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HomeMy WebLinkAboutOrd. 1430 2010-09-13 Draft 9/1/2010 ORDINANCE NO. 1430 AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS, SERIES 2010A, PRESCRIBING THE TERMS AND FORM THEREOF, MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT THERETO, AND DECLARING AN EMERGENCY BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS ARTICLE I FINDINGS AND DETERMINATIONS Section 1.1. Findings and Determinations The City Council hereby officially finds and determines that (a) The City of Pearland, Texas (the "City"), acting through its City Council, is authorized by Section 3 07 of its Home Rule Charter and the Constitution and laws of the State of Texas, particularly Chapters 1331 of the Texas Government Code,as amended, to issue bonds for the purpose of making needed public improvements; (b) The issuance of the bonds herein authorized was approved by the voters of the City at an election held for such purpose on May 12, 2007 (the "Election"), which was called by the City Council pursuant to Resolution No. R2007-35 adopted March 5, 2007, and which authorized the issuance of (i) $84,190,000 in bonds for purchasing and otherwise acquiring land for and constructing,repairing and improving streets,bridges and sidewalks of the City with first priority to be given to the construction, repair and improvement of Bailey Road, Cullen Boulevard, Dixie Farm Road and McHard Road("Proposition 1"), (u) $35,305,000 in bonds for purchasing, acquiring, enlarging, extending, equipping and constructing drainage improvements and facilities at various locations within the City, including acquiring lands and rights-of-way for any of such purposes ("Proposition 2"), (iii) $2,895,000 in bonds for purchasing, acquiring, constructing, repairing and improving land, facilities and equipment for public safety purposes (including fire fighting needs)("Proposition 3"), (iv) $19,990,000 in bonds for purchasing, acquiring, constructing, repairing and improving land, facilities and equipment for park and recreation purposes ("Proposition 4"), (v) $16,225,000 in bonds for purchasing, acquiring, constructing, repairing and improving land, facilities and equipment for park and recreation purposes, with first priority to be given to the construction of recreation center and the construction of a natatorium ("Proposition 5"), and (vi) $3,410,000 in bonds for purchasing and otherwise acquiring land for and constructing, repairing and improving library facilities ("Proposition 6"), (c) The City Council canvassed the returns of the Election and by Ordinance No R2007-86, adopted May 22, 2007 declared the results to be in favor of the issuance of the Bonds; HOU 3053042 1 (d) The City has previously authorized, issued and delivered two installments of such authorized bonds in an aggregate prmcipal amount of$22,835,000, consisting of(i) $22,225,000 of principal attributable to bonds authorized by Proposition 1; (ii) $12,777,500 of principal attributable to bonds authonzed by Proposition 2, (ui) $2,895,000 of principal attributable to bonds authorized by Proposition 3; and (iv) $180,000 of principal attributable to bonds authorized by Proposition 4, (v) $1,622,500 of principal attributable to Proposition 5; and(vi) $0 of principal attributable to Proposition 6 (e) The City has now determined that it is necessary and advisable to authorize, issue and deliver a third installment of such authorized bonds in an aggregate principal amount of $12,230,000, consisting of (i) $ of principal attributable to bonds authorized by Proposition 1, (u) $ of principal attributable to bonds authorized by Proposition 2; (iii) $ of principal attributable to bonds authorized by Proposition 3, (iv) $ of principal attributable to bonds authorized by Proposition 4; (v) $ of principal attributable to Proposition 5, and(vi) $ of principal attributable to Proposition 6. (f) Following the issuance of the Bonds, the City will have (i) $ authorized but unissued bonds remaining pursuant to the Proposition 1; (ii) $ authorized but unissued bonds remaining pursuant to the Proposition 2, (iii) $0 authorized but unissued bonds remaining pursuant to the Proposition 3, (iv) $ authorized but unissued bonds remaining pursuant to the Proposition 4, (v) $ authorized but unissued bonds remaining pursuant to the Proposition 5, and (vi) $ authorized but umssued bonds remaining pursuant to the Proposition 6, (g) The City Council is of the opinion and hereby affirmatively finds that it is m the best interest of the City to issue the bonds m the amounts and for the purposes herein stated ARTICLE II DEFINITIONS AND INTERPRETATIONS Section 2 1 Definitions As used herein, the following terms shall have the meanings specified,unless the context clearly indicates otherwise: "Act"shall mean Chapters 1331,Texas Government Code,as amended "Attorney General"shall mean the Attorney General of the State of Texas "Bond" or "Bonds" shall mean any or all of the City of Pearland, Texas Permanent Improvement Bonds, Series 2010A, authorized by this Ordinance "City"shall mean the City of Pearland,Texas and,where appropriate, its City Council "City Council"shall mean the governing body of the City "Code" shall mean the Internal Revenue Code of 1986,as amended. "Comptroller"shall mean the Comptroller of Public Accounts of the State of Texas 2 HOU 3053042 1 "Construction Fund" shall mean the Permanent Improvement Bonds, Series 2010A Construction Fund established by the City and described in section 5.3 of this Ordmance "Debt Service Fund" shall mean the Permanent Improvement Bonds, Series 2010A Debt Service Fund established by the City and described in section 5 2 of this Ordinance "DTC" shall mean The Depository Trust Company, 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 "Election" shall mean the election held May 12, 2007 and described in Section 1.1(b) of this Ordinance "Fiscal Year" shall mean the City's then designated fiscal year, which currently is the twelve-month period beginning on the first day of October of a calendar year and ending on the last day of September of the next succeeding calendar year and each such period may be designated with the number of the calendar year in which such period ends. "Interest Payment Date," when used in connection with any Bond, shall mean March 1, 2011, and each September 1 and March 1 thereafter until maturity or earlier redemption of such Bond "MSRB"means the Municipal Securities Rulemaking Board "Ordinance" shall mean this Ordinance and all amendments hereof and supplements hereto "Outstanding",when used with reference to the Bonds, shall mean, as of a particular date, all Bonds theretofore and thereupon delivered pursuant to this Ordinance except. (a)any Bonds canceled by or on behalf of the City at or before such date, (b)any Bonds defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased as permitted by applicable law, and(c)any Bonds in lieu of or in substitution for which a replacement Bond shall have been delivered pursuant to this Ordinance "Paying Agent/Registrar" shall mean Wells Fargo Bank Texas, N.A , Houston, Texas, and its successors in that capacity "Paying Agent/Registrar Agreement" shall mean the agreement between the City and the Paying Agent/Registrar as described more particularly in Section 6.1 hereof. "Record Date" shall mean the close of business on the 15`" day of the calendar month immediately preceding the applicable Interest Payment Date 3 HOU 3053042 1 "Register" shall mean the registration books for the Bonds kept by the Paying Agent/Registrar in which are maintained the names and addresses of, and the principal amounts registered to, each Registered Owner of Bonds. "Registered Owner" shall mean the person or entity in whose name any Bond is registered m the Register "Rule"means SEC Rule 15c2 12, as amended from time to time "SEC"means the United States Securities and Exchange Commission "Underwriters" shall mean First Southwest Company, Jeffenes & Company, Inc , and Morgan Keegan&Co ,Inc Section 2 2•. Interpretations All terms defined herein and all pronouns used m 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 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 Ordmance 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 Bonds and the validity of the levy of ad valorem taxes to pay the principal of and interest on the Bonds ARTICLE III TERMS OF THE BONDS Section 3 1 Amount, Purpose and Authorization. The Bonds shall be issued m fully registered form, without coupons, under and pursuant to the authority of the City's Home Rule Charter and the Act in the total authorized aggregate principal amount of AND NO/100 DOLLARS ($ ) for the purpose of providing all or part of the funds for the following purposes. (i) $ for purchasing and otherwise acquiring land for and constructing,repairing and improving streets,bridges and sidewalks of the City with first priority to be given to the construction, repair and improvement of Bailey Road, Cullen Boulevard, Dixie Farm Road and McHard Road, (u) $ for purchasing, acquiring, enlarging, extending, equipping and constructing drainage improvements and facilities at various locations within the City, including acquiring lands and rights-of-way for any of such purposes, and(in) $ for purchasing, acquiring, constructing, repairing and improving land, facilities and equipment for park and recreation purposes,with first priority to be given to the construction of recreation center and the construction of a natatorium Proceeds from the sale of the Bonds will also be used for paying costs of issuance of the Bonds and other professional services related thereto Section 3.2. Designation, Date and Interest Payment Dates The Bonds shall be designated as the "City of Pearland, Texas Permanent Improvement Bonds, Series 2010A," and shall be dated October 1, 2010 The Bonds shall bear interest at the rates set forth in Section 3 3 below, from the later of October 1, 2010 or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve 4 HOU 3053042 I 30-day months, payable on March 1, 2011, and each September 1 and March 1 thereafter until maturity or earlier redemption If interest on any Bond is not paid on any Interest Payment Date and contmues unpaid for thirty (30) days thereafter, the Paying Agent/Registrar shall establish a new record date for the payment of such mterest, to be known as a Special Record Date The Paying Agent/Registrar shall establish a Special Record Date when funds to make such interest payment are received from or on behalf of the City Such Special Record Date shall be fifteen (15) days prior to the date fixed for payment of such past due interest, and notice of the date of payment and the Special Record Date shall be sent by Umted States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record Date, to each affected Registered Owner as of the close of business on the day prior to mailing of such notice Section 3 3• Numbers, Denomination, Interest Rates and Maturities The Bonds shall be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set forth m the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature on March 1 m each of the years and m the amounts set out m such schedule Bonds delivered m transfer of or m exchange for other Bonds shall be numbered m order of their authentication by the Paying Agent/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 Year of Principal Interest Number Maturity Amount Rate R-1 2011 $ R-2 2012 R-3 2013 R-4 2014 R-5 2015 R-6 2016 R-7 2017 R-8 2018 R-9 2019 R-10 2020 R-11 2021 R-12 2022 R-13 2023 R-14 2024 R-15 2025 R-16 2026 R-17 2027 R-18 2028 R-19 2029 R-20 2030 R-21 2031 R-22 2032 R-23 2034 5 HOU 3053042 1 Bond Year of Principal Interest Number Maturity Amount Rate R-24 2035 Section 3 4 Redemption Prior to Matunty (a) The Bonds maturing on and after March 1, 2020 are subject to redemption prior to maturity, at the option of the City, in whole or m part, on March 1, 2019, or any date thereafter,at par plus accrued interest to the date fixed for redemption (b) Bonds may be redeemed in part 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. In selecting portions of Bonds for redemption, each Bond shall be treated as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond by$5,000 Upon presentation and surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of this Ordinance, 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 or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the Register, not less than thirty(30) days before the date fixed for such redemption By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds called for redemption If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed pnor to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being Outstanding except for the purpose of being paid with the funds so provided for such payment Section 3.5. Manner of Payment, Characteristics, Execution and Authentication. The Paying Agent/Registrar is hereby appointed the paying agent for the Bonds The Bonds shall be payable, shall have the characteristics and shall be executed, sealed, registered and authenticated, all as provided and in the manner indicated in the FORM OF BONDS set forth in Article IV of this Ordinance. 