Ord. 1365 2009-01-26CITY OF PEARLAND, TEXAS
WATER AND SEWER SYSTEM REVENUE BONDS
SERIES 2009
ORDINANCE NO. 1365
HOU 28>9987.6
TABLE OF CONTENTS
Page
ARTICLE I FINDINGS AND DETERMINAhIONS .......................................................... ...........1
Section 1.1. Findings and Dete-nlinations .................................................................... ...........1
ARTICLE II DEFINITIONS AND INTERPRETATIONS ................................................. ...........1
Section 2.1. Definitions ................................................................................................ ...........1
Section 2.2. Inte-pretations ........................................................................................... ...........5
ARTICLE III TERMS OF THE SERIES 2009 BONDS ...................................................... ...........5
Section 3.1. Name, Amount, Purpose, Authorization .................................................. ...........5
Section 3.2. Numbers, Date and Denomination ........................................................... ...........5
Section 3.3. Interest Payment Dates, Interest Rates and Maturities ............................. ...........5
Section 3.4. Redemption Prior to Maturity .................................................................. ...........6
Section 3.5. Manner of Payment, Characteristics, Execution and Authentication ....... ...........7
Section 3.6. Approval by Attorney General; Registration by Comptroller .................. ...........8
Section 3.7. Authentication .......................................................................................... ...........8
Section 3.8. Special Record Date ................................................................................. ...........8
Section 3.9. Ownership ................................................................................................ ...........8
Section 3.10. Book-Entry Only System ......................................................................... ...........9
Section 3.11. Payments and Notices to Cede & Co ....................................................... ...........9
Section 3.12. Successor Securities Depository; Transfer Outside Book-Entry Only
System ...................................................................................................... .........10
Section 3.13. Registration, Transfer, and Exchange ...................................................... .........10
Section 3.14. Cancellation of Series 2009 Bonds .......................................................... .........11
Section 3.15. Mutilated, Lost, or Stolen Series 2009 Bonds .......................................... .........ll
ARTICLE IV FORM OF SERIES 2009 BONDS AND CERTIFICATES .......................... .........12
Section 4.1. Forms ........................................................................................................ .........12
Section 4.2. Legal Opinion; CUSIP Numbers .............................................................. .........12
ARTICLE V SECURITY AND SOURCE OF PAYMENT FOR THE BONDS ................ .........12
Section 5.1. Pledge and Source of Payment ................................................................. ..........12
Section 5.2. Rates and Charges .................................................................................... .........13
Section 5.3. Special Funds ........................................................................................... .........13
Section 5.4. Flow of Funds ........................................................................................... .........13
Section 5.5. Interest and Sinking Fund ......................................................................... .........14
Section 5.6. Reserve Fund ............................................................................................ .........15
Section 5.7. Deficiencies in Funds ............................................................................... .........16
Section 5.8. Investment of Funds; Transfer of Invesment Income ............................. .........16
Section 5.9. Security for Uninvested Funds ................................................................. .........17
ARTICLE VI ADDITIONAL BONDS ................................................................................ .........17
Section 6.1. Additional Bonds ...................................................................................... .........17
Section 6.2. Subordinate Lien Obligations ................................................................... .........18
Section 6.3. Special Project Bonds ............................................................................... .........18
i
HOU28~9987.6
ARTICLE V11 COVENANTS AND PROVISIONS RELATING TO BONDS ...........................19
Section 7.1. Punctual Payment of Bonds ................................................................. .............19
Section 7.2. Power to Own and Operate System; Ratemaking Power ..................... .............19
Section 7.3. Maintenance of System ........................................................................ .............19
Section 7.4. Sale or Encumbrance of System ........................................................... .............19
Section 7.5. Insurance .............................................................................................. .............19
Section 7.6. Accounts, Records and Audits ............................................................. .............20
Section 7.7. Competition .......................................................................................... .............20
Section 7.8. Pledge and Encumbrance of Net Revenues .......................................... .............20
Section 7.9. Covenants with Respect to Certai~l Assumed Water District Bonds .... .............20
Section 7.10. Registered Owners' Rights and Remedies ........................................... .............21
Section 7.11. Defeasance .......................................:.................................................... .............21
Section 7.12. Legal Holidays ..................................................................................... .............22
Section 7.13. Unavailability of Authorized Publication ............................................. .............22
Section 7.14. No Recourse Against City Officials ..................................................... .............22
Section 7.15. Amendment to Ordinance .................................................................... .............22
ARTICLE VIII CONCERNING THE PAYING AGENT/REGISTRAR ........................ .............23
Section 8.1. Acceptance ........................................................................................... .............23
Section 8.2. Fiduciary Account ................................................................................ .............23
Section 8.3. Bonds Presented ................................................................................... .............23
Section 8.4. Series 2009 Bonds Not Timely Presented ............................................ .............23
Section 8.5. Paying Agent/Registrar May Own Series 2009 Bonds ........................ .............24
Section 8.6. Successor Paying Agents/Registrars .................................................... .............24
ARTICLE IX PROVISIONS CONCERNING SALE AND APPLICATION OF
PROCEEDS OF SERIES 2009 BONDS ..................................................... .............24
Section 9.1. Sale of Series 2009 Bonds; Insurance ................................................. ..............24
Section 9.2. Approval, Registration and Delivery ................................................... ..............25
Section 9.3. Offering Documents; Ratings .............................................................. ..............25
Section 9.4. Application of Proceeds of Series 2009 Bonds ................................... ..............26
Section 9.5. Tax Exemption .................................................................................... ..............26
ARTICLE X CONTINUING DISCLOSURE UNDERTAKING ................................... ..............28
Section 10.1. Annual Reports .................................................................................... ..............28
Section 10.2. Material Event Notices ........................................................................ ..............29
Section 10.3. Limitations, Disclaimers, and Amendments ....................................... ..............29
Section 10.4. Definitions ........................................................................................... ..............31
ARTICLE XI M ISCELLANEOUS ................................................................................. ..............31
Section 1 l.l. Related Matters .................................................................................... ..............31
Section 11.2. Severability .......................................................................................... ..............31
Section 11.3. Open Meeting ...................................................................................... ..............31
Section 11.4. Govei7iing Law .................................................................................... ..............32
Section 11.5. Repealer ............................................................................................... ..............32
Section 11.6. Emergency ........................................................................................... ..............32
Section 11.7. Effective Date ...................................................................................... ..............32
ii
IiOL1:23~9957.6
CITY OF PEARLAND
ORDINANCE NO. 1365
ORDINANCE AUTHORIZING ISSUANCE OF CITY OF PEARLAND,
TEXAS, WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 2009;
PRESCRIBING THE TERMS AND CONDITIONS THEREOF; PROVIDING
FOR THE PAYMENT THEREOF; AWARDING THE SALE THEREOF;
AUTHORIZING THE PREPARATION AND DISTRIBUTION OF AN
OFFICIAL STATEMENT TO BE USED IN CONNECTION WITH THE SALE
OF THE BONDS; AUTHORIZING THE PURCHASE OF BOND
INSURANCE; .MAKING OTHER. PROVISIONS REGARDING SUCH BONDS
AND MATTERS INCIDENT THERETO; AUTHORIZING EXECUTION AND
DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT;
CONTAINING OTHER MATTERS RELATED 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) The City is authorized by Chapter 1502, Texas Govenument Code, as
amended, to issue revenue bonds payable from the revenues of its water and sewer
system for the purpose of constructing repairs, improvements, additions and extensions to
the City's waterworks and sanitary sewer system.
(b) The City Council now deems it to be in the best interest of the City to
issue, sell and deliver the Series 2009 Bonds (hereinafter defined) as hereinafter
authorized.
(c) The conditions precedent to the issuance of additional bonds which are
contained in the ordinances authorizing the issuance of the Previously Issued Bonds and
the Series 2009 Bonds (both hereinafter defined) have been met, and the City is
authorized to issue the revenue bonds and make the pledges and covenants set forth
herein.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1. Definitions. In this Ordinance, the following terms shall have the
following meanings, unless the context clearly indicates otherwise:
"Act" shall mean Chapter 1502, Texas Goverrunent Code, as amended.
HOU2859987.6
"Additional Bonds " shall mean the additional revenue bonds penliitted to be issued by
the City pursuant to Section 6.1 hereof.
"Average Amrual Principal and Interest Requirements " shall mean the average annual
principal and interest requirements for all Bonds. Upon the issuance of the Series 2009 Bonds,
the Average Annual Principal and luterest Requirements are hereby determined to be $6,884,015
and shall be recomputed upon the issuance of each series of Additional Bonds and set forth in
each ordinance authorizing the issuance of Additional Bonds. For purposes of calculating the
Average Annual Principal and Interest Requirements with respect to any variable rate Additional
Bonds, interest on such bonds shall be calculated in accordance with Section 6.1 of this
Ordinance.
"Bond Insurer" shall mean Assured Guaranty.
"Bonds " shall mean any or all of the Previously Issued Bonds, the Series 2009 Bonds
and any Additional Bonds from time to time hereafter issued, but only to the extent such Bonds
remain Outstanding within the meaning of this Ordinance.
"Busir~~ess Day" shall mean any day other than (1) a Saturday or a Sunday, (2) a legal
holiday or the equivalent on which banking institutions generally are authorized or required to
close in New York, New York or Houston, Texas or any other city in which is located the
principal corporate mist office of the Paying Agent/Regish•ar or (3) a day on which the New
York Stock Exchange is closed in whole or in part.
"City " shall mean the City of Pearland, Texas, and, where appropriate, the City Council
thereof and any successor to the City as owner of the System.
"Code "shall mean the Internal Revenue Code of 1986, as amended.
"DTC" shall mean The Depository Trust Company of New York, New York, or any
successor securities depository.
"DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"Fiscal Year" shall mean the City's fiscal year, which cun•ently ions from October 1 to
September 30, but which maybe changed from time to time by the City.
"Gross Revenues " shall mean all revenues, income and receipts of every nature derived
or received by the City from the operation and ownership of the Systemm; the interest income
from the investment or deposit of money in the Revenue Fund and the Reserve Fund (each
hereinafter defined in Article V hereof); and any other revenues hereafter pledged to the payment
of all Bonds. Gross Revenues shall not inchide any of (i) grants from, or pa}nnents by, any
federal, state or local goverimental agency or authority or any other entity or person, the use of
which is restricted by law or by the terms of the grant or payment to capital expenditures of the
System, (ii) capital assets, debt service fiords or debt service reserve fields of water districts or
2
xov:?s~9~s~.~
other public or private sewer systems annexed, acquired or otherwise assumed by the City or (iii)
any interest earned on items (i) or (ii) above.
"Interest Pcrvment Date, "when used in connection with any Series 2009 Bond, shall
mean September 1 or March 1 of each year as applicable commencing September 1, 2009.
"Muinterunzce and Operatio~a Ea~enses " shall mean the reasonable and necessary
expenses of operation and maintenance of the System, including all salaries, labor, materials,
repairs and extensions necessary to render efficient service (but only such repairs and extensions
as, in the judgment of the governing body of the City, are necessary to keep the System in
operation and render adequate service to the City and the it~llabitants thereof, or such as might be
necessary to meet some physical accident or conditions which would otherwise impair the
Bonds), and all payments (including pa}m~ents of amounts equal to all or a part ~of the debt
service on bonds issued by other political subdivisions and authorities of the State of Texas)
under contracts which are now or hereafter defined as operating expenses by the Legislature of
Texas. Depreciation shall never be considered as a Maintenance and Operation Expense.
Maintenance and Operation Expenses shall include, without limitation, all pa}nnents tinder
contracts for the impoundment, conveyance or treatment of water or otherwise which are now or
hereafter defined as operating expenses by the Legislature of Texas and the treatment of such
payments as Maintenance and Operation Expenses shall not be affected in any way if,
subsequent to entering into such contracts, the City acquires as a part of the System title to any
properties or facilities used to impound, convey or treat water under such contracts, or if the City
contracts to acquire title to such properties or facilities as a part of the System upon the final
payment of debt service on the bonds issued to finance such properties or facilities.
"Net Revena~es" shall mean all Gross Revenues remaining after deducting the
Maintenance and Operation Expenses.
"Ordinance " shall mean this Bond Ordinance and all amendments hereof and
supplements hereto.
"Outsta~zding"when used with reference to the Bonds shall mean, as of a particular date,
all such bonds theretofore delivered except: (a) any such bond canceled by or on behalf of the
City at or before said date; (b) any such bond defeased pursuant to the defeasance provisions of
the ordinance authorizing its issuance, or otherwise defeased as permitted by applicable law; and
(c) any such bond in lieu of or in substitution for which another bond shall have been delivered
pursuant to the ordinance authorizing the issuance of such bond.
"O~~nner" or "Registered Owner" when used with respect to any Bond, shall mean the
person or entity in whose name such Bond is registered ill the Register. Any reference to a
particular percentage or proportion of the Owners of the Bonds of a particular class or series of
Bonds shall mean the Owners at a particular time of the specified percentage or proportion in
aggregate principal amount of all Bonds or the Bonds of such class or series then Outstanding.
"Paying Age~~t/Registrar " shall mean Wells Fargo Bank, N.A., Houston, Texas, and its
successors in that capacity.
3
Fiou:za~~9sz~
"Pre>>io~usly Issz~ed Bonds " shall mean the Outstanding City of Pearland, Texas Water
and Sewer System Adjustable Rate Revenue Bonds, Series 1996B, City of Pearland, Texas,
Water and Sewer System Adjustable Rate Revenue Bonds, Series 1999, City of Pearland, Texas,
Water and Sewer System Revenue Bonds, Series 2001, City of Pearland, Texas, Water and
Sewer System Revenue Bonds, Series 2003, the City of Pearland, Texas, Water and Sewer
System Revenue and Refunding Bonds, Series 2006, the City of Pearland, Texas, Water and
Sewer System Revenue Bonds, Series 2007 and the City of Pearland, Texas, Water and Sewer
System Revenue Bonds, Series 2008.
"Yz~rchaser" shall mean the underwriting syndicate comprised of Fist Southwest
Company and Wells Fargo Brokerage Services, LLC.
"Recorcl'Date" shall mean, with respect to any Interest Pa}nment Date, the fifteenth day
of the month, whether or not a Business Day, next preceding each hlterest Payment Date.
"Register" shall mean the books of registration kept by the Paying Agent/Registrar in
which are maintained the names and addresses of and the principal amounts registered to each
Owner of Series 2009 Bonds.
"Series ?009 Bonds" shall mean the City of Pearland, Texas, Water and Sewer System
Revenue Bonds, Series 2009, authorized by this Ordinance.
