HomeMy WebLinkAboutORD 2023-69 - Ercot Financial Security IncreaseGeorgetown | ERCOT Notes 2023 | Ordinance Cert
CERTIFICATE FOR ORDINANCE NO. 2023-69
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:
1.The City Council of the City convened in REGULAR MEETING ON THE 28TH
DAY OF NOVEMBER, 2023, (the "Meeting"), and the roll was called of the duly constituted
officers and members of the City, to-wit:
Josh Schroeder, Mayor
Amanda Parr, Councilmember District 1
Shawn Hood, Councilmember District 2
Mike Triggs, Councilmember District 3
Ron Garland, Councilmember District 4
Kevin Pitts, Councilmember District 5
Jake French, Councilmember District 6
Ben Stewart, 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 THE ISSUANCE OF
CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM SUBORDINATE LIEN
REVENUE NOTES (ERCOT FINANCIAL SECURITY), TAXABLE SERIES;
PLEDGING CERTAIN REVENUES IN SUPPORT OF THE NOTES; APPROVING A
NOTE PURCHASE AGREEMENT AND A PAYING AGENT/REGISTRAR
AGREEMENT; AND AUTHORIZING OTHER RELATED MATTERS
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 Meeting; 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
NONE
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Georgetown | ERCOT Notes 2023 | Ordinance Cert
foregoing paragraphs are the duly chosen, qualified and acting officers and members of the City
Council as indicated therein; that each of the officers and members of the City Council was duly
and sufficiently notified officially and personally, in advance, of the time, place and purpose of
the Meeting, and that the Ordinance would be introduced and considered for passage at the
Meeting, and each of the officers and members consented, in advance, to the holding of the
Meetings for such purpose, and that the Meeting was open to the public and public notice of the
time, place and purpose of the meeting was given, all as required by Chapter 551, Texas
Government Code, as amended.
3.The Mayor of the City has approved and hereby approves the Ordinance; that the
Mayor and the City Secretary of the City have duly signed the Ordinance; and that the Mayor
and the City Secretary of the City hereby declare that their signing of this Certificate shall
constitute the signing of the attached and following copy of the Ordinance for all purposes.
SIGNED AND SEALED the 28th day of November, 2023
[CITY SEAL]
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Georgetown I ERCOT Notes 2023 I Ordinance Cert
ORDINANCE AUTHORIZING THE ISSUANCE OF
CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM SUBORDINATE LIEN
REVENUE NOTES (ERCOT FINANCIAL SECURITY), TAXABLE SERIES;
PLEDGING CERTAIN REVENUES IN SUPPORT OF THE NOTES; APPROVING A
NOTE PURCHASE AGREEMENT AND A PAYING AGENT/REGISTRAR
AGREEMENT; AND AUTHORIZING OTHER RELATED MATTERS
Adopted: November 28, 2023
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Georgetown | ERCOT Notes 2023 | Ordinance
ORDINANCE AUTHORIZING THE ISSUANCE OF
CITY OF GEORGETOWN, TEXAS UTILITY SYSTEM SUBORDINATE LIEN
REVENUE NOTES (ERCOT FINANCIAL SECURITY), TAXABLE SERIES;
PLEDGING CERTAIN REVENUES IN SUPPORT OF THE NOTES; APPROVING A
NOTE PURCHASE AGREEMENT AND A PAYING AGENT/REGISTRAR
AGREEMENT; AND AUTHORIZING OTHER RELATED MATTERS
WHEREAS, the City of Georgetown, Texas (the “City”) is a home-rule municipality,
acting as such under the Constitution and laws of the State of Texas, has a population in excess of
50,000, and has outstanding long-term indebtedness that is rated by a nationally recognized rating
agency for municipal securities in one of the four highest rating categories for long-term
obligations; and
WHEREAS, capitalized terms used herein shall have the meanings given to them in
Section 1.01 hereof; and
WHEREAS, the Outstanding Parity Obligations and the Outstanding Subordinate Lien
Obligations are payable from Pledged Revenues; and
WHEREAS, the City is permitted by the ordinances authorizing the Outstanding Parity
Obligations and the Outstanding Subordinate Lien Obligations to encumber the Pledged Revenues
with additional Parity Obligations or additional Subordinate Lien Obligations or other bonds or
obligations payable from a subordinate lien on the Pledged Revenues; and
WHEREAS, on December 1, 2010, a nodal wholesale electric market design was
implemented within ERCOT's service area, and various electric market participants, including the
City, are required to comply with the ERCOT Nodal Protocols adopted by ERCOT; and
WHEREAS, on October 1, 2023, ECROT implemented amendments to its Nodal
Protocols requiring additional financial security by eliminating unsecured credit limits and
guarantee amounts; and
WHEREAS, in order to continue to comply with the ERCOT Nodal Protocols, the City
Council finds that it is necessary for the City to provide ERCOT additional financial security in an
amount not to exceed $20,005,000 and, in furtherance thereof, the City Council hereby authorizes
the Notes and their installment deliveries to the Note Purchaser, to induce the Note Purchaser to
enter into the Note Purchase Agreement and deliver the Financial Security to ERCOT as is
necessary for the City to participate in the ERCOT electric nodal market at the levels it deems
prudent; and
WHEREAS, the City Council finds and determines that it should issue the Notes, in a
principal amount not to exceed $20,005,000, as a series of Subordinate Lien Obligations pursuant
to this Ordinance to finance Project Costs of Eligible Projects, all in accordance with and subject
to Chapter 1371 and the terms, conditions, and limitations contained herein; and
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WHEREAS, the City Council finds, determines and represents that (i) the proceeds of any
draw upon the Financial Security by ERCOT are for the payment, on behalf or for the benefit of
the City, of Project Costs of Eligible Projects, (ii) such proceeds and the drawing upon such
Financial Security shall constitute and shall be the payment of the purchase price of the
corresponding Authorized Installment pursuant to the provisions of this Ordinance and (iii) the
Note Purchaser's delivery of the Financial Security to ERCOT is additional and sufficient
consideration for the transactions and agreements contemplated in this Ordinance; and
WHEREAS, this Ordinance constitutes an "obligation authorization," as defined in
Chapter 1371; and
WHEREAS, the Notes are issued pursuant to Texas law, including the Acts; and
WHEREAS, in the event of any draw upon the Financial Security by ERCOT, the City
Council intends to refinance Notes with refunding bonds issued under Chapter 1207, Texas
Government Code, as amended, on parity with or subordinate to City's Outstanding Parity
Obligations and, therefore (in accordance with Section 1371.057(c) of Chapter 1371), the City will
treat the Notes as having the intended term and payment schedule of such refunding bonds, as
determined by the City Authorized Representative; provided that the City retains the right to use
lawfully available funds to pay all or a portion of any Notes issued; and
WHEREAS, the meeting was open to the public and public notice of the time, place and
purpose of said meeting was given pursuant to Chapter 551, Texas Government Code;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
GEORGETOWN, TEXAS THAT:
ARTICLE I
DEFINITIONS AND CONSTRUCTION OF TERMS
Section 1.01. 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 1.02. Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural number
shall be considered to include the singular, and words of the masculine, feminine, or neuter gender
shall be considered to include the other genders.
Section 1.03. Interpretation. All references herein to “Articles,” “Sections” and other
subdivisions are to the corresponding Articles, Sections or subdivisions of this Ordinance, and the
words “herein,” “hereof,” “hereunder” and other words of similar import refer to this Ordinance
as a whole and not to any particular Article, Section or subdivision hereof.
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ARTICLE II
NOTE AUTHORIZATION AND SPECIFICATIONS
Section 2.01. Amount, Purposes and Designation of the Notes. Under and pursuant to
the authority granted hereby and subject to the limitations contained herein, the City Council
hereby authorizes the issuance of a series of notes designated "CITY OF GEORGETOWN,
TEXAS UTILITY SYSTEM SUBORDINATE LIEN REVENUE NOTES (ERCOT FINANCIAL
SECURITY), TAXABLE SERIES" (the "Notes") in a maximum aggregate principal amount not
to exceed TWENTY MILLION FIVE THOUSAND DOLLARS ($20,005,000) for the purpose to
finance Project Costs of Eligible Projects, all in accordance with the Acts and the terms, conditions,
and limitations contained in this Ordinance. The authority to issue Notes from time to time under
the provisions of this Ordinance and the Note Purchase Agreement shall exist until the end of the
Authorized Installment Draw Period regardless of whether at any time prior to the end of the
Authorized Installment Draw Period there are any Notes outstanding.
Section 2.02. Date, Denominations, Numbers, Maturities, and Terms of the Notes.