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 the Bonds or before the delivery of the Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office The approving legal opinion of Andrews Kurth LLP, Houston, Texas, Bond Counsel, may be printed on the Bonds over the certification of the City Secretary, which may be executed in facsimile CUSIP numbers also may be printed on the Bonds, but errors or omissions in the printing of either the opimon or the numbers shall have no effect on the validity of the Bonds Section 3.6: Authentication Except for the Bonds to be initially issued, which need not be authenticated by the Paying Agent/Registrar, only such Bonds as shall bear thereon a certificate of authentication, substantially in the form provided in Article IV of this Ordinance, 6 HOU 3053042 1 manually executed by an authorized representative of the Paying Agent/Registrar, shall be entitled to the benefits of this Ordinance or shall be valid or obligatory for any purpose Such duly executed certificate of authentication shall be conclusive evidence that the Bond so authenticated was delivered by the Paying Agent/Registrar hereunder Section 3 7• Ownership The City, the Paying Agent/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 thereof and interest thereon and for all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary All payments made to the person deemed to be the Registered Owner of any Bond in accordance with this Section shall be valid and effective and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the extent of the sums paid Section 3.8. Registration. Transfer and Exchange The Paying Agent/Registrar is hereby appointed the registrar for the Bonds. So long as any Bond remains Outstanding, the Paying Agent/Registrar shall keep the Register at its office in Houston, Texas in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of the Bonds in accordance with the terms of this Ordinance Each Bond shall be transferable only upon the presentation and surrender thereof at the office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or his authorized representative in form satisfactory to the Paying Agent/Registrar Upon due presentation of any Bond for transfer, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (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 matunty and aggregate principal amount and bearing interest at the same rate as the Bond or Bonds so presented and surrendered. All Bonds shall be exchangeable upon the presentation and surrender thereof at the office of the Paying Agent/Registrar for a Bond or Bonds, 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 Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this Section. Each Bond delivered by the Paying Agent/Registrar in accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds m lieu of which such Bond is delivered All Bonds issued in transfer or exchange shall be delivered to the Registered Owners thereof at the office of the Paying Agent/Registrar or sent by Umted States mail, first class, postage prepaid The City or the Paying Agent/Registrar may require the Registered 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 Paying Agent/Registrar for such transfer or exchange shall be paid by the City 7 HOU 3053042 1 The Paymg Agent/Registrar shall not be required to transfer or exchange any Bond called for redemption m whole or m part during the forty-five (45) day period immediately prior to the date fixed for redemption; provided, however, that this restriction shall not apply to the transfer or exchange by the Registered Owner of the unredeemed portion of a Bond called for redemption in part Section 3.9. Book-Entry Only System The definitive Bonds shall be initially issued in the form of a separate single fully registered Bond for each of the maturities thereof Upon initial issuance, the ownership of each such Bond shall be registered m the name of Cede&Co , as nominee of DTC, and except as provided m Section 3 11 hereof, all of the Outstanding Bonds shall be registered in the name of Cede & Co , as nominee of DTC Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee m place of Cede & Co , and subject to the provisions in this Ordinance with respect to interest checks being mailed to the Owner at the close of business on the Record Date, the word"Cede&Co"m this Ordinance shall refer to such new nominee of DTC. With respect to Bonds registered m the name of Cede & Co , as nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or to any person on behalf of whom such a DTC Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Paymg Agent/Registrar shall have no responsibility or obligation with respect to (a) the accuracy of the records of DTC, Cede & Co or any DTC Participant with respect to any ownership interest m the Bonds, (b) the delivery to any DTC Participant or any other person, other than a Bondholder, as shown on the Register, of any notice with respect to the Bonds, including any notice of redemption or (c) the payment to any DTC Participant or any other person, other than a Bondholder as shown in the Register, of any amount with respect to principal of Bonds, premium, if any, or interest on the Bonds Except as provided m Section 3 10 of this Ordinance, the City and the Paying Agent/Registrar shall be entitled to treat and consider the person m whose name each Bond is registered m the Register as the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and interest on Bonds, for the purpose of giving notices of redemption and other matters with respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all other purposes whatsoever The Paymg Agent/Registrar shall pay all principal of Bonds, premium, if any, and interest on the Bonds only to or upon the order of the respective owners, as shown m the Register as provided m this Ordinance, or their respective attorneys duly authorized m writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Bonds to the extent of the sum or sums so paid No person other than an owner shall receive a Bond evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance Section 3 10 Payments and Notices to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, as long as any Bonds are registered in the name of Cede& Co , as nominee of DTC, all payments with respect to principal of, premium, if any, and interest on the Bonds, and all notices with respect to such Bonds shall be made and given, respectively, m the manner provided in the representation letter of the City to DTC 8 HOU 3053042 1 Section 3.11. Successor Securities Depository, Transfer Outside Book-Entry Only System In the event that the City or the Paymg Agent/Registrar determmes that DTC is mcapable of discharging its responsibilities described herein and in the representation letter of the City to DTC, and that it is m the best mterest of the beneficial owners of the Bonds that they be able to obtam certificated Bonds, the City or the Paymg Agent/Registrar shall (a) appomt a successor securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC of the appomtment of such successor securities depository and transfer one or more separate Bonds to such successor securities depository or(b) notify DTC of the availability through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited to their DTC accounts In such event, the Bonds shall no longer be restricted to being registered m the Register m the name of Cede &Co., as nommee of DTC,but may be registered in the name of the successor securities depository, or its nominee, or in whatever name or names Bondholders transferring or exchanging Bonds shall designate, m accordance with the provisions of this Ordinance Section 3.12: Replacement Bonds Upon the presentation and surrender to the Paying Agent/Registrar of a damaged or mutilated Bond, the Paying Agent/Registrar shall authenticate and deliver m exchange therefor a replacement Bond, of the same maturity, interest rate and principal amount, bearmg a number not contemporaneously outstandmg. The City or the Paymg Agent/Registrar may require the Registered Owner of such Bond to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith and any other expenses connected therewith, mcludmg the fees and expenses of the Paymg Agent/Registrar and the City If any Bond is lost, apparently destroyed or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and ordmances of the City, and m the absence of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall execute, and the Paying Agent/Registrar shall authenticate and deliver, a replacement Bond of the same maturity, mterest rate and principal amount, bearing a number not contemporaneously outstanding, pro- vided that the Registered Owner thereof shall have (a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Bond, (b) furnished such security or indemnity as may be required by the Paying Agent/Registrar and the City to save and hold them harmless, (c) paid all expenses and charges m connection therewith, including, but not limited to, pnntmg costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that may be imposed, and (d) met any other reasonable requirements of the City and the Paying Agent/Registrar. If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond m lieu of which such replacement Bond was issued presents for payment such ongmal Bond, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Bond from the 9 HOU 3053042 1 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 Paying Agent/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, mstead of issuing a replacement Bond,authorize the Paying Agent/Registrar to pay such Bond. Each replacement Bond delivered in accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such replacement Bond is delivered Section 3.13. Cancellation. All Bonds paid or redeemed m accordance with this Ordinance, and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered m accordance herewith, shall be canceled and destroyed upon the making of proper records regarding such payment or redemption. The Paying Agent/Registrar shall periodically furnish the City with certificates of destruction of such Bonds ARTICLE IV FORM OF BONDS The Bonds, including the Form of Comptroller's Registration Certificate,Form of Paying Agent/Registrar Authentication Certificate, Form of Statement of Insurance, if any, and Form of Assignment, shall be in substantially the form set forth m Exhibit A hereto, with such omissions, insertions and variations as may be necessary or desirable,and not prohibited by this Ordinance. ARTICLE V SECURITY FOR THE BONDS Section 5 1 Pledge and Levy of Taxes (a) To provide for the payment of principal of and interest on the Bonds, there is hereby levied, within the limits prescribed by law, for the current year and each succeeding year thereafter, while the Bonds or any part of the principal thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all taxable property within the City sufficient to pay the interest on the Bonds and to create and provide a sinking fund of not less than 2% of the principal amount of the Bonds or not less than the principal payable out of such tax, whichever is greater, with full allowance being made for tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied to the payment of principal of and interest on the Bonds by deposit to the Debt Service Fund and to no other purpose (b) The City hereby declares its purpose and intent to provide and levy a tax legally sufficient to pay the principal of and interest on the Bonds, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax As long as any Bonds remain outstanding, all moneys on deposit m, or 10 HOU 3053042 1 credited to, the Debt Service Fund shall be secured by a pledge of security, as provided by law for cities in the State of Texas (c) The City hereby appropnates from current funds on hand and legally available therefor, funds sufficient,when added to the accrued interest received from the sale of the Bonds, to pay the interest on the Bonds payable on March 1,2011 and September 1, 2011. Section 5 2 Debt Service Fund The Permanent Improvement Bonds, Senes 2010A Debt Service Fund (the "Debt Service Fund") is hereby created as a special fund solely for the benefit of the Bonds The City shall establish and maintain such fund at an official City depository and shall keep such fund separate and apart from all other funds and accounts of the City. Any amount on deposit in the Debt Service Fund shall be mamtamed by the City m trust for the Registered Owners of the Bonds Such amount, plus any other amounts deposited by the City into such fund and any and all investment earnings on amounts on deposit in such fund, shall be used only to pay the principal of,premium, if any,and interest on the Bonds. Section 5.3: Construction Fund The Permanent Improvement Bonds, Series 2010A Construction Fund (the "Construction Fund") is hereby created as a special fund of the City Money on deposit m the Construction Fund shall be used only for the purposes set forth in Section 3 1 of this Ordinance. Money on deposit m the Construction Fund may, at the option of the City, be invested as permitted by Texas law,provided that all such deposits and mvestments shall be made m such manner that the money required to be expended from the Construction Fund will be available at the proper time or times All interest and income derived from such deposits and investments shall remain in the Construction Fund, except that, to the extent required by law, such interest and mcome may be applied to make such payments to the United States of America as shall be required to assure that mterest on the Bonds is exempt from federal income taxation. Upon the completion of the purposes set forth in Section 3 1 of this Ordinance, any surplus funds on deposit in the Construction Fund shall be transferred into the Debt Service Fund. Section 5 4• Further Proceedings 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 for exammation and approval After the Bonds to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller for registration Upon registration of the Bonds to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or attached to the Bonds to be initially issued, and the seal of said Comptroller shall be impressed, or placed m facsimile,thereon ARTICLE VI CONCERNING THE PAYING AGENT/REGISTRAR Section 6.1. Acceptance Wells Fargo Bank Texas, N.A, Houston, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Bonds pursuant to the terms and 11 HOU 3053042 1 provisions of the Paying Agent/Registrar Agreement by and between the City and the Paymg Agent/Registrar The Paying Agent/Registrar Agreement shall be substantially in the form attached hereto as Exhibit B, the terms and provisions of which are hereby approved, and the Mayor is hereby authonzed to execute and deliver such Paymg Agent/Registrar Agreement on behalf of the City m multiple counterparts and the City Secretary is hereby authonzed to attest thereto and affix the City's seal. Such initial Paying Agent/Registrar and any successor Paying Agent/Registrar, by undertakmg the performance of the duties of the Paying Agent/Registrar hereunder, and in consideration of the payment of any fees pursuant to the terms of any contract between the Paymg Agent/Registrar and the City and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept and agree to abide by the terms of this Ordinance Section 6 2 Trust Funds. All money transferred to the Paying Agent/Registrar in its capacity as Paymg Agent/Registrar for the Bonds under this Ordinance (except any sums representing Paymg Agent/Registrar's fees) shall be held m trust for the benefit of the City, shall be the property of the City and shall be disbursed m accordance with this Ordmance. Section 6 3 Bonds Presented. Subject to the provisions of Section 6 4, all matured Bonds presented to the Paying Agent/Registrar for payment shall be paid without the necessity of further instructions from the City. Such Bonds shall be canceled as provided herein Section 6 4 Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by the Paying Agent/Registrar that represent principal of and mterest on the Bonds remaining unclaimed by the Registered Owner thereof after the expiration of three years from the date such funds have become due and payable (a) shall be reported and disposed of by the Paying Agent/Registrar m accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent such provisions are applicable to such funds, or (b)to the extent such provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to the City upon receipt by the Paymg Agent/Registrar of a wntten request therefor from the City The Paying Agent/Registrar shall have no liability to the Registered Owners of the Bonds by virtue of actions taken in compliance with this Section Section 6 5 Paymg Agent/Registrar May Own Bonds. The Paying Agent/Registrar m its individual or any other capacity, may become the owner or pledgee of Bonds with the same nghts it would have if it were not the Paying Agent/Registrar. Section 6 6 Successor Paymg Agents/Registrars. The City covenants that at all times while any Bonds are Outstanding it will provide a legally qualified bank, trust company, fmancial institution or other agency to act as Paying Agent/Registrar for the Bonds The City reserves the nght to change the Paymg Agent/Registrar for the Bonds on not less than sixty(60) days' wntten notice to the Paying Agent/Registrar, as long as any such notice is effective not less than 60 days prior to the next succeeding principal or mterest payment date on the Bonds Promptly upon the appointment of any successor Paying Agent/Registrar, the previous Paying Agent/Registrar shall deliver the Register or a copy thereof to the new Paying Agent/Registrar, and the new Paying Agent/Registrar shall notify each Registered Owner, by Umted States mail, first class,postage prepaid, of such change and of the address of the new Paymg Agent/Registrar. 12 HOU 3053042 1 Each Paying Agent/Registrar hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Ordinance ARTICLE VII PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS OF BONDS Section 7.1• Sale of Bonds; Insurance The sale of the Bonds to the Underwriters at a price of $ (representing the principal amount of the Bonds, plus an original issue premium on the Bonds of$ and less an underwriting discount of$ ), plus accrued interest on the Bonds to the date of delivery of the Certificates, is hereby approved, and delivery of the Bonds to the Underwriters shall be made upon payment therefor in accordance with the terms of the Bond Purchase Agreement presented to and hereby approved by the Board, in substantially the form attached hereto as Exhibit C, which price and terms are hereby found and determined to be the most advantageous reasonably obtainable by the City The Mayor or the City Secretary and other appropriate officials of the City are hereby authorized and directed to execute such Bond Purchase Agreement on behalf of the City, and the Mayor and the City Secretary and all other officials, agents and representatives of the City are hereby authorized to do any and all things necessary or desirable to satisfy the conditions set out therein and to provide for the issuance and delivery of the Bonds Section 7 2 Approval, Registration and Delivery The Mayor is hereby authorized to have control and custody of the Bonds and all necessary records and proceedmgs pertaining thereto pending their delivery, and the Mayor and other officers and employees of the City are hereby authorized and directed to make such certifications and to execute such instruments as may be necessary to accomplish the delivery of the Bonds and to assure the investigation, examination and approval thereof by the Attorney General and the registration of the uutial Bonds by the Comptroller. Upon registration of the Bonds,the Comptroller(or the Comptroller's certificates clerk or an assistant certificates clerk lawfully designated in wntmg to act for the Comptroller) shall manually sign the Comptroller's Registration Certificates prescribed herein to be attached or affixed to each Bond initially delivered and the seal of the Comptroller shall be impressed or printed or lithographed thereon Section 7 3• Offering Documents, Ratings The City hereby approves the form and contents of the Preliminary Official Statement and the final Official Statement, dated as of the date hereof, relating to the Bonds, and any addenda, supplement or amendment thereto, and ratifies and approves the distribution of such Preliminary Official Statement and Official Statement in the offer and sale of the Bonds and in the reoffering of the Bonds by the Underwriters, with such changes therein or additions thereto as the officials executing same may deem advisable, such determination to be conclusively evidenced by their execution thereof The Mayor is hereby authorized and directed to execute, and the City Secretary is hereby authorized and directed to attest, the final Official Statement It is further hereby officially found, determined and declared that the statements and representations contained in the Preliminary Official Statement and final Official Statement are true and correct m all material respects,to the best knowledge and belief of the City Council, and that, as of the date thereof, the Preliminary Official Statement was an official statement of the City with respect to the Bonds 13 HOU 3053042 1 that was deemed"final"by an authonzed official of the City except for the omission of no more than the information permitted by subsection (b)(1) of Rule 15c2-12 of the Securities and Exchange Commission Copies of the Prelimmary Official Statement and the Official Statement are attached hereto as Exhibit D and Exhibit E,respectively Further, the City Council hereby ratifies, authorizes and approves the actions of the Mayor, the City's financial advisor and other consultants in seeking ratings on the Bonds from Standard& Poor's Ratmgs Services and Fitch Ratings, Inc, and such actions are hereby ratified and confirmed Section 7 4 Application of Proceeds of Bonds, Appropriation. Proceeds from the sale of the Bonds shall,promptly upon receipt by the City,be applied as follows (1) Accrued interest shall be deposited into the Debt Service Fund created in Section 5 2 of this Ordinance, (2) A portion of the proceeds, including premium generated by the sale of the Bonds in the amount of $ shall be applied to pay expenses arising m connection with the issuance of the Bonds, including the Underwriters' discount; (3) The remaining proceeds shall be deposited into the Construction Fund created in Section 5.3 of this Ordinance Section 7 5 Tax Exemption The City intends that the interest on the Bonds shall be excludable from gross income of the owners thereof for federal mcome tax purposes pursuant to Sections 103 and 141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and