HomeMy WebLinkAboutOrdinances (O-98-1103)-07/07/1998
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ORDINANCE NO.
0-'18..1103
AN ORDINANCE authorizing the issuance of "CITY OF
COLLEYVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BONDS, SERIES 1998"; prescribing the forms,
terms, and provisions of said bonds; pledging the
net revenues of the City's Waterworks and Sewer
System to the payment of the principal of and
interest on said bonds; enacting provisions
incident and related to the issuance, payment,
security, sale and delivery of said bonds,
including the approval and execution of a Paying
Agent/Registrar Agreement and the approval and
distribution of an Official Statement pertaining
thereto; and providing an effective date.
WHEREAS, notice of the Council's intention to issue revenue
bonds in the maximum amount of $2,825,000 for making improvements
and extensions to the City's combined Waterworks and Sewer System
has been duly posted at the City Hall, Colleyville, Texas, and
published in the Colleyville News and Times, a newspaper hereby
found and determined to be published and of general circulation in
the City of Colleyville, Texas, on June 11, 1998 and June 18, 1998,
the date of posting and the date of the first publication of such
notice being at least fourteen (14) days prior to the date of
passage of this ordinance; and
WHEREAS, no petition, signed by 10% or more of the qualified
voters of the City, has been submitted or filed with the City
Secretary or other official of the City petitioning the City
Council to submit to a referendum vote the question as to the
issuance of the above revenue bonds for such purposes; and
WHEREAS, the City Council hereby finds and determines that all
of such revenue bonds can and should be issued on a parity with the
outstanding and unpaid revenue bonds of the City (hereinafter
called and defined as "Previously Issued Bonds") payable from and
secured by a first lien on and pledge of the Net Revenues of the
System in that (i) the City is not now in default as to any
covenant, condition or obligation prescribed in the ordinances
authorizing the issuance of the Previously Issued Bonds, (ii) each
of the speCial Funds created for the payment and security of the
Previously Issued Bonds contains the amount now required to be on
deposit therein, (iii) the City can secure from a Certified Public
Accountant a report showing that the Net Earnings (hereinafter
defined) of the System in the completed Fiscal Year next preceding
the adoption of this ordinance are equal to at least one and twenty
hundredths (1.20) times the average annual principal and interest
requirements for all the revenue bonds to be secured by a first
lien on and pledge of the Net Revenues of the System which will be
Outstanding after the issuance of the revenue bonds herein
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authorized, (iv) the revenue bonds herein authorized shall mature
on January 1 and, (v) this ordinance provides for additional
deposits to be made to (a) the Interest and Sinking Fund
(hereinafter defined) established for the payment of the Previously
Issued Bonds in amounts adequate to pay the principal and interest
requirements ef the bonds herein authorized to be issued and
(b) the Reserve Fund (hereinafter defined)- created for the benefit
of the Previously Issued Bonds so that the total amount to be
accumulated therein will be equal to not less than the average
annual principal and interest requirements for all the Outstanding
Previously Issued Bonds and the revenue bonds herein authorized and
any additional amount required to be deposited therein will be
accumulated within ten (10) calendar years of the date of the
revenue bonds herein authorized; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF COLLEYVILLE,
TEXAS:
SECTION 1: Authorization-Desiqnation-Princioal Amount
-Puroose. Revenue bonds of the City shall be and are hereby
authorized to be issued in the aggregate principal amount of
$2,825,000 to be designated and bear the title "CITY OF
COLLEYVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE BONDS,
SERIES 1998" (hereinafter referred to as the "Bonds"), for the
purpose of making improvements and extensions to the City's
combined Waterworks and Sewer System, pursuant to authority
conferred by and in conformity with the Constitution and laws of
the State of Texas, including Articles 1111, et. seq., V.A.T.C.S.,
as amended.
SECTION 2: Fullv Reqistered Obliqations - Authorized
Denominations - Stated Maturities - Date. The Bonds shall be
issued as fully registered obligations; without coupons, shall be
dated July 1, 1998 (the "Issue Date") and, other than the single
fully registered Initial Bond referenced in Section 8 hereof, shall
be in denominations of $5,000 or any integral multiple thereof
(within a Stated Maturity), shall be numbered consecutively from
One (1) upward and shall become due and payable on January 1 in
each of the years and in principal amounts (the "Stated
Maturities") and bear interest at per annum rates in accordance
with the following schedule:
Year of
Stated Maturitv
Principal
Amount
Interest
Rate(s)
1999
2000
2001
2002
2003
$ 85,000
90,000
95,000
100,000
105,000
6.75%
6.75%
6.75%
6.75%
6.75%
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2004 110,000 5.60%
2005 115,000 4.25%
2006 120,000 4.30%
2007 125,000 4.35%
2008 130,000 4.375%
200~ 135,000 4.40%
2010 145,000 4.45%
2011 150,000 4.50%
2012 160,000 4.55%
2013 170,000 4.65%
2014 175,000 4.70%
2015 185,000 4.75%
2016 200,000 4.75%
2018 430,000 4.75%
The Bonds shall bear interest on the unpaid principal amounts
from the Issue Date at the rate(s) per annum shown in the above
schedule (calculated on the basis of a 360-day year of twelve
30-day months). Interest on the Bonds shall be payable on
January 1 and July 1 in each year, commencing January 1, 1999.
SECTION 3: Terms of Payment - Pavinq Aqent/Reqistrar. The
principal of, premium, if any, and the interest on the Bonds, due
and payable by reason of maturity, redemption or otherwise, shall
be payable only to the registered owners or holders of the Bonds
(hereinafter called the "Holders") appearing on the registration
and transfer books maintained by the Paying Agent/Registrar and the
payment thereof shall be in any coin or currency of the United
States of America, which at the time of payment is legal tender for
the payment of public and private debts, and shall be without
exchange or collection charges to the Holders.
The selection and appointment of U. S. Trust Company of Texas,
N.A., Dallas, Texas, to serve as Paying Agent/Registrar for the
Bonds is hereby approved and confirmed. Books and records
relating to the registration, payment, exchange and transfer of the
Bonds (the "Security Register") shall at all times be kept and
maintained on behalf of the City by the Paying Agent/Registrar, all
as provided herein, in accordance with the terms and provisions of
a "Paying Agent/Registrar Agreement II I substantially in the form
attached hereto as Exhibit A, and such reasonable rules and
regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor and City Secretary are hereby authorized to
execute and deliver such Agreement in connection with the delivery
of the Bonds. The City covenants to maintain and provide a Paying
Agent/Registrar at all times until the Bonds are paid and
discharged, and any successor Paying Agent/Registrar shall be a
bank, trust company, financial institution or other entity
qualified and authorized to serve in such capacity and perform the
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duties and services of Paying Agent/Registrar. Upon any change in
the Paying Agent/Registrar for the Bonds, the City agrees to
promptly cause a written notice thereof to be sent to each Holder
by United States Mail, first class postage prepaid, which notice
shall also give the address of the new Paying Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be
payable at the Stated Maturities or upon their earlier redemption,
only upon presentation and surrender of the Bonds to the Paying
Agent/Registrar at its designated offices in New York, New York
(the "Designated Payment/Transfer Office") Interest on the Bonds
shall be paid to the Holders whose names appear in the Security
Register at the close of business on the Record Date (the 15th day
of the month next preceding each interest payment date) and shall
be paid by the Paying Agent/Registrar (i) by check sent United
States Mail, first class postage prepaid, to the address of the
Holder recorded in the Security Register or (ii) by such other
method, acceptable to the Paying Agent/Registrar, requested by, and
at the risk and expense of, the Holder. If the date for the
payment of the principal of or interest on the Bonds shall be a
Saturday, Sunday, a legal holiday, or a day on which banking
institutions in the City where the Designated Payment/Transfer
Office of the Paying Agent/Registrar is located are authorized by
law or executive order to close, then the date for such payment
shall be the next succeeding day which is not such a Saturday,
Sunday, legal holiday, or day on which banking institutions are
authorized to close; and payment on such date shall have the same
force and effect as if made on the original date payment was due.
In the event of a non-payment of interest on one or more
maturities on a scheduled payment date, and for thirty (30) days
thereafter, a new record date for such interest payment for such
maturity or maturities (a "Special Record Date") will be
established by the Paying Agent/Registrar, if and when funds for
the payment of such interest have been received from the City.
Notice of the Special Record Date and of the scheduled payment date
of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to
the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or
maturities _appearing on the Security Register at the close of
business on the last business day next preceding the date of
mailing of such notice.
SECTION 4: Redemotion. (a) Ootional Redemotion. The Bonds
maturing on and after January 1, 2009 shall be subject to
redemption prior to maturity, at the option of the City, in whole
or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying
Agent/Registrar), on January 1, 2008 or on any date thereafter at
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the redemption price of par plus accrued interest to the date of
redemption.
At least forty-five (45) days prior to a date set for the
redemption of Bonds (unless a shorter notification period shall be
satisfactory ~o the Paying Agent/Registrar), the City shall notify
the Paying Agent/Registrar of its decision to exercise the right to
redeem Bonds, the principal amount of each Stated Maturity to be
redeemed, and the date set for the redemption thereof. The
decision of the City to exercise the right to redeem Bonds shall be
entered in the minutes of the governing body of the City.
(b) Mandatory Redemption. The Bonds maturing on January 1,
2018 (the "Term Bonds") shall be subject to mandatory redemption
prior to maturity at the redemption price of par and accrued
interest to the date of redemption on January 1, 2017 in the
principal amount of $210,000.
Approximately forty-five (45) days prior. to the mandatory
redemption date specified above the Term Bonds are to be redeemed,
the Paying Agent/Registrar shall select by lot the numbers of the
Term Bonds to be redeemed on the next following January 1 from
moneys set aside for that purpose in the Interest and Sinking Fund
(as hereinafter defined). Any Term Bonds not selected for prior
redemption shall be paid on the date of their Stated Maturity.
The principal amount of the Term Bonds required to be redeemed
pursuant to the operation of such mandatory redemption provisions
shall be reduced, at the option of the City, by the principal
amount of Term Bonds which, at least 50 days prior to the mandatory
redemption date, (1) shall have been acquired by the City at a
price not exceeding the principal amount of such Term Bonds plus
accrued interest to the date of purchase thereof, and delivered to
the Paying Agent/Registrar for cancellation or (2) shall have been
redeemed pursuant to the optional redemption provisions set forth
in paragraph (a) of this Section and not theretofore credited
against a mandatory redemption requirement.
(c) Selection of Bonds for Redemption. If less than all
Outstanding Bonds of the same Stated Maturity are to be redeemed on
a redemption date, the Paying Agent/Registrar shall treat such
Bonds as representing the number of Bonds Outstanding which is
obtained by dividing the principal amount of such Bond by $5,000
and shall select the Bonds, or principal amount thereof, to be
redeemed within such Stated Maturity by lot.
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(d) Notice of Redemption. Not less than thirty (30) days
prior to a redemption date for the Bonds, a notice of redemption
shall be sent by United States Mail, first class postage prepaid,
in the name of the City and at the City's expense, to each Holder
of a Bond to be redeemed in whole or in part at the address of the
Holder appeari~g on the Security Register at the close of business
on the business day next preceding the date of mailing such notice,
and any notice of redemption so mailed shall be conclusively
presumed to have been duly given irrespective of whether received
by the Holder.
All notices of redemption shall (i) specify the date of
redemption for the Bonds, (ii) identify the Bonds to be redeemed
and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state
the redemption price, (iv) state that the Bonds, or the portion of
the principal amount thereof to be redeemed, shall become due and
payable on the redemption date specified, and the interest thereon,
or on the portion of the principal amount thereof to be redeemed,
shall cease to accrue from and after the redemption date, and (v)
specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the
Designated Payment/Transfer Office of the Paying Agent/Registrar
only upon presentation and surrender thereof by the Holder. If a
Bond is subj ect by its terms to prior redemption and has been
called for redemption and notice of redemption thereof has been
duly given or waived as herein provided, such Bond (or the
principal amount thereof to be redeemed) shall become due and
payable, and interest thereon shall cease to accrue from and after
the redemption date therefor, provided moneys sufficient for the
payment of such Bonds (or of the principal amount thereof to be
redeemed) at the then applicable redemption price are held for the
purpose of such payment by the Paying Agent/Registrar.
SECTION 5: Reqistration - Transfer - Exchanqe of Bonds -
Predecessor Bonds. The Paying Agent/Registrar shall obtain,
record, and maintain in the Security Register the name and address
of each registered owner of the Bonds issued under and pursuant to
the provisions of this Ordinance. Any Bond may, in accordance with
its terms and the terms hereof, be transferred or exchanged for
Bonds of other authorized denominations upon the Security Register
by the Holder, in person or by his duly authorized agent, upon
surrender of such Bond to the Designated Payment/Transfer Office of
the Paying Agent/Registrar for cancellation, accompanied by a
written instrument of transfer or request for exchange duly
executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/ Registrar.
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Upon surrender for transfer of any Bond (other than the
Initial Bonds authorized in Section 8 hereof) at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, one or more
ne.w Bonds shall be registered and issued to the assignee or
transferee of the previous Holder; such Bonds to be in authorized
denominations,- of like Stated Maturity and of a like aggregate
principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds (other than the Initial
Bonds authorized in Section 8 hereof) may be exchanged for other
Bonds of authorized denominations and having the same Stated
Maturity, bearing the same rate of interest and of like aggregate
principal amount as the Bonds surrendered for exchange, upon
surrender of the Bonds to be exchanged at the Designated
Payment/Transfer Office of the Paying Agent/ Registrar. Whenever
any Bonds are surrendered for exchange, the Paying Agent/Registrar
shall register and deliver new Bonds, executed on behalf of, and
furnished by, the City, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall
be delivered at the Designated Payment/Transfer Office of the
Paying Agent/Registrar, or sent by United States Mail, first class
postage prepaid, to the Holder and, upon the delivery thereof, the
same shall be valid obligations of the City, evidencing the same
obligation to pay, and entitled to the same benefits under this
Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section
shall be made without expense or service charge to the Holder,
except as otherwise herein provided, and except that the Paying
Agent/Registrar shall require payment by the Holder requesting such
transfer or exchange of any tax or other governmental charges
required to be paid with respect to such transfer or exchange.
Bonds cancelled by reason of an exchange or transfer pursuant
to the provisions hereof are hereby defined to be 11 Predecessor
Bonds,lI evidencing all or a portion, as the case may be, of the
same obligation to pay evidenced by the Bond or Bonds registered
and delivered in the exchange or transfer therefor. Additionally,
the term 11 Predecessor Bonds 11 shall include any mutilated, lost,
destroyed, .or stolen Bond for which a replacement Bond has been
issued, registered and delivered in lieu thereof pursuant to
Section 29 hereof and such new replacement Bond shall be deemed to
evidence the same obligation as the mutilated, lost, destroyed, or
stolen Bond.
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Neither the City nor the Paying Agent/Registrar shall be
required to transfer or exchange any Bond called for redemption, in
whole or in part, within 45 days of the date fixed for redemption
of such Bondi provided, however, such limitation on transferability
shall not be applicable to an exchange by the Holder of the
unredeemed bal~nce of a Bond called for redemption in part.
SECTION 6: Book-Entry Only Transfers and Transactions.
