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R98-42 06-08-98RESOLUTION NO. R98-42 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN A PRINCIPAL AMOUNT NOT TO EXCEED $17,500,000 FOR THE ACQUISITION, CONSTRUCTION, AND IMPROVEMENT OF CERTAIN PUBLIC WORKS, AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO. WHEREAS, City Council of the City of Pearland, Texas, is authorized to issue certificates of obligation to pay contractual obligations to be incurred for the construction of public works, for the purchase of materials, supplies, equipment, machinery, buildings, land, and rights-of-way for authorized needs and purposes, and for professional services rendered in connection therewith pursuant to Texas Local Government Code Sections 271.041-064, as amended; and WHEREAS, the City Council has determined that it is in the best interests of the City and otherwise desirable to issue certificates of obligation in a principal amount not to exceed $17,500,000 styled "City of Pearland, Texas, Certificates of Obligation, Series 1998" (the "Certificates") for the acquisition, construction, and improvement of certain public works to be used for authorized needs and purposes; and WHEREAS, in connection with the Certificates, the City Council intends to publish notice of intent to issue the Certificates (the "Notice") in a newspaper of general circulation in the City; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. Preamble. The facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct. RESOLUTION NO. R98-42 Section 2. Authorization of Notice. The City Secretary is hereby authorized and directed to execute and deliver the Notice set forth in Exhibit "A" attached hereto and to publish such Notice on behalf of the City once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be at least fifteen (15) days before the date tentatively set in the Notice for the passage of the ordinance authorizing the issuance of the Certificates. Section 3. Authorization of Other Matters Relating Thereto. The Mayor, City Secretary, and other officers and agents of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this Resolution. Section 4. Effective Date. This Resolution shall take effect immediately from and after its passage in accordance with the provisions of the Charter of the City of Pearland and it is accordingly so resolved. Section 5. Public Meeting. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given all as required by the Texas Government Code, Chapter 551, as amended. 2 RESOLUTION NO. R98-42 PASSED, APPROVED and ADOPTED this the 8th day of June, A.D., 1998. TOM REID MAYOR ATTEST: SECR~7'ARY 4/ APPROVED AS TO FORM: DARRIN M. COKER INTERIM CITY ATTORNEY 3 NOTICE OF INTENTION TO ISSUE CERTIFICATES (Exhibit "A" to Resolution No. R98-42) NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City") will meet at its regular meeting place at City Hall, 3519 Liberty Drive, Pearland, Texas at 7:30 p.m. on the 29th day of June, 1998, which is the time and place tentatively set for the passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of the City's certificates of obligation, payable from ad valorem taxation and a subordinate pledge of certain revenues of the City's water and sewer system, in the maximum aggregate principal amount of $17,500,000, bearing interest at any rate or rates, not to exceed the maximum interest rate now or hereafter authorized by law, as shall be determined within the discretion of the City Council at the time of issuance and maturing over a period of years not to exceed forty (40) years from the date thereof, for the purpose of evidencing the indebtedness of the City to be incurred (i) for the planning, acquisition, construction, and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road, and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along FM 518; gravity sanitary sewer lines along Cullen; and general repair, renovation, and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems; (ii) for the planning, acquisition, construction, improvement, materials, supplies, and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of SH 288; (iii) for renovations, improvements, modifications, and repairs to the Barry Rose Wastewater Treatment Plant; (iv) for expansion, renovations, improvements, modification, and repairs to the Longwood Wastewater Treatment Plant; and (v) for professional services. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 8th day of June, 1998. 1 CITY OF PEARLAND, TEXAS By: it Lf oung Lor 'fig City Seca 1, i (415 Memo To: Mayor and Council Members Through: Paul Grohman, City Manager From: Alan Mueller Subject: State Revolving Loan Fund - Certificates of Obligation Date: June 3, 1998 The Texas Water Development Board approved the City's $17.1 million application to the State PP tY Revolving Loan Fund on May 21, 1998. The interest rate is expected to be in the 3.125%to 3.5% range. To close on the loan, we need to follow the same procedures as we normally follow for issuing Certificates of Obligation. This issuance will be a"negotiated transaction"rather than; the typical bidding procedure we use because the rates obtained through the Revolving Loan Fund are significantly less than the rate that can be obtained through the open bidding process. To complete this process, the resolution on the agenda for June 8 authorizes the publication of the Notice of Intent to Issue Certificates of Obligation. The Notice of Intent will be published twice in the Pearland Recorder-News. A special City Council meeting will be required on June 29 to close the loan. Proceeds should be released approximately 30 days after loan closing. Please note,Rick Witte, the City's Bond Counsel has recommended that the Notice of Intent reflect $17.5 million in case an unexpected expense arises during loan closing. The Water Development Board has only approved $17.1 million, so this is the amount I expect we will issue. Attached are short descriptions of the projects that will be funded by the loan proceeds. Rick Witte is planning to be at the meeting to answer any questions. PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application West Lea/ Ravenwood Description of Problem and/or Need The City of Pearland is in the process of final design for a new wastewater treatment plant to provide wastewater treatment for the west and southwest portion of the City. This facility is being funded through the Texas Water Development Board's State Revolving Fund, pre- design funding program and is known locally as the Southwest Environmental Center(SWEC). As part of this funding application, the City is requesting financial assistance to provide wastewater infrastructure in order to transport wastewater from the southwestern area of the SWEC service area. The proposed infrastructure includes a gravity line connecting West Lea/ Ravenwood to the SWEC plant. This proposed gravity line will run along Harkey Road in accordance with the SWEC master plan and provide regional service to the southern portion of the SWEC service boundary. This project is necessary to accommodate the flows from the West Lea/ Ravenwood area and will eliminate the need for septic systems in this area. - * Description of Project The City of Pearland is applying for financial assistance for the construction of a gravity sanitary sewer interceptor along Harkey Road. This will enable the West Lea / Ravenwood development to be served by the Southwest Environmental Center wastewater treatment plant. The West Lea / Ravenwood project in general includes 2,800 linear feet of 12" gravity sewer and 5,000 linear feet of 36" gravity sewer necessary to transport wastewater from the West Lea / Ravenwood development to the SWEC wastewater treatment plant. The City is requesting funding assistance for the development of the gravity line. Environmental Concerns Preliminary environmental research has been done along the route of the sanitary sewer line. The majority of the project is either in the existing right-of-way of Harkey Road or the proposed right-of-way of Ravenwood Drive. No environmental limitations were observed along this portion of the project. The remainder of the sewer line may impact an area believed to be a wetlands. Page 1 of 3 Crawl Carter Burgess ( ) PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application Far Northwest Wastewater Treatment Plant Description of Problem and/or Need The City of Pearland recently annexed a portion of land along McHard Road on the west side of State Highway 288 and, additionally, have negotiated with the City of Houston to take Extra Territorial Jurisdiction (E.T.J.) to the south of Beltway 8 and along F.M. 521 to Post Road. The City will need to develop a new wastewater treatment plant in order to provide wastewater treatment facilities to the newly annexed areas west of State Highway 288. The Far Northwest wastewater treatment plant will provide service to this newly annexed area, as well as the new E.T.J. boundaries when they are annexed by the City. .� Description of Project The City of Pearland is applying for financial assistance for planning and construction of the Far Northwest wastewater treatment plant. A description of the components of the proposed • project is presented within the following paragraph. Mechanical Wastewater Treatment Facility It is anticipated that the proposed mechanical treatment facility will have an ultimate treatment capacity of 6.0 mgd. The City intends to perform facility planning, final design and construction for the development of the first phase of the project. The first phase will include the design and construction of a 1.0 mgd mechanical treatment facility. The proposed plant will include plant lift station, headworks, aerobic treatment units, clarifier units, tertiary filters, disinfecting facilities, odor control, sludge digestion, and sludge dewatering. Environmental Concerns A preliminary environmental assessment was conducted on the proposed site for the Far Northwest wastewater treatment plant. Initial observations revealed the possibility that the entire site could be wetlands. A more detailed environmental assessment and wetlands determination need to be done at this site before any final conclusions can be made. The City has made arrangements to have a wetlands determination done at this site. No other environmental concerns were observed with regard to wastewater discharge. Page 1 of 3 Cr. Curter Burgess PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application • Barry Rose Wastewater Treatment Plant Description of Problem and/or Need The Southwest Environmental Center(SWEC) is currently under development and will provide. some relief for the Barry Rose wastewater treatment plant. The Barry Rose plant currently provides two-thirds of the population of the City of Pearland with wastewater treatment. Once _ the SWEC plant is on-line, forty percent of the flow to Barry Rose will be diverted to the SWEC' plant. Even with this diversion of flow, it is anticipated that the current capacity of the Barry Rose plant will be exceeded by the turn of the century. The existing facility is currently operating efficiently. With relatively minor modifications, however, the existing capacity of the plant can be increased substantially. Contractual agreements have been obtained for engineering services for designing the necessary changes to the existing wastewater treatment plant. The final design plans and specifications are nearing completion. The wastewater discharge permit has been recently amended to account for increased plant capacity as a result of the proposed plant modifications. —> Description of Project The City of Pearland is applying for financial assistance for modifications to the Barry Rose wastewater treatment plant. The project consists of the following: • installation of automatic bar screens • increase the sludge return pump capabilities • addition of an emergency generator • lift station improvements Environmental Concerns The discharge permit was amended in 1997. The existing plant capacity is 2.25 mgd, but the permitted limit is 3.1 mgd. The plant capacity is anticipated to be 3.1 mgd after construction. No environmental limitations were observed in conjunction with this project. • Page 1 of 2 Cry Carter Burgess I PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application • Longwood Wastewater Treatment Plant Description of Problem and/or Need The Longwood wastewater treatment plant currently provides one-third of the population of the City of Pearland with wastewater treatment. It is anticipated that the demand of the Longwood treatment facilities will exceed the capacity in the next ten years. Annexation and increased development are expected to be the two main reasons for this increase in demand. Contractual agreements have been obtained for engineering services for design of the modifications needed to provide the extra capacity at the existing wastewater treatment plant. ----> Description of Project The City of Pearland is applying for financial assistance for the expansion of the Longwood wastewater treatment plant. The project will include the following modifications: • additional landscaping • new aeration basin • increase the sludge return pump capabilities • expand the chlorine contact chamber • new splitter box to include weirs and gates • odor control • noise abatement • lift station improvements Environmental Concerns A discharge permit renewal application has been submitted. The existing plant capacity is 1.75 mgd, but the permitted limit will be 2.5 mgd once the permit amendment is approved. The plant capacity is anticipated to be 2.5 mgd after construction. The proposed changes are intended to address odor, noise, and potential surcharging problems in the Longwood service area. One protest to the permit renewal has been adequately addressed. No other environmental limitations were observed in conjunction with this project. Page 1 et 2 Cry Carter Burgess PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application • F.M. 518 Sewer Extension, Westgate Lift Station, and Fite - Harkey Interceptor Description of Problem and/or Need The City of Pearland is in a period of rapid expansion due to annexation and growth in the residential and commercial sectors. As part of this application, the City is requesting financial assistance to construct two gravity sanitary sewer lines and a lift station to account for the existing and projected flow demand. The lift station will be located along F.M. 518 as will the F.M. 518 Sewer Extension. The F.M. 518 Sewer Extension will begin at County Road 90 and extend to the west right-of-way line of State Highway 288. The 30" Fite - Harkey interceptor will commence at the intersection of F.M. 518 and County Road 1128 and run south to Fite Road. The line will turn and run east along Fite Road until it intersects Harkey Road where it will tie into the Harkey Road interceptor. Both of these gravity lines will feed the SWEC wastewater treatment plant. —> Description of Project The City of Pearland is applying for financial assistance for construction of both gravity sewer lines and the lift station. This project includes 7,200 linear feet of 12" gravity sanitary sewer, 11,000 linear feet of 30" gravity sanitary sewer, and a lift station with a peak design flow of 3.0 MGD necessary to provide wastewater treatment to areas along F.M. 518. The City is requesting funding assistance for these projects in order to provide certain areas of Pearland with wastewater treatment facilities. Environmental Concerns Both sewer lines are planned to be built within existing public right-of-ways. The lift station site will be adjacent to the right-of-way along F.M. 518 on a site to be acquired. No environmental concerns were observed. Page 1 of 2 Cis Carter Burgess PRELIMINARY ENGINEERING FEASIBILITY REPORT Texas Water Development Board Financial Assistance Application Cullen Sewer Extension Description of Problem and/or Need The City of Pearland has recently experienced quite a bit of growth due to annexation and development. The City is in the process of providing these new areas with er facilities. The Southwest Environmental Center (SWEC) wllp provide wastewater treatment tto many of the recently annexed areas. The Texas Water Development Board (TWDB) has approved funding for the SWEC and design is currently under way. As part of this funding- application, the City is requesting financial assistance to provide wastewater service to these areas. The proposed service includes a gravity sanitary sewer running south along Cullen and • continuing east along F.M. 518 to County Road 89. Contractual agreements have been - obtained for engineering services for planning and designing the new wastewater lines. —� Description of Project The City of Pearland is applying for financial assistance for construction of the sanitary sewers. The Cullen sewer extension project includes and 8,600 linear feet of 12" gravity sanitary sewer necessary to conduct wastewater to the SWEC plant. The City is requesting funding assistance for these upgrades to the sewer system. Environmental Concerns The entire project will be constructed within the existing right-of-ways of Cullen and F.M. 518. No adverse environmental conditions were observed in conjuntion with this project. Page 1 of 2 CA: Carter Burgess PRELIMINARY ENGINEERING FEASIBILITY REPORT ( Texas Water Development Board Financial Assistance.Application Infiltration/Inflow Correction Description of Problem and/or Need The City of Pearland recently received an Administrative Order(AO) from the United States Environmental Protection Agency (USEPA). This AO outlines several violations of the National Pollutant Discharge Elimination System (NPDES). The AO mandates that prompt attention be given to the violations. The City has prepared a plan to address all of these violations. The Barry Rose, Longwood, and Infiltration/Inflow projects will address all of the violations in the AO. A rehabilitation program exists that has been targeting certain areas of the collection system for the past six years. This program has spent in excess of $500,000 per year on rehabilitation efforts during that same span of time. The City has quite a few old, large diameter sanitary sewer lines that are vitrified clay, transite, or concrete. The goal of this program is'to inspect all of these lines and determine which lines need rehabilitation. The rehabilitation method will be chosen on a case by case basis. (See City of Pearland Abatement Program included within this section). Description of Project The City of Pearland is applying for financial assistance to fund the rehabilitation project. The City feels that they can more aggressively pursue their infiltration and inflow problems if the rehabilitation program receives more funding than the current Pearland budget allows. The City is requesting funding assistance for inspection and rehabilitation of certain areas in their collection system. Environmental Concerns This project will improve the quality of the environment in the areas identified in the USEPA Administrative Order. No adverse environmental concerns were identified with regard to this project. Page 1 of 2 CZ, Carter Burgess _ ,a RESOLUTION NO. R98-42 RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN A PRINCIPAL AMOUNT NOT TO EXCEED $17,500,000 FOR THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN PUBLIC WORKS, AND AUTHORIZING!CERTAIN OTHER MATTERS RELATING THERETO STATE OF TEXAS ; COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § WHEREAS, the City Council (the "City Council") of the City of Pearland, Texas (the "City"), is authorized to issue certificates of obligation to pay contractual obligations to be incurred for the construction of public works, for the purchase of materials, supplies, equipment, machinery, buildings, land and rights-of-way for authorized needs and purposes, and for professional services rendered in connection therewith pursuant to Texas Local Government Code sections 271.041-.064, as amended; WHEREAS,the City Council has determined that it is in the best interests of the City and otherwise desirable to issue certificates of obligation in a principal amount not to exceed $17,500,000 styled "City of Pearland, Texas Certificates of Obligation, Series 1998" (the "Certificates") for the acquisition, construction and improvement of certain public works to be used for authorized needs and purposes; and WHEREAS, in connection with the Certificates, the City Council intends to publish notice of intent to issue the Certificates (the "Notice") in a newspaper of general circulation in the City. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: Section 1. Preamble. The facts and recitations contained in the preamble of this Resolution are hereby found and declared to be true and correct. Section 2. Authorization of Notice. The City Secretary is hereby authorized and directed to execute and deliver the Notice set forth in Exhibit A hereto and to publish such Notice on behalf of the City once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be at least fifteen (15) days before the date tentatively set in the Notice for the passage of the ordinance authorizing the issuance of the Certificates. Section 3. Authorization of Other Matters Relating Thereto. The Mayor, City Secretary and other officers and agents of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this Resolution. Section 4. Effective Date. This Resolution shall take effect immediately upon passage. Section 5. Public Meeting. It is officially found, determined and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered at such meeting, including this Resolution, was given all as required by the Texas Government Code, Chapter 551, as amended. 2 PASSED AND APPROVED this 8th day of June , 1998. 0)12 Mayor City of Pearland, Texas ATTEST: • C./Secret:A Jr' / f of P- d, Texas (SEAL) ::0DMA\PCDOCS\HOUSTON15427172 3 EXHIBIT A TORESOLUTION NOTICE OF INTENTION TO ISSUE CERTIFICATES NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City") will meet at its regular meeting place at--'City Hall, Pearland, Texas at 7:30 p.m. on,the 291 day of June, 1998, which is the time and place tentatively set for the passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of the. City's certificates of obligation, payable from ad valorem taxation and a subordinate pledge of certain revenues of the City's water and sewer system, in the maximum aggregate principal amount of $17,500,000, bearing interest at any rate or rates, not to exceed the maximum interest rate now or hereafter authorized by law, as shall be determined within the discretion of the City Council at the time of issuance and maturing over a period of years not to exceed forty (40) years from the date thereof, for the purpose of evidencing the indebtedness of the City to be incurred (i)for the planning, acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii) for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of S.H. 288, (iii)for renovations, improvements, 'modifications and repairs to the Barry Rose wastewater treatment plant, (iv)for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and(v)for professional services. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 8th day of June, 1998. e Secr- ty of P . d, Te • (SEAL) ::ODMA\PCDOCs\FiousTON1s4471712 CERTIFICATE FOR RESOLUTION STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § - CITY OF PEARLAND § I ' 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 the 8th day of June , 1998, 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 and the City Secretary, to wit: Tom Reid Mayor Richard Tetens Council Member Klaus Seeger Council Member William Berger Council Member Helen Beckman Council Member Larry Wilkins Mayor Pro Tem 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 such meeting: a written RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN A PRINCIPAL AMOUNT NOT TO EXCEED$17,500,000 FOR THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN PUBLIC WORKS, AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO (the "Resolution") was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that such Resolution be adopted; and, after due discussion, the motion, carrying with it the adoption of the Resolution, prevailed and carried by the following vote: AYES NOES 2. That a true, full and correct copy of the aforesaid Resolution adopted at the meeting described in the above and foregoing paragraph is attached to and follows this rift) certificate; that the Resolution has been duly recorded in the City Council's minutes of the meeting; that the above and foregoing paragraph is a true,full and correct excerpt from the City Council's minutes of the meeting pertaining to the adoption of the Resolution; 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 purpose of the aforesaid meeting, and that the Resolution would be introduced and considered for adoption at the meeting, and each of the officers and members consented, in advance, to the holding of such meeting for such purpose; that the meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of the meeting. was given as required by the Open Meetings Law, Chapter 551, Texas Government Code, as amended. SIGNED AND SEALED this8 ,day of 1998. Ci etary / Mayor C' f Pearl. Texas City of Pearland, Texas (SEAL) :ODMA\PCDocsuloUSTON1342717u 2 MAYOR, DAY, CALDWELL 8 KEETON, L.L.P. 100 CONGRESS AVENUE,SUITE 1500 AUSTIN,TEXAS 78701-4042 (512)320-9200 700 LOUISIANA TELECOPIER(512)320-9292 SUITE 1900 HOUSTON,TEXAS 77002-2778 (7131 225-70 00 TELECOPIER(713)225-7047 RECEIVED SEP 19: 3 September 9, 1998 Mr. Alan Mueller City of Pearland, Texas 3519 Liberty Drive Pearland, Texas 77581 Re: $17,100,000 City of Pearland, Texas Certificates of Obligation, Series 1998 Dear Alan: Enclosed is a copy of the transcript of proceedings relating to the above-referenced financing. It was a pleasure working with you on this transaction and I look forward to our working together in the near future. Very y yours, erry Kyle, . Enclosure cc: Mr. David Castillo • ::ODMA\PCDOCS\AUSTIN\503232\1 CITY OF PEARLAND, TEXAS (Brazoria and Harris Counties, Texas) CERTIFICATES OF OBLIGATION L SERIES 1998 I. CERTIFICATE PROCEEDINGS AND DOCUMENTS Resolution Authorizing Publication of Notice 1 of Intention to Issue Certificates (with Certificate) Affidavits of Publication of Notice of Intent 2 Ordinance Authorizing Issuance of the Certificates (with Certificate) 3 Special Escrow Deposit Agreement 4 71, Paying Agent/Registrar Agreement 5 H. CERTIFICATES u=' General Certificate 6 Signature Identification and No-Litigation Certificate 7 No-Arbitrage Certificate and Form 8038G 8 Certificate of Assessed Valuation 9 9 Certificate of the Bond Insurer 10 III. OPINIONS Approving Opinion of Bond Counsel 11 Opinion of AttorneyGeneral of Texas with 12 p Certificate of Comptroller of Public Accounts 9 Opinion of Counsel to the Bond Insurer 13 Reliance Letter to Bond Insurer 14 C IV. MISCELLANEOUS rReceipt and Cross Receipt 15 Registrar's Receipt 16 Resolution of the Texas Water Development Board Approving an Application for Financial Assistance 17 Letter to the Attorney General 18 ln� 1 DTC Letter of Representation 19 rr Insurance Policy 20 Specimen Certificate 21 ::ODMA\PCDOCS\HOUSTON\566046\1 rit 1111 4i L_- n 1 r4� CERTIFICATE FOR RESOLUTION 6 STATE OF TEXAS § !-' COUNTIES OF BRAZORIA AND HARRIS '[11 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 the Sth day of ,i„np , 1998, at the regular meeting place thereof, within the City, and the roll was called of II the duly constituted officers and members of the City Council and the City Secretary, to wit: Torn Reid Mayor Richard Tetens Council Member Klaus Seeger Council Member William Berger Council Member Helen Beckman Council Member Larry Wilkins Mayor Pro Tern 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 such meeting: a written RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN A PRINCIPAL AMOUNT NOT TO EXCEED $17,500,000 FOR THE ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF CERTAIN PUBLIC WORKS, AND AUTHORIZING L. CERTAIN OTHER MATTERS RELATING THERETO [1: (the "Resolution") was duly introduced for the consideration of the City Council and read in full. It was then duly moved and seconded that such Resolution be adopted; and, after due discussion, the motion, carrying with it the adoption of the Resolution, prevailed and carried by the following vote: _5_ AYES _a NOES 2. That a true, full and correct copy of the aforesaid Resolution adopted at the meeting described in the above and foregoing paragraph is attached to and follows this tj I w certificate; that the Resolution has been duly recorded in the City Council's minutes of the meeting; that the above and foregoing paragraph is a true, full and correct excerpt from the City Council's minutes of the meeting pertaining to the adoption of the Resolution; 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 purpose of the aforesaid meeting, and that the Resolution would be introduced and considered for adoption at the meeting, and each of the officers and members consented, in advance, to the holding of such meeting for such purpose; that the meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of the meeting was given as required by the Open Meetings Law, Chapter 551, Texas Government Code, as amended. SIGNED AND SEALED thisath day of June , 19 8. .4011. C' Secret 41 Mayor of Pe AY.nd, Texas/ City of Pearland, Texas (SEAL) 7,1 ::ODMA\PCDOCS\HOUSTON\542717\2 051 1 I I Il I 2 r RESOLUTION NO. R98-42 i i RESOLUTION AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE CERTIFICATES OF OBLIGATION IN A PRINCIPAL AMOUNT `' NOT TO EXCEED $17,500,000 FOR THE ACQUISITION, CONSTRUCTION t AND IMPROVEMENT OF CERTAIN PUBLIC WORKS, AND AUTHORIZING CERTAIN OTHER MATTERS RELATING THERETO ill i l i STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § l CITY OF PEARLAND § WHEREAS, the City Council (the "City Council") of the City of Pearland, Texas (the "City"), is authorized to issue certificates of obligation to pay contractual obligations to be incurred for the construction of public works, for the purchase of materials, supplies, equipment, machinery, buildings, land and rights-of-way for authorized needs and purposes, and for -' professional services rendered in connection therewith pursuant to Texas Local Government Code sections 271.041-.064, as amended; WHEREAS,the City Council has determined that it is in the best interests of the City and otherwise desirable to issue certificates of obligation in a principal amount not to exceed $17,500,000 styled "City of Pearland, Texas Certificates of Obligation, Series 1998" (the "Certificates") for the acquisition, construction and improvement of certain public works to be used for authorized needs and purposes; and 1 WHEREAS, in connection with the Certificates, the City Council intends to publish notice of intent to issue the Certificates (the "Notice") in a newspaper of general circulation in the City: BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, 1 TEXAS: Section 1. Preamble. The facts and recitations contained in the preamble of this 1 Resolution are hereby found and declared to be true and correct. Section 2. Authorization of Notice. The City Secretary is hereby authorized and directed to execute and deliver the Notice set forth in Exhibit A hereto and to publish such Notice on behalf of the City once a week for two (2) consecutive weeks in a newspaper which is of general circulation in the City, the date of the first publication to be at least fifteen (15) days before the date tentatively set in the Notice for the passage of the ordinance authorizing the issuance of the Certificates. 7 i ril fa* Section 3. Authorization of Other Matters Relating Thereto. The Mayor, City Secretary and other officers and agents of the City are hereby authorized and directed to do any and all things necessary or desirable to carry out the provisions of this Resolution. Section 4. Effective Date. This Resolution shall take effect immediately upon passage. Section 5. Public Meeting. It is officially found, determined and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place and subject matter of the public business to be considered at such meeting, including this Resolution, was given all as required by the Texas Government Code, Chapter 551, as amended. I_ .' S {1 it 2 ,�V IL s* L PASSED AND APPROVED this8th day of June , 1998. i_i[1) L - 01 I.a Mayor City of Pearland, Texas ATTEST: ' I . Secret• ; / r of Pe. '•d, Texas L' s"" (SEAL) U ::ODMATCDOCS\HOUSTON\542717\2 :L r� Ty ITil M h 1`.. LI_ ri _ 3 1 (14 EXHIBIT A TO RESOLUTION NOTICE OF INTENTION TO ISSUE CERTIFICATES NOTICE IS HEREBY GIVEN that the City Council of the City of Pearland, Texas (the "City") will meet at its regular meeting place at City Hall, Pearland, Texas at 7:30 p.m. on the 29th day of June, 1998, which is the time and place tentatively set for the passage of an ordinance and such other action as may be deemed necessary to authorize the issuance of the City's ,14 certificates of obligation, payable from ad valorem taxation and a subordinate pledge of certain revenues of the City's water and sewer system, in the maximum aggregate principal amount of $17,500,000, bearing interest at any rate or rates, not to exceed the maximum interest rate now or hereafter authorized by law, as shall be determined within the discretion of the City Council at the time of issuance and maturing over a period of years not to exceed forty (40) years from the date thereof; for the purpose of evidencing the indebtedness of the City to be incurred (i)for the } planning, acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii)for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of S.H. 288, (iii)for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv)for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and(v) for professional services. WITNESS MY HAND AND THE OFFICIAL SEAL OF THE CITY, this 8th day of June, 1998. C' ecret. •f Pear r d, Texa P (SEAL) ::ODMA\PCDOCS\HOUSTON154271712 I1 I i CERTIFICATE OF NEWSPAPER PUBLISHER THE STATE OF TEXAS § Iii COUNTIES OF BAZORIA AND HARRIS § r L,II connection with the iss ce by the City of Pearland of its Certificates of Obligation, In �f the Pearland Reporter News, Series 1998, the undersigned, j hereby certifies as follows: the Pearland Reporter News (i) devotes not less than 25% of its total column lineage to (ii) published S� general interest items, is at least once each week, (iii)is entered as az°�� �" class postal matter in Brazoria and Harrise J Counties, lOs' and 1998(iv) June 17,tshed 1998_ � y I continuously for at least 12 months ci '..c he 1 Title: t_-41 ._� ::ODMAWCDOCS\{OUSTOM57185812 I JFI 17, Ti {I L n 1 p AFFIDAVIT OF PUBLICATION [7, The Pearland Reporter News 2404 South Park Pearland, Texas 77581 State of Texas Brazoria and Harris Counties II, Joan Cummings, hereby certify that the notice hereby appended was published in Brazoria and Harris Counties in the REPORTER NEWS, a newspaper of general cl circulation in Brazoria and Harris Counties, for / issues, as follows: r + No. I Date ., �0 19 n7 No. Date 19 Imo° No. Date 19 No. Date 19 No. Date 19 - Editor tI Subscribe and sworn to before me this 1 day of ji/t-eid, 19 , N•' li4att N . .Z: ::1 wore I_ -''°"_..