all applicable temporary, proposed and final regulations (the "Regulations") and procedures promulgated thereunder and applicable to the Bonds. For this purpose, the City covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Bonds (including all property the acquisition, construction or improvement of which is to be financed directly or indirectly with the proceeds of the Bonds) and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause interest on the Bonds to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Bonds for federal income tax purposes. Without limiting the generality of the foregoing, the City shall comply with each of the following covenants (a) The City will use all of the proceeds of the Bonds to (i) provide funds for the purposes described in Section 3 1 hereof, which will be owned and operated by the City and (u) to pay the costs of issuing the Bonds The City will not use any portion of the proceeds of the Bonds to pay the principal of or interest or redemption premium on, any other obligation of the City or a related person. (b) The City will not directly or indirectly take any action, or omit to take any action, which action or omission would cause the Bonds to constitute "private activity bonds"within the meaning of Section 141(a)of the Code 14 HOU 3053042 1 (c) Principal of and interest on the Bonds will be paid solely from ad valorem taxes collected by the City, investment earnings on such collections, and as available, proceeds of the Bonds (d) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Bonds are delivered, the City reasonably expects that the proceeds of the Bonds will not be used m a manner that would cause the Bonds or any portion thereof to be an"arbitrage bond"withm the meaning of Section 148 of the Code (e) At all times while the Bonds are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Bonds m accordance with the Regulations The City will monitor the yield on the investments of the proceeds of the Bonds and, to the extent required by the Code and the Regulations,will restrict the yield on such investments to a yield which isn materially higher than the yield on the Bonds To the extent necessary to prevent e Bonds from constituting "arbitrage bonds," the City will make such payments as are necessary to cause the yield on all yield restricted nonpurpose investments allocable to e Bonds to be less than the yield that is materially higher than the yield on the Bonds (f) The City will not take any actio or knowingly omit to take any action that, if taken or omitted, would cause the Bond to be treated as "federally guaranteed" obligations for purposes of Section 149(b)of the ode (g) The City represents that not more than fifty percent(50%) of the proceeds of the Bonds will be invested m nonpurpo e investments (as defined in Section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of Section 149(g)(3)(A)(n of the Code, and the City reasonably expects that at least eighty-five percent (85%) f the spendable proceeds of the Bonds will be used to carry out the governmental p ose of the Bonds within the three-year period beginning on the date of issue of the Bon s (h) The City will take all necessary s eps to comply with the requirement that certain amounts earned by the City on the inves ent of the gross proceeds of the Bonds, if any, be rebated to the federal government Specifically, the City will (i) mamtam records regarding the receipt, investment, and xpenditure of the gross proceeds of the Bonds as may be required to calculate such xcess arbitrage profits separately from records of amounts on deposit in the funds an accounts of the City allocable to other obligations of the City or moneys which d not represent gross proceeds of any obligations of the City and retain such records fo at least six years after the day on which the last outstanding Bond is discharged, (ii) ccount for all gross proceeds under a reasonable, consistently applied method of acc untmg, not employed as an artifice or device to avoid in whole or in part, the req irements of Section 148 of the Code, including any specified method of accounting quired by applicable Regulations to be used for all or a portion of any gross proceeds, (iii) calculate, at such times as are required by applicable Regulations, the amount of excess arbitrage profits, if any, earned from the investment of the gross proceeds of the Bonds and (iv) timely pay, as required 15 HOU 3053042 1 by applicable Regulations, all amounts required o be rebated to the federal government In addition, the City will exercise reasonable dil gence to assure that no errors are made m the calculations required by the preceding se tence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government f any delinquent amounts owed to it, interest thereon and any penalty (i) The City will not directly or mdir ctly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entenng mto any investment arrangement with respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results m a smaller profit or a larger loss than would have resulted if such arrangement had been at arm's length and had the yield on the Bonds not been relevant to either party (l) The City will timely file or cause to be filed with the Secretary of the Treasury of the Umted States the information required by Section 149(e) of the Code with respect to the Bonds on such form and in such place as the Secretary may prescnbe (k) The City will not issue or use the Bonds as part of an "abusive arbitrage device" (as defined m Section 1 148-10(a) of the Regulations) Without limitmg the foregoing, the Bonds are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gam a matenal financial advantage, or(ii) increasing the burden on the market for tax-exempt obligations (1) Proper officers of the City charged with the responsibility for issuing the Bonds are hereby directed to make, execute and deliver certifications as to facts, estimates or circumstances in existence as of the date of issuance of the Bonds and stating whether there are facts, estimates or circumstances that would matenally change the City's expectations On or after the date of issuance of the Bonds, the City will take such actions as are necessary and appropnate to assure the continuous accuracy of the representations contamed in such certificates (m) The covenants and representations made or required by this Section are for the benefit of the Bond holders and any subsequent Bond holder, and may be relied upon by the Bond holders and any subsequent Bond holder and bond counsel to the City In complying with the foregoing covenants, the City may rely upon an unqualified opinion issued to the City by nationally recognized bond counsel that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Bonds to be includable in gross income for federal mcome tax purposes under existing law 16 HOU 3053042 I Notwithstanding any other provision of this Ordinance, the City's representations and obligations under the covenants and provisions of this Section 7 5 shall survive the defeasance and discharge of the Bonds for as long as such matters are relevant to the exclusion of interest on the Bonds from the gross income of the owners for federal income tax purposes Section 7 6 Related Matters In order that the City shall satisfy in a timely manner all of its obligations under this Ordmance, the Mayor, City Secretary and all other appropriate officers, agents, representatives and employees of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the issuance and delivery of the Bonds, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, notices, and other documents as may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and application of funds of the City consistent with the provisions of this Ordinance ARTICLE VIII CONTINUING DISCLOSURE UNDERTAKING Section 8.1. Annual Reports The City shall provide annually to the MSRB, within six (6) months after the end of each fiscal year and in an electronic format prescribed by the MSRB, financial information and operatmg data with respect to the City of the general type descnbed In the Official Statement, being the information described in Exhibit F attached hereto Any financial statements so to be provided shall be (a)prepared in accordance with generally accepted accounting principles for governmental units as prescribed by the Government Accountmg Standards Board from time to time, as such principles may be changed from time to time to comply with state or federal law or regulation and(b) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not available at the time the financial information and operating data must be provided, then the City shall provide unaudited fmancial statements for the applicable fiscal year to the MSRB and shall provide to the MSRB audited financial statements,when and if the same become available If the City changes its Fiscal Year, it will notify the MSRB of the change(and of the date of the new fiscal year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Article. The financial information and operating data to be provided pursuant to this Article may be set forth in full in one or more documents or may be mcluded by specific reference to documents(i)available to the public on the MSRB's Internet web site or(u) filed with the SEC Section 8 2• Material Event Notice The City shall notify the MSRB in an electronic format prescribed by the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal secunties laws. (a) Principal and interest payment delinquencies, (b) Non-payment related defaults; 17 HOU 3053042 1 (c) Unscheduled draws on debt service reserves reflecting fmancial difficulties, (d) Unscheduled draws on credit enhancements reflecting fmancial difficulties, (e) Substitution of credit or liquidity providers or their failure to perform, (f) Adverse tax opinions or events affectmg the tax-exempt status of the Bonds, (g) Modifications to nghts of holders of the Bonds, (h) Bond calls, (i) Defeasances; (0) Release, substitution,or sale of property secunng repayment of the Bonds, (k) Rating changes. The City shall notify the MSRB m an electromc format prescnbed by the MSRB, m a timely manner, of any failure by the City to provide financial information or operating data m accordance with Section 8 1 of this Order by the time required by such Article Section 8 3 Identifying Information. All documents provided to the MSRB shall be accompanied by identifying information, as prescnbed by the MSRB Section 8 4 Limitations, Disclaimers and Amendments. The City shall be obligated to observe and perform the covenants specified m this Article for so long as,but only for so long as, the City remams an"obligated person"with respect to the Bonds within the meaning of the Rule, except that the City m any event will give the notice required by Section 8.2 of any Bond calls and defeasance that cause the City to be no longer such an"obligated person" The provisions of this Article are for the sole benefit of the Holders and beneficial owners of the Bonds, and nothing m this Article,express or implied, shall give any benefit or any legal or equitable nght, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial information, operatmg data, pnncipal statements, and notices which it has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide any other information that may be relevant or matenal to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided m accordance with this Article or otherwise, except expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest m or sell Bonds at any future date UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH 18 HOU 3053042 1 BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE No default by the City in observing or performing its obligations under this Article shall constitute a breach of or default under the Order for purposes of any other provision of this Order. Nothing in this Article is mtended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities law. The provisions of this Article may be