Notwithstanding the provisions contained in Sections 3, 4 and 5
hereof relating to the payment, and transfer/exchange of the Bonds,
the City hereby approves and authorizes the tJ.se of "Book-Entry
Only" securities clearance, settlement and transfer system provided
by The Depository Trust Company (DTC), a limited purpose trust
company organized under the laws of the State of New York, in
accordance with the requirements and procedures identified in the
Letter of Representation, by and between the City, the Paying
Agent/Registrar and DTC (the "Depository Agreement") relating to
the Bonds.
Pursuant to the Depository Agreement and the rules of DTC, the
Bonds shall be deposited with DTC who shall hold said Bonds for its
participants (the "DTC Participants"). While the Bonds are held by
DTC under the Depository Agreement, the Holder of the Bonds on the
Security Register for all purposes, including payment and notices,
shall be Cede & Co., as nominee of DTC, notwithstanding the
ownership of each actual purchaser or owner of each Bond (the
"Beneficial Owners") being recorded in the records of DTC and DTC
Participants.
In the event DTC determines to discontinue serving as
securities depository for the Bonds or otherwise ceases to provide
book-entry clearance and settlement of securities transactions in
general or the City determines that DTC is incapable of properly
discharging its duties as securities depository for the Bonds, the
City covenants and agrees with the Holders of the Bonds to cause
Bonds to be printed in definitive form and provide for the Bond
certificates to be issued and delivered to DTC Participants and
Beneficial Owners, as the case may be. Thereafter, the Bonds in
definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and
payment of such Bonds shall be made in accordance with the
provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution - Reqistration. The Bonds shall be
executed on behalf of the City by the Mayor under its seal
reproduced or impressed thereon and countersigned by the City
Secretary. The signature of said officers on the Bonds may be
manual or facsimile. Bonds bearing the manual or facsimile
signatures of individuals who are or were the proper officers of
the City on the Issue Date shall be deemed to be duly executed on
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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 Bonds to the initial purchaser(s) and with respect to Bonds
delivered in subsequent exchanges and transfers, all as authorized
and provided in the Bond Procedures Act of 1981, as amended.
No Bond shall be entitled to any right or benefit under this
Ordinance, or be valid or obligatory for any purpose, unless there
appears on such Bond either a certificate of registration
substantially in the form provided in Section 9C, manually executed
by the Comptroller of Public Accounts of the State of Texas or his
duly authorized agent, or a certificate of registration
substantially in the form provided in Section 9D, manually executed
by an authorized officer, employee or representative of the Paying
Agent/Registrar, and either such certificate upon any Bond duly
signed shall be conclusive evidence, and the only evidence, that
such Bond has been duly certified, registered and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized
shall be initially issued either (i) as a single fully registered
bond in the total principal amount noted in Section 1 with
principal installments to become due and payable as provided in
Section 2 hereof and numbered T-1, or (ii) as nineteen (19) fully
registered bonds, being one bond for each year of maturity in the
applicable principal amount and denomination and to be numbered
consecutively from T-1 and upward (hereinafter called the "Initial
Bond (s) ") and, in either case, the Initial Bond (s) shall be
registered in the name of the initial purchaser(s) or the designee
thereof. The Initial Bond(s) shall be the Bonds submitted to the
Office of the Attorney General of the State of Texas for approval,
certified and registered by the Office of the Comptroller of Public
Accounts of the State of Texas and delivered to the initial
purchaser(s). Any time after the delivery of the Initial Bond(s),
the Paying Agent/Registrar, pursuant to written instructions from
the initial purchaser (s), or the designee thereof, shall cancel the
Initial Bond(s) delivered hereunder and exchange therefor
definitive Bonds of authorized denominations, Stated Maturities,
principal amounts and bearing applicable interest rates for
transfer and delivery to the Holders named at the addresses
identified therefor; all pursuant to and in accordance with such
written instructions from the initial purchaser (s), or the designee
thereof, and such other information and documentation as the Paying
Agent/Registrar may reasonably require.
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SECTION 9: Forms. A. Forms Generallv. The Bonds, the
Registration Certificate of the Comptroller of Public Accounts of
the State of Texas, the Certificate of Registration, and the form
of Assignment to be printed on each of the Bonds, shall be
substantially in the forms set forth in this Section 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
(including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American
Bankers Association) and such legends and endorsements (including
insurance legends on insured Bonds and any reproduction of an
opinion of counsel) thereon as may, consistently herewith, be
established by the City or determined by the officers executing
such Bonds as evidenced by their execution thereof. Any portion of
the text of any Bonds may be set forth on the reverse thereof, with
an appropriate reference thereto on the face of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed,
lithographed, or engraved or typewritten, photocopied or otherwise
reproduced in any other similar manner, all as determined by the
officers executing such Bonds as evidenced by their execution
thereof.
B. Form of Definitive Bond.
REGISTERED REGISTERED
NO. $
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF COLLEYVILLE, TEXAS, WATERWORKS AND SEWER SYSTEM
REVENUE BOND
SERIES 1998
Issue Date:
July I, 1998
Interest Rate: Stated Maturity: CUSIP NO:
Registered Owner:
-
Principal Amount:
DOLLARS
The City of Colleyville (hereinafter referred to as the
"City"), a body corporate and municipal corporation in the County
of Tarrant, State of Texas, for value received, hereby promises to
pay to the order of the Registered Owner named above, or the
.registered assigns thereof, solely from the revenues hereinafter
identified, on the Stated Maturity date specified above, the
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Principal Amount stated above (or so much thereof as shall not have
been paid upon prior redemption) and to pay interest on the unpaid
Principal Amount hereof from the Issue Date at the per annum rate
of interest specified above computed on the basis of a 360-day year
of twelve 30-day months; such interest being payable on January 1
and July 1 of each year, commencing January 1, 1999. Principal of
this Bond is payable at the Stated Maturity or redemption to the
registered owner hereof, upon presentation and surrender, at the
Designated Payment/Transfer Office of the Paying Agent/Registrar
executing the registration certificate appearing hereon, or its
successor; provided, however, while this Bond is registered to Cede
& Co., the payment of principal upon a partial redemption of the
principal amount hereof may be accomplished without presentation
and surrender of this Bond. Interest is payable to the registered
owner of this Bond (or one or more Predecessor Bonds, as defined in
the Ordinance hereinafter referenced) whose name appears on the
"Security Register" maintained by the Paying Agent/ Registrar at
the close of business on the "Record Date", which is the 15th day
of the month next preceding each interest payment date and interest
shall be paid by the Paying Agent/ Registrar by check sent United
States Mail, first class postage prepaid, to the address of the
registered owner recorded in the Security Register or by such other
method, acceptable to the Paying Agent/Registrar, requested by, and
at the risk and expense of, the registered owner. All payments of
principal of, premium, if any, and interest on this Bond shall be
without exchange or collection charges to the owner hereof and in
any coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and
private debts.
This Bond is one of the series specified in its title issued
in the aggregate principal amount of $2,825,000 (herein referred to
as the "Bonds") for the purpose of making improvements and
extensions to the City's combined Waterworks and Sewer System,
under and in strict conformity with the Constitution and laws of
the State of Texas, including Articles 1111 et. seq., V.A.T.C.S.,
and pursuant to an Ordinance adopted by the City Council of the
City (herein referred to as the "Ordinance").
The Bonds maturing on January 1, 2018 (the "Term Bonds") are
subject to.mandatory redemption prior to maturity with funds on
deposit in the Interest and Sinking Fund established and maintained
for the payment thereof in the Ordinance, and shall be redeemed in
part prior to maturity at the price of par and accrued interest
thereon to the date of redemption, and without premium, on
January 1, 2017 in the amount set forth in the Ordinance. The
particular Term Bonds to be redeemed on each redemption date shall
be chosen by lot by the Paying Agent/Registrar; provided, however,
that the principal amount of Term Bonds required to be redeemed
pursuant to the operation of such mandatory redemption provisions
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shall be reduced, at the option of the City, by the principal
amount of Term Bonds which, at least 50 days prior to a mandatory
redemption date, (1) shall have been acquired by the City at a
price not exceeding the principal amount of such Term Bonds plus
accrued interest to the date of purchase thereof, and delivered to
the Paying Agent/Registrar for cancellation or (2) shall have been
redeemed pursuant to the optional redemption provisions appearing
below and not theretofore credited against a mandatory redemption
requirement.
The Bonds maturing on and after January 1, 2009, may be
redeemed prior to their Stated Maturities, at the option of the
City, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by lot
by the Paying Agent/ Registrar), on January 1, 2008, or on any date
thereafter, at the redemption price of par, together with accrued
interest to the date of redemption.
At least thirty days prior to the date fixed for any
redemption of Bonds, the City shall cause a written notice of such
redemption to be sent by United States Mail, first class postage
prepaid, to the registered owners of each Bond to be redeemed at
the address shown on the Security Register and subject to the terms
and provisions relating thereto contained in the Ordinance. If a
Bond (or any portion of its principal sum) shall have been duly
called for reaemption and notice of such redemption duly given,
then upon such redemption date such Bond (or the portion of its
principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the
redemption date therefor, provided moneys for the payment of the
redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such
payment by the Paying Agent/Registrar.
In the event a portion of the principal amount of a Bond is to
be redeemed and the registered owner is someone other than Cede &
Co., payment of the redemption price of such principal amount shall
be made to the registered owner only upon presentation and
surrender of such Bond to the Designated Payment/Transfer Office of
the Paying Agent/Registrar, and a new Bond or Bonds of like
maturity an~ interest rate in any authorized denominations provided
by the Ordinance for the then unredeemed balance of the principal
sum thereof will be issued to the registered owner, without charge.
If a Bond is selected for redemption, in whole or in part, the City
and the Paying Agent/Registrar shall not be required to transfer
such Bond to an assignee of the registered owner within 45 days of
the redemption date therefor; provided, however, such limitation on
transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Bond redeemed in
part.
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The Bonds are special obligations of the City, and, together
with the outstanding Previously r'ssued Bonds (identified and
defined in the Ordinance), are payable solely from and equally and
r~tably secured by a first lien on and pledge of the Net Revenues
(as defined in the Ordinance) of the City's combined Waterworks and
Sanitary Sewer System (the "System"). The Bonds do not constitute
a legal or equitable pledge, charge, lien or encumbrance upon any
property of the City or the System, except with respect to the Net
Revenues. The holder hereof shall never have the right to demand
payment of this obligation out of any funds raised or to be raised
by taxation.
Subject to satisfying the terms and conditions prescribed
therefor, the City has reserved the right to issue additional
revenue obligations payable from and equally and ratably secured by
a parity lien on and pledge of the Net Revenues of the System, in
the same manner and to the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is
on file in the Designated Payment/Transfer Office of the Paying
Agent/Registrar, and to all of the provisions of which the Holder
by the acceptance hereof. hereby assents, for definitions of terms;
the description of and the nature and extent of the security for
the Bonds; the properties constituting the System; the Net Revenues
pledged to the payment of the principal of and interest on the
Bonds; the nature and extent and manner of enforcement of the lien
and pledge securing the payment of the Bonds; the terms and
conditions for the issuance of additional revenue obligations; the
terms and conditions relating to the transfer or exchange of this
Bond; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying
Agent/Registrar; 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 Bond, and this Bond
deemed to be no longer Outstanding thereunder; and for the other
terms and provisions contained therein. Capitalized terms used
herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the
Ordinance, ~ay be transferred on the Security Register only upon
its presentation and surrender at the Designated Payment/Transfer
Office of the Paying Agent/Registrar, with the Assignment hereon
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Paying Agent/Registrar duly
executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or
more new fully registered Bonds of the same Stated Maturity, of
authorized denominations, bearing the same rate of interest, and of
708069
-13-
, .
the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of
either, may treat the registered owner hereof whose name appears on
the Security Register (i) on the Record Date as the owner entitled
to payment of interest hereon, (ii) on the date of surrender of
this Bond as the owner entitled to payment of principal hereof at
its Stated Maturity or its redemption, in whole or in part, and
(iii) on any other date as the owner for all other purposes, and
neither the City nor the Paying Agent/Registrar, or any agent of
either, shall be affected by notice to the contrary. In the event
of non-payment of interest on a scheduled payment date and for
thirty (30) days thereafter, a new record date for such interest
payment (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record
Date and of the scheduled payment date of the past due interest
(which shall be 15 days after the Special Record Date) shall be
sent at least five (5) business days prior to the Special Record
Date by United States Mail, first class postage prepaid, to the
address of each Holder appearing on the Security Register at the
close of business on the last business day next preceding the date
of mailing of such notice.
It is hereby certified, recited, represented and covenanted
that the City is a duly organized and legally existing municipal
corporation under and by virtue of the Constitution and laws of the
State of Texas; that the issuance of the Bonds is duly authorized
by law; that all acts, conditions and things required to exist and
be done precedent to and in the issuance of the Bonds to render the
same lawful and valid obligations of the City 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 the Bonds do not exceed
any constitutional or statutory limitation; and that due provision
has been made for the payment of the principal of and interest on
the Bonds by a. pledge of the Net Revenues of the System as
aforestated. In case any provision in this Bond or any application
thereof shall be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby.
The terms and provisions of this Bond and the Ordinance shall be
construed in accordance with and shall be governed by the laws of
the State of Texas.
708069
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IN WITNESS WHEREOF, the City Council of the City has caused
this Bond to be duly executed under the official seal of the City
as of the Issue Date.
CITY OF COLLEYVILLE, TEXAS
COUNTERSIGNED:
Mayor
City Secretary
(SEAL)
C. *Form of Reqistration Certificate of Comotroller
of Public Accounts to aooear on Initial Bond(s) only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
REGISTER NO.
THE STATE OF TEXAS
I HEREBY CERTIFY that this Bond has been examined, certified
as to validity and approved by the Attorney General of the State of
Texas, and duly registered by the Comptroller of Public Accounts of
the State of Texas.
WITNESS
my
signature
and
seal
of
office
this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*NOTE TO PRINTER:
Do Not Print on Definitive Bonds
708069
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D. Form of Certificate of Payinq Aqent/Reqistrar to
aooear on Definitive Bonds only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued and registered under the
provisions of the within-mentioned Ordinance; the bond or bonds of
the above entitled 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.
The designated offices of the Paying Agent/Registrar in
Houston, Texas, is the Designated Payment/Transfer Office for this
Bond.
U. S. TRUST COMPANY OF TEXAS, N.A.,
Dallas, Texas,
as Paying Agent/Registrar
Registration Date:
By
Authorized Signature
E.
Form of Assiqnment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned
assigns, and transfers unto (Print or typewrite
and zip code of transferee:)
hereby sells,
name, address,
or other identifying number:
within Bond and all rights thereunder,
constitutes and appoints
(SocialSecurity
) the
and hereby irrevocably
attorney
to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
Signature guaranteed:
NOTICE: The signature on this
assignment must correspond with
the name of the registered owner
as it appears on the face of the
within Bond in every particular.
F.
The Initial Bond (s) shall be in the form set forth in
oaraqraoh B of this Section, exceot that the form of a sinqle
fully reqistered Initial Bond shall be modified as follows::
708069
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(i) immediately under the name of the bond the headings
"Interest Rate " and "Stated Maturity II
shall both be omitted;"
(ii) Paragraph one shall read as follows:
The City of Colleyville (hereinafter referred to as the
"City"), a body corporate and municipal corporation in the County
of Tarrant, State of Texas, for value received, hereby promises to
pay to the order of the Registered Owner named above, or the
registered assigns thereof, solely from the revenues hereinafter
identified, on January 1 in each of the years and in principal
amounts and bearing interest at per annum rates in accordance with
the following schedule:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from
schedule in Section 2 hereof) .