"Special Project" shall mean, to the extent permitted by law, any water or sewer system
property, improvement or facility declared by the City not to be part of the System, for which the
costs of acquisition, construction, and installation are paid from proceeds of a financing
hansaction other than the issuance of bonds payable from ad valorem taxes or revenues of the
System and for which all maintenance and operation expenses are payable from sources other
than ad valorem taxes or revenues of the System, but only to the extent that and for so long as all
or any part of the revenues or proceeds of which are or will be pledged to secure the pa}mient or
repayment of such costs of acquisition, construction, and installation tinder such financing
transaction.
"Sirborclinate Lien Obligations "shall mean the obligations permitted to be issued by the
City pursuant to Section 6.2 hereof.
"Surety Policy" shall mean and inchide a surety bond, bond insurance policy or other
credit agreement, as authorized by Section 1502.064, Texas Government Code, provided that the
issuer of any Surety Policy shall be rated in the highest rating category at the time of issuance of
such Surety Policy by A.M. Best Company, Standard & Poor's Ratings Group, or Moody's
Investors Service. A Surety Policy shall insure all Bonds and Additional Bonds on a pro rata
basis. A Surety Policy may include a letter of credit or other agreement or instrument, including
any related reimbursement or financial guaranty agreement, whereby the issuer is obligated to
provide fiords up to and including the maximum amount and trader the conditions specified in
such agreement or instrument.
"System "shall mean all properties, facilities, improvements, equipment, interests, rights
and powers constituting the water and sewer system of the City, and all future extensions,
replacements, betterments, additions, improvements, enlargements, acquisitions, purchases and
4
HOU23~9957.6
repairs to the System, including without limitation, all those heretofore or hereafter acquired as a
result of the annexation and dissolution of water districts or the acquisition of the properties or
assets of any other public, private or non-profit entities. The System shall not include any
Special Project.
Section 2.2. Interpretations. All terms defined herein and all pronolu~s used in this
Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles
and headings of the articles and sections of this Ordinance and the Table of Contents of this
Ordinance have been inserted for convenience of reference only and are not to be considered a
part hereof and shall not in any way modify or restrict any of the terms or provisions hereof.
This Ordinance and all the teens 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 lien
on and pledge of the Net Revenues to secure the payment of the Bonds.
ARTICLE III
TERMS OF THE SERIES 2009 BONDS
Section 3.1. Name, Amount, Purpose, Authorization. The City of Pearland, Texas
Water and Sewer System Revenue Bonds, Series 2009 shall be issued in fully registered form,
without coupons, in the aggregate principal amount of THIRTEEN MILLION ONE HUNDRED
THIRTY THOUSAND AND NO/100 DOLLARS ($13,130,000) for the purpose of constructing
certain repairs, improvements, additions and extensions to the System and payment of expenses
of issuance of the Series 2009 Bonds, all under and pursuant to the authority of the Act and all
other applicable law.
Section 3.2. Numbers, Date and Denomination. The Series 2009 Bonds shall be
initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set
forth in Section 3.3 hereof. The Series 2009 Bonds shall be dated as of February 1, 2009, and
shall be issued in denominations of $5,000 of principal amount or any integral multiple thereof.
Section 3.3. Interest Payment Dates, Interest Rates and Maturities. The Series 2009
Bonds shall bear interest from the later of the February 1, 2009, or the most recent hlterest
Payment Date to which interest has been paid or duly provided for, at the rate or rates per annum
set forth below, calculated on the basis of a 360-day year composed of twelve 30-day months
and payable semiaimually on September 1 and March 1 of each year, commencing September 1,
2009, until maturity or prior redemption.
The Series 2009 Bonds shall mature and become payable on the dates and in the
respective principal amounts set forth below, subject to prior redemption as set forth in this
Ordinance:
Bond Maturity Principal h~terest
Number 09/01 Amount Rate
R-1 2010 $320,000 3.000%
R-2 2011 360,000 3.000
R-3 2012 360,000 3.000
R-4 2013 370,000 3.000
5
r~ou:zas99s~.~
Bond Maturity Principal Interest
Number 09( ~Ol~ Amount Rate
R-S 2014 $380,000 3.000%
R-6 2015 385,000 3.000
R-7 2016 400,000 3.250
R-8 2017 410,000 3.375
R-9 2018 420,000 3.625
R-10 2019 435,000 4.000
R-I1 2020 450,000 4.000
R-12 2021 465,000 4.250
R-13 2022 485,000 4.500
R-14 2023 505,000 4.625
R-15 2024 520,000 4:875
R-16 2025 545,000 5.000
R-17 2026 570,000 5.125
R-18 2027 600,000 5.125
R-19 2028 630,000 5.250
R-20 2029 665,000 5.375
=k** ~=~,* *~~*
R-21 2032 2,195,000 5.500
R-22 2034 1,660,000 5.500
Section 3.4. Redemption Prior to Maturity.
(a) The City reserves the right, at its option, to redeem prior to maturity Series
2009 Bonds maturing on or after September 1, 2019, in whole or in part, in principal
installments of $5,000 or any integral multiple thereof, on September 1, 2018, or any date
thereafter, at a price equal to the principal amount of the Series 2009 Bonds or portions
thereof called for redemption plus accrued interest to the date of redemption.
(b) The Series 2009 Bonds maturing on September 1 in the years 2032 and
2034 (the "Tenn Bonds") are subject to mandatory sinking fund redemption in the
following amomlts (subject to reduction as hereinafter provided), on the following dates,
in each case at a redemption price equal to the principal amount of the Series 2009 Bonds
or the portions thereof so called for redemption plus accrued interest to the date fixed for
redemption:
Term Bonds Maturing September 1, 2032
Mandatory Redemption Dates
September 1, 2030
September 1, 2031
September 1, 2032 (maturity)
Principal Amounts
$700,000
730,000
765,000
Term Bonds Maturing September 1, 2034
September 1, 2033
September 1, 2034 (mahuity)
$815,000
845,000
The particular Tenn Bonds to be redeemed shall be selected by the Registrar by lot or
other customary random selection method, oil or before July 15 of each year in which
6
xou:zs~~~sz~
Term Bonds are to be mandatorily redeemed. The principal amo~ult of Term Bonds to be
mandatorily redeemed in each year shall be reduced by the principal amount of such
Tei-~l~ Bonds that have been optionally redeemed on or before July 15 of such year and
which have not been made the basis for a previous reduction.
(c) Series 2009 Bonds may be redeemed only in integral nniltiples of $5,000
of principal amount. If a Series 2009 Bond subject to redemption is in a denomination
larger than $5,000, a portion of such Series 2009 Bond may be redeemed, but only in
integral multiples of $5,000. h1 selecting portions of Series 2009 Bonds for redemption,
the Registrar shall treat each Series 2009 Bond as representing that number of Series
2009 Bonds of $5,000 denomination which is obtained by dividing the principal amount
of such Series 2009 Bond by $5,000. Upon surrender of any Series 2009 Bond for
redemption in part, the Registrar, in accordance with Section 3.11 hereof, shall
authenticate and deliver in exchange therefor a Series 2009 Bond or Bonds of like
maturity and interest rate in an aggregate principal amount equal to the unredeemed
portion of the Series 2009 Bond so surrendered.
(d) Not less than thirty (30) days prior to a redemption date for the Series
2009 Bonds, a notice of redemption will be sent by U.S. mail, first class postage prepaid,
in the name of the City to each Owner of a Series 2009 Bond to be redeemed in whole or
in part at the address of such Owner appearing on the Register at the close of business on
the Business Day next preceding the date of mailing. Such notices shall state the
redemption date, the redemption price, the place at which Series 2009 Bonds are to be
surrendered for payment and, if less than all Series 2009 Bonds outstanding are to be
redeemed, the numbers of Series 2009 Bonds or portions thereof to be redeemed. Any
notice of redemption so mailed as provided in this Section will be conclusively presumed
to have been duly given, whether or not the Owner receives such notice. By the date
fixed for redemption, due provision shall be made with the Registrar for payment of the
redemption price of the Series 2009 Bonds or portions thereof to be redeemed. When
Series 2009 Bonds have been called for redemption in whole or in part and notice of
redemption has been given as herein provided, the Series 2009 Bonds or portions thereof
so redeemed shall no longer be regarded to be outstanding, except for the purpose of
receiving payment solely from the fiords so provided for redemption, and interest which
would otherwise accrue or compound after the redemption date on any Series 2009 Bond
or portion thereof called for redemption shall terminate on the date fixed for redemption.
Section 3.5. Manner of Payment Characteristics Execution and Authentication. The
Paying Agent/Registrar shall be the paying agent for the Series 2009 Bonds. The Series 2009
Bonds shall be payable, shall have the characteristics, shall be signed and executed, shall be
sealed, and shall be authenticated, all as provided Form of Bond inchided as Exhibit A to this
Ordinance. The Series 2009 Bonds initially delivered shall also have attached or affixed to each
such Series 2009 Bond the registration certificate of the Comptroller of Public Accounts of the
State of Texas.
The Series 2009 Bonds shall be signed on behalf of the City by the Mayor and
countersigned by the City Secretary by their manual, lithographed, or facsimile signatures
thereon. Such facsimile signature on the Series 2009 Bonds shall have the same effect as if each
7
1~ou:zss9~s~.~
of the Series 2009 Bonds had been signed manually and in person by each of said officials. If
any officer of the City whose manual or facsimile signature shall appear on the Series 2009
Bonds, as provided in the Form of Bond included as Exhibit A hereto, shall cease to be such
officer before the authentication of the Series 2009 Bonds or before the delivery of the Series
2009 Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all
pwposes as if such officer had remained in such office.
The approving legal opinion of Andrews Kurth LLP, F[ouston, Texas, Bond Counsel,
may be printed on the Series 2009 Bonds over the certification of the City Secretary, which may
be executed in facsimile. CUSIP numbers also may be printed on the Series 2009 Bonds, but
errors or omissions in the printing of either the opinion or the numbers shall have no effect on the
validity of the Bonds.
Section 3.6. Approval by Attorney General; Registration by Comptroller. The Initial
Series 2009 Bond shall be delivered to the Attorney General of the State of Texas for
examination and approval and shall be registered by the Comptroller of Public Accounts of the
State of Texas. The manually executed registration certificate of such Comptroller substantially
in the form provided in Exhibit A of this Ordinance shall be affixed or attached to the Initial
Series 2009 Bonds.
Section 3.7. Authentication. Except for the Series 2009 Bonds to be initially issued,
which need not be authenticated, only such Series 2009 Bonds as shall bear thereon a certificate
of authentication substantially in the form provided in Exhibit A of this Ordinance, 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 Series 2009 Bond so
authenticated was delivered by the Paying Agent/Registrar hereunder.
Section 3.8. Special Record Date. If interest on any Series 2009 Bond is not paid on
any Interest Payment Date and continues unpaid for 30 days thereafter, the Paying
Agent/Registrar shall establish a new record date for the payment of such interest, to be known
as a "Special Record Date." The Paying Agent/Registrar shall establish a Special Record Date
when fiords to make such interest pa}nnent 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
United States mail, first class, postage prepaid, not later than five (5) days prior to the Special
Record Date, to each Registered Owner of an affected Series 2009 Bond as of the close of
business on the day prior to the mailing of such notice.
Section 3.9. Ownership. Subject to the fiirther provisions of this Section, the City, the
Paying Agent/Registrar, and any other person may treat the person in whose name any Series
2009 Bond is registered on the Register as the absolute Owner of such Series 2009 Bond for the
purpose of making and receiving payment of the principal of or interest on such Series 2009
Bond, and for all other proposes, whether or not such Series 2009 Bond is overdue, and neither
the City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the
contrary. All pa}nnents made to the person deemed to be the Owner of any Series 2009 Bond in
accordance with this Section 3.9 shall be valid and effectual and shall discharge the liability of
8
HOU?8~9957.6
the City and the Paying Agent/Registrar upon such Series 2009 Bond to the extent of the sums
paid.
Section 3.10. Boole-Entry Only System. The definitive Series 2009 Bonds shall be
initially issued in the form of a separate single frilly registered Series 2009 Bond for each of the
maturities thereof. Upon initial issuance, the ownership of each such Series 2009 Bond shall be
registered in the ~1ame of Cede & Co., as nominee of DTC, and except as provided in Section
3.12 hereof, all of the Outstanding Bonds shall be registered in the Hanle 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 in 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." in this Ordinance shall refer to
such new nominee of DTC.
With respect to Series 2009 Bonds registered in 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 au interest in
the Series 2009 Bonds. Without limiting the innnediately preceding sentence, the City and the
Paying 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 in the Series 2009 Bonds, (b) the delivery to any DTC Participant or any other person,
other than a Registered Owner of a Series 2009 Bond, as shown on the Register, of any notice
with respect to the Series 2009 Bonds, including any notice of redemption or (c) the payment to
any DTC Participant or any other person, other than a Registered Owner of a Series 2009 Bond
as shown in the Register, of any amount with. respect to principal of Series 2009 Bonds,
premium, if any, or interest on the Series 2009 Bonds.
Except as provided in Section 3.11 of this Ordinance, the City and the Paying
Agent/Registrar shall be entitled to treat and consider the person in whose name each Series
2009 Bond is registered in the Register as the absolute owner of such Series 2009 Bond for the
purpose of payment of principal of, premium, if any, and interest on Series 2009 Bonds, for the
purpose of giving notices of redemption and other matters with respect to such Series 2009
Bond, for the purpose of registering transfer with respect to such Series 2009 Bond, and for all
other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of Series 2009
Bonds, premium, if any, and interest on the Series 2009 Bonds only to or upon the order of the
respective owners, as shown in the Register as provided in this Ordinance, or their respective
attorleys duly authorized in writing, and all such payments shall be valid and effective to frilly
satisfy and discharge the City's obligations with respect to payment of principal of, premium, if
any, and interest on the Series 2009 Bonds to the extent of the sum or stuns so paid. No person
other than an owner shall receive a Series 2009 Bond evidencing the obligation of the City to
make payments of amounts due pursuant to this Ordinance.
Section 3.11. Payments and Notices to Cede & Co. Notwithstanding any other
provision of this Ordinance to the contrary, as long as any Series 2009 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 Series 2009 Bonds, and all notices with respect to such
9
HOU23i99R7.6
Series 2009 Bonds shall be made and given, respectively, in the manner provided in the
representation letter of the City to DTC.
