Ord. 1578 2019-07-08 ' Ordinance No.
CERTIFICATE FOR ORDINANCE 2019-1578
THE STATE OF TEXAS §
COUNTIES OF BRAZORIA, FORT BEND AND HARRIS §
CITY OF PEARLAND §
I, the undersigned officers of the City of Pearland, Texas (the "City"), hereby
certify as follows:
1. The City Council of the City convened in a regular meeting on July 8, 2019, at the
regular meeting place thereof, within the City, and the roll was called of the duly constituted
officers and members of the City Council, to wit:
Tom Reid Mayor
Trent Perez Mayor Pro Tem
Luke Orlando Councilmember
Derrick Reed Councilmember
Gary Moore Councilmember
Adrian Hernandez Councilmember
J. David Little Councilmember
Woody Owens Councilmember
and all of such persons were present, except Woody Owens, thus constituting a quorum.
Whereupon, among other business, the following was transacted at said meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND,
TEXAS, PERMANENT IMPROVEMENT AND/OR REFUNDING BONDS IN
ONE OR MORE SERIES; SETTING CERTAIN PARAMETERS FOR THE
BONDS; AUTHORIZING REFUNDING OF CERTAIN OUTSTANDING
OBLIGATIONS; AUTHORIZING A PRICING OFFICER TO APPROVE THE
AMOUNT, THE INTEREST RATE, PRICE, AND TERMS THEREOF AND
CERTAIN OTHER PROCEDURES AND PROVISIONS RELATING
THERETO •
(the "Ordinance") was duly introduced for the consideration of the City Council and read in full.
It was then duly moved and seconded that the Ordinance be adopted; and, after due discussion,
such motion, carrying with it the adoption of the Ordinance, prevailed and carried by the
following vote:
AYES: 6 NAYS: 0 ABSTENTIONS: 0
2. That a true, full and correct copy of the Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate; that the
Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above
and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of
such meeting pertaining to the adoption of the Ordinance; that the persons named in the above
and foregoing paragraph are the duly chosen, qualified and acting officers and members of the
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City Council as indicated therein; that each of the officers and members of the City Council was
duly and sufficiently notified officially and personally, in advance, of the date, hour, place and
subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for
adoption at such meeting, and each of such officers and members consented, in advance, to the
holding of such meeting for such purpose; that such meeting was open to the public as required
by law; and that public notice of the date, hour, place and subject of such meeting was given as
required by the Open Meetings Law, Chapter 551, Texas Government Code.
SIGNED AND SEALED this_ �� Y 2019.
City Secretary - tt'4 Mayor
OF PEARLAND, TEXAS CITY OF PEARLAND, TEXAS
IA
(SEAL)
4145-8530-8699.1
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND,
TEXAS, PERMANENT IMPROVEMENT AND/OR REFUNDING BONDS IN
ONE OR MORE SERIES; SETTING CERTAIN PARAMETERS FOR THE
BONDS; AUTHORIZING REFUNDING OF CERTAIN OUTSTANDING
OBLIGATIONS; AUTHORIZING A PRICING OFFICER TO APPROVE THE
AMOUNT, THE INTEREST RATE, PRICE, AND TERMS THEREOF AND
CERTAIN OTHER PROCEDURES AND PROVISIONS RELATING
THERETO
THE STATE OF TEXAS §
COUNTIES OF BRAZORIA, FORT BEND AND HARRIS §
CITY OF PEARLAND §
WHEREAS, the City of Pearland, Texas (the "City"), acting through its City Council, is
authorized by Section 3.07 of its Home Rule Charter and the Constitution and laws of the State
of Texas, particularly Chapters 1331 of the Texas Government Code, as amended, to issue bonds
for the purpose of making needed public improvements;
WHEREAS, the issuance of certain bonds herein authorized was approved by the voters
of the City at an election held for such purpose on May 12, 2007 (the "Election"), which was
called by the City Council pursuant to Resolution No. R2007-35 adopted March 5, 2007, and
which authorized the issuance of: (i) $84,190,000 in bonds for purchasing and otherwise
acquiring land for and constructing, repairing and improving streets, bridges and sidewalks of the
City with first priority to be given to the construction, repair and improvement of Bailey Road,
Cullen Boulevard, Dixie Farm Road and McHard Road ("Proposition 1"); (ii) $35,305,000 in
bonds for purchasing, acquiring, enlarging, extending, equipping and constructing drainage
improvements and facilities at various locations within the City, including acquiring lands and
rights-of-way for any of such purposes ("Proposition 2"); (iii) $2,895,000 in bonds for
purchasing, acquiring, constructing, repairing and improving land, facilities and equipment for
public safety purposes (including firefighting needs)("Proposition 3"); (iv) $19,990,000 in bonds
for purchasing, acquiring, constructing, repairing and improving land, facilities and equipment
for park and recreation purposes ("Proposition 4"); (v) $16,225,000 in bonds for purchasing,
acquiring, constructing, repairing and improving land, facilities and equipment for park and
recreation purposes, with first priority to be given to the construction of recreation center and the
construction of a natatorium ("Proposition 5"); and (vi) $3,410,000 in bonds for purchasing and
otherwise acquiring land for and constructing, repairing and improving library facilities
("Proposition 6");
WHEREAS, the City Council canvassed the returns of the Election and by Ordinance
No. R2007-86, adopted May 22, 2007 declared the results to be in favor of the issuance of the
Bonds;
WHEREAS, the City has previously authorized, issued and delivered ten installments of
such authorized bonds from the Election in an aggregate principal amount of $137,325,000,
consisting of (i) $65,426,000 of principal attributable to bonds authorized by Proposition 1;
(ii) $30,393,500 of principal attributable to bonds authorized by Proposition 2; (iii) $2,895,000
of principal attributable to bonds authorized by Proposition 3; and (iv) $19,990,000 of principal
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attributable to bonds authorized by Proposition 4; (v) $15,210,500 of principal attributable to
Proposition 5; and (vi) $3,410,000 of principal attributable to Proposition 6;
WHEREAS, the City has now determined that it is necessary and advisable to authorize,
issue and deliver an eleventh installment of such authorized bonds from the Election in an
aggregate principal amount not to exceed $6,359,500 for the purposes of funding the permanent
improvements described herein;
WHEREAS, the City Council is of the opinion and hereby affirmatively finds that it is in
the best interest of the City to issue such eleventh installment of bonds from the Election in the
amounts and for the purposes herein stated.