• n Em Ss ier 17 AFFIDAVIT OF PUBLICATION The Pearland Reporter News •L 2404 South Park Pearland, Texas 77581 I State of Texas Brazoria and Harris Counties I, Joan Cummings, hereby certify that the notice hereby appended was published in Brazoria and Harris Counties in the REPORTER NEWS, a newspaper of general circulation in Brazoria and Harris Counties, for / issues, as follows: L.i No. / Date ( / ! 19 No. Date 19 No. ' Date 19 No. Date 19 No. Date 19 /r]rl'L- Editor Subscribe and sworn to before me this 1 day of()KZ/ 19 41 .• • N ota `-;. f4 itatvo .Reps ,•'4ry0'7- - Laura' t -- -"irons, Publisher k c. 4,_6 ' I L_', . 1 . . . • • iroulre..—•......• •etris. ;....i•-, :1 LEGALS-1 LEGALS • ! . LEGALS III LEGALS [i ' :,......i .,.?••,'4.;:".2V4-i.i:gj,•:;:.... -'' oti.,-91,..",•?.-4,;,1:* .,.., . . gf...1-;:'''',..'-':'-',- --', Ni.,f,,,i-):,..., •.:-....:`...•:•;.,;•,,,,••••) - ... • • •this? .. .,......t v f. I. .,.. . ,ThURSDAYMI:(7,198o•- I-14,..°71.511.P91:1111.4,17:••••••1;-TONA:101,RWECTINCI,THE' ' • • " 114' . ,•...,,. ••• .;':' '• ,...,yel....--....., ..e.:--:,,,::,. .:AND ATM/011g PUB- .f 1.7. ..-.-:,..::-;...z!: ..,,,;::, ,,,,,,LuotaAiwFoR.•<19 iiteritOdies;Pearland,:: •4„.1,)* 7`•6 1 ..• r.'"•:.'.......':',• -•UGLY OPENED AND READ' ••1°:Y.°49g lan't:' "• ,,,'.0AS}c szywiETIER..... jou 47201i-ot DO Soo •- F-') ,' ,•••••• '.'''..2.,. -• • '... 1:1-1k:":41•:1•1".:''; .'""' ..OpERATION 6 CoNcAs- "isi gof ce ICI CSITRAQINC4 D/13/A'• 111)1.-._.•8PAssagl 11 li • .• :1•; . .. .; .. .: • ' . , • oresance end such other•. Q.; x 1 • ; ,... ..:;:• .,, 4.HOU,STON,INC.,,AND FIND- .I; • . •' 'i . '''...‘2%••• •'.-''''''•''. •'.' -•"' • •' • -SEORTSEARK, ' * 1 ':,'.•.':'-:'-f•:*'1•1'1.:'PIG:HOCH pRoiPosEzEW'''''"•' t'turtimw ihe• ORDU1AKC .I E NO.,98:15;;.. EsTTES4Bus..HIN.frii.HAELE:4 lam,' ;1•1.:'_.01,,,,,..___;,,_,...,,,,44,...:-.....*,..pk.„,,,,-...,,,' .. • • • •But . ,TED IN EEPJ113 ., , AN'Ogykay;cg Rilicy," 1,131IPERIZ,TIFJ3 PER ''. •ii F7 ENVELOPES CtEAPLY -'NOIR SCHEDULE OF :,SSE:SCRIBER PER 1101,1711:.,`•'';1' :•-•-••"-'-`''* 1. ,1 •'. •-.•7.1--r..---'•-rd.7:•• - IN ABLE:SEC1: '.* '*'7;9'."81"89:•'.6811-9s1I8s aleml°'i r)' 'I,1; ;2;.,'.. .,.. .••.•7.•.7•4.•IS,.,P.-.v,J•.11:;<••• .•• .ia' -'..-..:..,... ..:. .TMHERKsiEGD}i 4n13o RR ERJ NCOT,9 8.• EEVQII./A.TMO CN ANRBDNAT.ED1P4IVHILNSDSCIO•IN•7 O1,'F.'::• 74C,9-f i..T..RPV'FIfE9 1 40 want 3•••:..'..',..Ifn.!iS.aiixn t4e8naa8tL9 ai9li1t8aw9a8 tins? DALLFFPSAND • HOUTONA INO p4a.D/8AiiiiiBriv; y090j4a,0/i1s4 3o11:,r•• " . TO 6,,b„ousToN.Dic.,,:.;. ,..:,,,...„thi;in.& . - •.' .WAIVE ANY INFORAW: •THAT SUCH RAMS ARE.,-• C1 1 . • • ' '1.-'.:'.'1.1''••-• • - 11' *AGTYCCO°°INDSRRFPDAI REPS RECEIVES.- :1'...1HCIMEyEmpHARERASGE. • -• - - THE COY OF' ; • •': . ., :1..PROVISIONS KLATT-0'70'V dot 111Pekose byliw, FRIENDsw000 PAYS FoR.; Kbuny saivicz,...,.....,..•,oliE suasEciymovmula, b.#detpabol vain. •••••••••i,HEIIE'4DArEntomplY_ANDV109F4rioN020.:'',..' •-tidthaiwurin,'°.114.9tha4": t• % Sell it.NOW in the -yisroNs OF CHAPTER 2251,.'AND 34FrAukx3N Ham,•::,.‘,......• :ii r„.-- 4,.:,.- . .. Opera not td twecel • .. • OFTHE GOVERNMENT., ":'CFTC'CENTRAL;PIC,'"1•••••1---"•17'7-7-71F1.1'114' '11.' • * ' REPORTER.Niws .• ;,=ATP CABLEVISION OF:•.4Assm Agri Ficjim- aria;who „.. .': .SPECIFICATIONS AND RFP 4 HolayoN;HaTaausHING:,....,.. PE rl ' DOCUMENTS ARE AVAIL-'' THE LIAXIIIIIIipERNITTE13.::-118818848111911818188)181 the Indebtedness ot . I .: .• CLASSIFIED- .ABLEF°RREviEwDumm3',ATEsoRE.www,i..,:i''"`'Ia!''..f:--',1:,•,:''' • c41'''"'kuwe''''''" • t.„,, , REGULAR BUSINESS::•'-' AHD deaTALLATIoN...,,• -:: '''1'•-•_,_,'''' • 0 PIO:INNS soNelsilice,con-. , ... . , • _ . . HOURS AT THECHYSEC,',.cHARGEs;DEcupwia.; ."..EASSED.AFPHOVEt1.8.3'' and km:on:nen;ol °T:0.13E:imutpESTmENTTrA13:...ErTING RIM°TH'ER 'f':' he"Iola now o,. " • s' '' •••RETARY'S OFRCE AND• -•;THE HEGHIATEpaygua• •,,._,A111°F,EPIm„,%ga•nd,. and .: 11,11158118a1T,,,,...,„..,...sem1111°-• .IgEtiO tta c a c • COMMUNITY SERICES, -,,°File glawmagwAIN.,l':Oooasorlfolloyle15111114 of•••• ry•••••..-w . . •••••• •••• 910 S.FRIENDSWOOD .; TENANSE PROGRA11;SET-1,1:,J111.,!„..I.P11711:-.1\•,..4.e.,,,1,,,, CM°,;,;.°1•;Way`tionn."°• .. DRNE;FFSENDSWOOD,.' ::TING FORT11OTHER PRO-1'.-:.•: "1"t-•1-11:'1'' ''' 88wHeay.81--1/Aarm)H1814°'Road. 4. • NOTICE OF A JOMPUB• NOTICE OF A JOINT PUB- TaAS.RFP DOCUMENTS .•...-i:LicouP HEAR/11N,,ANDIC1THEFW_Call--Lk HEARING Of TIIE CITY'- ARE TO BE PICKF_D UP AT:1.rue.,ECTRE11;pRoTEDyinsitacinsEa';,;.:.•1:•:crrn••IF--"• .vi-.7"Di;)?12... •• •. -Rtes. •-• ELAN-,''COUNCIL AND THE PLAN- THE CITY SECRUARY8 :-:psytaLri op AN/wow f:,..,,,,....f-111:11•1141-..,'-•J-`• ,,,,,,,,,,ralin"1„,,,,.,,„,..• "d A ::••otcf AND ZOMPiG COL--- ;.• • - ,MEI=ZONING•COM- ••OFFICE ••• • • NOTTO EXCEED 1500 FER.11789';••••r•11 11'-. I • :MISSION OFTHE'CITY OF 7 • :'? .:111.45;,,,9 1.-11,1•0: : Hitses1310.1111003RA' ; mak%Toms _ ___ , AY FOR EACH VIOLATION I„. ,... -.,.. ,,, .,,,,,,,,,,..,,,,,, . uswoot1,11BLAS ..•,1?THE PERSON TO CON,.•;-:HER F;AND PROVIDING/•I..71'*e•-•',••.•;11,.:-.. 1,-....•SIV"•'''----'--- rol that the City of Fdendswood' 'REYF-S,REC.COORDINAj 1•1.....:_,"*".••''7..._'-'1'11,..'"I'111`L.'11''''''141011YEiofolool .......,,gion otth,COY%we-' LI- •' ,.1.Noese Is Hersey giseHthat on •COY Coueel end'PlaAnLig aial TOR(181)896-3228. ,•.:•::;"o°E0 611UAPPRPV4011j''CI.IY 0.. '...4....5"''r77.-• `•'.' `1.17°'';3118mk;maw):• • •.0.290 thyof junk ink al Zordng commLssion wIlll hold a :• '-_.:•'11' ''Pokot_,foo411111111.4.1litd,ay et:t..,........... ELIO pia;thiCCowisa.1::•agatneslolail Pubic Hearing:.DIELORIS IACKENZIH;;I;RI4C'.,Joot•fro...,'11',.;•.:...,:' •:1;14111 i„ 4.41 ••,1'th°0611'14 icO"Ifim" 1•-•1 A. --,Canm*laiicithaCiLyd Soda Frier:dr...cod Drlie;on';'.1.1.CITY OF FRIENDSVOOD1..••"PASSED,APPROVED,Iontlf I Tki ya • ,'•- ." I Us:oo11911es,and 4.: •Pe:11413razodieral Hues.'fflo follow1113&bond fVfle: '1 :, ', • • - ;.-POMO ai eecoe3 am.,.,., ,;IV, :.f . ti.:.,. •..el a new weak«... 1' i • ,Caotes,•TeXes,Wil mead•S'NONDAY,3ULY11,1114111-11•;:":07161reogarr,Slix;,..,final reidiv eili 1441 dey el ,;.•r Ti• , • ......, ,-"trE.nat.?9,1*1 and . 1 CE TO VENDOS,S -..•1.,' away Lee sa ea . ., ...i Jai Public HeiangIn the ' TM Elf- • ' * '. I *77•'7•7'4`'`:177714 199°' - • lig . e ....' .- •:- .1 1,:FRIENDSW001:1111DEPENj'"''•, •.le tecinoransesi eoP UM Ube:V.01M;NAHA., ,,•, •* "• ••'•FfItnikTovrw7,-: .. ..CITYCF E111.11.JDE11;1000:!-' y1Eau ILI 151131arPOSALS; ::•; °I fh6 C141.,,,,,,_.,"wil alc11.,.,,,....,•1 "4 -Toon,on the loeues1 of "..°11w1gIOS a woo Was-'"DOUNDAPILV.". Rth atl (I•,.1 . . . .L,,,_,,,,,,,,,:,__.. ,.TRAkspoRmin,,, t , ,,,,...,..,, oe ....,,,,,,..for..,-....kkara to ....3.7363 acres enerred II, -'PUVININGAND ZOHING ' „•••••°•`•Ir 7111°°°,7':..1 ..'„).•---s.,-,...--E,,,,..-),,..-e77:;,.. ,..<7....Th fr...„..west of 1;,..: . ...sit.thanth.um wavoki.t•ind urb.(s,D),.:..Aba.14.37a5 ac1:::<.eamistpnroli7:FRIECOMIN4:1000N IA;cLL:E.ETi4,1,. 1 1i .;•askipay Ham claaessesee':. Iho Sant,MOKIINI*Ligto141:151111998 AT1733011.14ATJ11,.1.''''•:"..1,..,..' '';;;;SIT....‘.......,...1..:'''.::::•1.1L•1,;.:':;'1..•.... .;.'::',!!•;,willf:ISC°P,:THEFTA'ai.I3OcTuailiiiR1r71:1°;.'4iIi:tu12:40"y',..11'..‘1;‘:••'::43I:Ii mimiltevnIe'v--II tt°1:reatnercl"."--:PRpseLant: 1•••: IL log*yamyyp,,,,,ding ., :Coil:1y,Texas.from:SIINIO::: ENTRYWAVOVERLAY';1'.. 1-,'••••L_...°•10..P:01P44, 4 1 ttpinya• ',„;•••.: ..,,. F)8111:1918188:,.,188m- •y ut.• HA thp • ••;.F4enay Resitirde(SFR te,1:1SOUNDARIES IS__SCHED11'1.441"uPF•7"farbry-..;•:'f'',.•••••,„'T'ayied.xs,•_,--77-•74 f'1•."-•11••:'•••1 -1•-"--—'7'— • ' ' ••meeles,144ALL•.:.- : i I % lt• i.-,r,•.:*',.---....K.•••,•-••••'•-•,--.1iiali DERIDC.`7:77,..-,F',';"6", ""7'77:51.71F•tiiii3.77-7.7•'..''"..' - Wutilt.' us u . ce. .EQUIPMENT REPAIR .-•• mfesskinal services. i too I'l .. .• )::• •........,•:.' -: '1 Poo=hoop tho 11111111oor,4.ACTION MAY BETAKENAT .I •• •:A paltil. Olhad 1310,M•5141 0i9:414140-40.31 arid be .THIS MEETING. '•• • II' .,..... , .....' — ' .— ' '' . ' •• 7 co of wod La. . aaeas an the yubol both orw:. ' '.13.111). INAN:,..,..iOE1,0;;H:-..,:l.a. ,.:,,,....,11TioFORNseyotfttn.AusA.t.TSPBECruANIFICA7.... 0ESSFFicui1P1 HANDsvd.A14130F, .. ThE SOO:Mop,seeSee3,Hock 91'ond seftin..Derumeelation le'•.17**0411illnijiia9 ; • et Section.1131iT.a EL RR.,-.•available for Wawa;lee o44:' .,":„:1'....,,,,,,A.,,,,,,,,,e,,03 'AN ORDINANCE REJECT .I.MELSINGER AT(231)482;11'1:••11 CITY,VINO day of. irl . .,1 •co.sun%048,Bram&:1, Secretaye peke,910 Swat 1, •..•• .. •f ka T RE SCHEDULE OF.,:;.,,I'•3025,PROPOSALS AREt.•I 1 •.. • •• ' • 1i CO-TIC(55181.1elbabpd . FrIendswoed Days,. - „:COY OF PEABIAND:. . .RATEEFOR BASIC SER,I1' JJ2.,...;E*MINE 25,lel,ST"':I"1:', 4 . . - ,' •LA) . FrIencHwoccl,Texas.• 7.:.'. NOTICE OF pueuc kw-T .vicE TIER CAPLEFR0::;';'1"in"A•IL-ME PRIPPs•'::•:."'••? • ..•• '•.• • 1 'i • •.,..,....../NG.( ,..•,,.,.....: -pO$ED BrrctquaRAL.-.•...,!ALPAND.CONTRIXTV 1,"W. ".0F p.,.,,..,,,,'•-': •• . Al sainSaanno as inaie ..Dew!.104,,,,ale,Two ...";.- .. .. - ,,,., ., ..'INC,OVA TCICABLEW;II1;eIAY SE CONSIDERED ARO 1-'•1' __72'_71---Y1-1, ,,•1 pa/teased have the Pit•'•UT Slags/ .q.:, iorce iih.reby 61,,,,,,wan'....•wax oFriousToN;iNc. ..f.AWARDED ATTHEJIII-Y1,••..?, ' and twortinhy to appear ad-•FrIendsvood,Texas "1,'"the 22441 day olAnipse.sags:,•1ANDFI5DI4G uqf P1107'h1114;fWEIPOSWOOO LSA,:'1•11.1':1;,.,-,., 117,-.71111•11.7 . .,1 •11p hod on the cabled -.',1: • -;WOO pm,tes Gay Neva: POSE-b FIATES LIHREA1:11,..4.11SCH001.1110439,14191#9,,; ':&•-•:14.-7-,.44-1--:-"-.7;" 47'111 '4 -SI'.• ' - . 'tirifilimiEillf ,..qh4ciyosp.arland, .....i.,...pomBLE,DErammo?....c.FRIEWSWOODISD __,xt:.:r-t--..,, icyng Lerirng..,:,:.,-..'.--., PU 11:-1;i41,4.4 -•":-•:Bruer:a:tee Hams i...,-A REAsoNR,BtE kujoRm;;iiEsEnvo,71tERIGHTTo I( •'1 I ,,,:, 119.1. (..L it City Smeltery•-• ,* •• ••':. ' . :`.,;..Tom,HO contled a', .,.1'•EMITTEDRATE PER".4:11-Accr oRREJgcrtuft•:::::`-:**-?' '-; -•••••'' .. 1 ', ••• ,•.,.,.-. .:-., ..... ...NontET0 RgouEsT FoR . . Doc,ladd P ueiatile g e EP SCRI EER PER MONTH40N AUFROPOSALS1AR:Dp;,;1;,4 pAPRCATIONNO17I7 PROpOSA1,9 theCeeneChan6-es3519 FORHEFERIPP1JHE114414°EESERVEETHETNOTICE OF."A:.110.;.1 0.,..P U4B.,-••• • ''. • i ,-,,.•.,.,,,,,,i-.,,,,„,",..11'TECAS•. 4c.,..:.......:3:,••,•::TeNscrege/dIng an;,..,:t.; ::EEJECTIlia THE ECHED".`q,'_,F,L3P111).,.,111A17.,,,TE)11F4rt,I1COUNCILANIME pie* • ,Nplthitice, :•v?,,!°•.,w.,..,.••••- •••:..t,:;.1e,sonAhu'd=gr.'-'..;:. ,,;: ...,JILEOFRATES FOR EASIC.,::"...."RY'''''Effj,,'•'7'1'1'7•;41310 ANO ZONING;COIF, SERVICE TWA CABL k 04 4"••'`-''''''''''''''''''''''''''''..1'1115510N OF , THE H1S32AS STEM P 0. THE CITY0F. 11 •dAS ,LoII3 Ihe East one-hat(E,, . I ENTRM,,,, -' - •112)el Lot 7 Dock 14 ef `INC,TISIVA TC1 CAE:MI..1.* ,,;,NoUce Is herd:ye:van thaton , School Usti:tea hid a pub: PflY OE EEIENDSW,.__ __000,1,:--'' - • • 4''4' • • • •.', • Ileacenag wady se.saga g•ATTN:DELORS 14OKEIME,':No•Poo Atm,a subdyIslon,...,;.EJON 0E-111114TON:WC,';:: ...ea Peth day of June;itse.at A . .5,F.,in the Fdirdi,,,,oad COY SECRETARY,411111:BE...1 05E-5E2 woo out of 000too .1I:AND FillE°1119°VC°P11%'''''''1 °UPHEgCERTIFIPFINTOr1tMCATEar-•111,,,ae929;h88.111pseaabigth°C14;;;HC9"illeele; '1 4 LSDAdnitstration al,.RECEIVEDAT:1;:.''' X.'1'4,WO SoNoTeAbselicl' ,,F;4Psf-Diwc-i imams,,tiv, ''j '...344we!DI','-',: --.':.:F"DIECLre's-ra,,Dg,,RIL4:1P0;19aPt%TiZ4-A.. ii;THErmlaulluilP.A4 a';,;?ei 0711...!-:=1).1.°;'::•,,,u'i,v`40°4014 Z.IS-01 - .1 .•.F. F.934. OP3 • •' • 1":•recordeoVphend 7 15•1 11 Pr-R„611,...,,,„55CREn PEP 11.7'. '"-.-'''''''''''''''T';'•'• ' * ' '' '1'' ,,,,,,,,,,,,. •...,,,..e:-.:4'.:,.,.Countleklessis,veil conduct I 1 . 71.'41,11o74 Pf*PPS the •'1.C13111FERC-RWI•l•9/C!:I•• i 1,.khoobudg.tf,ith.:,,,i,,,,,-. ,.. 1 ..•••. ..,...4„.1.::.4..,and 18;Plat Recores;.,.',,, .:.11-NTR••,..,,,o.u.a4s.F,E)fw -PcEPHEREBYGNEN,:,4,Joint Pubk Flowing lA the: ,I ...!:kios,.... ;,,„,.., .. •'S.FRIENDSWOOD ERNE,'I•:Eeizerla County,1.6.11.9..;",,r i WA BP1TE•50J1 TRE'41:<4!`I•7711. IloitifYGoindlIgiffo"1-hCceisei Chambari;ary Hal' ''''.. " . iS-‘ERIEttaproo TECIS 'iithulki P b 6 V r''.1, 1 1,....... ii I . k-r i,, .4 •• , 'i fl 1;71 I; IL 1 11 I ' 11' . I • i'.I/1 .:1 I I 1 t I 1 t N- I El ts ' l_ giuSSWdre, tafmrmre, emu ,..._.._ l much more.III opportunity to appear and be I NOTICE OF.A JOINT PUB- heard on the subject both oral LIC HEARING OF THE CITY ` 1537 WESTFIELD IN 1 COUNCILANDTHEPLAN- i PEARLAND off Dixie Farm, and written. Documentation Is Wir• e I' a A' June 12&13. Furniture, available for review at the City 4A' �►t o NING AND ZONING COM- 17 ,,,•.•- MISSION OF THE CITY OF excellent clothes(baby to plus Secretary's Office,910 South.'>"`"'` "'`'' '"' D THE size),household items,and Friendswood Drive, NOTICEOF'INTENTIONTO PEARLAND,TEXAS t,,, ISSUE CERTIFICATES. • R IT •g-cart. Fdendswood,Texas. (Exhibit'A'to Resolution No. Notice is hereby given that on i1 s5 elr 3-FAMILY GARAGE SALE, R98.42) the 29th day of June,1998,at d all mods Friday, 6/12, 8.2 p.m. NOTICE OF A JOINT PUB- , ri n my goal, 6:30 p.m.,the City Council me Drive Furniture,clothes(children LIC HEARING OF THE CITYAN- NOTICE IS HEREBY GIVEN and the Planning and Zoning it 1 fo etinl and adult),books,toys,and COUNCIL AND THE PLAN- '�y rid t k that the City Council of the Commission of the City of • 4 ,y fire you exercise equipment. 12518 NING AND ZONING COM- City of Peadand,Texas(the Peadand,Biazoria and Hams , ,nt hills Eiker Rd.(Brookside). MISSION OF THE CITY OF nk you for FRIENDSWOOD,TEXAS :City')will meet at ita regular Counties,Texas,will conduct 10 confirm meeting placeat City Hall, a Joint Public Hearing In the fever want Council Chambers,CityHall, from you •NOTICE IS HEREBY GIVEN 519 Liberty Drive,Peadand, �(((```r*** !Material REAL ESTATE• Texae at 7:30 m.an Ste 3519 Liberty Drive,Peadand, v 1.!...i '; that the City of Friendawoodp' Texas,on the r uest of R. :. ed ones in dcyou for FOT 5818. City Council and Planning and 91h day°f June,1998,which your mercy , Zoning Commission will hold -.1„Me time and place tents- West Development Co.,Irc., ,'s PEARLAND:Horse lovers,lg; r a Joint Docketed Public lively set for the passage of agent for Frank D.Barr nger, be"ained. 312 home w/2 tams;12 stall Hearin at Friendswood Citytin ordiriancearideu Tritfier Trustee;owner,forek-amend- v; F e dean.ed &2 stall both w/cement floor- Hall,910 South Fderidswo action as may be'deemed merit to the Land Use and IL,. 1 for ffavon inn&walla,round pen,80 x Drive,on the following date' necessary to author zed the Urban Development n + d. issuance of the Cis certifi-- Ordinance of said City from •'. I. 1, ly in 160 arena. Ranch setting on and time: ry almost 5 acres. Close to MONDAY,JUNE 15,1998- cotes of obligation,payable Classification Suburban � y Hwy. 288•. $289,500. 7:00 P.M. from ad valorem taxation and Development(SD)to .TATE MLSti130858. Call ERA to consider the following: ti ubordinate pledge of cer- Commercial District(C)on the i Realty America. 281-485- lain revenues of the City's following described property, 3Ie 3295. • A.Requesting a Specific Use water and sewer system,in to wit: 4/2/2 1810 OAKWOOD DR. Permit-Multi Familythe maximum aggregate prtnr. - ;I• 're TOW EAST,PEARLAND(OAK- Residential-High ensity cipal amount of$17,500,000, Being a 1.6142 acre tract ° y p retirement BROOK SUB.). For sale by Apartment(SUP-MFR-H), bearing intent at any rate or located in the H.T.&B.RR '- j I 1 1 aft.on It owner. For more information, 17231 Blackhawk Boulevard, rates, •not to exceed the maxi- Co.survey,A-241,same, ., i patio over- 'mum interest rate now or being out of 39.2484 acres • ;� ' cal1281-996.0877. Freshly SeahawkApartments,12.597 • (f T. Reducedt painted outside andgreat acre tract of land out ofunre hereaflerauthorized bylaw; conveyed in 96-015983 of the 2,000• Pat condition stricted Reserve"H°,Block as shall be determined within Official Records,Braioria Co. im l c. 281-085- the discretion of the CityTX(6516 Broadway) ; PEARLAND/DIXIE HOL- 17,Section 3,Forest Bend /' LOW: 3-2-2,new listing! Subdivision,Harris County, Council at the time ofT. v lust listed!' issuance and aturing over a At said hearing all interested I Trait.,3.2-2 Remodeled kitchen,new a.c., Texas. period of years.not to exceed parties shall have the right tg. Covered large trees. Rustic Oaks At said hearin,all interested forty(40)years from the date and opportunity to appear and • 1 :thefts,park, School District $78.5K. 281- 9 • .thereof,for the purpose of evi- be heard on the subject - .` persons have the right and r ,( v all. fireplace 992-5415,owner, opportunity to appear and be denting the indebtedness of Pat Griffin owner. I OD VILLAGE:By heard on the subject both oral the City to be incurred(i)for. Young Lorfing 1-485-8375. owner. Immaculate 2-story. and written.Documentation is the planning,acquisition,con- City Secretary �� I 2350 sq. It. 4-2.5-2Atl. struction,and improvement of { �ammercis. Gameroom, •liv./din.comb. available for review at the City certainsanta sewer•ro- APPLICATION NO.247 i.ft.on 2 lots. Secretary's Office,910 South ry P Master down. Professional jects In the City including but F, d bathroom. Friendswood Drive, �^^ , p landscaping and decorating. Friendswood,Texs. notlimltedto:agravitysani- ••�Attb.l a, t I I 1, nufacturing. Must see. Loaded with tarysewerInterceptoralong R kR 7 zI t;4 ti I , letails. Pat I lc.281.485- upgrades. $117,500. No Deloris Mckenzie,TRMC • Harkey ,SSd R nvel Road, NOTICE OF A JOINT PUB- ' agents please.281-489-7120. Fle:Road,and Ravenwood- CirySecretary .LIC HEARING OF THE CiTY k. Drive; ravf sewer lines and 9 ty COUNCIL AND THE PLAN- �" Fnandswood Texas a liftstation to provide waste ) Realty America NING AND ZONING COM- 1 r,� watertreatmentalongFM MISSION OF THE CITY OF ti '__ `PU- ' O. 44. lines ravitysanitarysewer PEARLAND,TEXAS ° W Iinea'along Cullen;and goner •- ®■ ZONING BOARD OF al repair,renovation,and k. Notice is hereby given that on rl ERA ADJUSTMENT PUBLIC rehabilitation of the Citys van- Han) the 29th day of June,1998,at �^°) HEARING sewersystemtomrect 1 s e.r 6:30 p.m.,the.City Council Infilfiation/inflow problems;G9 I / ,at race.ill town to findand the Planning and Zoning : ` P find NOTICE IS HEREBY GIVEN for the planning,acquisition, Commission of City of ' , 'best place in town, that the City of Friendswood coristmction;improvement, Peadand, of liathe and Harris • j Zoning Board of Adjustment, materials,supplies;and. Counties,Texas,will t l )1 W.BROADWAY will hold a meeting: equipment of a new waste i;", t a Joint Public Hearing In the t , (281)485-3295 TUESDAY,JUNE 23,1998, w rier tary atment plant and Council Chambers,City Hall, i intheTOO P.M. sanitary sewer fine to be 3519 Liberty Drive,Peadand, In Friendswood City.Hall, legated in the northwest por- .Texas,on the request of R. r City.Council Chamber at 910 flap of the City,with such 85-8375 ® • West Development Co.,Inc.,. • S.Friendswood Drive,to con- wastewater treatment plant to agent for Gallentine. -.....r MIS. sider request for the following provide service to newly ssociates, LTY1 I i1C. . variance: annexed areas west of SH•.2640 E.Broadway.Bede 104 renova A Amendment owner,for an to the Land Use • 288;(iii)for tio It' • ns, and Urban Development :.a - Peadand.TX 77581 1.Seekingrequest for admin- 4n rovements,modifications,• Rose Ordinance of said City from ; �°t "`a =4. .lsocated at 806 Fall trative review for property pLEaf,all W stewaterT atmers to the nt Plante Classification Suburban 1-"> �. Development(SD)to Single p. r. ` ,, of Lot 4,Section 5,Greenbrier (N)for expansion,renova • - ' / , Family Dwelling District(R-4) - liVe ,� Subdivision,Galveston lipns,improvements,modifi- on the following described r Fi ..,„„i;„,., ' 1.4 r" '- � ° County,Texas,to determine if gallon,and repairs to the to wit hLpngwood Wastewater properly, yf. , r E the Administrative Official has � 1i� lx 0 n,.h am, made an error in the interpre- T•reatment P•lant and(a).for Being a 20.5591 acre tract r 0.., r professional services. r s 4 } lotion of the City of .;l located In the HT&B RR Sur- Friendswood City Code, nay,A-241,Brazorie Count, ;.' L FRIENDSWOOD,TOWNHOME:Great starter or' WITNESS MY HAND AND 1 Appendix C-Zoning,Sect on TX,out of the residue of a 160 ; •ettrement home.2-2.2Att.Bedrooms up. THE OFFICIAL SEAL OF 1 Bookshelves In den Storage room.Private 7.0.3.b• acre tract conveyed to John e courtyard.Inside utility$57 q 0 "THE CITY,this 8th day of Massey per an instrument ;4. . , At said hear rig all Interested June,1998. recorded In Vol.708,pg.109, r' a citizens shall have the right . i • Deed Records of Brazoda d I ti = '�- c and •opportunity to appear and CJTY OF PEARLAND, - Co•,TX(ott Fite Road) 'Ti + ri be heard on the subject • Documentation Is available for B'Young Lading. At said healing allinterested r' 5 w �` { �.1 s review at the City Secrete s e t A r ty y Cily.Secretaio,p, 4 . ,, parties aidnhiave the right r 4 c's� Office,Fnendswood City HAB and opporWnity toappearand 910 S.Friendswoad Drive ay( I " .,.,.:1_, r** s ,:s" �0,�} G Q be heard on the subject ,i ( a;,s :-r ,�. Fnendsviood,Texas. 1 r FRIENDSWOOD CONDO-REDUCED AGAIN! -Young Lading + Sodom/comer unik 1,bodloom,1 bath.Great. Debris McKenzie,TRMC NOTICE OF A JOINT PUB- • f 'rtveatment property.Mid$ae'a• C' Secrete City Secretary City Secretary LIC HEARING OF THE CITY APPLICATION NO.262 •+ • Friendswood,Texas COUNCIL AND THE PLAN- CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § We,the undersigned officers of the Cityof Pearland, Texas (the "City"),gnty ), hereby certify as follows: 1. The City Council of the City convened in a special meeting on June 29, 1998, 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 Richard Tetens Council Member Klaus Seeger Council Member William Berger Council Member Larry Wilkins Council Member Helen Beckman Mayor Pro Tern 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 AND ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998; PRESCRIBING THE TERMS AND FORM THEREOF; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND INTEREST THEREON; AWARDING THE SALE THEREOF; AUTHORIZING THE PURCHASE OF BOND INSURANCE; MAKING OTHER PROVISIONS REGARDING SUCH CERTIFICATES, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT 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; and, after due discussion, such motion, carrying with it the adoption of the Ordinance, prevailed and carried by the following vote: AYES: 4 NAYS: 1 ABSTENTIONS p 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 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 1998. ecretar OF P ARL AND, EXAS (SEAL) fi, I 4-21 2 ORDINANCE NO. 855 ORDINANCE AUTHORIZING AND ORDERING THE ISSUANCE OF CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998; a"" PRESCRIBING THE TERMS AND FORM THEREOF; PROVIDING FOR THE PAYMENT OF THE PRINCIPAL THEREOF AND INTEREST THEREON; AWARDING THE SALE THEREOF; AUTHORIZING THE PURCHASE OF BOND INSURANCE; MAKING OTHER PROVISIONS REGARDING SUCH CERTIFICATES, INCLUDING USE OF THE PROCEEDS THEREOF, AND MATTERS INCIDENT THERETO; AND DECLARING AN EMERGENCY L BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND: ARTICLE I. FINDINGS AND DETERMINATIONS Section 1.1.: Findings and Determinations. The City Council hereby officially finds and determines that: (a) The City of Pearland, Texas (the "City"), acting through its City Council, is authorized pursuant to and in accordance with the provisions of Texas Local Government Code, Chapter 271, Subchapter C, as amended (the "Act"), to issue certificates of obligation to provide all or part of the funds to pay contractual obligations to be incurred (i) for the planning, acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii) for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant to be located in the northwest portion of the City, with such wastewater treatment plant and sanitary sewer lines to provide service to newly annexed areas west of S.H. 288, (iii) for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv)for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and (v) for professional services. (b) The City Council authorized the publication of a notice of intention to issue Certificates of Obligation, Series 1998 (the "Certificates") to the effect that the r ti 1 City Council was tentatively scheduled to meet at 7:30 p.m. on June 29, 1998 at its regular meeting place to adopt an ordinance authorizing the issuance of the Certificates to be payable from (i) an ad valorem tax levied, within the limits prescribed by law, on the taxable property located within the City, and (ii) a subordinate pledge of certain revenues to be derived from the City's waterworks and sanitary sewer system (the "System"). (c) Such notice was published at the times and in the manner required by the Act. (d) No petition signed by at least five percent (5%) of the qualified voters of the City has been filed with or presented to any official of the City protesting the issuance of such Certificates on or before June 29, 1998, or the date of passage of this Ordinance. (e) The City has determined that it is in the best interests of the City and that it is otherwise desirable to issue the Certificates to provide all or part of the funds to pay contractual obligations to be incurred for the purposes authorized by the Act. ARTICLE II. 711 DEFINITIONS AND INTERPRETATIONS flSection 2.1.: Definitions. As used herein, the following terms shall have the meanings rL. specified, unless the context clearly indicates otherwise: "Act" shall mean Texas Local Government Code, Chapter 271, Subchapter C, as amended. 00 i "Attorney General" shall mean the Attorney General of the State of Texas. "Certificate" or "Certificates" shall mean any or all of the City of Pearland, Texas Certificates of Obligation, Series 1998, being sold to the TWDB pursuant to this Ordinance. "Certificate Insurance Policy" shall mean the municipal bond new issue insurance policy issued by the Certificate Insurer that guarantees the scheduled payment of principal of and interest on the Certificates when due. "Certificate Insurer" shall mean Financial Security Assurance Inc., a New York stock IJ insurance company, or any successor thereto or assignee thereof. �I "City" shall mean the City of Pearland, Texas and, where appropriate, its City Council. "City Council" shall mean the governing body of the City. "Code" shall mean the Internal Revenue Code of 1986, as amended. 2 "Comptroller" shall mean the Comptroller of Public Accounts of the State of Texas. {41! "DTC" shall mean The Depository Trust Company, New York, New York, or any successor securities depository. { "DTC Participant" shall mean brokers and dealers, banks, trust companies, clearing z_. 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 then designated fiscal year, which currently is the twelve-month period beginning on the first day of October of a calendar year and ending on the last day of September of the next succeeding calendar year and each such period may be designated with the number of the calendar year in which such period ends. "Interest Payment Date," when used in connection with any Certificate, shall mean March 1, 1999, and each March 1 and September 1 thereafter until maturity or earlier redemption of such Certificate. L "Issuance Date" shall mean the date on which the Certificates are delivered to and paid for by the TWDB. "Ordinance" shall mean this Ordinance and all amendments hereof and supplements hereto. "Outstanding", when used with reference to the Certificates, shall mean, as of a particular date, all Certificates theretofore and thereupon delivered pursuant to this Ordinance except: (a) 4 ' any Certificates canceled by or on behalf of the City at or before such date; (b) any Certificates defeased pursuant to the defeasance provisions of this Ordinance or otherwise defeased as iL permitted by applicable law; and (c) any Certificates in lieu of or in substitution for which a replacement Certificate shall have been delivered pursuant to this Ordinance. "Paying Agent/Registrar" shall mean Chase Bank of Texas, National Association, Houston, Texas, and its successors in that capacity. Li "Record Date" shall mean the close of business on the fifteenth day of the calendar month immediately preceding the applicable Interest Payment Date. "Register" shall mean the registration books for the Certificates kept by the Paying Agent/Registrar in which are maintained the names and addresses of, and the principal amounts registered to, each Registered Owner of Certificates. "Registered Owner" or "Owner" shall mean the person or entity in whose name any Certificate is registered in the Register. "TWDB" shall mean the Texas Water Development Board. 6 3 r E Section 2.2.: Interpretations. All terms defined herein and all pronouns used in this Ordinance shall be deemed to apply equally to singular and plural and to all genders. The titles and headings of the articles and sections of this Ordinance have been inserted for convenience of reference only and are not to be considered a part hereof and shall not in any way modify or ^'6 restrict any of the terms or provisions hereof. This Ordinance and all the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to sustain the validity of the Certificates and the validity of the levy of ad valorem taxes to pay the principal of and interest on the Certificates. ARTICLE III. L TERMS OF THE CERTIFICATES 9 Section 3.1.: Amount, Purpose and Authorization. The Certificates shall be issued in fully registered form, without coupons, under and pursuant to the authority of the Act in the total authorized aggregate principal amount of SEVENTEEN MILLION ONE HUNDRED L THOUSAND AND NO/100 DOLLARS ($17,100,000) for the purpose of providing all or part of the funds to pay contractual obligations to be incurred (i) for the planning, acquisition, 7 construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii)for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the L' City, with such wastewater treatment plant to provide service to newly annexed areas west of S.H. 288, (iii) for renovations, improvements, modifications and repairs to the Barry Rose I~' i wastewater treatment plant, (iv) for expansion, renovations, improvements, modification and b, repairs to the Longwood wastewater treatment plant, and (v) for professional services. Section 3.2.: Designation, Date and Interest Payment Dates. The Certificates shall be L) designated as the "City of Pearland, Texas Certificates of Obligation, Series 1998," and shall be dated July 1, 1998. The Certificates shall bear interest at the rates set forth in Section 3.3 below, from the later of the Issuance Date or the most recent Interest Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360-day year of twelve 30-day. months, payable on March 1, 1999, and each March 1 and September 1 thereafter until maturity or earlier redemption. If interest on any Certificate is not paid on any Interest Payment Date and continues unpaid for thirty (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 funds to make such interest payment are received from or on behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed for payment of such past due interest, and notice of the date of payment Li 4 7 L 1 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 affected Registered Owner as of the close of business on the day prior to mailing of such notice. Section 3.3.: Numbers, Denomination, Interest Rates and Maturities. (a) The Certificates ti"l shall be initially issued bearing the numbers, in the principal amounts and bearing interest at the rates set forth in the following schedule, and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature on March 1 in each of the years and in the amounts set 7 out in such schedule. Certificates delivered in transfer of or in exchange for other Certificates shall be numbered in order of their authentication by the Paying Agent/Registrar, shall be in the denomination of$5,000 or integral multiples thereof and shall mature on the same date and bear (" interest at the same rate as the Certificate or Certificates in lieu of which they are delivered. L Certificate Year of Principal Interest Number Maturity Amount Rate tee R-1 2000 $ 50,000 2.60% R-2 2001 50,000 2.70% R-3 2002 75,000 2.80% 7 R-4 2003 90,000 2.85% R-5 2004 100,000 2.90% R-6 2005 855,000 2.95% r R-7 2006 880,000 3.05% L R-8 2007 915,000 3.10% R-9 2008 945,000 3.15% r R-10 2009 980,000 3.25% `._ R-11 2010 1,015,000 3.35% R-12 2011 1,050,000 3.45% 7 R-13 2012 1,090,000 3.55% R-14 2013 1,125,000 3.60% R-15 2014 1,170,000 3.65% 7 R-16 2015 1,210,000 3.70% R-17 2016 1,250,000 3.75% R-18 2017 2,090,000 3.80% R-19 2018 2,160,000 3.80% Section 3.4.: Redemption Prior to Maturity. (a) Optional Redemption. The Certificates 7 maturing on and after March 1, 2009 are subject to redemption prior to maturity, at the option of the City, in whole or in part, and if in part in inverse order of maturity, on September 1, 2008, or any date thereafter, at par plus accrued interest to the date fixed for redemption. (b) Certificates may be redeemed in part only in integral multiples of $5,000. If a Certificate subject to redemption is in a denomination larger than $5,000, a portion of such 7 Certificate may be redeemed, but only in integral multiples of$5,000. In selecting portions of Certificates for redemption, each Certificate shall be treated as representing that number of P t. 5 7 L _ Certificates of$5,000 denomination which is obtained by dividing the principal amount of such Certificate by $5,000. Upon presentation and surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of this Ordinance, shall authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate t*+ so surrendered. L (c) Notice of any redemption, identifying the Certificates or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the Register, not less than thirty (30) days before the date fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Certificates called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being Outstanding except for the purpose of being paid with the funds so provided for such payment. elm Section 3.5.: Manner of Payment, Characteristics, Execution and Authentication. The Paying Agent/Registrar is hereby appointed the paying agent for the Certificates. The Certificates shall be payable, shall have the characteristics and shall be executed, sealed, registered and authenticated, all as provided and in the manner indicated in the FORM OF CERTIFICATES set forth in Article IV of this Ordinance. If any officer of the City whose manual or facsimile signature shall appear on the Certificates shall cease to be such officer before the authentication of the Certificates or before the delivery of the Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all purposes as if such officer had remained in such office. e The approving legal opinion of Mayor, Day, Caldwell & Keeton, L.L.P., Houston, Texas, r" Bond Counsel, may be printed on the back of the Certificates over the certification of the City Secretary, which may be executed in facsimile. CUSIP numbers also may be printed on the Certificates, but errors or omissions in the printing of either the opinion or the numbers shall have no effect on the validity of the Certificates. Section 3.6.: Authentication. Except for the Certificates to be initially issued, which need not be authenticated by the Registrar, only such Certificates as shall bear thereon a certificate of authentication, substantially in the form provided in Article IV 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 Certificate so authenticated was delivered by the Paying Agent/Registrar hereunder. Section 3.7.: Ownership. The City, the Paying Agent/Registrar and any other person may treat the person in whose name any Certificate is registered as the absolute owner of such Certificate for the purpose of making and receiving payment of the principal thereof and interest thereon and for all other purposes, whether or not such Certificate is overdue, and neither the r 6 r City nor the Paying Agent/Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be the Registered Owner of any Certificate in accordance with this Section shall be valid and effective and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate to the extent of the sums paid. Section 3.8.: Registration, Transfer and Exchange. The Paying Agent/Registrar is hereby appointed the registrar for the Certificates. So long as any Certificate remains Outstanding, the Paying Agent/Registrar shall keep the Register at the City Administrator's office in which, subject to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the registration and transfer of the Certificates in accordance with the terms of this Ordinance. Each Certificate shall be transferable only upon the presentation and surrender thereof at the principal corporate trust office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or his authorized representative in form satisfactory to the Paying Agent/Registrar. Upon due presentation of any Certificate for transfer, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor, within seventy-two (72) hours after such presentation, a new Certificate or Certificates, registered in the name of the transferee or transferees, in authorized denominations and of the same maturity and aggregate principal amount and bearing interest at the same rate as the Certificate or Certificates so presented and surrendered. All Certificates shall be exchangeable upon the presentation and surrender thereof at the principal corporate trust office of the Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and in any authorized denomination, in an aggregate principal amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this Section. Each Certificate delivered by the Paying Agent/Registrar in accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such Certificate is delivered. All Certificates issued in transfer or exchange shall be delivered to the Registered L Owners thereof at the principal corporate trust office of the Paying Agent/Registrar or sent by United States mail, first class, postage prepaid. The City or the Paying Agent/Registrar may require the Registered Owner of any Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of such Certificate. Any fee or charge of the Paying Agent/Registrar for such transfer or exchange shall be paid by the City. RII The Paying Agent/Registrar shall not be required to transfer or exchange any Certificate - called for redemption in whole or in part during the forty-five (45) day period immediately prior ,.