(or so much thereof as shall not have been prepaid prior to
maturity) and to pay interest on the unpaid principal amounts
hereof from the Issue Date at the per annum rates of interest
specified above computed on the basis of a 360-day year of twelve
30-day months; such interest being payable on January 1 and July 1
of each year, commencing January 1, 1999. Principal installments
of this Bond are payable at its Stated Maturity or on a prepayment
date to the registered owner hereof by U. S. Bank Trust Company of
Texas, N.A., Dallas, Texas (the "Paying Agent/Registrar"), upon
presentation and surrender, at its designated offices in New York,
New York (the "Designated Payment/Transfer Office"). Interest is
payable to the registered owner of this Bond whose name appears on
the "Security Register" maintained by the Paying Agent/ Registrar
at the close of business on the "Record Date", which is the 15th
day of the month next preceding each interest payment date and
interest shall be paid by the Paying Agent/Registrar by check sent
United States Mail, first class postage prepaid, to the address of
registered owner recorded in the Security Register on the Record
Date or by such other method, acceptable to the Paying
Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. All payments of principal of, premium, if any,
and interest on this Bond shall be without exchange or collection
charges to the owner hereof and in any coin or currency of the
United States of America which at the time of payment is legal
tender for the payment of public and private debts.
SECTION 10: Definitions. For all purposes of this
Ordinance and in particular for clarity with respect to the
issuance of the Bonds herein authorized and the pledge and
708069
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appropriation of revenues to the payment of the Bonds, the
following definitions are provided:
"Additional Parity Obligations" - Bonds, notes,
warrants, certificates of obligation or other evidences
of indebtedness which the City reserves the right to
issue or enter into, as the case may be, in the future
under the terms and conditions provided in Section 18 of
this Ordinance and which are equally and ratably secured
by a first lien on and pledge of the Net Revenues of the
System.
"Bonds" - The "City of Colleyville, Texas
Waterworks and Sewer System Revenue Bonds, Series 1998",
dated July 1, 1998, authorized by this Ordinance.
"City" - The City of Colleyville, located in the
County of Tarrant, Texas.
"Fiscal Year" - The twelve month operational period
of the System ending each year on September 30th;
provided, however, at such time as the Series 1975 and
Series 1975-A Previously Issued Bonds have been fully
paid as to both principal and interest, the City may
change the Fiscal Year to another period of not less
than twelve calendar months by the passage of an
ordinance, but in no event may the Fiscal Year be
changed more than one time in any three calendar year
period.
"Government Obligations" - Direct obligations of
the United States of America, including obligations the
principal of and interest on which are unconditionally
guaranteed by the United States of America, and United
States Treasury obligations such as its State and Local
Government Series in book-entry form.
"Gross. Revenues" - All income, receipts and
revenues of every nature derived or received from the
operation and ownership (excluding refundable meter
deposits, restricted gifts and grants in aid of
construction) of the System.
"Holder" or "Holders" - The registered owner, whose
name appears in the Security Register, for any Bond.
"Maintenance and Operating Expenses" - All current
expenses of operating and maintaining the System as
authorized by the provisions of Texas Revised Civil
Statutes Annotated Article 1113, as amended, including
708069
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708069
but not limited to, all salaries, labor, materials,
repairs and extensions necessary to render efficient
service; provided, however, that only such repairs and
extensions, as in the judgment of the City Council,
reasonably and fairly exercised, are necessary to
maintain~he operations and render adequate service to
the City and the inhabitants thereof, or such as might
be necessary to meet some physical accident or condition
which would otherwise impair obligations payable from
Net Revenues shall be deducted in determining Net
Revenues. Depreciation charges shall not be considered
Maintenance and Operating Expenses. Maintenance and
Operating Expenses shall include payments under
contracts for the purchase of water supply, treatment of
sewage or other materials, goods or services for the
System to the extent authorized by law and the
provisions of such contract.
"Net Revenues" - Gross Revenues of the System, with
respect to any period, after deducting the System's
Maintenance and Operating Expenses during such period.
"Obligations Similarly Secured" - Collectively, the
Bonds, the Previously Issued Bonds and any Additional
Parity Obligations, which shall be parity obligations
being equally and ratably secured by and payable from a
lien on and pledge of the Net Revenues of the System.
"Outstanding" - When used in this Ordinance with
respect to any Bonds means, as of the date of
determination, all Bonds theretofore issued and
delivered under this Ordinance, except:
1. those Bonds theretofore cancelled by
the Paying Agent/Registrar or delivered to
the Paying Agent/Registrar for cancellation;
2; those Bonds for which payment has
been duly provided by the City in accordance
with the provisions of Section 30 of this
Ordinance; and
3. those Bonds that have been
mutilated, destroyed, lost, or stolen and
replacement Bonds have been registered and
delivered in lieu thereof as provided in
Section 29 of this Ordinance.
"Previously Issued Bonds" - shall mean the
Outstanding and unpaid revenue bonds of the City payable
-19-
708069
from and equally and ratably secured by a first lien on
and pledge of the Net Revenues of the System, identified
as follows:
(1) City of Colleyville, Texas
Waterworks and Sewer System Revenue Bonds,
Series 1975, dated January 1', 1975, and
originally issued in the principal amount of
$2,000,000;
(2) City of Colleyville,. Texas
Waterworks and Sewer System Revenue Bonds,
Series 1975-A, dated July 1, 1975, and
originally issued in the principal amount of
$250,000;
(3) City of Colleyville, Texas
Waterworks and Sewer System Revenue Bonds,
Series 1981, dated April 1, 1981, and
originally issued in the principal amount of
$1,400,000;
(4) City of Colleyville, Texas,
Waterworks and Sewer System Revenue Bonds,
Series 1989, dated August 1, 1989, and
originally issued in the principal amount of
$750,000;
(5) City of Colleyville, Texas,
Waterworks and Sewer System Revenue Bonds,
Series 1994, dated June 1, 1994, and
originally issued in the pri~cipal amount of
$2,860,000; and
(6) City of Colleyville, Texas,
Waterworks and Sewer System Refunding and
Improvement Revenue Bonds, Series 1996, dated
March 15, 1996, and originally issued in the
principal amount of $4,220,000.
"Required Reserve Amount" - The amount required to
be deposited and maintained in the Reserve Fund under
the provisions of Section 15 of this Ordinance.
"System" - The waterworks and sewer system of the
Ci ty, together with any additions and extensions thereto
and improvements and replacements thereof hereafter
constructed or acquired.
-20-
SECTION 11: Pledqe. The City hereby covenants and agrees
that all of the Net Revenues of the System, with the exception of
those in excess of the amounts required to establish and maintain
the special Funds created for the payment and security of the
Obligations Similarly Secured, are hereby irrevocably pledged,
equally and ratably, to the payment of the Previously Issued
Bonds, the Bonds, and Additional Parity Obligations, if issued,
and the interest thereon, as hereinafter provided. It is hereby
ordained that the Obligations Similarly Secured, and the interest
thereon, shall constitute a first lien on the Net Revenues of the
System and be valid and binding without any physical delivery
thereof or further act by the City.
SECTION 12: Rates and Charqes. For the benefit of the
Holders of the Bonds 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
Bonds are Outstanding, to establish and maintain rates and charges
for facilities and services afforded by the System that are
reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce
Gross Revenues in each Fiscal Year sufficient:
1. To pay Maintenance and Operating Expenses,
depreciation charges and replacement and betterment
costs, and
2. To produce Net Revenues sufficient to pay the
principal of and interest on the Obligations Similarly
Secured and the amounts required to be deposited in any
reserve or contingency fund created for the payment and
security of the Obligations Similarly Secured, and any
other obligations or evidences of indebtedness issued or
incurred that are payable only from and secured solely
by a lien on and pledge of the Net Revenues of the
System.
3. Any other legally incurred indebtedness payable
from the revenues of the System and/or secured by a lien
on the System.
SECTION 13: Waterworks and Sewer System Fund. The City
hereby covenants, agrees and reaffirms its covenants to the
Holders of the Previously Issued Bonds that the Gross Revenues of
the System shall be deposited, as collected and received, into a
separate account (previously created, established and to be
maintained with a depository bank of the City) known as the
Waterworks and Sewer System Fund (herein called the "System Fund")
and that the Gross Revenues of the System shall be kept separate
and apart from all other funds of the City. All Gross Revenues
708069
-21-
deposited into the System Fund shall be pledged and appropriated
to the extent required for the following uses and in the order of
priority shown:
FIRST: To the payment of all necessary and reasonable
Maintenance and Operating Expenses as defined herein or
required by statute to be a first charge on and claim
against the Gross Revenues of the System.
SECOND: To the payment of the amounts required to be
deposi ted into the Interest and Sinking Fund
(hereinafter defined) created and established for the
payment of the principal of and interest on each of the
Obligations Similarly Secured as the same become due and
payable.
THIRD: To the payment of the amounts required to be
deposited into the Reserve Fund (hereinafter defined) to
establish and maintain the Required Reserve Amount in
accordance with the provisions of this Ordinance or any
other ordinance relating to the issuance of Obligations
Similarly Secured.
Any Net Revenues remaining in the System Fund after
satisfying the foregoing payments, or making adequate and
sufficient provision for the payment thereof, may be appropriated
and used for any other City purpose now or hereafter permitted by
law.
SECTION 14: Interest and Sinkinq Fund. For purposes of
providing funds to pay the principal of and interest on the
Obligations Similarly Secured as the same become due and payable,
the City agrees to maintain on the books and records of the City,
a separate and special account or fund known as the "Waterworks
and Sewer System Interest and Sinking Fund" (the "Interest and
Sinking Fund") and moneys deposited to the credit of such account
shall be kept in a special fund maintained at the depository of
the City. The City covenants that there shall be deposited to the
credit of the Interest and Sinking Fund prior to each principal
and interest payment date from the available Net Revenues an
amount equal to one hundred per centum (100%) of the amount
required to fully pay the interest on and the principal of the
Bonds then falling due and payable, such deposits to pay maturing
principal and accrued interest on the Bonds to be made in
substantially equal monthly installments on or before the
fifteenth day of each month, beginning on or before the fifteenth
day of the month next following the delivery of the Bonds to the
initial purchaser(s).
708069
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The required monthly deposits to the Interest and Sinking
Fund for the payment of principal of and interest on the Bonds
shall continue to be made as hereinabove provided until such time
as (i) the total amount on deposit in the Interest and Sinking
Fund and Reserve Fund is equal to the amount required to fully pay
and discharg~ all Outstanding Obligations Similarly Secured
(principal and interest) or, (ii) the Bonds are no longer
Outstanding.
Accrued interest and premium, if any , received from the
initial purchaser(s) of the Bonds, shall be taken into
consideration and reduce the amount of the monthly deposits
hereinabove required to be deposited into the Interest and Sinking
Fund from the Net Revenues of the System. Additionally, any
proceeds of the Bonds not required to complete the improvements
and extensions to be made to the System shall be deposited into
the Interest and Sinking Fund and may be taken into consideration
and reduce the amount of monthly deposits required to be deposited
into the Interest and Sinking Fund from the Net Revenues of the
System.
SECTION 15: Reserve Fund. For purposes of accumulating and
maintaining funds as a reserve for the payment of the Obligations
Similarly Secured, the City agrees, covenants and reaffirms its
covenants to the Holders of the Previously Issued Bonds to
maintain a special fund or account known as the "Waterworks and
Sewer System Reserve Fund" (the "Reserve Fund"), which Fund shall
be kept and maintained at an official depository of City funds.
All funds deposited to the credit of the Reserve Fund (excluding
earnings and income derived or received from deposits or
investments which may be transferred to the System Fund referenced
in Section 13 of this Ordinance during such periods as there is on
deposit in the Reserve Fund the Required Reserve Amount) shall be
used solely for the payment of the principal of and interest on
the Obligations Similarly Secured, when and to the extent other
funds available for such purposes are insufficient.
In accordance with the provisions of the ordinances
authorizing the issuance of the Previously Issued Bonds, the
amount currently on deposit in the Reserve Fund is $576,153.00
(the "Current Reserve"). By reason of the issuance of the Bonds,
the total amount required to be accumulated and maintained in the
Reserve Fund shall be and is hereby increased to the sum of
$870,903.00 (the "Required Reserve Amount"), which amount equals
at least the average annual principal and interest
requirements for the Bonds and the Previously Issued Bonds now
Outstanding. Beginning on or before the 15th day of the month
next following the month the Bonds are delivered to the initial
purchasers and on or before the 15th day of each following month
until the Required Reserve Amount has been fully accumulated,
708069
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there shall be deposited into the Reserve Fund from the Net
Revenues of the System an amount equal to at least 1/60th of the
difference between the Required Reserve Amount and the Current
Reserve.
When and ~o long as the cash and investments in the Reserve
Fund total not less than the Required Reserve Amount, no deposits
need be made to the credit of the Reserve Fund; but, if and when
the Reserve Fund at any time contains less than the Required
Reserve Amount (other than as the result of the issuance of
Additional Parity Obligations as provided in the preceding
paragraph), the City covenants and agrees to cure the deficiency
in the Required Reserve Amount by resuming monthly deposits to
said Fund in an amount equal to 1/60th of the Required Reserve
Amount from the Net Revenues of the System on or before the
fifteenth day of each month until the Required Reserve Amount has
been fully restored. The City further covenants and agrees that,
subj ect only to the payments to be made to the Interest and
Sinking Fund, the Net Revenues shall be applied and appropriated
and used to establish and maintain the Required Reserve Amount and
to cure any deficiency in such amounts as required by the terms of
this Ordinance and any other ordinance pertaining to the issuance
of Additional Parity Obligations.
Money in the Reserve Fund, at the option of the City, may be
invested or reinvested from time to time in direct obligations or
obligations the principal and interest of which are guaranteed by
the United States of America or invested in direct obligations of
or participation certificates guaranteed by the Federal
Intermediate Credit Banks, Federal Land Banks, Federal National
Mortgage Association, Federal Home Loan Banks, Banks for
Cooperatives, and in certificates of deposit of any bank or trust
company the deposits of which are fully secured by a pledge of
securities of any of the kinds hereinabove specified, such
obligations or securities to mature in not more than ten (10)
years from the date of such investment. Any obligations in which
money is so invested shall be kept in escrow in the City IS
depository bank and shall be promptly sold and the proceeds of
sale applied to the making of payments required to be made from
the Reserve Fund whenever such payments are necessary to be made.
The deposits to the Reserve Fund shall be subordinate to those
required to be made into the Interest and Sinking Fund.
SECTION 16: Deficiencies - Excess Net Revenues.
(a) If on any occasion there shall not be sufficient Net
Revenues of the System to make the required deposits into the
Interest and Sinking Fund and the Reserve Fund, then such
deficiency shall be cured as soon as possible from the next
available unallocated Net Revenues of the System, or from any
708069
-24-
other sources available for such purpose, and such payments shall
be in addition to the amounts required to be paid into said Funds
during such month or months.
(b) Subject to making the required deposits to the Interest
and Sinking Fund and the Reserve Fund when and as required by this
Ordinance, or any ordinance authorizing the issuance of Additional
Parity Obligations, the excess Net Revenues of the System may be
used by the City for any lawful purpose.