WHEREAS, the City Council of the City has heretofore issued or assumed the
obligations described in Exhibit A attached hereto and as more particularly described in the
Officer's Pricing Certificate (defined herein); and
WHEREAS, the City desires to refund part of said obligations in advance of their
maturities as determined pursuant to the parameters set forth herein (the "Refunded Bonds") for
the purpose of achieving debt service savings; and
WHEREAS, Chapter 1207, Texas Government Code, as amended ("Chapter 1207")
authorizes the City to issue refunding bonds payable from taxes, without an election, for the
purpose of refunding the Refunded Bonds in advance of their maturities, and to accomplish such
refunding by depositing directly with any paying. agent for the Refunded Bonds (or other
qualified escrow agent), the proceeds of such refunding bonds, together with other available
funds, in an amount sufficient to provide for the payment or redemption of the Refunded Bonds,
and provides that such deposit shall constitute the making of firm banking and financial
arrangements for the discharge and final payment or redemption of the Refunded Bonds; and
WHEREAS, the City desires to authorize the execution of an escrow agreement, if
necessary, and provide for the deposit of proceeds of the refunding bonds, together with other
lawfully available funds of the City, to pay the Refunded Bonds; and
WHEREAS, upon the issuance of the refunding bonds herein authorized and the deposit
of funds referred to above, the Refunded Bonds shall no longer be regarded as being outstanding,
except for the purpose of being paid pursuant to such deposit, and the pledges, liens, trusts and
all other covenants, provisions, terms and conditions of the ordinances authorizing the issuance
of the Refunded Bonds shall be, with respect to the Refunded Bonds, discharged, terminated and
defeased;
WHEREAS, the City is a home-rule municipality that (i) adopted its charter under
Section 5, Article XI, Texas Constitution; (ii) has a population of 50,000 or more; and (iii) has
outstanding long-term indebtedness that is rated by a nationally recognized rating agency for
municipal securities in one of the four highest rating categories for a long-term obligation and
thus the City qualifies as an "Issuer" under Chapter 1371, Texas Government Code ("Chapter
1371"); and
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WHEREAS, Chapter 1207 and Chapter 1371 authorize the City to delegate the authority
to effect the sale of the Bonds to a Pricing Officer, as defined herein. Now, therefore
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND:
1. Recitals; Consideration. It is hereby found and determined that the matters and
facts set out in the preamble to this Ordinance are true and correct.
It is hereby found and determined that the refunding contemplated in this Ordinance will
benefit the City by providing a present value savings in the debt service payable by the City, that
such benefit is sufficient consideration for the refunding of the Refunded Bonds, and that the
issuance of the refunding bonds is in the best interests of the City.
2. Definitions. Throughout this Ordinance the following terms and expressions as
used herein shall have the meanings set forth below:
"Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of
Representations between the City,the Registrar and DTC.
"Bond Purchase Agreement" means an agreement between the City and the Underwriter
described in Section 23 of this Ordinance.
"Bonds" means the means one or more series of Bonds issued by the City of Pearland,
Texas authorized in this Ordinance, as designated in an Officer's Pricing Certificate.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the
Registrar is authorized by law or executive order to close, or a legal holiday.
"City"means the City of Pearland, Texas.
"Closing Date"means the date of the initial delivery of and payment any series of Bonds.
"Code"means the Internal Revenue Code of 1986, as amended.
"Comptroller"means the Comptroller of Public Accounts of the State of Texas.
"Debt Service Fund" means the debt service fund for payment of the Bonds established
by the City in Section 20 of this Ordinance.
"DTC" means The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Escrow Agent"means Wells Fargo Bank,N.A.
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"Escrow Agreement" means an agreement between the City and the Escrow Agent
relating to the escrow of funds to pay the Refunded Bonds.
"Initial Bond"means the Initial Bond authorized by Section 6(d).
"Interest Payment Date", when used in connection with any Current Interest Bond, means
shall mean the date(s) determined by a Pricing Officer and set forth in the Officer's Pricing
Certificate.
"MSRB"means the Municipal Securities Rulemaking Board.
"Officer's Pricing Certificate" means a certificate signed by the Pricing Officer pursuant
to Section 5 hereof.
"Ordinance" as used herein and in the Bonds means this ordinance authorizing the Bonds.
"Owner"means any person who shall be the registered owner of any outstanding Bond.
"Pricing Officer" means the Mayor, City Manager, Deputy City Manager or the Director
of Finance.
"Record Date" means, with respect to the Bonds, the close of business on the 15th
calendar day of the month preceding such Interest Payment Date.
"Refunded Bonds" means any of the obligations described on Exhibit A attached hereto
and as more specifically described in the Officer's Pricing Certificate.
"Register" means the books of registration kept by the Registrar, in which are maintained
the names and addresses of, and the principal amounts of the Bonds registered to, each Owner.
"Registrar"means Wells Fargo Bank,N.A., and its successors in that capacity.
"Report" means the report verifying the accuracy of certain mathematical computations
relating to the Bonds and the Refunded Bonds as further described in the Escrow Agreement.
"Rule"means SEC Rule 15c2-12, as amended from time to time.
"SEC"means the United States Securities and Exchange Commission.
"Underwriters" means the firms listed in the Officer's Pricing Certificate as the
underwriters or initial purchasers of the Bonds.
3. Authorization. The Bonds shall be issued in fully registered form in a maximum • .
principal amount, including any premium counted against voted authorization, (i) not to exceed
$6,359,500 for the public improvements as follows: (a) $2,100,000 in bonds for purchasing,
acquiring, enlarging, extending, equipping and constructing drainage improvements and facilities
at various locations within the City, including acquiring lands and rights-of-way for any of such
purposes, (b) $1,014,500 for purchasing, acquiring, constructing, repairing and improving land,
facilities and equipment for park and recreation purposes, including a Natatorium (c) $3,245,000
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4145-8530-8699.1
for purchasing and otherwise acquiring land for and constructing, repairing and improving
streets, bridges and sidewalks of the City, (d) the costs of issuing the Bonds, and/or (ii) if certain
savings thresholds are achieved, in an amount not to exceed $13,000,000 for the purpose of
refunding the Refunded Bonds, under and in strict conformity with the Constitution and laws of
the State of Texas, particularly Chapters 1207, Texas Government Code and the costs of issuing
the Bonds. The Bonds may be issued in one or more series/installments.
4. Date, Denomination, Interest Rates, and Maturities. The Bonds shall be
designated as City of Pearland, Texas Permanent Improvement 1 and shall be dated the date set
forth in the Officer's Pricing Certificate, shall mature on March 1 in each of the years and in the
amounts set out in the Officer's Pricing Certificate, shall be subject to prior optional and
mandatory redemption on the dates, for the redemption prices and in the amounts set out in the
Officer's Pricing Certificate and shall bear interest from their issuance date at the rates set forth
in the Officer's Pricing Certificate payable on each March 1 and September 1 commencing on
the date set forth in the Officer's Pricing Certificate. The Bonds may be transferred and
exchanged as set out in this Ordinance. The Initial Bond shall be numbered I-1 and all other
Bonds shall be numbered in sequence beginning with R-1. Bonds delivered on transfer of or in
exchange for other Bonds shall be numbered in order of their authentication by the Registrar,
shall be in the denomination of$5,000 or integral multiples thereof, and shall mature on the same
date and bear interest on the same rate as the Bond or Bonds in lieu of which they are delivered.