(a) Terms of Notes. There initially shall be issued, sold and delivered fully registered notes
reflecting Authorized Installments (except for the Initial Note), without interest coupons,
numbered consecutively from R-1 upward (except the Initial Note provided to the Attorney
General of the State of Texas which shall be numbered T-1), payable to the Note Purchaser,
maturing not later than the Maximum Maturity Date, in the manner, on the dates, in the years and
in the principal amounts, respectively, and dated, all as set forth in this Ordinance, the Pricing
Certificate to be executed and delivered by the City Authorized Representative pursuant to
subsection (b) of this Section and the Note Purchase Agreement. The Pricing Certificate is hereby
incorporated in and made a part of this Ordinance.
An Initial Note bearing interest at zero percent (0%) in the aggregate principal amount
determined in the Pricing Certificate will be issued on the Original Issue Date and will be dated as
set forth in the Pricing Certificate. The Initial Note shall, after approval by the Attorney General
of the State of Texas and registration by the Comptroller of Public Account of the State of Texas,
be provided to the Paying Agent/Registrar, and concurrently with the delivery of the Initial Note,
the initial Authorized Installment of the Notes, in the aggregate principal amount determined in
the Pricing Certificate, will be issued, in accordance with the terms of the Note Purchase
Agreement executed by the City and Wells Fargo Bank, National Association, as the Note
Purchaser.
The initial Authorized Installment of the Notes delivered on the Original Issue Date shall
be dated as determined in the Pricing Certificate. An Authorized Installment of the Notes delivered
after the Original Issue Date shall be dated as of its Issue Date. The Authorized Installments of the
Notes shall bear interest as determined in the Pricing Certificate and the Note Purchase Agreement
from the Issue Date of an Authorized Installment of the Notes until payment of the principal
amount thereof at maturity or prior redemption or prepayment.
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Subject to applicable terms, limitations, and procedures contained herein, after the delivery
of the initial Authorized Installment, Authorized Installments of the Notes may be sold and
delivered pursuant to the terms of the Note Purchase Agreement in consideration of and in the
amount of, any draw upon the Financial Security by ERCOT, reflecting payment by the Note
Purchaser of the purchase price of such Notes concurrently upon payment to ERCOT, on behalf
of the City, pursuant to such draw upon the Financial Security. No Authorized Installments may
be issued and delivered after the end of the Authorized Installment Draw Period, and no Authorized
Installment may be issued and delivered in an amount that exceeds the Maximum Available
Amount in effect as of the date of the applicable draw on the Financial Security; provided that the
aggregate principal amount of all Authorized Installments issued and delivered under this
Ordinance may at times exceed the then applicable Maximum Available Amount due to a
reduction in such amount subsequent to the issuance of Authorized Installments pursuant to the
terms of the Financial Security, if provided for by the Financial Security, but in no case may the
aggregate principal amount of all Authorized Installments issued and delivered under this
Ordinance exceed the amount of Notes authorized by the Pricing Certificate. The City shall
promptly notify the Paying Agent/Registrar of any changes to the Maximum Available Amount
made pursuant to the Note Purchase Agreement and of the end of the Authorized Installment Draw
Period, provided that the Paying Agent/Registrar may alternatively receive actual notice of such
events from the Note Purchaser.
The Note Purchaser shall give written notice to the City and the Paying Agent/Registrar of
any draw upon the Financial Security by ERCOT, provided such notice is not required for the
delivery of an Authorized Installment. The Paying Agent/Registrar shall issue and deliver an
Authorized Installment in the principal amount of any draw on the Financial Security to the Note
Purchaser pursuant to the terms of this Ordinance and the Note Purchase Agreement; provided,
however, in consideration of the delivery of the Financial Security and the unconditional obligation
of the Note Purchaser thereunder, any particular Authorized Installment corresponding to the
related draw on the Financial Security is deemed issued and delivered to the Note Purchaser on
the date of any such drawing.
In the event the Pricing Certificate and the Note Purchase Agreement as provided in
Section 2.05 shall not be executed on or before 5:00 p.m. on May 28, 2024, the delegation to the
City Authorized Representatives pursuant to this Ordinance shall cease to be effective unless the
City Council shall act to extend such delegation.
In satisfaction of Section 1201.022(a)(3), Texas Government Code, the City Council
determines that the delegation of the authority to the City Authorized Representative to approve
the final terms and conditions of the Notes as set forth in this Ordinance is, and the decisions made
by the City Authorized Representative pursuant to such delegated authority and incorporated in
the Pricing Certificate will be, in the best interests and shall have the same force and effect as if
such determination were made by the City Council and the City Authorized Representative is
hereby authorized to make and include in a Pricing Certificate an appropriate finding to that effect.
(b) Selling and Delivering Notes. As authorized by Chapter 1371, Texas Government
Code, as amended and this Ordinance, a City Authorized Representative is hereby authorized to
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act on behalf of the City in selling and delivering the Notes, including the Authorized Installments,
and carrying out the other procedures specified in this Ordinance, including determining and fixing
(i) the Original Issue Date of the Notes, (ii) the principal amount of the initial Authorized
Installment, (iii) the price at which the Notes will be sold, (iv) the date or dates in which the Notes
will mature, (v) the aggregate principal amount to mature on any such date or dates, (vi) the
aggregate principal amount of Notes, (vii) the fixed or variable rate of interest to be borne by the
Notes, (viii) the interest payment periods, (ix) the dates, price, and terms, if any, upon and at which
the Notes shall be subject to redemption or prepayment prior to maturity at the option of the City,
(x) the dated dates of the Initial Note and the initial Authorized Installment of the Notes delivered
on the Original Issue Date and (xi) all other matters relating to the issuance, sale, and delivery of
the Notes and the delivery of the Note Purchase Agreement (as provided in Section 2.05 hereof),
all of which shall be specified in the Pricing Certificate; provided that (A) the price to be paid for
the Notes shall not be less than 100% of the aggregate original principal amount thereof plus
accrued interest thereon from their date to their delivery and (B) none of the Notes shall bear
interest at a rate greater than the Maximum Rate. It is further provided, however, that,
notwithstanding the foregoing provisions, the Initial Note shall not be delivered unless prior to
delivery, the Notes have been rated by a nationally recognized rating agency for municipal
securities (I) in one of the four highest rating categories for long-term obligations or (II) in one of
the three highest rating categories for short-term obligations, as required by Chapter 1371.
(c) General. The Notes (i) may be redeemed or prepaid prior to the respective scheduled
maturity dates, (ii) shall have the characteristics, and (iii) shall be signed and sealed and the
principal of and interest on the Notes shall be payable, all as provided, and in the manner required
or indicated, in this Ordinance, including the FORM OF NOTES set forth in Exhibit “B” to this
Ordinance, as may be modified in the Pricing Certificate, and in the Note Purchase Agreement.
(d) Payments on Holidays. In the event that any date for payment of the principal of or
interest on the Notes is a Saturday, Sunday, legal holiday, or day on which banking institutions in
the city where the Paying Agent/Registrar is located are authorized by law or executive order to
close, then the date for such payment will be the next succeeding day that is not a Saturday,
Sunday, legal holiday, or day on which such banking institutions are authorized to close, and such
extended period of time shall be included in the computation of interest; provided, however, that
the payment of interest on the Notes on such extended date shall have the same force and effect as
if made on the original payment date.
Section 2.03. Payment of Notes; Paying Agent/Registrar. The principal of, premium,
if any, and the interest on the Notes shall be payable in immediately available funds, without
exchange or collection charges to the Note Purchaser, in any coin or currency of the United States
of America that at the time of payment is legal tender for the payment of public and private debts.
Payments of principal of and interest on the Certificates may be made by wire transfer of
immediately available funds at no cost to the Note Purchaser.
The City Authorized Representative shall designate in the Pricing Certificate a bank to act
as the Paying Agent/Registrar for the Notes. In the Note Purchase Agreement, the Note Purchaser,
by accepting the appointment as Paying Agent/Registrar, will acknowledge receipt of copies of
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this Ordinance, and is deemed to have agreed to the provisions hereof. The City agrees and
covenants to cause to be kept and maintained at the office of the Paying Agent/Registrar a Security
Register, all as provided herein, in accordance with the terms and provisions of the Paying
Agent/Registrar Agreement and such reasonable rules and regulations as the Paying
Agent/Registrar and the City may prescribe. In addition, to the extent required by law, the City
covenants to cause to be kept and maintained the Security Register or a copy thereof in the State
of Texas. The City covenants to maintain and provide a Paying Agent/Registrar at all times until
the Notes are paid and discharged, and any successor Paying Agent/Registrar shall be a bank, trust
company, financial institution, or other entity duly qualified and legally authorized to serve as and
perform the duties and services of Paying Agent/Registrar for the Notes. The City will not, without
the prior written consent of the Note Purchaser (such consent not to be unreasonably withheld),
appoint or permit the appointment of a successor Paying Agent/Registrar.