amended by the City from time to time to adapt to changed circumstances that arise from a change, legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if(1) the provisions of this Article,as so amended,would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances and (2) either(a) the Holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Order that authorizes such an amendment) of the Outstanding Bonds consent to such amendment or(b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interest of the Holders and beneficial owners of the Bonds If the City so amends the provisions of this Article it shall include with any amended financial information or operating data next provided in accordance with Section 8 1 an explanation in narrative form of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided The City may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. ARTICLE IX MISCELLANEOUS Section 9 1 Defeasance The City may defease the provisions of this Ordinance and discharge its obligations to the Registered Owners of any or all of the Bonds to pay the principal of and interest thereon in any manner permitted by law, including by depositing with the Paying Agent/Registrar or with the Comptroller of Public Accounts of the State of Texas either (a) cash in an amount equal to the principal amount of such Bonds plus interest thereon to the date of maturity or redemption, or (b) pursuant to an escrow or trust agreement, cash and/or (i) direct noncallable obligations of United States of America, including obligations that are unconditionally guaranteed by the United States of America, (u) noncallable obligations of an agency or instrumentality of the United States, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the governing body of the issuer 19 HOU 3053042 I adopts or approves the proceedings authonzmg the issuance of refunding bonds, are rated as to mvestment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, or (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the governing body of the issuer adopts or approves the proceedings authonzmg the issuance of refundmg bonds, are rated as to investment quality by a nationally recognized investment ratmg firm not less than AAA or its equivalent, which, in the case of(i), (u) or(in), may be in book-entry form, and the principal of and interest on which will, when due or redeemable at the option of the holder, without further investment or reinvestment of either the principal amount thereof or the interest earnings thereon, provide money m an amount which, together with other moneys, if any, held in such escrow at the same time and available for such purpose, shall be sufficient to provide for the timely payment of the principal of and interest thereon to the date of maturity or earlier redemption; provided, however, that if any of the Bonds are to be redeemed pnor to their respective dates of maturity, provision shall have been made for giving notice of redemption as provided m this Ordmance Upon such deposit, such Bonds shall no longer be regarded to be Outstandmg or unpaid. Any surplus amounts not required to accomplish such defeasance shall be returned to the City Section 9.2. Application of Chapter 1208. Government Code Chapter 1208, Government Code, applies to the issuance of the Bonds and the pledge of the taxes granted by the City under Section 5 1 of this Ordinance, and such pledge is therefore valid, effective and perfected If Texas law is amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes granted by the City under Section 5 1 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then m order to preserve to the Registered Owners of the Bonds the perfection of the security mterest in said pledge, the City agrees to take such measures as it determmes are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur Section 9 3 Ordinance a Contract - Amendments This Ordinance shall constitute a contract with the Registered Owners from time to time, be bmdmg on the City, and shall not be amended or repealed by the City so long as any Bond remains Outstanding except as permitted m this Section The City may,without the consent of or notice to any Registered Owners, from time to time and at any time, amend this Ordinance in any manner not detrimental to the interests of the Registered Owners, mcludmg the curing of any ambiguity, inconsistency, or formal defect or omission herein In addition, the City may, with the consent of Registered Owners who own in the aggregate 51 % of the principal amount of the Bond then Outstandmg, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the consent of all Registered Owners of Outstanding Bonds, no such amendment, addition, or rescission shall (i) extend the time or times of payment of the principal of and mterest on the Bonds, reduce the principal amount thereof, the redemption price, or the rate of interest thereon, or m any other way modify the terms of payment of the principal of or interest on the Bonds, (ii)give any preference to any Bond over any other Bond, or (in)reduce the aggregate principal amount of Bonds required to be held by Registered Owners for consent to any such amendment, addition, or rescission 20 HOU 3053042 1 Section 9.4. Legal Holidays. In any case where the date interest accrues and becomes payable on the Bonds or principal of the Bonds matures or the date fixed for redemption of any Bonds or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date, or the Record Date shall not occur on such date, but payment may be made or the Record Date shall occur on the next succeeding day which is not in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close with the same force and effect as if(i)made on the date of maturity or the date fixed for redemption and no interest shall accrue for the period from the date of maturity or redemption to the date of actual payment or (u)the Record Date had occurred on the fifteenth day of that calendar month. Section 9.5. No Recourse Against City Officials. No recourse shall be had for the payment of principal of or interest on any Bonds or for any claim based thereon or on this Ordinance against any official of the City or any person executing any Bonds Section 9.6. Further Proceedings The Mayor, City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms of this Ordinance. Section 9 7 Severability If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance Section 9 8• Power to Revise Form of Documents Notwithstanding any other provision of this Ordinance, the Mayor is hereby authorized to make or approve such revisions, additions, deletions, and variations to this Ordinance and in the form of the documents attached hereto as exhibits as, in the judgment of the Mayor, and in the opinion of Bond Counsel to the City, may be necessary or convement to carry out or assist in carrying out the purposes of this Ordinance, or as may be required for approval of the Bonds by the Attorney General of Texas; provided, however, that any changes to such documents resulting in substantive amendments to the terms and conditions of the Bonds or such documents shall be subject to the prior approval of the City Council Section 9.9. Open Meeting It is hereby found, determined and declared that a sufficient written notice of the date, hour,place and subject of the meeting of the City Council at which this Ordinance was adopted was posted at a place convement and readily accessible at all times to the general public at City Hall for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this meeting has been open to the public as required by law at all times during which this Ordinance and the subject matter thereof has been discussed, considered and formally acted upon The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 9 10 Repealer All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency 21 HOU 3053042 1 Section 9.11. Declaration of Emergency It is hereby officially found and determined that a case of emergency and urgent public necessity exists that requires that this Ordinance be passed finally and take effect immediately on the date of its introduction, such emergency and urgent public necessity being that the proceeds from the sale of the Bonds are required as soon as possible and without delay for the purposes set forth herein Section 9 12 Effective Date This Ordinance shall be in force and effect from and after its passage on the date shown below [signature page follows] 22 HOU 3053042 1 PASSED AND APPROVED on first reading pursuant to Section 3 10 of the City Charter this September , 2010 CITY OF PEARLAND, TEXAS Mayor ATTEST City Secretary (SEAL) Exhibit A—Form of Bond Exhibit B—Paying Agent/Registrar Agreement Exhibit C—Bond Purchase Agreement Exhibit D—Preliminary Official Statement Exhibit E—Official Statement Exhibit F—Contmuing Disclosure S-1 HOU 3053042 1 EXHIBIT A FORM OF BOND UNITED STATES OF AMERICA STATE OF TEXAS CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS, SERIES 2010A NUMBER DENOMINATION 1R- REGISTERED REGISTERED 2INTEREST RATE DATED DATE 2MATURITY DATE• 2 CUSIP• October 1, 2010 March 1, REGISTERED OWNER PRINCIPAL AMOUNT DOLLARS 3THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas (the"City"), for value received,hereby promises to pay to the Registered Owner identified above or its registered assigns, on the maturity date specified above (or on earlier redemption as herein provided),upon presentation and surrender of this Bond at the office of Wells Fargo Bank Texas, N A, Houston, Texas or its successor (the "Paying Agent/Registrar"), the principal amount identified above (or so much thereof as shall not have been paid or deemed to have been paid upon prior redemption) 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 to the United States of America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months, from the later of the Dated Date identified above or the most recent interest payment date to which Interest has been paid or duly provided for. Interest on this Bond is payable on March 1, 2011, and each September 1 and 1 Initial Bond shall be numbered T-1 2 Omitted from Initial Bond 3 The first sentence of the initial Bond shall read as follows THE CITY OF PEARLAND,TEXAS,a municipal corporation of the State of Texas(the"City"),for value received, hereby promises to pay to the Registered Owner identified above or its registered assigns, on March 1 of the year of maturity specified below (or on earlier redemption as herein provided), upon presentation and surrender of this Bond at the office of Wells Fargo Bank Texas,N A,Houston,Texas or its successor (the "Paying Agent/Registrar"), the principal amount identified set forth in the following schedule [Insert information regarding years of maturity, principal amounts and interest rates from the Section 3.3 of the Bond Order] (or so much thereof as shall not have been paid or deemed to have been paid upon prior redemption)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 to the United States of America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months, from the later of the Dated Date identified above or the most recent interest payment date to which interest has been paid or duly provided for A-1 HOU 3053042 1 March 1 thereafter until matunty or earlier redemption of this Bond, by check sent by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to the Registered Owner of record as of the close of business on the 15`h day of the calendar month immediately preceding the applicable interest payment date, as shown on the registration books kept by the Paymg Agent/Registrar Any accrued mterest payable at matunty or earlier redemption shall be paid upon presentation and surrender of this Bond at the office of the Paying Agent/Registrar THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS (the "Bonds") in the aggregate principal amount of$ issued pursuant to an ordinance adopted by the City Council of the City on September 13, 2010 (the "Ordinance") for the purpose of providing funds for public improvements in the City and refunding certam outstanding obligations of the City, under and pursuant to the authority of Chapter 1331,Texas Government Code, as amended, the City's Home Rule Charter, and an election held on May 12, 2007. Proceeds of the Bonds will also be used to pay costs of issuance of the Bonds and other professional services related thereto. 