5. Selling and Delivering the Bonds. As authorized by Sections 1207 and 1371,
Texas Government Code, as amended, the Pricing Officer is hereby authorized to act on behalf
of the City in selling and delivering the Bonds, in one or more series of bonds/installments, and
carrying out the other procedures specified in this Ordinance, including without limitation
determining the price at which the Bonds will be sold, the issuance date for the Bonds, the form
in which the Bonds shall be issued (whether as current interest bonds or as any combination of
current interest bonds and compound interest bonds), the years in which the Bonds will mature,
the principal amount to mature in each of such years, the rate of interest to be borne by each such
maturity, the dates, prices and terms upon and at which the Bonds shall be subject to redemption
prior to maturity at the option of the City, as well as any mandatory redemption provisions for
the Bonds, and all other matters not expressly provided in this Ordinance, relating to the
issuance, sale and delivery of the Bonds, and the refunding of the Refunded Bonds, all of which
shall be specified in the Officer's Pricing Certificate; provided that:
(i) none of the Bonds shall bear interest at a rate in excess of the maximum rate
allowed by Chapter 1204, Texas Government Code, as amended;
(ii) the aggregate principal amounts of the Bonds may not exceed the maximum
principal amounts authorized in Section 3 hereof, and the proceeds from the sale
of the Bonds, along with any available funds of the City to be used in the
refunding, must be sufficient to provide, after all original issue discount and
underwriter's discount, amounts necessary to fund the costs and expenses of
refunding the Refunded Bonds and the estimated costs of issuance of the Bonds;
' Insert from Pricing Certificate.
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(iii) the net present value savings in debt service resulting from the refunding of the
Refunded Bonds shall be at least 3% of the principal amount of the Refunded
Bonds, as shown by a table of calculations prepared by the City's financial
advisor and attached to the Officer's Pricing Certificate; and
(iv) the refunding of the Refunded Bonds shall be undertaken to achieve debt service
savings and not for the purpose of restructuring or shortening the amortization of
debt evidenced by the Refunded Bonds.
6. Execution of Bonds; Seal. (a) The Bonds shall be signed on behalf of the City by
the Mayor and countersigned by the City Secretary or the Interim City Secretary, by their
manual, lithographed, or facsimile signatures, and the official seal of the City shall be impressed
or placed in facsimile thereon. Such facsimile signatures on the Bonds shall have the same effect
as if each of the Bonds had been signed manually and in person by each of said Officer's, and
such facsimile seal on the Bonds shall have the same effect as if the official seal of the City had
been manually impressed upon each of the Bonds.
(b) If any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of such Bonds or before the
delivery of such Bonds, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Registrar's Authentication Bond substantially in the form provided herein, duly authenticated by
manual execution by an officer or duly authorized signatory of the Registrar.• In lieu of the
executed Registrar's Authentication Bond described above, the Initial Bond delivered at the
Closing Date shall have attached hereto the Comptroller's Registration Certificate substantially
in the form provided herein, manually executed by the Comptroller, or by his duly authorized
agent, which certificate shall be evidence that the Initial Bond has been duly approved by the
Attorney General of the State of Texas and that it is a valid and binding obligation of the City,
and has been registered by the Comptroller.
(d) On the Closing Date, the Initial Bond, being a single bond representing the entire
principal amount of the Bonds, payable in stated installments to the Underwriter or its designee,
executed by manual or facsimile signature of the Mayor and City Secretary of the City, approved
by the Attorney General, and registered and manually signed by the Comptroller, shall be
delivered to the Underwriter or its designee. Upon payment for the Initial Bond, the Registrar
shall cancel the Initial Bond and deliver definitive Bonds to DTC.
7. Payment of Principal and Interest. The Registrar is hereby appointed as the
paying agent and registrar for the Bonds. The principal of the Bonds shall be payable, without
exchange or collection charges, in any coin or currency of the United States of America which,
on the date of payment, is legal tender for the payment of debts due the United States of
America, upon their presentation and surrender as they respectively become due and payable at
the principal payment office of the Registrar. The interest on each Bond shall be payable on
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each Interest Payment Date, by check mailed by the Registrar on or before the Interest Payment
Date to the Owner of record as of the Record Date.
If the date for payment of the principal of or interest on any Bond is not a Business Day,
then the date for such payment shall be the next succeeding Business Day with the same force
and effect as if made on the date payment was originally due.
8. Successor Registrars. The City covenants that at all times while any Bonds are
outstanding it will provide a commercial bank or trust company, organized under the laws of the
United States or any state, and duly qualified and legally authorized to serve as Registrar for the
Bonds. The City reserves the right to change the Registrar on not less than 60 days written
notice to the Registrar, so long as any such notice is effective not less than 60 days prior to the
next succeeding principal or interest payment date on the Bonds. Promptly upon the
appointment of any successor Registrar, the previous Registrar shall deliver the Register or
copies thereof to the new Registrar, and the new Registrar shall notify each Owner, by United
States mail, first class postage prepaid, of such change and of the address of the new Registrar.
Each Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the
provisions of this Section.
9. Special Record Date. If interest on any Bond is not paid on any Interest Payment
Date and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a new
record date for the payment of such interest, to be known as a Special Record Date. The
Registrar shall establish a Special Record Date when funds to make such interest payment are
received from or on behalf of the City. Such Special Record Date shall be fifteen(15) days prior
to the date fixed for payment of such past due interest, and notice of the date of payment and the
Special Record Date shall be sent by United States mail, first class, postage prepaid, not later
than five (5) days prior to the Special Record Date, to each affected Owner of record as of the
close of business on the day prior to the mailing of such notice.
10. Ownership; Unclaimed Principal and Interest. The City, the Registrar and any
other person may treat the person in whose name any Bond is registered as the absolute owner of
such Bond for the purpose of making and receiving payment of the principal of or interest on
such Bond, and for all other purposes, whether or not such Bond is overdue, and neither the City
nor the Registrar shall be bound by any notice or knowledge to the contrary. All payments made
to the person deemed to be the Owner of any Bond in accordance with this Section shall be valid
and effectual and shall discharge the liability of the City and the Registrar upon such Bond to the
extent of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such
amounts have become due and payable shall be reported and disposed of by the Registrar in
accordance with the applicable provisions of Texas law including, to the extent applicable, Title
6 of the Texas Property Code, as amended.
11. Registration, Transfer, and Exchange. So long as any Bonds remain outstanding,
the Registrar shall keep the Register at its principal payment office, and, subject to such
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reasonable regulations as it may prescribe, the Registrar shall provide for the registration and
transfer of Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Registrar, duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his authorized representative in form
satisfactory to the Registrar. Upon due presentation of any Bond for transfer, the Registrar shall
authenticate and deliver in exchange therefor, within three Business Days after such presentation,
a new Bond or Bonds registered in the name of the transferee or transferees, in authorized
denominations and of the same maturity and aggregate principal amount and bearing interest at
the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
payment office of the Registrar, for a Bond or Bonds of like maturity and interest rate and in any
authorized denomination, in an aggregate amount equal to the unpaid principal amount of the
Bond or Bonds presented for exchange. The Registrar shall be and is hereby authorized to
authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each
Bond delivered in accordance with this Section shall be entitled to the benefits and security of
this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is delivered.
The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection with the transfer
' or exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall
be paid by the City.
12. Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender to the
Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of like maturity, interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Bond is lost, apparently destroyed, or wrongfully taken,
the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or
knowledge that such Bond has been acquired by a bona fide purchaser, shall authorize and the
Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and
principal amount, bearing a number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Bond to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection
therewith and any other expenses connected therewith, including the fees and expenses of the
Registrar. The City or the Registrar may require the Owner of a lost, apparently destroyed or
wrongfully taken Bond, before any replacement Bond is issued, to:
(i) furnish to the City and the Registrar satisfactory evidence of the ownership of and
the circumstances of the loss, destruction or theft of such Bond;
(ii) furnish such security or indemnity as may be required by the Registrar and the
City to save them harmless;
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(iii) pay all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Registrar and any tax or other
governmental charge that may be imposed; and
(iv) meet any other reasonable requirements of the City and the Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu
of which such replacement Bond was issued presents for payment such original Bond, the City
and the Registrar shall be entitled to recover such replacement Bond from the person to whom it
was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any loss, damage,
cost or expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or
is about to become due and payable, the City in its discretion may, instead of issuing a
replacement Bond, authorize the Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which
such replacement Bond is delivered.
13. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and all
Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in.
accordance herewith, shall be canceled and destroyed upon the making of proper records
regarding such payment. The Registrar shall furnish the City with appropriate certificates of
destruction of such Bonds.
14. Book-Entry Only System. (a) The Initial Bond shall be registered in the name of
the Underwriters. Except as provided in Section 15 hereof, all other Bonds shall be registered in
the name of Cede & Co., as nominee of DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC,
the City and the Registrar shall have no responsibility or obligation to any DTC Participant or to
any person on behalf of whom such DTC Participant holds an interest in the Bonds, except as
provided in this Ordinance. Without limiting the immediately preceding sentence, the City and
the Registrar shall have no responsibility or obligation with respect to (i)the accuracy of the
records of DTC, Cede & Co. or any DTC Participant with respect to any ownership interest in
the Bonds, (ii)the delivery to any DTC Participant or any other person, other than an Owner, as
shown on the Register, of any notice with respect to the Bonds, including any notice of
redemption, or (iii)the payment to any DTC Participant or any other person, other than an
Owner, as shown on the Register, of any amount with respect to principal of,premium, if any, or
interest on the Bonds. Notwithstanding any other provision of this Ordinance to the contrary, the
City and the Registrar shall be entitled to treat and consider the person in whose name each Bond
is registered in the Register as the absolute Owner of such Bond for the purpose of payment of
principal of and interest on the Bonds, for the purpose of giving notices of redemption and other
matters with respect to such Bond, for the purpose of registering transfer with respect to such .
Bond, and for all other purposes whatsoever. The Registrar shall pay all principal of, premium,
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if any, and interest on the Bonds only to or upon the order of the respective Owners, as shown in
the Register as provided in this Ordinance, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and discharge the
City's obligations with respect to payments of principal, premium, if any, and interest on the
Bonds to the extent of the sum or sums so paid. No person other than an Owner, as shown in the
Register, shall receive a Bond certificate evidencing the obligation of the City to make payments
of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar of written
notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co.,
and subject to the provisions of this Ordinance with respect to interest checks being mailed to the
Owner of record as of the Record Date, the phrase "Cede & Co." in this Ordinance shall refer to
such new nominee of DTC.
15. Successor Securities Depository; Transfer Outside Book-Entry Only System. In
the event that the City in its sole discretion, determines that the beneficial owners of the Bonds
be able to obtain certificated Bonds, or in the event DTC discontinues the services described
herein, the City shall (i) appoint a successor securities depository, qualified to act as such under
Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC
Participants, as identified by DTC, of the appointment of such successor securities depository
and transfer one or more separate Bonds to such successor securities depository or (ii) notify
DTC and DTC Participants, as identified by DTC, of the availability through DTC of Bonds and
transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC
accounts, as identified by DTC. In such event, the Bonds shall no longer be restricted to being
registered in the Register in the name of Cede & Co., as nominee of DTC, but may be registered
in the name of the successor securities depository, or its nominee, or in whatever name or names
Owners transferring or exchanging Bonds shall designate, in accordance with the provisions of
this Ordinance.
16. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance
to the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of
DTC, all payments with respect to principal of, premium, if any, and interest on such Bonds, and
all notices with respect to such Bonds, shall be made and given, respectively, in the manner
provided in the Blanket Letter of Representations.
17. Optional and/or Mandatory Redemption; Defeasance. The Bonds are subject to
optional and/or mandatory redemption as set forth in the Form of Bond in this Ordinance and in
the Officer's Pricing Certificate.
Principal amounts may be redeemed only in integral multiples of $5,000. If a Bond
subject to redemption is in a denomination larger than $5,000, a portion of such Bond may be
redeemed, but only in integral multiples of$5,000. Upon surrender of any Bond for redemption
in part, the Registrar, in accordance with Section 11 hereof, shall authenticate and deliver in
exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal
amount equal to the unredeemed portion of the Bond so surrendered.
Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall
be given by the Registrar at least thirty days prior to the date fixed for redemption by sending
written notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at
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4145-8530-8699.1
the address shown on the Register. Such notices shall state the redemption date, the redemption
price, the place at which Bonds are to be surrendered for payment and, if less than all Bonds
outstanding of a particular maturity are to be redeemed, the numbers of the Bonds or portions
thereof of such maturity to be redeemed. Any notice given as provided in this Section shall be
conclusively presumed to have been duly given, whether or not the Owner receives such notice.
By the date fixed for redemption, due provision shall be made with the Registrar for payment of
the redemption price of the Bonds or portions thereof to be redeemed, plus accrued interest to the
date fixed for redemption. When Bonds have been called for redemption in whole or in part and
due provision has been made to redeem same as herein provided, the Bonds or portions thereof
so redeemed shall no longer be regarded as outstanding except for the purpose of receiving
payment solely from the funds so provided for redemption, and the rights of the Owners to
collect interest which would otherwise accrue after the redemption date on any Bond or portion
thereof called for redemption shall terminate on the date fixed for redemption.
The City reserves the right to give notice of its election or direction to optionally redeem
Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i)that the
redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount
equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such
other entity as may be authorized by law, no later than the redemption date or (ii) that the City
retains the right to rescind such notice at any time prior to the scheduled redemption date if the
City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying Agent
/Registrar to rescind the redemption notice, and such notice of redemption shall be of no effect if
such moneys and/or authorized securities are no so deposited or if the notice is rescinded. The
Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice of
redemption to the affected owners. Any Bonds subject to conditional redemption where
redemption has been rescinded shall remain Outstanding.
The Bonds may be discharged, defeased, redeemed or refunded in any manner now or
hereafter permitted by law, unless otherwise provided in the Officer's Pricing Certificate.
18. Forms. The form of the Bond, including the form of Registration Certificate of
the Comptroller, which shall be attached or affixed to the Initial Bond, the form of Assignment
and the form of the Registrar's Authentication Certificate, shall be, respectively, substantially as
follows, with such additions, deletions and variations as may be necessary to conform to the
terms specified in the Officer's Pricing Certificate:
(a) Form of Bond.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF BRAZORIA, FORT BEND AND HARRIS
REGISTERED REGISTERED
NUMBER DENOMINATION
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4145-8530-8699.1
CITY OF PEARLAND, TEXAS
PERMANENT IMPROVEMENT 2
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
March 1, 20 2
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Pearland, Texas (the "City") promises to pay to the registered owner
identified above, or registered assigns, on the maturity date specified above, upon presentation
and surrender of this Bond at the principal payment office of Wells Fargo Bank, N.A. (the
"Registrar"), the principal amount identified above, payable in any coin or currency of the
United States of America which on the date of payment is legal tender for the payment of debts
due the United States of America, and to pay interest thereon at the rate shown above, calculated
on the basis of a 360-day year of twelve 30-day months, from 2 , or the most recent interest
payment date to which interest has been paid or duly provided for. Interest on this Bond is
payable by check on March 1 and September 1 beginning on 2 , mailed to the registered
owner of record as of the close of business on the 15th day of the month preceding each interest
payment date.