� to the date fixed for redemption; provided, however, that this restriction shall not apply to the transfer or exchange by the Registered Owner of the unredeemed portion of a Certificate called for redemption in part. 7 41 L Section 3.9.: Book-Entry Only System. The definitive Certificates shall be initially issued in the form of a separate single fully registered Certificate for each of the maturities thereof. Upon initial issuance, the ownership of each such Certificate shall be registered in the name of Cede & Co., as nominee of DTC, and except as provided in Section 3.10 hereof; all of the Outstanding Certificates shall be registered in the name of Cede & Co., as nominee of DTC. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new nominee 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 1411 on the Record Date, the word "Cede& Co." in this Ordinance shall refer to such new nominee of DTC. With respect to Certificates 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 an interest in the Certificates. Without limiting the immediately 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 Certificates, (b) the delivery to any DTC Participant or any other person, other than a Certificateholder, as shown on the Register, of any notice with respect to the Certificates, including any notice of redemption or (c) the payment to any DTC Participant or any other person, other than a Certificateholder as shown in the Register, of any amount with respect to principal of Certificates, premium, if any, or interest on the Certificates. 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 Certificate is registered in the Register as the absolute owner of such Certificate for the purpose of payment of principal of, premium, if any, and interest on Certificates, for the purpose of giving notices of redemption and other matters with respect to such Certificate, for the purpose of registering transfer with respect to such Certificate, and for all other purposes whatsoever. The Paying C Agent/Registrar shall pay all principal of Certificates, premium, if any, and interest on the Certificates only to or upon the order of the respective owners, as shown in the Register as provided in this Ordinance, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the City's obligations with respect to payment of principal of, premium, if any, and interest on the Certificates to the extent of the sum or sums so paid. No person other than an owner shall receive a Certificate evidencing the obligation of the City to make payments of amounts due pursuant to this Ordinance. Section 3.10.: Payments and Notices to Cede & Co. Notwithstanding any other provision of this Ordinance to the contrary, as long as any Certificates 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 Certificates, and all notices with respect to such Certificates shall be made ` and given, respectively, in the manner provided in the representation letter of the City to DTC. Section 3.11.: Successor Securities Depository; Transfer Outside Book-Entry Only System. In the event that the City or the Paying Agent/Registrar determines that DTC is r 8 E 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 Certificates that they be able to obtain certificated Certificates, 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 transfer one or more separate Certificates to such successor securities depository or (b) notify DTC of the availability through DTC of Certificates and transfer one or more separate Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event, the Certificates 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 Certificateholders transferring or exchanging Certificates shall designate, in accordance with the provisions of this Ordinance. Section 3.12.: Replacement Certificates. Upon the presentation and surrender to the Paying Agent/Registrar of a damaged or mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a replacement Certificate, of the same maturity, "'" interest rate and principal amount, bearing a number not contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Registered Owner of such Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in "'11 connection therewith and any other expenses connected therewith, including the fees and expenses of the Paying Agent/Registrar and the City. If any Certificate is lost, apparently destroyed or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and ordinances of the City, and in the absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall execute, and the Paying Agent/Registrar shall authenticate and deliver, a replacement Certificate of the same maturity, interest rate and principal amount, bearing a number not contemporaneously outstanding, provided that the Registered Owner thereof shall have: (a) furnished to the City and the Paying Agent/Registrar satisfactory evidence of the ownership of and the circumstances of the loss, destruction or theft of such Certificate; (b) furnished such security or indemnity as may be required by the Paying .44 Agent/Registrar and the City to save and hold them harmless; (c) paid all expenses and charges in connection therewith, including, but not limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental charge that may be imposed; and (d) met any other reasonable requirements of the City and the Paying Agent/Registrar. If, after the delivery of such replacement Certificate, a bona fide purchaser of the original Certificate in lieu of which such replacement Certificate was issued presents for payment such 9 rul original Certificate, the City and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to whom it was delivered or any person taking [44 therefrom, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith. If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is about to become due and payable, the City in its discretion may, instead of issuing a {" replacement Certificate, authorize the Paying Agent/Registrar to pay such Certificate. Each replacement Certificate delivered in accordance with this Section shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which such replacement Certificate is delivered. Section 3.13.: Cancellation. All Certificates paid or redeemed in accordance with this Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and delivered in accordance herewith, shall be canceled and destroyed upon the making of proper records regarding such payment or redemption. The Paying Agent/Registrar L shall periodically furnish the City with certificates of destruction of such Certificates. ARTICLE IV. FORM OF CERTIFICATES The Certificates, including the Form of Comptroller's Registration Certificate, Form of Paying Agent/Registrar Authentication Certificate and Form of Assignment, shall be in substantially the following forms, with such omissions, insertions and variations as may be necessary or desirable, and not prohibited by this Ordinance: 7 r r r 10 Pal UNITED STATES OF AMERICA STATE OF TEXAS CITY OF PEARLAND, TEXAS .14 NUMBER DENOMINATION �+ R- $ REGISTERED CERTIFICATE OF OBLIGATION REGISTERED SERIES 1998 INTEREST RATE: ISSUANCE DATE: MATURITY DATE: CUSIP: July 30, 1998 March 1, REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas (the "City"), for value received, hereby promises to pay to the Registered Owner identified above or its registered assigns, on the maturity date specified above (or on earlier redemption as herein provided), upon presentation and surrender of this Certificate at the principal corporate trust office of Chase Bank of Texas, National Association, Houston, Texas, or its successor (the "Paying Agent/Registrar"), the principal amount identified above (or so much thereof as shall not have been paid or deemed to have been paid upon prior redemption) payable in any coin or currency of the United States of America which on the date of payment of such principal is legal tender for the payment of debts due to the United States of America, and to pay interest thereon at the rate shown above, calculated on a basis of a 360-day year composed of twelve 30-day months, from the later of the Issuance Date identified above or the most recent interest payment date to which interest has been paid or duly provided for. The date of this Certificate is July 1, 1998, but interest shall accrue on the principal amount hereof from the Issuance Date. Interest on this Certificate is payable on March 1, 1999, and each March 1 and September 1 thereafter until maturity or earlier redemption of this Certificate, by check sent by United States mail, first class, postage prepaid, by the Paying Agent/Registrar to the Registered Owner of record as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable interest payment date, as shown on the registration books kept by the Paying Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be paid upon presentation and surrender of this Certificate at the principal corporate trust office of the Paying Agent/Registrar. So long as the Texas Water Development Board (herein the "TWDB") is the holder of this Certificate, payment of the principal and interest on this Certificate shall be made to the TWDB by wire transfer at no cost to the TWDB. L_ i L 11 THIS CERTIFICATE IS ONE OF A DULY AUTHORIZED SERIES OF CERTIFICATES OF OBLIGATION (the "Certificates") in the aggregate principal amount of $17,100,000 issued pursuant to an ordinance adopted by the City Council of the City on June 29, 1998 (the "Ordinance") for the purpose of providing all or part of the funds to pay contractual obligations to be incurred (i) for the planning, acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer [11 lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii) for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and ("9 sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to.provide service to newly annexed areas west of S.H. 288, (iii) for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv)for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and (v) for professional services. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE. flTHIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Certificate either (i) is registered by the Comptroller of Public Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or (ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication certificate endorsed hereon. IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or placed in facsimile hereon and this Certificate to be signed by the Mayor and countersigned by the City Secretary by their manual, lithographed or printed facsimile signatures. (AUTHENTICATION OR CITY OF PEARLAND, TEXAS 114 REGISTRATION CERTIFICATE) L Mayor (SEAL) COUNTERSIGNED: City Secretary * n 12 E [REVERSE OF CERTIFICATE] THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity, Certificates maturing on and after March 1, 2009, in whole or in part, and if in part in inverse order of maturity on September 1, 2008, or any date thereafter, at par plus accrued interest to the date fixed for redemption. CERTIFICATES MAY BE REDEEMED IN PART only in integral multiples of$5,000. If a Certificate subject to redemption is in a denomination larger than $5,000, a portion of such Certificate may be redeemed, but only in integral multiples of$5,000. In selecting portions of Certificates for redemption, each Certificate shall be treated as representing that number of Certificates of$5,000 denomination which is obtained by dividing the principal amount of such Certificate by $5,000. Upon surrender of any Certificate for redemption in part, the Paying Agent/Registrar, in accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange therefor a Certificate or Certificates of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered. NOTICE OF ANY SUCH REDEMPTION, identifying the Certificates or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the books of registration kept by the Paying Agent/Registrar, not less than thirty (30) days before the date fixed for such redemption. By the date fixed for redemption, due provision shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Certificates called for redemption. If such notice of redemption is given, and if due provision for such payment is made, all as provided above, the Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the purpose of being paid with the funds so provided for such payment. THIS CERTIFICATE IS TRANSFERABLE only upon presentation resentation and surrender at the principal corporate trust office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or its authorized representative, subject to the terms and conditions of the Ordinance. THIS CERTIFICATE IS EXCHANGEABLE at the principal corporate trust office of the Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and in the principal amount of $5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange any Certificate called for redemption, in whole or in part, during the forty-five (45) day period immediately prior to the date fixed for redemption; provided, however, that such limitation shall not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a Certificate called for redemption in part. 13 THE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of any Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of a Certificate. Any fee or charge of the Paying Agent/Registrar for a transfer or exchange shall be paid by the City. THE REGISTERED OWNER of this Certificate by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. IT IS HEREBY DECLARED AND REPRESENTED that this Certificate has been duly and validly issued and delivered; that all acts, conditions and things required or proper to be performed, exist and to be done precedent to or in the issuance and delivery of this Certificate have been performed, exist and have been done in accordance with law; that the Certificates do not exceed any constitutional or statutory limitation; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest comes due and such principal matures, have been levied and ordered to be levied, within the limits prescribed by law, against all taxable property in the City and have been irrevocably pledged for such payment. IT IS FURTHER DECLARED AND REPRESENTED that the revenues to be derived from the City's waterworks and sanitary sewer system, after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), in an amount not to exceed $10,000, are pledged to the payment of the principal of and interest on the Certificates to the extent that ad _ valorem taxes may ever be insufficient or unavailable for such purpose, provided that the pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind, secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the Certificates. REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered Owners of the Certificates assent by acceptance of the Certificates. * * * i== 4- 4" 14 FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE The following form of Comptroller's Registration Certificate shall be attached or affixed to each of the Certificates initially delivered: THE STATE OF TEXAS REGISTER NO. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS I hereby certify that this certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this certificate has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts [SEAL] of the State of Texas 711-- * * * FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE The following form of authentication certificate shall be printed on the face of each of the Certificates other than those initially delivered: AUTHENTICATION CERTIFICATE This Certificate is one. of the Certificates described in and delivered pursuant to the within-mentioned Ordinance; and, except for the Certificates initially delivered, this Certificate has been issued in exchange for or replacement of a Certificate, Certificates, or a portion of a Certificate or Certificates 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. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION By Authorized Signature * * * Date of Authentication: 15 FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE The following form of Comptroller's Registration Certificate shall be attached or affixed to each of the Certificates initially delivered: THE STATE OF TEXAS REGISTER NO. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS I hereby certify that this certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this certificate has been registered by the Comptroller of Public Accounts of the State of Texas. WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts [SEAL] of the State of Texas * * * n FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE The following form of authentication certificate shall be printed on the face of each of the Certificates other than those initially delivered: AUTHENTICATION CERTIFICATE This Certificate is one of the Certificates described in and delivered pursuant to the } within-mentioned Ordinance; and, except for the Certificates initially delivered, this Certificate has been issued in exchange for or replacement of a Certificate, Certificates, or a portion of a Certificate or Certificates 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. CHASE BANK OF TEXAS, NATIONAL ASSOCIATION By Authorized Signature Date of Authentication: * * * L) 15 Li r t (b) The City hereby declares its purpose and intent to provide and levy a tax legally g Y sufficient to pay the principal of and interest on the Certificates, it having been determined that Tr, the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax. As long as any Certificates remain outstanding, all moneys on deposit in, or credited to, the Certificates of Obligation, Series 1998 Debt Service Fund shall be secured by a pledge of security, as provided by law for cities in the State of Texas. (c) In addition, pursuant to the authority of Articles 1111-1118, Vernon's Texas Civil Statutes, as amended, the City also hereby pledges the revenues to be derived from the City's waterworks and sanitary sewer system, after the payment of all operation and maintenance expenses thereof(the "Net Revenues"), in an amount not to exceed $10,000, to the payment of the principal of and interest on the Certificates to the extent that the ad valorem taxes referred to in Section 5.1(a) of this Ordinance are ever insufficient or unavailable for such purpose, provided that the pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates. The City also reserves the right to issue, for `''11 any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind, secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the Certificates. Section 5.2.: Debt Service Fund. The "Certificates of Obligation, Series 1998 Debt Service Fund" is hereby created as a special fund solely for the benefit of the Certificates. The City shall establish and maintain such fund at an official City depository and shall keep such fund separate and apart from all other funds and accounts of the City. Any amount on deposit in the Certificates of Obligation, Series 1998 Debt Service Fund shall be maintained by the City in trust for the Registered Owners of the Certificates. Such amount, plus any other amounts deposited by the City into such fund and any and all investment earnings on amounts on deposit in such fund, shall be used only to pay the principal of, premium, if any, and interest on the Certificates. Section 5.3 Investment of Funds. Money in the Debt Service Fund and the Construction Fund (hereinafter defined) may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner 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, Lincluding the Public Funds Investment Act; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times. If necessary, such investments shall be promptly sold to prevent any default. Section 5.4: Further Proceedings. After the Certificates to be initially issued have been executed, it shall be the duty of the Mayor to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General for examination and approval. After 17 E r , , FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE The following form of Comptroller's Registration Certificate shall be attached or affixed to each of the Certificates initially delivered: THE STATE OF TEXAS REGISTER NO. OFFICE OF THE COMPTROLLER OF PUBLIC ACCOUNTS L' I hereby certify that this certificate has been examined, certified as to validity and approved by the Attorney General of the State of Texas, and that this certificate has been registered by the Comptroller of Public Accounts of the State of Texas. �r WITNESS MY SIGNATURE AND SEAL OF OFFICE this Comptroller of Public Accounts [SEAL] of the State of Texas n * * * FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE The following form of authentication certificate shall be printed on the face of each of the Certificates other than those initially delivered: 7 AUTHENTICATION CERTIFICATE This Certificate is one of the Certificates described in and delivered pursuant to the within-mentioned Ordinance; and, except for the Certificates initially delivered, this Certificate has been issued in exchange for or replacement of a Certificate, Certificates, or a portion of a Certificate or Certificates 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. ri CHASE BANK OF TEXAS, NATIONAL ASSOCIATION FBy Authorized Signature Date of Authentication: * * * 15 FORM OF ASSIGNMENT The following form of assignment shall be printed on the back of each of the Certificates: ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto (Please print or type name, address, and zip code of Transferee) (Please insert Social Security or Taxpayer Identification Number of Transferee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer such certificate on the books kept for registration thereof, with full power of substitution in the premises. I DATED: Signature Guaranteed: Registered Owner NOTICE: The signature above must correspond to the name of the registered owner L` as shown on the face of this certificate in every NOTICE: Signature must be guaranteed by a particular, without any alteration, enlargement member firm of the New York Stock Exchange or change whatsoever. or a commercial bank or trust company. ARTICLE V. SECURITY FOR THE CERTIFICATES Section 5.1.: Pledge and Levy of Taxes and Revenues. (a) To provide for the payment of principal of and interest on the Certificates, there is hereby levied, within the limits prescribed by law, for the current year and each succeeding year thereafter, while the Certificates or any part of the principal thereof and the interest thereon remain outstanding and unpaid, an ad valorem tax upon all taxable property within the City sufficient to pay the interest on the Certificates and to create and provide a sinking fund of not less than 2% of the principal amount of the Certificates or not less than the principal payable out of such tax, whichever is greater, with full allowance being made for tax delinquencies and the costs of tax collection, and such taxes, when collected, shall be applied to the payment of principal of and interest on the Certificates by deposit to the Certificates of Obligation, Series 1998 Debt Service Fund and to no other purpose. r 16 L_I (b) The City hereby declares its purpose and intent to provide and levy a tax legally sufficient to pay the principal of and interest on the Certificates, it having been determined that the existing and available taxing authority of the City for such purpose is adequate to permit a legally sufficient tax. As long as any Certificates remain outstanding, all moneys on deposit in, or credited to, the Certificates of Obligation, Series 1998 Debt Service Fund shall be secured by a pledge of security, as provided by law for cities in the State of Texas. (c) In addition, pursuant to the authority of Articles 1111-1118, Vernon's Texas Civil Statutes, as amended, the City also hereby pledges the revenues to be derived from the City's waterworks and sanitary sewer system, after the payment of all operation and maintenance expenses thereof(the "Net Revenues"), in an amount not to exceed $10,000, to the payment of the principal of and interest on the Certificates to the extent that the ad valorem taxes referred to L' in Section 5.1(a) of this Ordinance are ever insufficient or unavailable for such purpose, provided that the pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to the payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind, secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the Certificates. Section 5.2.: Debt Service Fund. The "Certificates of Obligation, Series 1998 Debt Service Fund" is hereby created as a special fund solely for the benefit of the Certificates. The City shall establish and maintain such fund at an official City depository and shall keep such fund separate and apart from all other funds and accounts of the City. Any amount on deposit in the Certificates of Obligation, Series 1998 Debt Service Fund shall be maintained by the City in trust for the Registered Owners of the Certificates. Such amount, plus any other amounts deposited by the City into such fund and any and all investment earnings on amounts on deposit in such fund, shall be used only to pay the principal of, premium, if any, and interest on the Certificates. Section 5.3 Investment of Funds. Money in the Debt Service Fund and the Construction Fund (hereinafter defined) may, at the option of the City, be invested in time deposits or certificates of deposit secured in the manner 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, including the Public Funds Investment Act; provided that all such deposits and investments shall be made in such manner that the money required to be expended from any Fund will be available at the proper time or times. If necessary, such investments shall be promptly sold to prevent any default. Section 5.4: Further Proceedings. After the Certificates to be initially issued have been executed, it shall be the duty of the Mayor to deliver the Certificates to be initially issued and all pertinent records and proceedings to the Attorney General for examination and approval. After r L 17 the Certificates to be initially issued shall have been approved by the Attorney General, they shall be delivered to the Comptroller for registration. Upon registration of the Certificates to be initially issued, the Comptroller (or a deputy lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's registration certificate prescribed herein to be affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon. �I ARTICLE VI. CONCERNING THE PAYING AGENT/REGISTRAR Section 6.1.: Acceptance. Chase Bank of Texas, National Association, Houston, Texas, is hereby appointed as the initial Paying Agent/Registrar for the Certificates pursuant to the terms and provisions of the Paying Agent/Registrar Agreement by and between the City and the Paying Agent/Registrar. The Paying Agent/Registrar Agreement shall be substantially in the form attached hereto as Exhibit A, the terms and provisions of which are hereby approved, and the Mayor is hereby 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 thereto and affix the City's seal. Such initial Paying Agent/Registrar and any successor Paying Agent/Registrar, by undertaking the performance of the duties of the Paying Agent/Registrar hereunder, and in consideration of the payment of any fees pursuant to the terms of any contract between the Paying Agent/Registrar and the City and/or the deposits of money pursuant to this Ordinance, shall be deemed to accept and agree to abide by the terms of this Ordinance. Section 6.2.: Trust Funds. All money transferred to the Paying Agent/Registrar in its capacity as Paying Agent/Registrar for the Certificates under this Ordinance (except any sums representing Paying Agent/Registrar's fees) shall be held in trust for the benefit of the City, shall be the property of the City and shall be disbursed in accordance with this Ordinance. Section 6.3.: Certificates Presented. Subject to the provisions of Section 6.4, all matured Certificates presented to the Paying Agent/Registrar for payment shall be paid without the necessity of further instructions from the City. Such Certificates shall be canceled as provided herein. Section 6.4.: Unclaimed Funds Held by the Paying Agent/Registrar. Funds held by the Paying Agent/Registrar that represent principal of and interest on the Certificates remaining unclaimed by the Registered Owner thereof after the expiration of three years from the date such funds have become due and payable (a) shall be reported and disposed of by the Paying Agent/Registrar in accordance with the provisions of Title 6 of the Texas Property Code, as amended, to the extent such provisions are applicable to such funds, or (b) to the extent such provisions do not apply to the funds, such funds shall be paid by the Paying Agent/Registrar to the City upon receipt by the Paying Agent/Registrar of a written request therefor from the City. The Paying Agent/Registrar shall have no liability to the Registered Owners of the Certificates by virtue of actions taken in compliance with this Section. r 18 Section 6.5.: Paying Agent/Registrar May Own Certificates. The Paying Agent/Registrar in its individual or any other capacity, may become the owner or pledgee of Certificates with the same rights it would have if it were not the Paying Agent/Registrar. Section 6.6.: Successor Paying Agents/Registrars. The City.covenants that at all times while any Certificates are Outstanding it will provide a legally qualified bank, trust company, J financial institution or other agency to act as Paying Agent/Registrar for the Certificates. The City reserves the right to change the Paying Agent/Registrar for the Certificates 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 60 days prior to the next succeeding principal or interest payment date on the Certificates. 