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HomeMy WebLinkAboutOrd. 1536 2017-02-13 CITY OF PEARLAND, TEXAS WATER AND SEWER SYSTEM REVENUE BONDS SERIES 2017B ORDINANCE NO. 2017-1536 HOU:3751292.1 TABLE OF CONTENTS Page ARTICLE I FINDINGS AND DETERMINATIONS 1 Section 1 1 Findings and Determinations 1 ARTICLE II DEFINITIONS AND INTERPRETATIONS 1 Section 2.1 Definitions 1 Section 2.2 Interpretations 5 ARTICLE III TERMS OF THE SERIES 2017B BONDS 5 Section 3 1 Name, Amount, Purpose, Authorization 5 Section 3.2. Numbers, Date and Denomination. .5 Section 3.3 Interest Payment Dates, Interest Rates and Maturities 6 Section 3 4 Redemption Prior to Maturity 6 Section 3.5 Manner of Payment, Characteristics, Execution and Authentication 7 Section 3 6 Approval by Attorney General, Registration by Comptroller 8 Section 3 7 Authentication 8 Section 3 8 Special Record Date 8 Section 3 9 Ownership 8 Section 3 10 Book-Entry Only System 9 Section 3 11 Payments and Notices to Cede& Co 9 Section 3 12. Successor Securities Depository; Transfer Outside Book-Entry Only System 10 Section 3 13 Registration, Transfer, and Exchange 10 Section 3 14 Cancellation of Series 2017B Bonds 11 Section 3 15 Mutilated, Lost, or Stolen Series 2017B Bonds 11 ARTICLE IV FORM OF SERIES 2017B BONDS AND CERTIFICATES 12 Section 4 1 Forms 12 Section 4.2. CUSIP Numbers 12 ARTICLE V SECURITY AND SOURCE OF PAYMENT FOR THE BONDS 12 Section 5 1 Pledge and Source of Payment 12 Section 5.2 Rates and Charges 13 Section 5.3 Special Funds 13 Section 5 4 Flow of Funds 13 Section 5 5 Interest and Sinking Fund. 14 Section 5 6 Reserve Fund 15 Section 5 7 Deficiencies in Funds 16 Section 5 8 Investment of Funds, Transfer of Investment Income 16 Section 5 9 Security for Uninvested Funds 17 ARTICLE VI ADDITIONAL BONDS 17 Section 6 1 Additional Bonds 17 Section 6.2. Subordinate Lien Obligations 18 Section 6 3 Special Project Bonds 18 HOU:3751292.1 ARTICLE VII COVENANTS AND PROVISIONS RELATING TO BONDS 19 Section 7 1 Punctual Payment of Bonds 19 Section 7.2. Power to Own and Operate System, Ratemaking Power 19 Section 7.3 Maintenance of System 19 Section 7 4 Sale or Encumbrance of System 19 Section 7.5 Insurance 19 Section 7 6 Accounts, Records and Audits .20 Section 7 7 Competition .20 Section 7 8 Pledge and Encumbrance of Net Revenues .20 Section 7 9 Covenants with Respect to Certain Assumed Water District Bonds .20 Section 7 10 Registered Owners' Rights and Remedies .21 Section 7 11 Defeasance .21 Section 7 12 Legal Holidays .22 Section 7 13 Unavailability of Authorized Publication. .22 Section 7 14 No Recourse Against City Officials .22 Section 7 15 Amendment to Ordinance .22 ARTICLE VIII CONCERNING THE PAYING AGENT/REGISTRAR .23 Section 8 1 Acceptance .23 Section 8.2 Fiduciary Account .23 Section 8.3 Bonds Presented 1 .23 Section 8 4 Series 2017B Bonds Not Timely Presented .23 Section 8 5 Paying Agent/Registrar May Own Series 2017B Bonds .24 Section 8 6 Successor Paying Agents/Registrars .24 ARTICLE IX TAX EXEMPTION .24 Section 9 1 Covenants to Maintain Tax Exempt Status .24 ARTICLE X CONTINUING DISCLOSURE UNDERTAKING .27 Section 10 1 Annual Reports .27 Section 10.2 Event Notices .28 Section 10.3 Limitations, Disclaimers, and Amendments .29 Section 10 4 Definitions 30 ARTICLE XI 30 SALE AND DELIVERY OF BONDS, DEPOSIT OF PROCEEDS .30 Section 11 1 Sale of Series 2017B Bonds .30 Section 11.2 Approval, Registration and Delivery .31 Section 11.3 Offering Documents 31 Section 11 4 Application of Proceeds of Series 2017B Bonds 31 Section 11 5 Related Matters 31 Section 11 6 Control and Delivery of Series 2017B Bonds 32 ARTICLE XII SPECIAL PROVISIONS RELATING TO THE TEXAS WATER DEVELOPMENT BOARD 32 Section 12.1 Compliance with the Texas Water Development Board's Rules and Regulations 32 Section 12.2 Construction Fund 32 Section 12.3 Records .33 11 HOU.3751292.1 Section 12.4 Annual Audit .33 Section 12.5 Unused Funds. Any unused funds (those funds unspent after the original approved project is completed) shall be used for enhancements to the original project that are explicitly approved by the Executive Administrator or if no enhancements are authorized by the Executive Administrator, the City shall submit a final accounting and disposition of any unused funds .33 Section 12 6 Investment of Proceeds .33 Section 12 7 Surplus Proceeds 33 Section 12.8 Insurance 33 Section 12.9 Water Conservation Program .33 Section 12.10 TWDB Remedies 33 Section 12.11 Environmental Determination 33 Section 12.12. Environmental Indemnification 34 Section 12.13 Compliance with Davis-Bacon. 