4THIS BOND SHALL NOT BE VALID OR OBLIGATORY for any purpose or be entitled to any benefit under the Ordinance unless this Bond is authenticated by the Paying Agent/Registrar by due execution of the authentication certificate endorsed hereon THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity, Bonds maturing on and after March 1, 2020, in whole or in part, on March 1, 2019, or any date thereafter, at par plus accrued interest to the date fixed for redemption. BONDS MAY BE REDEEMED IN PART only m 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 m integral multiples of $5,000 In selectmg portions of Bonds for redemption, each Bond shall be treated as representing that number of Bonds of $5,000 denomination which is obtained by dividing the principal amount of such Bond by $5,000 Upon surrender of any Bond for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange therefor a Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Bond so surrendered NOTICE OF ANY SUCH REDEMPTION, identifying the Bonds or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the books of registration kept by the Paymg Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Bonds called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Bonds which are to be so redeemed thereby automatically shall be redeemed prior to their 4 In the Initial Bond,this paragraph shall read THIS BOND SHALL NOT BE VALID OR OBLIGATORY for any purpose or be entitled to any benefit under the Ordinance unless this Bond is registered by the Comptroller of Public Accounts of the State of Texas by due execution of the registration certificate endorsed hereon A-2 HOU 3053042 1 scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the purpose of being paid with the funds so provided for such payment THIS BOND IS TRANSFERABLE only upon presentation and surrender at the office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or its authorized representative, subject to the terms and conditions of the Ordinance THIS BOND IS EXCHANGEABLE at the office of the Paying Agent/Registrar for a Bond or Bonds of the same maturity and interest rate and in the principal amount of$5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange any Bond called for redemption, m whole or m part, during the forty-five (45) day period immediately prior to the date fixed for redemption; provided, however, that such limitation shall not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a Bond called for redemption m part THE CITY OR PAYING AGENT/REGISTRAR may require the Registered 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 a Bond Any fee or charge of the Paying Agent/Registrar for a transfer or exchange shall be paid by the City. THE REGISTERED OWNER of this Bond by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, 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, that the Bonds do not exceed any constitutional or statutory limitation; 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,within the limits prescribed by law, against all taxable property in the City and have been irrevocably pledged for such payment REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed with the Paymg Agent/Registrar, for the full provisions thereof, to all of which the Registered Owners of the Bonds assent by acceptance of the Bonds IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or placed in facsimile hereon and this Bond to be signed by the Mayor and countersigned by the City Secretary by their manual, lithographed or printed facsimile signatures. A-3 HOU 3053042 I (AUTHENTICATION OR CITY OF PEARLAND, TEXAS REGISTRATION CERTIFICATE) Mayor (SEAL) COUNTERSIGNED City Secretary * * * A-4 HOU 3053042 1 FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE The following form of Comptroller's Registration Certificate shall be attached or affixed to each of the Bonds initially delivered: OFFICE OF THE COMPTROLLER § OF PUBLIC ACCOUNTS § REGISTER NO THE STATE OF TEXAS § I hereby certify that this bond has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this bond has been registered by the Comptroller of Public Accounts of the State of Texas WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts (SEAL) of the State of Texas * * * FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE The followmg form of authentication certificate shall be printed on the face of each of the Bonds other than those initially delivered. AUTHENTICATION CERTIFICATE This Bond is one of the Bonds described in and delivered pursuant to the within mentioned Ordinance; and, except for the Bonds initially delivered, this Bond has been issued m exchange for or replacement of a Bond, Bonds, or a portion of a Bond or Bonds of an issue which ongmally was approved by the Attorney General of the State of Texas and registered by the Comptroller of Public Accounts of the State of Texas WELLS FARGO BANK,N A as Paying Agent/Registrar By Authonzed Signature Date of Authentication. * * * A-5 HOU 3053042 I FORM OF ASSIGNMENT The following form of assignment shall be printed on the back of each of the Bonds ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Please pnnt or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer such bond on the books kept for registration thereof,with full power of substitution m the premises. DATED. Signature Guaranteed Registered Owner NOTICE The signature above must correspond to the name of the Registered Owner as shown on the face of this bond m NOTICE Signature must be guaranteed every particular, without any alteration, by a member firm of the New York Stock enlargement or change whatsoever Exchange or a commercial bank or trust company * * * A-6 HOU 3053042 1 EXHIBIT B PAYING AGENT/REGISTRAR AGREEMENT See Tab B-1 HOU 3053042 1 EXHIBIT C BOND PURCHASE AGREEMENT See Tab No._ C-1 HOU 3053042 1 EXHIBIT D PRELIMINARY OFFICIAL STATEMENT See Tab No._ D-1 HOU 3053042 I EXHIBIT E OFFICIAL STATEMENT See Tab No._ E-1 HOU 3053042 1 EXHIBIT F CONTINUING DISCLOSURE The following mformation is referred to in Section 8.1 of this Ordmance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified (and included m the Appendix or under the headings of the Official Statement referred to)below. 1 The audited mformation found in the Official Statement under the headings "INVESTMENT AUTHORITY AND INVESTMENT OBJECTIVES OF THE CITY- Current Investments," "CITY TAX DEBT," "TAX DATA" (except under the subheading estimated overlapping taxes), "SELECTED FINANCIAL DATA" and in Appendix B Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above H-1 HOU 3053042 I MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, HELD ON MONDAY, SEPTEMBER 13, 2010, AT 7:30 P.M., IN THE COUNCIL CHAMBERS, CITY HALL, 3519 LIBERTY DRIVE, PEARLAND, TEXAS. Mayor Reid called the meeting to order at 7:58 p.m. with the following present: Mayor Mayor Pro -Tem Councilmember Councilmember Councilmember Councilmember City Manager City Attorney City Secretary Tom Reid Scott Sherman Woody Owens Steve Saboe Felicia Kyle Ed Thompson Bill Eisen Darrin Coker Young Lorfing Others in attendance: Jon Branson Assistant City Manager; J.C. Doyle Police Chief; Trent Epperson Project Director; Mike Hodge Assistant City Manager; Lata Krishnarao Planning Director; Claire Bogard Finance Director; Michelle Smith Director of Parks and Recreation; Colene Cabezas Recreation Superintendent; Meg McNulty Utility Billing Services Supervisor; Ian Clowes Planner I; Judy Krajca Planning Office Coordinator; June Ellis Budget Officer; Julie Diaz Recreation Manager; Evan Duvall Planner II; Theresa Battenfield Assistant Project Director; Andrea Brinkley Project Manager; Cara Nesby Project Manager; Debbie Schielke Web/Cable Administrator; Rosalyn Epting Assistant Director of Parks and Recreation; Billy Pounds Aquatic Manager. The invocation was given by Councilmember Saboe and the Pledge of Allegiance was led by Troop 460 Eagle Scout Terry Johnston. MAYOR'S ACTIVITY REPORT Mayor Reid reported on August 31 he attended the Northern Brazoria County Educational Alliance Board of Director's Meeting; September 3, joined the Chamber of Commerce for the Premier Pool Ribbon Cutting; September 7, attended the Agenda Meeting and joined Mayor Pro -Tem Scott Sherman and City Manager Bill Eisen at the Westside Library Meeting; September 8, spoke on City Progress at the Exchange Club; September 9, attended the Brazoria County Tax Abatement Review Committee; September 10 attended the Chamber Before Business Breakfast, met with Alvin Animal Trainer to present a Service Dog to Sherry Govella, a Pearland citizen and presented a Certificate of Appreciation to Kyle Lord, a Pearland soldier just returned home; September 11 gave the prayer at the opening ceremony of Little League Football, spoke at the recognition of the Pearland Little League Allstar Team and spoke at the Eagle Scout Court of Honor for Troop 464. Page 1 of 16 — 9/10/2010 Mayor Reid presented Pearland Chamber of Commerce President Carol Artz with a Certificate of Recognition for achieving the Chamber Executive Certification. Mayor Reid presented Janie Lewis, Alzheimer's Association, with a proclamation proclaiming September 21, 2010, "World Alzheimer's Day." Mayor Reid and Councilmember Owens presented Michael Rambaran, Ruth Rambaran, and Bill Cyrus with a proclamation proclaiming September 19 — 24, 2010, "Employee Support of Guard and Reserve Week." Mayor Reid and Assistant City Manager Mike Hodge presented Planning Director Lata Krishnarao, Plan and Plat Administrator Richard Keller, Office Coordinator Judy Krajca, Planner II Evan Duvall, and Planning and Zoning Commissioners Henry Fuertes, Susan Sherrouse, Neil West, and Richard Golden with the American Planning Association "Planning Excellence Award 2009" for the Planning Department. Parks, Recreation, and Beautification Boardmembers Quentin P. Wiltz and Kelly Moody presented Parks and Recreation director Michelle Smith, Assistant Parks and Recreation Director Rosalyn Epting, Recreation Superintendent Colene Cabezas, Recreation Manager Julie Diaz, Aquatic Manager Billy Pounds, Project Director Trent Epperson, and Project Manager Andrea Brinkley with a plaque for the Recognition of their commitment and dedication to the Recreation Center and Natatorium Project. COUNCIL ACTIVITY REPORTS Councilmember Owens commended the Parks and Recreation Department for a great job on the parade for the Little League Team's efforts in the World Series. He stated the boys are a great group of kids that represented themselves and Pearland in a very positive way. The Texas Contractors Association voted the Pearland Recreation Center and Natatorium as the best Natatorium in the area and he feels Staff did an excellent job. Councilmember Saboe passed on giving a report. Mayor Pro -Tem Sherman stated he agrees with Councilmember Owens on the success of the Little League Parade. The Friends of the Westside Pearland Library conducted a reorganization meeting and will meet September 14, 2010, at 7:00 p.m. at Nolan Ryan Junior High if anyone is interested in attending. Councilmember Kyle stated she attended the Ring of Honor Fundraiser. She wanted to commend the group that organized the event and the citizens that came out for the cause and help raise $40,000, which was the most money that had been raised at a single event. Page 2 of 16 — 9/10/2010 Councilmember Thompson stated he attended the Ring of Honor Fundraiser and it was a wonderful event. The citizens that came out to donate their time and money exhibited the caring and giving attitude of the community. He also is very proud of the young men on the Little League Team and the parents of the Dad's Club. CITY MANAGER'S REPORT City Manager Bill Eisen stated