SECTION 17: PaYment of Bonds. While any of the Bonds are
Outstanding, the Director of Finance shall cause to be transferred
to the Paying Agent/Registrar, from funds on deposit in the
Interest and Sinking Fund, and, if necessary, in the Reserve Fund,
amounts sufficient to fully pay and discharge promptly each
installment of interest on and principal of the Bonds as such
installment accrues or matures; such transfer of funds must be
made in such manner as will cause immediately available funds to
be deposited with the Paying Agent/Registrar for the Bonds at the
close of the business day next preceding the date a debt service
payment is due on the Bonds.
SECTION 18: Issuance of Additional Parity Obliqations.
Subject to the provisions hereinafter appearing as to the
conditions precedent which must be satisfied, the City reserves
the right to issue, from time to time as needed, Additional Parity
Obligations for any lawful purpose. The Additional Parity
Obligations, when issued, shall be payable from and secured by a
first lien on and pledge of the Net Revenues of the System in the
same manner and to the same extent as the Bonds and the Previously
Issued Bonds. Such Additional Parity Obligations may be issued in
such form and manner as now or hereafter authorized by the laws of
the State of Texas for the issuance of evidences of indebtedness
or other instruments, and should new methods or financing
techniques be developed that differ from those now available and
in normal use, the City reserves the right to employ the same in
its financing arrangements provided only that the following
conditions precedent for the authorization and issuance of any
Additional Parity Obligations are satisfied, to wit:
1 . The City is not then in default as to any covenant,
condition or obligation prescribed by the ordinances authorizing
the Obligations Similarly Secured.
2. Each of the Funds created and established for the payment
and security of Obligations Similarly Secured contains the amount
of money then required to be on deposit therein.
3. The Net Earnings (hereinafter defined) of the System for
(i) the completed Fiscal Year next preceding the adoption of an
708069
-25-
ordinance authorizing the issuance of the proposed Additional
Parity Obligations, or (ii) the twelve (12) months next preceding
the adoption of such ordinance are equal to at least 1.20 times
the average annual principal and interest requirements of all
bonds to be secured by a first lien on and pledge of the Net
Revenues of the System after giving effect to the issuance of the
proposed Additional Parity Obligations, as such Net Earnings are
shown by a report by a Certified Public Accountant or a Licensed
Publ ic Accountant. The term "Net Earnings" as used in this
Section shall mean the Gross Revenues after deducting Maintenance
and Operating Expenses, but not deducting depreciation or
expenditures which, under standard accounting practice, should be
charged to capital expenditures.
4. The Additional Parity Obligations are made to mature on
January 1 of each of the years in which they are scheduled to
mature.
5. The ordinance authorizing issuance of the Additional
Parity Obligations provides for the accumulation in the Interest
and Sinking Fund of amounts sufficient to pay the principal and
interest on such Additional Parity Obligations as the same mature.
6. The ordinance authorizing the issuance of Additional
Parity Obligations provides that the amount to be accumulated and
maintained in the Reserve Fund (including the amount required to
be deposited therein by the provisions of this Ordinance) will be
equal to not less than the average annual principal and interest
requirements for all Obligations Similarly Secured which will be
Outstanding after giving effect to the issuance of the proposed
Additional Parity Obligations (such average annual requirement to
be calculated on a Fiscal Year basis as of the date of the
proposed Additional Parity Obligations). Any additional Reserve
Fund Amount shall be required (by such authorizing ordinance) to
be accumulated therein within sixty (60) calendar months from the
date of issuance of the proposed Additional Parity Obligations.
SECTION 19: Refundinq Bonds. The City reserves the right to
issue refunding bonds to refund all or any part of the Outstanding
Obligations Similarly Secured, pursuant to any law then available,
upon such terms and conditions as the City Council of the City may
deem to be in the best interest of the City and its inhabitants,
and if less than all such Outstanding Obligations Similarly
Secured are refunded, the conditions precedent prescribed, for the
issuance of Additional Parity Obligations, set forth in Section 18
of this Ordinance shall be satisfied and the Accountant's
certificate or opinion required in subparagraph (3) shall give
effect to the principal and interest requirements of the proposed
refunding bonds (but shall not give effect to the Obligations
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~.,________.____._......____________.,__'___....'--...- ,n ______.^___..___.,.....,___ _"._,._,__.~.____.m.._"_w_,.._,_...._ .,~.,..~._.~,_",~_....__,_,__..... __ ....___.._..".. ._.. _._...,________._,,____.~__.__._.__._._________.~_~_.._____,~._'''~______,_,.,._~._,.__ _ _' _____._..0__.~.__~"O>__._~__
Similarly Secured being refunded following their cancellation or
provision being made for their paYment) .
SECTION 20: Obliqations of Inferior Lien and Pledqe. The
City hereby reserves the right to issue, at any time, obligations
payable from -and secured by a lien on and pledge of the Net
Revenues of the System, junior and subordinate in rank and dignity.
to the lien on and pledge of such Net Revenues securing the
paYment of the Obligations Similarly Secured, as may be authorized
by the laws of the State of Texas.
SECTION 21: Security of Funds. All moneys on deposit in the
funds for which this Ordinance makes provision (except any portion
thereof as may be at any time properly invested) shall be secured
in the manner and to the fullest extent required by the laws of
Texas for the security of public funds, and moneys on deposit in
such funds shall be used only for the purposes permitted by this
Ordinance.
SECTION 22: Maintenance of System - Insurance. The City
covenants, agrees and reaffirms its covenants to the Holders of
the Previously Issued Bonds that while the Bonds remain
Outstanding, it will maintain and operate the System with all
possible efficiency and maintain casualty and other insurance on
the properties of the System and its operations of a kind and in
such amounts customarily carried by municipal corporations in the
State of Texas engaged in a similar type of business.
SECTION 23: Records and Accounts - Annual Audit. The City
covenants, agrees and reaffirms its covenants to the Holders of
the Previously Issued Bonds that so long as any of the Bonds
remain Outstanding, it will keep and maintain separate and
complete records and accounts pertaining to the operations of the
System in which complete and correct entries shall be made of all
transactions relating thereto, as provided by Texas Revised Civil
Statutes Annotated Article 1113, as amended, or other applicable
law. The Holder or Holders of the Bonds of any duly authorized
agent or agents of such Holders shall have the right to inspect
the System and all properties comprising the same. The City
further agrees that following the close of each Fiscal Year, it
will cause .an audit of such books and accounts to be made by an
independent firm of Certified Public Accountants. This audit will
address, at a minimum, the requirements set forth in the
ordinances authorizing the issuance of the Previously Issued
Bonds. Copies of each annual audit shall be furnished to the
Executive Director of the Municipal Advisory Council of Texas at
his office in Austin, Texas, and, upon written request, to the
initial purchaser of the Bonds and any subsequent Holder thereof.
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SECTION 24: Remedies in Event of Default. In addition to
all the rights and remedies provided by the laws of the State of
Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in the paYments to be made to the
Interest and Sinking Fund or the Reserve Fund, or (b) defaults in
the observance or performance of any other of the covenants,
conditions or obligations set forth in this Ordinance, the Holder
or Holders of any of the Bonds shall be entitled to a writ of
mandamus issued by a court of proper jurisdiction compelling and
requiring the governing body of the City and other officers of the
City to observe and perform any covenant, condition or obligation
prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power or shall be
construed to be a waiver of any such default or acquiescence
therein, and every such right or power may be exercised from time
to time and as often as may be deemed expedient. The specific
remedies herein provided shall be cumulative of all other existing
remedies and the specification of such remedies shall not be
deemed to be exclusive.
SECTION 25: Soecial Covenants.
further covenants as follows:
That the City hereby
1. It has the lawful power to pledge the Net Revenues
supporting this issue of Bonds and has lawfully exercised said
powers under the Constitution and laws of the State of Texas,
including said power existing under Texas Revised Civil Statutes
Annotated Articles 1111 et seq, as amended, and Texas Revised
Civil Statutes Annotated Article 2368a, as amended.
2. The Obligations Similarly Secured shall be equally and
ratably secured by a lien on and a pledge of the Net Revenues of
the System in a manner that one bond shall have no preference over
any other bond.
3. Other than for the paYment of the Outstanding Obligations
Similarly Secured, the Bonds, and the outstanding "City of
Colleyville, Texas, Tax and Waterworks and Sewer System (Limited
Pledge) Revenue Certificates of Obligation, Series 1989", dated
August 1, 1989 and "City of Colleyville, Texas, Tax and Waterworks
and Sewer System (Limited Pledge) Revenue Certificates of
Obligation, Series 1991, dated January 1, 1991, the Net Revenues
of the System have not in any manner been pledged to the paYment
of any debt or obligation of the City or of the System.
4. As long as any Obligations Similarly Secured, or any
interest thereon, remain Outstanding, the City will not sell,
lease or encumber the System or any substantial part thereof,
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provided that this covenant shall not be construed to prohibit the
sale of such machinery, or other properties or equipment which has
become obsolete or otherwise unsuited to the efficient operation
of the System; also, with the exception of Additional Parity
Obligations issued in accordance with the terms and conditions of
this Ordinanc~, it will not encumber the Net Revenues unless such
encumbrance is made junior and subordinate to all of the
provisions of this Ordinance.
5. No free service of the System shall be allowed, and
should the City or any of its agents or instrumentalities make use
of the services and facilities of the System, payment of the
reasonable value thereof shall be made by the City out of funds
from sources other than the revenues and income of the System.
6. To the extent that it legally may, the City further
covenants and agrees that, so long as any of the Obligations
Similarly Secured, or any interest thereon, are Outstanding, no
franchise shall be granted for the installation or operation of
any competing waterworks and sanitary sewer systems other than
those owned by the City, and the operation of any such systems by
anyone other than the City is hereby prohibited.
SECTION 26: Soecial Obliqations. The Bonds are limited,
special obligations of the City payable solely from and secured by
a lien on and pledge of the Net Revenues of the System, and the
Holders thereof shall never have the right to demand paYment of
the principal or interest on the Bonds from any funds raised or to
be raised through taxation by the City.
SECTION 27: Notices to Holders ; Waiver. Wherever this
Ordinance provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid,
to the address of each Holder as it appears in the Security
Register.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice to any particular Holders, nor any
defect in any notice so mailed, shall affect the sufficiency of
such notic~ with respect to any other Holders. Where this
Ordinance provides for notice in any manner, such notice may be
waived in writing by the Holder entitled to receive such notice,
either before or after the event with respect to which such notice
is given, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon
such waiver.
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SECTION 28: Cancellation. All Bonds surrendered for
payment, redemption, transfer, exchange, or replacement, if
surrendered to the Paying Agent/Registrar, shall be promptly
cancelled by it and, if surrendered to the City, shall be
delivered to the Paying Agent/Registrar and, if not already
cancelled, shall be promptly cancelled by the Paying
Agent/Registrar. The City may at any time deliver to the Paying
Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly
cancelled by the Paying Agent/Registrar. All cancelled Bonds held
by the Paying Agent/Registrar shall be destroyed as directed by
the City.
SECTION 29: Mutilated. Destroyed. Lost. and Stolen Bonds.
In case any Bond shall be mutilated, or destroyed, lost or stolen,
the Paying Agent/Registrar may execute and deliver a replacement
Bond of like form and tenor, and in the same denomination and
bearing a number not contemporaneously outstanding, in exchange
and substitution for such mutilated Bond, or in lieu of and in
substitution for such destroyed, lost or stolen Bond, only upon
the approval of the City and after (i) the filing by the Holder
thereof with the Paying Agent/Registrar of evidence satisfactory
to the Paying Agent/Registrar of the destruction, loss or theft of
such Bond, and of the authenticity of the ownership thereof and
(ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the
Paying Agent/Registrar harmless. All expenses and charges
associated with such indemnity and with the preparation, execution
and delivery of a replacement Bond shall be borne by the Holder of
the Bond mutilated, or destroyed, lost or stolen.
Every replacement Bond issued pursuant to this Section shall
be a valid and binding obligation, and shall be entitled to all
the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds; notwithstanding the enforceability of paYment
by anyone of the destroyed, lost, or stolen Bonds.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement and paYment of mutilated, destroyed,
lost or stolen Bonds.
SECTION 30: Satisfaction of Obliqation of City. If the City
shall payor cause to be paid, or there shall otherwise be paid to
the Holders, the principal of and interest on the Bonds, at the
times and in the manner stipulated in this Ordinance, then the
pledge of any taxes, or Net Revenues of the System or other money,
securities, and funds pledged under this Ordinance and all
covenants, agreements, and other obligations of the City to the
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Holders shall thereupon cease, terminate, and become void and be
discharged and satisfied, and the Paying Agent/Registrar shall pay
over or deliver all money held by it under this Ordinance to the
City.
Bonds or any principal amount(s) thereof shall be deemed to
have been paid within the meaning and with the effect expressed
above in this Section when (i) money sufficient to pay in full
such Bonds or the principal amount(s) thereof at maturity or to
the redemption date therefor, together with all interest due
thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent/Registrar, or an authorized escrow
agent, or (ii) Government Obligations shall have been irrevocably
deposited in trust with the Paying Agent/ Registrar, or an
authorized escrow agent which Government Obligations have been
certified by an independent accounting firm to mature as to
principal and interest in such amounts and at such times as will
insure the availability, without reinvestment, of sufficient
money, together with any moneys deposited therewith, if any, to
pay when due the principal of and interest on such Bonds, or the
principal amount(s) thereof, on and prior to the Stated Maturity
thereof or (if notice of redemption has been duly given or waived
or if irrevocable arrangements therefor acceptable to the Paying
Agent/Registrar have been made) the redemption date thereof. The
City covenants that no deposit of moneys or Government Obligations
will be made under this Section and no use made of any such
deposit which would cause the Bonds to be treated as "arbitrage
bonds" within the meaning of Section 148 of the Internal Revenue
Code of 1986, as amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/Registrar, or
an authorized escrow agent, and all income from Government
Obligations held in trust by the Paying Agent/Registrar or an
authorized escrow agent, pursuant to this Section which is not
required for the paYment of the Bonds, or any principal amount(s)
thereof, or interest accruing thereon, with respect to which such
moneys have been so deposited shall be remitted to the City or
deposited as directed by the City. Furthermore, any money held by
the Paying Agent/Registrar for the paYment of the principal of and
interest on the Bonds and remaining unclaimed for a period of four
(4) years after the Stated Maturity, or applicable redemption
date, of the Bonds such moneys were deposited and are held in
trust to pay shall, upon the request of the City, be remitted to
the City against a written receipt therefor. Notwithstanding the
above and foregoing, any remi t tance of funds from the Paying
Agent/Registrar to the City shall be subject to any applicable
unclaimed property laws of the State of Texas.