34 Section 12.14 Federal Funding Accountability and Transparency Act. 34 Section 12.15 American Iron and Steel Requirement 34 Section 12.16 Additional Covenants 34 ARTICLE XIII MISCELLANEOUS 35 Section 13 1 Related Matters .35 Section 13.2. Severability .35 Section 13.3 Open Meeting 35 Section 13 4 Legal Opinion, Engagement of Bond Counsel. The approving legal opinion of Andrews Kurth Kenyon LLP, Houston, Texas, Bond Counsel, may be printed on the Series 2017B Bonds over the certification of the City Secretary, which may be executed in facsimile The engagement of Andrews Kurth Kenyon LLP as bond counsel in connection with the issuance, sale and delivery of the Bonds is hereby approved, ratified and confirmed. 35 Section 13.5 Governing Law .36 Section 13 6 Repealer .36 Section 13 7 Effective Date .36 ORDINANCE NO. 1536 An Ordinance of the City Council of the City of Pearland, Texas, authorizing issuance of City of Pearland, Texas, water and sewer system revenue bonds, series 2017B; prescribing the terms thereof; providing for the payment thereof; awarding the sale thereof; declaring and emergency and making other provisions regarding such bonds and matters incident thereto. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS iii HOU:3751292.1 ARTICLE I FINDINGS AND DETERMINATIONS Section 1.1. Findings and Determinations. It is hereby officially found and determined that: (a) The City is authorized by Chapter 1502, Texas Government Code, as amended, to issue revenue bonds payable from the revenues of its water and sewer system for the purpose of constructing repairs, improvements, additions and extensions to the City's waterworks and sanitary sewer system. (b) The City Council now deems it to be in the best interest of the City to issue, sell and deliver the Series 2017B Bonds (hereinafter defined) as hereinafter authorized, pursuant to the laws of the State of Texas, including specifically, Chapter 1502, Texas Government Code. (c) The conditions precedent to the issuance of additional bonds which are contained in the ordinances authorizing the issuance of the Previously Issued Bonds and the Series 2017B Bonds (hereinafter defined) have been met, and the City is authorized to issue the revenue bonds and make the pledges and covenants set forth herein. (d) The Series 2017B Bonds herein authorized for issuance are to be delivered to the Texas Water Development Board (the "TWDB" or the "Purchaser") in evidence of a loan commitment received in the aggregate amount of the Series 2017B Bonds. (e) The Series 2017B Bonds are issued in the aggregate principal amount of $12,025,000, and shall be issued as the second installment of the $159,500,000 multi- year commitment from the TWDB Drinking Water State Revolving Fund. ARTICLE II DEFINITIONS AND INTERPRETATIONS Section 2.1. Definitions Ins this Ordinance, the following terms shall have the following meanings, unless the context clearly indicates otherwise. "Act" shall mean, collectively Chapter 1502, Texas Government Code, as amended. "Additional Bonds" shall mean the additional revenue bonds permitted to be issued by the City pursuant to Section 6 1 hereof. "Average Annual Principal and Interest Requirements" shall mean the average annual principal and interest requirements for all Bonds. Upon the issuance of the Series 2017B Bonds, the Average Annual Principal and Interest Requirements are hereby determined to be $ and shall be recomputed upon the issuance of each series of Additional Bonds and set forth in each ordinance authorizing the issuance of Additional Bonds. For purposes of calculating the Average Annual Principal and Interest Requirements with respect to any variable rate Additional Bonds, interest on such bonds shall be calculated in accordance with Section 6 1 of this Ordinance S-1 HOU:3751292.1 "Bonds" shall mean any or all of the Previously Issued Bonds, the Series 2017B Bonds and any