance 31
initial delivery of the Series 2010 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 of the 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 (111) obtain the approval of the Series 2010 Bonds by the Texas
Attorney General's office.
In case any officer of the City whose signature shall appear on any Series 2010 Bond shall
cease to be such officer before the delivery of such Series 2010 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 38. 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 2010 Bonds and the validity of the lien on and pledge of the
Pledged Revenues to secure the payment of the Series 2010 Bonds.
Section 39. 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 40. 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 2010 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 of the Series 2010 Bonds.
Section 41. 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 42. 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.
GTOWN\Uti1SysRev&Refg2008: Ordinance 32
Section 43. REPEALER. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
Section 44. 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 45. PERFECTION. Chapter 1208, Government Code, applies to the issuance of
the Series 2010 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 2010 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 2010 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.
Section 46, 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 2010 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 2010 Bonds.
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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 2010
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 of the owner thereof other than by acceleration or other demand conditioned upon default
by the City on such Debt, or be payable in respect of any required purchase of such Debt by the City)
in such Fiscal Year, and, for such purposes, any one or more of the following rules shall apply at the
election of the City:
(1) 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;
GTOWN\UtiI1SysRev&Refg2008: Ordinance A-1
(2) Consent Sinkina 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 shallp ermt 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 extentrovided for b
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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
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with respect to such Debt on or before the times required b such schedule and provided
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further that this clause (2) shall not apply where the Cit has elected to apply the rule set forth
City pp Y
in clause (1) above;
(3) Prepaid Debt. Principal of and interest on Series 2010 Bonds and Additional Parity
Obligations, or portions thereof, shall not be included in the computation of the Annual Debt
Service Requirements for any Fiscal Year for which such principal or in_terest are payable
from funds on deposit or set aside in trust for thepay ment 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 thepay ment
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
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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 an 24 month
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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
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Buyer, in which case an index of revenue bonds with maturities of at least 20y ears 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
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Obligations taken as a whole, such composite fixed rate shall be used in determining g the
Annual Debt Service Requirement with respect to such ParityObligations
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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 p
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respect to prosective
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calculations, only those payments reasonably expected to be made in the period eriod shall be taken
into account in making the calculation.
GTOWN\Uti1SysRev&Refg2008: Ordinance A-2
'Average 14nnual 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.
"Bond Insurer" means any 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 of The 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 service
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
Debt deposited for cancellation; and the
it shall not be considered Debt. No item shall be
GTOWN\Uti1SysRev&Refg2008: Ordinance
A3
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 of an agency
or instrumentality of the United States of America, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date the City 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 2010 Bonds are rated as to investment
quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent, (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 2010 Bonds, are rated as to investment quality by a
nationally recognized investment rating firm no less than "AAA" or its equivalent and (iv) any other
then authorized securities or obligations under applicable State law that may be used to defease
obligations such as the Series 2010 Bonds.
"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 of the United States
of America, including obligations that are unconditionally guaranteed by the United States of America
(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 of the System, currently ending on September 30 of each year, which maybe 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.
GTOWN\Uti1SysRev&Refg2008: Ordinance A4
"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
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.
"Insurance Policy" means the insurance policy issued by the Insurer guaranteeing the
scheduled payment of principal of and interest on the Series 2010 Bonds when due.
"Insurer" means any insurer of the Series 2010 Bonds, or any successor thereto or assignee
thereof.
"Interest and Sinking Fund' means the special Fund maintained by the provisions of Sections
8 and 11 of this Ordinance.
"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. The definition includes a two-month reserve amount, as
provided under Section 10 of this Ordinance.
"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.
GTOWN\Uti1SysRev&Refg2008: Ordinance A-5
"MSRB means the Municipal Securities Rulemaking Board.
"Net Revenues" and "Net Revenues of the City's System" mean all Gross Revenues remaining
after deducting the Maintenance and Operating Expenses.
Ordinance means this ordinance finally adopted by the City Council on April 27, 2010
"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 2010 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,
GTOWN\Uti1SysRev&Refg2008: Ordinance Amb
"Previously Issued Parity Obligations" means the Outstanding Parity Obligations of the City
entitled 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 Bonds, Series 2002," "City of Georgetown, Texas Utility System Revenue Bonds,
Series 2003"City of Georgetown, Texas Utility System Revenue Bonds, Series 2005," "City of
Georgetown Texas Utility System Revenue Bonds, Series 2006, "City of Georgetown, Texas Utility
System Revenue and Refunding Bonds, Series 2006A," "City of Georgetown, Texas Utility System
Revenue and Refunding Bonds, Series 2007" and "City of Georgetown, Texas Utility System
Revenue and Refunding Bonds, Series 2008."