SECTION 31: Ordinance a Contract - Amendments - Outstandinq
Bonds. The City acknowledges that the covenants and obligations of
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the City herein contained are a material inducement to the
purchase of the Bonds. This Ordinance shall constitute a contract
with the Holders from time to time, binding on the City and its
successors and assigns, and shall not be amended or repealed by
the City so long as any Bond remains Outstanding except as
permitted in tbis Section. The City may, without the consent of
or notice to any Holders, from time to time and at any time, amend
this Ordinance in any manner not detrimental to the interests of
the Holders, including the curing of any ambiguity, inconsistency,
or formal defect or omission herein. In addition, the City may,
with the written consent of Holders holding a majority in
aggregate principal amount of the Bonds then Outstanding affected
thereby, amend, add to, or rescind any of the provisions of this
Ordinance; provided that, without the consent of all Holders of
Outstanding Bonds, no such amendment, addition, or rescission
shall (1) extend the time or times of paYment of the principal of
and interest on the Bonds, reduce the principal amount thereof or
the rate of interest thereon, or in any other way modify the terms
of paYment of the principal of or interest on the Bonds, (2) give
any preference to any Bond over any other Bond, or (3) reduce the
aggregate principal amount of Bonds required for consent to any
such amendment, addition, or rescission.
SECTION 32: Covenants to Maintain
Status. (a) Definitions. When used in this
following terms shall have the following meanings:
Tax-Exemot
Section, the
"Closing Date" means the date on which the Bonds
are first authenticated and delivered to the initial
purchasers against paYment therefor.
"Code" means the Internal Revenue Code of 1986, as
amended by all legislation, if any , effective. on or
before the Closing Date.
"Computation Date" has the meaning set forth in
Section 1.148-1(b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in
Section 1.148-1(b) of the Regulations, and any
replaqement proceeds as defined in Section 1.148-1 (c) of
the Regulations, of the Bonds.
"Investment" has the meaning set forth in Section
1.148-1(b) of the Regulations.
"Nonpurpose Investment" means any investment
property, as defined in section 148(b) of the Code, in
which Gross Proceeds of the Bonds are invested and which
708069
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is not acquired to carry out the governmental purposes
of the Bonds.
"Rebate Amount" has the meaning set forth in
Section 1.148-1(b) of the Regulations.
"Regulations" means any proposed, temporary, or
final Income Tax Regulations issued pursuant to Sections
103 and 141 through 150 of the Code, and 103 of the
Internal Revenue Code of 1954, which are applicable to
the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary
or final Income Tax Regulation designed to supplement,
amend or replace the specific Regulation referenced.
"Yield" of
(1) any Investment has the meaning set
forth in Section 1.148-5 of the Regulations;
and
(2) the Bonds has the meaning set forth
in Section 1.148-4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall
not use, permit the use of, or omit to use Gross Proceeds or any
other amounts (or any property the acquisition, construction or
improvement of which is to be financed directly or indirectly with
Gross Proceeds) in a manner which if made or omitted,
respectively, would cause the interest on any Bond to become
includable in the gross income, as defined in section 61 of the
Code, of the owner thereof for federal income tax purposes.
Without limiting the generality of the foregoing, unless and until
the City receives a written opinion of counsel nationally
recognized in the field of municipal bond law to the effect that
failure to comply with such covenant will not adversely affect the
exemption from federal income tax of the interest on any Bond, the
City shall comply with each of the specific covenants in this
Section.
(c) No Private Use or Private Pavrnents. Except as permitted
by section- 141 of the Code and the Regulations and rulings
thereunder, the City shall at all times prior to the last Stated
Maturity of Bonds:
(1) exclusively own, operate and possess all
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use
or permit the use of such Gross Proceeds (including all
708069
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contractual arrangements wi th terms different than those
applicable to the general public) or any property
acquired, constructed or improved with such Gross
Proceeds in any activity carried on by any person or
entity (including the United States or any agency,
department and instrumentality thereof) other than a
state or local government, unless such use is solely as
a member of the general public; and
(2) not directly or indirectly impose or accept
any charge or other paYment by any person or entity who
is treated as using Gross Proceeds of the Bonds or any
property the acquisition, construction or improvement of
which is to be financed or refinanced directly or
indirectly with such Gross Proceeds, other than taxes of
general application within the City or interest earned
on investments acquired with such Gross Proceeds pending
application for their intended purposes.
(d) No Private Loan. Except to the extent permitted by
section 141 of the Code and the Regulations and rulings
thereunder, the City shall not use Gross Proceeds of the Bonds to
make or finance loans to any person or entity other than a state
or local government. For purposes of the foregoing covenant, such
Gross Proceeds are considered to be "loaned" to a person or entity
if: (1) property acquired, constructed or improved with such Gross
Proceeds is sold or leased to such person or entity in a
transaction which creates a debt for federal income tax purposes;
(2) capacity in or service from such property is committed to such
person or entity under a take-or-pay, output or similar contract
or arrangement; or (3) indirect benefits, or burdens and benefits
of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise
transferred in a transaction which is the economic equivalent of
a loan.
(e) Not to Invest at Hiqher Yield. Except to the extent
permitted by section 148 of the Code and the Regulations and
rulings thereunder, the City shall not at any time prior to the
final Stated Maturity of the Bonds directly or indirectly invest
Gross Proceeds in any Investment (or use Gross Proceeds to replace
money so invested), if as a result of such investment the Yield
from the Closing Date of all Investments acquired with Gross
Proceeds (or with money replaced thereby), whether then held or
previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent
permitted by section 149(b) of the Code and the Regulations and
rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed
708069
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within the meaning of section 149(b) of the Code and the
Regulations and rulings thereunder.
(g) Information Reoort. The City shall timely file the
information required by section 149 (e) of the Code with the
Secretary of the Treasury on Form 8038-G or such other form and in
such place as the Secretary may prescribe.
(h) Rebate. The City warrants and represents that it
satisfies the requirements of paragraph (2) and (3) of section
148(f) of the Code with respect to the Bonds without making the
paYments for the United States described in such section.
Specifically, the City warrants and represents that
(1) the City is a governmental unit with general
taxing powers;
(2) at least 95% of the Gross Proceeds of the
Bonds will be used for the local governmental activities
of the City;
(3) the aggregate face amount of all tax-exempt
obligations issued or expected to be issued by the City
(and all subordinate entities thereof) in the calendar
year in which the Bonds are issued is not reasonably
expected to exceed $5,000,000.
PROVIDED, HOWEVER, should additional tax exempt obligations
be issued or incurred, including lease purchase financings, in the
1998 calendar year which would cause the total face amount of tax
exempt obligations issued and incurred in such calendar year to
exceed $5,000,000, the City agrees and covenants that it will
maintain complete records regarding the investments of the
proceeds of sale of the Bonds and rebate any "arbitrage profits"
to the United States as required by Section 148(f) of the Code.
(i) Elections. The City hereby directs and authorizes the
City Manager, Director of Finance and City Secretary, individually
or jointly, to make elections permitted or required pursuant to
the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Bonds, in the
Certificate as to Tax Exemption or similar or other appropriate
certificate, form or document.
SECTION 33: Qualified Tax Exemot Obliqations. In
accordance with the provisions of paragraph (3) of subsection (b)
of Section 265 of the Code, the City hereby designates the Bonds
to be "qualified tax exempt obligations" in that the Bonds are not
"private activity bonds" as defined in the Code and the reasonably
anticipated amount of "qualified tax exempt obligations" to be
708069
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issued by the City (including all subordinate entities of the
City) for the calendar year 1998 will not exceed $10,000,000.
SECTION 34: Sale of Bonds. Pursuant to a public sale for
the Bonds, the bid submitted by Dean Witter Reynolds (herein
referred to as the "Purchasers") is declared to be the best bid
received producing the lowest true interest cost rate to the City,
and the sale of the Bonds to said Purchasers at the price of par
and accrued interest to the date of delivery, plus a premium of
$-0-, is hereby approved and confirmed. Delivery of the Bonds to
the Purchasers shall occur as soon as possible upon paYment
being made therefor in accordance with the terms of sale.
SECTION 35: Official Statement. The Official Statement
prepared in the initial offering and sale of the Bonds by the
City, together with all addendas, supplements, and amendments
thereto issued on behalf of the City, is hereby approved as to
form and content, and the City Council hereby finds that the
information and data contained in said Official Statement
pertaining to the City and its financial affairs is true and
correct in all material respects and no material facts have been
omitted therefrom which are necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading. The use of such Official Statement in the
reoffering of the Bonds by the Purchasers is hereby approved and
authorized.
SECTION 36: Control and Custody of Bonds. The Mayor of the
City 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 definitive Bonds, and shall take and have charge and
control of the Initial Bonds pending the approval thereof by the
Attorney General, the registration thereof by the Comptroller of
Public Accounts and the delivery thereof to the Purchasers.
Furthermore, the Mayor, Mayor Pro Tem, City Secretary, City
Manager, Assistant City Manager and Director of Finance, anyone
or more of said officials, are hereby authorized and directed to
furnish and execute such documents and certifications relating to
the City and the issuance of the Bonds, including certifications
as to facts, estimates, circumstances and reasonable expectations
pertaining to the use, expenditure and investment of the proceeds
of the Bonds, as may be necessary for the approval of the Attorney
General, the registration by the Comptroller of Public Accounts
and the delivery of the Bonds to the Purchasers, and, together
with the City's financial advisor, bond counsel and the Paying
Agent/Registrar, make the necessary arrangements for the delivery
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of the Initial Bond(s) to the Purchasers and the initial exchange
thereof for definitive Bonds.
SECTION 37: Proceeds of Sale. The proceeds of sale of the
Bonds, excluding the accrued interest received from the
purchasers, shall be deposited in a construction fund maintained
at the City's depository bank. Pending expenditure for authorized
projects and purposes, such proceeds of sale may be invested in
authorized investments and any investment earnings realized shall
be expended for such authorized projects and purposes or deposited
in the Interest and Sinking Fund as shall be determined by the
City Council. Accrued interest received from the sale of the
Bonds and any excess bond proceeds, including investment earnings,
remaining after completion of all authorized projects or purposes
shall be deposited to the credit of the Interest and Sinking Fund.
SECTION 38: Leqal Ooinion. The obligation of the
Purchasers to accept delivery of the Bonds is subject to being
furnished a final opinion of Fulbright & Jaworski L.L.P.,
Attorneys, Dallas, Texas, approving such Bonds as to their
validity, said opinion to be dated and delivered as of the date of
delivery and payment for such Bonds. A true and correct
reproduction of said opinion or an executed counterpart thereof is
hereby authorized to be either printed on definitive printed
obligations or deposited with DTC along with the global
certificates for the implementation and use of the Book Entry Only
System used in the settlement and transfer of the Bonds.
SECTION 39: CUSIP Numbers. CUSIP numbers may be printed
or typed on the definitive Bonds. It is expressly provided,
however, that the presence or absence of CUSIP numbers on the
definitive Bonds shall be of no significance or effect as regards
the legality thereof and neither the City nor attorneys approving
said Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Bonds.
SECTION 40: Benefits of Ordinance. Nothing in this
Ordinance, expressed or implied, is intended or shall be construed
to confer upon any person other than the Ci ty, the Paying
Agent/Registrar and the Holders, any right, remedy, or claim,
legal or equitable, under or by reason of this Ordinance or any
provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the
City, the Paying Agent/Registrar and the Holders.
SECTION 41: Inconsistent Provisions. All ordinances,
orders or resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this
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Ordinance shall be and remain controlling as to the matters
contained herein.
SECTION 42: Governinq Law. This Ordinance shall be
construed and enforced in accordance with the laws of the State of
Texas and the United States of America.
SECTION 43: Severability. If any provision of this
Ordinance or the application thereof to any circumstance shall be
held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be
valid, and this governing body hereby declares that this Ordinance
would have been enacted without such invalid provision.
SECTION 44: 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 45: Incorooration of Findinqs and Determinations.
The findings and determinations of the City Council contained in
the preamble hereof are hereby incorporated by reference and made
a part of this Ordinance for all purposes as if the same were
restated in full in this Section.
SECTION 46: Amendments to Ordinance Uoon Discharqe of
Previously Issued Bonds. That, at such time as the Series 1975,
Series 1975-A and Series 1981 Previously Issued Bonds identified
in Section 10 have been paid or are no longer Outstanding, the
following Sections of this Ordinance shqll be amended and modified
to read as follows:
(a) Section 10 shall be amended and modified to read as
follows:
"SECTION 1 0 : Def ini t ions. For all purposes of
this Ordinance and in particular for clarity with
respect to the issuance of the Bonds herein authorized
and tl].e pledge and appropriation of revenues to the
payment of the Bonds, the following definitions are
provided:
"Additional Parity Obligations" - Bonds,
notes, warrants, certificates of obligation
or other evidences of indebtedness which the
Ci ty reserves the right to issue or enter
into, as the case may be, in the future under
the terms and conditions provided in
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Section 18 of this Ordinance and which are
equally and ratably secured by a first lien
on and pledge of the Net Revenues of the
System.
- "Average Annual Debt Service" - That
average amount which, at the time of
computation, will be required to pay the Debt
Service of obligations when due and derived
by dividing the total of such Debt Service by
the number of years then remaining before
final maturity. Capitalized interest
paYments provided from proceeds of
Obligations Similarly Secured shall be
excluded in making the aforementioned
computation.
"Bonds II - The "City of Colleyville,
Texas Waterworks and Sewer System Revenue
Bonds, Series 1998", dated July 1, 1998,
authorized by this Ordinance.
"City" - The City of Colleyville,
located in the County of Tarrant, Texas.
IIDebt Service II - As of any particular
date of computation, with respect to any
obligations and with respect to any period,
the aggregate of the amounts to be paid or
set aside by the City as of such date or
in such period for the payment of the
principal of, premium, if any, and interest
(to the extent not capitalized) on such
obligations; assuming, in the case of
Obligations Similarly Secured without a fixed
numerical rate, that such obligations bear,
or would have borne, interest at the highest
rate reached, or that would have applied to
such obligations (using the index or method
for computing interest applicable to such
Qbligations) during the twenty-four (24)
month period next preceding the date of
computation; and further assuming in the case
of obligations required to be redeemed or
prepaid as to principal prior to maturity,
the principal amounts thereof will be
redeemed prior to maturity in accordance with
the mandatory redemption provisions
applicable thereto.
708069
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"Fiscal Year" - The twel ve month
financial accounting period for the System
ending September 30th of each year; provided,
however, the City, by ordinance, may change
the Fiscal Year to another period of not less
tharr twelve calendar months.
"Government Obligations" - Direct
obligations of the United States of America,
including obligations the principal of and
interest on which are unconditionally
guaranteed by the United States of America,
and United States Treasury obligations such
as its State and Local Government Series in
book-entry form.
"Gross Revenues" - All income and
revenues of every nature derived or received
from the operation and ownership (excluding
refundable meter deposits, gifts and grants
in aid of construction, impact fees charged
developers and special assessments against
landowners) of the System, including earnings
and income derived from the investment or
deposit of moneys in any special funds or
accounts created and established for the
paYment and security of the Obligations
Similarly Secured and other obligations
payable solely from and secured only by a
lien on and pledge of the Net Revenues.
"Maintenance and Operating
Expenses II - All current expenses of operating
and maintaining the System, including all
salaries, labor, materials, repairs and
extensions necessary to render efficient
service; provided, however, that only such
repairs and extensions, as in the judgment of
the City Council, reasonably and fairly
exercised, are necessary to maintain the
operations and render adequate service to the
City and the inhabitants thereof, or such as
might be necessary to meet some physical
accident or condition which would otherwise
impair obligations payable from Net Revenues
shall be deducted in determining "Net
Revenues ". Depreciation charges shall not be
considered Operating and Maintenance
Expenses. Operating and Maintenance Expenses
shall include payments under contracts for
708069
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the purchase of water supply, treatment of
sewage or other materials, goods or services
for the System to the extent authorized by
law and the provisions of such contract.