Additional Bonds from time to time hereafter issued, but only to the extent such Bonds remain Outstanding within the meaning of this Ordinance. "Business Day" shall mean any day other than (1) a Saturday or a Sunday, (2) a legal holiday or the equivalent on which banking institutions generally are authorized or required to close in New York, New York or Houston, Texas or any other city in which is located the principal corporate trust office of the Paying Agent/Registrar or (3) a day on which the New York Stock Exchange is closed in whole or in part. "City" shall mean the City of Pearland, Texas, and, where appropriate, the City Council thereof and any successor to the City as owner of the System. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Defeasance Securities"means (1) direct, non-callable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (2) non-callable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent, and (3) non-callable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the City adopts or approves the proceedings authorizing the financial arrangements are rated as to investment quality by a nationally recognized investment rating firm not less than "AAA" or its equivalent. "DTC" shall mean The Depository Trust Company of New York, New York, or any successor securities depository "DTC Participant" shall mean 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 "Fiscal Year" shall mean the City's fiscal year, which currently runs from October 1 to September 30, but which may be changed from time to time by the City "Gross Revenues" shall mean all revenues, income and receipts of every nature derived or received by the City from the operation and ownership of the System, the interest income from the investment or deposit of money in the Revenue Fund and the Reserve Fund (each hereinafter defined in Article V hereof), and any other revenues hereafter pledged to the payment of all Bonds. Gross Revenues shall not include any of (i) grants from, or payments by, any federal, state or local governmental agency or authority or any other entity or person, the use of which is restricted by law or by the terms of the grant or payment to capital expenditures of the System, (ii) capital assets, debt service funds or debt service reserve funds of water districts or other public or private sewer systems annexed, acquired or otherwise assumed by the City or (iii) any interest earned on items (i) or(ii) above S-1 HOU.3751292.1 "Interest Payment Date, " when used in connection with any Series 2017B Bond, shall mean September 1 or March 1 of each year as applicable commencing [September 1, 2017] "Maintenance and Operation Expenses" shall mean the reasonable and necessary expenses of operation and maintenance of the System, including all salaries, labor, materials, repairs and extensions necessary to render efficient service (but only such repairs and extensions as, in the judgment of the governing body of the City, are necessary to keep the System in operation and render adequate service to'the City and the inhabitants thereof, or such as might be necessary to meet some physical accident or conditions which would otherwise impair the Bonds), and all payments (including payments of amounts equal to all or a part of the debt service on bonds issued by other political subdivisions and authorities of the State of Texas) under contracts which are now or hereafter defined as operating expenses by the Legislature of Texas. Depreciation shall never be considered as a Maintenance and Operation Expense. Maintenance and Operation Expenses shall include, without limitation, all payments under contracts for the impoundment, conveyance or treatment of water or otherwise which are now or hereafter defined as operating expenses, by the Legislature of Texas and the treatment of such payments as Maintenance and Operation Expenses shall not be affected in any way if, subsequent to entering into such contracts, the City acquires as a part of the System title to any properties or facilities used to impound, convey or treat water under such contracts, or if the City contracts to acquire title to such properties or facilities as a part of the System upon the final payment of debt service on the bonds