The principal of, premium, if any, and interest on the Notes due and payable by reason of
maturity, redemption, or otherwise, shall be payable only to the owner thereof appearing on the
Security Register, and, to the extent permitted by law, neither the City nor the Paying
Agent/Registrar, nor any agent of either, shall be affected by notice to the contrary.
The Paying Agent/Registrar Agreement in substantially the form and substance attached
hereto as Exhibit “C” is hereby approved and the City Authorized Representative is hereby
authorized and directed to complete, amend, modify and execute the Paying Agent Agreement as
necessary.
Section 2.04. Redemption. The Notes shall be subject to redemption or prepayment prior
to scheduled maturity at such times and with such provisions as provided in the Pricing Certificate
and the Note Purchase Agreement.
Section 2.05. Note Purchase Agreement. The draft of the Note Purchase Agreement
relating to the Notes, in substantially the form submitted to the City Council with this Ordinance,
is hereby approved pursuant to the terms of this Ordinance, including the prepayment, redemption,
term and interest rates applicable to any Notes purchased thereunder. Subject to the provisions of
this Ordinance, the City Authorized Representative may determine the final terms of the Note
Purchase Agreement consistent with Section 1371.056(c) of Chapter 1371. The Note Purchase
Agreement shall constitute a "credit agreement" under Chapter 1371. Any City Authorized
Representative and the City’s Bond Counsel are each hereby authorized to complete, amend and
modify the Note Purchase Agreement and the Mayor and Mayor Pro Tem, and any City Authorized
Representative are each hereby authorized to execute and deliver such Note Purchase Agreement,
in the form so amended, completed and modified, and to take such other actions as shall be required
under the Note Purchase Agreement in connection with the issuance of the Financial Security. The
Note Purchase Agreement and the obligation of the City to make certain payments thereunder,
including certain fees, will constitute a Subordinate Lien Obligation. Any City Authorized
Representative may enter into transactions under the Note Purchase Agreement and execute any
instruments in connection therewith, including requesting any increases or decreases to the stated
amount of the Financial Security in accordance with the provisions of the Note Purchase
Agreement but in no case may the stated amount of the Financial Security exceed (i) the amount
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of Notes authorized by the Pricing Certificate minus (ii) the amount of the initial Authorized
Installment of the Notes delivered on the Original Issue Date.
Section 2.06. Registration and Ownership.
(a) Registration of Notes. The Paying Agent/Registrar shall obtain, record, and maintain
in the Security Register the name and address of each owner of any Note issued under and pursuant
to the provisions of this Ordinance.
(b) Ownership of Notes. The entity in whose name any Note shall be registered in the
Security Register at any time shall be deemed and treated as the absolute owner thereof for all
purposes of this Ordinance, whether or not such Note shall be overdue, and, to the extent permitted
by law, the City Council and the Paying Agent/Registrar shall not be affected by any notice to the
contrary; and payment of, or on account of, the principal of, premium, if any, and interest on any
such Note shall be made only to such Registered Owner. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Note to the extent of the sum or sums so
paid.
Section 2.07. Form of Notes. The Notes and the Authentication Certificate of the Paying
Agent/Registrar to appear on each of the Notes, shall be substantially in the form set forth in
Exhibit “B” to this Ordinance with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers or
other marks of identification and such legends and endorsements (including any reproduction of
an opinion of counsel) thereon as may be established by the City or determined by the officers
executing such Notes as evidenced by their execution thereof. Any portion of the text of any Notes
may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Notes shall be typewritten, photocopied, printed, lithographed, engraved, or produced
in any other similar manner, all as determined by the officers executing such Notes as evidenced
by their execution thereof.
Section 2.08. Execution and Registration. Notes shall be executed on behalf of the City
by the Mayor and City Secretary under its seal reproduced or impressed thereon. The signature of
said officers on the Notes may be manual or facsimile. Notes bearing the manual or facsimile
signatures of individuals who are or were the proper officers of the City as of their authorization
shall be deemed to be duly executed on behalf of the City, notwithstanding that such individuals
or either of them shall cease to hold such offices at the time of delivery of the Notes to the Note
Purchaser, all as authorized and provided in Chapter 1201, Texas Government Code.
Subject to Section 2.02(a) hereof, no Note shall be entitled to any right or benefit under
this Ordinance, or be valid or obligatory for any purpose, unless there appears on such Note the
Authentication Certificate of the Paying Agent/Registrar substantially in the form provided in
Exhibit “B” to this Ordinance, executed by the manual signature of an authorized officer or
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employee of the Paying Agent/Registrar, and either such certificate duly signed upon any Note
shall be conclusive evidence that such Note has been duly certified, registered, and delivered.
Section 2.09. Control and Custody of Notes. The City Authorized Representative shall
be and is hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas, including the printing and supply of
printed Notes.
Furthermore, any one or more of the Mayor and Mayor Pro Tem, and the City Authorized
Representative are each hereby authorized and directed to furnish and execute such documents
relating to the City and its financial affairs as may be necessary for the issuance of Notes, the
approval of the Attorney General of the State of Texas of Notes and, together with the City's bond
counsel and the Paying Agent/Registrar, make the necessary arrangements for the delivery of
Notes to the Note Purchaser thereof.
Section 2.10. Mutilated, Destroyed, Lost, and Stolen Notes. If (1) any mutilated Note
is surrendered to the Paying Agent/Registrar, or the City and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered
to the City and the Paying Agent/Registrar such security or indemnity as may be required to save
each of them harmless, then, in the absence of notice to the City or the Paying Agent/Registrar that
such Note has been acquired by a bona fide purchaser, the City shall execute and, upon its request,
the Paying Agent/Registrar shall register and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a new Note of the same maturity date and of like tenor
and principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost, or stolen Note has become or is about to become
due and payable, the City in its discretion may, instead of issuing a new Note, pay such Note and
the interest due thereon to the date of payment.
Upon the issuance of any new Note under this Section, the City may require payment by
the Note Purchaser of a sum sufficient to cover any tax or other governmental charge imposed in
relation thereto and any other expenses (including the fees and expenses of the Paying
Agent/Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or
stolen Note shall constitute a replacement of the prior obligation of the City, whether or not the
mutilated, destroyed, lost, or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and ratably with all other outstanding Notes.
ARTICLE III
ESTABLISHMENT OF NOTE PROGRAM AND SECURITY THEREFOR
Section 3.01. Establishment of Program. This Ordinance is intended to establish a
master plan for the authorization, issuance, sale, delivery, form, characteristics, provisions of
payment and redemption, and security of the Notes.
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Section 3.02. Security; Subordinate Lien; and Pledge.
(a) The Notes and the other obligations under the Note Purchase Agreement are special
obligations of the City, and the payment of the principal of and interest on the Notes and the other
obligations under the Note Purchase Agreement are and shall be secured by and payable only from
a lien on and pledge of (i) the Pledged Revenues, and the Pledged Revenues are further pledged to
the establishment and maintenance of the Payment Fund; provided that the pledge of Pledged
Revenues securing the Notes and the other obligations under the Note Purchase Agreement is
expressly made subordinate and inferior to the lien on and pledge of Pledged Revenues securing
Parity Obligations, and the Notes and the other obligations under the Note Purchase Agreement
shall constitute Subordinate Lien Obligations, as provided in the ordinances authorizing Parity
Obligations, payable on a parity with all Subordinate Lien Obligations, and (ii) all amounts in the
Payment Fund created and maintained pursuant to this Ordinance, and such amounts constitute
funds held for that purpose, subject only to the provisions of this Ordinance permitting the
application thereof for the purposes and on the terms and conditions set forth herein. The pledge
herein made shall be irrevocable until the Notes and the other obligations under the Note Purchase
Agreement have been paid and retired. The granting of this pledge by the City does not limit in
any manner the rights of the City to issue any additional debt or incur any other obligations, except
as otherwise set forth in the Note Purchase Agreement. The Notes are not secured by or payable
from any funds raised or to be raised by the levy of taxes by the City nor a mortgage or deed of
trust on any properties, whether real, personal, or mixed, constituting the System or otherwise, nor
from any source other than as specified in this Ordinance.
(b) The City shall not issue Notes on a parity with the Parity Obligations.
(c) The City covenants to pay the principal of, premium, if any, and the interest on the
Notes when due, whether by reason of maturity or redemption.
