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1985-07-22 CITY COUNCIL REGULAR MEETING MINUTES92 MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS HELD ON JULY 22, 1985, AT 7:30 P. M. IN THE CITY HALL, 2335 N. TEXAS AVENUE, PEARLAND, TEXAS The meeting was called to order with the following present: Mayor Councilman/Mayor Pro Tem Councilman Councilman Councilman City Manager City Attorney City Secretary Tom Reid James E. Bost Al Lentz Dennis Frauenberger Terry Gray Ronald J. Wicker Luke L. Daniel Kay Krouse Absent from the Meeting: Councilman Richard Tetens INVOCATION AND PLEDGE OF ALLEGIANCE: The invocation was given by Mayor Pro Tem James Bost. The Pledge of Allegiance was led by Assistant City Manager Gary Jackson. APPROVAL OF MINUTES: It was moved by Councilman Lentz, seconded by Councilman Bost, that the Minutes of the Regular Meeting of July 8, 1985 be approved as submitted. Motion passed 3 to 0. Councilman Frauenberger abstained. MAYOR'S ACTIVITY REPORT: Mayor Reid reported that the Brazos Bend Water Authority Bill was recently passed in the State Legislature. There will be an organizational meeting of the representatives Wednesday, July 24, 1985, at 7:30 in the Pearland Library. COUNCIL ACTIVITY REPORTS: Councilman Bost reported that there will be a Sign Ordinance Review meeting one day next week. DEPARTMENTAL REPORTS: City Manager Ron Wicker reported that the South Grand Community Center renovations are proceeding very nicely and hopefully within the next 30-45 days the facility will be useable. We will try to have some sort of formal opening ceremony when it is com- pleted, he said. Mayor Reid stated that he thought it would be appropriate to have some guidelines drawn up for the use of this facility and requested the Staff and the Park Board to work together on this item. City Manager Ron Wicker requested the Council to call a workshop for continuing work on the Land Use and Urban Development Ordinance. The workshop was called for Monday, July 29, 1985, at 7:30 P. M. in the Council Chambers. City Manager Wicker gave recognition to Barbara Lenamon who recently has been re- certified by the State Board of Tax Professional Examiners as a Registered Pro- fessional Appraiser and Registered Tax Assessor -Collector. Mr. Wicker stated he appreciated the good work Barbara has been doing. CHANGE IN ORDER OF BUSINESS: NEW BUSINESS ORDINANCE NO. 495, AN ORDINANCE AUTHORIZING THE ISSUANCE OF $12,060,000 CITY OF PEARLAND TEXAS, REFUNDING BONDS, SERIES 1985 AND DECLARING AN EMERGENCY 93 Messrs. Larry Catuzzi and John M. Driskill, representing Underwood, Neuhaus & Com- pany, presented Council a handout that was a brief summary of the refunding, showing a projected annual savings for the City of approximately $42,000. Mr. Catuzzi stated that he would like to request, if everything was agreeable with Council, approval of the Bond Purchase Agreement with Underwood, Neuhaus & Company and all the necessary documents needed to complete the refunding. It was moved by Councilman Bost, seconded by Councilman Lentz, that the City enter into a Bond Purchase Agreement with Underwood, Neuhaus & Company, Inc., and that the Mayor be authorized to sign the agreement. Motion passed 4 to 0. It was moved by Councilman Gray, seconded by Councilman Bost, that the Mayor be authorized to sign, on behalf of the City, the application to purchase the State and Local Government Sureties (SLGS) and the agreement with the Federal Guaranty Insurance Corp. to insure the bonds. Motion passed 4 to 0. Ordinance No. 495 read in caption by Councilman Gray. (First and Only Reading) It was moved by Councilman Gray, seconded by Councilman Frauenberger, that Ordinance No. 495 be passed and approved on first and only reading, as an emergency ordinance. Voting "Aye" - Councilman Gray, Councilman Frauenberger, Councilman Bost, and Councilman Lentz. Voting "No" - None Motion passed 4 to 0. Certificate and Ordinance No. 495, as adopted, reads as follows: CERTIFICATE FOR ORDER THE STATE OF TEXAS X COUNTIES OF BRAZORIA AND HARRIS X We, the undersigned members of the City Council of the City of Pearland, Texas hereby certify as follows: 1. The City Council of the City of Pearland, Texas convened in a regular meeting on the 22nd day of July, 1985, at the regular meeting place thereof, within said City, and the roll was called of the duly constituted members of said Council to -wit: Tom Reid Mayor James E. Bost Mayor Pro Tem Dennis M. Frauenberger Councilman Terry Gray Councilman Alfred E. Lentz Councilman Richard F. Tetens Councilman and all of said persons were present, except the following absentee: Richard F. Tetens , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: a written ORDINANCE AUTHORIZING THE ISSUANCE OF $12,060,000 CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1985; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OBLIGATIONS; AUTHORIZING THE PURCHASE OF CERTAIN SECURITIES AND THE TRANSFER OF CERTAIN FUNDS; AUTHORIZING THE EXECUTION OF AN ESCROW AGREEMENT AND DECLARING THAT THIS ORDINANCERELATES TO AN IMMEDIATE PUBLIC EMERGENCY AFFECTING LIFE, HEALTH, PROPERTY AND 44 THE PUBLIC PEACE IN THAT THE PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE FOR THE PURPOSES STATED HEREIN was duly introduced for the consideration of said Council and read in full. It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: AYES: All members of the City Council shown present above voted "Aye". NOES: None 2. That a true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said ordinance has been duly recorded in said Council's minutes of said meeting; that the above and foregoing paragraph is a true, full and correct ex- cerpt from said Council's minutes of said meeting pertaining to the adoption of said ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting members of said Council as indicated therein; that each of the members of said Council was duly and sufficiently notified officially and person- ally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that said ordinance would be introduced and considered for adoption at said meeting, and each of said members consented, in advance, to the holding of said meeting for such purposes; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Vernon's Article 6252-17, as amended. SIGNED AND SEALED this 22nd day of July, 1985. /s/ Kay Krouse City Secretary ( SEAL) /s/ Tom Reid Mayor ORDINANCE NO. 495 ORDINANCE AUTHORIZING THE ISSUANCE OF $12,060,000 CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1985; AUTHORIZING THE REDEMPTION PRIOR TO MATURITY OF CERTAIN OBLIGATIONS; AUTHORIZING THE PURCHASE OF CERTAIN SECURITIES AND THE TRANSFER OF CERTAIN FUNDS; AUTHORIZING THE EXECUTION OF AN ESCROW AGREEMENT; AND DECLARING THAT THIS ORDINANCE RELATES TO AN IMMEDIATE PUBLIC EMERGENCY AFFECTING LIFE, HEALTH, PROPERTY AND THE PUBLIC PEACE IN THAT THE PROCEEDS OF SALE OF SUCH BONDS ARE REQUIRED AS SOON AS POSSIBLE FOR THE PURPOSES STATED HEREIN THE STATE OF TEXAS X COUNTIES OF BRAZORIA AND HARRIS X CITY OF PEARLAND X WHEREAS, the City of Pearland, Texas (the "City") has heretofore issued its Permanent Improvement Bonds series 1982 and its Public Improvements Bonds, Series 1984, of which $10,850,000 in aggregate amount remains outstanding (the "Refunded Bonds"); and WHEREAS, the City desires to refund the Refunded Bonds, in advance of their maturities, to reduce the debt service payable by the City; and WHEREAS, the City is authorized by Article 717k, Vernon's Texas Civil Statutes, as amended, to issue refunding bonds 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 the proceeds of such refunding bonds, to- 95 gether with other available funds, in an amount sufficient to provide for the payment or redemption of the Refunded Bonds, and such deposit shall constitute the making of firm banking and financial