issued to finance such properties or facilities "MSRB"means the Municipal Securities Rulemaking Board. "Net Revenues" shall mean all Gross Revenues remaining after deducting the Maintenance and Operation Expenses. "Ordinance" shall mean this Bond Ordinance and all amendments hereof and supplements hereto "Outstanding"when used with reference to the Bonds shall mean, as of a particular date, all such bonds theretofore delivered except: (a) any such bond canceled by or on behalf of the City at or before said date; (b) any such bond defeased pursuant to the defeasance provisions of the ordinance authorizing its issuance, or otherwise defeased as permitted by applicable law; and (c) any such bond in lieu of or in substitution for which another bond shall have been delivered pursuant to the ordinance authorizing the issuance of such bond. "Owner" or "Registered Owner" when used with respect to any Bond, shall mean the person or entity in whose name such Bond is registered in the Register Any reference to a particular percentage or proportion of the Owners of the Bonds of a particular class or series of Bonds shall mean the Owners at a particular time of the specified percentage or proportion in aggregate principal amount of all Bonds or the Bonds of such class or series then Outstanding. "Paying Agent/Registrar" shall mean Wells Fargo Bank, N.A., Minneapolis, Minnesota, and its successors in that capacity "Previously Issued Bonds" shall mean the Outstanding City of Pearland, Texas, Water and Sewer System Adjustable Rate Revenue Bonds, Series 1999, City of Pearland, Texas, Water S-1 HOU.3751292.1 and Sewer System Revenue Bonds, Series 2003, the City of Pearland, Texas, Water and Sewer System Revenue and Refunding Bonds, Series 2006, the City of Pearland, Texas, Water and Sewer System Revenue Bonds, Series 2007, the City of Pearland, Texas, Water and Sewer System Revenue Bonds, Series 2008, the City of Pearland, Texas, Water and Sewer System Revenue Bonds, Series 2009, the City of Pearland, Texas, Water and Sewer System Revenue Bonds, Series 2010A, the City of Pearland, Texas, Water and Sewer System Revenue Refunding Bonds, Series 2010B, the City of Pearland, Texas Water and Sewer System Revenue and Refunding Bonds, Series 2012, the City of Pearland, Texas Water and Sewer System Revenue Bonds, Series 2014, the City of Pearland, Texas Water and Sewer System Revenue Bonds, Series 2016A, the City of Pearland, Texas Water and Sewer System Revenue Bonds, Series 2016B and City of Pearland, Texas Water and Sewer System Revenue Bonds, Series 2016C "Purchaser"shall mean the Texas Water Development Board. "Record Date" shall mean, with respect to any Interest Payment Date, the fifteenth day of the month, whether or not a Business Day, next preceding each Interest Payment Date. "Register" shall mean the books of registration kept by the Paying Agent/Registrar in which are maintained the names and addresses of and the principal amounts registered to each Owner of Series 2017B Bonds. "Series 2017B Bonds" shall mean the City of Pearland, Texas, Water and Sewer System Revenue Bonds, Series 2017B, authorized by this Ordinance "Special Project" shall mean, to the extent permitted by law, any water or sewer system property, improvement or facility declared by the City not to be part of the System, for which the costs of acquisition, construction, and installation are paid from proceeds of a financing transaction other than the issuance of bonds payable from ad valorem taxes or revenues of the System and for which all maintenance and operation expenses are payable from sources other than ad valorem taxes or revenues of the System, but only to the extent that and for so long as all or any part of the revenues or proceeds of which are or will be pledged to secure the payment or repayment of such costs of acquisition, construction, and installation under such financing transaction. "Subordinate Lien Obligations" shall mean the obligations permitted to be issued by the City pursuant to Section 6.2 hereof. "Surety Policy" shall mean and include a surety bond, bond insurance policy or other credit agreement, as authorized by Section 1502 064, Texas Government Code, provided that the issuer of any Surety Policy