THIS BOND is one of a duly authorized issue of Bonds, aggregating $ 3 (the
"Bonds"), issued for [(i)purposes authorized by the Election as set forth in the Ordinance
(defined below) [and/or] (ii)the purpose of refunding a portion of the City's outstanding
obligations, under and in strict conformity with the Constitution and laws of the State of Texas,
particularly Chapters 1207, 1331 and 1371, Texas Government Code, as amended,] and pursuant
to an ordinance adopted by the City Council (the "Ordinance"), which Ordinance is of record in
the official minutes of the City.
THE CITY RESERVES THE RIGHT, at its option, to redeem Bonds maturing on and
after March 1, 20 4 , in whole or from time to time in part, in integral multiples of$5,000, on
March 1, 20 5 , or any date thereafter at par plus accrued interest on the principal amounts called
for redemption to the date fixed for redemption. If less than all the Bonds are to be redeemed,
the City shall select the Bonds to be redeemed.
[If applicable, mandatory redemption language]
NOTICE OF ANY REDEMPTION shall be given by the Registrar at least thirty
(30) days prior to the date fixed for redemption by first class mail, addressed to the registered • .
2 Insert from Officers Pricing Certificate
3 Insert from Officers Pricing Certificate.
4 Insert from Officers Pricing Certificate.
5 Insert from Officers Pricing Certificate.
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4145-8530-8699.1
owners of each Bond to be redeemed in whole or in part at the address shown on the books of
registration kept by the Registrar. When Bonds or portions thereof have been called for
redemption, and due provision has been made to redeem the same, the principal amounts so
redeemed shall be payable solely from the funds provided for redemption, and interest which
would otherwise accrue on the amounts called for redemption shall terminate on the date fixed
for redemption.
THIS BOND IS TRANSFERABLE only upon presentation and surrender at the principal
payment office of the Registrar, duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
THE BONDS ARE EXCHANGEABLE at the principal payment office of the Registrar,
for Bonds in the principal amount of$5,000 or any integral multiple thereof, subject to the terms
and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond is either (i) registered by the Comptroller of Public
Accounts of the State of Texas by registration certificate attached or affixed hereto or
(ii) authenticated by the Registrar by due execution of the authentication certificate endorsed
hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally
qualified registrar for the Bonds and will cause notice of any change of registrar to be mailed to
each registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
issued and delivered; that all acts, conditions and things required or proper to be performed, to
exist and to be done precedent to or in the issuance and delivery of this Bond have been
performed, exist and have been done in accordance with law; and that annual ad valorem taxes,
within the limits prescribed by law, sufficient to provide for the payment of the interest on and
principal of this Bond, as such interest comes due and such principal matures, have been levied
and ordered to be levied against all taxable property in the City, and have been pledged
irrevocably for such payment.
IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile
signature of the Mayor and countersigned with the manual or facsimile signature of the City
Secretary or the Interim City Secretary, and the official seal of the City has been duly impressed,
or placed in facsimile, on this Bond.
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4145-8530-8699.1
(AUTHENTICATION (SEAL) CITY OF PEARLAND, TEXAS
CERTIFICATE)
Mayor
Interim City Secretary
(b) Form of Registration Certificate of Comptroller of Public Accounts.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved
by the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
(c) Form of Registrar's Authentication Certificate.
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the Bond Ordinance
described in the text of this Bond.
Wells Fargo Bank,N.A.
As Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
(d) Form of Assignment.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
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4145-8530-8699.1
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered owner
as shown on the face of this Bond in every
NOTICE: Signature must be guaranteed by a particular, without any alteration, enlargement
member firm of the New York Stock Exchange or change whatsoever.
or a commercial bank or trust company.
(e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall both be completed with the words "As Shown
Below" and the word"CUSIP" deleted;
(ii) in the first paragraph of the Bond, the words "on the maturity date specified
above" and "at the rate shown above" shall be deleted and the following shall be
inserted at the end of the first sentence "..., with such principal to be paid in
installments on March 1 in each of the years and in the principal amounts
identified in the following schedule and with such installments bearing interest at
the per annum rates set forth in the following schedule:
[Information to be inserted from the Officer's Pricing Certificate]
(iii) the Initial Bond shall be numbered I-1.
19. CUSIP Numbers. CUSIP Numbers may be printed on the Bonds, but errors or
omissions in the printing of such numbers shall have no effect on the validity of the Bonds.
20. Debt Service Fund; Tax Levy. There is hereby established a separate fund of the
City to be known as the City of Pearland, Texas, Permanent Improvement 6 Debt Service
Fund (the "Debt Service Fund"), which shall be kept separate and apart from all other funds of
the City. The proceeds from all taxes levied, assessed and collected for and on account of the
Bonds authorized by this Ordinance shall be deposited, as collected, in the Debt Service Fund.
While the Bonds or any part of the principal thereof or interest thereon remain outstanding and
6 Insert from Officers Pricing Certificate.
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4145-8530-8699.1
unpaid, there is hereby levied and there shall be annually assessed and collected in due time,
form and manner, and at the same time as other City taxes are assessed, levied and collected, in
each year, a continuing direct annual ad valorem tax, within the limits prescribed by law, upon
all taxable property in the City, sufficient to pay the current interest on the Bonds as the same
becomes due and to provide and maintain a debt service fund of not less than two percent of the
principal amount of the Bonds or the amount required to pay each installment of principal of the
Bonds as the same matures, whichever is greater, full allowance being made for delinquencies
and costs of collection, and said taxes are hereby irrevocably pledged to the payment of the
interest on and principal of the Bonds and to no other purpose.
To pay the debt service coming due on the Bonds prior to receipt of the taxes levied to
pay such debt service, there is hereby appropriated from current funds on hand, which are hereby
certified to be on hand and available for such purpose, an amount sufficient to pay such debt
service, and such amount shall be used for no other purpose.
21. Application of Chapter 1208, Government Code. Chapter 1208, Government
Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the City under
Section 20 of this Ordinance, and such pledge is therefore valid, effective and perfected. If
Texas law is amended at any time while the Bonds are outstanding an unpaid such that the
pledge of the taxes granted by the City under Section 20 of this Ordinance is to be subject to the
filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the
registered owners of the Bonds the perfection of the security interest in said pledge, the City
agrees to take such measures as it determines are reasonable and necessary under Texas law to
comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a
filing to perfect the security interest in said pledge to occur.
