Ord. 1325 2007-08-06
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CITY OF PEARLAND
ORDINANCE NO. 1325
ORDINANCE AUTHORIZING AMENDMENT OF ORDINANCE
AUTHORIZING THE ISSUANCE OF CITY OF PEARLAND, TEXAS
ADJUSTABLE RATE REVENUE BONDS, SERIES 1999; AUTHORIZING
AMENDMENT OF A STANDBY BOND PURCHASE AGREEMENT
ENTERED IN CONNECTION WITH SUCH BONDS; PROVIDING FOR THE
CONVERSION TO FIXED RATE OF CERTAIN OF SUCH BONDS;
AUTHORIZING AND RATIFYING CERTAIN ACTIONS OF AUTHORIZED
REPRESENTATIVES OF THE CITY WITH REGARD TO SUCH
CONVERSION; AND ENACTING OTHER PROVISIONS RELATING
THERETO; AND DECLARING AN EMERGENCY
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND,
(, TEXAS:
Section 1.
Findings and Determinations.
(a) Pursuant to Chapter 1502, Texas Government Code, and an ordinance adopted by
the City Council (the "City Council") of the City of Pearland, Texas (the "City") adopted on
October 11, 1999 (the "Bond Ordinance"), the City Council of the City authorized the issuance
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of the City's Water and Sewer System Adjustable Rate Revenue Bonds, Series 1999 (the "Series
c, 1999 Bonds");
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(b) Series 1999 Bonds maturing September 1, 2020 in the principal amount of
$3,395,000 currently bear interest pursuant to the Bond Ordinance at a Long Rate whose term is
scheduled to expire on September 1, 2007 (as September 1, 2007, is a Saturday such expiration
will occur on the next business day of September 4, 2007) (the "Conversion Bonds");
(c) Series 1999 Bonds in the principal amount of $3,390,000 currently bear interest
pursuant to the Bond Ordinance at a Long Rate whose term is scheduled to expire on September
1, 2009 (the "Unconverted Bonds");
(d) The City has determined that it is in the City's best interest to convert the
Conversion Bonds on September 4, 2007 from the Long Rate to a Fixed Rate (the "Fixed Rate
Bonds");
(e) In connecrion with the conversion of the Conversion Bonds to a Fixed Rate, the
City desires to amend the Bond Ordinance to facilitate such conversion and the City also desires
to amend the Standby Bond Purchase Agreement between the City and Bank of America, N.A.
(the "Standby Bond Purchase Agreement") entered in connection with the issuance of the Series
1999 Bonds pursuant to the authority of the Bond Ordinance and the Standby Bond Purchase
Agreement in order to facilitate such conversion;
(f) The amendments to the Bond Ordinance and the Standby Bond Purchase
Agreement authorized herein shall become effective as provided herein, subject to the City's
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11\ receipt of the written consents (the "Consents") to the amendment of the Bond Ordinance by the
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owner of 100% of the outstanding Series 1999 Bonds and the amendment of the Standby Bond
.. Purchase Agreement by the Bank (as defined in the Bond Ordinance); and
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(g) Pursuant to the Bond Ordinance, as amended herein, and a Commitment Letter
dated August 6, 2007 (the "Commitment Letter") between the City and Banc of America Public
Capital Corp (the "Purchaser"), the Remarketing Agent has determined, and the City Council
desires to confirm and approve, the Fixed Rates that will be applicable to the Fixed Rate Bonds
upon converSIOn.
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Section 2. Definitions. Terms not other:wise defined in this Ordinance shall have the
same meanings set forth in the Bond Ordinance.