shall be rated in the highest rating category at the time of issuance of such Surety Policy by A.M. Best Company, Standard & Poor's Ratings Group, or Moody's Investors Service. A Surety Policy shall insure all Bonds and Additional Bonds on a pro rata basis. A Surety Policy may include a letter of credit or other agreement or instrument, including any related reimbursement or financial guaranty agreement, whereby the issuer is obligated to provide funds up to and including the maximum amount and under the conditions specified in such agreement or instrument. S-1 HOU.3751292.1 "System" shall mean all properties, facilities, improvements, equipment, interests, rights and powers constituting the water and sewer system of the City, and all future extensions, replacements, betterments, additions, improvements, enlargements, acquisitions, purchases and repairs to the System, including without limitation, all those heretofore or hereafter acquired as a result of the annexation and dissolution lof water districts or the acquisition of the properties or assets of any other public, private or non-profit entities. The System shall not include any Special Project. Section 2.2. Interpretations. All terms defined herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Ordinance and the Table of Contents of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Series 2017B Bonds and the validity of the lien on and pledge of the Net Revenues to secure the payment of the Senes 2017B Bonds. ARTICLE III TERMS OF THE SERIES 2017B BONDS Section 3.1. Name, Amount, Purpose, Authorization. The City of Pearland, Texas Water and Sewer System Revenue Bonds, Series 2017B shall be issued in fully registered form, without coupons, in the aggregate principal amount of TWELVE MILLION TWENTY FIVE THOUSAND DOLLARS ($12,025,000) for the purposes of (i) constructing certain repairs, improvements, additions and extensions to the System, and (ii) payment of expenses of issuance of the Series 2017B Bonds, all under and pursuant to the authority of the Act and all other applicable law Section 3.2. Numbers, Date and Denomination. The Series 2017B Bonds shall be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set forth in Section 3 3 hereof. The Series 2017B Bonds shall be dated as of , 2017 and shall be issued in denominations of $5,000 of principal amount or any integral multiple thereof. Section 3.3. Interest Payment Dates, Interest Rates and Maturities The Series 2017B Bonds shall bear interest from the later of the date of delivery of the Series 2017B Bonds to the Purchaser, or the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate or rates per annum set forth below, calculated on the basis of a 360-day year composed of twelve 30-day months and payable semiannually on March 1 and September 1 of each year, commencing [September 1, 2017] until maturity or prior redemption. The Series 2017B Bonds shall mature and become payable on the dates and in the respective principal amounts set forth below, subject to prior redemption as set forth in this Ordinance S-1 HOU.3751292.1 Bond Maturity Principal Interest Number (09/01) Amount Rate R-1 $ R-2 R-3 R-4 R-5 R-6 R-7 R-8 R-9 R-10 R-11 R-12 R-13 R-14 R-15 R-16 R-17 R-18 R-19 R-20 R-21 R-22 R-23 R-24 R-25 R-26 R-27 R-28 R-29 Section 3.4. Redemption Prior to Maturity. (a) Optional Redemption - The City reserves the right, at its option, to redeem prior to maturity Series 2017B Bonds maturing on or after September 1, 20_, in inverse order of maturity, in whole or in part, in principal installments of$5,000 or any integral multiple thereof, on September 1, 20_, or any date thereafter, at a price equal to the principal amount of the Series 2017B Bonds or portions thereof called for redemption plus accrued interest to the date of redemption. (b) Series 2017B Bonds may be redeemed only in integral multiples of$5,000 of principal amount. If a Series 2017B Bond subject to redemption is in a denomination larger than $5,000, a portion of such Series 2017B Bond may be redeemed, but only in integral multiples of$5,000 In selecting portions of Series 2017B Bonds for redemption, the Registrar shall treat each Series 2017B Bond as representing that number of Series S-1 HOU.3751292.1