22. Further Proceedings. After the Initial Bond has been executed, it shall be the duty
of the Mayor and other appropriate officials and agents of the City to deliver the Initial Bond and
all pertinent records and proceedings to the Attorney General of the State of Texas, for
examination and approval. After the Initial Bond has been approved by the Attorney General, it
shall be delivered to the Comptroller for registration. Upon registration of the Initial Bond, the
Comptroller (or the Comptroller's bond clerk or an assistant bond clerk lawfully designated in
writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate
prescribed herein and the seal of said Comptroller shall be impressed, or placed in facsimile,
thereon.
23. Sale; Bond Purchase Agreement. The Bonds shall be sold and delivered to the
Underwriter, who shall be designated in the Pricing Officer's Certificate, at the price set forth in
the Pricing Officer's Certificate and in accordance with the terms of the Bond Purchase Contract
which the Pricing Officer is hereby authorized and directed to execute on behalf of the City. The
Pricing Officer and all other officers, agents and representatives of the City are hereby
authorized to do any and all things necessary or desirable to satisfy the conditions set out therein • .
and to provide for the•issuance and delivery of the Bonds. The Pricing Officer is hereby
authorized and directed to execute the Bond Purchase Agreement on behalf of the City, and the
Mayor, City Manager, Deputy City Manager, Director of Finance and all other officers, agents
and representatives of the City are hereby authorized to do any and all things necessary or
desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of
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4145-8530-8699.1
the Bonds. In the event the Bond Purchase Agreement shall not be executed by the one year
anniversary of the date of this Ordinance (the "Expiration Date"), the delegation to the Pricing
Officer pursuant to this Ordinance shall cease to be effective unless the City shall act to extend
such delegation. Bonds sold pursuant to a Bond Purchase Agreement or winning bid form
executed on or before the Expiration Date may be delivered after such date.
24. Federal Income Tax Exclusion.
The City intends that the interest on the Bonds shall be excludable from gross income of
the owners thereof for federal income tax purposes pursuant to Sections 103 and 141 through
150 of the Internal Revenue Code of 1986, as amended, (the "Code") and all applicable
temporary, proposed and final regulations (the "Regulations") and procedures promulgated
thereunder and applicable to the Bonds. For this purpose, the City covenants that it will monitor
and control the receipt, investment, expenditure and use of all gross proceeds of the Bonds
(including all property, the acquisition, construction or improvement of which is to be financed
directly or indirectly with the proceeds of the Bonds) and take or omit to take such other and
further actions as may be required by Sections 103 and 141 through 150 of the Code and the
Regulations to cause the interest on the Bonds to be and remain excludable from the gross
income, as defined in Section 61 of the Code, of the owners of the Bonds for federal income tax
purposes. Without limiting the generality of the foregoing, the City shall comply with each of
the following covenants:
(a) 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 shall have received 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.
(b) 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 the Bonds,
(1) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds of such series of the Bonds (including property financed with Gross Proceeds of
the Refunded Obligations or notes or bonds refunded by the Refunded Obligations and
not use or permit the use of such Gross Proceeds or any property acquired, constructed,
or improved with such Gross Proceeds in any activity carried on by any person or entity
other than a state or local government, unless such use is solely as a member of the
general public, or
(2) not directly or indirectly impose or accept any charge or other payment for
use of Gross Proceeds of such series of the Bonds or any property the acquisition,
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4145-8530-8699.1
construction or improvement of which is to be financed directly or indirectly with such
Gross Proceeds (including property financed with Gross Proceeds of the Refunded
Obligations or notes or bonds refunded by the Refunded Obligations other than taxes of
general application and interest earned on investments acquired with such Gross Proceeds
pending application for their intended purposes.
(c) 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, Gross Proceeds are considered to be "loaned" to a person or entity if (1)property
acquired, constructed or improved with Gross Proceeds (including property financed with Gross
Proceeds of the Refunded Obligations or notes or bonds refunded by the Refunded Obligations 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 such property are otherwise
transferred in a transaction which is the economic equivalent of a loan.
(d) 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 earlier of the final stated maturity
or final payment of the Refunded Obligations, directly or indirectly invest Gross Proceeds of
such Bonds in any Investment (or use such Gross Proceeds to replace money so invested), if as a
result of such investment the Yield of all Investments allocated to such Gross Proceeds whether
then held or previously disposed of, exceeds the Yield on the Refunded Obligations.
(e) Based on all of the facts and estimates now known or reasonably expected to be in
existence on the date the Bonds are delivered, the City reasonably expects that the proceeds of
the Bonds and the Refunded Obligations (to the extent any of such proceeds remain unexpended)
will not be used in a manner that would cause the Bonds or the Refunded Obligations or any
portion thereof to be"arbitrage bonds"within the meaning of Section 148 of the Code.
(f) At all times while the Bonds are outstanding, the City will identify and properly
account for all amounts constituting gross proceeds of the Bonds in accordance with the
Regulations. The City will monitor the yield on the investments of the proceeds of the Bonds
and, to the extent required by the Code and the Regulations, will restrict the yield on such
investments to a yield which is not materially higher than the yield on the Bonds. To the extent
necessary to prevent the Bonds from constituting "arbitrage bonds," the City will make such
payments as are necessary to cause the yield on all yield restricted nonpurpose investments
allocable to the Bonds to be less than the yield that is materially higher than the yield on the
Bonds.
(g) The City will not take any action or knowingly omit to take any action, if taken or
omitted, would cause the Bonds to be treated as "federally guaranteed" obligations for purposes
of Section 149(b) of the Code.
(h) The City represents that not more than fifty percent (50%) of the proceeds of any
new money portion of the Bonds or any new money issue refunded by, the Refunded Bonds was
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4145-8530-8699.1
invested in nonpurpose investments (as defined in Section 148(f)(b)(A) of the Code) having a
substantially guaranteed yield for four years or more within the meaning of
Section 149(g)(3)(A)(ii) of the Code, and the City reasonably expected at the time each issue of
the Refunded Bonds was issued that at least eighty-five percent (85%) of the spendable proceeds
of the Bonds or the Refunded Bonds would be used to carry out the governmental purpose of
such Bonds within the corresponding three-year period beginning on the respective dates of the
Bonds or the Refunded Bonds.
(i) The City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the gross proceeds of the Bonds, if any, be
rebated to the federal government. Specifically, the City will (i) maintain records regarding the
receipt, investment and expenditure of the gross proceeds of the Bonds as may be required to
calculate such excess arbitrage profits separately from records of amounts on deposit in the funds
and accounts of the City allocable to other obligations of the City or moneys which do not
represent gross proceeds of any obligations of the City and retain such records for at least six
years after the day on which the last outstanding Bond is discharged, (ii) account for all gross
proceeds under a reasonable, consistently applied method of accounting, not employed as an
artifice or device to avoid, in whole or in part, the requirements of Section 148 of the Code,
including any specified method of accounting required by applicable Regulations to be used for
all or a portion of the gross proceeds, (iii) calculate, at such times as are required by applicable
Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the
gross proceeds of the Bonds and (iv)timely pay, as required by applicable Regulations, all
amounts required to be rebated to the federal government. In addition, the City will exercise
reasonable diligence to assure that no errors are made in the calculations required by the
preceding sentence and, if such an error is made, to discover and promptly correct such error
within a reasonable amount of time thereafter, including payment to the federal government of
any delinquent amounts owed to it, including interest thereon and penalty.