he wanted to recognize Cary Cappers of the Parks and Recreation Department for her efforts involved with the Little League Parade. He would also like to thank the Pearland Police Department, Pearland Citizen Police Academy Alumni Association for their services for crowd control. The Fire and EMS Departments also committed their time and services for the event. CITIZENS Larry Marcott, 3606 Inverness Court, addressed Council and stated he would like to discuss Inverness Lane. There is a sign that states Inverness Lane will be closed September 20, 2010. The subdivision has only one way out and in and closing this road will not allow residents in or out. He understands that this is probably something the contractor has done and that the project is a State project. He has worked with Project Director Trent Epperson on the issue before. Someone needs to address this situation and accommodate the residents and allow them access to their homes. DOCKETED PUBLIC HEARING: None CONSENT AGENDA: A. CONSIDERATION AND POSSIBLE ACTION — APPROVAL OF MINUTES: 1. Minutes of the August 16, 2010, Special Meeting — held at 6:00 p.m. 2. Minutes of the August 16, 2010, Public Hearing — Annexation Area No. 1 held at 6:30 p.m. 3. Minutes of the August 16, 2010, Public Hearing — Annexation Area No. 2 held at 6:30 p.m. 4. Minutes of the August 16, 2010, Public Hearing — Annexation Area No. 3 and 4 held at 6:30 p.m. 5. Minutes of the August 23, 2010, Special Meeting held at 7:15 p.m. 6. Minutes of the August 23, 2010, Public Hearing held at 6:30 p.m. 7. Minutes of the August 23, 2010, Regular Meeting held at 7:30 p.m. B. CONSIDERATION AND POSSIBLE ACTION — EXCUSE COUNCILMEMBER STEVE SABOE'S ABSENCE FROM THE AUGUST 23, 2010, REGULAR COUNCIL MEETING. City Council. Page 3 of 16 — 9/10/2010 Councilmember Owens made the motion, seconded by Councilmember Saboe, to adopt Consent Agenda Items A through B as presented on the Consent Agenda. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. MATTERS REMOVED FROM CONSENT AGENDA None NEW BUSINESS: FIRST READING OF ORDINANCE NO. 2000M-72 — AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AMENDING ORDINANCE NO. 2000M, THE ZONING MAP OF THE CITY OF PEARLAND, TEXAS, FOR THE PURPOSE OF CHANGING THE CLASSIFICATION OF CERTAIN REAL PROPERTY, LOCATION BEING APPROXIMATELY 3.0 ACRE TRACT OF LAND OUT OF A 10 ACRE TRACT, A RESIDUE OF D. H, STRIPLING12.000 ACRE TRACT RECORDED VOLUME 868, PAGE 239 OF THE BRAZORIA COUNTY DEED RECORDS. ALL BEING PART OF THE SOUTH 99 ACRES OF THE H.T. & B. R. R. CO. SURVEY, SEC. 7, A-219 AS RECORDED IN VOLUME 595, PAGE 63 OF THE DEED OF RECORDS OF BRAZORIA COUNTY, TEXAS GENERALLY LOCATED AT: 6301 BROADWAY STREET, PEARLAND TEXAS (ZONE CHANGE APPLICATION NO. 2010-03Z), FROM PLANNED DEVELOPMENT DISTRICT (PD) TO GENERAL BUSINESS RETAIL DISTRICT (GB), AT THE REQUEST OF CROWN WAREHOUSE SERVICES, APPLICANT AND OWNER, PROVIDING FOR AN AMENDMENT OF THE ZONING DISTRICT MAP; CONTAINING A SAVINGS CLAUSE, A SEVERABILITY CLAUSE, AN EFFECTIVE DATE AND OTHER PROVISIONS RELATED TO THE SUBJECT. Mr. Mike Hodge, Assistant City Manager. Councilmember Saboe made the motion, seconded by Mayor Pro -Tem Sherman, to approve Ordinance No. 2000M-72 on its first reading. Mayor Reid read into the record the Planning & Zoning Commission's recommendation to forward to Council for approval of Application No. 2010-03Z. City Manager Bill Eisen stated this item is a request for a zoning change from the current zoning of Planned Development to General Business retail to accommodate a fine arts studio. Staff and the Planning and Zoning Commission have recommended the request be approved. Page 4 of 16 — 9/10/2010 Connie McMaster, 2614 Thelma Drive, addressed Council and stated she has no objection to the music studio being established, but she does have an objection to the location being zoned as General Business. If the business moves out, there are too many unfavorable businesses that can locate on the property with that zoning classification. If the property is left at the current zoning, would the next owner be required to obtain the approval of the Planning and Zoning Commission for any use. Bettye Olsteen, 2550 Thelma Drive, addressed Council and stated she is concerned that the residents aren't being governed well enough to monitor what the property may be used for in the future. The proposed fine arts studio would be an asset if the business succeeds. There are businesses that can potentially be located on the property that will not be good for the surrounding residents. Johnny Aguara, 2626 Thelma Drive, addressed Council and stated he agrees with the previous statements and would like the businesses that could be located on the property to be monitored and approved by the City. Mayor Pro -Tem Sherman asked for an explanation of why the decision was made to not follow the planned development route. It was his understanding that the City would have some control over what happens next and he is not sure why this did not occur. Planning Director Lata Krishnarao stated when the property was zoned planned development, there were not sufficient buffers and other requirements between residential and retail properties. There were certain issues associated with the zoning at that time. This property was determined to be appropriate for a retail zoning classification. Discussion ensued between Council, Planning Director Lata Krishnarao, and Planner I Ian Clowes regarding the Ordinance. Councilmember Saboe made the motion, seconded by Councilmember Thompson, to call the question. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. Mayor Reid called for the vote. Voting "Aye" Councilmember Owens. Voting "No" Councilmembers Thompson, Kyle, Sherman, and Saboe. Page 5 of 16 — 9/10/2010 Motion Failed 4 to 1. FIRST AND ONLY READING OF ORDINANCE NO. 1431 — AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT REFUNDING BONDS, SERIES 201013; PRESCRIBING THE TERMS AND FORM THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS THEREOF, AUTHORIZING THE DEFEASANCE AND DISCHARGE OF CERTAIN OUTSTANDING OBLIGATIONS, AND MATTERS INCIDENT THERETO; AND DECLARING AN EMERGENCY. Mr. Bill Eisen, City Manager. Mayor Pro -Tem Sherman made the motion, seconded by Councilmember Saboe, to approve Ordinance No. 1431 on its first reading. Frank Ildebrando, RBC Capital Markets, provided Council with a detailed review of the proposed bond sales. City Manager Bill Eisen stated the City's existing credit rating is an AA- rating. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. FIRST AND ONLY READING OF ORDINANCE NO. 1430 — AN ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS PERMANENT IMPROVEMENT BONDS, SERIES 2010A; PRESCRIBING THE TERMS AND FORM THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH BONDS, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT THERETO; AND DECLARING AN EMERGENCY. Mr. Bill Eisen, City Manager. Councilmember Kyle made the motion, seconded by Councilmember Thompson, to approve Ordinance No. 1430 on its first reading. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. Page 6 of 16 — 9/10/2010 FIRST READING OF ORDINANCE NO. 1427 — AN ORDINANCE EXTENDING THE CITY LIMITS OF THE CITY OF PEARLAND, TEXAS, TO INCLUDE ALL LAND AREA WITHIN CERTAIN LIMITS AND BOUNDARIES AND ANNEXING TO THE CITY OF PEARLAND ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES (126 ACRES OF LAND, MORE OR LESS, NORTH OF BAILEY ROAD AND EAST OF FM1128 — AREA 1); APPROVING A SERVICE PLAN FOR ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES; CONTAINING OTHER PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING A SAVINGS AND SEVERABILITY CLAUSE. Mr. Mike Hodge, Assistant City Manager. Councilmember Thompson made the motion, seconded by Councilmember Saboe, to approve Ordinance No. 1427 on its first reading. City Manager Bill Eisen stated this Ordinance is for the annexation of Area No. 1. This annexation has been the topic of discussions for several months. Robin Anderson, 7730 Bailey Road, addressed Council and stated she noticed in the proposed budget discussion that there were nine vacancies in the Police Department and several positions were not going to be filled. She stated if the City is planning to annex more land, those positions will be necessary to adequately serve those areas. Ron Anderson, 7730 Bailey Road, addressed Council and stated the residents of the area being annexed have been shown by the City that it is going to do whatever it wants to do no matter how they feel about it. The children in the area that he lives in want to raise live stock and use these skills throughout their lives. He likes to raise cattle and ride horse and so does his entire family and now the City wants to take that away from them. This will only bring taxes to the City to the detriment of the residents in the area. The annexation of the area is not right and it needs to be reconsidered. This is not an annexation, but a hostile take-over. Debbie Kirby, 3610 Curtiss Lane, addressed Council and stated she is opposed to the annexation of Area No. 1. She stated she has contacted many representatives of the City and received no response. People from other cities have advised her that if a City is annexing an area in this manner, it is not about anything except money. She moved to her residence when Pearland had 17,000 residents and the increase in population has not done nothing but raise the crime rate. She wishes that the City would reconsider this annexation. Bruce Kirby, 3610 Curtis Lane, addressed Council and stated he would like the City to reconsider annexing the area where he resides. There are no benefits to the residents in the area and they have not been able to get answers regarding the future plans for their property. Page 7 of 16 — 9/10/2010 Councilmember Owens stated he can understand how the residents feel and their concern. Many of the complaints have been that the residents do not receive anything from the City; however, the City will provide EMS and Fire Emergency service. He stated he feels the City will be able to provide many benefits to the residents in the area. Councilmember Saboe stated he is sympathetic to the residents who have spoken out in opposition to this annexation. He does not see there being a solution to the problem because the City and the residents see the situation differently. He fundamentally believes that everyone in the area will receive a benefit whether they choose to utilize it or not. He stated he does not agree that the City will be taking away any rights to residents in the area and views zoning as a positive system. Councilmember Thompson stated he does not have a problem with the proposed annexation; however, one thing that concerns him is the zoning issue. He stated he would feel more comfortable if the zoning issues were addressed before the annexation process. When the residents bought their property it wasn't zoned and now the City will bring it in and control what it can be used for and he doesn't feel this is right. Mayor Pro -Tem Sherman stated he is concerned about coming in and telling the residents what they can do in their backyard. He would not be opposed to having some type of analysis done to better classify the properties. City Attorney Darrin Coker stated the concern regarding livestock is not addressed by zoning, but is address in a separate City Ordinance. Discussion ensued between Council and City Attorney Darrin Coker regarding the Ordinance. Councilmember Kyle stated Council has invited Citizens to come speak because they need to hear from them. We may not see eye to eye, but it doesn't mean a compromise can't be reached. The Bailey Corridor is growing and the City is investing a large sum of money and has to consider the position of the rest of the citizens. Voting "Aye" Councilmembers Owens, Saboe, and Kyle. Voting "No" Councilmembers Thompson and Sherman. Motion Passed 3 to 2. Page 8 of 16 — 9/10/2010 FIRST READING OF ORDINANCE NO. 1428 — AN ORDINANCE EXTENDING THE CITY LIMITS OF THE CITY OF PEARLAND, TEXAS, TO