- "Net Earnings" - The meaning assigned to
such term in Section 18 hereof.
"Net Revenues" - Gross Revenues of the
System, with respect to any period, after
deducting the System's Maintenance and
Operating Expenses during such period.
"Outstanding" - When used in this
Ordinance with respect to Bonds or
Obligations Similarly Secured means, as of
the date of determination, all Bonds or
Obligations Similarly Secured theretofore
issued and delivered under their respective
authorizing ordinances, except:
(1) those Bonds or
Similarly Secured cancelled or
cancellation by the appropriate
therefor;
Obligations
received for
paying agent
(2) those Bonds or Obligations
Similarly Secured paid or deemed to be duly
paid by the City in accordance with the
provisions of the ordinances governing their
issuance and applicable laws; and
(3) those Bonds or Obligations
Similarly Secured that have been mutilated,
destroyed, lost, or stolen and replacement
Bonds have been registered and delivered in
lieu thereof in accordance with applicable
terms and provisions.
"Previously Issued Bonds" - shall mean
the Outstanding and unpaid revenue bonds of
the City payable from and equally and ratably
secured by a first lien on and pledge of the
Net Revenues of the System, identified as
follows:
(1) City of Colleyville, Texas,
Waterworks and Sewer System Revenue Bonds,
Series 1989, dated August 1, 1989, and
708069
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originally issued in the principal amount of
$750,000;
(2) City of Colleyville, Texas,
Waterworks and Sewer System Revenue Bonds,
Serres 1994, dated June 1, 1994, and
originally issued in the principal amount of
$2,860,000; and
(3) City of Colleyville, Texas,
Waterworks and Sewer System Refunding and
Improvement Revenue Bonds, Series 1996, dated
March 15, 1996, and originally issued in the
principal amount of $4,220,000.
"Obligations Similarly Secured"-
Collectively, the Bonds, the Previously
Issued Bonds and any Additional Parity
Obligations, which shall be pari ty
obligations being equally and ratably secured
by and payable from a lien on and pledge of
the Net Revenues of the System.
"Required Reserve" - The amount required
to be accumulated and maintained in the
Reserve Fund under the provisions of
Section 15.
"System" - All properties, facilities
and plants currently owned, operated and
maintained by the City for the supply,
treatment, transmission and distribution of
potable water and the collection, treatment
and disposal of water-carried wastes,
together with all future extensions,
improvements, replacements and additions
thereto; provided, however, tha t
notwi thstanding the foregoing, and to the
extent now or hereafter authorized or
permitted by law, the term "System" shall not
mean to include facilities of any kind which
are declared not to be a part of the System
and which are acquired or constructed by or
on behalf of the City with the proceeds from
the issuance of "Special Facilities Bonds",
which are hereby defined as being special
revenue obligations of the City which are not
Bonds but which are payable from and secured
by other liens on and pledges of any
revenues, sources or paYments, not pledged to
708089
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the payment of the Obligations Similarly
Secured including, but not limited to,
special contract revenues or payments
received from any other legal entity in
connection with such facilities."
(b)
follows:
Section 12 shall be amended and modified to read as
"SECTION 12: Rates and Charqes. That, for the
benefit of the Holders of the Bonds 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 Bonds are
Outstanding, to establish and maintain rates and charges
for facilities and services afforded by the System that
are reasonably expected, on the basis of available
information and experience and with due allowance for
contingencies, to produce Gross Revenues in each Fiscal
Year sufficient:
(1) To pay Maintenance and Operating
Expenses, depreciation charges and
replacement and betterment costs,
(2) To produce Net Revenues sufficient
to pay the current Debt Service on the
Obligations Similarly Secured then
Outstanding and the amounts required to be
deposited in any reserve or contingency fund
created for the paYment and security of the
Obligations Similarly Secured, or other
evidences of indebtedness issued or incurred
that are payable only from and secured solely
by a lien on and pledge of the Net Revenues
of the System, and
(3) To produce Net Revenues equal to at
least 1.20 times the annual Debt Service for
the Obligations Similarly Secured then
Outstanding.
(4) To pay all other indebtedness
payable from the Net Revenues and/or secured
by a lien on the properties or the revenues
of the System.
(c)
follows:
Section 13 shall be amended and modified to read as
708069
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"SECTION 13: Water and Sewer System Fund. The
City hereby covenants and agrees that Gross Revenues of
the System (excluding earnings and income derived from
investments held in the Interest and Sinking Fund and
Reserve Fund) shall be deposited as collected to the
credit of- a fund maintained at an official depository of
City funds and known on the books and records of the
City as the "Water and Sewer System Fund" (herein called
the "System Fund "), and such revenues of the System
shall be kept separate and apart from all other funds of
the City. All revenues deposited in the System Fund
shall be pledged and appropriated to the extent required
for the following uses and in the order of priority
shown:
(1) To the paYment of all necessary and
reasonable Maintenance and Operating Expenses
as defined herein or required by statute to
be a first charge on and claim against the
Gross Revenues thereof.
(2) To the paYment of the amounts
required to be deposited in the Interest and
Sinking Fund established and maintained for
the paYment of Debt Service on the
Obligations Similarly Secured as the same
becomes due and payable.
(3) To the paYment of the amounts
required to be deposited in the Reserve Fund
to accumulate and maintain therein the
Required Reserve in accordance with the
provisions of this Ordinance or any other
ordinance relating to issuance of Obligations
Similarly Secured.
Any Net Revenues remaining in the System Fund after
satisfying the foregoing paYments, or making adequate
and sufficient provision for the payment thereof, may be
appropriated and used for any other City purpose now or
hereafter permitted by law."
(d)
follows:
Section 14 shall be amended and modified to read as
"SECTION 14: Interest and Sinkinq Fund. For
purposes of providing funds to pay current Debt Service
on Obligations Similarly Secured when and as the same
shall become due and payable, a separate and special
account shall be established and maintained on the books
708069
-44-
and records of the City known as the "City of
Colleyville Revenue Bond Interest and Sinking Fund" (the
"Interest and Sinking Fund") and all funds deposited to
the credit of such Fund shall be kept and maintained in
a special banking account or fund maintained at an
official -depository of the City. In addition to the
deposi ts to the Interest and Sinking Fund for the
payment of the Previously Issued Bonds, the City
covenants that there shall be deposited into the
Interest and Sinking Fund prior to each principal and
interest paYment date from the Net Revenues an amount
equal to one hundred per centum (100%) of the amount
required to fully pay the interest on and the principal
of the Bonds then falling due and payable by reason of
maturity or redemption, and such deposits to pay
principal and accrued interest on the Bonds shall be
made in substantially equal monthly installments on or
before the 15th day of each month, beginning on or
before the 15th day of the month next following the
delivery of the Bonds to the initial purchaser. If the
Net Revenues in any month are then insufficient to make
the required payments into the Interest and Sinking
Fund, then the amount of any deficiency in the paYment
shall be added to the amount otherwise required to be
paid into the Interest and Sinking Fund in the next
month.
"The required monthly deposits to the Interest and
Sinking Fund for the payment of principal of and
interest on the Bonds shall continue to be made as
hereinabove provided until (i) the total amount on
deposit in the Interest and Sinking Fund and Reserve
Fund is equal to the amount required to fully pay and
discharge all Obligations Similarly Secured then
Outstanding (principal and interest) or (ii) the Bonds
are no longer Outstanding.
"Accrued interest and premium, if any, received
from the purchaser(s) of the Bonds, as well as earnings
derived from the investment of moneys in the Interest
and S~nking Fund, shall be deposited to the credit of
the Interest and Sinking Fund and taken into
consideration and reduce the amount of the monthly
deposits hereinabove required to be deposited in the
Interest and Sinking Fund from the Net Revenues of the
System. II
(e)
follows:
Section 15 shall be amended and modified to read as
708069
-45-
708069
"SECTION 15: Reserve Fund. For purposes of
accumulating and maintaining funds as a reserve for the
paYment of the Obligations Similarly Secured, the City
agrees and covenants to create and maintain on the books
and records of the City a separate and special fund or
account known as the "Revenue Bond Reserve Fund" (the
"Reserve Fund"), and all funds deposited to the credit
of such Fund shall be kept and maintained in a special
banking account or fund maintained at an official
depository of the City. All funds deposited therein
(excluding earnings and income derived or received from
deposits or investments which may be transferred to the
System Fund referred to in Section 13 hereof during such
periods as there is on deposit in the Reserve Fund the
Required Reserve) shall be used solely for the paYment
of the principal of and interest on the Obligations
Similarly Secured when (whether at maturity, upon a
mandatory redemption date or any interest paYment date)
other funds available for such purposes are
insufficient, and, in addition, may be used to the
extent not required to maintain the "Required Reserve",
to pay, or provide for the payment of, the final
principal amount of a series of Obligations Similarly
Secured so that such series of Obligations Similarly
Secured is no longer deemed to be "Outstanding" as such
term is defined herein.
"The City hereby reaffirms that it will accumulate
and, when accumulated, continuously maintain in the
Reserve Fund an amount equal to the lesser of (i) the
Average Annual Debt Service (calculated on a Fiscal Year
basis) for all Obligations Similarly Secured then
Outstanding, as determined on the "date each series of
Additional Parity Obligations are delivered or incurred,
as the case may be, or (ii) the maximum amount in a
reasonably required reserve fund that can be invested
without restriction as to yield pursuant to Subsection
(d) of Section 148 of the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder --
the "Required Reserve".
By reason of the issuance of the Bonds, the
Required Reserve shall be an amount equal to the Average
Annual Debt Service (calculated on a Fiscal Year basis)
for all Obligations Similarly Secured that are
Outstanding at the time the provisions hereof become
operative and effective, and the City shall continue to
make monthly deposits in the Reserve Fund, if then
required, on or before the 15th day of each month in
substantially equal amounts so that the Required Reserve
-46-
708069
shall have been accumulated in the Reserve Fund within
60 months from the date of issuance of the Bonds.
"When and so long as the cash and investments in
the Reserve Fund total not less than the Required
Reserve, no deposits need be made to the credit of the
Reserve Fund; but, if and when the Reserve Fund at any
time contains less than the Required Reserve, the City
covenants and agrees to cure the deficiency in the
Required Reserve by resuming monthly deposits to said
Fund from the Net Revenues of the System; such monthly
deposits to be in amounts equal to not less than 1/60th
of the then total Required Reserve to be maintained in
said Fund and to be made on or before the 15th day of
each month until the total Required Reserve then to be
maintained in said Fund has been fully restored. The
City further covenants and agrees that, subject only to
the payments to be made to the Interest and Sinking
Fund, the Net Revenues shall be applied and appropriated
and used to establish and maintain the Required Reserve
and to cure any deficiency in such amounts as required
by the terms of this Ordinance and any other ordinance
pertaining to the issuance of Additional Parity
Obligations.
"During such time as the Reserve Fund contains the
total Required Reserve, the City may, at its option,
withdraw all surplus in the Reserve Fund in excess of
the Required Reserve and deposit such surplus in the
System Fund."
(f) Section 16 shall be added and shall read as follows:
"SECTION 16: Investments. Money deposited to the
credit of any Fund referenced in this Ordinance may, at
the option of the City, be invested in funds and
obligations authorized and identified in the Public
Funds Investment Act of 1987, as enacted or hereafter
amended; provided, however, the investment of moneys in
the Interest and Sinking Fund and Reserve Fund shall be
restricted to Government Obligations and time deposits
or certificates of deposit secured (to the extent not
insured by the Federal Deposit Insurance Corporation) by
Government Obligations; provided that all such deposits
and investments shall be made in such a manner that the
money required to be expended from any Fund will be
available at the proper time or times. Such investments
(except State and Local Government Series investments
held in book entry form, which shall at all times be
valued at cost) shall be valued in terms of current
-47-
market value within 45 days of the close of each Fiscal
Year and, with respect to investments held for the
account of the Reserve Fund, within 30 days of the date
of passage of each ordinance authorizing the issuance of
Addi tional Parity Obligations. All interest and income
derived from deposits and investments in the Interest
and Sinking Fund immediately shall be credited to, and
any losses debited to, the Interest and Sinking Fund.
All interest and interest income derived from deposits
in and investments of the Reserve Fund shall, subject to
the limitations provided in Section 15 hereof, be
credited to and deposited in the System Fund. All such
investments shall be sold promptly when necessary to
prevent any default in connection with the Bonds."
(g) Sections 18, 19 and 20 shall be consolidated, merged,
amended, modified and renumbered as Section 19 to read as follows:
"SECTION 19: Issuance of Additional Parity Obli-
qations-Refundinq Bonds-Obliqations Secured by Inferior Lien.
(a) Subject to the provisions hereinafter appearing as to
conditions precedent which must be satisfied, the City
reserves the right to issue, from time to time as needed,
Additional Parity Obligations for any lawful purpose. Such
Additional Parity Obligations may be issued in such form and
manner as now or hereafter authorized by the laws of the
State of Texas for the issuance of evidences of indebtedness
or other instruments, and should new methods or financing
techniques be developed that differ from those now available
and in normal use, the City reserves the right to employ the
same in its financing arrangements provided only that the
following conditions precedent for the authorization and
issuance of the same are satisfied, to wit:
(1) The Director of Finance of the City
(or other officer of the City then having the
primary responsibility for the financial
affairs of the City) shall have executed a
certificate stating (a) that, to the best of
his knowledge and belief, the City is not
then in defaul t as to any covenant,
obligation or agreement contained in any
ordinance or other proceeding relating to any
obligations of the City payable from and
secured by a lien on and pledge of the Net
Revenues of the System that would materially
affect the security or paYment of such
obligations and (b) either (i) paYments into
all special funds or accounts created and
established for the paYment and security of
708069
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708069
all outstanding obligations payable from and
secured by a lien on and pledge of the Net
Revenues of the System have been made and
that the amounts on deposit in such special
funds or accounts are the amounts then
required to be on deposit therein or (ii) the
application of the proceeds of sale of such
obligations then being issued will cure any
such deficiency.
(2) The Additional Parity Obligations
shall be scheduled to mature or be payable as
to principal on January 1 or July 1 (or both)
in each year the same are to be outstanding
or during the term thereof.
(3) The City has secured a certificate
or opinion of an independent Certified
Public Accountant to the effect that,
according to the books and records of the
Ci ty , the Net Earnings, for the preceding
Fiscal Year or for 12 consecutive months out
of the 15 months immediately preceding the
month the ordinance authorizing the issuance
of the Additional Parity Obligations is
adopted, are at least equal to 1.25 times the
Average Annual Debt Service for all
Obligations Similarly Secured then
Outstanding after giving effect to the
issuance of the Additional Parity Obligations
then being issued. In making a determination
of the Net Earnings, the Accountant may take
into consideration a change in the rates and
charges for services and facilities afforded
by the System that became effective at least
sixty (60) days prior to the last day of the
period for which Net Earnings are determined
and, for purposes of satisfying the above Net
Earnings test, make a pro forma determination
of the Net Earnings of the System for the
period of time covered by his certification
or opinion based on such change in rates and
charges being in effect for the entire period
covered by the Accountant's certificate or
opinion.