arrangements for the discharge and final payment or redemp- tion of the Refunded Bonds; and WHEREAS, the City desires to enter into an escrow agreement with First City National Bank of Houston, Houston, Texas (the "Escrow Agent"), as authorized by Article 717k, pursuant to which proceeds of the refunding bonds herein authorized, together with other available funds, will be deposited, invested and applied in a manner independently certified to be sufficient to provide for the full and timely payment of all interest on and principal of the Refunded Bonds; and WHEREAS, the City desires to authorize the subscriptions for and purchase of certain obligations of the United States of _America for deposit under and pursuant to such escrow agreement and to authorize the transfer and deposit of certain existing funds; and WHEREAS, upon the issuance of the refunding bonds herein authorized and the creation of the escrow referred to above, the Refunded Bonds shall no longer be re- garded as being outstanding, except for the purpose of being paid pursuant to such Escrow Agreement, and the pledges, liens, trusts and all other covenants, provisions, terms and conditions of the order authorizing the issuance of the Refunded Bonds shall be discharged, terminated and defeased; Now, Therefore BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: 1. Throughout this ordinance the following terms and expressions as used herein shall have the meanings set forth below: The term "Bond Register" shall mean the. -books of registration kept by the Regis- trar in which are maintained the names and addresses of, and the principal amounts of the Bonds registered to, each Owner. The term "Bonds" shall mean the $12,060,000 City of Pearland, Texas, Refunding Bonds, Series 1985 authorized in this Ordinance, unless the context clearly indicates otherwise. The term "Interest and Sinking Fund" shall mean the interest and sinking fund for payment of the Bonds designated in Section 7 of this Ordinance. The term "City" shall mean the City of Pearland, Texas. The term "Interest Payment Date", when used in connection with any Bond, shall mean March 1, 1986, and each September 1 and March 1 thereafter until maturity or earlier redemption of such Bond. The term "Ordinance" as used herein and in the Bonds shall mean this ordinance authorizing the Bonds. The term "Owner" shall mean any person who shall be the registered owner of any outstanding Bond. The term "Paying Agent" shall mean the Registrar. The term "Record Date" shall mean the fifteenth (15th) calendar day of the month next preceding each Interest Payment Date. The term "Refunded Bonds" shall mean outstanding bonds of the City's Permanent Improvement Bonds, Series 1982, dated July 1, 1982, and Public Improvement Bonds, Series 1984, dated December_.1, 1984, in the aggregate principal amount of $10,850,000. The term "Registrar" shall mean First City: National Bank:of Houston, Houston, Texas, and its successors in that capacity. The term "Underwriters" shall mean Underwood, Neuhaus & Co., Incorporated and Rauscher Pierce Refsnes, Inca The terms "Escrow Agent," "Escrowed Securities," "Open Market Securities," and "Report" shall have the meanings assigned to them in the Escrow Agreement attached hereto as Exhibit "A". 2. The Bonds shall be issued in: fully registered form in the total authorized aggregate amount of Twelve Million Sixty Thousand Dollars ($12,060,000) for the pur- pose of advance refunding all of the Refunded Bonds. aWt 3. (a) The Bonds shall be designated as "CITY OF PEARLAND, TEXAS, REFUNDING BONDS, SERIES 1985", and shall be dated August 15, 1985. The Bonds shall bear interest at the rates set forth below from the later of August 15, 1985, or the most recent Interest Pay- ment Date to which such interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day months, payable on March 1, 1986, and semiann- ually thereafter on September 1 and March 1 of each year until maturity or prior redemp- tion. (b) The Bonds shall be issued bearing the numbers, in the principal amounts, and bearing interest at the rates set forth in the following schedule, and may be trans- ferred and exchanged as set out in this Ordinance. The Bonds shall mature, subject to prior redemption in accordance with this Ordinance, on March l in each of the years and in the amounts set out in such schedule. 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 at the same rate as the Bond or Bonds in lieu of which they are delivered. Bond Principal Interest Number Year Amount Rate R-1 1986 205,000 4.75% R-2 1987 545,000 5.50% R-3 1988 610,000 6.20% R-4 1989 645,000 6.70% R-5 1990 705,000 7.00% R-6 1991 770,000 7.25% R-7 1992 830,000 7.50% R-8 1993 915,000 7.75% R-9 1994 1,095,000 8.00% R-10 1995 1,190,000 8.10% R-11 1996 1,285,000 8.25% R-12 1997 1,280,000 8.40% R-13 1998 510,000 8.50% R-14 1999 500,000 8.60% R-15 2000 490,000 8.70% R-16 2001 485,000 8.80% (c) The Bonds shall be signed by the Mayor and countersigned by the 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 officers, 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. 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. (d) Only such Bonds as shall bear thereon either (i) the manually executed registration certificate of the Comptroller of Public Accounts of the State of Texas substantially in the form provided in Section 5(b) of this Ordinance or (ii) a certi- ficate of authentication, substantially in.the form provided in Section 5(c) of this Ordinance, manually executed by an authorized officer of the Registrar, shall be en- titled to the benefits of this Ordinance or shall be valid or obligatory for any pur- pose. Such duly executed certificate of authentication shall be conclusive evidence that the Bond so authenticated was delivered by the Registrar hereunder. (e) The Registrar is hereby appointed as the paying agent for the Bonds. The principal of and premium, if any, on 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 the 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, whether at maturity or by prior redemption, at the principal corporate trust office of the Registrar. The interest on each Bond shall be payable by check payable on the Interest Payment Date, mailed by the Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date,- to the address of such Owner as shown on the Bond Register. (f) 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 and premium, if any, on such Bond, and for the further purpose of making and receiving payment of the 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 97 payments made to the person deemed to be the Owner of any Bond in accordance with this section 3(f) 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. (g) So long as any Bonds remain outstanding, the Registrar shall keep at its principal corporate trust office the Bond Register, in which, subject to such 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 transferrable only upon the presentation and surrender thereof at the principal corporate trust 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 72 hours 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 corporate trust office of the Registrar for a Bond or Bonds of the same maturity and interest rate and in any authorized denomination, in an aggregate principal 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 3(g). Each Bond delivered in accordance with this Section 3(g) 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 theRegistrarmay 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. The Registrar shall not be required to transfer or.exchange any Bond called for redemption in whole or in part during the forty-five (45) calendar days prior to the date fixed for redemption; provided, however, such limitation shall not apply to —' the transfer or exchange by the Owner of the unredeemed balance of a Bond called for redemption in part. (h) All Bonds paid or redeemed 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 cancelled and destroyed upon the making of proper records regarding such payment or redemption. The 'Registrar shall furnish the City with appropriate certificates of destruction of such Bonds. (i) 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 con- temporaneously 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 there- with, including the fees and expenses of the Registrar. 