"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.
"RequiredReserve Amount" means the amount required to be maintained in the Reserve Fund
pursuant to the provisions of Section 12 of this Ordinance.
"RequiredReserveFundDeposits" 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 Section 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 City is obligated to provide funds up to
and including the maximum amount and under the conditions specified in such agreement or
instrument.
GTOWN\Uti1SysRev&Refg2008: Ordinance
A-7
"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 15 c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Series 2010 Bonds" means, the City of Georgetown, Texas Utility System Revenue Bonds,
Series 2010 authorized by this Ordinance.
"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.
"Stated Maturity "means the annual principal payments of the Parity Obligations payable on
the respective date 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
GTOWN\UtilSysRev&Refg2008 Ordinance A'S
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.
"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 of time equal to the greater
of (i) the period of time commencing on the date of issuance of such Balloon Debt and ending on the
final maturity date of such Balloon Debt or (ii) twenty-five years.
R UNITED STATES OF AMERICA PRINCIPAL
STATE OF TEXAS AMOUNT
CITY OF GEORGETOWN, TEXAS
UTILITY SYSTEM REVENUE BOND, SERIES 2010
INTEREST RATE MATURITY DATE DATE OF SERIES CUSIP NO.
April 15, 2010
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 3 60 -day year of twelve 3 0 -day months) from April 15, 2010 at the Interest Rate per
annum specified above, payable on February 15, 2011, 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 of New York Mellon Trust Company, N.A.., Dallas, Texas which is the "Paying
GTOWN\Uti1SysRev&Refg2008: Ordinance B4
Agent/Registrar" for this Bond. The payment of interest on this Bond shall be made by the Paying
Agent/Registrar to the Registered Owner hereof on each interest payment date by check, 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 ofthe scheduled payment date ofthe 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 ofthe 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 of this 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 a series ofBonds dated April 15, 2010, authorized in accordance with
the Constitution and laws of the State of Texas in the principal amount of $10,120,000 FOR THE
PURPOSE OF (I) CONSTRUCTING IMPROVEMENTS AND EXTENSION TO THE
CITY,S UTILITY SYSTEM (HEREINAFTER DEFINED) AND (II) PAYING THE COSTS
ASSOCIATED WITH THE ISSUANCE OF THE BONDS,
GTOWN\Uti1SysRev&Refg2008: Ordinance B-2
ON AUGUST 15, 2019 OR ON ANY DATE THEREAFTER, the Bonds maturing on and
after August 15, 2020 may be redeemed prior to their scheduled maturities, at the option of the City,
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 Agentaegistrar 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
. B-3
GTOWN\Ub1SysRev&Refg2008: Ordinance
such interest rate shall be selected in accordance with the arrangements between the City and the
securities depository.
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 ofthis 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
signment, in form and with guarantee of signatures satisfactory to the Paying
proper instruments of as
Agent/Registrar, evidencing assignment of this Bond or any portion or portions hereof in any integral
multiple of $5,000 to the assignee or assignees in whose name or names this Bond or any such
portion or portions hereof is or are to be 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 of business 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
hP mai]Prl to Ap R PCYictPrPd OW"Pre of the RnnriC
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
obligation of the City, and that the interest on and principal of this 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 a lien 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
Previously Issued Parity Obligations or any Additional Parity Obligations.
the Bonds, the Pre
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 si nature
g
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.
low
Je
00000L
• r (facsimile signature)
C • Secretary e0ou Mayor
[CITY SEAL]
GTOWN\Uti1SysRev&Refg2008: Ordinance B -5
OF THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE:
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public `Accounts of the State of Texas.
Witness my signature and seal this
(COMPTROLLER'S SEAL) Comptroller of Public Accounts
of the State of Texas
FORM OF PAYING AGENUREGISTRAR' 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; THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.
Paying Agent/Registrar
By
Authorized Representative
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 NOTICE The signature above must
a member firm of the New York Stock correspond with the name of the Registered
Exchange or a commercial bank or trust Owner as it appears upon the front of this
company. 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 BELOW, the City of Georgetown, 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 February 15 in each of
the years, in the principal installments and bearing interest at the per annum rates set forth in the
following schedule:
Year Principal Rate
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, 2010 at the respective Interest Rate per
annum specified above. Interest is payable on February 15, 2009 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.''
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 areas 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.
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.