INCLUDE ALL LAND AREA WITHIN CERTAIN LIMITS AND BOUNDARIES AND ANNEXING TO THE CITY OF PEARLAND ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES (189 ACRES OF LAND, MORE OR LESS SOUTH OF BAILEY ROAD BETWEEN VETERANS DRIVE AND FM 1128 — AREA 2); APPROVING A SERVICE PLAN FOR ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES; CONTAINING OTHER PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING A SAVINGS AND SEVERABILITY CLAUSE. Mr. Mike Hodge, Assistant City Manager. Councilmember Owens made the motion, seconded by Councilmember Saboe, to approve Ordinance No. 1428 on its first reading. City Manager Bill Eisen stated this item is a proposed annexation of Area No. 2 that is located south of Bailey Road between FM 1128 and Veterans Drive. Voting "Aye" Councilmembers Owens, Saboe, and Kyle. Voting "No" Councilmembers Thompson and Sherman. Motion Passed 3 to 2. FIRST READING OF ORDINANCE NO. 1429 — AN ORDINANCE EXTENDING THE CITY LIMITS OF THE CITY OF PEARLAND, TEXAS, TO INCLUDE ALL LAND AREA WITHIN CERTAIN LIMITS AND BOUNDARIES AND ANNEXING TO THE CITY OF PEARLAND ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES (307 ACRES MORE OR LESS WEST OF SH 288 BETWEEN BROADWAY AND MUSTANG BAYOU — AREAS 3 AND 4); APPROVING A SERVICE PLAN FOR ALL OF THE AREA WITHIN SUCH LIMITS AND BOUNDARIES; CONTAINING OTHER PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING A SAVINGS AND SEVERABILITY CLAUSE. Mr. Mike Hodge, Assistant City Manager. Councilmember Saboe made the motion, seconded by Councilmember Owens, to approve Ordinance No. 1429 on its first reading. City Manager Bill Eisen stated this item is for the annexation of Areas No. 3 and No. 4 that are located in the general vicinity of C.R. 48 south of Broadway. Voting "Aye" Councilmembers Owens, Saboe, and Kyle. Voting "No" Councilmembers Thompson and Sherman. Voting "No" None. Page 9 of 16 — 9/10/2010 Motion Passed 3 to 2. FIRST READING OF ORDINANCE NO. 1432 — AN APPROPRIATION ORDINANCE ADOPTING A REVISED BUDGET FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010 AND ADOPTING A BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2010, AND ENDING SEPTEMBER 30, 2011. Mr. Bill Eisen, City Manager. Mayor Pro -Tem Sherman made the motion, seconded by Councilmember Saboe, to approve Ordinance No. 1432 on its first reading. City Manager Bill Eisen stated Council has conducted five Workshops and two Public Hearings regarding the proposed Fiscal Year 2011 Budget. This item is to approve the Ordinance that will adopt the final Budget. Councilmember Kyle stated she has not made a decision on whether to support the fire service fees previously discussed because the information exchange was less than perfect. She would like to be clear on that issue so that when and if the Ordinance for the fire fees comes to Council, she has planted the seed that she may or may not support it. She cannot take that item out of the proposed Budget at this point; however, she would like to clarify that if she votes in favor of the budget the vote is not in favor of that particular item. Councilmember Kyle made the motion, seconded by Mayor Pro -Tem Sherman, to amend the Ordinance No. 1432 to remove the funding of $210,000 for the Northern Brazoria County Education Alliance from the Pearland Economic Development Budget. Voting "Aye" Councilmembers Sherman and Kyle. Voting "No" Councilmembers Thompson, Saboe, and Owens. Motion Failed 3 to 2. Mayor Reid called for the vote on the original motion. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. Page 10 of 16 — 9/10/2010 FIRST READING OF ORDINANCE NO. 1433 — AN ORDINANCE ADOPTING A TAX RATE OF $0.6651 AND LEVYING TAXES FOR THE USE AND SUPPORT OF THE MUNICIPAL GOVERNMENT OF THE CITY OF PEARLAND, TEXAS, AND PROVIDING FOR THE INTEREST AND SINKING FUND OF THE TAXABLE YEAR 2010. Mr. Bill Eisen, City Manager. Councilmember Kyle made the motion, seconded by Councilmember Owens, to approve Ordinance No. 1433 on its first reading. City Manager Bill Eisen stated this Ordinance will adopt a tax rate of $0.6551/$100. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. COUNCIL ACTION — RESOLUTION NO. R2010-117 — RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS SUPPORTING THE CERTIFICATION OF A MUNICIPAL SETTING DESIGNATION AT 6712 TELEAN STREET, HOUSTON, HARRIS COUNTY, TEXAS. Mr. Darrin Coker, City Attorney. Councilmember Thompson made the motion, seconded by Mayor Pro -Tem Sherman, to approve Resolution No. R2010-117. City Attorney Darrin Coker stated a Workshop was recently held regarding the Municipal Setting Designation. An update of the status of the Resolutions of other entities has also been provided to Council. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. COUNCIL ACTION — RESOLUTION NO. R2010-121 — A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AWARDING A BID FOR CONSTRUCTION SERVICES ASSOCIATED WITH THE MCHARD ROAD SOUND WALL PROJECT. Mr. Trent Epperson, Project Director. Councilmember Owens made the motion, seconded by Councilmember Saboe, to approve Resolution No. R2010-121. Page 11 of 16 — 9/10/2010 City Manager Bill Eisen stated this item is for the award of a bid for the McHard Road Sound Wall Project. Sound studies were completed that indicated in certain locations sound walls were warranted. The low bid was submitted by John Reed and Company, Ltd. in the amount of $934,242. Brazoria County will fund $575,906 of that amount. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. FIRST READING OF ORDINANCE NO. 1358-5 — AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AMENDING NON -DEVELOPMENT USAGE AND SERVICE FEES; CONTAINING A SAVINGS CLAUSE, A SEVERABILITY CLAUSE AND A REPEALER CLAUSE; PROVIDING FOR PUBLICATION AND AN EFFECTIVE DATE. Mr. Bill Eisen, City Manager. Councilmember Saboe made the motion, seconded by Mayor Pro -Tem Sherman, to approve Ordinance No. 1358-5 on its first reading. City Manager Bill Eisen stated the City has an Ordinance which prescribes various fees that are provided. The changes needed are a result of changes in the proposed Budget. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. COUNCIL ACTION — RESOLUTION NO. R2010-120 — A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AWARDING A BID FOR CONSTRUCTION SERVICES ASSOCIATED WITH THE INTERIM TRAFFIC SIGNAL LOCATED AT MYKAWA ROAD AND BROOKSIDE ROAD. Mr. Bill Eisen, City Manager. Mayor Pro -Tem Sherman made the motion, seconded by Councilmember Kyle, to approve Resolution No. R2010-120. City Manager Bill Eisen stated a study was completed that determined that a signal was warranted at the intersection of MyKawa Road and Brookside Road. This item is for the temporary installation of an interim traffic light in that location. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Page 12 of 16 — 9/10/2010 Voting "No" None. Motion Passed 5 to 0. COUNCIL ACTION — RESOLUTION NO. R2010-119 — A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS RATIFYING EXPENDITURES FOR REPAIRS AND REPLACEMENT PARTS ASSOCIATED WITH THE CITY'S WATER METER TESTING PROGRAM. Mr. Bill Eisen, City Manager. Councilmember Kyle made the motion, seconded by Councilmember Saboe, to approve Resolution No. R2010-119. City Manager Bill Eisen stated the City had entered into an agreement to test large water meters within the City and, as a result of those tests, it was noted that many of the water meters were reading inaccurately. The necessary repairs were completed and the expenses exceeded the amount that could be expended without Council approval. This Resolution is to ratify the expenditures associated with those repairs. Councilmember Saboe asked if the possibility was considered when the firm was asked to perform the testing. Utility Billing Supervisor Margaret McNulty stated that at that time, the magnitude of meters needing to be repaired was not realized. The Public Works Department was not going to be able to get to the repairs of these meters right away. Because of the financial impact, the firm that performed the testing was utilized to perform the repairs. Discussion ensued between Council and Utility Billing Supervisor Margaret McNulty regarding the Resolution. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. COUNCIL ACTION — RESOLUTION NO. R2010-118 — A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING PARTICIPATION WITH THE TEXAS ASSOCIATION OF SCHOOL BOARDS (TASB) FOR THE PURCHASE OF COPIER SERVICES. Mr. Bill Eisen, City Manager. Councilmember Thompson made the motion, seconded by Councilmember Saboe, to approve Resolution No. R2010-118. Page 13 of 16 — 9/10/2010 City Manager Bill Eisen stated this item would replace the existing copiers, within the City, to take advantage of an $8,700 savings. Councilmember Saboe asked if there was a local option to provide this service and stated, with the current economic conditions, the City needs to utilize local businesses whenever possible. Purchasing Officer Bob Pearce stated, with service requirements of this size, there are typically not local options. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. FIRST READING OF ORDINANCE NO. 33-1 — AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AMENDING CHAPTER 20, OFFENSES AND MISCELLANEOUS PROVISIONS, OF THE CITY OF PEARLAND CODE OF ORDINANCES, AS IT MAY HAVE BEEN, FROM TIME TO TIME, AMENDED, TO AMEND SECTION 20-4, ENTITLED DISCHARGE OF WEAPONS; PROVIDING A PENALTY; HAVING A SAVINGS CLAUSE, A SEVERABILITY CLAUSE, AND A REPEALER CLAUSE; AND PROVIDING FOR CODIFICATION AND AN EFFECTIVE DATE. Mr. Darrin Coker, City Attorney. Councilmember Owens made the motion, seconded by Councilmember Saboe, to approve Ordinance No. 33-1 on its first reading. City Attorney Darrin Coker stated this Ordinance will amend the Fire Arms Ordinance to allow in -door firing ranges within the allowances of the Unified Development Code and zoning restrictions. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. OTHER BUSINESS: Council adjourned into Executive Session under Texas Government Code at 10:20 p.m. to discuss the following: Page 14 of 16 — 9/10/2010 EXECUTIVE SESSION UNDER TEXAS GOVERNMENT CODE 1. SECTION 551.071 - CONSULTATION WITH CITY ATTORNEY - REGARDING INFORMATION SUBJECT TO THE ATTORNEY CLIENT PRIVILEGE REGARDING ECONOMIC DEVELOPMENT. Mr. Darrin Coker, City Attorney. NEW BUSINESS (CONTINUED): Council returned from Executive Session at 11:54 p.m. COUNCIL ACTION — REGARDING INFORMATION SUBJECT TO THE ATTORNEY CLIENT PRIVILEGE REGARDING ECONOMIC DEVELOPMENT. City Council. FIRST READING OF ORDINANCE NO. 1432 — AN APPROPRIATION ORDINANCE ADOPTING A REVISED BUDGET FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010 AND ADOPTING A BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2010, AND ENDING SEPTEMBER 30, 2011. Mr. Bill Eisen, City Manager. Councilmember Kyle made the motion, seconded by Mayor Pro -Tem Sherman, to place Ordinance No. 1432 back on the table for Council's consideration. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. Councilmember Kyle made the motion, seconded by Mayor Pro -Tem Sherman, to amend the Ordinance and remove the funding of $210,000 for the Northern Brazoria County Education Alliance from the Pearland Economic Development Budget. Voting "Aye" Councilmembers Thompson, Kyle, Sherman, Saboe, and Owens. Voting "No" None. Motion Passed 5 to 0. FIRST READING OF ORDINANCE NO. 1432 — AN APPROPRIATION ORDINANCE ADOPTING A REVISED BUDGET FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2010 AND ADOPTING A BUDGET FOR THE FISCAL YEAR BEGINNING OCTOBER 1, 2010, AND ENDING SEPTEMBER 30, 2011. Mr. Bill Eisen, City Manager. Page 15 of 16 — 9/10/2010 Councilmember Kyle made the motion, seconded by Mayor Pro -Tem Sherman, approve the 2010-2011 Budget as amended. Voting "Aye" Councilmembers Owens, Saboe, Sherman, Kyle, and Thompson. Voting "No" None. Motion Passed 5 to 0. ADJOURNMENT Meeting was adjourned at 11:54 p.m. Minutes approved as submitted and/or corrected this the 27th day of September, A.D., 2010. C-IVULIJ Tom Reid Mayor ATTEST: Page 16 of 16 — 9/10/2010