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 United States mail, first class, 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 VII. PROVISIONS CONCERNING SALE AND APPLICATION OF PROCEEDS OF CERTIFICATES Section 7.1.: Sale of Certificates. The sale of the Certificates is hereby awarded to the TWDB at a price of the par value thereof. It is hereby officially found, determined and declared that the above price and terms of sale of the Certificates are the most advantageous reasonably obtainable by the City. Section 7.2.: Approval, Registration and Delivery. The Mayor is hereby authorized to have control and custody of the Certificates and all necessary records and proceedings pertaining thereto pending their delivery, and the Mayor and other officers and employees of the City are hereby authorized and directed to make such certifications and to execute such instruments as may be necessary to accomplish the delivery of the Certificates and to assure the investigation, examination and approval thereof by the Attorney General and the registration of the initial Certificates by the Comptroller. Upon registration of the Certificates, the Comptroller (or the Comptroller's certificates clerk or an assistant certificates clerk lawfully designated in writing to act for the Comptroller) shall manually sign the Comptroller's Registration Certificates prescribed herein to be attached or affixed to each Certificates initially delivered and the seal of the Comptroller shall be impressed or printed or lithographed thereon. Section 7.3.: Application of Proceeds of the Certificates. The proceeds from the sale of pP the Certificates shall be deposited to the Construction Fund established pursuant to Section 10.2(b) of this Ordinance and used only for the purposes set forth in Section 3.1 of this Ordinance and to pay all expenses arising in connection with the issuance of the Certificates. Any proceeds of the Certificates, together with earnings from the investment thereof, remaining after making all such deposits and payments shall be deposited into the Interest and Sinking r 19 Fund and, to the extent applicable, applied to pay or redeem Certificates as provided in Section 10.2(c) of this Ordinance. Notwithstanding the above and foregoing, immediately following the delivery of the Certificates and prior to the deposit of the proceeds from the sale of such Certificates in the ("! "Special City of Pearland Loan Construction Fund" established at an official depository of the Li City pursuant to Section 10.2 hereof, such proceeds shall be held in trust and in escrow pursuant to the written escrow agreement described below at an official depository of the City pending written authorization to release said proceeds. A "Special Escrow Deposit Agreement" by and between the City and the official depository, attached hereto as Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved as to form and content, and the Mayor and the City Secretary of the City are hereby authorized and directed to execute such Agreement in substantially the same form and content herein approved. Section 7.4.: Tax Exemption. The City intends that the interest on the Certificates 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 Internal Revenue Code of 1986, as amended, (the "Code") and all applicable temporary, proposed and final regulations (the "Regulations") and procedures promulgated thereunder and applicable to the Certificates. For this purpose, the City covenants that it will monitor and control the receipt, investment, expenditure and use of all gross proceeds of the Certificates (including all property the acquisition, construction or improvement of which is to be financed directly or indirectly with the proceeds of the Certificates) and take or omit to take such other and further actions as may be required by Sections 103 and 141 through 150 of the Code and the Regulations to cause interest on the Certificates to be and remain excludable from the gross income, as defined in Section 61 of the Code, of the owners of the Certificates 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 Certificates to (i) provide funds to pay contractual obligations to be incurred for the purposes set forth in Section 3.1 hereof and (ii) to pay the costs of issuing the Certificates. The City will not use any portion of the proceeds of the Certificates 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 Certificates to constitute "private activity bonds" within the meaning of Section 141(a) of the Code. (c) Principal of and interest on the Certificates will be paid solely from ad valorem taxes and pledged revenues collected by the City, investment earnings on such collections, and as available, proceeds of the Certificates. (d) Based upon all facts and estimates now known or reasonably expected to be in existence on the date the Certificates are delivered, the City reasonably expects that the proceeds of the Certificates will not be used in a manner that would cause 20 J{ -_; the Certificates or any portion thereof to be an "arbitrage bond" within the meaning of Section 148 of the Code. (e) At all times while the Certificates are outstanding, the City will identify and properly account for all amounts constituting gross proceeds of the Certificates in accordance with the Regulations. The City will monitor the yield on the �.) investments of the proceeds of the Certificates 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 Certificates. To the extent 1° necessary to prevent the Certificates from constituting "arbitrage bonds," the City will make such payments as are necessary to cause the yield on all yield restricted nonpurpose investments allocable to the Certificates to be less than the yield that is materially higher than the yield on the Certificates. f ; (f) The City will not take any action or knowingly omit to take any action, if taken or omitted, would cause the Certificates 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 Certificates 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 Certificates will be used to carry out the governmental purpose of the Certificates within the three-year period beginning on the date of issue of the Certificates. (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 Certificates, 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 Certificates as may be required to calculate such excess arbitrage profits separately from records of amounts on deposit in the funds 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 Certificate is discharged, (ii) account for all gross proceeds under 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 Certificates and (iv) timely pay, as required by applicable Regulations, all amounts required to be rebated to the federal government. In addition, the City will exercise reasonable diligence to assure that no errors are made in the calculations required by the preceding r 21 n r sentence and, if such an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter, including payment to the federal government of any delinquent amounts owed to it, interest thereon and any penalty. The City will not directly or indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Certificates 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 resulted if such arrangement had been at arm's length and had the yield on the Certificates 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 information required by Section 149(e) of the Code with respect to the Certificates on such form and in such place as the Secretary may ` prescribe. (k) The City will not issue or use the Certificates as part of an "abusive arbitrage device" (as defined in Section 1.148-10(a) of the Regulations). Without limiting the foregoing, the Certificates are not and will not be a part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the Regulations by (i) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage or(ii) increasing the burden on the market for tax-exempt obligations. (1) Proper officers of the City charged with the responsibility for issuing the Certificates 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 Certificates 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 Certificates, 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 bythis Section are for the ( ) p q benefit of the Certificateholders and any subsequent Certificateholder, and may be relied upon by the Certificateholders and any subsequent Certificateholder and bond counsel to the City. In complying with the foregoing covenants, the City may rely upon an unqualified opinion issued to the City by nationally recognized bond counsel that any action by the City or reliance upon any interpretation of the Code or Regulations contained in such opinion will not cause interest on the Certificates to be includable in gross income for federal income tax purposes under existing law. r 22 i 11 Notwithstanding any other provision of this Ordinance, the City's representations and obligations under the covenants and provisions of this Section 7.4 shall survive the defeasance and discharge of the Certificates for as long as such matters are relevant to the exclusion of interest on the Certificates from the gross income of the owners for federal income tax purposes. Section 7.5.: Related Matters. In order that the City shall satisfy in a timely manner all of its obligations under this Ordinance, the Mayor, the Mayor, City Secretary and all other appropriate officers, agents, representatives and employees of the City are hereby authorized and directed to take all other actions that are reasonably necessary to provide for the issuance and delivery of the Certificates, including, without limitation, executing and delivering on behalf of the City all certificates, consents, receipts, requests, notices, and other documents as may be reasonably necessary to satisfy the City's obligations under this Ordinance and to direct the transfer and application of funds of the City consistent with the provisions of this Ordinance. Section 7.6.: Insurance on the Certificates. In order to obtain the lowest attainable interest rates on the Certificates, the City shall purchase a Certificate Insurance Policy issued by the Certificate Insurer for the Certificates. The Mayor is authorized to execute and the City Secretary is authorized to attest and affix the City's seal to any documents required in connection with the purchase of such policy. ARTICLE VIII. CONTINUING DISCLOSURE UNDERTAKING Section 8.1.: Annual Reports. The City shall provide annually to each NRMSIR and any SID, within six months after the end of each fiscal year, financial information and operating data with respect to the City of the general type described in Exhibit C hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C 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 audited financial statements become available. 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 pursuant 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 official 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 the SEC. L r L . 23 Section 8.2.: Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Certificates, 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 enhancements 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 Certificates; (g) Modifications to rights of holders of the Certificates; (h) Certificate calls; (i) Defeasances; (j) Release, substitution, or sale of property securing repayment of the Certificates; and (k) Rating changes. The Cityshall notifyanySID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with Section 8.1 of this Ordinance by the time required by such Section. Section 8.3.: Limitations, Disclaimers and Amendments. The City shall be obligated to 111 observe and perform 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 Certificates within the meaning of the Rule, except that the City in any event will give the notice required by Section 8.2 of any Certificate calls and defeasance that cause the City to be no longer such an "obligated person." The provisions of this Article are for the sole benefit of the holders and beneficial owners of the Certificates, and the beneficial owners of the TWDB's bonds if the City is an obligated person with respect to the TWDB's bonds under the Rule, and nothing in this Article, express or implied, shall give any benefit or any legal or equitable right, remedy, 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 pursuant to this Article L 24 n I 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 usefulness to a decision to invest in or sell Certificates at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN l 4 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 C:1 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 7, constitute a breach of or default under the 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 the changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Article, as so amended, would have permitted an underwriter to purchase or sell the Certificates in the primary offering of the Certificates in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a)the holders of a majority in i- aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Certificates consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the holder and beneficial owners of the Certificates. If the City so amends the provisions of this Article, it shall include with any amended financial information or operating data next provided in accordance with Section 8.1 an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. The City may also amend or repeal the provisions of this Article if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction 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 have prevented an underwriter from lawfully purchasing or selling Certificates in the primary offering of the Certificates, giving ret effect to (a) such provisions as so amended and (b) any amendments or interpretations of the Rule. r 25 7 Section 8.4.: Definitions. As used in this Article, the following terms have the meanings ascribed to such terms below: "MSRB" means the Municipal Securities Rulemaking Board. "NRMSIR" means each person whom 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. L i ARTICLE IX. PROVISIONS RELATING TO INSURANCE Section 9.1. Provisions Relating to Insurance. Notwithstanding anything in this Ordinance to the contrary and in consideration of the issuance of the Certificate Insurance Policy, the City agrees and covenants with the Certificate Insurer as follows: (a) The Certificate Insurer shall be deemed to be the sole holder of the Certificates Insured by it for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the holders of the Certificates insured by it are entitled to take pursuant to the Ordinance. The maturity of Certificates insured by the Certificate Insurer shall not be accelerated (41 without the consent of the Certificate Insurer. (b) No waiver, modification, amendment or supplement to the Ordinance may become effective except upon obtaining the prior written consent of the Certificate Insurer. (c) Copies of any modification or amendment to the Ordinance shall be sent to Standard & Poor's Ratings Services and Moody's Investors Service, Inc. at least 10 days prior to the effective date thereof. (d) Amounts paid by the Certificate Insurer under the Certificate Insurance Policy shall not be deemed paid for purposes of the Ordinance and shall remain Outstanding and continue to be due and owing until paid by the Issuer in accordance with the Ordinance. The Certificate Insurer shall, to the extent it to" L 26 makes any payment of principal of or interest on the Certificates, become subrogated to the rights of the recipients of such payments in accordance with the � terms of the Certificate Insurance Policy. The Ordinance shall not be discharged L, unless all amounts due or to become due to the Certificate Insurer have been paid in full or duly provided for. Section 9.2. Claims Upon the Certificate Insurance Policy and Payments by and to the Certificate Insurer. (a) If, on the business day prior to the related scheduled interest payment date or principal payment date ("Payment Date") there is not on deposit with the Paying Agent, after making all transfers and deposits required under the Ordinance, moneys sufficient to pay the principal of and interest on the Certificates due on such Payment Date, the Paying Agent shall make a claim under the Certificate Insurance Policy and give notice to the Certificate ' Insurer and to its designated agent (if any) (the"Certificate Insurer's Fiscal Agent") by telephone or telecopy of the amount of such deficiency, and the allocation of such deficiency between the amount required to pay interest on the Certificates and the amount required to pay principal of the Certificates, confirmed in writing to the Certificate Insurer and the Certificate Insurer's Fiscal Agent by 12:00 noon, New York City time, on such Business Day by filling in the form of [1, Notice of Claim and Certificate delivered with the Certificate Insurance Policy. (b) In the event the claim to be made is for a mandatory sinking fund redemption 7 installment, upon receipt of the moneys due, the Paying Agent shall authenticate and deliver to affected Certificateholders who surrender their Certificates a new Certificate or Certificates in an aggregate principal amount equal to the unredeemed portion of the Certificate surrendered. The Paying Agent shall designate any portion of payment of principal on Certificates paid by the Certificate Insurer, whether by virtue of mandatory sinking fund redemption, maturity or other advancement of maturity, on its books as a reduction in the principal amount of Certificates registered to the then current Certificateholder, whether DTC or its nominee or otherwise, and shall issue a replacement Certificate to the Certificate Insurer, registered in the name of Financial Security Assurance Inc., in a principal amount equal to the amount of principal so paid (without regard to authorized denominations); provided that the Paying Agent's failure to so designate any payment or issue any replacement Certificate shall have no effect on the amount of principal or interest payable by the Issuer on any Certificate or the subrogation rights of the Certificate Insurer. (c) The Paying Agent shall keep a complete and accurate record of all funds deposited by the Certificate Insurer into the Policy Payments Account and the allocation of such funds to payment of interest on and principal paid in respect of any Certificate. The Certificate Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Paying Agent. to. (d) Upon payment of a claim under the Certificate Insurance Policy the Paying Agent shall establish a separate special purpose trust account for the benefit of Certificateholders referred to herein as the"Policy Payments Account" and over which the Paying Agent shall have exclusive control and sole right of withdrawal. The Paying Agent shall receive any amount paid under the Certificate Insurance Policy in trust on behalf of Certificateholders and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes 27 of making the payments for which a claim was made. Such amounts shall be disbursed by the Paying Agent to Certificateholders in the same manner as principal and interest payments are to be made with respect to the Certificates under the sections hereof regarding payment of Certificates. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments. (e) Funds held in the Policy Payments Account shall not be invested by the Paying Agent and may not be applied to satisfy any costs, expenses or liabilities of the Paying Agent. (f) Any funds remaining in the Policy Payments Account following a Payment Date shall promptly be remitted to the Certificate Insurer. Section 9.3. Notices and Reports; Third Party Beneficiary. (a) The Certificate Insurer shall be provided with all reports, notices and correspondence to be delivered under the terms of the Ordinance. (b) The notice address of the Certificate Insurer is: Financial Security Assurance Inc., 350 Park Avenue, New York, New York 10022-6022, Attention: Managing Director — Surveillance; Re: Policy No. 23841-N; Telephone: (212) 826-0100; Telecopier: (212) 339- E3529. In each case in which notice or other communication refers to an Event of Default, then a copy of such notice or other communication shall also be sent to the attention of General Counsel and shall be marked to indicate"URGENT MATERIAL ENCLOSED." rft (c) The Certificate Insurer shall be deemed to be a third party beneficiary to the Ordinance. LL' ARTICLE X. MISCELLANEOUS Section 10.1.: Defeasance. The City may defease the provisions of this Ordinance and discharge its obligations to the Registered Owners of any or all of the Certificates to pay the principal of and interest thereon in any manner permitted by law, including by depositing with the Paying Agent/Registrar or with the State Treasurer of the State of Texas either: (a) cash in an amount equal to the principal amount of such Certificates plus interest thereon to the date of maturity or redemption; or (b) pursuant to an escrow or trust agreement, cash and/or direct obligations of, or obligations the principal of and interest on which are guaranteed by the United States of America, in principal amounts and maturities and bearing interest at rates sufficient to provide for the timely payment of the principal amount of the Certificates plus interest thereon to the date of maturity or redemption; provided, however, that if any of the Certificates 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 Certificates 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. r 28 Section 10.2.: Compliance with TWDB Rules and Regulations. In compliance with the rules and regulations of the TWDB, the City agrees and covenants: (a) to keep and maintain full and complete records and'accounts pertaining to the construction of the project financed with the proceeds of sale of the Certificates, including the construction fund account created below, in accordance with the standards set forth by the Government Accounting Standard Board; l� (b) to create and establish at an official depository of the City a "Special City of Pearland Loan Construction Fund (the "Construction Fund") for the receipt and disbursement of the proceeds from the sale of the Certificates (less amounts to pay costs of issuance) and all other funds acquired by the City in connection with the planning and construction of the projects financed, in whole or in part, by the TWDB pursuant to a loan evidenced by the Certificates and all funds deposited to the credit of the ,t71, Construction Fund shall be disbursed only for the payment of costs and expenses incurred in connection with the planning and building of such projects as approved by the TWDB and as otherwise allowed by the rules; (c) upon completion of the construction of the projects financed, in whole or in part, by the loan evidenced by the Certificates, to provide (i) to the Development Fund Manager of the TWDB a complete set of as-built drawings and (ii) to the TWDB a final accounting of the total costs of the projects. If the projects as finally completed were Eak built at a total cost less than the amount of available funds for building the projects, or if the Development Fund Manager of the TWDB disapproves construction of any portion of such projects as not being in accordance with the plans and specifications, the City agrees to immediately, with filing of the final accounting, return to the TWDB the amount of any such excess and/or the cost determined by the Development Fund Manager of the TWDB relating to the parts of such projects not built in accordance with the plans and specifications, to the nearest multiple of the authorized denominations for the Certificates held by the TWDB in inverse order of their Stated Maturities. In determining the amount of available funds for building the project, the City agrees to account for all amounts deposited to the credit of the Construction Fund, including all loan funds extended by the TWDB, all other funds available from the projects as described in the project engineer's or fiscal representative's sufficiency of funds statement and all interest earned by the City on money in the Construction Fund; (d) to maintain adequate insurance coverage on the projects financed with the proceeds of the Certificates in amounts adequate to protect the TWDB's interest; (e) to maintain current, accurate and complete records and accounts necessary to demonstrate compliance with financial assistance related legal and contractual provisions; (f) to implement any water conservation program required by the TWDB until all financial obligations to the State of Texas have been discharged; 29 it (g) to comply with any special conditions specified by the TWDB's environmental determination until all financial obligations to the State of Texas have U been discharged; e"" (h) to abide by the TWDB's rules and relevant state statutes, including the Texas Water Code, Chapters 15, 16 and 17; and (i) so long as any Certificates are held by the TWDB, to provide to the TWDB's Development Fund Manager a copy of each of its annual audited financial statements, to be submitted without charge. Section 10.3.: Legal Holidays. In any case where the date interest accrues and becomes payable on the Certificates or principal of the Certificates matures or the date fixed for redemption of any Certificates or a Record Date shall be in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date, or the Record Date shall not occur on such date, but payment may be made or the Record Date shall occur on the next succeeding day which is not in the City a Saturday, Sunday, legal holiday or a day on which banking institutions are authorized by law to close with the same force and effect as if(i) made on the date of maturity or flthe date fixed for redemption and no interest shall accrue for the period from the date of maturity or redemption to the date of actual payment or(ii) the Record Date had occurred on the fifteenth day of that calendar month. Section 10.4.: No Recourse Against City Officials. No recourse shall be had for the payment of principal of or interest on any Certificates or for any claim based thereon or on this Ordinance against any official of the City or any person executing any Certificates. Section 10.5.: Further Proceedings. The Mayor, Mayor Pro-Tem, City Secretary and other appropriate officials of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry out the terms of this Ordinance. Section 10.6.: Severability. If any Section, paragraph, clause or provision of this Ordinance shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance. Section 10.7.: Open Meeting. It is hereby found, determined and declared that a sufficient written notice of the date, hour, place and subject of the meeting of the City Council at which this Ordinance was adopted was posted at a place convenient and readily accessible at all times to the general public at City Hall for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code, and that this meeting has been open to the public as required by law at all times during which this Ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. r 30 Section 10.8.: Repealer. All orders, resolutions and ordinances, or parts thereof, inconsistent herewith are hereby repealed to the extent of such inconsistency. Section 10.9.: Emergency. It is hereby officially found and determined that this Ordinance relates to an immediate public emergency affecting life, health, property and the 4 public peace, and that such emergency exists, the specific emergency being that the proceeds from the sale of the Certificates 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 10.10.: Effective Date. This Ordinance shall be in force and effect from and after its passage on the date shown below. [The remainder of this page intentionally left blank] Li r rN E 31 n l.- " PASSED AND APPROVED on first reading pursuant to Section 3.10 of the City Charter this June 29, 1998. CITY OF PEARLAND, TEXAS PL_, I .D Mayor ATTEST Ale ecret.j / / Li (SEAL) Exhibit A —Paying Agent/Registrar Agreement Exhibit B —Description of Annual Financial Information �{ Exhibit C —Form of Special Escrow Deposit Agreement L. L ` 32 t• EXHIBIT A PAYING AGENT/REGISTRAR AGREEMENT See Tab No. 5 II r r r r r EXHIBIT B DESCRIPTION OF ANNUAL FINANCIAL INFORMATION 41 "") Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with Article VIII of this Ordinance are as specified below. 1. The City's audited financial statements for the most recently concluded fiscal year and, to the extent that such statements are not completed and available, unaudited ► financial statements for such fiscal year. 2. The financial information and operating data set out in Appendix C, Appendix D and Appendix E and paragraphs (5), (6), (7), (8), (9) and (10) of the section entitled "FISCAL INFORMATION" of the City's Application to the Texas Water Development Board. Accounting Principles The accounting principles referred to in such section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 above. [1 ra! 4 i 0 0 r EXHIBIT C FORM OF SPECIAL ESCROW DEPOSIT AGREEMENT See Tab No. 4 ::0DMA\PCDOCS\HOUSTON\542714\4 0,1 0n 1 r C SPECIAL ESCROW DEPOSIT AGREEMENT THIS SPECIAL ESCROW DEPOSIT AGREEMENT, dated as of June 29, 1998, made by and between the City of Pearland, Texas, a home rule city of the State of Texas in Brazoria and Harris Counties, Texas (the "City"), acting by and through the Mayor and City Secretary of the City and Pearland State Bank, Pearland, Texas (the "Bank"), a banking association organized and existing under the laws of the State of Texas. WITNES SETH : WHEREAS, pursuant to an ordinance finally adopted on June 29, 1998, the City Council of the City authorized the issuance of $17,100,000 City of Pearland, Texas Certificates of Obligation, Series 1998, dated July 1, 1998 (the "Certificates") for the purpose of providing all or part of the funds to pay contractual obligations to be incurred (i) for the planning, acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii)for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of r^+ S.H. 288, (iii) for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv) for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and (v) for professional services. WHEREAS, such ordinance also confirmed the sale of the Certificates to the Texas Water Development Board (the "Board"); and WHEREAS, a condition to the purchase of the Certificates by the Board is the deposit of the proceeds of sale (less amounts to pay costs of issuance) in escrow subject to being withdrawn only with the approval of the Development Fund Manager of the Board or an authorized representative; provided, however, that such funds may be transferred to different investments if the City and the Bank consent to such transfer; NOW, THEREFORE,the City and the Bank hereby mutually agree as follows: SECTION 1: Upon the delivery of the Certificates described above, proceeds of sale (less amounts to pay costs of issuance) shall be deposited to the credit of the Construction Fund (as defined in the ordinance authorizing the issuance of the Certificates) to be maintained by the Bank on behalf of the City and the Board, and such amount shall be held in escrow by the Bank in accordance with the terms of this Agreement. SECTION 2: The Bank shall not honor any disbursement from the Construction Fund unless and until it has been supplied with the written approval and consent of the Development Fund Manager of the Board (or an authorized representative thereof) to the release from escrow [Noi 7 L of such funds, or portion thereof, as the Board shall indicate in such release; provided, however, that no written approval and consent by the Development Fund Manager shall be required if the disbursement only involves transferring funds from one investment to another. Notice reflecting the type of investments purchased for the Construction Fund shall be sent to the Development Fund Manager. The City reserves the right to secure the release from escrow of all or a portion of the Funds upon presentation to the Bank of an executed escrow agreement with another financial institution. Upon receipt of such an agreement and with the written authorization of the Development Fund Manager (or an authorized representative thereof), the Bank shall transfer Funds held in escrow pursuant to this Agreement to such new escrow agent. SECTION 3: If only a portion of the Funds are released from escrow pursuant to Section 2 of this Agreement, the Bank shall continue to maintain the Funds in escrow in accordance with the terms hereof until all Funds have been released or transferred, after which the Bank shall have no further duties pursuant to this Agreement. SECTION 4: The Bank shall be authorized to accept and rely upon the certifications and J documents furnished to the Bank by the City and shall not be liable for the payment of any funds in reliance in good faith upon such certificates or other evidence or approval as herein recited. SECTION 5: The Bank shall have no liability except as expressly set forth herein and, if a controversy arises, either party hereto may introduce the dispute into a court of proper jurisdiction for adjudication thereof and, to the extent allowed by law, the Bank shall not be L. liable for any costs and expenses, including reasonable attorney's fees, in connection therewith, unless such costs and expenses result from the Bank's negligence or bad faith. ram SECTION 6_ All cash deposited to the credit of the Construction Fund in excess of the amount insured by the Federal Deposit Insurance Corporation and remaining uninvested under the terms of this Agreement shall be continuously secured by a valid pledge of direct obligations of the United States of America, or its agencies or instrumentalities, having an aggregate market value, exclusive of accrued interest, at all times, at least equal to such excess and uninvested cash on deposit in said Fund. SECTION 7: While funds are held in the Construction Fund,the Bank, at the direction of the City, is authorized to invest such funds in direct obligations of the United States of America or any other authorized investments for political subdivisions of the State of Texas. Earnings of such investments may, at the option of the City and with the approval of the Development Fund Manager(or an authorized representative thereof), be transferred to the Debt Service Fund. SECTION 8: An account statement of the Construction Fund will be provided by the City to the Development Fund Manager on a monthly basis. SECTION 9: This Agreement may be amended from time to time, as necessary, with the f" consent of the City Council and the Board, but no amendment shall increase the liabilities or responsibilities or diminish the rights of the Bank without its prior written consent. r C 1n I. IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed and attested as of the date first above written. EXECUTED as of the date first written above. t,J CITY OF PEARLAND, TEXAS By: �vyyj 4e-) Mayor ATTEST: BY: I I_i/ ✓ /� %�, 49 Secret. f (CITY SEAL) [1. PEARLAND STATE BANK Pearland, Texas By: Title:C A a ,(4d. q. £! E. PR es;de at ATTEST: • By:942.64, 0 Title: n 1°42aco 0 (SEAL) 4!