Section 3.12. Successor Securities Depository; Transfer Outside Book-Enh•y Only
S~ sy tem. In the event that. the City or the Paying Agent/Registr•ar detern~ines that DTC is
incapable of discharging its responsibilities described herein and in the representation letter of
the City to~ DTC, and that it is in the best interest of the beneficial owners of the Series 2009
Bonds that they be able to obtain certificated Series 2009 Bonds, the City or the Paying
Agent/Registrar shall (a) appoint 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
appointment of such successor securities depository and h•ansfer one or more separate Series
2009 Bonds to such successor securities depository or (b) notify DTC of the availability thro~.igh
DTC of Series 2009 Bonds and transfer one or more separate Series 2009 Bonds to DTC
Participants having Series 2009 Bonds credited to their DTC accounts. In such event, the Series
2009 Bonds shall no longer be restricted to being registered in the Register in the name of Cede
& Co., as nominee of DTC, but may be registered in the name of the successor securities
depository, or its nominee, or in whatever name or names a Registered Owner of a Series 2009
Bond transferring or exchanging Series 2009 Bonds shall designate, in accordance with the
provisions of this Ordinance.
Section 3.13. Registration Transfer, and Exchange. The Paying Agent/Registrar shall
keep the Register at its principal corporate trust office and, subject to such reasonable regulations
as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of
Series 2009 Bonds in accordance with the teens of this Ordinance.
Each Series 2009 Bond shall be transferable only upon the presentation and surrender
thereof at the principal corporate trust office of the Paying Agent/Registrar, duly endorsed for
transfer, or accompanied by an assignment duly executed by the Registered Owner or his
authorized representative in form satisfactory to the Paying Agent/Registrar. Upon due
presentation of any Series 2009 Bond in proper form for transfer, the Paying Agent/Registrar
shall authenticate and deliver in exchange therefor, within three (3) Business Days after such
presentation, a new Series 2009 Bond or Series 2009 Bonds, registered in the name of the
transferee or transferees, in the same maturity and aggregate principal amount and bearing
interest at the same rate as the Series 2009 Bond or Series 2009 Bonds so presented.
All Series 2009 Bonds shall be exchangeable upon presentation and surrender thereof at
the principal corporate htiist office of the Paying Agent/Registrar for a Series 2009 Bond or
Series 2009 Bonds of the same maturity in any authorized denomination and interest rate, in an
aggregate amount equal to the unpaid principal amolmt of the Series 2009 Bond or Series 2009
Bonds presented for exchange. The Paying Agent/Registrar shall be and is hereby atrthorized to
authenticate and deliver exchange Series 2009 Bonds in accordance with the provisions of this
Section 3.11. Each Series 2009 Bond delivered in accordance with this Section 3.11 shall be
entitled to the benefits and security of this Ordinance to the same extent as the Series 2009 Bond
or Series 2009 Bonds in lieu of which such Series 2009 Bond is delivered.
The City or the Paying Agent/Registrar may require the Owner of any Series 2009 Bond
to pay a sum sufficient to cover any tax or other govenlmental charge that may be imposed in
10
HOU28~9987.6
connection with the transfer or exchange of such Series 2009 Bond. Any fee or charge of the
Paying Agent/Registrar for such transfer or exchange shall be paid by the City.
The Paying Agent/Registrar shall not be required to transfer or exchange any Series 2009
Bond called for redemption in whole or in part dln-ing 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 t11e Registered Owner of the unredeemed portion of a Series 2009
Bond called for redemption in hart.
Section 3.14. Cancellation of Series 2009 Bonds. All Series 2009 Bonds paid or
redeemed in accordance with this Ordinance, and all Series 2009 Bonds in lieu of which
exchange Series_2009 Bonds or replacement Series 2009 Bonds are authenticated and delivered
in accordance herewith, shall be canceled and destroyed upo~1 the malting of proper records
regarding such payment or redemption. The Paying Agent/Registrar shall. funlish the City with
appropriate ce1-tificates of destruction of such Series 2009 Bonds.
Section 3.15. Mutilated Lost or Stolen Series 2009 Bonds. Upon the presentation and
slu7-ender to the Paying Agent/Registrar of a mutilated Series 2009 Bond, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Bond of like
maturity, interest rate, and principal amount, bearing a number not contemporaneously
outstanding. The City or the Paying Agent/Registrar may require the Owner of such Series 2009
Bond to pay a sum sufficient to cover any tax or other govenunental charge that maybe imposed
in comlection therewith and any other expenses connected therewith, including the fees and
expenses of the Paying Agent/Registrar.
If any Series 2009 Bond is lost, apparently destroyed, or wrongfully taken, the City,
pursuant to the applicable laws of the State of Texas, and in the absence of notice or la~owledge
that such Series 2009 Bond has been acquired by a bona fide purchaser, shall execute and the
Paying Agent/Registrar shall authenticate and deliver, a replacement Series 2009 Bond of like
maturity, interest rate, and principal amount, bearing a number not contemporaneously
outstanding, provided that the Owner thereof shall have:
(a) fiuzlished 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 Series
2009 Bond;
(b) fiu7lished such seclu-ity or indenulity as may be required by the Paying
Agent/Registrar and the City to save them harmless;
(c) paid all expenses and charges in comlection therewith, inchiding, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar, and any tax or
other govei7lmental 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 Series 2009 Bond, a bona fide purchaser of the
original Bond in lieu of which such replacement Bond was issued presents for payment such
11
HOU:28~9987.6
original Series 2009 Bond, the City and the Paying Agent/Registrar shall be entitled to recover
such replacement Series 2009 Bond from the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security
or indemnity provided thel•efor 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, apparent y destroyed, or wrongfully taken Series 2009 Bond
has become or is about to become due and payable, the City in its discretion may, instead of
issuing a replacement Series 2009 Bond, authorize the Paying Agent/Registrar to pay such Series
2009 Bond.
Each replacement Series 2009 Bond delivered .in accordance with this Section 3.i3 shall
be entitled to the benefits and security of this Ordinance to the same extent as the Series 2009
Bond or Series 2009 Bonds in lieu of which such replacement Series 2009 Bond is delivered.
ARTICLE IV
FORM OF SERIES 2009 BONDS AND CERTIFICATES
Section 4. L Forms. The form of the Series 2009 Bonds, including the form of the
Paying Agent/Regish•ar's Authentication Certificate, the form of Assignment, the form of the
Comptroller's Registration Certificate and the foi7n of the Statement of Insurance, if any, which
shall be attached or affixed to the Initial Series 2009 Bonds, shall be, respectively, as described
in Exhibit A to this Ordinance, with such additions, deletions, and variations as may be necessary
or desirable and not prohibited by this Ordinance.
Section 4.2. Le~a~ 1 Opinion; CUSIP Ntunbers. The approving legal opinion of
Andrews Kurth LLP, Houston, Texas, Bond Cotmsel, may be printed on the Series 2009 Bonds
over the certification of the City Secretary, which may be executed in facsimile. CUSIP numbers
also may be printed on the Series 2009 Bonds, but errors or omissions in the printing of either
the opinion or the numbers shall have no effect on the validity of the Bonds.
ARTICLE V
SECURITY AND SOURCE OF
PAYMENT FOR THE BONDS
Section 5.1. Pledge and Source of Payment. The City hereby covenants and agrees
that Gross Revenues of the System shall, as collected and received by the City, be deposited and
paid into the special fiords hereinafter established, and shall be applied in the manner hereinafter
set forth, in order to provide for the payment of all Maintenance and Operation Expenses and to
provide for the payment of principal of, interest on and any redemption premiums on the Bonds
and all expenses of paying same; and to provide for the disposition of the remaining Net
Revenues. The Bonds shall constitute special obligations of the City that shall be payable solely
from and shall be equally and ratably secured by a first lien on and pledge of the Net Revenues
as collected and received by the City from the operation and ownership of the System, which Net
Revenues shall, in the manner herein provided, be set aside for and are hereby pledged to the
payment of the Bonds in the Interest and Sinking Fund and the Reserve Fund as hereinafter
provided, and the Bonds shall be, in all respects, on a parity with and of equal dignity with one
12
11OU:28~9987.6
another. The Owners of the Bonds shall never have the right to demand payment of either the
principal of, interest on or any redemption premium on the Bonds out of any funds raised or to
be raised by taxation.
Section 5.2. Rates and Charles. So long as any Bonds remain Outstanding, the City
shall fix, charge and collect rates and charges for the rise and services of the System which are
calculated to be fully sufficient to produce Net Revenues in each Fiscal Year at least equal to
1 I S% of the principal and interest requirements scheduled to occur in such Fiscal Year on all
Bonds then Outstanding, plus an amo~-nt equal to the sum of all deposits required to be made to
the Reserve Fund in such Fiscal Year (but in no event shall Net Revenues ever be less than the
amount required to establish and maintain the Interest and Sinking Fund and tl~-e Reserve Fund as
hereinafter provided) and, to the extent that funds for such purpose are not otherwise available,
to pay all other outstanding obligations payable from the Net Revenues of the System,including
all amounts owed by the City to a provider of a Surety Policy, if any, as and when the same
become due. For the purpose of complying with its obligation to f x, charge and collect rates and
charges, as herein provided, the City shall be entitled to rely on the certificate described in
Section 6.1 of tlvs Ordinance, as therein provided, in detei7nining the amount of interest
anticipated to be paid in respect of Bonds bearing interest at a variable rate.
The City will not grant or permit any free service from the System, except for public
buildings and institutions operated by the City. hi addition, the City will not grant or permit any
free service from the System permitted by the previous sentence if to do so would violate any
condition or covenant to which the City is bound in coimection with any federal grant agreement
or otherwise.
Section 5.3. Special Funds. The following "Special Funds" shall be established,
maintained and accounted for as hereinafter provided so long as any of the Bonds remain
Outstanding:
(a) Revenue Fund;
(b) Interest and Sinking Fund; and
(c) Reserve Ftmd.
All of such Funds shall be maintained as separate accounts on the books of the City. The
hlterest and Sinking Fund and the Reserve Fund shall constitute trust funds which shall be held
in trust for the Owners of the Bonds and the proceeds of which shall be pledged to the payment
of the Bonds. All of the Funds named above shall be used solely as herein provided so long as
any Bonds remain Outstanding.
Section 5.4. Flow of Funds. Gross Revenues of the System shall be deposited as
collected into the Revenue Fund. Moneys from time to time on deposit to the credit of the
Revenue Fund shall be applied in the following manner and in the following order of priority:
(a) First, to pay Maintenance and Operation Expenses and to provide by
enclmlbrance for the payment of all obligations incLU-red by the City for Maintenance and
13
Hou:zg>99s~.6
Operation Expenses and to establish and maintain an operating reserve equal to one
month's estimated Maintenance and Operation Expenses;
(b) Second, to make all deposits into the Interest and Sinking Fund required
by any ordinance authorizing the issuance of Bonds;
(c) Third, to reimburse the provider of a Surety Bond any amo~ults advanced
under such Surety Bond;
(d) Fourth, to pay interest to any provide7• of a Surety Bond any amo~mts
advanced under such Surety Bond;
(e) Fifth, to make all deposits .into the Reserve Fund required by any
ordinance authorizing the issuance of Bonds;
(f) Sixth, to make all deposits, as may be required by any ordinance of the
City authorizing the issuance of certain Subordinate Lien Obligations described in
Section 6.2 hereof, in order to provide for the pa}nnent of and security for such
Subordinate Lien Obligations; and
(g) Seventh, for any lawful purpose.
Section 5.5. Interest and Sinking Fund. On or before the last Business Day of each
month so long as any Bonds remain Outstanding, after making all required pa}nnents and
provision for payment of Maintenance and Operation Expenses, there shall be transfen•ed into
the Interest and Sinking Fund from the Revenue Fund the following amounts:
(a) Such amounts, in approximately equal monthly installments, as will be
sufficient to accumulate the amount required to pay the interest scheduled to become due
on the Bonds on the next Interest Payment Date; and
(b) Such amounts, in approximately equal monthly installments, as will be
sufficient to accumulate the amount required to pay the next maturing principal of the
Bonds (i.e., the principal amount payable on the next September I), including the
principal amounts of, and any redemption premiums on, any Bonds payable as a result of
the operation or exercise of any mandatory or optional redemption provision contained in
any ordinance authorizing the issuance of Bonds.
Whenever the total amounts on deposit to the credit of the Interest and Sinking Fund and
the Reserve Fund shall be equivalent to the sum of the aggregate principal amount of all
Outstanding Bonds plus the aggregate amount of all interest accrued and to accrue thereon, no
fiu-ther payments need be made into the Interest and Si~~l{ing Fund or the Reserve Fluid, and such
Bonds shall not be regarded as being Outstanding except for the purpose of being paid with the
moneys on deposit in such Funds.
Moneys deposited to the credit of the Interest and Sinking Fund shall be used solely for
the purpose of paying principal (at maturity, prior redemption or tender, or to purchase Bonds in
the open market to be credited against mandatory redemption requirements), interest and
14
IIOU2R~9987.6
redemption premiums on the Bonds, plus all bank charges and other costs and expenses relating
to such payment.
On or before each date principal becomes due and/or each Interest Payment Date on the
Bonds, the City shall transfer from the h~terest and Sinking Fund to the Paying Agent for .the
Bonds an amount equal to the principal of, interest on and any redemption premiums payable on
the Bonds on such date, together with an amount equal to all bank charges and other costs and
expenses relating to such payment. The Paying Agent shall destroy all paid Bonds and shall
provide the City with an appropriate certi{icate of destruction.
Section_5.6. Reserve Fund.. On or before the last. Business Day of each month so long
as any Bonds remain Outstanding, after waking a.ll required payments and provision for payment
of Maintenance and Operation Expenses and after making all required transfers into the Interest
and Sinking FLUid, there shall be transfen-ed into the Reserve Fund from the Revenl~-e Fund
amounts equal to one-sixtieth (1/60th) of the Average Annual Principal and hlterest
Requirements on the Bonds unless or until there has been accumulated in the Reserve Fund
money and inveshnents in an aggregate amolult at least equal to the Average Annual Principal
and Interest Requirements on the Bonds; provided that additional deposits into the Reserve Fund
sufficient to provide for the increased reserve requirements resulting from the issuance of any
Additional Bonds shall be made by not later than 60 months from the date of issuance of such
Additional Bonds as required by Section 6.1 (d) hereof. Such additional deposits into the Reserve
Fund in comlection with the issuance of any Additional Bonds shall be made each month in
amounts equal to one-sixtieth (I/60th) of the Average Aimual Principal and Interest
Requirements on the Bonds and such Additional Bonds. After such amount has accumulated in
the Reserve Fund and so long thereafter as such field contains such amount, no fiu-ther deposits
shall be required to be made into the Reserve Ftmd, and any excess amounts in the Fund maybe
transferred to the Revenue Fund; but if and whenever the balance in the Reserve Fund is reduced
below such amount, monthly deposits into such Fund shall be resumed and continued in amounts
at least equal to one-twelfth (1/12th) of the Average Aiuntal Principal and Interest Requirements
on the Bonds until the Reserve Fund has been restored to such amount. The Reserve Fund shall
be used to pay the principal of and interest on the Bonds at any time when there is not sufficient
money available in the 111terest and Sinking Fund for such propose and it may be used finally to
pay and retire the last Bonds to mature or be redeemed.