OFFICIAL BID FORM
Honorable Mayor and City Council
City of Georgetown, Texas
101 East 7th Street
Georgetown, Texas 78627
Members of the City Council;
April 16, 2010
Reference is made to your Official Statement and Notice of Sale and Bidding Instructions, dated April 15, 2010, of $10,120,000
CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM REVENUE BONDS, SERIES 2010, both of which constitute a part
hereof.
For your legally issued Bonds, as described in said Notice of Sale and Bidding Instructions and Official Statement, we will pay
you par and accrued interest from date of issue to delivery to us for Bonds maturing and bearing interest as follows:
Maturity
(August 15)
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Principal
Amount
$ 195,000
350,000
370,000
390,000
410,000
430,000
450,000
470,000
495,000
520,000
Interest
Rate
-- %
3.00%
c Jt0 %
%
t % o
%
%
f 1 V %
Maturity
(August 15)
2021
2022
2023
2024
2025
2026
2027
2028
2029
Principal
Amount
$ 545,000
575,000
605,000
635,000
665,000
700,000
735,000
770,000
810,000
Interest
Rate
�r 570 %
ob %
AA %
4yQ0 %
4400 %
4 . %
goo %
1- dDo %
_rvowssi %
Of the principal maturities set forth in the table above, term bonds have been created as indicated in the following table (which
may include multiple term bonds, one term bond or no term bond if none is indicated). For those years which have been
combined into a term bonds, the principal amount shown in the table above shall be the mandatory sinking fund redemption
amounts in such years except that the amount shown in the year of the term bond maturity date shall mature in such year. The
term bonds created are as follows:
Term Bonds
Maturing
August 15
Year of
First Mandatory
Redemption
Principal
Amount
Our calculation (which is not a part of this bid) of the interest cost from the above is:
TRUE INTEREST COST
Interest
Rate
We are having the Bonds of the following maturities � � insured by at a
premium of $ , said premium to be paid by the Bond Purchaser. Any fees to be paid to the rating
agencies as a result of said insurance will be paid by the City.
The Initial Bonds shall be registered in the name of , which will, upon payment for the Bonds, be
cancelled by the Paying Agent/Registrar, The Bonds will then be registered in the name of Cede & Co. (DTC's partnership
nominee), under the book -entry -only system.
A bank cashiers check or certified check of the I c� Bank
� , in the amount of
$202,400, which represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening
of this bid), and is submitted in accordance with the terms as set forth in the Official Statement and Notice of Sale and Bidding
Instructions.
Al'I ' 1 U 21: 441 Wwllbl? T (TOU F1 vMW UU I HWl I LOK11 ltd 1 w44 P. U�� U� 'raVI
Wc. vao to accept delivery of Cho Bands utkiizing the book -afar! anly systorn through CFTC and malCe p4VITIent for the tnrtild
Bond icy iinittadi tcly �va;lable f ltd& in tho Corpomtc Trust Di�,risiot�. '�'1Yr Bank O:' Now York Mellon Trout Cgsliprxi:��., Dalia�►t
Tea:as, 001 later than 10;00 AM, CDT, ali Wy 20: rp 1 Ot or thercallor on the date alit 13ot* 4t'e art md i'ae ae-livory: pursuant to
thr, tcixns SO forth In t1W Notioa of Sato and Flidding Insimationfi, it will bo thf: Obligo'O t of the Primbawr of tho MW3 to
complete the lYX li, i i i i tyuaa6o1ina l ra,
Tlie undargianod awca to Qu mplatc, exaoute, un4 dciivor to the City, not later thnil the clow of businoss On the busine qday
fel of ing thr a%kfar4 of tie We of the tnnd4, a wrffllcm relating To the "iRwe pri N' of tho Tnnds in the form and to thep efTc4l*
ccoonvawng tkib NOW= of Salo and Biddlu'laAtruc�ttat d Wil each � ian�cs cher ire as �t� #r be noo pt, bl t the City.
We agnea to proyl4v in wrNing 4he initial tvaffei iris pricos and ather terms, If any, to the Finwelal Art ar by the close Df
;tre Unt bUtlnou dsy, atter the awfir'd.
NRMO ca#'Bond Rifellsser or m4nogv
Michael - i!&=
AWhim ,,O'Rc miefuative
Tte aboyc mid forogoing bid is hero y in till
Syndicift Ionubtrs:
lin a� cpt y by i l:y of �r aftr tiq {t'ex , tlii flip '27 ' div of prii, 20101
1W I -
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Cit, of 0aorgat&wrj, ?rexa4