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 execute and the Registrar shall authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Owner thereof shall have: (1) 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; (2) furnish such security or indemnity as may be required by the Regis- trar and £he City to save them harmless; (3) 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 (4) 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 orig- inal Bond, the City and the Registrar shall be entitled to recover such replacement In 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 3(i) 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. 4. (a) The City reserves the right, at its option, to redeem prior to maturity the Bonds maturing in the year 1996 and thereafter, in whole or from time to time in part, in such manner as the City may select, on March 1, 1995, or on any Interest Payment Date thereafter, at par plus accrued interest on the Bonds called for redemp- tion to the date fixed for redemption. If less than all the Bonds are to be redeemed within a stated maturity, the particular Bonds to be redeemed shall be selected by the City. (b) 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 3(g) 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. (c) 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 (i) sending written notice by first class mail, postage pre- paid, to the Owner of each Bond to be redeemed in whole or in part at the address shown on the Bond Register and (ii) publication in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. 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 are to be redeemed, the numbers of the Bonds or portions thereof to be redeemed. Any notice given as provided in this Section 4(c) 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 re- demption, 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. 5. (a) The Bonds shall be in substantially the following form, with such addi- tions, deletions, and variations as may be necessary or desirable and not prohibited by this Ordinance: NUMBER REGISTERED INTEREST RATE: REGISTERED OWNER: PRINCIPAL AMOUNT: (Face of Bond) United States of America State of Texas CITY OF PEARLAND, TEXAS REFUNDING BOND SERIES 1985 MATURITY DATE: ISSUE DATE: August 15, 1985 AMOUNT REGISTERED CUSIP: DOLLARS The City of Pearland, Texas (the "City") promises to pay to the Registered e0 MAN Owner identified above, or registered assigns, on the Maturity Date specified above, upon presentation and surrender of this bond at the principal corporate trust office of First City National Bank of Houston, Houston, Texas (the "Registrar"), the prin- cipal amount identified above, payable in any coin or currency of the United States of America which on the date of payment of such principal 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 the later of August 15, 1985, or the most recent interest payment date to which interest has been paid or duly provided for. Interest on this bond is pay- able by check payable semiannually on March 1 and September.l, beginning on March 1, 1986, mailed to the registered owner of record as of the previous February 15 and August 15 as shown on the books of registration kept by the Registrar. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE. 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, and the official seal of the City has been duly impressed, or placed in facsimile, on this bond. (AUTHENTICATION CERTIFICATE) (SEAL) CITY OF PEARLAND /s/ Tom Reid Mayor /s/ Kay Krouse City Secretary (Back Panel of Bond) THIS BOND is one of a duly authorized issue of Bonds, aggregating $12,060,000 (the "Bonds"), issued for the purpose of refunding all of the City's outstanding Permanent Improvement Bonds, Series 1982 and Public Improvement Bonds, Series 1984, pursuant to an ordinance adopted by the City Council on July 22, 1985 (the "Ordinance"). THE CITY RESERVES THE RIGHT, at its option, to redeem the Bonds maturing in the year 1996 and thereafter, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples of $5,000, on March 1, 1995, or on any interest payment date thereafter, at par plus accrued interest on the principal amounts called for redemption to the date fixed for redemption. Reference is made to the Ordinance for complete details concerning the manner of redeeming the Bonds. Notice of any redemption shall be given at least thirty (30) days prior to the date fixed for redemption by first class mail, addressed to the registered 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 and by publication once in a financial journal or publication published in the City of New York, New York, or in the City of Austin, Texas. When Bonds or portionsthereof have been called for redemption, and due pro- vision 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 transferrable only upon presentation and surrender at the princi- pal corporate trust office of the Registrar, duly endorsed for transfer or accompanied by an assignment duly executed by the registered owner or his authorized representa- tive, subject to the terms and conditions of the Ordinance. The Bonds are exchangeable at the principal corporate trust office of the Reg- istrar for bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. The Registrar is not required to transfer or exchange any Bond called for re- demption during the forty-five days prior to the date fixed for redemption; provided, however, that such limitation shall not apply to the transfer or exchange by the owner of a Bond called for redemption in part. This Bond shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Bond either (i) is registered by the 100 Comptroller of Public ,Accounts of the State of Texas by registration certificate endorsed hereon or (ii) is authenticated by the Registrar by due execution of the authentication certificate endorsed hereon. Such duly executed certificate of authen- tication shall be conclusive evidence that this Bond has been delivered by the Regis- trar pursuant to the Ordinance. 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 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, within the limits prescribed by law, and have been pledged irrevocably for such payment. (b) Bonds No. R-1 through R-16 shall be registered by the Comptroller of Public Accounts of the State of Texas, as provided by law. The registration certif- icate of the Comptroller of Public Accounts shall be printed on Bonds R-1 through R-16 and shall be in substantially the following form: 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 xxxxxxxxxx Comptroller of Public Accounts of the State (SEAL) of Texas (c) The following form of authentication certificate shall be printed on the face of each of the Bonds: Registration Date: AUTHENTICATION CERTIFICATE This bond is one of the bonds described in and delivered pursuant to the within -mentioned ordinance. First City National Bank of Houston By Authorized Officer (d) The following form of assignment shall be printed on the back of each of the Bonds: For value received, unto appoints for registration thereof, with DATED Signature Guaranteed: ASSIGNMENT the undersigned hereby sells, assigns, and transfers _ the within bond and hereby irrevocably constitutes and attorney to transfer said bond on the books kept full power of substitution in the premises. Registered Owner 6. The approving opinion of Vinson & Elkins, Houston, Texas, and CUSIP Num- bers may be printed on the Bonds, but errors or omissions in the printing of such opinion or such numbers shall have no effect on the validity of the Bonds. 