The requirements of the immediately preceding paragaph of this Section
notwithstanding, the City may provide a Surety Policy or Policies issued in amounts equal to all
or part of the Average Atu7ual Principal and h~terest Requirements on the Bonds in lieu of
depositing cash into the Reserve Fund; provided, however, that no such Surety Policy maybe so
substituted unless (i) the ordinance authorizing the substitution of the Surety Policy for all or part
of the Average Annual Principal and Interest Requirements on the Bonds contains a finding that
such substitution is cost effective and (ii) the City obtains an opinion of nationally recognized
bond counsel that such substitution is pei~nitted by applicable Texas law then in effect. If a
Surety Policy or Policies are issued in accordance with the preceding sentence, such Surety
Policy or Policies shall be drawn upon and reimbursed on a pro rata basis.
In the event aSurety -Policy issued to satisfy all or a part of the City's obligation with
respect to the Reserve Fund causes the amount then on deposit in the Reserve Fund to exceed the
15
No~:zs~99s~.~
Average Annual Principal and ].merest Requirements on all Bonds, the City may transfer such
excess amount to any fund or funds established for the payment of or security for Bonds or any
Subordinate Lien Obligations (including any escrow established for the final payment of any
such obligations pursuant to Chapter 1207, Texas Government Code); provided, however, that
no funds constituting bond proceeds shall be h•ansfeired for the benefit of the Subordinate Lien
Obligations.
Section SJ. Deficiencies in Funds. if in any month there shall not be deposited into
any fund maintained pursuant to this Article ~ the full amolmts required hereinabove, amounts
equivalent to such deficiency shall be set apart and paid into such Special Fund or Funds from
the first available and unallocated moneys in the Revenue Fund, and such payment shall be in
addition to the amoLUlts otherwise required to be paid ilrto suz;h Funds during any succeeding
Month or months. To the extent necessary- , ~ the rates and charges for the System snail be
increased to make up for any such deficiencies.
Section 5.8. Investment of Funds; Transfer of Investment lncome.
(a) Money in the Revenue F~u~d, the Interest and Sinking Fund and the
Reserve Fund may, at the option of the City, be invested in time deposits or certificates of
deposit secured in the mamler required by law for public funds, or be invested in direct
obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America, in obligations of any agencies or
instrumentalities of the United States of America or as otherwise permitted by state law;
provided that all such deposits and investments shall be made in such manner (which may
include repurchase agreements for such investments with any national bank) that the
money required to be expended from any Special Fund will be available at the proper
time or times, and provided further that in no event shall such deposits or investments of
moneys in the Reserve Fund mature later than the final maturity date of the Bonds. All
such investments shall be valued in terms of current market value no less frequently than
the last Business Day of the City's Fiscal Year, except that any direct obligations of the
United States of America -State and Local Government Series shall be continuously
vahied at their par vahie or principal face amount. Any obligation in which money is so
invested shall be kept and held ill an official depository of the City, except as hereinafter
provided. For purposes of maximizing investment returns, money in such fiends may be
invested, together with money in other funds or with other money of the City, in common
investments of the kind described above, or in a common pool of such investments which
shall be kept and held at an official depository of the City, which shall not be deemed to
be or constitute a commingling of such money or funds provided that safekeeping
receipts or certificates of participation clearly evidencing the investment or investment
pool in which such money is invested and the share thereof purchased with such money
or owned by such fiord are held by or on behalf of each such fund. If necessary, such
investments shall be promptly sold to prevent any default.
(b) All interest and income derived from such deposits and investments shall
be credited monthly to the Special Fund from which such investment was made.
16
1IOU:28~9987.6
Section 5.9. Security for Uninvested Fends. So long as any Bonds remain
Outstanding, all uninvested moneys on deposit in, or credited to, the Revenue Fund, the lnterest
and Sinking Hued and the Reserve Fund shall be sec~u-ed by the pledge of security as provided by
law for cities in the State of Texas.
ARTICLE ~~I
ADDITIONAL BONDS
Section 6.1. Additional Bonds. The City reserves the right to issue, for any lawful
p~upose, including the refunding of any previously issued Bonds or any other bonds or
obligations of the City issued in connection with the System or payable from Net Revenues,-one
or more series of Additional Bonds on a parity with the Outstanding Bonds and any Additional
Bonds then Outstanding, payable from, and secured by a first lien on, the Net Reven~.~es of the
System; provided, howevery that no Additional Bonds maybe issued unless:
(a) All Additional Bonds shall mature only on September 1 and interest
thereon shall be payable only on March 1 and September 1;
(b) The Interest and Sii~lcing Fund and the Reserve Fund each contains the
amount of money then required to be on deposit therein;
(c) For either the preceding Fiscal Year or any consecutive 12-month period
out of the 15-month period immediately preceding the month in which the bond
ordinance authorizing such Additional Bonds is adopted (the `Base Period") either:
(1) Net Revenues are certified by the Director of Finance of the City to
have been equal to at least one hundred and forty percent (140%) of the Average
Annual Principal and Interest Requirements on all Bonds, after giving effect to
the issuance of the Additional Bonds to be issued; or
(2) Net Revenues, adjusted to give effect to any rate increase or
aimexation of territory placed into effect or consummated prior to the adoption of
the ordinance authorizing the Additional Bonds to the same extent as if such rate
increase or amZexation had been placed into effect or consummated prior to the
conunencement of the Base Period, would have been equal to at least the amount
required in paragraph (1) above, as certified by an independent consulting
engineer or independent firm of consulting engineers;
Provided, however, that this requirement shall not apply to the issuance of any series of
Additional Bonds for refunding purposes that will not have the result of increasing the average
amnlal principal and interest requirements on the Bonds; and
(d) Provision is made in the bond ordinance authorizing the Additional Bonds
then proposed to be issued for (1) additional payments into the Interest and Sinking Fund
sufficient to provide for the pa}nnent of the increased principal of and interest on the
Bonds resulting from the issuance of such Additional Bonds, and (2) additional payments
into the Reserve Fund sufficient to provide for the accumulation therein of the increased
17
Hou:as~y9s~.~
reserve requirement resulting fi-ou~ the issuance of such Additional Bonds, by not later
than sixty (60) months from the date of issuance of such Additional Bonds.
The provisions of this Section 6.1(a) notwithstanding, the City may issue Additional
Bonds that bear interest at a variable rate. Such variable rate bonds may mature on dates other
than September 1 and interest thereon may be payable on dat-es other than March 1 or September
1; provided that the issuance of Additional Bonds as variable rate bonds may not cause the total
amount of Outstanding Bonds that are variable rate bonds to exceed 50% (20% as long as the
Series 1999 Bonds shall remain outstanding) of the aggregate principal amount of all
Outstanding Bonds and Subordinate Lien Obligations at the time of such issuance. For purposes
of calculating the funding requirements for the Reserve Ftmd and for the purposes of calculating
compliance with the conditions precedent to the issuance of hdditional Bonds pursuant to
Section 6.1(c) and the rate covenant set forth i» Section 5.2, any Bonds that are variable rate
bonds shall be assumed to bear interest at a rate which shall be estimated and certified by the
financial advisor to the City as the rate that would be borne by such variable rate bonds if they
were at the date of such certification issued as Bonds bearing a fixed rate of interest to their
scheduled maturity or maturities.
Section 62. Subordinate Lien Obligations. The City reserves the right to issue, for any
lawfitl purpose, bonds, notes or other obligations secured in whole or in part by liens on the Net
Revenues that are junior and subordinate to the lien on Net Revenues securing pa}nnent of the
Bonds. Such Subordinate Lien Obligations may be filrther secured by any other source of
payment lawfully available for such purposes. In the event that the City should decide to issue
such Subordinate Lien Obligations as variable rate bonds, for purposes of calculating the funding
requirements for the reserve fiord for such Subordinate Lien Obligations, the variable rate bonds
shall be assumed to bear interest at the rate of 10% per annum, and for purposes of calculating
compliance with any conditions precedent to the issuance of additional Subordinate Lien
Obligations and any rate covenants relating to such Subordinate Lien Obligations, the variable
rate bonds shall be assumed to bear interest at the higher of 9% per amltun or the highest variable
rate over the preceding twenty-four (24) months.
Deposits may be made pursuant to Section 5.4(f) of this Ordinance into such fiords as
may be created and maintained for the payment of and security for Subordinate Lien Obligations
described in this Section (including a reserve fiord not to exceed the Average Aiuiual Principal
and Interest Requirements on such Subordinate Lien Obligations and any provisions for curing
deficiencies in such fiords), but only to the extent that the aggregate Outstanding principal
amount of such Subordinate Lien Obligations does not exceed 50% of the aggregate principal
amount of Bonds and Subordinate Lien Obligations Outstanding on the date of such calculation.
Section 6.3. Special Project Bonds. The City reserves the right to issue revenue bonds
seethed by liens on and pledges of revenues and proceeds derived from Special Projects.
18
}iou:as~~~s~.c,
ARTICLE VII
COVENANTS AND PROVISIONS
RELATING TO BONDS
Section 7. ] . ~Ptu~ctual Payment of Bonds. The City coven~ults that it will ptmctually
pay or cause to be paid the interest on and principal of all Bonds according to the teens thereof
and will faithfully do and perform, and at all times fully observe, any and all covenants,
undertakings, stipulations and provisions contained in this Ordinance and in any other ordinance
authorizing the issuance of such Bonds.
Section 7.2. Power to Own and Operate System; Ratemaking Power. The City
covenants that it has all necessary power and authority to own and operate the System as herein
described and provided and that it possesses, and shall exercise, all necessary power .and
authority to establish, fix, increase, impose and collect rates and charges for the use and services
of the System in the amounts required to comply with the covenants and provisions contained
herein.
Section 7.3. Maintenance of System. So long as any Bonds remain Outstanding, the
City covenants that it will at all times maintain the System, or within the limits of its authority
cause the same to be maintained, in good condition and working order and will operate the same,
or cause the same to be operated, in an efficient and economical manner at. a reasonable cost and
in accordance with sound business principles. hl operating and maintaining the System, the City
will comply with all contractual provisions and agreements entered into by it and with all valid
Hiles, regulations, directions or orders of any goverrmlental, administrative or judicial body
promulgating same, noncompliance with which would materially and adversely affect the
operation of the System.
Section 7.4. Sale or Encumbrance of System. So long as any Bonds remain
Outstanding, the City covenants that it will not sell, dispose of or, except as permitted in Article
VI, fiirther enctunber the System; provided, however, that this provision shall not prevent the
City from disposing of any portion of the System which is being replaced or is deemed by the
City to be obsolete, worn ottt, surplus or no longer needed for the proper operation of the System.
Net proceeds from any such disposition may be deposited in the Revenue Fund and,
notwithstanding any other provision contained herein, shall be used only for System purposes.
Any agreement pursuant to which the City contracts with a person, corporation, municipal
corporation or political subdivision to operate the System or to lease and/or operate all or part of
the. System shall not be considered as an encumbrance of the System.
Section 7.5. Insurance. The City covenants that it will keep the System insured with
insurers of good standing, against risks, accidents or casualties against which and to the extent
customarily insured against by political subdivisions of the State of Texas operating similar
properties, to the extent that such insurance is available. All net proceeds of such insurance shall
be applied to repair or replace any insured property that is damaged or destroyed, or shall be
deposited in the Revenue Fund, or shall be used to redeem Outstanding Bonds. The cost of all
such insurance, together with any additional insurance, shall be a part of the Maintenance and
Operation Expenses.
19
i~ou:?s~9~s~.~
Section 7.6. Accounts, Records and Audits. So long as any Bonds remain Outstanding,
the City covenants thai it will maintain a proper and complete system of records and accounts
pertaining to the operation of the System in which full, h•ue and proper entries will be made of all
dealings, transactions, business and affairs which in any way affect or pertain to the System or
the Gross Revenues or the Net Revenues thereof. The City shall, after the close of each Fiscal
Year, prepare financial statements of the System, and have those financial statements audited by
an independent certified public accountant or independent fii~l~ of certified public accountants.
After the audit, the City shall furnish a copy of these audited financial statements, together with
the independent certified public accountant's report thereon, without cost, to the Municipal
Advisory Council of Texas, the major municipal rating agencies, and any Owners of Bonds who
shall request the same. All expenses incun-ed in preparing such audits shall be Mainte~lance and
013eration Expenses.
Section 7.7. Competition. To the extent it legally may, the City covenants that it will
not grant any franchise or permit for the acquisition, consh•uction or operation of any competing
facilities which might be used as a substitute for the System and will prohibit _the operation of
any such competing facilities to the extent that such competing facilities would impair the City's
ability to pay principal of or interest on the Bonds.
Section 7.8. Pledge and Encumbrance of Net Revenues. The City covenants that it has
the lawful power to create a lien on and to pledge the Net Revenues to secure the payment of the
Bonds, and has lawfillly exercised such power tinder the Constitution and laws of the State of
Texas. The City further covenants that, other than to the payment of the Bonds, the Net
Revenues are not and will not be made subject to any other lien, pledge or encumbrance to
secure the payment of any debt or obligation of the City, unless such lien, pledge or
encumbrance is junior and subordinate to the lien and pledge securing payment of the Bonds.
Section 7.9. Covenants with Respect to Certain Assumed Water District Bonds. So
long as any Bonds remain Outstanding, the City covenants as follows:
(a) To the extent it legally may, the City will impose, and strictly enforce, the
requirement upon all water districts located within the City's extraterritorial jurisdiction
that any bonds issued by such water districts which are secured in whole or in part by
pledges of or liens on water or sewer system revenues shall provide that all such pledges
of and liens on water or sewer system revenues shall automatically terminate upon the
amlexation and dissolution of the district by the City;
(b) The City shall use its best efforts to redeem, refund or defease all aimexed
water district bonds assumed by the City which by their own tei7ms are secured in whole
or in part by pledges of or liens on water or sewer system revenues which do not
terminate upon amlexation and dissolution by the City of such water dish•ict, or otherwise
to provide for the discharge of such pledges or liens on water or sewer system revenues;
and
(c) Pursuant to Section 43.075, Texas Local Governnent Code (successor to
Article 1182c-1, Verion's Texas Civil Statutes, as amended), the City shall, tulless it has
theretofoi`e made adequate provision for the payment thereof, annually levy and cause to
20
HOU23~9957.6
be collected taxes upon all taxable property of the City sufficient to pay principal of and
interest, as they respectively become due and payable, on all assumed bonds, warrants
and other obligations that were issued by water districts that have been annexed to, and
dissolved by, the City, and which are by their own terms secured in whole or in part by a
lien on or pledge of water or sewer system revenues which did not terminate upon the
annexation and dissolution by the City of such water district.