` ODMA\PCDOCS\I_IOUSTON\570386\1 L� PAYING AGENT/REGISTRAR AGREEMENT THIS PAYING AGENT/REGISTRAR AGREEMENT dated as of June 29, 1998 (together with any amendments or supplements hereto, the "Agreement") is entered into by and between the CITY OF PEARLAND, TEXAS (the "Issuer"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, HOUSTON, TEXAS, as paying agent/registrar(together with any successor in such capacity, the "Bank"). WITNESSETH: WHEREAS, the Issuer has duly authorized and provided for the issuance of its City of E Pearland, Texas Certificates of Obligation, Series 1998 (the "Certificates") in the aggregate principal amount of$17,100,000 to be issued as fully registered certificates; E WHEREAS, all things necessary to make the Certificates the valid obligations of the Issuer, in accordance with their terms, will be done upon the issuance and delivery thereof; FWHEREAS, the Issuer and the Bank wish to provide the terms under which the Bank will act as Paying Agent to pay the principal of, redemption premium, if any, and interest on the Certificates, in accordance with the terms thereof, and under which the Bank will act as Registrar for the Certificates; and WHEREAS, the Issuer and the Bank have duly authorized the execution and delivery of this Agreement; and all things necessary to make this Agreement the valid agreement of the parties, in accordance with its terms, have been done. NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to act as Paying Agent with respect to the Certificates, to pay to the Registered Owners of the Certificates, in accordance with the terms and provisions of this Agreement and the ordinance authorizing the issuance of the Certificates (the "Ordinance"), the principal of, redemption premium, if any, and interest on all or any of the Certificates. The Issuer hereby appoints the Bank as Registrar with respect to the Certificates. The Bank hereby accepts its appointment, and agrees to act as Paying Agent and Registrar with respect to the Certificates. E Section 1.02. Compensation. As compensation for the Bank's Services as Paying Agent and Registrar, the Issuer hereby agrees to pay the Bank the fees set forth in the Bank's fee schedule attached as Exhibit A hereto. The Bank reserves the right to amend the fee schedule at any time, provided the Bank - shall have furnished the Issuer with a written copy of such amended fee schedule at least 60 days prior to the date that the new fees are to become effective. ARTICLE TWO DEFINITIONS Section 2.01. Definitions. EFor all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Bank" means Chase Bank of Texas, National Association, Houston, Texas, a commercial bank which is a national bank duly organized and existing under the laws of the United States of America. "Certificate" or "Certificates" means any one or all of the "City of Pearland, Texas Certificates of Obligation, Series 1998" authorized by the Ordinance. "Issuer" means the City of Pearland, Texas. "Ordinance" means the ordinance of the Issuer approved by its City Council on June 29, 1998, pursuant to which the Certificates are issued. "Paying Agent" means the Bank when it is performing the function of paying agent. "Person" means any individual, corporation, partnership, joint venture, associations, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or any entity whatsoever. "Registrar" means the Bank when it is performing the function of registrar. "Registered Owner" means the Person in whose name any Certificate is registered in the books of registration maintained by the Bank under this Agreement. All other capitalized terms shall have the meanings assigned to them in the Ordinance. r p ARTICLE THREE EI DUTIES OF THE BANK Section 3.01. Initial Delivery of the Certificates. The Certificates will be initially registered and delivered by the Bank to the purchaser designated by the Issuer as set forth in the Ordinance. If such purchaser delivers a written request to the Bank not later than five business days prior to the date of initial delivery, the Bank will, on the date of initial delivery, exchange the Certificates initially delivered for Certificates of authorized denominations, registered in accordance with the instructions in such request and the Ordinance. Section 3.02. Duties of Paying Agent. As Paying Agent, the Bank shall, provided adequate funds have been provided to it for such purpose by or on behalf of the Issuer, timely pay on behalf of the Issuer the principal of and interest on each Certificate in accordance with the provisions of the Ordinance. If the issue is to be Depository Trust Company (DTC) eligible, the Paying Agent will comply with all eligibility requirements as outlined and agreed upon in the eligibility E questionnaire. Section 3.03. Duties of Registrar. The Bank shall provide for the proper registration of the Certificates and the timely exchange, replacement and registration of transfer of the Certificates in accordance with the provisions of the Ordinance. Any changes to Registered Owners for such exchange, replacement and registration shall be made by the Bank only in accordance with the Ordinance. The Bank will maintain the books of registration in accordance with the Bank's general practices and procedures in effect from time to time; provided, however, that the Bank agrees to comply with the terms of Tex. Rev. Civ. Stat. Ann. art. 715b, § 4, as amended, and more specifically agrees also to maintain books of registration for the Certificates at the City Secretary's office in City of Pearland, Texas, which books of registration may be a copy of the register which shall be kept current by the Bank. Section 3.04. Unauthenticated Certificates. The Issuer shall provide an adequate inventory of unauthenticated Certificates to facilitate transfers. The Bank covenants that it will maintain such unauthenticated Certificates in safekeeping and will use reasonable care in maintaining such Certificates in safekeeping, which shall be not less than the care it maintains for debt securities of other government entities or corporations for which it serves as registrar, or which it maintains for its own bonds. L r Section 3.05. Reports. Upon request of the Issuer, the Bank will provide the Issuer reports which will describe in reasonable detail all transactions pertaining to the Certificates and the books of registration for L the period of time specified by the Issuer. The Issuer may also inspect and make copies of the information in the books of registration and such other documents related to the Certificates and in the Bank's possession at any time the Bank is customarily open for business, provided that Li reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the content of the books of registration to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a subpoena, court order or as otherwise required by law. Upon receipt of a subpoena, court order or other lawful request, the Bank will notify the Issuer immediately so that the Issuer may contest the subpoena, court order or other request if it so chooses. Section 3.06. Canceled Certificates. All Certificates surrendered for payment, redemption, transfer, exchange or replacement,. if surrendered to the Bank, shall be promptly canceled by it and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already canceled, shall be promptly canceled by the Bank. The Issuer may at any time deliver to the Bank for cancellation any Certificates previously authenticated and delivered which the Issuer may have acquired in any manner whatsoever, and all Certificates so delivered shall be promptly canceled by the Bank. All Lcanceled Certificates held by the Bank shall be destroyed and evidence of such destruction shall be furnished to the Issuer. Section 3.07. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on certificates or opinions furnished to the Bank by the Issuer. (b) The Bank shall not be liable to the Issuer for actions taken under this Agreement as long as it acts in good faith and exercises due diligence, reasonableness and care, as prescribed by law, with regard to its duties hereunder. (c) This Agreement is not intended to require the Bank to expend its own funds for performance of any of its duties hereunder. (d) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys. Section 3.08. Money Held by Bank. Money held by the Bank hereunder shall be held in trust for the benefit of the Registered Owners of the Certificates. r E The Bank shall be under no obligation to pay interest on any money received by it hereunder. All money deposited with the Bank hereunder shall be secured in the manner and to the fullest extent required by law for the security of funds of the Issuer. l._! Any money deposited with the Bank for the payment of the principal of or interest on any Certificates and remaining unclaimed by the Registered Owner after the expiration of three years from the date such funds have become due and payable shall be reported and disposed of by the Bank in accordance with the provisions of Texas law including, to the extent applicable, Title 6 of the Texas Property Code, as amended. To the extent such provisions of the Property Code do not apply to the funds, such funds shall be paid by the Bank to the Issuer upon receipt of a written request therefor from the Issuer. The Bank shall have no liability to the Registered Owners of the Certificates by virtue of actions taken in compliance with the foregoing provision. ARTICLE FOUR MISCELLANEOUS PROVISIONS Section 4.01. May Own Certificates. The Bank, in its individual or any other capacity, may become the owner or pledgee of Certificates with the same rights it would have if it were not the Paying Agent and Registrar for the Certificates. Section 4.02. Amendment. This Agreement maybe amended onlybyan agreement in writingsigned byboth of the �' g g parties hereof Section 4.03Assignment.. This Agreement may not be assigned by either party without the prior written consent of the other. Section 4.04. Notices. Any request, demand, authorization, direction, notice, consent, waiver or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown herein, or such other address as may have been given by one party to the other by 15 days'written notice. Ls7 [1 Section 4.05. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 4.06. Successors and Assigns. L,1 All covenants and agreements herein by the Issuer and the Bank shall bind their successors and assigns, whether so expressed or not. This Agreement shall not be assigned by the Bank without the prior written consent of the Issuer. Section 4.07. Severability. If any provision of this Agreement shall be invalid or unenforceable, the validity and enforceability of the remaining provisions hereof shall not in any way be affected or impaired. ti Section 4.08. Benefits of Agreement. ' (9R Nothing herein, express or implied, shall give to any Person, other than the parties hereto L. and their successors hereunder, any benefit or any legal or equitable right, remedy or claim hereunder. Section 4.09. Ordinance Governs Conflicts. This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying Agent and Registrar and if any conflict exists between this Agreement and the Ordinance, the Ordinance shall govern. The Bank agrees to be bound by the terms of the Ordinance with respect to the Certificates. Section 4.10. Term and Termination. This Agreement shall be effective from and after its date and may be terminated for any reason by the Issuer or the Bank at any time upon 60 days' written notice; provided, however, that no such termination shall be effective until a successor has been appointed and has accepted the duties of the Bank hereunder. In the event of early termination, regardless of circumstances, the Bank shall deliver to the Issuer or its designee all funds, Certificates and all books and records pertaining to the Bank's role as Paying Agent and Registrar with respect to the Certificates, including, but not limited to, the books of registration. Section 4.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. L r A• Section 4.12 Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Texas. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CITY OF PEARLAND, S BY: -rii-i-t Mayor ADDRESS: 3519 Liberty Drive Pearland, Texas 77581 ATTEST: /CSeey �. �^* AL) CHASE BANK OF TEXAS, NATIONAL ASSOCIATION By: Title. Vice President& -ruspficer ADDRESS: 600 Travis, 11th Floor Houston, Texas 77002 ATTEST: By: free 'resod Trust fifer Title: (SEAL) _ _ _ _ - _ _ _ - _ _ _ EXHIBIT A L' FEE SCHEDULE ::ODMATCDOCS\HOUSTON\571325\1 r L L_ r FEE SCHEDULE BOND REGISTRAR,TRANSFER AGENT AND PAYING AGENT [1 ACCEPTANCE for accepting appointment, execution of documents,attendance D at closing,conferring with interested parties and setting up records 500.00 BOND REGISTRAR Annual Administrative Charge 600.00 f Account Maintenance For each bondholder account maintained, based upon the number of accounts maintained at the beginning of each billing period, plus all new accounts added 1.00 Annual Minimum 100.00 Bondholder List For each account 0.04 Minimum per List 100.00 Mailing'Services Preparation of labels-per account 0.04 Minimum per set of labels 100.00 Inserting enclosures-per enclosure 0.04 Minimum per job 100.00 TRANSFER AGENT ACTIVITY For each bond issue. Includes cancellation of surrendered bond(s), and posting to account 3.00 Replacement of lost bonds 30.00 PAYING AGENT ACTIVITY Interest Payment [-1 For each check issued including calculation,check register, replacement of checks,and reconcilement 0.50 Minimum per payable date 100.00 [1 Principal Payment For each bond redeemed at maturity or call 5.00 INCOME TAX REPORTING REQUIREMENTS For preparation of forms required to report income to either state,federal or individuals-per form 2.00 111 ADDITIONAL FEES AND EXPENSES Bond Calls 250.00 Account Termination Fee(Minimum) 1,000.00 Audit Confirmations(per issue) 75.00 Out-of-pocket expenses incurred in rendering any service covered by this schedule are in addition to the fees quoted. Expenses for which we are regularly reimbursed include,but are not limited to, - counsel fees,travel expenses, publications,printing cost,postage,wire charges,long distance LLL telephone calls,stationery,and forms. 9 '! All fees quoted are subject to our review and acceptance,and that of our counsel, of the documents governing this issue. 1 L 0 GENERAL CERTIFICATE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § We, the undersigned officers of the City of Pearland, Texas (the "City"), do hereby make and execute this certificate for the benefit of the Attorney General of the State of Texas and all other persons interested in the City's $17,100,000 CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998, dated July 1, 1998 (the "Certificates"), now in the process of issuance, as follows: Li (1) The City is a duly incorporated Home Rule City, having more than 5,000 inhabitants, operating and existing under the Constitution and laws of the State of Texas and the duly adopted Home Rule Charter of the City, which Charter was amended pursuant to an election held on May 2, 1998 and otherwise has not been changed since the approval by the Attorney General of the State of Texas of the City of Pearland, Texas Certificates of Obligation, Series 1997A, dated September 1, 1997, which were the last obligations issued by or on behalf of the City. Attached hereto as Exhibit A is a copy of the Resolution and Order Canvassing the Results of the May 2, 1998 Election. (2) The Certificates are being issued to provide funds to pay contractual obligations to be incurred (i) for the planning, acquisition, construction and improvement of certain sanitary �-I sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road, Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M. 518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii) for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of S.H. 288, (iii) for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv) for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant, and (v) for professional services. (3) The currently effective ad valorem tax appraisal roll of the City (the "Tax Roll") is the Tax Roll prepared and approved during the calendar year 1997, being the most recently approved Tax Roll of the City; the taxable property in the City has been appraised, assessed and valued as required and provided by the Texas Constitution and Property Tax Code (collectively, "Texas law"); the Tax Roll for the year has been submitted to the City Council of the City as required by Texas law, and has been approved and recorded by the City Council; and according to the Tax Roll for the year, the net aggregate taxable value of taxable property in the City (after deducting the amount of all applicable exemptions required or authorized under Texas law), upon which the annual ad valorem tax of the City has been or will be imposed or levied, is $1,012,049,410. U ::ODMA\PCDOCS\HOUSTON\571955\1 (4) From June 29, 1998, to the date hereof, the following individuals were the duly elected and qualified Mayor, and City Council of the City holding the offices opposite their C 1 names: Tom Reid Mayor L Richard Tetens Council Member Klaus Seeger Council Member William Berger Council Member Larry Wilkins Council Member Helen Beckman Council Member and Mayor Pro Tern �- (5) From June 29, 1998, to the date hereof, the following individuals were the duly appointed and qualified officers of the City holding the positions opposite their names: III Administration Position Paul Grohman City Manager Young Lorfing City Secretary Rubye Jo Knight Tax Assessor/Collector (6) The Certificates were sold at a price equal to $17,100,000 (representing the par amount of the Certificates)to the Texas Water Development Board. U (7) Neither the revenues nor the properties of the System are in any way pledged or hypothecated other than the pledge of the Net Revenues of the System to the Certificates now in the process of issuance, the City's Certificates of Obligation, Series 1997A, Certificates of Obligation, Series 1997, Water and Sewer System Revenue Refunding Bonds, Series 1996A, Water and Sewer System Revenue Bonds, Series 1996B, Combination Tax and Revenue Certificates of Obligation, Series 1995 and Combination Tax and Revenue Certificates of Obligation, Series 1991. • (8) Attached to this certificate as Exhibit B is a true, full and correct debt service schedule for the Certificates. Attached as Exhibit B-1 is a true, full and correct debt service schedule for all of the City's outstanding tax supported debt. The principal amount of the City's total outstanding tax supported debt, not including the Certificates, is $34,070,000. (9) The following is a true, full and current schedule of the City's waterworks and sewer system (the "System") revenues, remaining after the payment of all operation and maintenance expenses thereof("Net Revenues"), for the past three fiscal years: Fiscal Year Ended September 30, •1 1995 1996 1997 Li, $1,675,304 $1,280,733 $1,636,132 ::ODMA\PCDOCS\HOUSTON\571955\1 [14 (10) Attached to this certificate as Exhibit C is a true, full and current resolution establishing the utility rates of the System that are currently in effect. (11) The City is not in default as to any covenant, condition or obligation on any prior bonds or other obligations payable from the Net Revenues of the System. SIGNED AND SEALED this June 29 1998. CITY OF PEARLAND, TEXAS cal c y Secret Mayor (CITY SEAL) �. 1 I 741 ::ODMA\PCDOCS\HOUSTON\571955\1 "0, Exhibit A Resolution Canvassing Results of Election 7 _I n L1 , 411 ::ODMA\PCDOCS\HOUSTON\571955\1 n • RESOLUTION NO. R98-38 A RESOLUTION AND ORDER OF THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS, CANVASSING THE RETURNS AND DECLARING THE RESULTS OF THE GENERAL ELECTION AND SPECIAL ELECTION r HELD IN THE CITY OF PEARLAND, TEXAS, ON MAY 2, 1998. WHEREAS, there was held in the City of Pearland, Texas, on the 2nd day of May, 1998, a City General Election and Special Election at which the offices to be filled for Member of the Council, Position No. One (1), and Member of the Council, Position No. Five (5), along with six (6) proposed Charter Amendments were submitted to a vote of the duly qualified resident electors of said City. U WHEREAS, at this Special Meeting of the City Council of the City of Pearland, on May 5, 1998, after date of said election, being the first meeting of the City Council to be held since said election at which returns of said election could be considered and final L I results declared; now therefore, ' i BE IT RESOLVED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: SECTION I. [1 That the election described was duly called and notice thereof given in accordance with law; that said election was held in the manner required by law; that due returns of said election have been made by the proper officers; and it appeared from said returns, duly and legally made, that there were cast at such election 1447 valid and legal votes; and that said election resulted in the following vote totals: r FOR MEMBER OF THE COUNCIL, POSITION NUMBER ONE NAME OF CANDIDATE NUMBER OF VOTES RECEIVED PERCENTAGE Helen W. Beckman 898 100 % FOR MEMBER OF THE COUNCIL, POSITION NUMBER FIVE NAME OF CANDIDATE NUMBER OF VOTES RECEIVED PERCENTAGE Kevin Cole 567 40.21 % Klaus W. Seeger 843 59.79 % PROPOSED CHARTER AMENDMENTS AMENDMENT NO. 1 AMENDING SECTION 3.10 FOR 618 AGAINST 562 AMENDMENT NO. 2 n Li AMENDING SECTION 5.01 FOR 888 AGAINST 456 AMENDMENT NO. 3 AMENDING SECTION 6.03 FOR 838 AGAINST 496 [11 2 n • AMENDMENT NO. 4 REPEALING SECTION 6.12 0„1 AMENDING SECTION 6.08 FOR 864 AGAINST 454 AMENDMENT NO. 5 AMENDING SECTION 8.10 FOR 536 AGAINST 793 p ! AMENDMENT NO. 6 AMENDING SECTION 8.17 FOR 455 AGAINST 855 _ 4 SECTION II. That the City Council of the City of Pearland, Texas, hereby officially and affirmatively declares that the results as shown above are the real and true results of the election held on May 2, 1998, within the City of Pearland, Texas, that the candidate elected for Member of the Council, Position Number One (1) is declared to be HELEN W. BECKMAN and the candidate elected for Member of the Council, Position r Number Five (5) is declared to be KLAUS W. SEEGER, and said above parties are hereby declared duly elected to said respective offices, subject to taking of their Oaths of Office and Statements of Elected Officers as provided by the laws of the State of E Texas. SECTION III. The City Council of the City of Pearland, Texas, hereby officially and affirmatively declares that Amendment Numbers 1 through 4 passed and Amendment Numbers 5 and t' 3 1 ' • 6 failed (attached hereto as Exhibit "A") to the Home Rule Charter of the City of Pearland and presented to the duly qualified voters of the City of Pearland as a result of said election. SECTION IV. The following Exhibits B, C, and D (Election Results) are attached hereto and Lmade a part hereof by reference. r PASSED, APPROVED, ADOPTED, and ORDERED this ii th day of May, A. D., 1998. Tom Reid Mayor ATTEST: • Y• g Lo jSecr; w APPROVED AS TO FORM: 0,„„„ CAL,. -11 Darrin M. Coker Interim City Attorney 4 PROPOSED AMENDMENT NO. 1 flummijmni This amendment allows the City Council to vote upon ordinances and resolutions by consent agenda, and deletes the requirement of reading captions, so long as the official number assigned to the ordinance or resolution is read aloud. THE AMENDMENT OF the Pearland Charter, Section 3.10, PROCEDURES FOR PASSING OF ORDINANCES OR RESOLUTIONS, to read as follows: '...The readingaloud of the title--a title -and —e# official number assigned to the ordinance or resolution by the city secretary shall suffice as a reading, provided printed copies of the ordinance or resolution in the form required for adoption are available to all members of the city council and a reasonable number of additional copies are available to all interested citizens present at the session. The city council may address selected items by consent agenda in the absence of any objection by council. ... [underlined portions ADDED; stricken portion DELETED] PROPOSED AMENDMENT NO. 2 L" This amendment establishes the City's annual election dates in accordance with state law. THE AMENDMENT OF the Pearland Charter, Section 5.01, REGULAR ELECTIONS, to read as follows: L� �`' City elections shall be held at a time established by state law.' [underlined portion ADDED; stricken portion DELETED] p PROPOSED AMENDMENT NO. 3 This amendment corrects information required in a recall petition, in accordance with state law. THE AMENDMENT OF the Pearland Charter, Section 6.03, PETITION FOR RECALL, to read as follows: ... ;g m mu;MI name vi eaan signer must appearsn the petition. Each signer ef-suehreeail-petitlen shall personally sign his/her name thereto in ink . And date the petition, specifying the day, month and year. The signer must provide his/her voter registration number and county of registration. The signer must also include his/her address including the street name, number and zi ' (underlined portions ADDED; stricken portion DELETED] PROPOSED AMENDMENT NO. 4 This amendment establishes the City Councils ministerial duty to call a recall election and repeals the section of the Charter granting a Brazoria County judge this authority. THE AMENDMENT OF the Pearland Charter, REPEALING Section 6.12, FAILURE OF CITY COUNCIL TO CALL AN ELECTION, and AMENDING Section 6.08, ELECTION TO BE CALLED, to read as follows: 'If the officer whose removal Is sought does not resign, tip it shall become the ministerial duty of the city council to order an election,and fix a date for holding such recall election, and discharge any other duties jmposed upon said council ter the rovisions of this Charter and state law. The date for the election shall be ordered and held in a timely manner as Prescribed by the general election laws of the State of Texas.' [underlined portions ADDED; stricken portion DELETED] L PROPOSED AMENDMENT NO, 5 This amendment allows the proposed budget for an upcoming fiscal year to go.irgo effect automatically if it does not pass formally by vote of Council prior to the beginning of said fiscal year to ensure that the City's effective tax rate calculations remain in compliance with state law, after which time, the City Council may amend said budget. THE AMENDMENT OF the Pearland Charter, Section 8.10, DATE OF FINAL ADOPTION, to read as follows: 'The budget shall be finally adopted no later than fifteen (15) days [1 prior to the beginning of the fiscal year and should the city council fail to so adopt a budget, 4 i budget proposed by the city manager shall go into effect for the ensuing fiscal year.' [underlined portion ADDED; stricken portion DELETED] p 4 ■•ww-;�.�w ..0 rum f i r , o This amendment clarifies the City Managers authority to transfer appropriations L' • among line items within the same department without prior Council approval, so long as the total department budget is not affected and the City Council is notified of such transfers. THE AMENDMENT OF the Pearland Charter, Section 8.17, PURCHASE ` PROCEDURE, to ADD language as follows: '...Nothing herein shall prohibit the city manager or his designee from transferring part or all of any unencumbered appropriation balances among programs within a department or organizational unit during the fiscal year without prior approval of city council, so long as the total department budget is not affected and such transfers are reported to the city council within seven (7) days of said transfer.' l_� • ACCUMULATED TOTAL:PEARLAND CITY ELECTION Pegs 1 EXHIBIT 21:27;40 2-wY-1998 `` CITY,SCNOOL,NOSPITAL,ORAIMAGE DIST. AND WATERSHED GIST. ELECTIONS BRAZORIA COUNTY, TEXAS - MAY 2, 1998 Total Pet Total Pct Precincts Counted - TOTAL 2 20.00 Ballots Cast - TOTAL 1,447 PEARLAND CITY MUNICIPAL OFFICER ELECTION COUNCILMEMSER,POSITION 1 NELEN W. BECKMAN 898 100.00 Total 898 100.00 COUNCIUEMSER,POSITION 5 KEVIN COLE 567 40.21 KLAUS W. SEEGER 843 59.79 Total 1,410 100.00 PROPOSED AMENDMENTS N0.1-SEC.3.10,PROCEDURES FOR PASSING ORDIMANCES..TO READ AS FOLLOWS "THE READING ALOUD OF THE OFFICIAL NUMBER.... FOR 618 52.37 AGAINST 562 47.63 Total 1,180 100.00 NO.2-SEC.5.01,REGULAR ELECTIONS SHALL BE HELD AT A TIME ESTABLISHED BY LAW FOR 888 . 66.07 AGAINST 456 • 33.93 Total 1,344 100.00 NO.3-SEC.6.03,PETITION FOR RECALL,TO READ AS FOLLOWS:TNE PRINTED NAME OF EACH SIGNER MUST APPEAR ON PETITION.... FOR 838 . 62.82 AGAINST 496 - 37.18 Total 1,334 100.00 N0.4-REPEALING SEC.6.12,FAILURE OF COUNCIL TO CALL AN ELECTION,AND AMEND SEC.6.08, ELECTION TO BE CALLED.... FOR 864 • 65.55 AGAINST 454 • 34.45 Total 1,318 100.00 NO.5-SEC.8.10,DATE Of FINAL ADOPTION TO READ AS FOLLOWS- THE BUDGET SHALL BE..ADOPTED MO LATER THAN 15 DAYS.... FOR 536 40.33 AGAINST 793 • S9.67 Total 1,329 100.00 NO.6-SEC.8.17-PURCHASE PROCEDURE TO ADO LANGUAGE .. NOTHING HEREIN SHALL PROHIBIT CITY MANAGER FROM... FOR 455• 34.73 AGAINST 855• 65.27 Total 1,310 100.00 ACCUMULATED TOTAL:PEARLAND CITY ELECTION Page 2 21:27:40 2-May-1998 CITY,SCNOOL,NOSPITAL,DRAINAOE DIST. AND IATERSNED DIST. ELECTIONS •RAZONIA COUNTY, TEXAS - MAT 2, 1996 Ye. the undersigned, certify that the above results ere true and correct. Signed: Itt 0546 EARLY VOTING-PEARLAND CITY Papa 1 21:19:39 2-May-1998 EXHIBIT CITY,SCNOOL,NOSPITAL,DRAINAGE D1ST. AND WATERSHED DIST. ELECTIONS BRAZORIA COUNTY, TEXAS - MAY 2, 1998 1 Posn Count Pet Posn Cant Pet /7' Ballots Cast - TOTAL 292 PEARLAND CITY MUNICIPAL OFFICER ELECTION COUNCILMEMBER,POSITION 1 HELEN W. BECKMAN 7 178 100.00 Total 178 100.00 COUNCILMEMIER,POSITION 5 KEVIN COLE 9 128 44.44 KLAUS W. SEEGER 10 160 55.56 Total 288 100.00 PROPOSED AMENDMENTS NO.1-SEC.3.10,PROCEDURES FOR PASSING ORDINANCES..TO READ AS FOLLOWS •THE READING ALOUD OF THE OFFICIAL NUMBER.... FOR 37 156 66.38 AGAINST 38 79 33.62 Total 235 100.00 NO.2-SEC.5.O1,REGULAR ELECTIONS SHALL BE HELD AT A TIME ESTABLISNED BY LAW FOR 49 201 74.44 AGAINST 50 69 25.56 Total 270 100.00 N0.3-SEC.6.03,PETITION FOR RECALL,TO READ AS FOLLOWS:TNE PRINTED NAME OF EACH SIGNER MUST APPEAR ON PETITION.... FOR 71 193 72.56 AGAINST 72 73 27.44 Total 266 100.00 NO.4-REPEALING SEC.6.12,FAILURE OF COUNCIL TO CALL AN ELECTION,AND AMEND SEC.6.08, ELECTION TO BE CALLED.... FOR 89 193 72.56 AGAINST 90 73 27.44 Total 266 100.00 N0.5-SEC.8.10,DATE OF FINAL ADOPTION TO READ AS FOLLOWS- THE BUDGET SMALL BE..ADOPTED MO LATER THAN 15 DAYS.... FOR 108 123 46.59 AGAINST 109 141 53.41 Total 264 100.00 N0.6-SEC.8.17-PURCHASE PROCEDURE TO ADO LANGUAGE .. NOTHING HEREIN SMALL PROHIBIT CITY MANAGER FROM... FOR 125 113 43.46 AGAINST 126 147 56.54 Total 260 100.00 • • 0546 EARLY VOTING-PEARLANO CITY Page 2 21:19:39 2-Nay-1996 CITY,SCHOOL,NOSPITAL,DRAINAGE DIST. AND WATERSHED DIST. ELECTIONS DRAZORIA COUNTY, TEXAS - MAY 2, 1996 We, the undersigned. certify that the above results are true and correct. Signed: 0046 PEARLAND CITY-KNAPP ACTIVITY Papa 1 EXHIBIT 21:27:08 2-May-1998 / CITY,SCNOOL,HOSPITAL,DRAINAGE 01ST. AND WATERSHED DIST. ELECTIONS BRAZORIA COUNTY, TEXAS - MAY 2, 1998 Porn Cant Pct Posn Cant Pct Ballots Cast - TOTAL 1,155 PEARLAND CITY MUNICIPAL OFFICER ELECTION COUNCILMEMBER,POSITIOM 1 HELEN W. BECKMAN 7 720 100.00 Total 720 100.00 COUNCILMEMBER,POSITION 5 KEVIN COLE 9 439 39.13 KLAUS W. SEEGER 10 683 60.87 Total 1,122 100.00 PROPOSED AMENDMENTS 160.1-SEC.3.10,PROCEDURES FOR PASSING OROINANCES..TO READ AS FOLLOWS THE READING ALOUD OF THE OFFICIAL NUMBER.— FOR 37 462 48.89 AGAINST 38 483 51.11 Total 945 100.00 N0.2-SEC.5.01,REGULAR ELECTIONS SHALL BE HELD AT A TIME ESTABLISHED BY LAW FOR 49 687 63.97 AGAINST 50 387 36.03 Total 1,074 100.00 NO.3-SEC.6.03,PETITION fOR RECALL,TO READ AS FOLLOWS:THE PRINTED NAME OF EACH SIGNER MUST APPEAR ON PETITION.... FOR 71 645 60.39 AGAINST 72 423 39.61 Total 1,068 100.00 NO.4-REPEALING SEC.6.12,FAILURE OF COUNCIL TO CALL AN ELECTION,AND AMEND SEC.6.08, ELECTION TO BE CALLED.... FOR 89 671 63.78 AGAINST 90 381 36.22 Total 1,052 100.00 NO.5-SEC.8.10,DATE OF FINAL ADOPTION TO READ AS FOLLOWS- THE BUDGET SHALL BE..ADOPTED NO LATER THAN 15 DAYS.... FOR 108 413 38.78 AGAINST 109 652 61.22 Total 1,065 100.00 NO.6-SEC.8.17-PURCHASE PROCEDURE TO ADD LANGUAGE .. NOTHING HEREIN SHALL PROHIBIT CITY MANAGER FROM... FOR 125 342 32.57 AGAINST 126 708 67.43 Total 1,050 100.00 0046 PEARLAND CITY-KNAPP ACTIVITY Pape 2 21:27:08 2-Nay-1998 CITY,SCNOOL,NOSPITAL,DRAINAGE 01ST. AND WATERSHED DIST. ELECTIONS RRAZORIA COUNTY, TEXAS - NAY 2, 1998 We, the undersigned, certify that the above results are true and correct. Signed: ri 7 Exhibit B Debt Service Schedule for the Certificates r ,, €I ,. 7 . 7 r IL 4r 7 ,I; ::ODMA\PCDOCS\HOUSTON\571955\1 Issue Date: 7/30/98 City of Pearland Certificates Of Obligation Delivery Date: 7/30/98 Series 1998 MATURING P4 DATES (tee) COUPON AMOUNT PROCEEDS RATE YIELD PRICE INTEREST TOTAL Fis Yr - 10/01 N 3/01/99 AMOUNT DEBT SERVICE DEBT SERVICE aq 9/01/99 ~ 3/01/00 350,220.44 35D,220.44 50 000,00 298,766.25 W 04 3/01/00 50,000.00 2.600 2.600000 100.000000 298,766.25 �,76666.225 648.986.69 9/01/01 50,000.00 298,116.25 9/01/0150,000.00 2.700 2.700000 100.000000 298,116.25 646,882.50 3/01/O2 298,116.25 348,116.25 9/01/02 75,000,00 75,000.00 2.800 2.800000 100.000000 297,441.25 297,441.25 645,557.50 3/01/03297 441.Z5 90,000.00 296,391.25 372 441.25 9/01/03 90,000.00 2.850 2.850000 100.000000 286,391.25 668,832.50 3/O1/04 100,000,00 296,391.Z5 386,391.25 9/01/04 1Q0,000.00 2.900 2.900000 100.000000 295,108.75 295,108.75 681,500.00 3/01/05 295,108.75 395,108.75 9/01/05 855,000.00 855,000.00 2.950 2.950000 100.000000 293,658.75 293 658.75 688,767.50 3/01/06 293,658.75 1,148,658.75 9/01/06 880,000.00 880,000.00 3.050 3.050000 100.000000 281,00..50 281,047.50 1,429,706.25 3/01/OT 281,047.50 1,161,047.50 9/01/07 915,000.00 915,000.00 3.100 3.100000 100.000000 267,627.50 267,627.50 1,428,675.00 3/01/08 267,627.50 1,182,627.50 9/01/08 945,000.00 945,000.00 3.150 3.150000 100,000000 253,445.00 253,445.00 1,436,072.50 3/01/09 980,000,00 253,445.00 1,198,445.00 9/01/09 980,000.00 3.250 3.250000 100.000000 238,561.25 238,561.25 1,437,006.25 3/01/10 1,015,000.00 238,561.25 1,218,561.25 3/01/10 1,015,000.00 3.350 3.350000 100.000000 222,636.25 1,237,636.25 1,441,197.50 3/01/11 1,050 000.00 222 636.Z5 /01/11 1,050,000.00 3.450 3.450000 100.000000 205,635.00 ,205,635.00 1,443,271.25 3/01/12 . 205,635.00 1,255,635.00 93/01/12 1,090,000.00 1,090,000.00 3.550 3.550000 100.000000 187,522.50 187,522.50 1,443,157.50 3/01/13 187,522.50 1,277,522.50 9/01/13 1,125,000.00 1,125,000.00 3.600 3.600000 100.030000 168,175.00 193,175.00 1,445,697.50 3/01/14 168,175.00 1,293,175.00 3/01/14 1,170,000.00 1,170,000.00 3.650 3.650000 100.000000 147,925.00 147,925.00 1,441,100.00 3/01/15 147,925.00 1,317,925.00 9/01/15 1,210,000.00 1,210,000.00 3.700 3.700000 100.000000. 126,572.50 126,572.50 126,572.50 1,336,572.50 1.444.497.50 9/01/16 1,Z50,000.00 104,187.50 104 187.50 , 9/01/16 1,250,000.00 3.750 3.750000 100.000000 10i 187.50 , 1 440 760.00 3/01/171,354,187.50 3/01/17 2,�.000.00 2,090,000.00 3.800 3.800000 100.000000 80,750.00 70,750.00 1,434,93T.50 3/01/18 2,160,000.00 80,750.00 2,170,750.00 2,160,000.00 3.800 3.800000 100.000000 41,040.00 41,040.00 2,211,790.00 $17 100 000.00 41,040.00 2,201,040.00 2,201,040.00 Accrued Interest ' • 517,100,000.00 $8,559,435.44 $25,659,435.44 $25,659,435.44 Totals S17,100,000.00 t 0.00 0.00 17 100 000.00 $8,559,435.44 S25,659.435.44 City of Peerland Tot. D.S. 9/30/97+ Ser 98 COs MATURING PRINCIPAL DATES AMOUNT AMOUNT INTEREST 10/01 TOTAL FT TOTAL j 9/01/98 0.00 -�.