7. 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 Interest and Sinking Fund. While the Bonds or any part of the principal thereof or interest thereon remain outstanding and 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, beginning with the current year, a continuing direct annual ad valorem tax upon all taxable property 101 in the City, within the limits prescribed by law, sufficient to pay the current interest on the Bonds as the same becomes due and to provide and maintain a sinking 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, which- ever 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. In addition, interest accrued from the date of the Bonds until their delivery will be deposited in such fund. 8. After the Bonds to be initially issued have been executed, it shall be the duty of the Mayor to deliver the Bonds to be initially issued and all pertinent records and proceedings to the Attorney General of Texas, for examination and appro- val by the Attorney General. After the Bonds to be initially issued have been approved by the Attorney General, they shall be delivered to the Comptroller of Public Accounts of the State of Texas for registration. Upon registration of the Bonds to be initially issued, the Comptroller of Public Accounts (or a deputy law- fully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be printed and endorsed on the Bonds to be initially issued, and the seal of said Comptroller shall be im- pressed, or placed in facsimile, thereon. 9. The Bonds are hereby sold and shall be delivered to the Underwriters for $11,643,735.35, plus accrued interest to date of delivery, pursuant to the terms set forth in the bond purchase agreement of even date herewith, between the City and the Underwriters, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City. The City hereby authorizes the execution, delivery and due performance of such bond purchase agree- ment. The Mayor is hereby authorized and directed to execute and enter into such bond purchase agreement on behalf of the City, and the City Secretary is hereby authorized and directed to attest thereto. 10. The City certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds initially issued are delivered and paid for, the City reasonably expects that the proceeds of the Bonds will not be used in a manner that would cause the Bonds or any portion of the Bonds to be an "arbitrage bond" under Section 103(c) (2) of the Internal Revenue Code of 1954, as amended, and the regulations prescribed thereunder. Furthermore, all officers, employees and agents of the City are authorized and directed to provide certifications of facts and estimates that are material to the reasonable expect- ations of the City as of the date the Bonds initially issued are delivered and paid for. In particular, all or any officers of the City are authorized to certify for the City the facts and circumstances and reasonable expectations of the City on the date the Bonds initially issued are delivered and paid for regarding the amount and use of the proceeds of the Bonds. Moreover, the City covenants that it shall make such use of the proceeds of the Bonds, regulate investments of proceeds of the Bonds and take such other and further actions as may be required so that the Bonds shall not be "arbitrage bonds" under Section 103(c) (2) of the Internal Revenue Code of 1954, as amended, and the regulations prescribed from time to time thereunder. 11. Proceeds from the sale of the Bonds shall, promptly upon receipt by the City, be applied as follows: (a) Accrued interest shall be deposited into the Interest and Sinking Fund. (b) The remaining proceeds from the sale of the Bonds, together with other available funds, shall be applied to establish an Escrow Fund to refund the Refund- ed Bonds, as more fully provided in the Escrow Agreement referred to 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 refund- ing of the Refunded Bonds. Any proceeds of the Bonds remaining after making all such deposits and payments shall be deposited into the Interest and Sinking Fund. 12. The City hereby irrevocably calls the following bonds of the City for re- demption prior to maturity on the dates set forth below, and authorizes and directs notice of such redemption to be given in accordance with the ordinances authorizing the issuance of such bonds: BONDS TO BE REDEEMED REDEMPTION DATE Permanent Improvement Bonds, March 1, 1991 Series 1982 Public Improvement Bonds, Series 1984 March 1, 1995 13. The discharge and defeasance of the Refunded Bonds shall be effectuated pursuant to the terms and provisions of an Escrow Agreement to be entered into by M9, 9, and between the City and First City National Bank of Houston, Houston, Texas, as Escrow Agent, which shall be substantially in the form attached hereto as Exhibit "A", the terms and provisions of which are hereby approved, subject to such inser- tions, additions and modifications as shall be necessary (a) to carry out the pro- gram designed for the City by the Underwriters, which shall be certified as to math- ematical accuracy by Ernst & Whinney, Certified Public Accountants, whose Report shall be attached to the Escrow Agreement, (b) to maximize.the City's present value savings and/or to minimize the City's costs of refunding, (c) to comply with all applicable laws and regulations relating to the refunding of the Refunded Bonds and (d) to carry out the other intents and purposes of this Ordinance; and the Mayor is hereby authorized to execute and deliver such Escrow Agreement on behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest there- to and affix the City's seal. 14. On the date of delivery of the Bonds, there shall be transferred from the City's existing Interest and Sinking Fund an amount sufficient to purchase the Open Market Securities for deposit with the Escrow Agent, pursuant to the Escrow Agree- ment. 15. In order to assure the purchase of the Escrowed Securities referred to in the Escrow Agreement, the Mayor is hereby authorized to subscribe for, agree to purchase and purchase, obligations of the United States of America, in such amounts and maturities and bearing interest at such rates as may be provided for in the Report to be attached to the Escrow Agreement, 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 by the Mayor for such purpose are hereby ratified and approved. 16. In order that the City shall satisfy in a timely manner all of its obliga- tions under this Ordinance and the Escrow Agreement, the Mayor and City Secretary 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 deliver- ing 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 and to direct the transfer and application of funds of the City consistent with the provisions of such Escrow Agreement. 17. The form of agreement setting forth the duties of the Registrar is here- by approved, and an appropriate official of the City is hereby authorized to execute such agreement for and on behalf of the City. The City reserves the right to replace the Registrar or its successor at any time. If the Registrar is replaced by the City, the new Registrar shall accept the previous Registrar's records and act in the same capacity as the previous Regis- trar. Any Registrar selected by the City shall be a bank, trust company, financial institution or other entity duly qualified and legally authorized to act as and perform the duties of Registrar for the Bonds. The successor Registrar, if any, shall be determined by the City. 18. The Official Statement submitted to the City Council is hereby approved for use in connection with the distribution of the Bonds. 