"As used in this Section, the term "Net Earnings"
shall mean the Gross Revenues of the System after
deducting the Maintenance and Operating Expenses of the
System, but not depreciation charges or expenditures
-49-
which, under generally accepted accounting principles,
should be charged to capital expenditures.
" (b) The City reserves the right to issue
refunding bonds to refund all or any part of the
Obligations Similarly Secured (pursuant to any law then
available) upon such terms and conditions as the City
Council of the City may deem to be in the best interest
of the City and its inhabitants, and if less than all
such Obligations Similarly Secured then outstanding are
refunded, the conditions precedent prescribed (for the
issuance of Additional Parity Obligations) set forth in
subparagraph (a) (3) of this Section shall be satisfied
and the Accountant's certificate or opinion required in
subparagraph (a) (3) shall give effect to the Debt
Service of the proposed refunding bonds (and shall not
give effect to the Debt Service of the Obligations
Similarly Secured being refunded following their
cancellation or provision being made for their payment) .
"(c) The City hereby reserves the right to issue
obligations payable from and secured by a lien on and
pledge of the Net Revenues of the System, junior and
subordinate in rank and dignity to the lien and pledge
securing the paYment of the Obligations Similarly
Secured, as may be authorized by the laws of the State
of Texas."
(h)
follows:
Section 22 shall be amended and modified to read as
"SECTION 22 : Maintenance and Ooeration
Insurance. The City shall maintain the System in good
condition and operate the same in an efficient manner
and at reasonable cost. In regard to the operations and
properties of the System, the City also agrees to carry
and maintain liability and property damage insurance of
the kind and in the amounts carried by municipal
corporations in Texas owning and operating similar
facilities and providing like services; provided,
however, the City in lieu of and/or in combination with
carryfng such insurance may self-insure against such
perils and risks by establishing self-insurance
reserves. Annually each year not later than the end of
each Fiscal Year, the City shall prepare or cause to be
prepared by a person competent and knowledgeable in such
matters a written evaluation of the adequacy of such
self-insurance and/or insurance coverage and of any
recommended changes in regard to the City's
708069
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insurance/self-insurance
procedures."
policies,
practices
and
(i)
follows:
Section 23 is hereby amended and modified to read as
"SECTION 23: Records - Accounts - Accountinq
Reoorts. The City hereby covenants and agrees that
while any of the Bonds are Outstanding, it will keep and
maintain separate and complete records and accounts
pertaining to the operations of the System in which
complete and correct entries shall be made of all
transactions relating thereto, as provided by
Article 1113, V.A.T.C.S. or other applicable law. The
Holders of any Bonds or any duly authorized agent or
agents of such Holders shall have the right at all
reasonable times to inspect such records, accounts and
data relating thereto, and to inspect the System and all
properties comprising same. The City further agrees
that following the close of each Fiscal Year, it will
cause an audit of such books and accounts to be made by
an independent firm of Certified Public Accountants.
Each such audit, in addition to whatever other matters
may be thought proper by the accountant, shall
particularly include the following:
(1) A statement of the income and
expenses of the System for such Fiscal Year.
(2) A balance sheet for the System as
of the end of such Fiscal Year.
(3) The Accountant's comments regarding
the manner in which the City has carried out
the requirements of this Ordinance and any
other ordinance authorizing the issuance of
Additional Parity Obligations and his
recommendations for any changes or
improvements in the operations, records and
accounts of the System.
"Expenses incurred in making an annual audit of the
operations of the System are to be regarded as Operating
and Maintenance Expenses. Copies of each annual audit
shall be furnished to the Executive Director of the
Municipal Advisory Council of Texas at his office in
Austin, Texas, and, upon request, to the initial
purchasers of the Bonds and subsequent Holders of any of
said Bonds. The audits herein required shall be made
708069
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within 120 days following the close of each Fiscal Year
insofar as is possible."
(j) Subparagraph 4 of Section 24 shall be amended and
modified to read as follows:
"4. While the Bonds remain Outstanding, the City
will not sell or otherwise dispose of the System or,
except as authorized below, any substantial portion of
the System or its component parts; provided, however, to
the extent and in the manner authorized by law, the City
may sell or dispose of any property, facilities and
equipment not necessary or essential to the operations
of the System or which is obsolete, damaged or surplus
and the proceeds of sale of such property, facilities
and equipment, if any, shall be deposited to the credit
of the System Fund."
SECTION 47: Continuinq Disclosure Undertakinq. (a)
Definitions. As used in this Section, the following terms
have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has
determined to be a nationally recognized municipal securities
information repository within the meaning of the Rule from time to
time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
II SEe" means the United States Securities and Exchange
Commission.
"SID" means any person designated by the State of Texas or an
authorized department, officer, or agency thereof as, and
determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
708069
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(b) Annual Reports. The City shall provide annually to each
NRMSIR and any SID, within six months after the end of each fiscal
year (beginning with the fiscal year ending September 30, 1998)
financial information and operating data with respect to the City
of the general type included in the final Official Statement
approved by Section 35 of this Ordinance, being the information
described in Exhibit B hereto. Financial statements to be.
provided shall be (1) prepared in accordance with the accounting
principles described in Exhibit B hereto and (2) audited, if the
City commissions an audit of such statements and the audit is
completed within the period during which they must be provided.
If audited financial statements are not available at the time the
financial information and operating data must be provided, then
the City shall provide unaudited financial statements for the
applicable fiscal year to each NRMSIR and any SID with the
financial information and operating data and will file the annual
audit report when and if the same becomes available.
If the City changes its fiscal year, it will notify each
NRMSIR and any SID of the change (and of the date of the new
fiscal year end) prior to the next date by which the City
otherwise would be required to provide financial information and
operating data pursuant to this Section.
The financial information and operating data to be provided
pursuant to this Section may be set forth in full in one or more
documents or may be included by specific reference to any document
(including an official statement or other offering document, if it
is available from the MSRB) that theretofore has been provided to
each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID
and either each NRMSIR or the MSRB, in a timely manner, of any of
the following events with respect to the Bonds, if such event is
material within the meaning of the federal securities laws:
1. Principal and interest paYment delinquencies;
2. Non-paYment related defaults;
3. Unscheduled draws on debt service reserves
reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting
financ~al difficulties;
5. Substitution of credit or liquidity providers, or
their failure to perform;
6. Adverse tax opinions or events affecting the tax-
exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
708069
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10. Release, substitution, or sale of property securing
repaYment of the Bonds; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance with
subsection (b) of this Section by the time required by such
Section.
(d) Limitations, Disclaimers, and Amendments. The City
shall be obligated to observe and perform the covenants specified
in this Section while, but only while, the City remains an
"obligated person" with respect to the Bonds within the meaning of
the Rule, except that the City in any event will give the notice
required by subsection (c) hereof of any Bond calls and defeasance
that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of
the Holders and beneficial owners of the Bonds, and nothing in
this Section, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other
person. The City undertakes to provide only the financial
information, operating data, financial statements, and notices
which it has expressly agreed to provide pursuant to this Section
and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the
City's financial results, condition, or prospects or hereby
undertake to update any information provided in accordance with
this Section or otherwise, except as expressly provided herein.
The City does not make any representation or warranty concerning
such information or its usefulness to a decision to invest in or
sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT
OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH
BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY
OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY
SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE- .
No default by the City in observing or performing its
obligations under this Section shall constitute a breach of or
default under this Ordinance for purposes of any other provision
of this Ordinance.
708069
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Nothing in this Section is intended or shall act to disclaim,
waive, or otherwise limit the duties of the City under federal and
state securities laws.
The provisions of this Section may be amended by the City
from time to time to adapt to changed circumstances resulting from
a change in legal requirements, a change in law, or a change in
the identity, nature, status, or type of operations of the City,
but only if (1) the provisions of this Section, as so amended,
would have permitted an underwriter to purchase or sell Bonds in
the primary offering of the Bonds in compliance with the Rule,
taking into account any amendments or interpretations of the Rule
to the date of such amendment, as well as such changed
circumstances, and (2) either (a) the Holders of a majority in
aggregate principal amount (or any greater amount required by any
other provision of this Ordinance that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or
(b) a Person that is unaffiliated with the City (such as
nationally recognized bond counsel) determines that such amendment
will not materially impair the interests of. the Holders and
beneficial owners of the Bonds. The provisions of this Section
may also be amended from time to time or repealed by the City if
the SEC amends or repeals the applicable provisions of the Rule or
a court of final jurisdiction determines that such provisions are
invalid, but only if and to the extent that reservation of the
City's right to do so would not prevent underwriters of the
initial public offering of the Bonds from lawfully purchasing or
selling Bonds in such offering. If the City so amends the
provisions of this Section, it shall include with any amended
financial information or operating data filed with each NRMSIR and
SID pursuant to subsection (b) of this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact
of any change in the type of financial information or operating
data so provided.
SECTION 48: Public Meetinq. It is officially found,
determined, and declared that the meeting at which this Ordinance
is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered
at such meeting, including this Ordinance, was given, all as
required by V.T.C.A., Government Code, Chapter 551, as amended.
708069
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SECTION 49 : Effective Date. This Ordinance shall take
effect and be in force immediately from and after its second
reading and final passage, and it is so ordained.
FIRST READING, June 16, 1998.
SECOND AND FINAL READING, PASSED AND ADOPTED July 7, 1998.
TEXAS
(City Seal)
708069
Mayor
APPROVED AS TO FORM:
-56-
EXHlB\T 1\
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of July 7, 1998 (this
"Agreement"), -by and between the City of Colleyville, Texas (the
"Issuer"), and U. S. Trust Company of Texas, N.A., a banking
association duly organized and existing under the laws of the
United States of America (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the
issuance of its "City of Colleyville, Texas, Waterworks and Sewer
System Revenue Bonds, Series 1998" (the "Securities") in the
aggregate principal amount of $2,825,000, which Securities are
scheduled to be delivered to the initial purchasers on or about
August 6, 1998; and
WHEREAS, the Issuer has selected and the Bank has agreed to
serve as Paying Agent/Registrar in connection with the paYment of
the principal of, premium, if any, and interest on said Securities
and with respect to the registration, transfer and exchange
thereof by the registered owners; and
WHEREAS, the Bank represents it has full power and authority
to perform and serve as Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Aooointment. The Issuer hereby appoints the
Bank to serve as Paying Agent with respect to the Securities, and,
as Paying Agent for the Securities, the Bank shall be responsible
for paying on behalf of the Issuer the principal, premium (if
any), and interest on the Securities as the same become due and
payable to the registered owners thereof; all in accordance with
this Agreement and the "Bond Resolution" (hereinafter defined) .
The Issuer hereby appoints the Bank as Registrar with respect to
the Securities and, as Registrar for the Securities, the Bank
shall keep and maintain for and on behalf of the Issuer books and
records as to the ownership of said Securities and with respect to
the transfer and exchange thereof as provided herein and in the
"Bond Resolution".
708123
The Bank hereby accepts its appointment, and agrees to serve
as the Paying Agent and Registrar for the Securities.
Section 1.02. Comoensation. As compensation for the Bank's
services as Paying Agent/Registrar, the Issuer hereby agrees to
pay the Bank the fees and amounts set forth in Annex A attached
hereto.
In addition, the Issuer agrees to reimburse the Bank upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Bank in accordance wi th any of the
provisions hereof (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) .
ARTICLE TWO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this
Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
"Acceleration Date" on any Security means the date on
and after which the principal or any or all installments of
interest, or both, are due and payable on any Security which
has become accelerated pursuant to the terms of the Security.
"Bank Office" means the principal office of the Bank as
indicated on page 11 hereof. The Bank will notify the Issuer
in writing of any change in locat{on of the Bank Office.
"Bond Resolution" means the resolution, order, or
ordinance of the governing body of the Issuer pursuant to
which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year" means the fiscal year of the Issuer,
ending September 30th.
"Holder" and "Security Holder" each means the Person in
whose name a Security is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written
request or order signed in the name of the Issuer by the
Mayor, City Manager, Assistant City Manager, Director of
Finance or City Secretary, anyone or more of said officials,
and delivered to the Bank.
708123
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f=\:~..!; 181T A
...-...........d II..
"Legal Holiday" means a day on which the Bank is
required or authorized to be closed.
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or
political subdivision of a government.
"Predecessor Securities" of any particular Security
means every previous Security evidencing all or a portion of
the same obligation as that evidenced by such particular
Security (and, for the purposes of this definition, any
mutilated, lost, destroyed, or stolen Security for which a
replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the
Resolution) .
"Redemption Date" when used with respect to any Security
to be redeemed means the date fixed for such redemption
pursuant to the terms of the Bond Resolution.
"Responsible Officer" when used with respect to the Bank
means the Chairman or Vice-Chairman of the Board of
Directors, the Chairman or Vice-Chairman of the Executive
Committee of the Board of Directors, the President, any Vice
President, the Secretary, any Assistant Secretary, the
Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust
Officer, or any other officer of the Bank customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Security Register" means a register maintained by the
Bank on behalf of the Issuer providing for the registration
and transfers of Securities.
".Stated Maturity" means the date specified in the Bond
Resolution the principal of a Security is scheduled to be due
and payable.
Section 2.02. Other Definitions. The terms "Bank, "
"Issuer," and "Securities (Security)" have the meanings assigned
to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar" refers to the Bank in the
performance of the duties and functions of this Agreement.
708123
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EXHiBIT A
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Payinq Aqent. As Paying Agent, the
Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on
behalf of the Issuer the principal of each Security at its Stated
Maturity, Redemption Date, or Acceleration Date, to the Holder
upon surrender of the Security to the Bank at the following
offices:
By Hand:
By Mail:
U. S. Trust Company
of Texas, N.A.
111 Broadway
Lower Level
New York, New York 10006-1906
U. S. Trust Company
of Texas, N.A.
P. o. Box 841
Cooper Station
New York, New York
10276
As Paying Agent, the Bank shall, provided adequate collected
funds have been provided to it for such purpose by or on behalf of
the Issuer, pay on behalf of the Issuer the interest on each
Security when due, by computing the amount of interest to be paid
each Holder and making payment thereof to the Holders of the
Securities (or their Predecessor Securities) on the Record Date.
All paYments of principal and/or interest on the Securities to the
registered owners shall be accomplished (1) by the issuance of
checks, payable to the registered owners, drawn on the fiduciary
account provided in Section 5.05 hereof, sent by United States
mail, first class, postage prepaid, to the address appearing on
the Security Register or (2) by such other method, acceptable to
the Bank, requested in writing by the Holder at the Holder's risk
and expense.
Section 3.02. Pavrnent Dates. The Issuer hereby instructs
the Bank to pay the principal of and interest on the Securities at
the dates specified in the Bond Resolution.
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Reqister - Transfers and Exchanqes.
The Bank agrees to keep and maintain for and on behalf of the
Issuer at the Bank Office books and records (herein sometimes
referred to as the "Security Register") for recording the names
and addresses of the Holders of the Securities, the transfer,
exchange and replacement of the Securities and the paYment of the
principal of and interest on the Securities to the Holders and
containing such other information as may be reasonably required by
708123
-4-
EXHIBIT A
the Issuer and subject to such reasonable regulations as the
Issuer and Bank may prescribe. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
The Bank represents and warrants its office in Dallas, Texas will
at all times have immediate access to the Security Register by
electronic or-other means and will be capable at all times of
producing a hard copy of the Security Register at its Dallas
office for use by the Issuer. All transfers, exchanges and
replacement of Securities shall be noted in the Security Register.