Section 7.10. Registered Owners' Rights and Remedies. This Ordinance shall constitute
a contract between the City and the Owners of the Series 2009 Bonds from time to time
Outstanding and this Ordinance shall be and remain in-epealable until the Series 2009 Bonds and
the interest thereon shall be fully paid or discharged. or provision therefor shall have been made
as provided herein. In the event of a default in the payment of the principal of or interest on any.
of the Series 2009 Bands or a default in the performance of any duty or covenant provided by
law or in this Ordinance, the Owner or Owners of any of the Series 2009 Bonds may pursue all
legal remedies afforded by the Constitution and laws of the State of Texas to compel the City to
remedy such default and to prevent further default or defaults. Without in any way limiting the
generality of the foregoing, it is expressly provided that any Owner of any of the Series 2009
Bonds may at law or in equity, by suit, action, mandamus, or other proceedings, enforce and
compel performance of all duties required to be performed by the City Linder this Ordinance,
including the making and collection of reasonable and sufficient rates and charges for the use
and services of the System, the deposit of the revenues thereof into the Special Funds herein
provided, and the application of such revenues in the malmer required in this Ordinance.
Section 7.11. Defeasance. The City may defease the provisions of this Ordinance and
discharge its obligations to the Registered Owners of any or all of the Series 2009 Bonds to pay
the principal of and interest thereon in any maimer now or hereafter pe1711itted by law, including
by depositing with the Paying Agent/Registrar or with the State Treasurer of the State of Texas
either:
(a) cash in an amount equal to the principal amount of such Series 2009
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 Unted States of America, including obligations that are unconditionally
guaranteed by the United States of America; (ii) 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 govei7ling
body of the issuer adopts or approves the proceedings authorizing the issuance of
refunding bonds, are rated as to investment 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 reflmded and that, on the date the governing body of the issuer adopts or approves
the proceedings authorizing the issuance of refiulding bonds, are rated as to investment
quality by a nationally recognized investment rating fii-~n not less than AAA or its
equivalent, which, in the case of (i), (ii) or (iii), may be in book-entry foi7n, 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
21
~iou:zs;~~s~.~
or the interest earnings thereon, provide money in 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 Series 2009 Bonds are to be redeemed prior to their
respective dates of maturity, provision shall have been made for giving notice of redemption as
provided in this Ordinance. Upon such deposit, such Series .2009 Bonds shall no longer be
regarded to be Outstanding or unpaid. Any surplus amounts not required to accomplish such
defeasance shall be returned to the City.
Section 7.12. Leal Holidays. Iu any case where the date of maturity of interest on or
principal of the Series 2009 Bonds or the date fixed for redemption of any Series 2009 Bonds
shall be in the City a legal holiday or a day on which the Paying Agent/Registrar for the Series
2009 Bonds is authorized by law to close, then payment of interest or principal need not be made
on such date but maybe made on the next succeeding day not in the City a legal holiday or a day
on which such Paying Agent Registrar is authorized by law to close with the same force and
effect as if 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.
Section 7.13. Unavailability of Authorized Publication. If, because of the temporary or
permanent suspension of any newspaper, jounlal or other publication, or, for any reason,
publication of notice caimot be made meeting any requirements herein established, any notice
required to be published by the provisions of this Ordinance shall be given in such other manner
and at such time or times as in the judgment of the City or of the Paying Agent/Registrar (or
paying agent) for the Series 2009 Bonds shall most effectively approximate such required
publication and the giving of such notice in such manner shall for all purposes of this Ordinance
be deemed to be in compliance with the requirements for publication thereof.
Section 7.14. No Recourse Against City Officials. No recourse shall be had for the
payment of principal of or interest on any Series 2009 Bonds or for any claim based thereon or
on this Ordinance against any official of the City or any person executing any Series 2009
Bonds.
Section 7.15. Amendment to Ordinance. The City may, with the consent of Owners
holding a majority in aggregate principal amount of the Bonds then Outstanding affected
thereby, amend, add to, or rescind any of the provisions of this Ordinance; provided that, without
the consent of all Owners of Outstanding Bonds, no such amendment, addition, or rescission
shall (1) extend the time or times of payment of the principal of, premium, if any, and interest on
the Bonds, reduce the principal amount thereof, the redemption. price therefor, or the rate of
interest thereon, or in any other way modify the teens of payment of the principal of, premium, if
any, or interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3)
reduce the aggregate principal amount of Bonds required to be held by Owners for consent to
any such amendment, addition, or rescission.
22
~~ou:as~~9s~.~
ARTICLE VIII
CONCERNING THE PAYING AGENT/REGISTRAR
Section 8.1. Acceptance. Wells Fargo Bank, N.A., Houston, Texas, is hereby
appointed as the initial Paying Agent/Registrar for the Series 2009 Bonds. Such initial Paying
Agent/Registrar and any successor Paying Agent/Registrar, by undertaking the performance of
the duties of the Paying Agent/Regish•ar hereunder, and in consideration of the payment of fees
and/or deposits of money pursuant to this Ordinance, shall be deemed to accept and agree to
abide by the terms of this Ordinance. The registration of and payment of the principal of;
premium, if any, and interest on the Series 2009 Bonds when due shall be effectuated pursuant to
the terms of a Paying Agent/Registrar Agreement to be entered into by and between the City and
the Paying Agent/Registrar, which shall be substantially in the fol~n attached hereto as_ Exhi:bit B,
the tenlis and provisions of which are hereby approved, and the Mayor and/or the Mayor Pro
Tem arehereby authorized to execute and deliver such Paying Agent/Registrar Agreement on
behalf of the City in multiple counterparts and the City Secretary is hereby authorized to attest
and affix the City's seal thereto.
Section 8.2. Fiduciary Account. All money t•ansfen•ed to the Paying Agent/Registrar
under this Ordinance (except sums representing Paying Agent/Registrar's fees) shall be held in a
fiduciary account for the benefit of the City, shall be the property of the City, and shall be
disbursed in accordance with this Ordinance.
Section 8.3. Bonds Presented. Subject to the provisions of Section 8.4, all matured
Series 2009 Bonds properly and timely presented to the Paying Agent/Registrar for payment
shall be paid without the necessity of further instructions from the City. Such Series 2009 Bonds
shall be canceled as provided herein.
Section 8.4. Series 2009 Bonds Not Timely Presented. The Paying Agent/Registrar
shall remit to the City, upon receipt of the certificate provided for herein, a sum equal to the
aggregate face amount of all Series 2009 Bonds which have not been presented for payment
prior to the date specified in such certificate. Such certificate shall:
(a) Specify the Series 2009 Bonds or portions thereof to which it applies and
the amount of each;
(b) Specify the date on which the City believes itself to be no longer obligated
to pay such Series 2009 Bonds or portions thereof by virtue of the expiration of the
applicable statute of limitations under the laws of the State of Texas; and
(c) Be signed by the Mayor and attested by the City Secretary.
Funds held by the Paying Agent/Registrar that represent principal of and interest on the
Series 2009 Bonds remaining unclaimed by any Registered Owner after the expiration of tlu•ee
years from the date such funds have become due and payable (a) shall be reported and disposed
of by the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas
Property Code, as amended, to the extent such provisions are applicable to such fiords, or (b) to
the extent such provisions do not apply to the funds, such fiords shall be paid by the Paying
23
HOU:28~9987.6
Agent/Registrar to the City upon receipt by the Paying Agent/Registrar of a written request
therefor [i-om the City.
The Paying Agent/Registrar shall have no liability to the Owners of the Series 2009
Bonds by virtue of actions taken in compliance with this Section.
Section 8.5. Paying Agent/Registrar May Own Series 2009 Bonds. The Paying
Agent/Registrar in. its individual or any other capacity, may become the Owner or pledgee of
Series 2009 Bonds with the same rights it would have if it were not the Paying Agent/Registrar.
Section 8.6. Successor Payin Agents/Registrars. The City covenants that at all times
while any Series -2009 Bonds are Outstanding it will provide a legally qualified bank; trust
company, financial institution, or other agency to act as Paying Agent/F.egistrar for the Series
2009 Bonds. If the Paying Agent/Registrar or its successor for any reason no longer acts as
Paying Agent/Registrar hereunder, the City covenants that it will appoint a bank in the same city
as the Paying Agent/Registrar initially appointed to perfoi-~n the duties of Paying Agent/Registrar
hereunder. Any successor Paying Agent/Registrar shall be either a national or state banking
institution, and a corporation organized and doing business tinder the laws of the United States of
America or any state, which is authorized under such laws to exercise trust powers and is subject
to supervision or examination by federal or state authority.
The City reserves the right to change the Paying Agent/Registrar for the Series 2009
Bonds on not less than sixty (60) days written notice to the Paying Agent/Registrar, as long as
any such notice is effective not less than sixty (60) days prior to the next succeeding principal or
interest payment date on the Series 2009 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 First-class mail, postage prepaid, of such change and of the
address of the new Paying Agent/Registrar. Each Paying Agent/Registrar hereunder, by acting
in that capacity, shall be deemed to have agreed to the provisions of this Ordinance.
ARTICLE IX
PROVISIONS CONCERNING SALE AND APPLICATION
OF PROCEEDS OF SERIES 2009 BONDS
Section 9.1. Sale of Series 2009 Bonds; Insurance. The sale of the Series 2009 Bonds
to the Purchaser at a price of $12,962,403.05 (representing the principal amount of the Series
2009 Bonds, less an original issue discount on the Series 2009 Bonds of $78,969.45 and less an
underwriting discount of $88,627.50), phis accrued interest to the date of delivery of the Series
2009 Bonds, in accordance with the teens of the Bond Purchase Agreement presented to and
hereby approved by the City Council, in substantially the foi7n attached hereto as Exhibit C
which price and teens are hereby found and determined to be the most advantageous reasonably
obtainable by the City. The Mayor, Mayor Pro-Tem and all other officials, agents and
representatives of the City are hereby authorized to do any and all things necessary or desirable
to provide for the issuance and delivery of the Bonds.
24
~iou:zs~~~a~.~
The City hereby aclalowledges that the sale of the Series 2009 Bonds is contingent upon
the issuance of a policy of municipal bond insurance from the Bond Insurer insuring the timely
payment of principal of and interest on the Series 2009 Bonds. The terms and conditions of such
policy, as set out in Exhibit D hereto, are incorporated herein for all purposes for so long as such
policy remains in effect. The appropriate off cials and representatives of the City are hereby
authorized and directed to execute such documents and certificates, including any credit
agreements related- thereto, and to do any and all things necessary or desirable to obtain such
policy, and the printing on the Series 2009 Bonds of an appropriate legend or statement
regarding such insurance, as provided by the Bond Insurer, is hereby approved.
Section 9.2. Approval Registration and Delivery. The Mayor and the City Secretary
are hereby authorized to have control and custody of the Series 2009 Bonds and all necessary
records and proceedings pertaining thereto pending their delivery, and the Mayor of the City, the
City Secretary of the City, the City Manager of the City and other officers and employees of the
City are hereby authorized, directed and instructed to make such certifications and to execute
such instruments (including by printed facsimile signature, the Series 2009 Bonds) as may be
necessary to accomplish the delivery of the Series 2009 Bonds and to assure the investigation,
examination, and approval thereof by the Attorney General of Texas and the registration of the
initial Series 2009 Bonds by the Comptroller of Public Accounts of the State of Texas. Upon
registration of the Series 2009 Bonds, the Comptroller of Public Accoluits of the State of Texas
(or a deputy designated in writing to act for him) shall be requested to sign manually the
registration certificate prescribed herein to be attached or affixed to each Series 2009 Bond
initially delivered and the seal of the Comptroller of Public Accounts of the State of Texas shall
be impressed or printed or lithographed thereon. Delivery of the Series 2009 Bonds is subject to
the iulqualified approving opinion as to the legality of the Series 2009 Bonds of the Attorney
General of Texas and of Andrews Kurth LLP, Houston, Texas, Bond Counsel.
Section 9.3. 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 Series 2009 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 Series 2009 Bonds and in the reoffering of the
Series 2009 Bonds by the Purchaser, 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 t-ue and correct
in 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 Series 2009 Bonds that was deemed "final" by an authorized official of the City except for
the omission of no more than the infoi7mation permitted by subsection (b)(1) of Rule 15c2-12 of
the Securities and Exchange Commission. Copies of the Preliminary Official Statement and the
Official Statement are attached hereto as Exhibits E and Exhibit F, 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 a rating on the Series 2009
25
uou:zs~9ys~.6
Bonds from Moody's Investors Service, Inc. and Standard & Poor's Ratings Services and such
actions are hereby ratified and confirmed.
Section 9.4. Application of Proceeds of Series 2009 Bonds. Proceeds from the sale of
the Series ?009 Bonds shall, promptly upon receipt by the City, be applied as follows:
(a) First, accrued interest and premium, if any, shall be deposited into the
hrterest and Sinking Fund; and
(b) Second, the remaining proceeds from the sale of the Series 2009 Bonds
shall be deposited to a separate carlstruction fund of the City and used for the pui~~oses
set forth in Section 3.1 of this Ordinance and to pay all expenses arising in connection
with the issuance of the Series 2009 Bonds. Any proceeds of the Series ?009 Bonds
remaining after making all such deposits and payments shall be deposited into the h~terest
and Sinking Fund.
Section 9.5. Tax Exemption. The City intends that the interest on the Bonds shall be
excludable from gross income of the owners thereof for federal income tax purposes pursuant to
Sections 103 and 141 through 150 of the hiternal 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 fiu-ther 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 repairs,
improvements, additions and extensions to the System, which will be owned and operated by the
City and (ii) 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(x) of the Code.
(c) Principal of and hlterest on the Bonds will be paid solely from Pledged Revenues
collected by the City, investment eaniings on such collections, and as available, proceeds of the
Bonds.
(d) Based upon all facts and estimates now lalown 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 in a manner that would cause the Bonds or anyportion thereof to be
an "arbitrage bond" within the meaning of Section 148 of the Code.