19. It is hereby officially found and determined that the meeting at which this Ordinance was adopted was open to the public, and public notice of the time, place, and purpose of said meeting was given, all as required by Article 6252-17, Vernon's Texas Civil Statutes. 20. It is hereby officially found, determined, and declared that this Ordinance relates to an immediate public emergency affecting life, health, property and the public peace in that the proceeds of sale of the Bonds are required as soon as possible to reduce the City's debt service payments. PASSED AND APPROVED this 22nd day of July, 1985. /s/ Tom Reid Mayor City of Pearland, Texas ATTEST: /s/ Kay Krouse City Secretary City of Pearland, Texas ( SEAL) 103 EXHIBIT "A" ESCROW AGREEMENT THIS ESCROW AGREEMENT (the "Escrow Agreement") dated for convenience July 22, 1985, but effective on the Escrow Funding Date described herein, is made and entered into by and between the City of Pearland, Texas, a Home Rule City organized and existing under the Constitution and laws of the State of Texas (together with any successor to its duties and functions, the "City"), and First City National Bank of Houston, Houston, Texas, as paying agent for the City's Public Improvement Bonds , Series 1984, and as Escrow Agent under this Agreement (the "Escrow Agent"). WHEREAS, the City has heretofore issued and there remain outstanding the City's Permanent Improvement Bonds, Series 1982 and Public Improvement Bonds, Series 1984, in the aggregate principal amount of $10,850,000 (hereinafter referred to collectively as the "Refunded Bonds"); and WHEREAS, Article 717k, Vernon's Texas Civil Statutes, as amended, authorizes and empowers the City to issue, sell and deliver refunding bonds payable from ad valorem taxes and to deposit the proceeds of such bonds, together with other available funds or resources, with any place of payment (paying agent) for the Refunded Bonds in an amount which is sufficient to provide for the payment or redemption of the principal of and interest on the Refunded Bonds; and WHEREAS, the City Council of the City has adopted an ordinance authorizing the issuance of the City's Refunding Bonds, Series 1985, in the aggregate principal amount of $12,060,000 (the "Refunding Bonds"), for the purpose of providing a portion of the funds necessary to refund the Refunded Bonds, in order to reduce the City's debt service requirements; and WHEREAS, the City has provided for the transfer to the Escrow Agent pursuant to this Escrow Agreement of certain money held in the City's Interest and Sinking Fund created and maintained pursuant to the ordinances authorizing the issuance of the Re- funded Bonds, and for the application of such money, along with the proceeds of the Refunding Bonds and other money lawfully available for such purpose, to provide for the payment or redemption of the Refunded Bonds; and WHEREAS, the City Council of the City has further determinded to effectuate the advance refunding of the Refunded Bonds pursuant to this Escrow Agreement, under which provision is made for the safekeeping „investment„reinvestment,,administration and disposition of the proceeds of the Refunding Bonds and such other money made available in connection with such advance refunding, so as to provide firm banking and financial arrangements for the discharge and final payment or redemption of the Refunded Bonds; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agree- ments herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in order to secure the full: and time- ly payment of the principal of and the interest on the Refunded Bonds, the City and the Escrow Agent contract and agree as follows: ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.01. Definitions. Unless otherwise expressly provided or unless the con- text clearly requires otherwise, the following terms shall have the respective meanings specified below for all purposes of this Escrow Agreement: "Book Entry Securities” shall mean the United States Treasury Obligations, State and Local Government Series, initially purchased with the proceeds of the Refunding Bonds, all as more fully described in of the Report. "Code" shall mean the Internal Revenue Code of 1954, as amended, and the regulations promulgated thereunder. "City" shall mean the City of Pearland, Texas, and any successor to its duties and functions. "Escrow Agent" shall mean First City National Bank of Houston, Houston, Texas, in its capacity as escrow agent hereunder, and any successor or assign in such capacity. "Escrow Agreement" shall mean this escrow agreement as it may be amended or supple- mented from time to time. "Escrow Fund" shall mean the fund created in Section 3.01 of this Escrow Agreement 104 to be administered by the Escrow Agent pursuant to the provisions of this Escrow Agree- ment. "Escrow Funding Date" shall mean the date on which the City deposits with the Escrow Agent the cash and Escrowed Securities described in Section 2.01. "Escrowed Securities" shall mean, collectively, the Book Entry Securities and the Open Market Securities, together with all reinvestments of the proceeds thereof as con- templated and required by the provisions of this Escrow Agreement and the Report. "Open Market Securities" shall mean the United States Treasury obligations to be pur- chased in the open market with funds other than proceeds of the Refunding Bonds, as more fully described in of the Report. "Paying Agents for the Refunded Bonds" shall mean, collectively: Pearland State Bank, Pearland, Texas, for the Series 1982 Refunded Bonds; and First City National Bank of Houston, Houston, Texas for the Series 1984 Refunded Bonds. "Refunded Bond Ordinances" shall mean the City's ordinances authorizing the issu- ance, sale and delivery of the Refunded Bonds. "Refunded Bonds" shall mean, collectively, the outstanding bonds of the City's Permanent Improvement Bonds, Series 1982, dated July 1, 1982, and Public Improvement Bonds, Series 1984, dated December 1, 1984. "Refunding Bonds" shall mean the City's Refunding Bonds, Series 1985, dated August 15, 1985, in the initial aggregate principal amount of $12,060,000. "Refunding Bond Ordinance" shall mean the City's Ordinance adopted July 22, 1985, authorizing the issuance, sale and delivery of the Refunding Bonds. "Report" shall mean the verification report prepared by Ernst & Whinney relating to the advance refunding of the Refunded Bonds, a copy of which is attached hereto as Exhibit "A". Section 1.02. Interpretations. The titles and headings of the articles and sections of this Escrow Agreement have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms here- of. This Escrow Agreement and all of the terms and provisions hereof shall be liberal- ly construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with appli- cable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2.01. Deposits with Escrow Agent; Acquisition of Escrowed Securities. On the Escrow Funding Date the City will deposit, or cause to be deposited, with the Escrow Agent the following: (a) Book Entry Securities in the principal amount of $ purchased with a portion of the proceeds of the Refunding Bonds; (b) Open Market Securities in the amount of $ purchased with funds other than proceeds of the Refunding Bonds; and (c) A beginning cash balance of $ ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3.01. Escrow Fund. On the Escrow Funding Date the Escrow Agent will create on its books a special fund and irrevocable escrow to be known as the City of Pearland Series 1985 Escrow Fund, into which will be deposited the cash and Escrowed Securites described in Section 2.01. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund shall be the property of the Escrow Fund, and shall be applied only in strict conformity with the terms and conditions hereof. The Escrowed Securities, all proceeds therefrom and all cash balances from time to time on deposit in the Escrow Fund are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds, which payment shall be made by timely transfers to the Paying Agents for the Refunded Bonds of such amounts at such times as are provided in Section 3.02 hereof provided, however, that nothing contained in this Section 3.01 shall prohibit the transfer to the City of any income or increment earned from the reinvestment of the proceeds of Open Market 105 Securities, as provided in Section 5.02 of this Escrow Agreement. When the final trans- fers have been made to the Paying Agents for the Refunded Bonds for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Es- crow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.02. Payment of Principal of and Interest on Refunded Bonds. (a) The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agents for the Refunded Bonds from the cash balance from time to time on deposit in the Escrow Fund the amounts required to pay the principal of and interest on the Refunded Bonds as the same become due and payable, all as provided on of the Report. (b) Money transferred to and held by the Paying Agents for the Refunded Bonds in accordance with the provisions hereof shall be held by the Paying Agents for the Re- funded Bonds as a separate trust fund for the account of the respective holders of the Refunded Bonds in connection with which such money is held; provided, however, that money so held remaining unclaimed by the owners of such Refunded Bonds for ten (10) years after the dates on which payment thereon was due, payable and available for pay- ment shall be paid to the City to be used for any lawful.;purpose. Thereafter, neither the City, the Escrow Agent, the Paying Agents for the Refunded Bonds nor any other person shall be liable or responsible to any holders of such Refunded Bonds for any further payment of such unclaimed money or on account of any such Refunded Bonds. (c) Except as provided in Article IV hereof, the City hereby covenants and agrees that it will not exercise any right that it may have to redeem any of the Refunded Bonds prior to their scheduled maturities. Section 3.03. Sufficiency of Escrow Fund. The City represents (based solely upon the Report) that the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide money for transfer to the Paying Agents for the Refunded Bonds at the times and in the amounts required to pay the interest on the Refunded Bonds as such interest comes due and to pay the principal of the Refunded Bonds as the Refunded Bonds mature or are redeemed. Section 3.04. Escrow Fund. The Escrow Agent at all times shall hold the Escrow Fund, the Escrowed Securities and all other assets of the Escrow.Fund wholly segre- gated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be com- mingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund always shall be maintained by the Escrow Agent for the benefit of the holders of the Refunded Bonds; and a special account there- for evidencing such fact shall be maintained at all times on the books of the Escrow Agent. The holders of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof and all other assets of the Escrow Fund as are enjoyed by other beneficiaries of similar accounts. The amounts received by the Escrow Agent under this Escrow Agreement shall not be consider- ed as a banking deposit by the City, and the Escrow Agent shall have no right or title with respect thereto except as escrow agent under the terms hereof. The amounts re- ceived by the Escrow Agent hereunder shall not be subject to warrants, drafts or checks drawn by the City. Section 3.05. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund, to the extent not insured by the Federal Deposit Insur- ance Corporation or its successor, shall be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, held by an independent third party, and having a market value at least equal to such cash balances. ARTICLE IV REDEMPTION OF CERTAIN REFUNDED BONDS PRIOR TO MATURITY Section 4.01. Optional Redemption of Certain Refunded Bonds. The City has irrevocably exercised its option to call the bonds set forth below for redemption prior to maturity on the dates indicated. Such optional redemption shall be carried out in accordance with the Ordinance authorizing the issuance of such Bonds. The Escrow Agent is hereby authorized to provide funds therefor as set forth in Section 3.02(a) hereof. Inn Bonds To Be Redeemed Redemption Date Permanent Improvement Bonds, Series 1982 March 1, 1991 Public Improvement Bonds, Series 1984 March 1, 1995 ARTICLE V LIMITATION ON INVESTMENTS Section 5.01. General. Except as herein otherwise expressly provided, the Escrow Agent shall not have any power or duty to invest any money held hereunder; or to make substitutions of the Escrowed Securities; or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 5.02. Reinvestment of Open Market Securities. At the written request of the City, the Escrow Agent is hereby authorized and directed to reinvest the proceeds of the Open Market Securities, including interest received and maturing principal, in direct obligations of the United States of America maturing no later than the date on which the proceeds are needed for transfer to the Paying Agents for the Refunded Bonds as contemplated by the Report. Any income or increment earned from such reinvestment which is not required according to the schedules contained in the Report for the pay- ment of the Refunded Bonds (that is any amount which on any payment date, after making all required transfers to the Paying Agents for the Refunded Bonds, is in excess of the amount shown in of the Report as the ending balance for such date) shall be transferred to the City. Section 5.03. Substitution of Securities. At the written request of the City, and upon compliance with the conditions hereinafter stated, the Escrow Agent shall sell, transfer, otherwise dispose of or request the redemption of all or any portion of the Escrowed Securities and apply the proceeds therefrom to purchase Refunded Bonds or direct obligations of, or obligations the principal of and interest on which are conditionally guaranteed by, the United States of America and which do not permit the redemption thereof at the option of the obligor. Any such transaction may be effect- ed by the Escrow Agent only if (1) the Escrow Agent shall have received a written opinion from a recognized firm of certified public accountants that such transaction will not cause the amount of money and securities in the Escrow Fund to be reduced below an amount which will be sufficient, when added to the interest to accrue there- on, to provide for the payment of principal and interest on the remaining Refunded Bonds as they become due, and (2) the Escrow Agent shall have received the unqualified written legal opinion of nationally recognized bond counsel or tax counsel acceptable to the City and the Escrow Agent to the effect that such transaction will not cause any of the Refunding Bonds to be an "arbitrage bond" within the meaning of Section 103(c) of the Code. ARTICLE VI RECORDS AND REPORTS Section 6.01. Records. The Escrow Agent shall keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrowed Secur- ities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the City and the holders of the Refunded Bonds. Section 6.02. Reports. For the period beginning on the Escrow Funding Date and ending on September 1, 1986, and for each twelve (12) month period thereafter while this Agreement remains in effect, the Escrow Agent shall prepare and send to the City, at the City's request, within thirty (30) days following the end of such period a written re- port summarizing all transactions relating to the Escrow Fund during such period, includ- ing, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund to the Pay- ing Agents for the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Section 6.03. Notification. The Escrow Agent shall notify the City immediately if at any time during the term of this agreement it determines that there is insufficient cash and Escrowed Securities in the Escrow Fund to provide for the transfer to the Pay- ing Agents for the Refunded Bonds for timely payment of all interest on and principal of the Refunded Bonds. 