(j) The City will not indirectly pay any amount otherwise payable to the federal
government pursuant to the foregoing requirements to any person other than the federal
government by entering into any investment arrangement with respect to the gross proceeds of
the Bonds that might result in a reduction in the amount required to be paid to the federal
government because such arrangement results in smaller profit or a larger loss than would have
resulted if such arrangement had been at arm's length and had the yield on the issue not been
relevant to either party.
(k) The City will timely file or cause to be filed with the Secretary of the Treasury of
the United States the information required by Section 149(e) of the Code with respect to the
Bonds on such form and in such place as the Secretary may prescribe.
(1) The City will not issue or use the Bonds as part of an "abusive arbitrage device"
(as defined in Section 1.148 10(a) of the Regulations). Without limiting the foregoing, the
Bonds are not and will not be a part of a transaction or series of transactions that attempts to
circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the
City to exploit the difference between tax exempt and taxable interest rates to gain a material
financial advantage, or (ii) increasing the burden on the market for tax-exempt obligations.
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4145-8530-8699.1
(m) Proper officers of the City charged with the responsibility for issuing the Bonds
are hereby directed to make, execute and deliver certifications as to facts, estimates or
circumstances in existence as of the Issue Date and stating whether there are facts, estimates or
circumstances that would materially change the City's expectations. On or after the Issue Date,
the City will take such actions as are necessary and appropriate to assure the continuous accuracy
of the representations contained in such certificates.
(n) The covenants and representations made or required by this Section are for the
benefit of the Bond holders and any subsequent Bond holder, and may be relied upon by the
Bond holder and any subsequent Bond holder and bond counsel to the City.
In complying with the foregoing covenants, the City may rely upon an unqualified
opinion issued to the City by nationally recognized bond counsel that any action by the City or
reliance upon any interpretation of the Code or Regulations contained in such opinion will not
cause interest on the Bonds to be includable in gross income for federal income tax purposes
under existing law.
Notwithstanding any other provision of this Ordinance, the City's representations and
obligations under the covenants and provisions of this Section 7.5 shall survive the defeasance
and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on
the Bonds from the gross income of the owners for federal income tax purposes.
25. Use of Proceeds. Proceeds from the sale of the Bonds shall, promptly upon
receipt by the City, be applied as follows:
(a) Accrued interest in the amount of $ 7 and, if necessary, net premium on the
Bonds in the amount of$ 8 , shall be deposited into the Debt Service Fund.
(b) Premium in the amount of$ 9 shall be used to pay the underwriter's discount.
(c) Net premium in the amount of$ 10 _shall be used to pay the costs of issuance.
(d) Bond proceeds in the amount of $ shall be used for the purposes
described in Section 3(i).
(e) The remaining proceeds from the sale of the Bonds, together with other available
funds of the City (in the amount of$ 11 ), shall be applied to establish an escrow fund to
refund the Refunded Bonds or a deposit with the paying agent for the Refunded Bonds, as more
fully provided in Section 26 below, and, to the extent not otherwise provided for, to pay all
expenses arising in connection with the issuance of the Bonds, the establishment of such escrow
fund and the refunding of the Refunded Bonds.
Insert from Officer's Pricing Certificate.
Insert from Officer's Pricing Certificate.
9 Insert from Officer's Pricing Certificate.
10 Insert from Officer's Pricing Certificate.
11 Insert from Officer's Pricing Certificate.
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4145-8530-8699.1
(f) Any proceeds of the Bonds remaining after making all such deposits and
payments shall be deposited into the Debt Service Fund.
26. Escrow Agreement/Deposit with Paying Agent for Refunding Bonds. If
Refunding Bonds are issued, the discharge and defeasance of the Refunded Bonds may be
effectuated pursuant to the terms and provisions of an Escrow Agreement to be entered into by
and between the City and the Escrow Agent or pursuant to a deposit of funds with the paying
agent for the Refunded Bonds. The terms and provisions of an Escrow Agreement or other
deposit agreement, if needed, are hereby approved, subject to such insertions, additions and
modifications as shall be necessary to carry out the terms of this Ordinance and the Pricing
Certificate. The mathematical accuracy of the terms of the refunding shall be certified to by
verification agent or bya certificate of sufficiency of deposit executed by the City's financial
advisor or the paying agent for the Refunded Bonds. The Mayor is hereby authorized to execute
and deliver such Escrow Agreement or other such deposit agreement on behalf of the City in
multiple counterparts and the Secretary or the Assistant Secretary is hereby authorized to attest
thereto and affix the City's seal.
27. Redemption of Refunded Bonds. If Refunding Bonds are issued, the City has
irrevocably exercised its option to call the bonds of the City for redemption prior to maturity on
the dates and at the prices shown on Exhibit C to the Officer's Pricing Certificate, and authorized
and directed notice of such redemption to be given in accordance with the ordinances authorizing
the issuance of such bonds.
28. Purchase of Escrowed Securities. If an Escrow Agreement is utilized, to assure
the purchase of the Escrowed Securities referred to in the Escrow Agreement, if required, the
Pricing Officer is hereby authorized to subscribe for, agree to purchase, and purchase obligations
which are authorized investments for escrow accounts pursuant to Section 1207.062, Texas
Government Code, in such amounts and maturities and bearing interest at such rates as may be
provided for in the Report, and to execute any and all subscriptions, purchase agreements,
commitments, letters of authorization and other documents necessary to effectuate the foregoing,
and any actions heretofore taken for such purpose are hereby ratified and approved.
29. Continuing Disclosure Undertaking. (a) Annual Reports. The City will provide
certain updated financial information and operating data to the MSRB annually in an electronic
format as prescribed by the MSRB and available via the Electronic Municipal Market Access
("EMMA") system at www.emma.msrb.org. Unless provided for in the Pricing Certificate, the
information to be updated includes all quantitative financial information and operating data with
respect to the City of the general type included in the final Official Statement authorized by
Section 31 of this Ordinance under Tables 1-3 and 5-13 and in APPENDIX "B." The City will
update and provide this information within six months after the end of each fiscal year.
If the City changes its fiscal year, it will submit a notice of such change to the MSRB,
and 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 may be set forth in full in
one or more documents or may be included by specific reference to any document available to
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the public on the MSRB's Internet Web site or filed with the SEC, as permitted by the SEC Rule.
The updated information will include audited financial statements, if the City commissions an
audit and it is completed by the required time. If audited financial statements are not available
by the required time, the City will provide unaudited financial statements by the required time
and audited financial statements when and if such audited statements become available. Any
such financial statements will be prepared in accordance with the accounting principles described
in APPENDIX B or such other accounting principles as the City may require to employ from
time to time pursuant to State law or regulation.