Every Security surrendered for transfer or exchange shall be
duly endorsed or be accompanied by a written instrument of
transfer, the signature on which has been guaranteed by an officer
of a federal or state bank or a member of the National Association
of Securities Dealers, in form satisfactory to the Bank, duly
executed by the Holder thereof or his agent duly authorized in
writing.
The Bank may request any supporting documentation it feels
necessary to effect a re-registration, transfer or exchange of the
Securities.
To the extent possible and under reasonable circumstances,
the Bank agrees that, in relation to an exchange or transfer of
Securities, the exchange or transfer by the Holders thereof will
be completed and new Securities delivered to the Holder or the
assignee of the Holder in not more than three (3) business days
after the receipt of the Securities to be cancelled in an exchange
or transfer and the written instrument of transfer or request for
exchange duly executed by the Holder, or his duly authorized
agent, in form and manner satisfactory to the Paying
Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an
adequate inventory of printed Securities to facilitate transfers
or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use
and reasonable care will be exercised by the Bank in maintaining
such Securities in safekeeping, which shall be not less than the
care maintained by the Bank for debt securities of other
governments-or corporations for which it serves as registrar, or
that is ma1ntained for its own securities.
Section 4.03. Form of Security Reqister. The Bank, as
Registrar, will maintain the Security Register relating to the
registration, paYment, transfer and exchange of the Securities in
accordance with the Bank's general practices and procedures in
effect from time to time. The Bank shall not be obligated to
maintain such Security Register in any form other than those which
708123
-5-
EXHIBIT A
the Bank has currently available and currently utilizes at the
time.
The Security Register may be maintained in written form or in
any other form capable of being converted into written form within
a reasonable time.
Section 4.04. List of Security Holders. The Bank will
provide the Issuer at any time requested by the Issuer, upon
paYment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the
information contained in the Security Register at any time the
Bank is customarily open for business, provided that reasonable
time is allowed the Bank to provide an up-to-date listing or to
convert the information into written form.
The Bank will not release or disclose the contents of the
Security Register to any person other than to, or at the written
request of, an authorized officer or employee of the Issuer,
except upon receipt of a court order or as otherwise required by
law. Upon receipt of a court order and prior to the release or
disclosure of the contents of the Security Register, the Bank will
notify the Issuer so that the Issuer may contest the court order
or such release or disclosure of the contents of the Security
Register.
Section 4.05. Return of Cancelled Certificates. The Bank
will, at such reasonable intervals as it determines, surrender to
the Issuer, Securities in lieu of which or in exchange for which
other Securities have been issued, or which have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securi-
ties. The Issuer hereby instructs the Bank, subject to the
provisions of Section 29 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated,
destroyed, lost, or stolen Securities as long as the same does not
result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost
or stolen, the Bank may execute and deliver a replacement Security
of like form and tenor, and in the same denomination and bearing
a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in
substitution for such destroyed lost or stolen Security, only upon
the approval of the Issuer and after (i) the filing by the Holder
thereof with the Bank of evidence satisfactory to the Bank of the
destruction, loss or theft of such Security, and of the
authenticity of the ownership thereof and (ii) the furnishing to
the Bank of indemnification in an amount satisfactory to hold the
Issuer and the Bank harmless. All expenses and charges associated
708123
-6-
EXHJBJT ,4
with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of
the Security mutilated, or destroyed, lost or stolen.
Section 4.07. Transaction Information to Issuer. The Bank
will, within a reasonable time after receipt of written request
from the Issuer, furnish the Issuer information as to the
Securities it has paid pursuant to Section 3.01, Securities it has
delivered upon the transfer or exchange of any Securities pursuant
to Section 4.01, and Securities it has delivered in exchange for
or in lieu of mutilated, destroyed, lost, or stolen Securities
pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to
perform the duties set forth herein and agrees to use reasonable
care in the performance thereof.
Section 5.02. Reliance on Documents. Etc.
may conclusively rely, -as to the truth of the
correctness of the opinions expressed therein, on
opinions furnished to the Bank.
(a) The Bank
statements and
certificates or
(b) The Bank shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Bank was negligent in ascertaining the pertinent
facts.
(c) No provisions of this Agreement shall require the Bank
to expend or risk its own funds or otherwise incur any financial
liability for performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repaYment of such funds or
adequate indemnity satisfactory to it against such risks or
liability is not assured to it.
(d) The Bank may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, security, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine
the ownership of any Securities, but is protected in acting upon
receipt of Securities containing an endorsement or instruction of
transfer or power of transfer which appears on its face to be
signed by the Holder or an agent of the Holder. The Bank shall
not be bound to make any investigation into the facts or matters
708123
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~XH/81T A.
stated in a resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
note, security, or other paper or document supplied by Issuer.
(e) The Bank may consult with counsel, and the written
advice of such-counselor any opinion of counsel shall be full and
complete authorization and protection with respect to any action
taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon.
(f) The Bank may exercise any of the powers hereunder and
perform any duties hereunder either directly or by or through
agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer. The recitals contained
herein with respect to the Issuer and in the Securities shall be
taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any
Holder or Holders of any Security, or any other Person for any
amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its
individual or any other capacity, may become the owner or pledgee
of Securities and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or
any other agent.
Section 5.05. Moneys Held by Bank - Fiduciary Account/
Collateralization. A fiduciary account shall at all times be kept
and maintained by the Bank for the. receipt, safe~eeping and
disbursement of moneys received from the Issuer hereunder for the
paYment of the Securities, and money deposited to the credit of
such account until paid to the Holders of the Securities shall be
continuously collateralized by securities or obligations which
qualify and are eligible under both the laws of the State of Texas
and the laws of the United States of America to secure and be
pledged as collateral for fiduciary accounts to the extent such
money is not insured by the Federal Deposit Insurance Corporation.
PaYments made from such fiduciary account shall be made by check
drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other
medium of paYment.
The Bank shall be under no liability for interest on any
money received by it hereunder.
Subj ect to the applicable unclaimed property laws of the
State of Texas, any money deposited with the Bank for the paYment
708123
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EXHiBiT A-
of the principal, premium (if any), or interest on any Security
and remaining unclaimed for four years after final maturity of the
Security has become due and payable will be paid by the Bank to
the Issuer, and the Holder of such Security shall thereafter look
only to the Issuer for paYment thereof, and all liability of the
Bank with respect to such moneys shall thereupon cease.
Section 5.06. Indemnification. To the extent permitted by
law, the Issuer agrees to indemnify the Bank for, and hold it
harmless against, any loss, liability, or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with its acceptance or administration of its duties
hereunder, including the cost and expense against any claim or
liability in connection with the exercise or performance of any of
its powers or duties under this Agreement.
Section 5.07. Interoleader. The Issuer and the Bank agree
that the Bank may seek adjudication of any adverse claim, demand,
or controversy over its person as well as funds on deposit, in
either a Federal or State District Court located in the State and
County where either the Bank Office or the administrative offices
of the Issuer is located, and agree that service of process by
certified or registered mail, return receipt requested, to the
address referred to in Section 6.03 of this Agreement shall
constitute adequate service. The Issuer and the Bank further
agree that the Bank has the right to file a Bill of Interpleader
in any court of competent jurisdiction to determine the rights of
any Person claiming any interest herein.
Section 5.08. DT Services. It is hereby represented and
warranted that, in the event the Securities are otherwise
qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the
Bank has the capability and, to the extent within its control,
will comply with the "Operational Arrangements", effective
December 12, 1994, which establishes requirements for securities
to be eligible for such type depository trust services, including,
but not limited to, requirements for the timeliness of paYments
and funds availability, transfer turnaround time, and notification
of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only
by an agreement in writing signed by both of the parties hereto.
708123
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;:"V ~J; .B.IT A 4
L-J~...;, ~i
Section 6.02. Assiqnment. This Agreement may not be
assigned by either party without the prior written consent of the
other.
Section 6.03. Notices. Any request, demand, authorization,
direction, notice, consent, waiver, or other document provided or
permitted hereby to be given or furnished to the Issuer or the
Bank shall be mailed or delivered to the Issuer or the Bank,
respectively, at the addresses shown on page 11.
Section 6.04. Effect of Headinqs. The Article and Section
headings herein are for convenience only and shall not affect the
construction hereof.
Section 6.05. Successors and Assiqns. All covenants and
agreements herein by the Issuer shall bind its successors and
assigns, whether so expressed or not.
Section 6.06. Severability. In case any provision herein
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.
Section 6.07. Benefits of Aqreement. Nothing herein,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any benefit or any
legal or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Aqreement. This Agreement and the Bond
Resolution constitute the entire agreement between the parties
hereto relative to the Bank acting as Paying Agent/Registrar and
if any conflict exists between this Agreement and the Bond
Resolution, the Bond Resolution shall govern.
Section 6.09. Counteroarts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
Agreement.
Section 6.10. Termination. This Agreement will terminate
(i) on the date of final paYment of the principal of and interest
on the Securities to the Holders thereof or (ii) may be earlier
terminated by either party upon sixty (60) days written notice;
provided, however, an early termination of this Agreement by
either party shall not be effective until (a) a successor Paying
Agent/Registrar has been appointed by the Issuer and such
appointment accepted and (b) notice given to the Holders of the
Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree
that the effective date of an early termination of this Agreement
708123
-10-
EXHIBIT A
shall not occur at any time which would disrupt, delay or
otherwise adversely affect the paYment of the Securities.
Upon an early termination of this Agreement, the Bank agrees
to promptly transfer and deliver the Security Register (or a copy
thereof), together with other pertinent books and records relating
to the Securities, to the successor Paying Agent/Registrar
designated and appointed by the Issuer.
The provisions of Section 1.02
survive and remain in full force
termination of this Agreement.
and of Article Five shall
and effect following the
Section 6.11. Governinq Law. This Agreement shall be
construed in accordance with and governed by the laws of the State
of Texas.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
u.S. TRUST COMPANY OF TEXAS, N.A.
BY
Title:
[ SEAL]
Attest:
Address: 2001 Ross Ave., Suite 2700
Dallas, Texas 75201
Title:
CITY OF COLLEYVILLE, TEXAS
BY
(CITY SEAL)
Mayor
Attest:
Address: 5400 Bransford Road
Colleyville, Texas 76034
City Secretary
708123
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;....,, I ',......._
0.' '. __i' ;'..'! ,
'_,._.~ iI
A
Exhibit B
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 47 of
this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to
the City to be provided annually in accordance with such Section
are as specified (and included in the Appendix or under the
headings of the Official Statement referred to) below:
1. The financial statements of the City appended to
the Official Statement as Appendix B, but for the most
recently concluded fiscal year.
2. The information under Tables 1 through 10.
Accounting Principles
The accounting principles referred to in such Section are the
generally accepted accounting principles as applicable to
governmental units as prescribed by The Government Accounting
Standards Board.
708069
". 1> >~". .-~..,...."_" "'"
OFFICIAL BID FORM
Honorable Mayor and City Council
City of ColleyvilIe, Texas
July 7,1998
Members of the City Council:
Reference is made to your Official Statement and' Notice of Sale and Bidding Instructions, dated July 1, 1998, of $2,825,000
CITY OF COLLEYVILLE, TEXAS WATERWORKS AND SEWER SYSTEM REVENUE BONDS, SERIES 1998, both of
which constitute a part hereof.
For your legally issued Bonds, as described in said Notice of Sale and Bidding Instructions and Official Statement, we wilI pay
you par and accrued interest from date of issue to date of delivery to us, plus a cash premium of $ - 0 - for Bonds
maturing and bearing interest as follows:
I-Jan Principal Interest I-Jan Principal Interest
Maturity Amount Rate Maturity Amount Rate
1999 $ 85,000 fI, "5 % 2009 $ 135,000 ~.VO '%
2000 90,000 (,,75 % 2010 145,000 '1. "S %
2001 95,000 (,.75 % 2011 150,000 ~..sl) %
2002 100,000 ro. )5 % 2012 160,000 f{,SS %
2003 105,000 CI, ., 5 % 2013 170,000 C/. (IS %
2004 110,000 $,(,0 % 2014 175,000 '/, '0 %
2005 115,000 <!,~.s % 2015 185,000 ~. '.5 %
2006 120,000 ~.30 % 2016 200,000 41, ').$ %
2007 125,000 4.J5 % 2017 210,000 7C....., %
2008 130,000 '1.3') 5 % 2018 220,000 7(", ..., %
Bonds maturing on January I, 1999 through January 1,2008 shall be Serial Bonds. As indicated below, the Bidder elects to convert
certain of the maturities on or after January 1,2009 into one or more tenn certificates with each tenn consisting of no more than five
consecutive annual principal amounts accumulated from the maturity schedule shown above. For those years which have been
combined into tenn bonds. the principal amount shown in the table above shall be the mandatory sinking fund redemption amounts
in such years except that the amount shown in the year of the tenn bond maturity date shall mature in such year. The tenn bonds
created are as follows:
Year of
Maturity First Mandatory Principal Interest
I-Jan Redemption Amount Rate
/-1-,).0/8 /-/-;, 01 'J $ ~.J", OfJo 'f' )s %
$ %
$ 0/0
Our calculation (which is not a part of this bid) of the interest cost from the above is:
True Interest Cost
~. ])'1'15 %
.J '- c.../
We are having the Bonds of the following maturities /7 insured by _
~ .s A at a premium of $ 9, 8' {> 0 , said premium to be paid by the Purchaser.
Any fees to be paid to the rating agencies as a result of said insurance will be paid by the City.
The Initial Bonds shall be registered in the name of Dean Wi tter Reynal ds , which wilI, upon
payment for the Bonds, be cancelled by the Paying Agent/Registrar. The Bonds will then be registered in the name of Cede &
Co. (DTC's partnership nominee), under the Book-Entry-Only System.
,.
A bank cashier's check or certified check of the Fros t Na ti ana 1 Bank, Aus ti n , in the amount
of $56,500, which represents our Good Faith Deposit (is attached hereto) or (has been made available to you prior to the opening
of this bid), and is submitted in accordance with the terms as set forth in the Official Statement and Notice of Sale and Bidding
Instructions.
We agree to accept delivery of the Bonds utilizing the Book-Entry-Only System through DTC and make payment for the Initial
Bond in immediately available funds in the Corporate Trust Division, U.S. Trust Company of Texas, N.A., Dallas, Texas, not
later than 10:00 A.M., CDT, on August 6, 1998, or thereafter on the date the Bonds are tendered for delivery, pursuant to the
terms set forth in the Notice of Sale and Bidding Instructions. It will be the obligation of the purchaser of the Bonds to complete
the DTC Eligibility Questionnaire.
We agree to provide in writing the initial reoffering prices and other terms, if any, to the Financial Advisor by the close
of the next business day after the award.
Respectfully submitted,
Syndicate Members: (Yes)
Dean Witter Reynolds
Name of Underwriter or Manager
Stephen J. YounQ. Senior V.P.
Authorized Representative
972-774-6610
Phone Number
s;~Yf /
~/
ACCEPTANCE CLAUSE
The above and foregoing bid is hereby in all things accepted by the City of Colleyville, Texas, subject to and in accordance with
tho Noli" ofS,1o ",d B'wling I"t",olion, .hi, tho 7th dny of July, 1998. ~
~,
Mayor
,
City of Colley vi lie, Texas