107 ARTICLE VII CONCERNING THE ESCROW AGENT Section 7.01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Escrow Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 7.02. Limitation on Liability. The Escrow Agent shall not be liable for any action taken or neglected to be taken in good faith in the exercise of reason- able care and believed to be within the discretion or power conferred by this Escrow Agreement, nor shall it be responsible for the consequences of any error of judgment; and it shall not be answerable except for its own neglect or default, nor for any loss unless the same shall have been through their negligence or want of good faith. The liability of the Escrow Agent to transfer funds to the Paying Agents for the Refunded Bonds for the payments of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision con- tained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligor of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Refunding Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and pro- visions of this Escrow Agreement. The Escrow Agent makes no representation as to the accuracy of the Report, the value, condition or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall incur no liability or responsibility with respect to any such matters. It is the intention of the City and the Escrow agent that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal finan- cial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. Unless it is specifically provided otherwise herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund and to dispose of and deliver the same in accordance with this Escrow Agreement. If, however, the Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with the City, among others, at any time. Section 7.03. Compensation. (a) On the Escrow Funding Date the City will pay the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred by the Escrow Agent in the administration of this Escrow Agreement, and for its services in its capacity as a Paying Agent for the Refunded Bonds, the sum of $ If the Escrow Agent is requested to perform any extraordinary services hereunder, the City hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services. It is expressly provided that the Escrow Agent shall look only to the City for the pay- ment of such additional fees and reimbursement of such additional expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular, additional or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. Section 7.04. Successor Escrow Agents. If at any time the Escrow Agent or its legal successor or successors should cease to be the Escrow Agent hereunder, a vacancy shall forthwith exist hereunder in the office of the Escrow Agent. Any successor e Escrow Agent appointed by the City shall succeed, without further act, to all the rights, immunities, powers and trusts of the predecessor Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such immunities, rights, powers and duties. The Escrow Agent shall pay over to its successor Escrow Agent a proportional part of the Escrow Agent's fee hereunder equal to the portion of such fee attributable to duties to be performed after the date of succession. ARTICLE VIII MISCELLANEOUS Section 8.01. Notices. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed as follows: To the Escrow Agent: First City National Bank of Houston Post Office Box 809 Houston, Texas 77001 Attention: Corporate Trust Department To the City: City of Pearland, Texas Post Office Box 2068 Pearland, Texas 77588 Attention: Mayor The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten days prior notice thereof. Section 8.02. Termination of Escrow Agent's Obligations. Upon the taking by the Escrow Agent of all the actions as described herein, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the holders of the Refunded Bonds or to any other person or persons in connection with this Escrow Agree- ment. Section 8.03. Binding Agreement. This Escrow Agreement shall be binding upon the City, and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the holders of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 8.04. Severability. In case of any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal or unenforce- able in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Escrow Agreement, but this Escrow Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 8.05. Governing Law. This Escrow Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 8.06. Time of Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Escrow Agreement. Executed as of July 22, 1985, but effective as set forth herein. ATTEST: /s/ Kay Krouse City Secretary ATTEST: Assistant Cashier CITY OF PEARLAND, TEXAS By /s/ Tom Reid Mayor FIRST CITY NATIONAL BANK OF HOUSTON, as Escrow Agent and Paying Agent By Vice President and Trust Officer 109 MAYOR REID RECESSED THE MEETING AT 7:59 R. M. MAYOR REID RECONVENED THE MEETING AT 8:06 P. M. MAYOR'S ACTIVITY REPORT (Continued) Mayor Reid administered the oath of office to Hank Clore as a member of the Zoning Board of Adjustments for a two-year term. DOCKETED PUBLIC HEARING: 1. LAND USE CHANGE APPLICATION NO. 146 - Hector Diaz -Croda, Agent for Diaz -Montero Imports, Inc., Owner, From Classification Planned Unit (PU) to General Business (GB) on a 1.0543 Acre Tract of Land Out of Lot 10 of the Masterson Subdivision of Section 5, H. T. & B. R. R. Co. Survey, A-237 (5435 W. Broadway) PERSONS WISHING TO SPEAK FOR THE PROPOSED CHANGE: 1. Hector Diaz -Croda, 3510 E. Broadway, #1112, Pearland, Texas Mr. Diaz -Croda explained that his company has requested the change in zoning to General Business for the purpose of retail sales of pottery and imports. PERSONS WISHING TO SPEAK AGAINST THE PROPOSED CHANGE: None QUESTION AND ANSWER PERIOD: Mayor Reid read a letter from the Planning and Zoning Commission dated July 3, 1985, as follows: July 3, 1985 The Honorable Mayor and City Council City Hall Pearland, Texas 77588 Gentlemen: At the regular meeting of July 2, 1985, the Planning and Zoning Commission considered the request of Hector Diaz -Croda, Agent, Application No. 146, for an amendment to the Land Use and Urban Development Ordinance from Classification Planned Unit (PU) to General Business (GB). Motion was made by Charles Mack to approve Application No. 146 from classification Planned Unit (PU) to General Business (GB) as submitted. Motion was seconded by Carlton Baker. Motion carried 6-0. The Planning and Zoning Commission is presenting this for Council's consid- eration. Sincerely, /s/ Leroy Savoie, Chairman Planning and Zoning Commission LS/vc City Manager Ron Wicker stated that the proposed Land Use and Urban Development Map shows that area to be General Business. ADJOURN. COMPLETE TAPE OF HEARING ON FILE IN THE CITY SECRETARY'S OFFICE CHANGE IN ORDER OF BUSINESS »n NEW BUSINESS: (Continued) COUNCIL DECISION ON APPLICATION NO. 146, HECTOR DIAZ-CRODA, AGENT FOR DIAZ-MONTERO IMPORTS, INC., OWNER It was moved by Councilman Frauenberger, seconded by Councilman Lentz, that, in view of the testimony, the City Attorney be instructed to prepare the necessary ordinance for Application No. 146, Hector Diaz -Croda, Agent for Diaz -Montero Imports, Inc., for