� 0.00 898,891.26 898 B91.26 as 3/01/99 1,440,000.00 1,440,000.00 1,249,111.70 2,689,111.70 898 891.26 FA9/01/99 0.00 0.00 1,160,145.01 1,160,145.01 3,849,256.71 r+ 3/01/00 1,655,000.00 1,655,000.00 1,160,145.01 2,815,145.01 al 9/01/00 0.00 0.00 1,116,682.51 1,116,682.51 x 3/01/01 1,730,000.00 1,730,000.00 1,116,682.51 2,846,682.513,931,827.52 9/01/01 0.00 0.00 1,070,267.51 1070 .51 3,916,950.02 w 3/01/02 1,830,000.00 1,830,000.00 1,070,267.51 2,900,267.51 9/01/02 0.00 0.00 1,017,897.51 1,017,897.51 3,918,165.02 3/01/03 1,930,000.00 1,930,000.00 1,017,897.51 2,947,897.51 9/01/03 0.00 0.00 961,763.13 961,763.13 3,909,660.64 3/01/04 2,060,000.00 2,060,000.00 961,763.13 3,021,763.13 9/01/04 0.00 0.00 891,468.13 891,468.13 3,913,231.26 3/01/05 2,940,000.00 2,940,000.00 891,468.13 3,831,468.13 9/01/05 0.00 0.00 807,178.13 807,178.13 4,638,646.26 3/01/06 3,100,000.00 3,100,000.00 807,178.13 3,907,178.13 9/01/06 0.00 0.00 717,198.13 717,198.13 4,624,376.26 3/01/07 3,300,000.00 3,300,000.00 717,198.13 4,017,198.13 9/01/07 0.00 0.00 619,258.13 619,258.13 4,636,456.26 3/01/08 3,430,000.00 2,111,646.60 1,937,611.53 4,049,256.13 9/01/08 0.00 0.00 585,116.88 585,116.88 4,634,375.01 3/01/09 3,495,000.00 2,177,745.20 1,902,371.68 4,080,116.88 9/01/09 0.00 0.00 548,351.88 548,351.88 4,628,468.76 3/01/10 2,310,000.00 2,310,000.00 548,351.08 2,858,351.88 9/01/10 0.00 0.00 496,830.63 496,830.63 3,355,182.51 3/01/11 2,425.000.00 2,425,000.00 496,830.63 2,921,830.63 9(01/11 0.00 0.00 441,853.13 441,853.13 3,363,683.76 3/01/12 2,550.000.00 2,550,000.00 441,853.13 2,991,853.13 9/01/12 0.00 0.00 383,035.63 383,035.63 3,374,888.76 3/01/13 2,670.000.00 2,670,000.00 383,035.63 3,053,035.63 9/01/13 0.00 0.00 320,564.38 320,564.38 3,373,600.01 3/01/14 2,815,000.00 2,815,000.00 320,564.38 3,135,564.38 9/01/14 0.00 0.00 256,044.38 256,044.38 3,391,608.76 3/01/15 2,945,000.00 2,945,000.00 256,044.38 3,201,044.38 9/01/15 0.00 0.00 186,577.50 186,577.50 3,387,621.88 3/01/16 3,085,000.00 3,085,000.00 186,577.50 3,271,577.50 9/01/16 0.00 0.00 ' 112,955.00 112,955.00 3,384,532_50 3/01/17 2,680,000.00 2,680,000.00 112,955.00 2,792,955.00 9/01/17 0.00 0.00 57,315.00 57,315.00 2,850,270_00 3/01/18 2,780,000.00 2,7E0,000.00 57,315.00 2,837,315.00 2,837,315.00 Totals S51,170,000.00 S48,534,391.80 S28,284,616.36 S76,819,008.16 S76,81 9,008.16 ! .'I Exhibit C Resolution Establishing Utility Rates of the System L L_. a �_I r r ::ODMA\PCDOCS\HOUSTON\571955\1 0 C ORDINANCE NO. 820 AN ORDINANCE OF THE CITY.COUNCIL OF TH E CITY OF PEARLAND, TEXAS, DETERMINING CHARGES FOR WATER AND SEWER SERVICES FURNISHED BY THE CITY, AS PROVIDED IN CHAPTER 30, ARTICLE II, SECTION 30-38 OF THE CODE OF ORDINANCES; REPEALING PREVIOUS WATER AND SEWER SERVICE RATE SCHEDULES; PROVIDING A PENALTY �i FOR VIOLATION;CONTAINING A SAVINGS CLAUSE AND A SEVERABILITY CLAUSE; PROVIDING AN EFFECTIVE DATE, FOR PUBLICATION AND FOR CODIFICATION. WHEREAS, Chapter 30, Article II, Section 30-38 of the Code of Ordinances of the City of Pearland, Texas provides that the rates and charges for the consumption of utility services furnished bythe Cityshall be determined by the City Council from time to time, and the same shall be on file in the office of the City Secretary; now, • therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS: "Section 1. Definitions. Residential Unit-Any structure or part thereof used to fulfill the housing requirements of one or more persons living together as a single family. Y Commercial Unit - Any other structure or part thereof used to fulfill the housing w requirements of not more than one business establishment or of not more than one establishment of any other kind, but a business unit shall not include any kind of multi- family establishment. Multi-Unit Residence or Business - A building consisting of two or more residential or commercial units. User - Any person, firm or corporation connected to the City water system for the purpose of receiving water service. r** 1 r LI. ORDINANCE NO. 820 Section 2. Water Rates. All property upon which any building has been or may ri hereafter be erected having a connection with any mains or pipes presently existing or which may be hereafter constructed and used in connection with the City water system shall pay the following rates each month for water service furnished by the City: Residential Unit or Commercial Unit Consisting of a Single Unit: Up to and including first 2000 gallons $8.88 minimum All over 2000 ll ga ons $1 .64 per 1000 gallons Multi-Unit Residence or Business: Up to and including first 2000 gallons $8.00 minimum per unit All over 2000 gallons $1 .47 per 1000 gallon usage c The rate of $8.88 shall be the minimum monthly rate for all water users including the users for less than a monthly period. If the user's water meter becomes inoperative and fails to register, the user will be charged at the average monthly consumption as shown by the meter when in order. All water that passes through the meter shall be charged for, whether used or not. Section 3. Sewer Rates. The following rates or charges for the use and service of the sewage system of the City of Pearland are determined as follows: r 2 IT r ORDINANCE NO. 820 1 . Commercial and Industrial Users Having City Water Service: [1 The monthly sewer service charge for all Commercial and Industrial Users having City Water Service will be $9.29 minimum for 2000 gallons of water usage or less and $1 .19 per 1000 gallons for water usage over 2000 gallons. 2. Commercial and Industrial Users Not Having City Water Service: The monthly sewer service charge for all Commercial and Industrial Usershaving sewer service but not having City Water Service will be $1 .19 per 1000 gallons.of comparable bill for City Water Service. The City will install, at its expense, a water meter in the private water supply and read the meter monthly to determine the amount of water consumption. $9.29 Monthly Minimum charge. 3. Commercial and Industrial Users Who Have Waste Water Discharge Split Between the Sanitary Sewer and Other Methods of Discharge: In the event only a portion of the user's waste water is discharged into the Sanitary Sewer, the City Council, upon the user's request, shall estimate what portion of the water usage is discharged into the Sanitary Sewer and his monthly sewer charge will be figured accordingly. $9.29 Monthly Minimum Charge. 4. Commercial and Industrial Users Who Use the Water That is a Part of Their 1 I Product or Production Process and That is Not Discharged into the Sanitary Sewer System: - If water is a part of a Commercial or Industrial use's product or is used in his production process in such a manner that there is no discharge into the Sewer System, then, upon the user's request, the City Council will establish the amount of water used for such purpose and his monthly sewer charge will be figured accordingly. $9.29 Monthly Minimum Charge. 5. Residential Users Having City Water and Sewer Service: The monthly sewer service charge for all users having City Water will be $9.29 minimum for 2000 gallons of water usage or less and $1 .19 per 1000 gallons for water usage over 2000 gallons. 3 f ORDINANCE NO. 820 6. Residential Users Having City Sewer Service but not having City Water flService: a If a residential user is connected to the Sanitary Sewer System but not connected to the Water System, then the private system will be metered at City expense and the sewer rate will be $1 .19 per 1000 gallons of the comparable bill for City Water Service. $9.29 Monthly Minimum Charge. 7. Multi-Unit Building. Residence or Business: Each unit of a multi-unit, residence or business which is separately metered will be charged a monthly sewer service charge at the rate of $9.29 for 2000 gallons of water usage or less and $1 .19 per 1000 gallons for water usage over 2000 gallons. 8. Multi-Unit Building With Common Water Meter for All Units: A multi-unit residence or business in which the units are served through a common water meter will be billed at the rate of $8.36 minimum for 2000 gallons of water usage or less and $1 .08 per 1000 gallons of water usage over 2000 gallons. (Multi-unit being defined as being a building, residence `y1 or business consisting of two or more units)." Section 4. Repealer. All previously adopted water and sewer rate schedules in conflict herewith shall be and are hereby repealed but only to the extent of such conflict. Section 5. Penalty. Any person who shall violate the provisions of this section shall be deemed guilty of a misdemeanor and shall, upon conviction by a court of competent jurisdiction, be punished by a fine in any sum not exceeding Two Hundred Dollars ($200.00). 4 ORDINANCE NO. 820 Section 6. Savings. All rights and remedies which have accrued in favor of the I City under this Chapter and amendments thereto shall be and are preserved for the benefit of the City. Section 7. Severability. If any section, subsection, sentence, clause, phrase or portion of this Ordinance is for any reason held invalid, unconstitutional or otherwise unenforceable by any court of competent jurisdiction, such portion shall be deemed a separate, distinct, and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 8. Codification. It is the intent of the City Council of the City of Pearland, Texas, that the provisions of this Ordinance shall be codified in the City's official Code of Ordinances as provided hereinabove. Section 9. Publication. The City Secretaryshall cause this Ordinance, its or caption and penalty, to be published in the official newspaper of the City of Pearland, i upon passage of such Ordinance. U-'° Section 10. Effective Date. This r 0 dinance shall become effective at the time of the October, 1997 billing. PASSED and APPROVED on First Reading on this day of o ; l_. A.D., 1997. TOM REID MAYOR 5 • ORDINANCE NO. 820 ATTEST: C./ Y G LO C SEC ARY i PASSED and APPROVED on Second and Final Reading this 2 day of ---, A.D., 1997. TOM REID MAYOR ATTEST: L I Y NG IT SE ETA Y APPR ED AS TO FORM: "'°' M TES McCULLOUGH l�� CITY A ORNEY 7, 6 AFFIDAVIT OF PUBLICATION 5 The Pearland Reporter News 2404 South Park Pearland, Texas 77581 State of Texas Brazoria and Harris Counties I, Joan Cummings, hereby certify that the notice hereby appended was published in Brazoria and Harris Counties in the REPORTS for REPORTER NEWS, a newspaper of general circulation in Brazoria and Harris Counties, issues, as follows: No. I Date /v —( 19 /Pi No. Date 19 No. Date 19 • No. Date 19 No. Date 19 C.! ree.4.7.1 r Editor Subscribe and sworn to before me this 2- day of Oct Li 19 I , , • • •. , N tFblic State•vf Te 4 Laura Ann Emmons, Publisher fl 1 i . a n E ' Lit c ['I • imam(3230.00). •• ' PASSED and APPROVED on the Second and Final Rearing this the 22nd day of AN ORDINANCE OF TN September,A.D.,1997. --- CITY COUNCIL OF TN 'CITY--OF •PEARLAN' . 1SITOM READ rin TEXAS, DETERMININ MAYOR . I 11 CHARGES.FOR.WATE --1' AND_SEWER-SERVIC AT1EST_ " FURNISHED BY THE... . -. . -AS PROVIDED IN • - i 111YOUNG LORFING• . 30,.ART1CLE II,SECTIO CITY SECRETARY • a -- 30.30 OF THE CODE 0 ORDUTANCES; - - ,. APPROVED AS TO FORM: 4 PREVIOUS WATER AN 1 i . ..- SEWER SERVICE RAT ', :1sf NV MOTES lAcDULLDUSIi L ' SCHEDULES;PROVIDING A C1TY ATTORNEY PENALTY:FAR VIOLATI01H - - CONTAIN[N¢`A SAVINGS CLAUSE AND A SEVER- 1 Annitilafateill& ABILITY CLAUSE;PROVD- T B WSZIl `` . _ING AN"EFFECTNE DATE, FOR PUBLICATION AND VoUnI 'Aye' - ounclf• ' Vim,'FOR CODIRCATION. members Cole, Berger, - Badman,Vim,A Mans Section S.Penally.Any per- son who staf.Vor1e the pro- Votfng'He.None visions of this section shall be Ll, deemed guilty of a mij de- passed S 1b O. meanor and shall, upon con- viction by a court of comps- PUBLICATION DATE:SEP- T'', tent jurisdiction,be punished TEMBER 24,1007. by a fine in any sum not !EFFECTIVE DATE:OM- _ xceeding Two Hundred BER 4,1997. i L: ,-a ni, Li r SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE THE STATE OF TEXAS1 § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § We, the undersigned officers of the Cityof Pearland, Texas (the "City"), certify that we officially signed, by our manual or facsimile signatures, on behalf of the City, the following described certificates of obligation, to wit: CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998, dated July 1, 1998, and aggregating $17,100,000 (the "Certificates"). That the Certificates have been duly and officially executed by the undersigned with their manual or facsimile signatures in the same manner appearing hereon, and the undersigned hereby adopt and ratify their respective signatures in the manner appearing on each of the Certificates, whether in manual or facsimile form, as the case may be, as their own signatures. That on the date of such signing and on the date hereof, we were and are the duly chosen, qualified and acting officers authorized to execute the Certificates, and holding the official titles L." set forth below opposite such signatures. We further certify that no litigation is pending or, to our knowledge, threatened in any court in any way affecting the existence or boundaries of the City or the titles of its officers to their respective positions or their authority to act on the City's behalf or to restrain or enjoin the issuance or delivery of the Certificates, or the levy, collection or application of the ad valorem taxes or revenues pledged or to be pledged to pay the principal of and interest on the Certificates, or the pledge thereof, or in any way contesting or affecting the validity of the Certificates, the ordinance dated June 29, 1998, authorizing the issuance, sale and delivery of the Certificates (the "Ordinance"), or contesting the powers of the City or the authorization of the Certificates or the Ordinance. We further certify that the seal that has been impressed, or placed in facsimile, upon each of the Certificates is the legally adopted, proper and only official seal of the City, such official seal being impressed upon this certificate. We further certify that no petition or other request has been filed with or presented to any official of the City requesting that any of the proceedings authorizing the Certificates be submitted to a referendum or other election. p r r ti° We further certify that the information and data contained in the General Certificate dated June 29 , 1998 remain true and correct as of this date. I WITNESS OUR HANDS AND THE SEAL OF THE CITY this July 30 , 1998. SIGNATURE TITLE OF OFFICE _ Mayor, City of Pearland, Texas City Secretary, City of Pearland, Texas (CITY SEAL) Before me, on this day personally appeared the foregoing individuals, known to me to be the persons whose names were subscribed in my presence to the foregoing instrument. Given under my hand and seal of office this ,5CJsi4. - // /(p . /e...gSem Notary Public Typed or Printed Name: My Commission Expires: '9" .6 DEBRA J. SCHIELKE �° 1/=,„ - l• —3-0 Notary Public,State of Texas , Commission Expires 4-3-01 L. L‘:,::�•�-�\ice. r rt. r ::ODMA\PCDOCS\HOUSTON\571868\1 [7, NO ARBITRAGE CERTIFICATE r City of Pearland, Texas 1 Certificates of Obligation, Series 1998 I, the undersigned officer of the City of Pearland, Texas, a political subdivision of the State of Texas located within Brazoria and Harris Counties (the "City"), make this certification for the benefit of all persons interested in the exclusion from gross income and certain other treatment for federal income tax purposes of the interest to be paid on the City's Certificates of Obligation, Series 1998 (the "Obligations") in the aggregate principal amount of $17,100,000 which are being issued and delivered simultaneously with the delivery of this certificate (the "Certificate"). I do hereby certify as follows: W._ 1. General. I am the duly chosen, qualified and acting officer of the City for the [1 office shown below my signature. In such capacity, I am charged, along with others, with responsibility for issuing the Obligations. I am familiar with the facts, estimates and expectations certified herein, and I am duly authorized to execute and deliver this Certificate. I am familiar with the provisions of the ordinance adopted on June 29, 1998, authorizing the issuance of the Obligations (the "Ordinance"), and particularly the provisions thereof relating to the treatment of the Obligations and the interest thereon for federal income tax purposes. I am aware of the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 103. and 141 through 150 thereof, and the Treasury Regulations (the "Regulations") promulgated under the Code. This Certificate is being executed and delivered pursuant to the relevant provisions of the Code and Sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(d)-1, 1.149(g)-1, 1.150-1 and 1.150-2 of the Regulations. Certain terms used herein have the same meanings as given to those terms in the Code and the Regulations. Capitalized terms used in this Certificate (unless otherwise indicated herein) shall have the meanings ascribed to them in the Ordinance. 2. Reasonable Expectations. As an officer of the City responsible for issuing the Obligations, the undersigned hereby certifies, in good faith, that the City's expectations, as of the Issue Date (as defined herein), regarding the amount and use of the gross proceeds of the Obligations and other matters relevant to the treatment of interest on the Obligations for federal income tax purposes are accurately and completely stated herein, that all of such expectations ,.� and estimates stated in this Certificate are accurate, and that there are no facts, estimates or circumstances which would indicate that any of the expectations stated herein are not reasonable. 7*1 3. Descriptions of Governmental Purpose. The City is issuing the Obligations pursuant to the Ordinance to provide funds which will be used for (i) the planning, acquisition, construction and improvement of certain sanitary sewer projects in the City, as described in the r+A Ordinance; (ii) the planning, acquisition, construction, improvement, materials, supplies and equipment for a new wastewater treatment plant and sanitary sewer lines located in the City, as described in the Ordinance; (iii) renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant; (iv) expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant; and (v) payment of professional services, including the cost of issuance associated with the Obligations. Collectively, the ^'1 L L!: 1 ° purposes for which the Obligations are being issued listed in paragraphs (i) through (iv) above will be referred to a as the"Project." 4. Proceeds of the Obligations. The sales proceeds from the sale of the Obligations will be$17,100,000.00 which represents the principal amount of the Obligations. 5. Use of Proceeds of the Obligations. The sales proceeds from the sale of the Obligations will be expended and applied by the City as follows: (a) Proceeds of the Obligations in an amount equal to $16,673,340.90 will be used by the City to pay the costs of the Project. [1.1 (b) Proceeds of the Obligations in the amount equal to $310,604.00 represents origination fee of the Texas Water Development Board ("TWDB") and will be disbursed on the date hereof to the TWDB. t_L (c) Proceeds of the Obligations in the amount of approximately $75,000.00 will be disbursed within one year of the date hereof to pay the costs of issuing the Fl Obligations. (d) Proceeds of the Obligations in the amount of$41,055.10 will be disbursed on the date hereof to pay the cost of insuring the Obligations. 6. Pre-Issuance Accrued Interest. Interest on the Obligations begins to accrue on the Issue Date (as defined below), July 30, 1998; therefore, there is no pre-issuance accrued interest on the Obligations. 7. Investment Proceeds. The City has estimated the total amount of investment proceeds to be received with respect to the Obligations. Such earnings on the investment of the proceeds of the Obligations described in paragraph 5(a) will be used in addition to the amounts described in paragraph 5(a) to pay the costs of the Project. The total cost of the Project is expected to equal or exceed the sum of the amount described in paragraph 5(a) and the 11'3 investment earnings on the amount described in paragraph 5(a)which are used to pay costs of the Project. Earnings, if any, on the amounts described in paragraphs 5(b) through 5(d) will be used for the purposes described in paragraphs 5(b)through 5(d). LI.1 8. Replacement Proceeds. There are no amounts on hand, and there are no amounts expected to be received, other than amounts to be held in the Debt Service Fund (as defined in paragraph 15) for the payment of debt service on the Obligations which have or will have at any time a sufficiently direct nexus to the Obligations or to any governmental purpose of the Obligations to conclude that such amounts would have been used for that governmental purpose if the proceeds of the Obligations were not used or to be used for that governmental purpose. More specifically-- i I!. 2 (a) Sinking Funds and Pledged Funds. Other than the Debt Service Fund and the amounts and investments on deposit therein from time to time, there are not now and will not be at any time while the Obligations are outstanding-- (i) any debt service fund, reserve fund, replacement fund, any similar fund or any amount or investment reasonably expected to be used, directly or indirectly (such as, by the generation of income to be used), to pay principal or interest on the Obligations; and (ii) any fund, amount or investment that is directly or indirectly pledged to pay principal or interest on the issue. A pledge includes, but is not limited to, any arrangement, regardless of its form, which provides reasonable assurance that the amount will be available to pay principal or interest, even if the City encounters financial difficulty. A pledge to a guarantor or an agreement to maintain an amount at a particular level or balance for the direct or indirect benefit of bondholder or a guarantor would constitute a pledge for this purpose. 7, (b) No Other Replacement Proceeds. There will be no other replacement proceeds allocable to the Obligations. Based on the reasonable expectations of the City as of the date hereof, the term of the Obligations is not longer than, and the City will not allow the Obligations to remain outstanding longer than, is reasonably necessary for the governmental purposes for which the Obligations are being issued. The weighted average maturity of the Obligations does not exceed 120 percent of the reasonably expected economic life of the capital projects being financed or refinanced by the Obligations, determined in the same manner as provided under Section 147(b) of the Code. In addition, none of the proceeds of the Obligations will be used to finance working capital expenditures. 9. No Overissuance. Based on the expectations set forth in the preceding paragraphs, the amount of the proceeds from the issuance of the Obligations, plus all investment proceeds to be received with respect to the Obligations, does not exceed by any amount, the j amount required for the governmental purposes for which the Obligations are being issued. [, 10. Temporary Period Requirements for the Obligations. (a) Time Test. The City has incurred or will incur within six months of the date hereof substantially binding obligations to one or more unrelated parties (not subject to contingencies within the City's or the third parry's control) to which the City is obligated to expend at least 5 percent of the net sale proceeds of the Obligations. (b) Expenditure Test. The City expects at least 85 percent of the original proceeds of the Obligations will have been expended prior to_July 30, 2001 for costs of the Project. All original proceeds of the Obligations will be expended prior to July 30, 2001 will be invested on and after such date until final expenditure at a yield (as defined in paragraph 14) which is not materially higher than the yield on the Obligations, except as set forth in paragraph 14 below. n Li' 3 E (c) Due Diligence. The City expects that the Project will proceed with due diligence to completion and that the proceeds of the Obligations will be expended on the Project with reasonable dispatch. (d) Investment Proceeds. The City expects that all amounts derived from the investment of monies received from the sale of the Obligations and from the reinvestment of such investment proceeds will be expended within three years from the date hereof or within one year after receipt of such investment income, whichever is later. All investment proceeds of the Obligations not expended prior to such date will be invested on and after such date until final expenditure at a yield which is not materially higher than the yield on the Obligations, except as provided in paragraph 17 below. 11. Flow of Funds. Under the Ordinance, the City is obligated to assess and collect certain taxes and revenues in an amount sufficient to pay debt service on the Obligations. All taxes and revenues levied, assessed and collected by the City for or on account of the Obligations will be deposited into the Debt Service Fund(as defined below). 12. Issue Price. The Obligations were sold by the City to the TWDB for cash and no other economic consideration. The TWDB is not a bond house, broker or similar person or organization acting in the capacity of wholesaler or underwriter. The TWDB purchased the Bonds for investment on its own account and not for sale to the general public. The Issue Price of the Obligations is equal to the principal amount of the Obligations and does not exceed the fair market value of the Obligations as of the Sale Date. The term "Sale Date" shall mean the first day on which there was a binding agreement in writing for the issuance of the Obligations by the District on specific terms that were not later modified or adjusted in any material respect. In the case of the Obligations, the Sale Date was June 29, 1998. The term "Issue Date" shall mean the first day on which there is a physical delivery of the Lwritten evidence of the Obligations in exchange for the purchase price and such date shall not be earlier than the first day on which interest begins to accrue on the Obligations for federal income tax purposes. In the case of the Obligations, the Issue Date is July 30, 1998. Based on the foregoing and on the Certificate of Financial Advisor attached as Exhibit A and incorporated herein by reference, the Issue Price of the Obligations is $17,100,000.00. The Obligations were issued with no pre-issuance accrued interest. 13. Other Issues. There are no other obligations issued by the City or any related party of the City, which(a)were sold at substantially the same time as the Obligations (within 15 days), (b) are payable from the same source of funds as the Obligations and (c) are or will be sold pursuant to the same plan of financing as the Obligations. 14. Yield on the Obligations. For purposes of this Certificate, the term"yield" shall have the meaning ascribed to it in Section 148(h) of the Code and the Regulations in effect thereunder and, when used with respect to the Obligations, shall mean that interest rate which when used as a discount factor to compute the present value as of the Issue Date of all scheduled t 4 E payments of principal of and interest on the Obligations produces an amount equal to (i) the present value (using the same discount rate) of the Issue Price of the Obligations, plus (ii) pre- issuance accrued interest, if any, on the Obligations as of the Issue Date. The yield on the J Obligations shall not take into account or reflect any underwriters' discount or cost of issuance of the Obligations. For purposes hereof, yield is and shall be calculated on the basis of a 360-day year with interest compounded semi-annually. The yield on the Obligations is calculated on the basis of the final maturity date because, in the case of the Obligations subject to optional redemption, (i) the City has no present intention to call the Obligations for optional redemption, (ii) no Obligation is callable at any time for a price less than par plus accrued interest, and (iii) the Financial Advisor has represented on Exhibit A hereto that the Issue Price of each such callable Obligation is not greater than par plus accrued interest. No Obligation is subject to mandatory early redemption. The insurance premium (the "Insurance Premium") paid to insure the Obligations, constitutes a fee for a qualified guarantee;thus the Insurance Premium in the amount of$41,055.10 will be treated as additional interest on the Obligations for the purpose of calculating the yield on the Obligations. The Insurance Premium represents a fee for a qualified guarantee based on the I representations set forth below and included in the Certificate of Underwriters,Exhibit A hereto. (a) Interest Savings. The present value of the interest savings expected to be realized as a result of such guarantee exceeds the present value of the Insurance Premium discounted at a rate equal to the yield on the Obligations which results assuming recovery of the Insurance Premium. (b) Guarantee In Substance. The guarantee imposes secondary liability on Financial Security Assurance,Inc. ("FSA")that unconditionally shifts substantially all of the credit risk for all or part of the payments on the Obligations. FSA is not a co-obligor and does not expect to make any payments other than payments for which it will be reimbursed �,i immediately. FSA and related parties thereto will not use more than ten percent of the gross proceeds of the Obligations that are guaranteed by FSA. (c) Reasonable Charges. The Insurance Premium does not exceed a reasonable arms-length charge for the transfer of credit risk. The Insurance Premium is separately stated from all other fees and payments payable by the City to FSA for any other direct or indirect services other than the transfer credit risk. The Insurance Premium does not include payment for the cost of underwriting or remarketing the Obligations or for the cost of casualty insurance for property financed or refinanced by the Obligations. The 1 Insurance Premium is not refundable upon redemption of the Obligations prior to maturity. The yield on the Obligations, calculated in the manner set forth above and based on the information set forth in the Certificate of Financial Advisor, attached hereto as Exhibit A, is 3.592206 percent. { 15. The Debt Service Fund. In the Ordinance, the City created the Certificates of Obligation, Series 1998 Debt Service Fund (the "Debt Service Fund"). The proceeds from all �.1 5 revenues assessed and collected for and on account of the Obligations and all investment earnings on amounts in Debt Service Fund will be deposited promptly into the.Debt Service Fund. The Interest and Debt Service Fund will be used primarily to achieve a proper matching of revenues and debt service on the Obligations within each bond year. All amounts which will be used to pay principal of and interest on the Obligations with 13 months of the date of deposit in the Debt Service Fund and which will be depleted annually, except for a reasonable carryover amount not to exceed the greater of(i) one year's earnings on the Debt Service Fund or(ii) one- twelfth of the annual debt service on the Obligations, will constitute a bona fide debt service fund component of the Debt Service Fund (the "Bona Fide Portion"). All amounts on deposit in the Debt Service Fund from time to time in excess of the Bona Fide Portion thereof and all amounts in the Debt Service Fund and not spent within 13 months of the date of deposit therein (the "Reserve Portion") shall be treated separately for purposes of this Certificate. The expenditure of money deposited in the Debt Service Fund shall be accounted for on the basis of such method of accounting as properly adopted and consistently applied by the City for tax purposes. Amounts on deposit from time to time in the Bona Fide Portion and in the Reserve 1 J Portion are allocable between the Obligations and any other obligations of the City the payment of which may be secured by the Debt Service Fund and shall be allocated under such method as properly adopted and consistently applied by the City for tax purposes. So long as any of the Obligations are outstanding,the portion of the Reserve Portion allocable to the Obligations is not expected to exceed the lesser of(i) ten percent of the Issue Price, (ii) the maximum annual debt service on the Obligations or (iii) 125 percent of the average annual debt service on the Obligations. If, however, the balance of the Reserve Portion should ever exceed the limitation specified in the preceding sentence, such excess shall be invested at a yield not in excess of the yield on the Obligations. 16. No Other Sinking Funds. Other than the Debt Service Fund, there are no other [1 funds or accounts comprised of investment property established by and on behalf of the City (a) which are expected to be used, or expected to generate earnings to be used, to pay debt service on the Obligations, or which are reserved or pledged as collateral for payment of debt service on the Obligations and (b) for which there is reasonable assurance that amounts therein will be available to pay debt service on the Obligations if the City encounters financial difficulties. Use of amounts in the Debt Service Fund are described above. There is no other fund established, or Flto be created or established, which would .be treated as a sinking fund with respect to the Obligations. Use of amounts in the Debt Service Fund are described above. There is no other fund established, or to be created or established, which would be treated as a sinking fund with respect to the Obligations. 17. Minor Portion. The City expects that the gross proceeds of the Obligations, including all proceeds received with respect to the Obligations and all investment proceeds received on such amounts, and all other amounts pledged or anticipated to be used to pay [1 principal of and interest on the Obligations, other than amounts representing a portion of the Bona Fide Portion of the Debt Service Fund, will be expended in accordance with paragraphs 5 and 10 above. To the extent that such amounts remain unexpended or are otherwise on hand following the periods set forth in paragraphs 5 and 10 above exceeds the amount specified in paragraph 15, the City will invest such amounts (other than a minor portion not exceeding the 6 0 {J lesser of 5 percent of the proceeds of the Obligations or$100,000 in the aggregate) at a yield not materially higher than the yield on the Obligations. 4L 18. Identification of Replacement Proceeds. Notwithstanding the expectations of the City as stated above in paragraph 8 above,the City will(at all times while the Obligations are outstanding) identify all replacement proceeds with respect to the Obligations, including any sinking fund created for repayment of the principal or interest on the Obligations or any other amounts held in any fund of the City reasonably expected by the City to be used to pay principal or interest on the Obligations. If the City identifies any replacement proceeds and determines that a temporary period pursuant to Section 1.148-2(e) of the Regulations is not applicable to such replacement proceeds, the City will limit the yield on the investment of such replacement proceeds to the yield on the Obligations until such proceeds are treated as spent in accordance with the Regulations. The City acknowledges that failure to properly identify replacement proceeds and account for the investment and expenditure thereof as required by the Regulations -may result in interest on the Obligations.being includable in the gross income of the holders of the Obligations. 19. Compliance with Rebate Requirements. The City has covenanted in the Ordinance that it will take all necessary steps to comply with the requirement that rebatable arbitrage earnings on the investment of the gross proceeds of the Obligations, within the meaning of Section 148(f) of the Code, be rebated to the federal government. Specifically, the City will (i) maintain separate records regarding the amount.and timing of disbursements of proceeds of the Obligations, (ii) maintain records regarding the investment of the gross proceeds of the Obligations as may be required to calculate the amount earned on the investment of the gross proceeds of the Obligations which are part of a reasonably required reserve or replacement fund separately from records of amounts in other funds or accounts maintained for the Obligations, amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (iii) calculate at such times as required by applicable Regulations, the rebatable amount earned from the investment of the gross proceeds of any bonds of the City, (iii) calculate at such times as required by applicable Regulations, the rebatable amount earned from the investment of the gross proceeds of the Obligations which are part of a reasonably required reserve or replacement fund, and (iv) pay, not less often than every fifth anniversary date of the delivery of the Obligations or on such other dates as permitted or required by applicable Regulations, all amounts required to be rebated and all penalties required to be paid to the federal government. The City [1 acknowledges that for purposes of compliance with Section 148 of the Code, gross proceeds of the Obligations must be accounted for on the basis of a reasonable, consistently applied method of accounting, not employed in whole or in part as an artifice or device. The City will employ accountants or other persons with expertise in performing the rebate calculations as necessary to insure compliance with the Code. The City will employ legal counsel as necessary to resolve any interpretive issues involved in complying with the rebate requirements of the Code. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with respect to the gross proceeds of the Obligations. In the event that the City fails to comply with the rebate requirements of the Code, the City agrees to take all I� steps available under the Code to bring the Obligations into compliance with the Code; such 7 0 r steps include paying any penalty, interest, or other amounts which will allow the City to return to compliance with the rebate requirements of the Code. If the City is required to pay rebate or other amounts, such as penalties and interest, to the United States with respect to the Obligations pursuant to Section 148(f) of the Code in order to prevent the Obligations from constituting arbitrage bonds or being otherwise classified or treated such that interest on the Obligations would not be excludable from the gross income of the holders thereof for federal income tax purposes, the City will timely make such payments from available funds of the City and the City reasonably expects that it will have the ability to make such payments from available funds of the City in the event such payments become necessary. The undersigned reasonably expects that the City will fulfill its covenants and representations in this regard. 20. Not a Refunding. No portion of the proceeds of the Obligations are expected to be used to pay any interest on or principal of any issue of governmental obligations other than the Obligations. 21. Not a Reimbursement. Except for certain preliminary expenditures (as defined in Section 1.150-2(f)(2) of the Regulations) not exceeding 20 percent of the Issue Price of the Li Obligations, no portion of the proceeds of the Obligations will be allocated to, or otherwise used to reimburse, any expenditure paid by the City, either actually or constructively, prior to the Issue Date. 22. No Change in Use. The City does not expect to dispose of any portion of any project related to the Obligations, or to change the use of the proceeds of the Obligations while any of the Obligations are outstanding. 23. Not a Hedge Bond. Not more than 50 percent of the proceeds of the Obligation will be invested in non-purpose 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 85 percent of the Lspendable proceeds of the obligations will be used to carry out the governmental purposes of the obligations within the three-year period beginning on the date the obligations are issued. 24. No Abusive Arbitrage Device. The Obligations are not and will not be a part of an issue in which an abusive arbitrage device (as defined in Section 1.148-10(a) of the Regulations) is used. Without limiting the foregoing, the Obligations are not and will not be a part of a transaction or series of transactions that at-tempts to circumvent the provisions of Section 148 of the Code and the Regulations, by (i) enabling the City to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage, and (ii) increasing the burden on the market for tax-exempt obligations. In this regard, the City issued the Obligations for the primary purpose of accomplishing the bona fide governmental purposes set forth in paragraph 3 of this Certificate. Based on all the facts and circumstances, the City has not issued the Obligations in an amount higher than is reasonably necessary to accomplish the governmental purposes of the Obligations, the City has not issued the Obligations earlier than is reasonably necessary to accomplish the governmental purposes of the Obligations and the City is not allowing the Obligations to remain outstanding longer than is reasonably necessary to accomplish the governmental purposes of the Obligations. The City would have issued the 8 Obligations regardless of any arbitrage benefit which it may realize in connection with the Obligations. In fact, the City reasonably expects that even if the Obligations were not tax- exempt obligations and if market rates of interest on taxable and tax-exempt obligations were equal to each other and to the rates at which the Obligations are in fact now being issued, the City would have issued the Obligations, notwithstanding the loss of any opportunity to borrow at lower tax-exempt rates and invest at higher taxable rates. (a) No Impermissible Sinking Fund. No portion of the Obligations has a maturity determined primarily for the purpose of creating a sinking fund with respect to the Obligations the yield on which will be blended with the yield on the investment of other proceeds of the Obligations to reduce the negative arbitrage related to such investment. [", (b) No Window Refunding. No portion of the Obligations has been structured with the purpose of making available released revenues that will allow the City to avoid transferred proceeds, to invest such released revenues at a yield materially higher than the yield on the Obligations or to pay principal and interest on another issue of obligations of the City. (c) No Sale of a Conduit Loan. No portion of the gross proceeds of the Obligations has been or will be used to acquire, finance or refinance a conduit loan. 25. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected that the proceeds of the Obligations will not be used in a manner that would cause any of the Obligations to be an"arbitrage bond" within the meaning of Section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change such expectations. WITNESS MY HAND,this 30th day of July, 1998. L ' CITY OF PEARLAND, TEXAS o .+act. David Castillo Director of Finance EXHIBIT A—Certificate of Financial Advisor E r r9 ro4 EXHIBIT A CERTIFICATE OF FINANCIAL ADVISOR The undersigned hereby certifies with respect to the sale of the $17,100,000 City of EPearland, Texas Certificates of Obligation, Series 1998 (the"Obligations"), as follows: 1. The undersigned is a duly authorized representative of Damn Rauscher EIncorporated, the financial advisor ("Financial Advisor") to the City of Pearland, Texas (the "City") in connection with the sale and delivery of the Obligations. In this capacity, the undersigned is familiar with the facts stated herein. 2. The term "yield" shall have the meaningascribed to it in Section 148 h ( ) of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations in effect thereunder, and, when used with respect to the Obligations, shall mean that interest rate which when used as a discount factor to compute the present value as of the Issue Date of all scheduled payments of principal of and interest on the Obligations produces an amount equal to the present value, using the same discount rate, of the Issue Price of the Obligations. Yield on the Obligations shall not rti take into account or reflect any underwriters' discount, cost of issuance of the Obligations or costs of carrying or repaying the Obligations. For purposes hereof, yield is and shall be calculated on the basis of a 360-day year with interest compounded semi-annually. The yield with respect to that portion of the Obligations subject to optional [1 redemption is computed by treating such Obligations as retired at the stated redemption price on the final maturity date because (i) the City has no present intention to redeem prior to maturity the Obligations which are subject to optional redemption, (ii) no Obligation is subject to optional redemption at any time for a price less than the retirement price at final maturity plus accrued interest, (iii) no Obligation is subject to optional redemption within five years of the Issue Date, (iv) no Obligation subject to optional redemption is issued at an Issue Price that exceeds the stated redemption price at maturity of such Obligation by more than one-fourth of one percent multiplied by the product of the stated redemption price at maturity of such Obligation and the ,.� number of complete years to the first optional redemption date for such Obligation; and (v) no Obligation subject to optional redemption bears interest at a rate that increases during the term of the Obligation. No Obligation is subject to mandatory early redemption. As set forth in paragraphs 5 and 14 of the No Arbitrage Certificate to which this Certificate is attached, proceeds of the Obligations in the amount of$41,055.10(the "Insurance Premium")will be used to purchase municipal bond insurance for the Certificates from Financial Security Assurance, Inc. ("FSA"). The Insurance Premium in the amount of$41,055.10 will be treated as additional interest in calculating the yield on the Obligations. In this regard: (a) The present value of the interest savings expected to be realized as a result of such guarantee exceeds the present value of the Insurance Premium discounted at a rate equal to the yield on the Certificates which results.assuming recovery of the Obligation Insurance Premium. L A-1 � 1 f (b) The guarantee provided with the Obligation Insurance Premium imposes secondary liability on FSA that unconditionally shifts substantially all of the credit risk for all or part of the payments on the Certificates. FSA is not a co-obligor with respect to the Certificates and does not expect to make any payments other than payments for which it will be reimbursed immediately. FSA and related parties thereto will not use more than ten percent of the gross proceeds of the Certificates that are guaranteed by FSA. (c) The Insurance Premium does not exceed a reasonable arms-length charge for the transfer of credit risk. The Insurance Premium is separately stated from all other fees and payments payable by the City to FSA for any other direct or indirect services other than the transfer of credit risk. The Insurance Premium does not include payment for the cost of 7 underwriting or remarketing the Obligations or for the cost of casualty insurance for property financed or refinanced by the Obligations. The Insurance Premium is not refundable upon redemption of the Obligations prior to maturity. LI� The yield on the Obligations, calculated in the manner set forth above and based on the information set forth in the Certificate of Financial Advisor, attached hereto as Exhibit A, is 3.592206 percent. 3. With respect to the issuance of the Obligations, the representations set forth in paragraph 24 of the No Arbitrage Certificate are, to the best of our knowledge, true, correct and complete. EXECUTED and DELIVERED as of and on July 30, 1998. Very truly yours, FINANCIAL ADVISOR DAIN RAUSCHER INCORPORATED By: Frank J. Ildebrando Senior Vice President LII n it ::ODMA\PCDOCS\HOUSTON\570354\1 III A-2 U Form 8038-G Information Return for Tax-Exempt Governm ental mental Obligations OMB No.1545-0720 (Rev.May 1995) O. Under Internal Revenue Code section 149(e) 0 Department of the Treasury ► See separate Instructions. Internal Revenue Service (Note: Use Form 8038-GC if the issue price is under$100,000.) Part I Reporting Authority. If Amended Return. check here ►❑ 1 Issuer's name PM2 Issuer's employer identification number CITY OF PEARLAND, TEXAS 74-6028909 • 3 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 4 Report number 3519 LIBERTY DRIVE G19 98-1 5 City,town or post office,state and ZIP code 6 Date of issue PEARLAND, TEXAS JULY 30, 1998 Li 7 Name of issue $17,100,000 CITY OF PEARLAND, TEXAS CERTIFICATES OF 8 CUSIP number OBLIGATION, SERIES 1998 704862PU9 [11 Part II Type of Issue (check applicable box(es)and enter the issue price) 9 ❑ Education(attach schedule-see instructions) 10 0 Health and hospital(attach schedule-see instructions) 10 N/A 11 ❑ Transportation 11 N/A [1 12 ❑ Public safety . 12 N/A 13 ❑ Environment(including sewage bonds) , 13 N/A 14 0 Housing 14 N/A 7 15 0 Utilities 15 17,100,000.00 --1 16 0 Other. Describe(see instructions) ► N/A 16 N/A 17 If obligations are tax or other revenue anticipation bonds,check box ► ❑ � ;f. 18 If obligations are in the form of a lease or installment sale,check box ► 0 -.0, °, s ` ° ` as t-- Part Ill Description of Obligations (a) (b) (c) (d) (e) (0 00 .,_. -vq Maturity date Interest rate Issue price Stated redemption Weighted Yield Net interest - price at maturity average maturity cost 19 Final maturity 3/01/2018 3.800% 2,160,000.00 2,160,000.00 a t ' "e-1 *s "` ,° °°.° ' 20 Entire issue , - ° `i 17.100,000.00 17,100,000.00 13.958 years 3.592206% 3.586193 % -T. Part IV Uses of Proceeds of Bond Issue(including underwriter's discount) 21 Proceeds used for accrued interest 21 - 0.00 - 22 Issue price of entire issue(enter amount from line 20,column(c)) - 22 .. .. 17,100,000.00 23 Proceeds used for bond issuance costs(including underwriter's discount) . 23 385,604.00 rj 24 Proceeds used for credit enhancement 24 41,055:10 '% 25 Proceeds allocated to reasonably required reserve or replacement fund _ _ _ 25 0..00 26 Proceeds used to currently refund prior issues 26 0.00 27 Proceeds used to advance refund prior issues ° 1 27 0.00 . ` 28 Total(add lines 23 through 27) - 28 , 426,659.10 29 Nonrefunding proceeds of the issue(subtract line.28 from line 22 and enter amount here) . 29 • 16,673,340.90 Part V Description of Refunded Bonds (Complete this part only for refunding bonds.) 30 Enter the remaining weighted average maturity of the bonds to be currently refunded :► N/A -years 31 Enter the remaining weighted average maturity of the bonds to be advance refunded .► ...N/A years 32 Enter the last date on which the refunded bonds will be called ► r N/A 33 Enter the date(s)the refunded bonds were issued ►N/A — Part VI Miscellaneous 34 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . 34 N/A n35 Enter the amount of the bonds designated by the issuer under section 265(b)(3)(B)(i)(III)(small issuer exception) 35 N/A 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instruction- 36 1b Enter the final maturity date of the guaranteed investment contract - . , ,►N/A .; .;: .` -. `` 7 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37 N/A u b If this issue is a loan made from the proceeds of another tax-exempt issue,check box ► 0 and enter the name of the issuer ► N/A and the date of the issue ► N/A 38 If the issuer has elected to pay a penalty in lieu of arbitrage rebate,check box ► ❑ 39 If the issuer has identified a hedge,check box ► ❑ Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge Please and belief,they are true,correct,and complete. DAVID CASTILLO `Sign '� C,cs Q O e--, 7/30/98 DIRECTOR OF FINANCE - Here Signature of issuer's authorized representative Date Type or print name and title For Paperwork Reduction Act Notice,see page 1 of the Instructions. Cat No.63773E Form 8038-G(Rev.5-95) CERTIFICATE OF ASSESSED VALUATION THE STATE OF TEXAS COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § EI, Rubye Jo Knight, the duly appointed, qualified and acting Tax Assessor-Collector of the City of Pearland, Texas (the "City"), do hereby certify that the following is a true and correct statement of the assessed value of taxable property within the City, as shown by the duly approved tax rolls for the tax year 1997 as of the date shown below, which are the last approved tax rolls for the City on file in my office,to wit: $1,012,049,410 WITNESS MY HAND this day of , 1998. Tax Asses r-Co ector City of Pearland, Texas „„, ^� ::ODMA\PCDOCS\HOUSTON\571855\1 N 0 _1 IL CERTIFICATE OF BOND-INSURER 1 1 The undersigned hereby certifies on behalf of Financial Security Assurance Inc. ("FSA"), in connection with the issuance by FSA of its Policy No. 23841-N (the "Policy") in respect of the $17,100,000 in aggregate principal amount of the City of Pearland, Texas Certificates of Obligation, Series 1998 (the 7 "Bonds")that: tT1 (i) the Policy is an unconditional and recourse obligation of FSA (enforceable by or on behalf of the j; holders of the Bonds)to pay the scheduled principal of and interest on the Bonds in the event of Nonpayment by the Issuer(as set forth in the Policy), ri (ii) the insurance premium of$41,055.10 (the "Premium") is a charge for the transfer of credit risk and was determined in arm's length negotiations and is required to be paid as a condition to the issuance of the Policy, 0 (iii) no portion of such premium represents an indirect payment of costs of issuance, including rating agency fees, other than fees paid by FSA to maintain its ratings, which, together with all other overhead expenses of FSA, are taken into account in the formulation of its rate structure, or for the LI' provision of additional services by us, nor the direct or indirect payment for a cost, risk or other element that is not customarily borne by insurers of tax-exempt bonds (in transactions in which the guarantor has no involvement other than as a guarantor), C., (iv) FSA is not providing any services in connection with the Bonds other than providing the Policy, and except for the Premium, FSA will not use any portion of the Bond proceeds, 0 1 (v) except for payments under the Policy in the case of Nonpayment by the Issuer, there is no obligation 1 to pay any amount of principal or interest on the Bonds by FSA, and I (vi) the Issuer is not entitled to a refund in excess of the unearned portion of the premium for the Policy in� [7 the event a Bond is retired before the final maturity date. 1 r FSA makes no representation as to the nature of the interest to be paid on the Bonds or the treatment of L the Policy under Section 1.148-4(f) of the Income Tax Regulations. FINANCIAL SECURITY ASSURANCE INC. ti III'- By:Adt.--4_6(-1/1/4..vu,. 1A.. 4--11-k--42-&(--- uthorized Officer CDated: July 30, 1998 1' { i n MAYOR, DAY, CALDWELL 8 KEETON, L.L.P. 700 LOUISIANA, SUITE 1900 HOUSTON,TEXAS 77002-2778 (713)225-7000 100 CONGRESS AVENUE SUITE TELECOPIER(713)225 7047 AUSTIN,TEXAS1500 78701-4042 July 30, 1998 TE LECOPI ER(512)320-9292 L Li WE HAVE ACTED as Bond Counsel for the City of Pearland, Texas (the "City") in connection with an issue of certificates of obligation(the "Certificates") described as follows: CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998, dated July 1, 1998, in the aggregate principal amount of $17,100,000, maturing on March 1 in each year from 2000 through and including 2018. The Certificates are issuable in fully registered form only, in denominations of$5,000 or integral multiples thereof, bear interest, are subject to redemption prior to maturity and may be transferred and exchanged as set out in the Certificates and in the ordinance (the "Ordinance") adopted by the City Council of the City authorizing their issuance. WE HAVE ACTED as Bond Counsel for the sole purpose of rendering an opinion with respect to the legality and validity of the Certificates under the Constitution and laws of the State of Texas and with respect to the exclusion of interest on the Certificates from gross income under [1 federal income tax law. In such capacity we have examined the Constitution and laws of the State of Texas; federal income tax law; and a transcript of certain certified proceedings pertaining to the issuance of the Certificates, as described in the Ordinance. The transcript en, contains certified copies of certain proceedings of the City; certain certifications and representations and other material facts within the knowledge and control of the City, upon which we rely; and certain other customary documents and instruments authorizing and relating `i� to the issuance of the Certificates. We have also examined executed Certificate No. R-1 of this issue. WE HAVE NOT BEEN REQUESTED to examine, and have not investigated or verified, any original proceedings, records, data or other material, but have relied upon the transcript of certified proceedings. We have not assumed any responsibility with respect to the financial condition or capabilities of the City or the disclosure thereof in connection with the sale of the Certificates. July 30, 1998 Page 2 [1, BASED ON SUCH EXAMINATION, it is our opinion as follows: (1) The transcript of certified proceedings evidences complete legal authority for the issuance of the Certificates in full compliance with the Constitution and laws of the State of Texas presently in effect; the Certificates constitute valid and legally binding L? obligations of the City enforceable in accordance with the terms and conditions thereof, except to the extent that the rights and remedies of the owners of the Certificates may be limited by laws heretofore or hereafter enacted relating to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors of political subdivisions and the exercise of judicial discretion in appropriate cases; and the MIN Certificates have been authorized and delivered in accordance with law; (2) The Certificates are payable, both as to principal and interest, from the receipts of an annual ad valorem tax levied, within the limits prescribed by law, upon taxable property located within the City, which taxes have been pledged irrevocably to pay the principal of and interest on the Certificates; and (3) The revenues to be derived from the operation of the City's waterworks and sanitary sewer system after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), in an amount not to exceed $10,000, are pledged to the [1 payment of the principal of and interest on the Certificates, to the extent that ad valorem taxes may ever be insufficient or unavailable for said purpose; provided, however, that such pledge is junior and subordinate in all respects to the pledge of Net Revenues to the III payment of any obligation of the City, whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of Net Revenues to the payment of the Certificates. The City has reserved the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind secured by a pledge of the Net Revenues that may be prior and superior in right to, on a parity with, or junior and subordinate to the pledge of Net Revenues securing the Certificates. ALSO BASED ON OUR EXAMINATION AS DESCRIBED ABOVE, it is our further opinion that, subject to the restrictions hereinafter described, interest on the Certificates is excludable from gross income of the owners thereof for federal income tax purposes under existing law and is not subject to the alternative minimum tax on-individuals or, except as hereinafter described, corporations. The opinion set forth in the first sentence of this paragraph is subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Certificates in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The City has covenanted in the Ordinance to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Certificates in gross income for federal income tax purposes to be retroactive to the date of issuance of the Certificates. The Code and the existing regulations, rulings and court decisions thereunder, upon which the foregoing opinions of Bond Counsel are based, are subject July 30, 1998 Page 3 to change, which could prospectively or retroactively result in the inclusion of the interest on the Certificates in gross income of the owners thereof for federal income tax purposes. INTEREST ON all tax-exempt obligations, including the Certificates, owned by a corporation (other than an S corporation, a regulated investment company, a real estate investment trust (REIT) or a real estate mortgage investment conduit (REMIC)) will be included in such corporation's adjusted current earnings for purposes of calculating such corporation's alternative minimum taxable income. A corporation's alternative minimum taxable income is the basis on which the alternative minimum tax imposed by the Code is computed. EXCEPT AS DESCRIBED ABOVE, we express no opinion as to any federal, state or j local tax consequences resulting from the ownership of, receipt or accrual of interest on, or the acquisition or disposition of, the Certificates. Prospective purchasers of the Certificates should be aware that the ownership of tax-exempt obligations, such as-the Certificates, may result in collateral federal income tax consequences to, among others, financial institutions, property and casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with Subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who are deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. Such prospective purchasers should consult their tax advisors as to the consequences of investing in the i Certificates. t�ll iAtr- A 6911aise 162.1:-v4 p r f ::ODMA\PCDOCS\Houston\564434\1 1�? t44' - D�iNEY ;; A, 0�[471 etp�2'. AiC, ffice of tije 2Ittornep enerar &tate of Xexag DAN MORALES ATTORNEY GENERAL July 28, 1998 I� Ali THIS IS TO CERTIFY that the City of Pearland, Texas (the "Issuer"), has submitted to me City of Pearland, Texas Certificates of Obligation, Series 1998 (the "Certificates") in the aggregate principal amount of $17,100,000 for approval. The Certificates are dated July 1, 1998, numbered R-1 through R-19 and were authorized by Ordinance No. 855 of the Issuer passed on June 29, 1998. 711 I have examined the law and such certified proceedings and other papers as I deem necessary to render this opinion. LIB As to questions of fact material to my opinion, I have relied upon representations of the Issuer contained in the certified proceedings and other certifications of public officials furnished to me without undertaking to verify the same by independent investigation. I express no opinion relating to any official statement or any other offering material relating to the Certificates. Based on my examination, I am of the opinion, as of the date hereof and under existing law, as follows: (1) The Certificates have been issued in accordance with law and are valid and binding obligations of the Issuer. (2) The Certificates are payable from the proceeds of an annual ad valorem tax 11 levied,within the limits prescribed by law, upon all taxable property within the ' ' Issuer, and additionally, Net Revenues of the Issuer's waterworks and {71 sanitary sewer system, in an amount not to exceed $10,000, are pledged to the payment of the principal of and interest on the Certificates to the extent that ad valorem taxes may ever be insufficient or unavailable for such "1 purpose, provided that the pledge of Net Revenues is and shall be junior and Ll.l 512/463-2100 P.O. BOX 12548 AUSTIN, TEXAS 78711-2548 PRINTED ON RECYCLED PAPER AN EQUAL EMPLOYMENT OPPORTUNITY EMPLOYER City of Pearland, Texas Certificates of Obligation, Series 1998 - $17,100,000 Page -2- subordinate in all respects to the pledge of Net Revenues to the payment of any obligation of the Issuer, whether authorized heretofore or hereafter, which the Issuer designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates. Therefore, the Certificates are approved. INOgit rnQ & _ Attorney General of the State of Texas No. 32891 Book No.98-C `II - kcw II I T`1 .JI n [I OFFICE OF COMPTROLLER OF THE STATE OF TEXAS ^n I, John Sharp, Comptroller of Public Accounts of the State of Texas, do '• hereby certify that the attachment is a true and correct copy of the opinion of the Attorney General approving the: City of Pearland, Texas Certificates of Obligation,Series 1998 i numbered R-1/R-19, of the denomination of $ various, dated July 1, 1998, as authorized by issuer, interest various percent, under and by authority of which said bonds/certificates were registered electronically in the office of the Comptroller, on the 28th Day of July, 1998, under Registration Number 60782. Given under my hand and seal of office, at Austin, Texas, the 28th Day of July, 1998. {1 JOHN SHARP Comptroller of Public Accounts of the State of Texas CJ p 0 OFFICE OF COMPTROLLER OF THE STATE OF TEXAS I,Melissa Mora, ❑ Bond Clerk Assistant Bond Clerk in the office of the Comptroller of the State of Texas, do hereby certify that, acting under the direction and authority of the Comptroller on the 28th Day of July. 1998, I signed the name of the Comptroller to the certificate of registration endorsed upon the: City of Pearland, Texas Certificates of Obligation,Series 1998, numbered R-1/R-19, dated July 1. 1998, and that in signing the certificate of registration I used the following signature: IN WITNESS WHE F ave executed this rtific this the 28th Day of July. 1998. I, John Sharp, Comptroller of Public Accounts of the State of Texas, certify that the person who has signed the above certificate was duly designated and appointed by me under authority vested in me by TEX. REV. CIV. STAT.ANN. art.4362 (1969), with authority to sign my name to all certificates of registration, and/or cancellation of bonds required by law to be registered and/or cancelled by me, and was acting as such on the date first mentioned in this certificate, and that the bonds/certificates described in this certificate have been duly registered in the office of the Comptroller, under Registration Number 60782. GIVEN under my hand and seal of office at Austin,Texas,this the 28th Day of July. 1998. EJOHN SHARP Comptroller of Public Accounts of the State of Texas r r FSA (*7 Financial Security Assurance Inc. r July 30, 1998 r Municipal Bond Insurance Policy No.23841-N With Respect to $17,100,000 In Aqgregate Principal Amount of the City of Pearland,Texas Certificates of Obligation, Series 1998 Ladies and Gentlemen: I am Assistant General Counsel of Financial Security Assurance Inc., a New York stock insurance company ("Financial Security"). You have requested my opinion in such capacity as to the matters set forth below in connection with the issuance by Financial Security of its above-referenced policy (the "Policy"). In that regard, and for purposes of this opinion, I have examined such corporate records, documents and proceedings as I have deemed necessary and appropriate. Based upon the foregoing, I am of the opinion that: 1. Financial Security is a stock insurance company duly organized and validly existing under the laws of the State of New York and authorized to transact financial guaranty insurance business therein. • 2. The Policy has been duly authorized, executed and delivered by Financial Security. 3. The Policy constitutes the valid and binding obligation of Financial Security, enforceable in accordance with its terms, subject, as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, rehabilitation, moratorium and other similar laws affecting the enforceability of creditors' rights generally applicable in the event of the bankruptcy or insolvency of Financial Security and to the application of general principles of equity. ~'? I am a member of the Bar of the State of New York, and do not express any opinion as to any law other than the laws of the State of New York. Very truly yours, frojegf e Assistant G neral C nsel City of Pearland,Texas, City Hall, 3519 Liberty Drive, Pearland,Texas 77581. pp Texas Water Development Board, t_ 1700 North Congress Avenue, Austin,Texas 78701. 7 350 Park Avenue•New York,New York 10022•Tel:212.826.0100•Fax:212.688.3101 New York•Dallas•San Francisco•London•Madrid•Paris•Singapore•Sydney MAYOR, DAY, CALDWELL 8 KEETON, L.L.P. �. 700 LOUISIANA, SUITE 1900 HOUSTON,TEXAS 77002-2778 (713)225-7000 100 CONGRESS AVENUE TELECOPIER(7131225-7047 SUITE 1500 AUSTIN,TEXAS 78701-4042 (512)320-9200 TELECOPIER(512)320-9292 July 30, 1998 j3 Financial SecurityAssurance Inc. 350 Park Avenue New York,New York 10022 Re: $17,100,000 City of Pearland, Texas Certificates of Obligation, Series 1998 Ladies and Gentlemen: +cn Reference is made to our Bond Counsel opinion of even date herewith regarding the `I captioned Certificates of Obligation, a copy of which is attached hereto. Financial Security Assurance Inc. may rely on such opinion as if it were addressed to you. Also, based on our examination as described in such opinion, it is our opinion that the Ordinance was lawfully adopted and is valid and enforceable in accordance with its terms. Very truly yours, "rr CS -to'&20° 16eim (fc. ototi, 9r MAYOR, DAY, CALDWELL & KEETON, L.L.P. [1, i n ::ODMA\PCDOCS\HOUSTON\574442\1 ^'r'1 $17,100,000 ` CITY OF PEARLAND, TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998 RECEIPT AND CROSS RECEIPT July 30, 1998 I, the undersigned, a duly authorized representative of Chase Bank of Texas, National Association, Houston, Texas, hereby acknowledge receipt on behalf of the City of Pearland, Texas (the "City") of the full purchase price for the City's Certificates of Obligation, Series 1998, in the total amount of$17,100,000, representing the par amount of the Certificates. CHASE BANK OF TEXAS,NATIONAL ASSOCIATION �` Houston, Texas By: OAk, , Name: ARLA K. SCOTT Title: TRUST OFFICER I, the undersigned, a duly authorized representative of the Texas Water Development ^I Board, hereby acknowledge receipt from the City of the initial certificates of its Certificates of Obligation, Series 1998, dated July 1, 1998, which have been delivered to the undersigned in proper form on the date hereof. TEXAS WATER DEVELOPMENT BOARD L By: Name: Title: En ::ODMA\PCDOCS\HOUSTON\571864\1 En -- lam• 1J rN rwLK AUSTIN 51.2 320 9292 Ti:i 5114441477464475 • 1 00� �,� ,goo • CITY OF PEARLAND,TEXAS CERTIFICATES OF OBLIGATION, SERIES 1998 RECEIPT AND CROSS RECEIPT July 30, 1998 I, the undersigned, a duly authorized representative of Chase Bank of Texas, National Association, Houston, Texas, hereby acknowledge receipt on behalf of the City of Pearland, Texas(the "City") of the full purchase price for the City's Certificates of Obligation, Series 1998, in the total amount of S 17,100,000, representing the par amount of the Certificates. CHASE BANK OF TEXAS,NATIONAL ASSOCIATION Houston, Texas By: Name: Title: I, the undersigned, a duly authorized representative of the Texas Water Development Board, hereby acknowledge receipt from the City of the initial certificates of its Certificates of Obligation, Series 1998, dated July 1, 1998, which have been delivered to the undersigned in proper form on the date hereof TEXAS WATER DEVELOPMENT BOARD \IO lr 4 — M 6,lJ G P Titl V TKen1-3- ©FFtcL(L.Z C ::ODMA\PCL)OCS\HOUSTON\57156411 7 7 REGISTRAR'S RECEIPT r THE STATE OF TEXAS § COUNTIES OF BRAZORIA AND HARRIS § CITY OF PEARLAND § 7 The undersigned duly authorized representative of Chase Bank of Texas, National 7 Association, Houston, Texas, the paying agent/registrar for the $17,100,000 City of Pearland, Texas Certificates of Obligation, Series 1998, certifies that said certificates have been duly registered in accordance with the Ordinance dated June 29, 1998, and have been delivered to the 7 purchaser of said Certificates. Executed and delivered this ,,tb3("� , 1998. C CHASE BANK OF TEXAS,NATIONAL ASSOCIATION CHouston, Texas By: OA : 4 7Name: ARLA . S 'OTT' Title: TRUST OFFICER 7 7 7 i" 7 7 ::ODMA\PCDOCS\HOUSTON\571854\1 7 7 7 C j .• A RESOLUTION OF THE TEXAS'WATER DEVELOPMENT BOARD 7, ; APPROVING AN APPLICATION FOR FINANCIAL ASSISTANCE THROUGH THE;PURCHASE OF $17,100,000 CITY OF PEA.RLAND,TEXAS CERTIFICATES ( F OBLIGATION, • PROPOSED SERIES 1998 • (98.r58) • WHEREAS, the City of Pearland,Texas(the "City") has filed an application seeking financial assistance in the amount of$17,100,00Q from the State Water Pollution Control Revolving Fund(the "SRF")to finance the construction of a wastewater treatment plant, modification and expansion of existing treatment;plants, a sewer interceptor, and gravity sewer - service lines and lift stations, and rehabilitation cif existing sewer systems; and 7 • WHEREAS,the City seeks financial assistance from the Texas Water Development • Board(the "Board")through the Board's purchase of$17,100,000 City of Pearland,Texas Certificates of Obligation, proposed Series 1998,i all as is more specifically set forth in the application and in recommendations of the Development Fund Manager to the Board,to which documents express reference is made; and • WHEREAS,the Board hereby finds: 1. that in its opinion the tax pledged:,by the City will be sufficient to meet all the obligations assumed by the politiclal subdivision; 2. that the application and assistance applied for meet the requirements of the Federal Water Pollution Control 4ct,as amended(333 U.S.C. 1251 et. seq.)and state law; 3. that the City has considered cost-effective innovative methods of treatment; and 4. that the City has adopted and implemented a program of water conservation for the more efficient use of water thatt will meet reasonable anticipated local needs • and conditions and that incorporates practices,techniques or technology prescribed by the Texas Water Code and rules of the Board. NOW,THEREFORE,based on said considerations and findings,the Texas Water Development Board resolves as follows: • A commitment is made by the Board to the City of Pearland,Texas for financial assistance in the amount of S17,100,000 l'om the State Water Pollution Control Revolving Fund to be evidenced by the Board's purchase of$17,100,000 City of • C Pearland, Texas Certificates of Obligation, proposed Series 1998. This commitment will expire on May 19,2000. 