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Section 3. Amendment of Bond Ordinance. Pursuant to the findings and
determinations of the City Council set forth in Section 1 of this Ordinance and subject to the
City's receipt of the Consents, the City Council hereby authorizes, approves and directs that
Section 3.6(c) of the Bond Ordinance shall be amended to read as follows:
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"(c) The Series 1999 Bonds, while bearing interest at the Fixed Rate,
will be subj ect to optional redemption by the City prior to their scheduled
maturity date in whole or in part (but if in part in the principal amount of
$5,000 or in integral multiples thereof), on the date or dates determined by
the Remarketing Agent and acceptable to the City at the time of the
conversion to a Fixed Rate of the Series 1999 Bonds or any portion of the
Series 1999 Bonds, at a redemption price equal to the principal amount of
the Series 1999 Bonds being redeemed plus interest accrued to the date of
redemption; provided, however, optional redemption prior to maturity can
occur only on a date following a no-call period which shall commence on
the Conversion Date and end one year thereafter."
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,J Pursuant to the findings and determinations of the City Council set forth in Section 1 of
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.this Ordinance and subject to the City's receipt of the Consents, the City Council hereby
~&thorizes, approves and directs that the first paragraph of Section 3.12 of the Bond Ordinance
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shall be amended to read as follows:
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The Series 1999 Bonds are subject to conversion from any Long Rate to a
Fixed Rate at the election of the City, upon the approval of the City
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. Council, as provided herein. The City may elect to convert all or only a
portion (b~t if in part in principal amounts of $5,000 or in integral
multiples thereof) of the Series 1999 Bonds to a Fixed Rate. The City may
exercise the option to convert from a Long Rate to a Fixed Rate by
notifying the Paying AgentJRegistrar and the Remarketing Agent of (i) its
election to convert to a Fixed Rate and the principal amount of Series 1999
Bonds to be converted and (ii) the Conversion Date, which date shall be
not less than thirty-five (35) days from the date of such notice. In
connection with such conversion to a Fixed Rate, the City shall deliver to
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the Owners, the Remarketing Agent, and the Paying AgentlRegistrar an
opinion of nationally recognized bond counsel to the effect that the
conversion of the interest rate on the Series 1999 Bonds as requested is
authorized and permitted by the Act and will not have an adverse effect on
the exclusion from gross income for federal income tax purposes of
interest payable on the Series 1999 Bonds.
Section 4. Amendment of Standby Bond Purchase Agreement. Pursuant to the
applicable provisions of the Standby Bond Purchase Agreement, the City hereby authorizes and
approves the amendment to the Standby Bond Purchase Agreement in the form substantially
provided as Exhibit A hereto. The.Mayor and other appropriate officials of the City are hereby
authorized and directed to execute the amendment to the Standby Bond Purchase Agreement on
behalf of the City, and the Mayor 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
forth herein and in the Bond Ordinance and the Standby Bond Purchase Agreement in order to
provide for this amendment to the Standby Bond Purchase Agreement.
Section 5. Conversion to Fixed Rate. Pursuant to Section 3.12 of the Bond
Ordinance, as amended, and subject to the provisions ofthis Ordinance, Series 1999 Bonds in the
principal amount of $3,395,000, representing those Series 1999 Bonds currently outstanding and
paying interest at the Long Rate scheduled to expire on September 1, 2007, shall be converted to
Fixed Rate. As September 1, 2007 is a Saturday, the Conversion Date for the Fixed Rate Bonds
shall be September 4, 2007, the first business day following September 1, 2007. The Fixed Rate
Bonds shall be issued as one registered bond initially numbered "Conversion R -1", shall be in the
principal amount of$3,395,000, and shall mature on September 1,2020. The Fixed Rate Bonds
shall bear interest at the rate of 4.41 percent per annum calculated on the basis of a 360-day year,
composed of twelve 30-day months, from the date of the most recent Interest Payment Date to
which interest has been paid or duly provided for.
The Fixed Rate Bonds shall be subject to scheduled mandatory sinking fund redemption,
in whole or in part (at a redemption price equal to the principal amount thereof and any accrued
interest thereon to the date set for redemption), on September 1 in each of the years and in the
amounts set forth below:
Year Amount
2008 $100,000
2009 110,000
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.i 2010 110,000
2011 115,000
2012 120,000
2013 125,000
2014 130,000
2015 140,000
2016 140,000
2017 540,000
2018 560,000
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2019 590,000
2020 615,000
As determined by the Remarketing Agent and as hereby approved and accepted by the
City, the City further reserves the right to redeem prior to maturity the Fixed Rate Bonds, in
whole or in part (but if in part in the principal amount of $5,000 or any integral multiple thereof),
on September 1, 2008, or on any date thereafter, at a price equal to par plus accrued interest to
the date of redemption.
