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Ord. 1114 06-02-03ORDINANCE NO. 1114 AN ORDINANCE AUTHORIZING THE PURCHASE OF A SURETY RESERVE FUND POLICY; AND ENACTING OTHER PROVISIONS RELATING 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. It is hereby officially found and determined that: (a) Pursuant to the provisions of Ordinance No. 930, as amended (the "Bond Ordinance"), the City of Pearland, Texas (the "City") has previously issued its Water and Sewer System Adjustable Rate Revenue Bonds, Series 1999 (the "Series 1999 Bonds"). (b) Pursuant to Section 5.7 of the Bond Ordinance, the City is authorized to substitute a Surety Policy or Policies issued in amounts equal to all or part of the Average Annual Principal and Interest Requirements on the Series 1999 Bonds in lieu of depositing cash into the Reserve Fund. (c) The Bond Ordinance provides that no such substitution shall occur without (i) a finding that such substitution is cost effective and (ii) receipt of an opinion of nationally recognized bond counsel that such substitution is permitted by applicable Texas law. (d) The City Council has been presented with evidence that the substitution of a Surety Policy issued in an amount equal to the Average Annual Principal and Interest Requirements will provide an economic benefit to the City and the City Council therefore finds that such substitution is cost effective. (e) The City will obtain an opinion of nationally recognized bond counsel (attached as Exhibit A hereto) that the substitution of a Surety Policy herein authorized is permitted by applicable Texas law. ARTICLE II DEFINITIONS AND INTERPRETATIONS Section 2.1 Definitions. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Bond Ordinance. HOU:2155166.1 Section 2.2 Interpretations. All terms defined herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions hereof. This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein. ARTICLE III SURETY POLICY Section 3.1 Substitution of Surety Policy. Upon satisfying the requirements of Section 5.7 of the Bond Ordinance described in Article I hereto, the purchase of one or more Surety Policies issued by Ambac Assurance Corporation substantially in the form attached hereto as Exhibit B in an aggregate amount equal to the Average Annual Principal and Interest Requirements on the Series 1999 Bonds is hereby authorized. Such policy or policies, as the case may be, shall be deposited into the Reserve Fund immediately upon receipt by the City. Section 3.2 Disposition of Funds on Deposit in the Reserve Fund. Upon the deposit of the Surety Policy to the Reserve Fund, the amount on deposit in the Reserve Fund will exceed the Average Annual Principal and Interest Requirements on all Series 1999 Bonds by an amount equal to the amount of funds on deposit in the Reserve Fund immediately preceding the deposit of the Surety Policy. Therefore, pursuant to Section 5.7 of the Bond Ordinance, the funds currently on deposit in the Reserve Fund shall be transferred to the Interest and Sinking Fund established for the payment of the Series 1999 Bonds; provided however, that any such transfer of funds from the Reserve Fund shall be limited to the extent necessary to maintain in the Reserve Fund a fund balance that, when aggregated with the insured amount under the Surety Policy, is not less than the Average Annual Principal and Interest Requirements on all Series 1999 Bonds. ARTICLE IV MISCELLANEOUS Section 4.1 Further Proceedings and Related Matters. The Mayor, the City Secretary and other appropriate officers and agents of the City are hereby authorized and directed to do any and all things necessary and/or convenient and to take all other actions that are reasonably necessary to carry out the terms of this Ordinance, including executing by manual or facsimile signature and delivering on behalf of the City all certificates, consents, receipts, requests, notices, investment agreements 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. The Mayor may authorize such ministerial changes in the written text of this Ordinance as are necessary to consummate the substitution of the Surety Policy authorized hereby and as he determines are consistent with the intent and purposes of this Ordinance, which determination shall be final. 2 HOU:2155166.1 EXHIBIT A OPINION OF BOND COUNSEL HOU:2155166.1 EXHIBIT B FORM OF SURETY POLICY HOU:2155166.1 Section 4.2 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 4.3 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 convenient and readily accessible at all times to the general public at the City Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended, 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 4.4 Declaration of Emergency. It is hereby officially found and determined that a case of emergency affecting life, health, property and the public peace exists which requires the holding of the meeting at which this Ordinance is passed and further 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 purchase of the Surety Policy authorized herein and the substitution thereof for the funds on deposit in the Reserve Fund is required as soon as possible and without delay for the purposes set forth herein. Section 4.5 Repealer. All ordinances, or parts thereof inconsistent herewith, are hereby repealed to the extent of such inconsistency. PASSED AND APPROVED THIS 2nd day of June ATTEST: 3 HOU:2155166.1