a zone change from Planned Unit to General Business. Motion passed 4 to 0. APPROVAL OF CONCEPTUAL DESIGN ON NEW CITY HALL AS PRESENTED BY DANSBY & MILLER, nArurmFrmc Mr. Bill Miller and Mr. Doug Robb displayed two elevation drawings for Council consideration. One being a two-story building with 25,000 square feet, 30' in height for an estimated total cost of $1,722,500 including architect's fees; the other drawing being a three-story building with 30,000 square feet (25,000 square feet of finished area), 45' in height for an estimated cost of $1,876,000 including architect's fees. It was moved by Councilman Gray, seconded by Councilman Frauenberger, that the City accept the conceptual design of the three-story building with 25,000 square feet of finished area as presented by Dansby & Miller, Architects. Motion passed 4 to 0. TTNFTNTSHRn RTTSTNFSS ORDINANCE NO. 224-1B, AN ORDINANCE AMENDING SECTION 7-17 OF THE PEARLAND CODE OF ORDINANCES (BUILDING CODE) Ordinance No. 224-1B read in caption by Councilman Bost. (Second Reading) It was moved by Councilman Bost, seconded by Councilman Lentz, that Ordinance No. 224-1B be passed and approved on the second and final reading. Said Ordinance No. 224-1B reads in caption as follows: ORDINANCE NO. 224-1B AN ORDINANCE AMENDING SECTION 7-17 OF THE CODE OF ORDINANCES OF THE CITY OF PEARLAND, TEXAS; REQUIRING PERMIT BEFORE ERECTING OR CONSTRUCTING OR PREPARING TO ERECT OR CONSTRUCT ANY BUILDING OR STRUCTURE; PROVIDING A PENALTY FOR VIOLATION; HAVING A SAVINGS CLAUSE; HAVING A REPEALER CLAUSE; PROVIDING FOR CODIFICATION, PUBLICATION AND AN EFFECTIVE DATE. Voting "Aye" - Councilman Lentz, Councilman Bost, Councilman Frauenberger and Councilman Gray Voting "No" - None Motion passed 4 to 0. NEW BUSINESS: (Continued) ORDINANCE NO. 58E, AN ORDINANCE AMENDING SECTION 27-4 OF THE PEARLAND CODE OF ORDINANCES (SUBDIVISIONS) City Attorney Luke Daniel explained that there was a conflict between the Subdivi- sion Ordinance and the Land Use and Urban Development Ordinance relating to side yards. The subdivision ordinance provision was automatically repealed by the enact- ment of the zoning ordinance in 1973; consequently, Ordinance No. 58E amends the residential building setback lines - sideyards to coincide with those provisions of the zoning ordinance. Ordinance No. 58E read in caption by Councilman Frauenberger. (First Reading) 111 It was moved by Councilman Frauenberger, seconded by Councilman Bost, that ordinance No. 58E be passed and approved on the first of two readings. Said Ordinance No. 58E reads in caption as follows: ORDINANCE NO. 58E AN ORDINANCE AMENDING SECTION 27-4 OF THE CODE OF ORDINANCES OF THE CITY OF PEARLAND, TEXAS; HAVING A SAVINGS CLAUSE; HAVING A REPEALER CLAUSE; PROVIDING FOR CODIFICATION, PUBLICATION AND AN EFFECTIVE DATE. Voting "Aye" - Councilman Gray, Councilman Frauenberger, Councilman Bost, and Councilman Lentz. Voting "No" - None Motion passed 4 to 0. RESOLUTION NO. R85-15, A RESOLUTION PROVIDING FOR THE APPROVAL OF AGREEMENT WITH STATE OF TEXAS FOR THE INSTALLATION OF TRAFFIC SIGNAL. BY STATE DEPARTMENT OF HIGH- WAYS & PUBLIC TRANSPORTATION. LOCATION F. M. 518 AT WOODCREEK DRIVE IN PEARLAND Resolution No. R85-15 read in full -bar Councilman Lentz. It was moved by Councilman Lentz, seconded by -:Councilman Bost, that Resolution No. R85-15 be passed and approved on the first and only reading. Said Resolution No. R85-15 reads in caption as follows: RESOLUTION NO. R85-15 A RESOLUTION PROVIDING FOR THE APPROVAL OF THE AGREEMENT DATED JULY 22, 1985, BETWEEN THE STATE OF TEXAS AND THE CITY OF PEARLAND, FOR THE INSTALLATION, CONSTRUCTION, EXISTENCE, USE, OPERATION, AND MAINTENANCE OF HIGHWAY SIGNAL PROJECT AT THE LOCATION SHOWN ON EXHIBIT 1, ATTACHED HERETO AND MADE A PART HEREOF, IN THE CITY OF PEARLAND, PROVIDING FOR THE EXECUTION OF SAID AGREE- MENT; AND PROVIDING AN EFFECTIVE DATE. Voting "Aye" - Councilman Lentz, Councilman Bost, Councilman Frauenberger and Councilman Gray. Voting "No" - None Motion passed 4 to 0. APPROVAL AND POSSIBLE AWARD OF BID NO. B85-14, 1985 STREET MAINTENANCE PROGRAM The following bids were reviewed by Council: CONTRACTOR DURWOOD GREEN CONST. CITY OF PEARLAND BID NO. B85-14 BID TABULATION 1985 STREET MAINTENANCE PROGRAM TOTAL BID J. L. FALTISEK PAVING CONT. BROWN & ROOT, INC. IKE HALL $185,840,00 186.916.38 184,584.28 166,788.33 BID SECURITY Yes it it If City Manager Ron Wicker explained that bids were opened on the 1985 Street Maintenance Program on July 18, 1985, and we received four good bids. The Public Works Department estimated the cost of the 1985 street maintenance program to be approximately $200,000. We are recommending the low bid by Ike Hall, Inc. of $166,788.33. 112 It was moved by Councilman Lentz, seconded by Councilman Bost, that Bid No. B85-14, 1985 Street Maintenance Program, be awarded to Ike Hall, Inc. in the amount of $166,788.33 and that the Mayor be authorized to execute the contract. Motion passed 4 to 0. City Manager Ron Wicker reviewed the list of approved streets for the 1985 maintenance program, being: section of Dixie Farm Road south of 518; section of Old Alvin Road from Walnut to Orange and section of McLean from Walnut to where it ended on last year's program. At Council's request, Mr. Wicker noted that the number one priority for repaving will be Old Alvin Road. EXCUSED ABSENCE FOR COUNCILMAN DENNIS FRAUENBERGER FROM REGULAR MEETING OF JULY 8,1985 It was moved by Councilman Bost, seconded by Councilman Lentz, that Councilman Dennis Frauenberger be excused from the regular meeting of July 8, 1985. Motion passed 3 to 0. Councilman Frauenberger abstained. EXCUSED ABSENCE FOR COUNCILMAN RICHARD TETENS FROM REGULAR MEETING OF JULY 22, 1985 It was moved by Councilman Gray, seconded by Councilman Frauenberger, that Councilman Tetens be excused from the regular meeting of July 22, 1985; the reason being that he is out of town on vacation. Motion passed 4 to 0. APPROVAL OF INVOICE FROM MAINLAND CONSTRUCTION IN THE AMOUNT OF $64,844.31, CONSTRUC- TION OF F. M. 518 DRAINAGE CROSSING It was moved by Councilman Lentz, seconded by Councilman Gray, that Estimate No. 2 from Mainland Construction Company for the construction of F. M. 518 drainage cross- ing in the amount of $64,844.31 be approved and payment made out of the appropriate funds. Motion passed 4 to 0. APPROVAL OF PLANS AND SPECIFICATIONS AND AUTHORIZATION TO BID SECOND PHASE DRAINAGE PROJECT IN SHERWOOD SUBDIVISION City Manager Wicker explained that the drainage work across F. M. 518 at Barry Rose is nearing completion. This was the first phase in the correction to the drainage problem in Sherwood Subdivision, Lions Club area, apartments at 518 and Old Alvin Road and some of the old townsite. The second phase is a continuation of work in the Sherwood Subdivision, with possibly some work being done in the Westminister and Nottingham Subdivisions and around the Lions Club. We are now asking Council authori- zation to proceed with the bidding of phase two of the drainage work project. It was moved by Councilman Gray, seconded by Councilman Lentz, that the Staff be auth- orized to proceed with the bidding of the second phase of the drainage project in Sher- wood Subdivision. Motion passed 4 to 0. OTHER BUSINESS: MEETING RECESSED TO EXECUTIVE SESSION AT 8:56 P. M. UNDER TEXAS REVISED CIVIL STATUTES, ARTICLE 6252-17 SECTION 2 - SUBSECTION (e) LEGAL - Contemplated and Pending Litigation: (1) Article 1269m V.A.T.C.S., (2) Sue Alexander Morrison v. City of Pearland, (3) Pasternak, et al v. City of Pearland, and (4) Steven Moore v. City of Pearland. 113 MEETING RETURNED TO OPEN SESSION AT 9:35 P. M. -� No action taken. ADJOURN: The meeting adjourned at 9:35 P. M. Minutes approved as submitted and/or corrected this / oZ. day of , A. D., 1985. Mayor ATTEST: 7 City Secretary