Section 6. Sale of Fixed Rate Bonds to Purchaser. Pursuant to the Commitment
Letter, the Purchaser. has agreed to purchase the Fixed Rate Bonds onJhe Conversion Date, at the
par value thereof, with such Fixed Rate Bonds bearing interest at the rate set forth in Section 5
hereof. The Commitment Letter, a copy of which is attached hereto as Exhibit B, is hereby
approved and confirmed by the City and the Mayor and appropriate officials of the City are
authorized and directed to execute the Commitment Letter on behalf of the City and are hereby
authorized to do any and all things necessary or required to perform the obligations of the City
under the Commitment Letter.
Section 7. Form of Fixed Rate Bonds; Delivery to Owners. Definitive Fixed
Rate Bonds shall be prepared in appropriate principal amounts and delivered to the Paying
Agent/Registrar for distribution to the Purchaser of the Fixed Rate Bonds pursuant to this
Ordinance and the Bond Ordinance. Upon the Conversion Date, the Paying Agent/Registrar
shall authenticate and deliver to the Purchaser, a Fixed Rate Bond or Fixed Rate Bonds, as
applicable, substantially in the form set forth as Exhibit C hereto.
Section 8. Additional Actions Authorized; Prior Actions Ratified. The Mayor,
City Secretary, City Manager, Director of Finance and all other appropriate officers, agents and
representatives of the City are hereby authorized and directed to take all other actions that are
necessary to provide for the amendment of the Bond Ordinance, the amendment of the Standby
Bond Purchase Agreement and the conversion of Conversion Bonds to Fixed Rate as
contemplated by this Ordinance, including, without limitation, the employment of appropriate
consultants and advisors and the execution and delivery on behalf of the City of all agreements,
certificates, consents, waivers, receipts, notices, requests and other documents (in connection
with both the Conversion Bonds and the Unconverted Bonds) as may be reasonably necessary to
carry out the actions contemplated by this Ordinance. The actions of the Mayor, City Secretary,
City Manager, Director of Finance and all other appropriate officers, agents and representatives
taken prior to. the date ofi this Ordinance to accomplish the conversion of Conversion Bonds to
Fixed Rate, are hereby ratified, confirmed and approved. .
Section 9. Open Meeting. It is hereby officially found and determined that the
meeting at which this Ordinance was adopted was open to the public, and public notice of the
time, place and purpose of the meeting was given, all as required by the Texas Open Meetings
Act.
Section 10. Effective Date. This Ordinance shall be in full force and effect from and
upon its adoption. The amendment authorized hereby shall be effective as of September 4, 2007
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(subject to the City's receipt of the Consents not later than September 4,2007).
Section 11. 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 12. Declaration of Emergency. It is hereby officially found and determined
that this Ordinance relates to an immediate public emergency affecting life, health, property and
public peace, and that such emergency exists, the specific emergency being that the proceeds
from the sale of the Conversion Bonds are required as soon as possible for the repayment of the
origi~al owners of such Conversion Bonds and for the" continued financial well being of the City,
and that this Ordinance be passed and approved on the date of its introduction.
[signature page follows]
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Section 13. Repealer. All orders, resolutions and ordinances, or parts thereof,
inconsistent herewith are hereby repealed to the extent of such inconsistency.
PASSpD AND APPROVED on first reading pursuant to Section 3.10 of the City Charter
this August k'> 2007. f0
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Mayor, City of Pearl and, Texas
ATTEST:
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Exhibit A - Form of Amendment to Standby Bond Purchase Agreement
Exhibit B - Commitment Letter
Exhibit C - Form of Conversion Bond
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HOU:2716377.3