(d) Chapter 1208, Texas Government Code, applies to the issuance of the Notes and the
pledge of the proceeds of the sale of Notes and the Pledged Revenues granted by the City under
this section, and such pledge is therefore valid, effective, and perfected. If State law is amended
at any time while the Notes are outstanding such that the pledge granted by the City under this
section is to be subject to the filing requirements of Chapter 9, Texas Business & Commerce Code,
then in order to preserve to the Note Purchaser the perfection of the security interest in said pledge,
the City agrees to take such measures as it determines are reasonable and necessary under State
law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code
and enable a filing to perfect the security interest in said pledge to occur.
Section 3.03. No Reserve Funds Established. No reserve fund or account for the payment
of debt service on the Notes or any other reserve or contingency fund or account is established or
required by this Ordinance.
ARTICLE IV
CREATION OF FUNDS; PAYMENT
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Section 4.01. Payment Fund. (a) A City Authorized Representative may create and
establish a separate and special fund to be designated as the "City of Georgetown, Texas Utility
System Subordinate Lien Revenue Notes (ERCOT Financial Security), Taxable Series Payment
Fund" (the "Payment Fund"). Moneys on deposit in the Payment Fund shall be used to pay
principal of and interest on Notes hereafter issued at the respective interest payment, maturity or
redemption dates (if any) of each issue of such Notes as provided herein and the repayment of any
amounts owing under a Note Purchase Agreement.
(b) Pending the expenditure of moneys in the Payment Fund, if created and established,
for authorized purposes, moneys deposited in said fund may be invested and reinvested by a City
Authorized Representative in Permitted Investments, as directed in writing by a City Authorized
Representative. Funds in the Payment Fund shall be held by a Depository.
Section 4.02. Disposition of Note Proceeds. Proceeds from the initial Authorized
Installment of the Notes shall, as determined in the Pricing Certificate, promptly upon receipt
thereof, be applied by the City Authorized Representative to pay a portion of the costs of issuance
of the Notes.
Proceeds relating to any other Authorized Installments of the Notes corresponding to a
drawing upon the Financial Security by ERCOT will be for the payment, on behalf or for the
benefit of the City, of Project Costs of Eligible Projects.
Section 4.03. Defeasance of Notes. Notes shall not be deemed to have been paid in full
unless payment of the principal of and interest on the Notes either (a) shall have been made or
caused to be made in accordance with the terms of the Notes, the Note Purchase Agreement and
this Ordinance, or (b) shall have been provided for on or before such due date by irrevocably
depositing with or making available to the Paying Agent/Registrar in accordance with an escrow
agreement or other instrument for such payment (i) lawful money of the United States of America
sufficient to make such payment or (ii) Defeasance Securities that mature as to principal and
interest in such amounts and at such times as will insure the availability of sufficient money to
provide for such payment.
ARTICLE V
COVENANTS OF THE CITY
Section 5.01. Limitation on Issuance. Unless this Ordinance is amended and modified
by the City in accordance with the provisions of Article VI, the City covenants that there will not
be issued and Outstanding at any time more than the maximum aggregate principal amount of
Notes as provided in Section 2.01 of this Ordinance. The City, however, does reserve the right to
increase said amount by an amendment to this Ordinance duly adopted by the City Council.
Section 5.02. Tax Exemption. The City does not intend to issue the Notes in a manner
such that the Notes would constitute obligations described in section 103(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and all applicable temporary, proposed, and
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final regulations and procedures promulgated thereunder (the "Regulations"). The City covenants
that it will not file an Internal Revenue Form 8038 or an Internal Revenue Form 8038-G with
respect to the Notes.
Section 5.03. Federal Tax Information Reporting. To the extent required by the Code
and the Regulations it shall be the duty of the Paying Agent/Registrar to report to the Registered
Owners and the Internal Revenue Service (i) the amount of "reportable payments," if any, subject
to back up withholding during each year and the amount of tax withheld, if any, with respect to
the payments on the Notes and (ii) the amount of interest or amount treated as interest, such as
original issue discount, on the Notes required to be included in the gross income of the owners
thereof for federal income tax purposes.
Section 5.04. General Covenants. The City further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) Performance. The City will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Ordinance and in the Notes; it will
promptly pay or cause to be paid the principal of and interest on the Notes on the dates and in the
places and manner prescribed therein; and the City 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 Payment Fund, and any Registered Owner of Notes may require the City, its City
Council, and its officials and employees, to carry out, respect, or enforce the covenants and
obligations of this Ordinance, by all legal and equitable means, including specifically, but without
limitation, the use and filing of mandamus proceedings, in any court of competent jurisdiction,
against the City, its City Council, and its officials and employees.
(b) City's Legal Authority. The City represents that 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 Notes; that all action on its part for the creation and issuance of the Notes has
been duly and effectively taken, and that the Notes in the hands of the Registered Owners thereof
are and will be valid and enforceable special obligations of the City in accordance with their terms.
(c) Title. The City 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 and
owners of the Parity Obligations and the Notes, against the claims and demands of all persons
whomsoever, that it is lawfully qualified to pledge the Pledged Revenues to the payment of the
Parity Obligations and the Notes in the manner prescribed herein, and has lawfully exercised such
rights.
(d) Liens. The City 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
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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. The City will, while any Notes are
Outstanding, 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.
(f) Further Encumbrance. While the Notes are Outstanding, the City will not
additionally encumber the Pledged Revenues in any manner, except as permitted in the ordinances
authorizing Parity Obligations in connection with Additional Parity Obligations, unless said
encumbrance is made on a parity with, or junior and subordinate in all respects to the liens, pledges,
covenants and agreements hereof; but the right of the City to issue obligations subordinate to the
Notes for any lawful purpose payable from a lien on all or a portion of the Pledged Revenues that
is subordinate to the Notes is specifically recognized and retained. This Ordinance does not and
is not intended to affect, limit, or prohibit the issuance of obligations of the City payable wholly
or in part from ad valorem taxes.
(g) Sale or Disposal of Property. While any Notes are Outstanding, the City will not
sell, convey, mortgage, encumber, lease or in any manner transfer title to, or otherwise dispose of
the System, or any significant or substantial part thereof; provided that whenever the City deems
it necessary to dispose of any other property, machinery, fixtures or equipment, it may sell or
otherwise dispose of such property, machinery, fixtures or equipment when it has made
arrangements to replace the same or provide substitutes therefor, unless it is determined that no
such replacement or substitute is necessary; and, provided further, that the City retains the right to
sell, convey, mortgage, encumber, lease or otherwise dispose of any significant or substantial part
of the System if (i) the City Manager delivers a certificate to the City Council to the effect that,
following such action by the City, the System is expected to produce Gross Revenues in amounts
sufficient in each Fiscal Year while any of the Parity Obligations or the Notes are to be outstanding
to comply with the obligations of the City contained in the ordinances authorizing Parity
Obligations and this Ordinance; (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 or the Notes 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.
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(h) Insurance. (1) The City 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
Registered Owners 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, 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 of Parity Obligations bears to the
total Outstanding principal of all Parity Obligations, provided that if on any such occasion
the principal of any such series is not subject to redemption, it shall not be regarded as
Outstanding in making the foregoing computation; or
(ii) if none of the Outstanding Parity Obligations is subject to redemption, then
for the purchase on the open market and retirement of said Parity Obligations in the same
proportion as prescribed in the foregoing clause (i), to the extent practicable; provided that
the purchase price for any Parity Obligation shall not exceed the redemption price of such
Parity Obligation on the first date upon which it becomes subject to redemption; or
(iii) to the extent that the foregoing clauses (i) and (ii) cannot be complied with
at the time, the insurance proceeds, or the remainder thereof, shall be deposited in a special
and separate trust fund, at an official depository of the City, to be designated the Insurance
Account. The Insurance Account shall be held until such time as the foregoing clauses (i)
and/or (ii) can be complied with, or until other funds become available which, together
with the Insurance Account, will be sufficient to make the repairs or replacements
originally required, whichever of said events occurs first.
(2) The foregoing provisions of (1) above notwithstanding, the City shall have
authority to enter into coinsurance or similar plans where risk of loss is shared in whole or
in part by the City.
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(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. The City 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. The City will not grant any franchise or permit for the acquisition,
construction or operation of any competing facilities which might be used as a substitute for the
System's facilities and, to the extent that it legally may, the City will prohibit any such competing
facilities. Notwithstanding the foregoing, the City retains the right, however, to "opt in" to electric
competition in accordance with State law if "opting in" will not materially adversely impact the
Net Revenues of the System as evidenced by a certification of the City Manager.