26
Hou:?ss~~s~ ~
(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 in 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 is not materially higher than the yield on the Bonds. To the extent
necessary to prevent the Bonds from constituting "arbitrage bonds," the City will make such
payments as are necessary to cause the yield on all yield restricted nonpurpose inveshnents
allocable to the Bonds to be less than the yield that is materially higher than the yield on the
Bonds.
(f) The City will not take any action or knowingly omit to take any action that, if
taken or on7itted~, would cause the Bonds to be treated. as "federally guaranteed" obligations for
purposes of Section 149(b) of the Code.
(g) The City represents that not more than fifty percent (50%) of the proceeds of the
Bonds will be invested in nonpurpose 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)(ii) of the Code, and the City reasonably expects that at least eighty-five
percent (85%) of the spendable proceeds of the Bonds will be used to can•y out the govenmiental
purpose of the Bonds within the three-year period begimling on the date of issue of the Bonds.
(h) The City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the gross proceeds of the Bonds, if any, be
rebated to the federal government. Specifically, the City will (i) maintain records regarding the
receipt, investment, and expenditure of the gross proceeds of the Bonds as may be required to
calculate such excess arbitrage profits separately from records of amounts on deposit in the fiords
and accounts of the City allocable to other obligations of the City or moneys which do not
represent gross proceeds of any obligations of the City and retain such records for at least six
years after the day on which the last outstanding Bond is discharged, (ii) account for all gross
proceeds Linder a reasonable, consistently applied method of accounting, not employed as an
artifice or device to avoid in whole or in part, the requirements of Section 148 of the Code,
including any specified method of accounting required 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 by applicable Regulations, all
amounts required to be rebated to the federal govei7lment. hi addition, the City will exercise
reasonable diligence to assure that no ei7ors are made in the calculations required by the
preceding sentence and, if such an error is made, to discover and promptly correct such en•or
within a reasonable amount of time thereafter, including payment to the federal govei7mient of
any delinquent amounts owed to it, interest thereon and any penalty.
(i) The City will not directly or indirectly pay any amount otherwise payable to the
federal government plv^suant to the foregoing requirements to any person other than the federal
govei7lment by entering into 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 in a smaller profit or a larger loss than would have
27
HOU28~9987.6
resulted if such arrangement bad been at arm's length and bad the yield on the Bonds not been
relevant to either party.
(j) The City will timely file or cause to be filed with the Secretary of the Treasury of
the United States the infor7ilation required by Section 149(e) of the Code with respect to the
Bonds on such form and in such place as the Secretary may prescribe.
(k) The City will not issue or use the Bonds as part of an "abusive arbitrage device"
(as defined in Section 1.148-] 0(a) of the Regulations). Without limiting 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 o1~ 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 gain a material
financial advantage, or (ii) increasingthe 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 materially 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
appropriate to assure the continuous accuracy of the representations contained 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.
hl 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 income tax purposes
under existing law.
Notwithstanding any other provision of this Ordinance, the City's representations and
obligations under the covenants and provisions of this Section 9.5 shall survive the defeasance
anal 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.
ARTICLE X
CONTINUING DISCLOSURE UNDERTAKING
Section 10.1. Armrtal Reports. The City shall provide amlually to each NRMSIR and
any SID, within six months after the end of each fiscal year ending in or after 2009, financial
infonllation and operating data with respect to the City of the general type described in Exhibit G
hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the
accounting principles described in Exhibit G hereto and (2) 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 so provided, then the City shall provide audited
financial statements for the applicable fiscal year to each NRMSIR and any SID, when and if
28
Hou:?s~99s~.~
audited financial statements become available, but if such audited financial statements are
unavailable the City will provide such financial statements on an unaudited basis within the
above-described six-month period.
If the City changes its fiscal year, it will notify each NRMSIR and any SID 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 p~u-suant to this Section.
The financial information and operating data to be provided pursuant to this Section may
be set forth in full in one or more documents or may be included by specific reference to any
document (including an off cial statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with tl?e SEC,
or maybe provided in any other manner consistent with the FLule.
Section 10.2. Material Event Notices. The City shall notify any SID and either each
NRMSIR or the MSRB, in a timely planner, of any of the following events with respect to the
Series 2009 Bonds, if such event is material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non-payment related defaults;
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit ei~llancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers, or their failure to perform;
F. Adverse tax opinions or events affecting the tax-exempt status of the Series 2009
Bonds;
G. Modifications to rights of holders of the Series 2009 Bonds;
H. Series 2009 Bond calls;
I. Defeasapces;
J. Release, substitution, or,sale of property securing repa}mlent of the Series 2009
Bonds; and
K. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely
maimer, of any failure by the City to provide financial information or operating data in
accordance with Section 10.1 of this Ordinance by the time required by such Section.
Section 10.3. Limitations Disclaimers, and Amendments. The City shall be obligated
to observe and perfornl the covenants specified in this Article for so long as, but only for so long
as, the City remains an "obligated person" with respect to the Series 2009 Bonds within the
29
IIOU2S~9987.6
meaning of the Rule, except that the City in any event will give the notice required by Section
10.2 of any Series 2009 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 Owners and beneficial owners
of the Series 2009 Bonds, and nothing in this Article, express or implied, shall give any benefit
or any legal or equitable right, reuledy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide plusuant to this Article and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Article or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefiihless to a decision to invest in or sell Series 2009 Bonds at airy future
date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY SERIES 2009 BOND OR ANY OTHER PERSON, Iht
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 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 this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Article is intended or shall act to disclaim, waive or otherwise limit the
duties of the City under federal and state securities laws.
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 in legal requirements, a change in law, or a
change in the identity, nature, states 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 Series 2009 Bonds in the primary offering o~ the Series 2009 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 Owners of a majority
in aggregate principal amount (or any greater amount required by any other provision of this
Ordinance that authorizes such an amendment) of the Outstanding Series 2009 Bonds consent to
such amendment or (b) a person or entity that is unaffiliated with the City (such as nationally
recogiuzed bond counsel) determines that such amendment will not materially impair the
interests of the Owners and beneficial owners of the Series 2009 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 10.1 an explanation, in narrative form,
of the reasons for the amendment and of the impact of any change in the type of financial
30
HOU28~998Z6
information or operating data so provided. The City may also amend or repeal the provisions of
this Article if the SEC amends or repeals the applicable provisions of the Rule or a cow-t of final
jLirisdiction enters judgment that such provisions of the Rule are invalid, and the City also may
amend the provisions of this Article in its discretion in any other manner or circumstance, but in
either case only if and to the extent that the provisions of this sentence would not prevent an
underwriter from lawfully purchasing or selling Series 2009 Bonds in the primary offering of the
Series 2009 Bonds.
Section 10.4. Definitions. As used in this Article; the following terms have the
meanings ascribed to such terms below:
"M,SRB"means the Municipal Securities Ruilemaking Board.
"NIZMSIR " means each person whoul the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Related Matters. 111 order that the City shall satisfy, in a timely maiuler,
all of its obligations under the Ordinance, the Mayor, the City Secretary and other appropriate
officers and agents of the City are hereby authorized and directed to take all other actions that are
reasonably necessary to provide for issuance and delivery of the Series 2009 Bonds, 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 the Ordinance and to direct the
transfer and application of funds of the City consistent with the provisions of such. Ordinance. If
requested by the Attonley General of Texas or his representatives, the Mayor may authorize such
ministerial changes in the written text of this Ordinance as are necessary to obtain the Atto171ey
General's approval and as he detenllines are consistent with the intent and purposes of this
Ordinance, which determination shall be final.
Section 11.2. Severability. If any Section, paragraph, clause or provision of this
Ordinance shall for airy 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 11.3. Open Meeting. It is hereby found, detei~nined and declared that a
surfficient written notice of the date, hour, place and subject of the meeting of the City Council at
31
iiou:zs~9~s~.~
which this Ordinance was adopted was posted at a place convenient ~u1d 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 fo---eally
acted upon. The City Council further ratifies, approves and confines such written notice and the
contents and posting thereof.
Section 11.4. Governiu~ Law. This Ordinance shall be construed in accordance with
and governed by the laws of the State of Texas.
Section 11.5. Repealer. All ordinances, or parts thereof inconsistent herewith, are
hereby repealed to the extent of such inconsistency.
Section 11.6. 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 Series 2009 Bonds are required as soon as possible for necessary and urgently needed
improvements, and that this Ordinance be passed and approved on the date of its introduction.
Section 11.7. Effective Date. This Ordinance shall be in force and effect from and after
its passage on the date shown below.
32
r-ou:?s~~9s~.6
EXHIBIT A
FORM OF BOND
United States of America
State of Texas
NUMBER
~R-
REGISTER:ED
'INTEREST RATE
DENOMINATION
REGISTERED
CITY OF PEARLAND, TEXAS
WATER AND SEWER SYSTEM REVENUE BC)NDS
SERIES 2009
DATED DATE: ZMATURITY DATE:
February 1, 2009 September 1,
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
3THE CITY OF PEARLAND, TEXAS (the "City"), a nnulicipal corporation duly
incorporated under the laws of the State of Texas, for value received hereby promises to pay, but
solely from certain Net Revenues as hereinafter provided, to the Registered Owner identified
above or registered assigns, on the Maturity Date specified above, upon presentation and
sun•ender of this Series 2009 Bond at the designated payment office of Wells Fargo Bank, N.A.
in Houston, Texas (the "Paying Agent/Registrar"), the principal amount identified above, in any
coin or clu-rency of the United States of America which on the date of payment of such principal
is legal tender for the payment of debts due the United States of America, and to pay, solely from
such Net Revenues, interest thereon at the rate described below, calculated on the basis of a 360-
day year, composed of twelve 30-day months, from the later of the Dated Date identified above
~ Initial Bond shall be numbered T-I .
' Omitted from hritial Bond.
' The first sentence of the Initial Bond shall read as follows:
"THE CITY OF PEARLAND, TEXAS (the "City"), a municipal corporation duly incorporated under die
laws of the State of Texas, for value received hereby pronuses to pay, but solely from certain Net Revenues as
hereinafter provided, to the Registered Owner identified above or registered assigns, on the Maturity Date
specified below, upon presentation and surrender~of this Series 2009 Bond at the designated payment office of
Wells Fargo Bank, N.A, in Houston, Texas (the "Paying Agent/Registrar"), the principal amount set forth in
the following schedule: [Insert information regarding years of maturity, principal amounts and interest rates
from Section 3.3 of the Ordinance], in any coin or currency of the United States of America which on the date
of payment of such principal is legal tender for the payment of debts due the United States of America, and to
pay, solely from such Net Revenues, interest thereon at the rate described above, calculated on the 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
'CUSIP:
F~ou:ass9~s~.c
or the most recent interest payulent date to which interest has been paid or duly provided for.
Interest on this Series 2009 Bond is payable by check sent by Ihiited States mail, first class,
postage prepaid, payable on September 1 and March 1, beginning on September 1, 2009, mailed
to the Registered Owner as shown on the books of registration kept by the Paying
Agent/Registrar as of the fifteenth calendar day of the month next preceding each interest
payment date. Any accrued interest payable at maturity or earlier redemption shall be paid upon
presentation and surrender of this Series 2009 Bond at the principal corporate trust office of the
Paying Agent/Registrar.
THIS SERIES 2009 BOND IS ONE OF A Dt1LY AUTHORIZED SERIES OF BONDS
(the "Series 2009 Bonds") aggregating $13,130,000, issued for the purpose of constructing
certain repairs, improvements, additions and extensions to the City's waterworks and sanitary
sewer system and payment of costs of issuance of the Series 2009 Bonds, all under and pursuant
to Chapter 1502, Texas Goven7ment Code, as amended, and an ordinance adopted by the City on
January 26, 2009 (the "Ordinance"), and other applicable Iaw. Capitalized teens used herein
without definition are defined in the Ordinance.
THIS SERIES 2009 BOND AND THE SERIES OF WHICH IT IS A PART are special
obligations of the City that are payable from and are equally and ratably secured by a first lien on
and pledge of the Net Revenues collected and received by the City from the operation and
ownership of the City's water and sewer system as defined and provided in the Ordinance, which
Net Revenues are required to be set aside and pledged to the payment of the Outstanding Bonds,
as described in the Ordinance, the Series 2009 Bonds, and all Additional Bonds issued on a
parity therewith, in the Interest and Sinking Fund and the Reserve Fund maintained for the
payment of all such Bonds, all as more fully described and provided for in the Ordinance.
THIS SERIES 2009 BOND AND THE SERIES OF WHICH IT IS A PART ARE
PAYABLE SOLELY FROM SUCH NET REVENUES AND NEITHER THE STATE, NOR
ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE, SHALL BE OBLIGATED
TO PAY THE SAME OR THE INTEREST THEREON AND NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE CITY, OR ANY OTHER
POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE SERIES 2009
BONDS. THE OWNER HEREOF SHALL NEVER HAVE THE RIGHT TO DEMAND
PAYMENT OF THIS SERIES 2009 BOND OUT OF ANY FUNDS RAISED OR TO BE
RAISED BY AD VALOREM TAXATION.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is on file in
the office of the Paying Agent/Registrar, and to all of the provisions of which the Registered
Owner of this bond by the acceptance hereof hereby assents, for definitions of terms; the
description of and the nature and extent of the security for the Series 2009 Bonds; the priority for
the application and use of the income and revenues of the System; the Net Revenues pledged to
the payment of the principal of and interest on the Series 2009 Bonds; the nature and extent and
maimer of enforcement of the lien and pledge securing the payment of the Series 2009 Bonds;
the teens and conditions for the issuance of additional revenue obligations, including Additional
Bonds; the teens and conditions for amending the Ordinance; the teens and conditions relating
to the transfer or exchange of this bond; the rights, duties, and obligations of the City and the
A-2
~iou:ass99s~.~
Paying Agent/Registrar; the terms and provisions upon which the liens, pledges, charges and
covenants made therein may be discharged at or prior to the maturity of this bond, and deemed to
be no longer Outstanding thereunder; and for the other terms and provisions thereof. Capitalized
terms used 1lerein, unless otherwise defined, have the same meanings assigned in the Ordinance.
THE CITY RESERVES THE RIGHT', at its option, to redeem the Series 2009 Bonds
maturing oil September l , 2019, and thereafter prior to their scheduled maturities, in whole or in
part, in integral multiples of $5,000 on September 1, 2018, or any date thereafter at par plus
accrued interest on the principal amounts called for redemption to the date fixed for redemption.