(b) Material Event Notices. The City shall notify the MSRB in an electronic format
prescribed by the MSRB, in a timely manner (not in excess of ten (10) days after the occurrence
of the event), of any of the following events with respect to the Bonds:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting financial difficulties;
(v) Substitution of credit or liquidity providers or their failure to perform;
(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed
or final determinations of taxability, Notices of Proposed Issue (IRS Form
5701-TEB) or other material notices or determinations with respect to the tax
status of the Bonds, or other material events affecting the tax status of the Bonds;
(vii) Modifications to rights of holders of the Bonds, if material;
(viii) Bond calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the City;
(xiii) The consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City, other than in the
ordinary course of business, the entry into a definitive agreement to undertake. • .
such an action or the termination of a definitive agreement relating to any such
actions, other than pursuant to its terms, if material;
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(xiv) Appointment of a successor Paying Agent/Registrar or change in the name of the
Paying Agent/Registrar, if material;
(xv) Incurrence of a Financial Obligation of the City, if material, or agreement to
covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the City, any of which affect security holders, if material;
and
(xvi) Default, event of acceleration, termination event, modification of terms, or other
similar events under the terms of a Financial Obligation of the City, any of which
reflect financial difficulties.
For the purposes, any event described in the immediate preceding paragraph (xii) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent
or similar officer for the City in a proceeding Under States Bankruptcy Code or any other
proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of order
confirming a plan of reorganization, arrangement or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the
City.
The City intends the words used in the immediately preceding paragraphs (xv) and (xvi)
and the definition of Financial Obligation in this Section to have the same meanings as when
they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018.
The Pricing Officer is authorized and directed to establish and implement written
procedures to ensure compliance with the reporting requirements imposed by this Section. Such
procedures may be modified and amended by the Pricing Officer from time to time to the extent
the modification or amendment of such procedures are deemed necessary, useful or appropriate.
The City shall notify the MSRB, in a timely manner, of any failure by the City to provide
financial information or operating data in accordance this Section by the time required by such
Section.
(c) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Bonds within the meaning of the
Rule, except that the City in any event will give notice of any deposit made in accordance with
Texas law that causes Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and the 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
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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 UNLIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, or status or type of principal payment of the City, if (1)the
agreement, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
initial primary offering 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 amount of the outstanding
Bonds consent to such amendment or (b) a person unaffiliated with the City (such as nationally
recognized bond counsel) determines that the amendment will not materially impair the interests
of the holders and beneficial owners of the Bonds. The City may also amend or repeal the
provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provisions of the Rule or a court of final jurisdiction enters judgment that such provisions of the
Rule are invalid, but only if and to the extent that the provisions of this sentence would not
prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the
Bonds. If any such amendment is made, the City will include in its next annual update an
explanation in narrative form of the reasons for the change and its impact on the type of
operating data or financial information being provided.
30. Related Matters. To satisfy in a timely manner all of the City's obligations under
this Ordinance, the Bond Purchase Agreement, and the Escrow Agreement, the Mayor or Mayor
Pro Tem, the City Secretary or an Assistant City Secretary, the City Manager, Deputy City
Manager, and all other appropriate officers and agents of the City are hereby authorized and
directed to take all other actions that are reasonably necessary to provide for the refunding of the
Refunded Bonds, including, without limitation, executing and delivering on behalf of the City all
certificates, consents, receipts, requests, and other documents as may be reasonably necessary to
satisfy the City's obligations under the Escrow Agreement, the Bond Purchase Agreement, and
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this Ordinance and to direct the application of funds of the City consistent with the provisions of
the Escrow Agreement and this Ordinance.
31. Power to Revise Form of Documents. Notwithstanding any other provision of
this the Pricing Officer is hereby authorized to make or approve such revisions, additions,
deletions, and variations to this Ordinance and in the form of the documents attached hereto as
exhibits as, in the judgment of the Pricing Officer, and in the opinion of Bond Counsel to the
City, may be necessary or convenient to carry out or assist in carrying out the purposes of this
Ordinance, the Preliminary Official Statement, the final Official Statement, or as may be
required for approval of the Bonds by the Attorney General of Texas; provided, however, that
any changes to such documents resulting in substantive amendments to the terms and conditions
of the Bonds or such documents shall be subject to the prior approval of the Board.
32. Amendments. The City may amend this Ordinance without the consent of or
notice to any Owner in any manner not detrimental to the interests of the Owners, including the
curing of any ambiguity, inconsistency, or formal defect or omission therein. In addition, the
City may with the written consent of the holders of a majority of the aggregate principal amount
of the Bonds then outstanding affected thereby, amend, add to, or rescind any of the provisions
of the Ordinance; except that, without the consent of the Owners of the Bonds affected, no such
amendment, addition or rescission may (i) make any change in the maturity of any of the .
outstanding Bonds; (ii) reduce the rate of interest borne by any of the outstanding Bonds;
(iii) reduce the amount of the principal of or redemption premium, if any, payable on any
outstanding Bonds; (iv) modify the terms of payment of principal or of interest or redemption
premium on outstanding Bonds or any of them or impose any condition with respect to such
payment; or (v) change the minimum percentage of the principal amount of the Bonds necessary
for consent to such amendment.
33. Official Statement. The City Council hereby approves the form and content of the
Preliminary Official Statement prepared for the initial offering and sale of the Bonds and hereby
authorizes the preparation of a final Official Statement reflecting the terms of the Bond Purchase
Agreement and other relevant matters. The use of such Official Statement in the reoffering of
the Bonds by the Underwriter is hereby approved and authorized.
34. Registrar. The form of agreement setting forth the duties of the Registrar is
hereby approved, and the appropriate officials of the City are hereby authorized to execute such
agreement for and on behalf of the City.
35. No Personal Liability. No recourse shall be had for payment of the principal of or
interest on any Bonds or for any claim based thereon, or on this Ordinance, against any official
or employee of the City or any person executing any Bonds.
36. Open Meeting. The meeting at which this Ordinance is adopted was open to the
public, and public notice of the time, place and purpose of said meeting was given, all as
required by the Texas Open Meetings Act; and such notice as given is hereby authorized,
approved, adopted and ratified.
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First Reading on the 24th day of June 2019
PASSED AND APPROVED on the Second Reading the 8th day of July, 2019.
•
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EXHIBIT A
ALL THE CITY'S OUTSTANDING OBLIGATIONS
Certificates of Obligation, Series 2007
Certificates of Obligation, Series 2008
Permanent Improvement Bonds, Series 2008
Certificates of Obligation, Series 2009
Permanent Improvement and Refunding Bonds, Series 2009
Certificates of Obligation, Series 2009A
Permanent Improvement Bonds, Series 2010A
Permanent Improvement Refunding Bonds, Series 2010B
Certificates of Obligation, Series 2011
Permanent Improvement Bonds, Series 2011
Unlimited Tax Bonds, Series 2011 (Brazoria County MUD No. 4)
Permanent Improvement Refunding Bonds, Series 2012
Permanent Improvement Bonds, Series 2013
Permanent Improvement and Refunding Bonds, Series 2014
Certificates of Obligation, Series 2014
Permanent Improvement Refunding Bonds, Series 2015
Permanent Improvement Bonds, Series 2015
Certificates of Obligation, Series 2015
Permanent Improvement Refunding Bonds, Series 2015-A
Certificates of Obligation, Series 2016
Permanent Improvement and Refunding Bonds, Series 2016A
Permanent Improvement Refunding Bonds, Series 2016B
Permanent Improvement and Refunding Bonds, Series 2017
Certificates of Obligation, Series 2017
Permanent Improvement Bonds, Series 2018
Certificates of Obligation, Series 2018
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