(k) Disaggregation of System. The City retains the right to disaggregate the System into
one or more independent resulting systems if (i) the City Manager delivers a certificate to the City
Council to the effect that, following such action by the City, the remaining System is expected to
produce Gross Revenues in amounts sufficient in each Fiscal Year while any of the Parity
Obligations and the Notes are to be outstanding to comply with the obligations of the City
contained in this Ordinance and in the ordinances authorizing 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 and the Notes 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 or any Outstanding Notes.
Section 5.05. Rates And Charges. For the benefit of the Registered Owners of the Notes
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 Notes 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
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allowance for contingencies, to produce Gross Revenues in each Fiscal Year reasonably
anticipated to be sufficient:
A. to pay Maintenance and Operating Expenses;
B. to produce Pledged Revenues at least equal to the greater of 1.25 times the Average
Annual Debt Service Requirements (as defined and determined in accordance with the ordinances
authorizing Parity Obligations) or 1.10 times the Maximum Annual Debt Service Requirements as
defined and determined in accordance with the ordinances authorizing Parity Obligations);
C. to produce Pledged Revenues in amounts sufficient to enable the City to make the
deposits and credits, if any, from Pledged Revenues to any reserve fund established by and in
accordance with the ordinances authorizing Parity Obligations securing any issue or series of
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), sufficient to pay the
principal of and interest on any Subordinate Lien Obligations issued by the City, including all
payments and deposits required to be made into the Payment Fund for the Notes (including any
obligations due and owning under a Note Purchase Agreement), and the amounts required to be
deposited in any reserve or contingency fund created for the payment and security of any other
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 the Ordinance reflect that the Pledged Revenues
for the Fiscal Year covered thereby were less than necessary to meet the requirements of this
Section, the City Council will review the operations of the System and the rates and charges for
services provided, and the City Council will make the necessary adjustments or revisions, if any,
in order that the Pledged Revenues for the succeeding year will be sufficient to satisfy the
foregoing coverage requirements.
Section 5.06 Records and Accounts - Annual Audit. The City covenants and agrees that
so long as any of the Notes 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 Registered Owners of the Notes or any duly authorized agent or agents of
such Registered Owners shall have the right to inspect the System and all properties comprising
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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
Registered Owner of the Notes 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.
ARTICLE VI
AMENDMENTS
Section 6.01. Amendments or Modifications with Consent of Note Purchaser. Any
amendment to this Ordinance shall be subject to the prior written approval of the Note Purchaser
as provided in the Note Purchase Agreement.
Section 6.02. Effect of Amendments. Upon the adoption by the City Council of any
ordinance to amend this Ordinance pursuant to the provisions of this Article VI, this Ordinance
shall be deemed to be amended in accordance with the Amended Ordinance, and the respective
rights, duties, and obligations of the City and all the owners of then Outstanding Notes and all
future Notes shall thereafter be determined, exercised, and enforced under this Ordinance.
Section 6.03. Additional Amendments. Subject to the provisions of Section 6.01 hereof,
the City may, from time to time and at any time, adopt an Amended Ordinance which amends the
provisions of an earlier Amended Ordinance.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Ordinance to Constitute a Contract; Equal Security. In consideration of
the acceptance of the Notes by those who shall hold the same from time to time, this Ordinance
shall be deemed to be and shall constitute a contract between the City and the Registered Owners
and the Note Purchaser and the pledge made in this Ordinance by the City and the covenants and
agreements set forth in this Ordinance to be performed by the City shall be for the equal and
proportionate benefit, security, and protection of all owners of the Notes and the Note Purchaser,
without preference, priority, or distinction as to security or otherwise of any of the Notes over any
of the others by reason of time of issuance, sale, or maturity thereof or otherwise for any cause
whatsoever, except as expressly provided in or permitted by this Ordinance or with respect to the
Notes, the Note Purchase Agreement.
Section 7.02. Individuals Not Liable. All covenants, stipulations, obligations, and
agreements of the City contained in this Ordinance shall be deemed to be covenants, stipulations,
obligations, and agreements of the City and the City Council to the full extent authorized or
permitted by the Constitution and laws of the State of Texas. No covenant, stipulation, obligation,
or agreement herein contained shall be deemed to be a covenant, stipulation, obligation, or
agreement of any member of the City Council or agent or employee of the City in his or her
individual capacity and neither the members of the City Council nor any officer of the City shall
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be liable personally on the Notes or be subject to any personal liability or accountability by reason
of the issuance thereof.
Section 7.03. Additional Actions; Recitals.
(a) The Mayor and Mayor Pro Tem, the City Authorized Representatives and the City
Secretary, and all other officers, employees and agents of the City are hereby authorized and
directed, jointly and severally, to do any and all things and to execute and deliver any and all
documents which they may deem necessary or advisable in order to consummate the issuance,
sale, and delivery of the Notes and otherwise to effectuate the purposes of this Ordinance, the Note
Purchase Agreement, and the Paying Agent/Registrar Agreement. In addition, the Mayor and
Mayor Pro Tem, the City Secretary, the City Authorized Representatives, and Bond Counsel are
hereby authorized to approve, subsequent to the date of adoption of this Ordinance, any
amendments or supplements to the above named documents, and any technical amendments to this
Ordinance as may be required by a Rating Agency as a condition to the granting or maintaining of
a rating on the Notes acceptable to a City Authorized Representative, or as may be required by the
Office of the Attorney General of the State in connection with the approval of this Ordinance or to
correct any ambiguity or mistake or properly or more completely document the transactions
contemplated and approved by this Ordinance. In addition, the statements, findings,
representations, and determinations set forth in the recitals to this Ordinance are hereby
incorporated into and made a part of this Ordinance for all purposes.
(b) The obligation of the Note Purchaser to accept delivery of the Initial Note is subject to
the Note Purchaser being furnished with the final, approving opinion of Bond Counsel, which
opinion shall be dated as of and delivered on the date of initial delivery of the Initial Note. The
engagement of such firm as Bond Counsel to the City in connection with issuance, sale and
delivery of the Notes is hereby approved and confirmed. The execution and delivery of an
engagement letter, to the extent desired by the City, between the City and such firm, with respect
to such services as bond counsel, is hereby authorized in such form as may be approved by the
Mayor or the City Manager and the Mayor or the City Manager is hereby authorized to execute
such engagement letter. Additionally, a closing instruction letter executed by the City Manager or
its Finance Director shall further provide for the fees and expenses to be paid for such bond counsel
services.
(c) A City Authorized Representative shall promptly give written notice to each Rating
Agency then rating the Notes, as appropriate, of any changes or amendments to this Ordinance, or
any other operative document used in connection with the issuance from time to time of the Notes.
Section 7.04. Severability of Invalid Provisions. If any one or more of the covenants,
agreements, or provisions herein contained shall be held contrary to any express provisions of law
or contrary to the policy of express law, though not expressly prohibited, or against public policy,
or shall for any reason whatsoever be held invalid, then such covenants, agreements, or provisions
shall be null and void and shall be deemed separable from the remaining covenants, agreements or
provisions and shall in no way affect the validity of any of the other provisions hereof or of the
Notes issued hereunder.
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Section 7.05. Performance on Business Days. Except as set forth in Section 2.02(d)
hereof, whenever under the terms of this Ordinance or the Notes, the performance date of any
provision hereof or thereof shall occur on a day other than a business day, then the performance
thereof need not be made on such day but may be performed on the next succeeding business day
with the same force and effect as if made on the date of performance is scheduled.
Section 7.06. Limitation of Benefits With Respect to the Ordinance. With the
exception of the rights or benefits herein expressly conferred, nothing expressed or contained
herein or implied from the provisions of this Ordinance or the Notes is intended or should be
construed to confer upon or give to any person other than the City, the Note Purchaser, and the
Paying Agent/Registrar, any legal or equitable right, remedy, or claim under or by reason of or in
respect to this Ordinance or any covenant, condition, stipulation, promise, agreement, or provision
herein contained. This Ordinance and all of the covenants, conditions, stipulations, promises,
agreements, and provisions hereof are intended to be and shall be for and inure to the sole and
exclusive benefit of the City, the Note Purchaser, and the Paying Agent/Registrar as herein and in
the Paying Agent/Registrar Agreement and the Note Purchase Agreement provided.
Section 7.07. Approval of Attorney General. No Notes herein authorized to be issued
shall be sold or delivered by a City Authorized Representative until the Attorney General of the
State shall have approved the Notes authorized by this Ordinance and the proceedings related
thereto and the Note Purchase Agreement, and other agreements and proceedings as may be
required in connection therewith, and the Comptroller of Public Accounts of the State of Texas
has registered the record of proceedings relating to this Ordinance and the Notes, all as is required
by the Acts.