THE SERIES 2009 BONDS MATURING on September 1 in the years 2032 and 2034
(the "Tenn Bonds") are subject to mandatory sinking fund redemption in the following amounts
(subject to reduction as hereinafter provided), on the following dates, in each case at a
redemption price equal to the principal amount of the Series 2009 Bonds or the portions thereof
so called for redemption phis accrued interest to the date fixed for redemption:
Term Bonds Maturing September 1, 2032
Mandator~~ Redemption Dates
September 1, 2030
September 1, 2031
September 1, 2032 (mahuity)
Principal Amounts
$700,000
730,000
765,000
Term Bonds Maturing September 1, 2034
September 1, 2033
September 1, 2034 (mahuity)
$815,000
845,000
The particular Tenn Bonds to be redeemed shall be selected by the Registrar by lot or other
customary random selection method, on or before July 15 of each year in which Tertn Bonds are
to be mandatorily redeemed. The principal amount of Tenn Bonds to be mandatorily redeemed
in each year shall be reduced by the principal amount of such Tenn Bonds that have been
optionally redeemed on or before July 15 of such year and which have not been made the basis
for a previous reduction.
NOT LESS THAN THIRTY (30) DAYS prior to a redemption date, a notice of
redemption will be sent by U.S. mail, first class postage prepaid, in the name of the City to each
registered owner of a Series 2009 Bond to be redeemed in whole or in part at the address of the
registered owner appearing on the registration books of the Paying Agent/Registrar at the close
of business on the business day next preceding the date of mailing. When Series 2009 Bonds or
portions thereof have been called for redemption and due provision has been made to redeem the
same, the amolults so redeemed shall be payable solely from the funds provided for redemption,
and interest which would otherwise accrue on the Series 2009 Bonds or portions thereof called
for redemption shall terminate on the date fixed for redemption.
``THIS SERIES 2009 BOND shall not be valid or obligatory for any purpose or be
entitled to any benefit under the Resolution unless this Bond is authenticated by the Paying
Agent/Registrar by due execution of the authentication certificate endorsed hereon.
a In the Initial Bond, this paragraph shall read as follows:
A-3
HOU:28~9987.6
THIS SERIES 2009 BOND IS TRANSFERABLE only upon presentation and surrender
at the designated payment office of the Paying Agent/Registrar, duly endorsed for transfer or
accompanied by an assignment duly executed by the Registered Owner or his authorized
representative, subject to the terms and conditions of the Ordinance.
TH lS SERIES 2009 BOND IS EXCHANGEABLE at the corporate trust office of the
Paying Agent/Registrar for bonds 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 Series 2009 Bond called for redemption in whole or in part during the 45 day
period immediately prior to the date fixed for redemption.
THE REGISTEP.ED OWNER of this Series 2009 Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all tin7es provide a legally
qualified Paying Agent/Registrar for the Series 2009 Bonds and will cause notice of any change
of Paying Agent/Registrar to be mailed to each Registered Owner.
THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL PARITY
BONDS, subject to the restrictions contained in the Ordinance, which may be equally and ratably
payable from, anal secured by a first lien on and pledge of, the Net Revenues in the same mamler
and to the same extent as the Outstanding Bonds, which inchtdes this Series 2009 Bond and the
series of which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Series 2009 Bond has
been duly and validly issued and delivered; that all acts, conditions, and things required or proper
to be performed, to exist, and to be done precedent to or in the issuance and delivery of this
Series 2009 Bond have been performed, have existed, and have been done in accordance with
law; that the Series 2009 Bonds do not exceed any statutory limitation; and that provision has
been made for the payment of the principal of and interest on this Series 2009 Bond and all of
the Series 2009 Bonds by the creation of the aforesaid lien on and pledge of the Net Revenues.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and has caused this Series 2009 Bond to be executed by the Mayor
and countersigned by the City Secretary by manual, lithographed, or printed facsimile signatures.
CITY OF PEARLAND, TEXAS
Mayor
(SEAL)
"THIS SERIES 2009 BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under
the Resolution unless this Bond is registered by the Comptroller of Public Accounts of the State of Texas by
registration certificate attached or affixed hereto."
A-4
I IOU:28i9987.6
COUNTERSIGNED
City Secl-etary
FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE]
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Series 2009 Bonds initially delivered.
THE STATE OF TEXAS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
REGISTER. NO.
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this bond and the proceedings for the issuance
hereof have been examined by him as required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of Texas and that it is a valid and binding
special obligation of the City of Pearland, Texas, payable from the revenues and other funds
pledged to its payment by and in the proceedings authorizing the same, and I do fiu-ther certify
that this bond has this day been registered by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
[SEAL]
Comptroller of Public Accounts
of the State of Texas
**~**
A-5
I-IOU:28~9987.6
(FORM OF AUTHENTICATION CERTIFICATE]
Tl-ie following form of Authentication Certificate shall appear on each of the Series 2009
Bonds.
AUTHENTICATION CERTIFICATE
Registration Date:
This bond is one of the Series 2009 Bonds described in and delivered pursuant to the
within-mentioned Ordinance; and, except for the Series 2009 Bonds initially delivered, this bond
has been issued in conversion of and exchange for or replacement of a bond, bonds oa• a portion
of a bond or bonds of an issue which originally was approved by the Attoi7~ey General of the
State of Texas and registered by the Comptroller of Public Accounts of the State of Texas.
WELLS FARGO BAND, N.A.
Bv:
Authorized Signature:_
Date of Authentication:
*****
A-6
HOU:23~9957.6
[FORM OF ASSIGNMENT
The following form of assignment shall appear on each of the Series 2009 Bonds.
ASSIGNMENT
For value received, the undersigned hereby se11s, assigns, and transfers unto
(Social Seczu-ity or Other Identifying N~lnnbei)
(Print or type ncinae, address, a~~~d zip code of trcn~sferee)
the within bond and hereby ii7-evocably constitutes and appoints attorney to
transfer said bond on the books kept for registration thereof, with full power of substitution in the
premises.
DATED:
Signature Guaranteed:
NOTICE: The signature must be guaranteed
by a commercial bank or a member fine of a
national securities exchange. Notarized or
witnessed signatures are not acceptable.
Registered Owner
NOTICE: The signature on this assigmnent
must correspond with the name of the
Registered Owner as it appears on the face of
the within bond in every particular, without
alteration or enlargement or any change
whatever.
*=~**
STATEMENT OF INSURANCE
[TO COME]
A-7
i~ou:za~9~8~.~
EXHIBIT D
TERMS AND CONDITIONS OF MUNICIPAL BOND INSURANCE POLICY
1IOU:28~9987.6
EXHIBIT G
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Article X of this Ordinance:
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
am~ually in accordance with such Article are as specified below:
The financial statements of the City for the most recentiy concluded fiscal year.
Accounting Principles
The accounting principles referred to in Article X are the accounting principles described
in the notes to the financial statements referred to in paragraph 1 above.
1
Hou:zs~99s~.6
PASSED AND APPROVED on first reading pursuant to Section 3.10 of the City Charter
this January26 , 2009.
_~
Mayor, City of Pearland, Texas
AT'hEST:
Seore ~ •y, Cite o earl d., Texas
:~~:
(SEA~,~ ~~_...
Exhibit A Form of Bond
Exhibit B Paying Agent/Registrar Agreement
Exhibit C Bond Purchase Agreement
Exhibit D Teens and Provisions of Insurance Policy
Exhibit E Preliminary Official Statement
Exhibit F Official Statement
Exhibit G Description of Annual Financial Infoi-~nation
S-1
Hou:zs~9~a~.~
EXHIBIT A
FORM OF BOND
United States of America
State of Texas
NUMBER
1R-
REGISTERED
DENOMINATION
REGISTERED
CITY OF PEARLAND, TEXAS
WATER AND SEWER SYSTEM REVENUE BONDS
SERIES 2009
2INTEREST RATE: DATED DATE: 2MATURITY DATE
February I, 2009 September 1,
REGISTERED OWNER:
PRINCIPAL AMOUNT:
2CUSIP:
DOLLARS
3THE CITY OF PEARLAND, TEXAS (the "City"), a municipal corporation duly
incorporated under the laws of the State of Texas, for value received hereby promises to pay, but
solely from certain Net Revenues as hereinafter provided, to the Registered Owner identified
above or registered assigns, on the Maturity Date specified above, upon presentation and
surrender of this Series 2009 Bond at the designated payment office of Wells Fargo Bank, N.A.
in Houston, Texas (the "Paying Agent/Registrar"), the principal amount identified above, in any
coin or currency of the United States of America which on the date of payment of such principal
is legal tender for the payment of debts due the United States of America, and to pay, solely from
such Net Revenues, interest thereon at the rate described below, calculated on the basis of a 360-
day year, composed of twelve 30-day months, from the later of the Dated Date identified above
~ Initial Bond shall be numbered T-l
2 Omitted from Initial Bond.
s The first sentence of the Initial Bond shall read as follows:
"THE CITY OF PEARLAND, TEXAS (the "City"), a municipal corporation duly incorporated under the
laws of the State of Texas, for value received hereby promises to pay, but solely from certain Net Revenues as
hereinafter provided, to the Registered Owner identified above or registered assigns, on the Maturity Date
specified below, upon presentation and surrender of this Series 2009 Bond at the designated payment office of
Wells Fargo Bank, N.A. in Houston, Texas (the "Paying Agent/Registrar"), the principal amount set forth in
the following schedule: [Insert information regarding years of maturity, principal amounts and interest rates
from Section 3.3 of the Ordinance], in any coin or currency of the United States of America which on the date
of payment of such principal is legal tender for the payment of debts due the United States of America, and to
pay, solely from such Net Revenues, interest thereon at the rate described above, calculated on the 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:2859987.4
or the most recent interest payment date to which interest has been paid or duly provided for..
Interest on this Series 2009 Bond is payable by check sent by United States mail, first class,
postage prepaid, payable on September 1 and March 1, beginning on September 1, 2009, mailed
to the Registered Owner as shown on the books of registration kept by the Paying
AgenbRegistrar as of the fifteenth calendar day of the month next preceding each interest
payment date. Any accrued interest payable at maturity or earlier redemption shall be paid upon
presentation and surrender of this Series 2009 Bond at the principal corporate trust office of the
Paying Agent/Registrar.
THIS SERIES 2009 BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS
(the "Series 2009 Bonds") aggregating $13,090,000, issued for the purpose of constructing
certain repairs, improvements, additions and extensions to the City's waterworks and sanitary
sewer system and payment of costs of issuance of the Series 2009 Bonds, all under and pursuant
to Chapter 1502, Texas Government Code, as amended, and an ordinance adopted by the City on
January 26, 2009 (the "Ordinance"), and other applicable law. Capitalized terms used herein
without definition are defined in the Ordinance.
THIS SERIES 2009 BOND AND THE SERIES OF WHICH IT IS A PART are special
obligations of the City that are payable from and are equally and ratably secured by a first lien on
and pledge of the Net Revenues collected and received by the City from the operation and
ownership of the City's water and sewer system as defined and provided in the Ordinance, which
Net Revenues are required to be set aside and pledged to the payment of the Outstanding Bonds,
as described in the Ordinance, the Series 2009 Bonds, and all Additional Bonds issued on a
parity therewith, in the Interest and Sinking Fund and the Reserve Fund maintained for the
payment of all such Bonds, all as more fully described and provided for in the Ordinance.
THIS SERIES 2009 BOND AND THE SERIES OF WHICH IT IS A PART ARE
PAYABLE SOLELY FROM SUCH NET REVENUES AND NEITHER THE STATE, NOR
ANY POLITICAL SUBDIVISION OR AGENCY OF THE STATE, SHALL BE OBLIGATED
TO PAY THE SAME OR THE INTEREST THEREON AND NEITHER THE FAITH AND
CREDIT NOR THE TAXING POWER OF THE STATE, THE CITY, OR ANY OTHER
POLITICAL CORPORATION, SUBDIVISION OR AGENCY THEREOF IS PLEDGED TO
THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE SERIES 2009
BONDS. THE OWNER HEREOF SHALL NEVER HAVE THE RIGHT TO DEMAND
PAYMENT OF THIS SERIES 2009 BOND OUT OF ANY FUNDS RAISED OR TO BE
RAISED BY AD VALOREM TAXATION.
REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is on file in
the office of the Paying Agent/Registrar, and to all of the provisions of which the Registered
Owner of this bond by the acceptance hereof hereby assents, for definitions of terms; the
description of and the nature and extent of the security for the Series 2009 Bonds; the priority for
the application and use of the income and revenues of the System; the Net Revenues pledged to
the payment of the principal of and interest on the Series 2009 Bonds; the nature and extent and
manner of enforcement of the lien and pledge securing the payment of the Series 2009 Bonds;
the terms and conditions for the issuance of additional revenue obligations, including Additional
Bonds; the terms and conditions for amending the Ordinance; the terms and conditions relating
to the transfer or exchange of this bond; the rights, duties, and obligations of the City and the
A-2
HOU:2859987.4
Paying Agent/Registrar; the terms and provisions upon which the liens, pledges, charges and
covenants made therein may be discharged at or prior to the maturity of this bond, and deemed to
be no longer Outstanding thereunder; and for the other terms and provisions thereof. Capitalized
terms used herein, unless otherwise defined, have the same meanings assigned in the Ordinance.
THE CITY RESERVES THE RIGHT, at its option, to redeem the Series 2009 Bonds
maturing on September 1, 2015, and thereafter prior to their scheduled maturities, in whole or in
part, in integral multiples of $5,000 on September 1, 2014, or any date thereafter at par plus
accrued interest on the principal amounts called for redemption to the date fixed for redemption.
THE SERIES 2009 BONDS MATURING on September 1 in the years 2028, 2030 and
2034 (the "Term Bonds") are subject to mandatory sinking fund redemption in the following
amounts (subject to reduction as hereinafter provided), on the following dates, in each case at a
redemption price equal to the principal amount of the Series 2009 Bonds or the portions thereof
so called for redemption plus accrued interest to the date fixed for redemption:
Term Bonds Maturing September 1, 2028
Term Bonds Maturing September 1, 2030
Mandatory Redemption Dates Principal Amounts
September 1, 2024 $530,000
September 1, 2025 560,000
September 1, 2026 590,000
September 1, 2027 630,000
September 1, 2028 (maturity) 660,000
September 1, 2029 $705,000
September 1, 2030 (maturity) 745,000
Term Bonds Maturing September 1, 2034
September 1, 2031 $780,000
September 1, 2032 845,000
September 1, 2033 895,000
September 1, 2034 (maturity) 935,000
The particular Term Bonds to be redeemed shall be selected by the Registrar by lot or other
customary random selection method, on or before July 15 of each year in which Term Bonds are
to be mandatorily redeemed. The principal amount of Term Bonds to be mandatorily redeemed
in each year shall be reduced by the principal amount of such Term Bonds that have been
optionally redeemed on or before July 15 of such year and which have not been made the basis
for a previous reduction.
NOT LESS THAN THIRTY (30) DAYS prior to a redemption date, a notice of
redemption will be sent by U.S. mail, first class postage prepaid, in the name of the City to each
registered owner of a Series 2009 Bond to be redeemed in whole or in part at the address of the
registered owner appearing on the registration books of the Paying Agent/Registrar at the close
of business on the business day next preceding the date of mailing. When Series 2009 Bonds or
portions thereof have been called for redemption and due provision has been made to redeem the
same, the amounts so redeemed shall be payable solely from the funds provided for redemption,
and interest which would otherwise accrue on the Series 2009 Bonds or portions thereof called
for redemption shall terminate on the date fixed for redemption.
A-3
HOU:2859987.4
4THIS SERIES 2009 BOND shall not be valid or obligatory for any purpose or be
entitled to any benefit under the Resolution unless this Bond is authenticated by the Paying
Agent/Registrar by due execution of the authentication certificate endorsed hereon.
THIS SERIES 2009 BOND IS TRANSFERABLE only upon presentation and surrender
at the designated payment office of the Paying Agent/Registrar, duly endorsed for transfer or
accompanied by an assignment duly executed by the Registered Owner or his authorized
representative, subject to the terms and conditions of the Ordinance.
THIS SERIES 2009 BOND IS EXCHANGEABLE at the corporate trust office of the
Paying Agent/Registrar for bonds 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 Series 2009 Bond called for redemption in whole or in part during the 45 day
period immediately prior to the date fixed for redemption.
THE REGISTERED OWNER of this Series 2009 Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally
qualified Paying Agent/Registrar for the Series 2009 Bonds and will cause notice of any change
of Paying Agent/Registrar to be mailed to each Registered Owner.
THE CITY HAS RESERVED THE RIGHT TO ISSUE ADDITIONAL PARITY
BONDS, subject to the restrictions contained in the Ordinance, which may be equally and ratably
payable from, and secured by a first lien on and pledge of, the Net Revenues in the same manner
and to the same extent as the Outstanding Bonds, which includes this Series 2009 Bond and the
series of which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Series 2009 Bond has
been duly and validly issued and delivered; that all acts, conditions, and things required or proper
to be performed, to exist, and to be done precedent to or in the issuance and delivery of this
Series 2009 Bond have been performed, have existed, and have been done in accordance with
law; that the Series 2009 Bonds do not exceed any statutory limitation; and that provision has
been made for the payment of the principal of and interest on this Series 2009 Bond and all of
the Series 2009 Bonds by the creation of the aforesaid lien on and pledge of the Net Revenues.
IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or
placed in facsimile hereon and has caused this Series 2009 Bond to be executed by the Mayor
and countersigned by the City Secretary by manual, lithographed, or printed facsimile signatures.
a In the Initial Bond, this paragraph shall read as follows:
"THIS SERIES 2009 BOND shall not be valid or obligatory for any purpose or be entitled to any benefit under
the Resolution unless this Bond is registered by the Comptroller of Public Accounts of the State of Texas by
registration certificate attached or affixed hereto."
A-4
HOU:2859987.4
CITY OF PEARLAND, TEXAS
(SEAL)
Mayor
COUNTERSIGNED
City Secretary
*****
[FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE]
The following form of Comptroller's Registration Certificate shall be attached or affixed
to each of the Series 2009 Bonds initially delivered.
THE STATE OF TEXAS
REGISTER NO.
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this bond and the proceedings for the issuance
hereof have been examined by him as required by law, that he finds that it has been issued in
conformity with the Constitution and laws of the State of Texas and that it is a valid and binding
special obligation of the City of Pearland, Texas, payable from the revenues and other funds
pledged to its payment by and in the proceedings authorizing the same, and I do further certify
that this bond has this day been registered by me.
WITNESS MY SIGNATURE AND SEAL OF OFFICE this
[SEAL]
Comptroller of Public Accounts
of the State of Texas
*****
A-5
HOU:2859987.4
[FORM OF AUTHENTICATION CERTIFICATE]
Bonds.
The following form of Authentication Certificate shall appear on each of the Series 2009
AUTHENTICATION CERTIFICATE
Registration Date:
This bond is one of the Series 2009 Bonds described in and delivered pursuant to the
within-mentioned Ordinance; and, except for the Series 2009 Bonds initially delivered, this bond
has been issued in conversion of and exchange for or replacement of a bond, bonds or a portion
of a bond or bonds of an issue which originally 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.
By:
Authorized Signature:
Date of Authentication:
*****
A-6
HOU:2859987.4
[FORM OF ASSIGNMENT]
The following form of assignment shall appear on each of the Series 2009 Bonds.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Social Security or Other Ident~ing Number)
(Print or type name, address, and zip code of transferee)
the within bond and hereby irrevocably constitutes and appoints attorney to
transfer said bond on the books kept for registration thereof, with full power of substitution in the
premises.
DATED:
Signature Guaranteed:
NOTICE: The signature must be guaranteed
by a commercial bank or a member firm of a
national securities exchange. Notarized or
witnessed signatures are not acceptable.
Registered Owner
NOTICE: The signature on this assignment
must correspond with the name of the
Registered Owner as it appears on the face of
the within bond in every particular, without
alteration or enlargement or any change
whatever.
****
STATEMENT OF INSURANCE
[TO COME]
A-7
HOU2859987.4
EXHIBIT D
TERMS AND CONDITIONS OF MUNICIPAL BOND INSURANCE POLICY AND
DEBT SERVICE RESERVE FUND POLICY
HOU:2859987.4
EXHIBIT G
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Article X of this Ordinance:
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 Article are as specified below:
The financial statements of the City for the most recently concluded fiscal year.
Accounting Principles
The accounting principles referred to in Article X are the accounting principles described
in the notes to the financial statements referred to in paragraph 1 above.
HOU:2859987.4
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF BRAZORIA AND HARRIS
CITY OF PEARLAND
We, the undersigned officers of the City of Pearland, Texas (the "City"), hereby certify as
follows:
1. The City Council of the City convened in a regular meeting on January 26, 2009,
at the regular meeting place thereof, within the City, and the roll was called of the duly
constituted officers and members of the City Council, to wit:
Tom Reid Mayor
Helen Beckman Mayor Pro Tem
Woodrow "Woody" Owens Council Member
Steve Saboe Council Member
Felicia Kyle Council Member
Kevin Cole Council Member
Young Lorfing City Secretary
and all of such persons were present except ,thus constituting a quorum.
Whereupon, among other business, the following was transacted at said meeting: a written
ORDINANCE AUTHORIZING ISSUANCE OF CITY OF PEARLAND,
TEXAS, WATER AND SEWER SYSTEM REVENUE BONDS, SERIES 2009;
PRESCRIBING THE TERMS AND CONDITIONS THEREOF; PROVIDING
FOR THE PAYMENT THEREOF; AWARDING THE SALE THEREOF;
AUTHORIZING THE PREPARATION AND DISTRIBUTION OF AN
OFFICIAL STATEMENT TO BE USED IN CONNECTION WITH THE SALE
OF THE BONDS; AUTHORIZING THE PURCHASE OF BOND
INSURANCE; MAKING OTHER PROVISIONS REGARDING SUCH BONDS
AND MATTERS INCIDENT THERETO; AUTHORIZING EXECUTION AND
DELIVERY OF A PAYING AGENT/REGISTRAR AGREEMENT;
CONTAINING OTHER MATTERS RELATED THERETO; AND
DECLARING AN EMERGENCY
(the "Ordinance") was duly introduced for the consideration of the City Council and read in full.
It was then duly moved and seconded that the Ordinance be adopted on first reading; and, after
due discussion, such motion, carrying with it the adoption of the Ordinance, prevailed and
carried by the following vote:
AYES: NAYS: ABSTENTIONS:
2. That a true, full and correct copy of the Ordinance adopted at the meeting
described in the above and foregoing paragraph is attached to and follows this certificate; that the
Ordinance has been duly recorded in the City Council's minutes of such meeting; that the above
HOU:2859987.4
and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of
such meeting pertaining to the adoption of the Ordinance; that the persons named in the above
and foregoing paragraph are the duly chosen, qualified and acting officers and members of the
City Council as indicated therein; that each of the officers and members of the City Council was
duly and sufficiently notified officially and personally, in advance, of the date, hour, place and
subject of the aforesaid meeting, and that the Ordinance would be introduced and considered for
adoption at such meeting, and each of such officers and members consented, in advance, to the
holding of such meeting for such purpose; that such meeting was open to the public as required
by law; and that public notice of the date, hour, place and subject of such meeting was given as
required by the Open Meetings Law, Chapter 551, Texas Government Code.
SIGNED AND SEALED this January 26, 2009.
City Secretary
CITY OF PEARLAND, TEXAS
Mayor
CITY OF PEARLAND, TEXAS
(SEAL)
2
HOU:2859987.4
AFFIDAVIT 'OF PUBLICATION
The Pearland Reporter News
2404 South Park
Pearland, Texas 77581
State of Texas
3razoria and Harris Counties •
, Lloyd Morrow, hereby certify that the notice hereby;appended was published
n THE REPORTER NEWS, a newspaper of general circulation in Brazoria, Harris
and Galveston Counties, for d . issues, as.follows
No / Date i' 2-1 20 0'1
No Date 20
No. Date 20
No. Date 20
No Date 20
J 0
CFO
'
subscribe and sworn to before me this day of
1:• 40 PU. LAURA Ants EMMONS
'F =. c Notary Public,State at Texas
•, �` Ex fires 09-09-210�`
t '� .+' Commission P ••••,.
•�°� Laura nn Emmons, Publisher
Notary Public, State of Texas
l _ Published January 14 and; LEGALS
January 21,2009
( 9 R revenues_of the water and
NOTICE OF INTENTION( sewer system of the City,q
TO ISSUE CERTIFI- ;'in the maximum aggre-I
CATES gate principal amount of
NOTICE IS HEREBY '$12,900,000, bearing
interest at any rate or
GIVEN that the City hates, not to exceed the
Council of the City of maximum interest rate?
Pearland, Texas (the ;now or hereafter author-
°City")will meet at its rag ized by law, as ular meeting place at City? determined within the allldis-
be
Hall, Pearland, Texas at cretion of the City Council'
7:30 p.m.on the 23rd day I at the time of Issuance
Of February, 2009,which and maturing over a peri-1
Is the time and place ten- od of years not to exceed
tatively set for the pas- forty(40)years from the
sage of an ordinance and' date thereof,for the pun-
such other action as may pose of evidencing the
be deemed necessary to Indebtedness of the City I
authorize the Issuance of to pay all or any part of
the City's certificates of the contractual oblige-
obligation, payable from, Lions to be Incurred for the'
ad valorem taxation and a construction of public I
limited(In an amount not works and the purchase 1
to exceed $10,000) sub-' ! of materials, supplies,l
ordinate pledge of certain, P equipment, machinery,
buildings,land and rights-1
of-way for authorized i
I needs and purposes and
for the payment of con-
I tractual obligations for
professional,services, to
wIt(I)the construptlpp of a
multi-purpose municipal
building located at the
intersection of McHard
Road and Pearland
Parkway, a portion of
which will be used for City
offices and a portion of
which will be leased to an
Institution of higher edu-
cation, the University of'
Houston, to promote a
public purpose related to
j higher education, (li) the
I payment of capitalised
1 interest on the certificates
p of obligation for a period
authorized by State law,
and(Ili)professional serv-
I, ices rendered in connec-
j tion with the above listed
y projects.
9
f WITNESS, MY HAND
9 AND THE OFFICIAL
SEAL OF THE CITY,this
12th day of January,
2009.
, /s/Young Lorfing
City Secretary
City of Pearland,Texas
AFFIDAVIT OF PUBLICATION
The Pearland Reporter News
2404 South Park
Pearland, Texas 77581
State of Texas
Brazoria and Harris Counties
I, Lloyd Morrow, hereby certify that the notice hereby appended was published
in THE REPORTER NEWS, a newspaper of general circulation in Brazoria, Harris
and Galveston Counties,. for / issues, as follows.
No 1 Date /- 2-1 20 Oq
No Date 20
No Date 20
No Date 20
No. Date 20
1 J ,P .
CFO
Subscribe and sworn to before me this day ofAcs
20 -
••,•••-
• I 79(,•,,.
Notary Public, "' i
�.
Nrr
'' or4�+'My Commission� ��
.w L._,��41 • r�u �n Emmons, Publisher
Notary Public, State of Texas
I Published January 14 and 1 ~LEGALS
I January 21,2009
tual obligations to be 1
I NOTICE OF INTENTION incurred for the construe.-+
I TO ISSUE CERTIFI• i lion of public works and I
I CATES the purchase of materials,'
f' ! -supplies, equipment,
INOTICE IS HEREBY ` I machinery,buildings,land
GIVEN that the City. and rights-of-way for
I Council of the City 'of, authorized 'needs ands
I Pearland, Texas (the I purposes and for the pay-'
"City")will meet at its reg- ; ment of contractual obi'-
) ular meeting place at City, gallons for professional;
Hall, Pearland, Texas at' services, to wit (i)
17:30 p.m.on the 23rd day I I Improvements, including
1 of February, 2009, which storm drainage and
is the time and place ten-I detention facilities, to
tatively set for the pas I Cullen Parkway from I
sage of an ordinance and; Farm-to-Market Road 518'
such other action as may, I to McHard Road, (II)the,
be deemed necessary to (construction of State'
authorize the issuance of Highway 288 frontage.
the City's certificates ofl roads, Including storm
obligation, payable from; drainage and detention
ad valorem taxation and a a facilities, from Farm-to-
limited(in an amount not; !Market Road 2234 to
°to!exceed $10,000) sub Farm-to-Market Road
ordinate pledge of certain 1 518,and(lii)professional
revenues of the water and; services rendered In con- i
sewer system of the City, nection with the above I
in the maximum aggre- listed projects.
gate principal amount of •
$8,525,000,bearing inter-' ;WITNESS MY HAND 1
est at any rate or rates, I AND THE ,,OFFICIAL
not to exceed the maxi- SEAL OF THE CITY this
°mum interest rate now or I1S;' day Of January,
hereafter authorized by, -2009.
law, as shall be deter-
mined within the discre- l/sl Young Lading
lion of the City•Council at 1 !City Secretary
the time of issuance and I i nay,nf_Panrlanef.Tovac__.�
maturing over a period of I
years not to exceed forty
(40) years from the date I
thereof,for the purpose of
evidencing the Indebted-1
ness of the City to pay all
or any part of the contrac-
1