Section 7.08. Notices. (a) The City Authorized Representative shall provide the Rating
Agencies with written notice of the occurrence of the following events: (i) the appointment of a
successor Paying Agent/Registrar, (ii) amendments or supplements to the Ordinance or the Paying
Agent/Registrar Agreement, (iii) the defeasance of all Outstanding Notes and (iv) the termination
of the Note program.
(b) Except as otherwise required herein, all notices required or authorized to be given to
the City or the Paying Agent/Registrar pursuant to this Ordinance shall be in writing and shall be
sent by registered or certified mail, postage prepaid, to the following addresses or otherwise given
in a manner deemed, in writing, acceptable to the party to receive the notice:
1. to the City, to:
808 Martin Luther King Jr. Street
Georgetown Texas 78626
Attn: Finance Director
Telephone: (512) 930-3677
2. to the Paying Agent/Registrar, to:
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Georgetown | ERCOT Notes 2023 | Ordinance
(as provided in the Paying Agent/Registrar Agreement)
3. to the Note Purchaser, to:
(as provided in the Note Purchase Agreement)
or to such other addresses as may from time to time be furnished to the parties, effective upon the
receipt of notice thereof given as set forth above.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. Each of the following events shall constitute and is
referred to in this Ordinance as an “Event of Default”:
(a) a failure by the City to pay principal of or interest on any Note when the same shall
have become due and payable;
(b) a failure by the City to observe and perform any covenant, condition, agreement or
provision contained in the Notes or in this Ordinance on the part of the City to be observed or
performed, which materially, adversely affects the rights of the owners of the Notes, including,
but not limited to, their prospect or ability to be repaid in accordance with this Ordinance and
which failure shall continue for a period of 30 days after written notice, specifying such failure
and requesting that it be remedied, shall have been given to the City by the Paying Agent/Registrar
or any owner of the Notes;
(c) bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
including, without limitation, proceedings under the United States Bankruptcy Code (as the same
may from time to time be hereafter amended), or other proceedings for relief under any federal or
State bankruptcy law or similar law for the relief of debtors are instituted by the City;
(d) an “Event of Default” shall have occurred and be continuing under the Note Purchase
Agreement; or
(e) the occurrence of any other Event of Default as is provided in an Amended Ordinance.
If any Event of Default has occurred, but is subsequently cured or waived, then such Event
of Default shall no longer constitute an Event of Default hereunder.
Section 8.02. Remedies for Default.
(a) Upon the happening of any Event of Default, any Registered Owner or an authorized
representative thereof, including, but not limited to, a trustee or trustees therefore, may proceed
against the City or the City Council, as appropriate, for the purpose of protecting and enforcing
the rights of the owners of Notes 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
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to enjoin any act or thing that may be unlawful or in violation of any right of the owners of Notes
hereunder or any combination of such remedies. It is provided that all such proceedings shall be
instituted and maintained for the equal benefit of all owners of Notes then Outstanding.
(b) 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 Notes 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 Notes shall not be available as a remedy under
this Ordinance.
(c) By accepting the delivery of a Note authorized under this Ordinance, a 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 or employees of the City or the City Council.
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EXHIBIT “A”
DEFINITIONS
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
independent certified public accountants, in either case, with demonstrated expertise and
competence in public accountancy.
“Acts” means Chapter 1371 and Chapter 1502, Texas Government Code, as amended.
“Amended Ordinance” means any ordinance amending or amending and restating this
Ordinance entered into as provided in Article VI of this Ordinance.
“Authorized Installment” means on the Original Issue Date, an amount determined in the
Pricing Certificate and on each Issue Date thereafter, an amount equal to the amount of any draw
upon the Financial Security by ERCOT, reflecting payment by the Note Purchaser of the purchase
price of such Authorized Installment of the Notes to ERCOT on behalf of the City.
“Authorized Installment Draw Period” means the period commencing on the Original Issue
Date and ending immediately following the effective date of the end of the term of the Financial
Security, whether by termination, non-renewal or otherwise.
“Bond Counsel” means McCall, Parkhurst & Horton L.L.P. or an attorney or law firm of
attorneys of national recognition selected or engaged by the City with knowledge and experience
in the field of municipal finance.
“Chapter 1371” means Chapter 1371, Texas Government Code, as amended.
“City” means the City of Georgetown, Texas.
“City Authorized Representative” means one or more of the following officers or
employees of the City: the Mayor, the Mayor Pro-Tem, the City Manager, each Assistant City
Manager, the City’s Finance Director (or any successors to any such positions), or such other
officer or employee of the City authorized by the City Council to act as a City Authorized
Representative.
“City Council” means the City Council of the City.
“Defeasance Securities” means (i) direct, noncallable obligations of the United States of
America, including obligations that are unconditionally guaranteed by the United States of
America, (ii) noncallable obligations of an agency or instrumentality of the United States of
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America, including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date of the purchase thereof are rated as to investment quality by
a nationally recognized investment rating firm not less than AAA or its equivalent, (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 governing body of the City adopts or
approves the proceedings authorizing the financial arrangements are rated as to investment quality
by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iv) any
other then authorized securities or obligations under applicable state law in existence at the time
of such defeasance that may be used to defease obligations such as the Notes.
“Depository” means such banks or trust companies, or any one of them at any time, selected
by the City for the custody of the special funds to be maintained by the City.
“Eligible Projects” means, as permitted by the Acts, including Chapter 1371, the
acquisition, purchase, sale of any property, including any contractual obligations related thereto,
for which, except with respect to the initial Authorized Installment, ERCOT may draw upon the
Financial Security for the payment thereof, on behalf or for the benefit of the City.
“ERCOT” means The Electric Reliability Council of Texas and any successor thereto.
“Financial Security” means the letter of credit of the Note Purchaser provided for in the
Note Purchase Agreement (and any extension or amendment of such letter of credit or any
substitute or replacement letter of credit of the Note Purchaser) provided to ERCOT for the benefit
of the City pursuant to Section 16 of the ERCOT Nodal Protocols.
“Fiscal Year” means the 12-month operational period of the City commencing on
October 1 of each year, or such other twelve-month period as may in the future be designated as
the Fiscal Year of the City.
“Gross Revenues” and “Gross Revenues of the City's System” mean all revenues, income
and receipts of every nature derived or received by the City from the operation and ownership of
the System; including the interest income from investment or deposit of money in any fund or
account created by any ordinance authorizing Parity Obligations or Subordinate Lien Obligations
or any fund or account maintained by the City in connection with the System; and any other
revenues hereafter pledged to the payment of Parity Obligations or Subordinate Lien Obligations.
“Initial Note” means the non-interest bearing Note, numbered T-1, delivered to and held
by the Paying Agent/Registrar in accordance with Section 2.02 hereof.
“Issue Date” means the date of delivery of an Authorized Installment of the Notes.
“Latest Draw Date” shall mean November 30, 2026, as may be extended in accordance
with the Note Purchase Agreement.
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"Maintenance and Operating Expenses" means the reasonable and necessary expenses of
operation and maintenance of the 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 Parity Obligations or Subordinate Lien 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 in the ordinances authorizing Parity
Obligations.
“Maximum Available Amount” means the maximum amount that is available to be drawn
on the Financial Security on any particular day.
“Maximum Maturity Date” means the ninetieth day after the Latest Draw Date, as may be
extended in accordance with the Note Purchase Agreement.
“Maximum Rate” means the lesser of the (i) maximum net effective interest rate (as defined
in and calculated in accordance with the provisions of Chapter 1204, Texas Government Code, as
amended) and (ii) maximum non-usurious lawful rate of interest permitted by applicable law.
“Net Revenues” and “Net Revenues of the City's System” mean all Gross Revenues
remaining after deducting the Maintenance and Operating Expenses.
“Note Purchase Agreement” means the Note Purchase Agreement between the City and
the Note Purchaser, including any amendment, supplement. restatement or extension of such Note
Purchase Agreement pursuant to the terms thereof.
“Note Purchaser” means Wells Fargo Bank, National Association, and its successors and
assigns under the Note Purchase Agreement.
“Notes” means the “City of Georgetown, Texas Utility System Subordinate Lien Revenue
Notes (ERCOT Financial Security), Taxable Series”, including any Authorized Installments,
issued pursuant to the provisions of this Ordinance, having the terms and characteristics specified
in Section 2.02 and in the form described in Exhibit “B” hereto.
“Ordinance” means this “Ordinance Authorizing the Issuance of City Of Georgetown,
Texas Utility System Subordinate Lien Revenue Notes (ERCOT Financial Security), Taxable
Series; Pledging Certain Revenues In Support Of The Notes; Approving A Note Purchase
Agreement And A Paying Agent/Registrar Agreement; And Authorizing Other Related Matters,”
adopted by the City Council on November 28, 2023 and as it may be amended or supplemented
from time to time by an Amended Ordinance.
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“Original Issue Date” means the date of delivery of the initial Authorized Installment, the
Note Purchase Agreement and the Financial Security.
“Outstanding”, when used with respect to Notes, means all Notes which have been
authenticated and delivered under this Ordinance, except: (a) Notes cancelled or purchased by the
Paying Agent/Registrar for cancellation or delivered to or acquired by the Paying Agent/Registrar
for cancellation and, in all cases, with the intent to extinguish the debt represented thereby
(including Notes surrendered pursuant to Section 2.10 hereof); (b) Notes in lieu of which other
Notes have been authenticated; (c) Notes that have become due (at maturity or on redemption or
otherwise) and for the payment of which sufficient moneys, including interest accrued to the due
date, are held by the Paying Agent/Registrar; (d) Notes which, under the terms of this Ordinance,
are deemed to be no longer Outstanding; and (e) for purposes of any consent or other action to be
taken by the Registered Owners of a specified percentage of Notes under this Ordinance, Notes
held by or for the account of the City or by any person controlling, controlled by or under common
control with the City.
"Outstanding", when used with respect to Parity Obligations or Subordinate Lien
Obligations, as applicable, means, as of the date of determination, all Parity Obligations or
Subordinate Lien Obligations, as applicable, theretofore delivered under the ordinance authorizing
such obligations, except:
(1) Parity Obligations or Subordinate Lien Obligations, as applicable, theretofore
cancelled and delivered to the City or delivered to the Paying Agent/Registrar for
cancellation;
(2) Parity Obligations or Subordinate Lien Obligations, as applicable, deemed paid
pursuant to the defeasance provisions of the ordinance authorizing such obligations;
(3) Parity Obligations or Subordinate Lien Obligations, as applicable, upon transfer of
or in exchange for and in lieu of which other Parity Obligations or Subordinate Lien
Obligations, as applicable, have been authenticated and delivered pursuant to the
provisions of the ordinance authorizing such Obligation; and
(4) Parity Obligations or Subordinate Lien Obligations, as applicable, under which the
obligations of the City have been released, discharged or extinguished in accordance with
the terms thereof.
“Paying Agent/Registrar” means such entity or entities acting as such which are appointed
by the City Authorized Representative pursuant to Section 2.03 hereof and have executed and
delivered a Paying Agent/Registrar Agreement as approved and executed by a City Authorized
Representative. When there is a co-Paying Agent/Registrar, either may perform the functions and
duties of the Paying Agent/Registrar hereunder and under the Paying Agent/Registrar Agreement.
“Paying Agent/Registrar Agreement” means any paying agent and registrar agreement
authorized to be entered into by Section 2.03 hereof, and any and all modifications, alterations,
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Georgetown | ERCOT Notes 2023 | Ordinance
amendments and supplements thereto, or any other Paying Agent/Registrar Agreement entered
into by the City and the Paying Agent/Registrar with respect to the Notes.
“Payment Fund” means that fund created pursuant to Section 4.01 hereof.
"Parity Obligations" means the Previously Issued Parity Obligations and any additional
Parity Obligations hereafter issued by the City in accordance with the ordinances authorizing
Parity Obligations or obligations issued to refund any of the foregoing (as determined within the
sole discretion of the City Council in accordance with applicable law) if issued in a manner that
provides that the refunding bonds are payable from and equally and ratably secured by a first lien
on and pledge of the Pledged Revenues.
“Permitted Investments” means any security or obligation or combination thereof permitted
under the Public Funds Investments Act, Chapter 2256, Texas Government Code, as amended or
other applicable law.
"Pledged Revenues" means (1) the Net Revenues, plus (2) any additional revenues, income,
receipts, or other resources, including, without limitation, any grants, donations or income received
or to be received from the United States Government, or any other public or private source, whether
pursuant to an agreement or otherwise, which hereafter are pledged by the City to the payment of
the Parity Obligations, and excluding those revenues excluded from Gross Revenues.
"Previously Issued Parity Obligations" means the Outstanding Parity Obligations of the
City entitled:
(i) "City of Georgetown, Texas Utility System Revenue Bonds, Series 2014";
(ii) "City of Georgetown, Texas Utility System Revenue Refunding Bonds, Series 2014";
(iii)"City of Georgetown, Texas Utility System Revenue Bonds, Series 2014A";
(iv) "City of Georgetown, Texas Utility System Revenue Bonds, Series 2015";
(v) "City of Georgetown, Texas Utility System Revenue Bonds, Series 2016";
(vi) "City of Georgetown, Texas Utility System Revenue Refunding Bonds, Series 2016";
(vii) "City of Georgetown, Texas Utility System Revenue and Refunding Bonds, Series
2017";
(viii) "City of Georgetown, Texas Utility System Revenue Bonds, Series 2018";
(ix) "City of Georgetown, Texas Utility System Revenue Bond, Series 2020";
(x) "City of Georgetown, Texas Utility System Revenue Refunding Bond, Series 2020";
(xi) "City of Georgetown, Texas Utility System Revenue Bonds, Series 2022"; and
(xii) “City of Georgetown, Texas Utility System Revenue Bonds, Series 2023".
“Project Costs” means all costs and expenses defined as "project costs" under Chapter 1371
incurred in relation to Eligible Projects and permitted by law to be paid with the proceeds of the
Notes, including the purchase of electricity.
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Georgetown | ERCOT Notes 2023 | Ordinance
“Rating Agency” means any nationally recognized securities rating agency which has
assigned, at the request of the City, a rating to Parity Obligations or the Notes, as applicable.
“Registered Owner” means the person or entity in whose name any Note is registered in
the Security Register.
“Security Register” means the books and records kept and maintained by the Paying
Agent/Registrar relating to the registration and payment of the Notes and the interest thereon.
"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.
“State” means the State of Texas.
“Subordinate Lien Obligations” means (i) any Outstanding Notes, (ii) the “City of
Georgetown Combination Tax and Surplus Revenue Public Property Finance Contractual
Obligation, Taxable Series 2021” to the extent payable from a pledge of the surplus revenues of
the City’s electric system as provided in the ordinance authorizing such obligation, (iii) 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 (iv) 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 5.04(k) of this
Ordinance and (ii) incorporate any other utility system as provided by the laws of the State of
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Georgetown | ERCOT Notes 2023 | Ordinance
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 5.04(k) of this Ordinance.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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Georgetown | ERCOT Notes 2023 | Ordinance
EXHIBIT “B”
FORM OF NOTES
UNITED STATES OF AMERICA
STATE OF TEXAS
WILLIAMSON COUNTY
CITY OF GEORGETOWN, TEXAS
UTILITY SYSTEM SUBORDINATE LIEN REVENUE NOTES
(ERCOT FINANCIAL SECURITY), TAXABLE SERIES
NO.: ___
Issue Date:
Principal Amount:
$
Maturity Date:
Dated Date:
Interest Rate or Interest Rate Formula (%): 1
THE CITY OF GEORGETOWN, IN GEORGETOWN COUNTY, TEXAS (the “City”)
being a political subdivision of the State of Texas, hereby promises to pay, solely from the sources
hereinafter identified and as hereinafter stated, to the order of
WELLS FARGO BANK, NATIONAL ASSOCIATION (the "Bank")
on the Maturity Date specified above [or date of prior redemption]2, the Principal Amount set forth
above, and to pay interest on said Principal Amount, if any, on the dates provided in the Note
Purchase Agreement at said Maturity Date [or date of prior redemption]2, from the above specified
Issue Date to said Maturity Date [or date of prior redemption]2 at the rate of interest calculated as
shown above (computed on the basis of actual days elapsed and a 360 day year) and as provided
for in the Note Purchase Agreement (as defined herein); both principal and interest on this Note
being payable in lawful money of the United States of America in freely transferable and
immediately available funds at the principal corporate office of the Paying Agent/Registrar
executing the "Certificate of Authentication" endorsed hereon and appearing below.
This Note is one of a duly authorized issue of notes of the City (the "Notes") issued in the
aggregate principal amount of $________,000, pursuant to the laws of the State of Texas, including
1 As provided for in the Pricing Certificate.
2 If the Notes are subject to redemption as provided in the Pricing Certificate.
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Georgetown | ERCOT Notes 2023 | Ordinance
specifically Chapter 1371 and Chapter 1502, Texas Government Code, as amended (the "Acts"),
and under and pursuant to an ordinance of the City Council of the City adopted November 28,
2023 (the "Ordinance") for the purpose of financing Project Costs of Eligible Projects. The Notes
are secured by the Ordinance, on a parity with all other Subordinate Lien Obligations and subject
only to the payment of Parity Obligations, if any. Terms used herein and not otherwise defined
shall have the meanings given in the Ordinance and in the Note Purchase Agreement dated
November 30, 2023 between the City and the Bank relating to the Notes (the "Note Purchase
Agreement").
The initial Authorized Installment of the Notes issued on the Original Issue Date is in the
principal amount of $____,000. Thereafter, additional Authorized Installments of the Notes in a
principal amount not to exceed $______,000 may be issued on any date so long as the total
aggregate principal amount of Notes issued does not exceed $________,000, as reflected in the
Schedule of Authorized Installment Deliveries attached to the Initial Note. The foregoing
notwithstanding, in no event shall an Authorized Installment of the Notes be issued after the end
of the Authorized Installment Draw Period, and in no event shall an Authorized Installment be
issued and delivered in an amount that exceeds the Maximum Available Amount in effect as of
the date of the applicable draw on the Financial Security; provided that the aggregate principal
amount of all Authorized Installments issued and delivered under the Ordinance may at times
exceed the then applicable Maximum Available Amount due to a reduction in such amount
subsequent to the issuance of Authorized Installments pursuant to the terms of the Financial
Security but in no case shall the aggregate principal amount of all Authorized Installments issued
and delivered under the Ordinance exceed $______,000.
Anything contained herein to the contrary notwithstanding, if the rate of interest payable
under any Authorized Installment shall exceed the Maximum Interest Rate (as defined in the Note
Purchase Agreement) for any period for which interest is payable, then (i) interest at the Maximum
Interest Rate shall be due and payable with respect to such interest period and (ii) interest at the
rate equal to the difference between (A) the rate of interest calculated in accordance with the terms
hereof without regard to the Maximum Interest Rate and (B) the Maximum Interest Rate (the
“Excess Interest”), shall be deferred until such date as the rate of interest calculated in accordance
with the terms hereof ceases to exceed the Maximum Interest Rate, at which time the City shall
pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue
interest hereunder, such portion of the deferred Excess Interest as will cause the rate of interest
then paid to the Bank to equal the Maximum Interest Rate, which payments of deferred Excess
Interest shall continue to apply to such unpaid amounts hereunder until all deferred Excess Interest
is fully paid to the Bank, not to exceed the Maturity Date.
The Notes are special obligations of the City, and the payment of the principal of and
interest on the Notes is and shall be secured by and payable only from a lien on and pledge of the
Pledged Revenues; provided that the pledge of Pledged Revenues securing the Notes is expressly
made subordinate and inferior to the lien on and pledge of Pledged Revenues securing Parity
Obligations, and the Notes shall constitute Subordinate Lien Obligations, payable, together with
all Outstanding Subordinate Lien Obligations and any additional Subordinate Lien Obligations
hereafter, solely from and equally secured by a lien on and pledge of the Pledged Revenues. The
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Georgetown | ERCOT Notes 2023 | Ordinance
Notes are not secured by or payable from any funds raised or to be raised by the levy of taxes by
the City nor a mortgage or deed of trust on any properties, whether real, personal, or mixed,
constituting the System or otherwise, nor from any source other than as specified in the Ordinance.
[INSERT ADDITIONAL PROVISIONS, IF ANY, PROVIDED FOR IN THE PRICING
CERTIFICATE AND THE NOTE PURCHASE AGREEMENT DEEMED NECESSARY BY
THE AUTHORIZED REPRESENTATIVE, INCLUDING ANY PREPAYMENT AND/OR
REDEMPTION PROVISIONS, ALL PURSUANT TO SECTIONS 2.02 AND 2.04 OF THE
ORDINANCE.]
The pledge of Pledged Revenues under the Ordinance may be discharged at or prior to the
maturity of the Notes upon the making of provision for their payment on the terms and conditions
set forth in the Ordinance.
The City has reserved the right to issue additional Subordinate Lien Obligations payable
solely from and equally and ratably secured by a parity lien on and pledge of the Pledged Revenues
and other moneys and securities pledged under the Ordinance to the payment of the Notes.
Subject to satisfying the terms and conditions stated in the ordinances authorizing the Parity
Obligations, the City has also reserved the right to issue additional Parity Obligations payable
solely from and equally and ratably secured by a parity lien on and pledge of the Pledged Revenues
that is senior and superior to the lien on Pledged Revenues securing the Notes.
Reference is hereby made to the Ordinance, copies of which may be obtained upon request
to the City, and to all of the provisions of which any owner of this Note by its acceptance hereof
hereby assents, for definitions of terms; the description of and the nature and extent of the security
for the Notes; the Pledged Revenues; the nature and extent and manner of enforcement of the
pledge; the rights of the City to issue additional Parity Obligations and additional Subordinate Lien
Obligations; the conditions upon which the Ordinance may be amended or supplemented with or
without the consent of the Registered Owners; the rights and remedies of the owner hereof with
respect hereto and thereto; the rights, duties and obligations of the City; the terms and provisions
upon which the liens, pledges, charges, and covenants made therein may be discharged at or prior
to the maturity or redemption of this Note and this Note thereafter no longer to be secured by the
Ordinance or be deemed to be outstanding thereunder; and for the other terms and provisions
thereof.
It is hereby certified, recited, represented, and declared that the City is a duly organized
and legally existing political subdivision of the State of Texas, organized under and by virtue of
the Constitution and laws of the State of Texas; that the issuance of this Note and the series of
which it is a part are duly authorized by law; that all acts, conditions, and things required to exist
and be done precedent to and in the issuance of this Note to render the same lawful and valid have
been properly done, have happened and have been performed in regular and due time, form, and
manner as required by the Constitution and laws of the State of Texas and the Ordinance; that this
series of Notes does not exceed any Constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of and interest on this Note and the series of which
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Georgetown | ERCOT Notes 2023 | Ordinance
it is a part as aforestated. In case any provision in this Note shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. The terms and provisions of this Note and the Ordinance
shall be construed in accordance with and shall be governed by the laws of the State of Texas.
This Note has been issued pursuant to proceedings approved by the Attorney General of
the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Except as provided in Section 2.02(a) of the Ordinance, this Note shall not be entitled to
any benefit under the Ordinance or be valid or become obligatory for any purpose until this Note
shall have been authenticated by the execution by the Paying Agent/Registrar or the Comptroller
of Public Accounts, as applicable, of the Certificate of Authentication hereon.
IN WITNESS WHEREOF, the City has authorized and caused this Note to be executed
and attested on its behalf by the manual or facsimile signatures of the Mayor of the City (or in the
Mayor’s absence, of the Mayor Pro-Tem) and countersigned with the manual or facsimile
signature of the City Secretary of said City and its official seal impressed or a facsimile thereof to
be printed hereon.
____________________________________ ____________________________________
City Secretary Mayor
(SEAL)
Form of Registration Certificate of Comptroller of Public Accounts to Appear on Initial Note only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER '
OF PUBLIC ACCOUNTS '
THE STATE OF TEXAS ' REGISTER NO. _______
I HEREBY CERTIFY that this Note has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller of
Public Accounts of the State of Texas.
WITNESS my signature and seal of office this ________________.
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Georgetown | ERCOT Notes 2023 | Ordinance
_________________________
Comptroller of Public Accounts
of the State of Texas
(SEAL)
Form of Authentication Certificate of Paying Agent/Registrar.
AUTHENTICATION CERTIFICATE OF
PAYING AGENT/REGISTRAR
This Note has been duly issued and registered under the provisions of the within-mentioned
Resolution; the note or notes of the above titled and designated series originally delivered having
been approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying Agent/Registrar.
[_______________________________]
as Paying Agent/Registrar
Registered this date:
___________________ By: __________________________
Authorized Signature
Form of Schedule of Authorized Installments Deliveries to appear on Initial Note only.
SCHEDULE OF AUTHORIZED INSTALLMENT DELIVERIES
Issue Date
No.
Principal
Amount
Remaining
Available
Principal
Balance
Date Paid
Principal and
Interest Paid
___________
___
________
________
________
________
___________
___
________
________
________
________
___________
___
________
________
________
________
___________
___
________
________
________
________
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Georgetown | ERCOT Notes 2023 | Ordinance
___________
___
________
________
________
________
___________
___
________
________
________
________
___________
___
________
________
________
________
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City of Georgetown | Sub Lien Rev Notes | Ordinance
EXHIBIT “C”
PAYING AGENT/REGISTRAR AGREEMENT
[See Separate Tab of Transcript]