0 Such commitment is conditioned as follows: 1. that the bond counsel opinion must include an opinion that the interest on the . obligations is excludable from gross income or is exempt from Federal income taxation. Bond counsel may rely on covenants and representations of the issuer in rendering this opinion; • 2. that the bond counsel opinion mart include an opinion that the obligations are not "private activity certificates." Boid counsel may rely on covenants and representations of the issuer on rendering this opinion; t713. that the ordinance authorizing the:issuance of the obligations must include that the proceeds of the obligations and the facilities financed with the proceeds of the obligations will not be used in a Manner that would cause the obligations to be "private activity certificates"; • -.r 4. that the ordinance authorizing they issuance of the obligations must include that the , issuer will comply with the provi:tions of Section 148 of the Internal Revenue Code of 1986 (relating to arbitrage); 5. that the ordinance authorizing the;issuance of the obligations must include that the issuer will make any required rebete to the United States of arbitrage earnings; 6. that the ordinance authorizing the issuance of the obligations must include that the issuer will take no action which Would cause the interest on the obligations to be [11 includable in gross income for Federal income tax purposes; • 7. that the transcript must include a No Arbitrage Certificate or similar certificate setting forth the issuer's reasonable expectations regarding the use,expenditure and investment of the proceeds()lithe obligations; 8. that the transcript must include evidence,that the information reporting requirements of Section 149(e)ol'the Internal Revenue Code of 1986 will be satisfied. This requirement is currently satisfied by filing IRS Form 8038 with the Internal Revenue Service. A completed copy of IRS Form 8038 must be provided to the Development Fund Managier prior to release of funds; � 9. that the City will not cause or permit the obligations to be treated as "Federally Guaranteed" obligations within the meaning of section 149(b)of the Internal Revenue Code; 7 i L) i . [31, 10. that this commitment is contingent on•a future sale of certificates or on the availability of funds on hand; 11. that the ordinance authorizing the!issuance of the obligations will state that 71 obligations can be called only afteir 10.years from the dated date of the obligations and only in inverse order of maturity; • ° 12. that the political subdivision, or au obligated person for whom financial or operating data is presented either individually or in combination with other issuers of the political subdivision's obligations or obligated persons, will, at a minimum, r covenant to comply with requirements for continuing disclosure on an ongoing basis substantially in the manner required by Securities and Exchange Commission(SEC)rule 15c2-12 i �jnd determined as if the Board were a 1 Participating Underwriter within Ole meaning of such rule, such continuing disclosure undertaking being for the benefit of the Board and the beneficial owner of the political subdivision's obligations, if the Board sells or otherwise transfers 7 such obligations,and the benefici4g owners of the Board's certificates if the political subdivision is an obligated person with respect to such certificates under 1,y • rule 15c2-12; 4 13. that prior to closing,the Citywill!submit documentation addressing the adoption and implementation of sufficient system rates and charges for the payment of p system operations and associated rlebt service requirements in lieu of tax revenues; or levy an interest and s4nking tax rate sufficient for the repayment of . (7 • system debt service requirements;i 14. prior to or at closing,the City shall pay to the Board a 1.85 percent origination [7_, charge calculated pursuant to Boaird rules; and 15. that the loan is approved for funding under the Board's pre-design funding option 7 as specified in Board rule 31 TAG§375.40,and initial and future releases of funds i are subject to all rules of the Board relating to such funding option. 11; . PROVIDED,however,the foregoing rescilution is subject to the following additional requirements prior to funding of the loan: ' 1. issuance of a written approving opinion of the Attorney General of the State of Texas stating that all of the requir+rments of the laws under which said obligations were issued have been complied vVith; that said obligations were issued in conformity with the Constitution ziuid laws of the State of Texas; and that said obligations are valid and binding Obligations of the issuer; and 1[1 2. compliance with all applicable recuirements contained in the Rules. Regulations, and Policies of the Texas Water Develoent Board. 7 t.J Li APPROVED and ordered of record this the 21st day of May, 1998. r, TEXAS WATER DEVELOPMENT BOARD L William B. Madden, Chairman ATTEST: Craig D. P dersen ExecutVe Administrator n . t.' .7 L 1 June 29, 1998 The Attorney General of Texas The Comptroller of Public Accounts Public Finance Division 111 East 17th Street Price Daniel Building Austin, Texas 78701 209 West 14th Street, 6th Floor Austin, Texas 78701 Re: $17,100,000 City of Pearland, Texas Certificates of Obligation, Series 1998 (the "Obligations") Ladies and Gentlemen: The captioned Obligations are being sent to the Office of the Attorney General, and it is requested that such office examine and approve the Obligations in accordance with law. After such approval, it is requested that the Attorney General deliver the Obligations to the Comptroller of Public Accounts for registration. Enclosed with the Obligations is a signed but undated copy of the SIGNATURE IDENTIFICATION AND NO-LITIGATION CERTIFICATE (the "Certificate") relating to the Obligations. The Attorney General is hereby authorized and directed to date the Certificate concurrently with the date of approval of the Obligations. If any litigation or contest should develop pertaining to the Obligations or any other matters covered by said Certificate, the undersigned will notify the Attorney General thereof immediately by telephone. With this assurance the Attorney General can rely on the absence of any such litigation or contest, and on the veracity and currency of said Certificate, at the time the Attorney General approves the Obligations unless the Attorney General is notified otherwise as aforesaid. The Comptroller is hereby requested to register the Obligations as required by law and the proceedings authorizing the Obligations. After such registration, the Comptroller is hereby authorized and directed to deliver the Obligations, together with three copies of each of the Attorney General's Approving Opinion and Comptroller's Certificate for the Obligations, to Jerry V. Kyle, Jr., Mayor, Day, Caldwell &Keeton, L.L.P., 100 Congress Avenue, Suite 1500, Austin, Texas 78701. CITY OF PEARLAND, TEXAS By: Title: Mayor I ::ODMA\PCDOCS\HOUSTON\571526\1 E Blanket Issuer Letter of Representations [To be Completed by Issuer] 17)1 City of Pearland, Texas [Name of Issuer] 1- a,, July 17, 1998 [Date] Attention:Underwriting Department—Eligibility The Depository Trust Company 55 Water Street;50th Floor New York,NY 10041-0099 Ladies and Gentlemen: This letter sets forth our understanding with respect to all issues (the"Securities") that Issuer shall request be made eligible for deposit.by The Depository Trust Company("DTC"). To induce DTC to accept the Securities as eligible for deposit at DTC,and to act in accordance with DTC's Rules with respect to the Securities, Issuer represents to DTC that Issuer will comply with the requirements stated in DTC's Operational Arrangements, as they may be amended from time to time. Note: Very truly yours, Schedule A contains statements that DTC believes accurately describe DTC,the method of effecting book- entry tran fersof securities distributedtluough DTC,and City of Pearland, Texa certain related matters. (Issuer) . BY avo (Authorized Officers Signature) Received and Accepted: Mayor (Typewrite Name de Title) S ORY COMP 3519 Liberty Drive (Street Address) By.( V Pearland, Texas 77581 (City) (State) (gyp) (281) 485-2411 (Phone Number) r r SCHEDULE A SAMPLE OFFERING DOCUMENT LANGUAGE t I DESCRIBING BOOK-ENTRY-ONLY ISSUANCE (Prepared by DTC—bracketed material may be applicable only to certain issues) 1.The Depository Trust Company ("DTC"), New York, NY,will act as securities depository for the securities (the"Securities").The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee). One fully-registered Security certificate will be issued for[each issue of]the Securities, [each] in the aggregate principal amount of such issue,and will be deposited with DTC. [If, however, the aggregate principal amount of[any] issue exceeds $200 million, one certificate will be issued with respect to each $200 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC is a limited purpose trust company organized under the New York Banking Law,a`banking organization"within the meaning of the New York Banking Law, a member of the Federal Reserve System,a"clearing corporation"within the meaning of the New York Uniform Commercial Code,and a "clearing,agency"registered pursuant to the provisions of Section 17A of the Securities Fxrbange Act of 1934. DTC holds securities that its participants ("Participants")deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions,such as transfers and pledges,in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby ( eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange,Inc.,the American Stock Exchange,Inc.,and the National Association of Securities Dealers, Inc.Access to the DTC system is also available to others such as securities brokers and dealers,banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly("Indirect Participants").The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission. 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's records.The ownership interest of each actual purchaser of each Security("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase,but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as weIl as periodic statements of their holdings, from the Direct or Indirect Participant • through which the Beneficial Owner entered into the transaction.Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners.Beneficial Owners will not receive certificates representing their ownership interests in Securities,except in the event that use of the book-entry system for the Securities is discontinued. 4.To facilitate subsequent transfers,all Securities deposited by Participants with DTC are registered in the name of DTCs partnership nominee,Cede&Co.The deposit of Securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited,which may or may not be the ("' Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. C 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [6. Redemption notices shall be sent to Cede&Co. If less than all of the Securities within an issue are ''' being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.] 7. Neither DTC nor Cede & Co. will consent or vote with respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co:s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus ! { Proxy). 8.Principal and interest payments on the Securities will be made to DTC.DTC's practice is to credit 7.1 Direct Participants' accounts on payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices,as is the case with securities held for the accounts of customers in bearer form'or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Agent, or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Issuer or the Agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. [9.A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered,through its Participant,to the[Tender/Remarketing]Agent,and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTCs records, to the p [Tender/Remarketing] Agent The requirement for physical delivery of Securities in connection with a demand for purchase or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records.] • DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to the Issuer or the Agent Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered. 11.The Issuer may decide to discontinue use of the system of book-entry transfers through DTC(or a successor securities depository).In that event,Security certificates will be printed and delivered. I 12.The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof. i P L_..' • ' In the event the Insurer is unable to fulfill its contractual obligation under this policy or contract or . •. application or certificate or evidence of. coverage, the policyholder.or'certificateholder is not protected by an insurance guaranty fund or other solvency protection arrangement. ���' FINANCIAL :: • • SECURIT. ...; : ':.. sirASSURANCES ASS.,: " ..tSA. hR:''::Gi .of Pearland•.Texas - 1. i . n : % f[ectiv°e Dae `•J 98f3 DS $17,i0070( n ag re ate nci al amount •of•. ':• ' ;:;'• : ' ••:- ::.Certificatesof0 i ation; ries.i 8: ' • • " Prei ,c.1 ,;.• ,. a `::.'.,'`,..: =A :<<;.•<:.,FINANCIAL:;.SE'CURITY..ASStJFEANCE.ING..:: Financial`•Securi :.for.cons•ideration•rec ed •..., :�<'-':^ •'.;>; :*•`-. hereb :UNCONDITIONALLY:AND'I RFREVOCABL ;a'ree l a' •to'.:> e`ttus e..t � ,"'Trus ee"' .. ,., Y 9 Y .(h r:•paying;' '`�:='".:,..,:`-.:`';.�f,::-," lwY s<to'`p th . . to e:.>,. t ):o" I . '`<,. > .-' ,'ageent:(the_.Paying;Agent") (a's'set forth:in.the documentation;providing for:.,:the ssuance•,of and:securin : ':.; ::'`:`",: ;; .: -:�;;:;'`the.Bonds) for:thejBonds,•forthe•benefit,of;the O+wrriers••or;at the:election of,Financial':Securi directl to `i; ,.,�;.�;`: ; ;. each';C7ytrnet;-sub•ect�'onl to?',ihe';teiTris';of<attis�P,olic wlifchincludes°eac�i�,eniioiaemerii:her ti5 `hate `.;".�,,;.f„<,,:;•::�;:...:r,;• , ! onion:of.'the rind al of'and<interest:'on th'e.Bonds the shall'.become<Due':for Payment but:shall'be :: . .,..:.. un d b :reason-of Non ent=b :.the assu •ai a ens::: :<::: ym y - • .....,rv._, . .,...<,....,,..::.�: ....:,;,:On theaater-ofahe<day:or>:which:such:principal•anii;'interest•becomes-Bue`#or;Payment:or;the: .. ., ' '°°' ` ' Bu•siness:Da :nextfollowln "'the'•.BuSiries-e Da ,on which Financial°Secant shathavetreceived.Notice`of I. ..�::::.r :' , ,,: ...;.•.;..Non a.ment,`.Ffnanctal::.Sec•unt .wilid"isburse,to.,or.for•.the benefit of,:each Owner of>a,Bond ahe::.face : - ..,,• amount of rincipal.of;an interest on'the.Bond.that:isthm Due for Pa`rrient but is tiien'un aid tiy;reason_""`" , ' :"''V >,::,';:.:. ,:,,:_': of.-.Nona ent<:b the-.issuer°but'onl ' ..upon receipt>b Financial':;Securiy ,'in;°a;form°:reasonabl , . ... ~,.' •.satisfactory;:tout,>:of.(a).evidence;of the:Owner's'tight to receive'payment:of the:principal'or interest then: `;_:':'::, •O . .. • g a,.y:. AP, p gn _ . ,,..,, , <;:>:.,.-.,;; -: ;::.?;;;-,..- :Due`<#of.F::eynient:.arid b evidence':includin - . . ro r:.,.. .;instruments;.of::assi nrraent that::alf:of.;.the; : ' ' '' Owner's rights'•with respect •to ' .a menu of`such:principal=:or•interest thaf•is''°Due';for.,Payment shall 'g anc' L: u Y :Notice of Nonpa rent:;will•be"deemed.•.receivedo`n:<.a:; iven;, ereupon:;yest::an Fin.,. .ia,:,Sec„rity::;�A. p x 9 .. - .__,,,_ :>,,,�:,..;-.......................... f•tt�is:recetved nor.•to.1:00=pri1:<:(New.:York'tithe):on such"Business;faay;=:ott7srwise;it, i _ ,� . . . P . If be..deemed,;received on.the,next Business Day.. If.;any Nofice,of: Nonpayment:receive•d,by Financial ;,,:, 5ecuri. 'is'incomplete;atshall•4:d—...•ed.riotito°have been received 6y: tiancial Security for:purpOses'of ` .. ..<:.: tY:: P P Ys. y 9 g....(4.1i•-••. s , =_; the:pecedmg sentence;and:Financial=;Securi shall' rom tf so::adise:;the°<;Trustee'. Pa in A ant.or. ,.,.:',;>.,.. "`• T=::Owner:.as:>a p roriateswho"may;.submit.an.amended'Notice`;of;Nonpayment U�`on.disbursement,in .`` " ` ••.<..;respect:Ote Bond;•Financial Sec•uri ,:01ali_becomeahe:ovitner of,the:Bond;any eppurfenanf:coupon.to.the: Bond or right:to recel tof:"a inent.of:principal:`ot or.inte• rest'on the Bond'and:shall be fully subrogated:to".:°,; . .,;::-;,;•' •-.,the.rights of:;the Owner.,-including:tlie Qwner's,Tight;to.;receiue;payments.u eler.lnelopnd;to the,:extent,of. .;!'.::':;, ;' ";;.;. z c. any payment by Financial Secunty,hereunder� Payment by;Financial Security to:the;Trustee'or`.Paying ,_,...., ., .''.'`- '"'`•'`' ''� '`A-ent for:the.benefit • f•the Owners shatf,'to`the extent thereof,`discharge the obligation''of'Financial ••.• <r: a rit der:thi� Poll S cu un s .:'', ,•:,.. ,,:;_.,. ;.�•:.. •_.;::.; , •� - c-,;,i rrE -r = ^.t�s''•,>a" -. "i.^."=-c.:' l5- - ..t.•.,. ';• ,^...,,,._ -<,; "'c t<-toahe extentex Cesst .tnod�fied.b ;an'.endorsement,hereto,ahe:::falEowfrig;cerms°shaft' .:'::'' . : _._ have'=the meanie s s ecified.for:all u oses of this:Polic 'Business>•.Da�" meansran da other°than:' '.• "' '` -" (a) a Saturday.or,Sunda or' b a"tla, on which banking institutions:yin.the;.State'of•:New,Yorle'ar`the _ ..;,-'.::;ansurer's;:Fiscal Agent.are.•authonzed,or regequired by,law or,executive.order to;remain;closed., "Due for -:.;' ( , .. . Paynient"means.:(a)iNtlen refe..:mng to,the'prin4'.':of;aGond''payable onahestated maturity date thereof:..`: l :,,?:; _, orVthe date on•which the same,shall nave been duly called.for mandatory:'sinking fund;redemption and,' , does not refer to.any earlier.date on which.payment is`due byreasoni of call for redemption.(other than by % , . -''��_;`.,°‘°',< ;_:>.,,rnandato. sinkingfund redemption), acceieratiflri�or.other;�advancement of, maturity:':unless:.;l=inancial�;"., = _. , f":.:T:_',. .Securtty'shall'elect;•in.:its sole;discretion,to,'pay.:such,principal dup."ypon.such.acceleration together with"-: ....j <°F<". "' '.'.'an accrued interest,to the date°of:acceleration and,,(b).when referring-to interest on;,a•Bond,.payable;on -:£ ',. ;;,;'t "" t t•he'stated`date.for a -ent.of interest '',Non a ment;,-means,Jin respect of:a':'Bond,'tfie,failure-of the `.?J..t�u.._,E.. �:5,.zs 1:,.;.an,.•_,.... ..,,,,t.............;. .Y_. _ ..r:. , :;x:s.'I :;.>.,.' :' o"-if'there is•no• Trustee'.to^ttte Pa 1n A.:,ent fol .,,,e 55_'.' i.,l.. ;.,, _..,4', .4;:".: issuerta„have.,•00idedsitf.kient_t0n0:1to,lheTrustee,, r,.., t Y9 g. ... .. •. ''''''',' >�I. i _. t., at=is•Due for,Pa.. a t:on..such;Borah:>>;"Non a meat"`;shall a ',°: ." a ment;-in,fufla#,-a11; pal,,andanteiesi,#h _ ;y. ;,,.� ►►,.� h... P .: ,.?,. r?ci .... Y..: nd :.an a ent"of' rinci al,or:Interest that-is`Due for:,Paymenta.made to_ ,.,,; • ';< ;also'inc[ude;:in'tespeCt.of;»So .,. •.y::P. Y!11 ,,, �l?. f?..1.,.�. ,.,-. .�.:.• - - ";. • „..IN• ;):,i!>:3,165 ..,.-;:3:<<.,: IS< _ -;. ,: !t ,y,. ,;s :; '.dM1 such>Owirer:. ursuaiat-ta the,la:<»i: >><L'.'--','..,,'_';':-I'-:,.:;',:„,.;;� : , Y' an.()wne.b :or.•,orybehalf.of the._Issuer'.aivhfch.has°besn recovere.. hom. • . F. J.._„ .,..a.. to ^.�... .n .,._ .•;.t , ,.. ;:,ai%'• i 5 J, Y,.,..,,,.> ,. .-•r .ten.,..:.,, a. ,<,n•,:s .,.,.n"^..<.. .)•<.ncr,.,.,,..�•<..:...>... •.�•,>,.,,. _1,..�'� - f�` r ,., • .. .... .,• .... • �r....:fi:;, .,; • I a, .,J l.. „ rl ,7, 1 ' • • - - - . • ':-- - 1 :-. • :. •• ----- .... ... . . • - -. - ... . ... ...„ .. ... . .. •• . . -. . ...... „ .-.„ - ., - . -..... . .. • ,..:. ; •,..:.-- : . ' . . • . - - ,.., . .. .. ... . . . .. .. . . . . - . . ..., ...... . ... . . 2 ' • .. --• .:-Page 2 Of. ••• •,N ...--: ::. ,•• - ,. .... ....... . , ... . . . ---• - - • • --.- :: - • - --- , - - - , . - - . : :..-. •. Policy... • .• - : . :. ,-, • • ..... , , ,.:. ....:.::., • , . .,...., - ..- • .. . . . ....,.....-„, -.. -......„ .., .-.. •.. , •• -,.:-. ,....: - - . . . . . . - - . . . . . .. . . . - : : •:-' ,-*• •:-' -- !--..:-••••!:• .......•-• •• --"•••• with a."tlfl , nona....:.,:,-- pealable - •' accordance • ••. telecopie... • ---- • . ,: .• :* .- *-: •. •••••.:• ' .:• - '••••::".:•:''-•••-:•••• '••:"•:".1:'•••••":' •••••• :•'::::, 44-in/benkliOlOy.•IP:..-.......: telephonic Pc:..i.. mail from from 0.n.-1:-.••••••••••::::":••••- ' ...iii r:--.:•. „,,y..• • i."-:..;-•:• ''-.::fl:::.......,., •... : 6-•-ti'm•s.,.:•-•:•.•,::::••••:•• .iN-tice"':.:,;:• ••• ' ' •No 23841-. i- •. . ,.'-.......: .... rdear.1,... . ....:., •.- ----:.:oilifie .. ..:,..,, ..0..„..„,.:,.;.::.„ •,- ...... ..,„....,„. .... •Bankruptcy,Code .... •'•jurisdiction notice by registered or .... f ( ) the person ,.. . date•••"" iPaPLY:•,:a.•:• •:...•''such••••• jetined •:.''''' . .... • ••••• competent-,Jo I.'''. .,:••:::• .. : 4..-,-....;,:Onited:States-71-:'' '14...having.:;1. r .,•••• or written ne..... tv which notioa ..:.•:shall :: ...,.. ... -bY • -- - 0 ,...... d writing , ::-.:-.-:-Iic.:'• order of a-•-;99Y,-, • --6d 1.6]i :Oi9T1,,•-q--:.:'' -- toFinancial Segull, . ' and (d) amount . r e notice n .. ntitywhoi,.a-1!,-.„ : :,•• .' ...:•••••::-,•: 'I '•••• ' '•••-•. * ' • sikSequeritlY.',OOnitr71. t 0.4fing..„'g„,PLIKI,iintiai•"."(c).14•:Olaill10:0.... ......,:„ .............. the f n Bond,,,t0e:P6ra° :P---- -:•'1-..t.hat:-'!PvvP;er !:::.:'..' .. ::-:-!•.• (b)lne ro"Lq•••••••!"'',,--means, in respectp, s 'thetetikV!P P.,- ...., ::.--:- :•:-,:-::::::•••;.::, OWP!:•,,..:„:,:::-:...the claim, :: ent-::""Cwner--Me--...' h:•Bondito payment:. " ' ... ' • • • r the Trustee or 1(44i,- ":•• ':-:::::•1•••••::::'. .ehtkti.:•rhal9ng • Due'for.Pqyfa. .,:•-'-'•'--- -thelet01P'of...siic constitutes the ....„......... ., ..: amount b.04lne t-Ie..entitled:"LirIP!1;-•'••• n Or:,entity .i.r.ii11°P. ' ..•..,,.„:„.......... .. . he de the ..„...„ . .,•. .. , . . .. . ........ ." .-. :-• . -•••' —•-•of NoriParrlen ' ••••••:Issuer.;or ani7i !7 ;..:) '::.,:•:::: :Q..:,*: •••••••• • -- '-- time ,..*:'* .'.s• ..... •••• '•••••••••hall nof{iriol.ii..... y for th&Bonds. ::::„.-.:::.,:-.,..:.-„,.• ses of this ..-.....:- ::.:- ; • - .:Agentu).forOY%).. ..-: -..::- -e:::..:•., ,- ::::,.• .,.. -..-r-- ii"......'--... Fiscal .•`- .:-,-- • ,and.notice ... . , - ...... ,, ... e direct or t(the Insurer's•. • - -.the'llom ..,:...: ..,.::...,; ......,.indirect o!:1i "":73..00n under,...,..: ....:.: .... fiscal agent • .Agentf .:.., :..... ''''•'••••'..'-'app•oirl .a -ilie:'PayiPg' • -- specifying• : 'f such notice . • ' ''• ''''''•::i. • ,:;::i.:,•••'.:::,•::: Financial Security b notice thp:Trustee... . the date: ..,., of:itceipt,o.,,.....„ d to Financial . 'Security pursuant,:.....,,s.„:„.,....,. Financial Security „:.!.'...: ":'• • - . ----,•-it.t0h,,,no :,• :•::..crom andafter. --- , delivered .:..., -,•,,, .,,,,::::•d-,. y -.:::::•:, ... ' . ...: ••- „.• ..,.... :-._... , •-. ,.•-•::::•••i„bc1!::::.bitfin0,:livr.-., Fiscal Agent.:::,:i . -•: requiredbe to be, , ... Agent.• •and to . . '':::::::: "".••• ••"':.::.iPlY:''' efliieillisurers ,:.. 1111.1.•' '...anct, ......... ,.. copies of all•• i,notices . ... the Insui-eilifi-scal required Insurer's Fiscal ....]:-.,!::-....... ...-:::-::::;•..;-,..., .:2-:• -- addresstheTrustee and Paying Agent c9Pusfy e•simultaneously :bbtli:;Sendl:.•,(b) allpayments d until'eAetV?d.by:'• ctlY:by.-FjOa-084-:-•:•'-'agent of dellVerafi.4...••: .,.. - . lSeOtifitr.bl7bk:•Ir!a.''!71 88us61.4i-.4•Oily-•-!i.:?.::;:••••: „:,:1:;•------. F for any any aC.. ...O/.•-ifeht‘iSillutidrsef;°O:%••l1116g71..:.1'.:::;•••••';::;::.;.:J.::-:.:.F1:;;:,.:,1,'.......:*,:.;:,:•ii:•.....::... to iF..inencia. . .,.........Thiq:...pol9:Y, ,ideemed receiVe--... ..: as.t.-..0e':•Mede:•..dire....., i Agent i .:'.the.-::.,:9 • The Insurer' Fiscal ..,.... '::•':•••••4-:'"•-•-•:•::;•••"--':Stiair•ii.O.tiLte. •••• .thi$:!.;P:ClI.WiT..4 ''•- •••••••• •..P. - -: • - Owner ,-.:86ddr#y,:••• -••••••f 1..1,:'•:.1iatite•to:.Apy deposited sufho........ Pifi.:::: . • :";1.-,.:...;::::::::....i:'•••:::::::::....;.Fio.46Cialf,...s..ecu.ritY under behalf of Financial-I- .'in'nO'...•.eyell --:,--• ••, cause to be.;:.,.....,....: :..„.....,,,..,.....;::.;:-.i.:•,i:.:::::::..; :•'-::;';:']::..!=!..:::::„•:',:::i::::::::,:::::zZ::::'::,Aderi....t,(10;.-A.7 Insurers Fiscal Agent shall- •••••':".':;•iii(V..'16:1':4:lelpdal,:91- .., .:::::.0::.::::;..-1:':;...7:::;"•::::i"'-'•'•":i.:!•:::'":;.:;:.::;:•:•i.::::,' :,..,:..,-,:...., ....,:.,..,:. ..,:.:•-•:,.,:- .1„::...:;:,...•....::„:,,::::.:::...:.;:]::: '':::•••;:-, ::,--:- :'----"•.'•'::•:-'--:;.: ••••••••• ••-tneiins41:5? -, f Financial !p.,.-,,•• .-.c.-,,..,; 4,-..:,: .„• -, •,....:-.:•...:::„:.:.,,,,•:.:,..:- ..:, ,,, ., , ,..„.;?:..,....,i.,16.:..aagarti an.!..,i1,.!.:„..:,:...•,.. •,...:_....... ..„....,.:,„,„:„..:.-.._.... '- • :i.!•::::". and &'•;failure,o,?.. fl.- 4--.. ..,,.....::: Agent::'9raduye•••ftinder... Policy ..'.i''.1::''i:.:':'.::1' '''-'''':',' '''-1:i''''''''' '•:: 2 ,,,%:':•......:..._ , ..'- :---.6.grPes.:no•••••••'--'' '...'Wetoff' PP:,:,":1.'„i:',.:,..:1:::',' ••••:::::'::::•••' : thW'• fici•;•:-."'"f•,':,..•.:::'„'!'::::::,,.:.,..:::.:;:,...., 'applicable law, Financial Securityacquired::by .6tibifiterclaim,- 1..,,,,iv..::: :::::.:;,;,:•..„,:,.„;,!••••. t ..i•fibfits •.,,(14 *ii,..'.-....: •' payments .. :."...':•::::..„1:',1:::i'..":".::::r•:, ,• ai-nliitiid:'6PPPLC.Owner y ..faidr*:M")ether t - vilable:40 ' :- . ,.:::i]:•-:,-.., ',...:".P.T•.l.:.':::::''''''•••x::.-:',•• ' :.:...=ri-':,.-':-:•?'.:!i."1:..-i:!•:ii:.::'= i6.1tiii.r6.80.:4Pr ?„.benefit 'ea•Q..h.'• •Tn • the of defenses:•:: ,014y-Pa •-•:::::::-... 0r6st i::,':::':':?......,......:::.: ..,.:.::.::-,-,;i:i.,.....--;:•.: To the•:.•„'' '. li---;4'ar`:-..th:oi,:benP ,,,,,::: no withodt'llthitation,,.....:...., . • -1i-tights and(whether accordancegiViith Ih,.-e .:,:.....;,,..,„.:,.-. „:...:::::;:::•;F:.::i1::;::•.;:--- -....-..i4i:i>.•,.......... hereby waives only (including thes'f-lOkti*K-144t..:sYft....,, Policy „,.;:. i:::::,-::::-:` _-•';:;.„;.:A•:•:-='-'1.`,`.,=,:•.-- fhiivvisaji4n0•,:-4-'•'- ..sar. ••therwis0;:t9, : 6NatiOris!:::tinder::.th.....,l7:...:..:,.;:.:.:. ....,,.,..,.:..;,.::'.WP.:r.: :::!- ••:•..'„;!:,..!'"••:•;•:,''...;:. .%;•.;::....;•.,`„,•-:..,, .-....,..:::i;...:! .. s,....,,,,..:-,,,, ., . r''",. ••••:::.!.5.",-.--T•',;''''''.. '•••'-'::•:9•-•7•bee atiotti',..a:SsignMent 9 ili' ..,-.• ...•i..:!:n,i;i:;:;;'.:',]::...::1,l'ac.. ....:'::--.::f, , -...:::::E.::•:-.r, :..........i. :,:.." payment•••Of-itF.o..,........,.,:,: .::.. ,, ,......:•:,.::::.•!:,,,,.....„!.iiii,,,,":-:::::,=:;•:'.,•;'; .....-:: ' '- -.'"•;: .„n0i:1;fie modified..••:"..".:'•:!:!-:ii•.,- .::,...„.,..,..i;„:',...:•;....-,.........,.. . --..: :• -,..i:.a.:::::::::,:,.::',..":::•.:A] :!..1gfati:saccidtY to avoid,..„::..::::-...:::!••...,..•:t:i;'.i•;;::-.•.:i'••• •••••'::.F.::••••::::::.:•:!:.••••::.::'.1::••::.:.--.:i'.;;!E•••-'''':?•!.:: ::!•' -. I'SedtliltY,- d shallan ,: ,::.iii..,arnetiOient •_ „„:- • ••-:::•...:,:i:::::-..gi.;-,..:c:,•••::-:::-Finano .: f this Policy ••••::::::t.'"':.-:.:""•:••.:..:: of Financial . anymodification -• paid in '',..: •!•':-?:::].................... •-••- . provisions ,....„.....:„.•,::::,... .,.:::::.:;:.,,.,,::.,,:::g .. . ::.:, li-ifie,46dertaP9 :::•••••iiificlt.idiR4-., . . .:::::::(4,:any.2-premium being-...-.....:::::. :', ,,. :.•,.:,:i:;:, ,,r,.:.,....- -.:„.:... ::::::::::::::::::::......:.;;:-.. -::•;:•:ii.:-:- -'.' sets forth in!Y...,::1,..,„,..•,,,,:::v••by•AnStFUrnen ,...-.::::,:••••••• inent410.0tOK::i...y,.• i,;•.,6r...iarovisipR... ..:-..„ ,;:,::-s:::,:,•,;,:',:;,:-,:lz-8-;-;: •-•:::,:,:•-.:::.-.::-::::-K:::,' *ik--::'..-2-::':-.•••'!-:i.:::.;-.1:'......, 11.;:::!:i!'.?:' Tb.i&-PoliPy.••.7-..,-, a ,,,,. Apbther', OtOq9:1e!! ':f. -d.-bsi....an:onclorAP.--.,i,diudind''OOmel1..!..;•,,,,,:ied.::-bc yeveke.0 . -:•..;::.; 1 ! . ...,..::,::::;,.',.3,•,1-:-.-!-,i,,,,,,,::,::::,•:,.. ,s,,,,":::ni,•r;:**•'1166ted!'ti.,::;:i , •:' •:-•:.,expresslymodiie . whatsoever, -::-.,:••- ..nst::.:bo':•eance ....: iiiity FuNa-,,: ::,:::•„.,-,.:.•••::::n:1:::•:„ •,:•.:,-,,:„-:— .,,, altered .,,..,-,..:.::::..i..- --,:it-xtent ., '''' •:-. ii.'"reasorl•N,. : Policy may„..--, - • : lo,-..ine.••• 'i •qoPgrl,:::- ••••••••::••••-•:,&(b)••••:thip. .,,--. liqsuRANGqi: ::,:.....:::,, ,. , ,::::,:::,...•.!.:.::....,,-.•;•,_ :-.... ...:.,;,:.- • -,..:,•,.....,,!i:t,,:-. -'theret04', .Except.•,•.,:::-_,i,6-.nonrefundable. •::::'''.iif iiiatootv.,;:an . /CASUALTY :::..........„•::, ,,,,,::::: •:;,:: ..,,,,•,„-:.„.,...,...,:,.. 1:'•::, : . :::::f:::::::-„,-::,:•: . !,:::::.: --,:'•- :•••:•m:::•.:•:;::::.!:::::::„•:•::::k.-:•i,•'"• ' eotiktnis,poticy.,.... ,. of h Bond4•PhPr", E'''PROPERTY...,...-i,:..t.A, w.."-.. ::-.-.Z.5•?•• * f‘'..',.-•.':'::;!--*::::....::::-..-...:,-.:FX.:1•:W.i-f•:.'..c --;--: •'..i:.:-....-:. .• ,.:';.:-•i•: f. THIS .,-..:.,::..„,...:,:•:. •TA!P- „------: ainijarit,::-i' ? .. --••••COVERED BY •,-.INSURAr4Y.P•:' ,..,;,-,--,•••:----f..-..,:•;: •,••,;.!•• ••:"f-::-•'•-'•••,Poli•o•Y••-to:PC. '..::::•:.,i::,-;=••:.;•;:', ........:,',...,:".',.... ••••:::,e-.1,"'....::::•;:::R.:::5,::::Imede•for'P--..-. .;:is NOT 114t,NEW Y9.91 ',..:•,. :...;-,,?•••.,:::,:::VO:',?'::•'-••••••••:•- this - * " .•-.• -' PECIFILJP.1:::),..:....,„,:;.: --.ke.ifiet,t-CuRIT. ASSURANCE-..!. .....J...?.!,:..::;-,..:••::•:.,..:::,,,..:,..:'-.!...:::•:.:;:3,:.,"--i::h.,';'i, :•,'•,.i'...::-:-.1::.-:..i.:::-::..,;:•::!:-.. .-!..'::-.--:.-••::::::::„.:::-::.•:•••-- :• .:';--:-;;: In witness whereof, -7. ..„7 ,1\j•-:-FINANCIAL '::::;:.....;•,!.. :.g:'•..':- ..-.:P.i:-....'•i'7'..:;•':',4'--:'!::::;.'":' ':.1:-.;;,':',:i:t..i:i•gl?--;;E:.1:::'-ii: -ASSURANCEike ......-:;•.::::.::::-'-;;::::::-.:::;H: 11:•-'-1--•::.:.:;:'-..:'..2.:.....:its--66frialf;.6S-fiilk?NqqF... 1,:::,:::::!;i7'::-::-.i.,;!.„:.:':•:',..-:•-iir.:E..-:.:,:!...!::':::::.;.:-.:4.::;:-...::!:i.1-,.- FINANCIAL, 660i ....._ executed on :,........:....r.,.. ......r.:..:'::i'i!:::.!•::'...::,.:.1;;.- 7..,,'''.,.:!.,U;;:;•...,....ii:i::::!'7:if:::: -....--...:.:.:*::'.,:. -.... SE TY . . . ...........,..... ., .:, ...: . • ..,... . . ..... .„... .... ..„ • • • --- • • - ... ... .... ............ . „.. , ,.....,..:::.:3:;::-:::,;...,..!::ii!i';.!?'''!''.....:':-..,--:: :E.':::i'-i.'':' '-' '''''...:.:-..;:.'..::!1':::;"'.':;:::',',.:1:.:.,...:•;,...',''''::,.;.:,;::::::::. ...ii::::::iii.gik.:,iii;.,:::::: .;.':.::::',."'":.:4:';':::,!:5!.i!..::::.'iBc:i.::::::-:::i::::gr:,:::.::!::,...'-,AuthorizedOfficer,i;i'i.i.!:: ...:::.!::: :::::- :::::::::'•)**:':::':'..... *:.:*:.:•••::.•••: :-.:::,-,,-• ?.•.,..: - . ::::::::::„.: .....:.:„;,-,. ,:..,,:,..---..:-...,.• .„:.,.:,..:, . .::;•:::•,:,,:,;.;::g(!::::.::.:.:K:::,.:••.••:::::.:-..:::::,• -,. s. ••••A subsidiary of Financial Secunty :,....... :..,-, .„,.......::::..H...::•••:-!i•::.•.:•.::....Assurance 1 .: , (i.i2)::1- 12 36 .-100. ;-,......: , . . ,... •;:.----:- -• •: ;-:•,':.::::,:!•:,..",•••,"•••••••:.'.::.1......."' ••,::::::: .••::::...ii.:-.:'..:::::::::::!,.--,•:::•:-,:•:-. ;:f. 9 ',....--:,-,:,:,--,-,-,?..Y...:-.:-::. • :•:•:.:::.... - • :::::::-.::ia.,:-..-.: , ,......:: , - ------- - ,,, •-•.: -•--- - - -- •..........,, ...•••.„.•,. ,... , . .. .. . . - ---•••• ••••••.'•••••',..• -.- '.-,, •---., -- - • .:,-:--• -....:. ... ..... ... •...„.. -- __ - .--, _.-- . . :::::.,- ...._ .: .. • :. -„:-:-.•.-, ,-,-:::. •••?••?: .-..• •-- - •------ , -- . . ,•-•-:„ :.-- . -..: -• - - - --.- : .- ----•-• .... -:.: -- . - - • • E UNITED STATES OF AMERICA STATE OF TEXAS CITY OF PEARLAND,TEXAS 144, CERTIFICATE OF OBLIGATION SERIES 1998 NUMBER DENOMINATION R-1 $50,000 REGISTERED REGISTERED INTEREST RATE: ISSUANCE DATE: MATURITY DATE: CUSIP: 2.60% July 30,1998 March 1,2000 704862PA3 C REGISTERED OWNER: CEDE&CO. L PRINCIPAL AMOUNT: FIFTY THOUSAND AND NO/100 DOLLARS THE CITY OF PEARLAND, TEXAS, a municipal corporation of the State of Texas (the "City"), (.. for value received,hereby promises to pay to the Registered 0,.•=`'dentified above or its registered assigns, on the maturity date specified above (or on earlier rede.•' yJ! • -rein provided), upon presentation and surrender of this Certificate at the principal co . �; �� , .- , , of Chase Bank of Texas, National Association,Houston,Texas, or its successor ,,4 d S;." gistrar"),the principal amount identified above (or so much thereof as shall not ‘.:Y'; 3 ed to have been paid upon prior redemption) payable in any coin or currency Y' = of America which on the date of payment of such 1"" principal is legal tender for the p - of qv': due to the United States of America, and to pay interest thereon at the rate shown above, ca `� r. on a basis of a 360-day year composed of twelve 30-day months, from the later of the Issuance Date i•entitled above or the most recent interest payment date to which interest has been paid or duly provided for. The date of this Certificate is July 1, 1998, but interest shall accrue on r" the principal amount hereof from the Issuance Date. Interest on this Certificate is payable on March 1, 1999, and each March 1 and September 1 thereafter until maturity or earlier redemption of this Certificate, by check sent by United States mail,first class,postage prepaid,by the Paying Agent/Registrar to the Registered 41141 Owner of record as of the close of business on the fifteenth day of the calendar month immediately preceding the applicable interest payment date, as shown on the registration books kept by the Paying Agent/Registrar. Any accrued interest payable at maturity or earlier redemption shall be paid upon presentation and surrender of this Certificate at the principal corporate trust office of the Paying Agent/Registrar. So long as the Texas Water Development Board (herein the "TWDB") is the holder of this Certificate, payment of the principal and interest on this Certificate shall be made to the TWDB by wire transfer at no cost to the TWDB. C E Page 1of7 E THIS CERTIFICATE IS ONE OF A DULY AUTHORIZED SERIES OF CERTIFICATES OF OBLIGATION (the "Certificates") in the aggregate principal amount of$17,100,000 issued pursuant to an ordinance adopted by the City Council of the City on June 29, 1998 (the "Ordinance") for the purpose of providing all or part of the funds to pay contractual obligations to be incurred (i)for the planning, (("" acquisition, construction and improvement of certain sanitary sewer projects in the City including but not limited to: a gravity sanitary sewer interceptor along Harkey Road,Manvel Road, Fite Road and Ravenwood Drive; gravity sewer lines and a lift station to provide wastewater treatment along F.M.518; gravity sanitary sewer lines along Cullen; and general repair, renovation and rehabilitation of the City's sanitary sewer system to correct infiltration/inflow problems, (ii)for the planning, acquisition, construction, improvement, materials, supplies and equipment of a new wastewater treatment plant and sanitary sewer lines to be located in the northwest portion of the City, with such wastewater treatment plant to provide service to newly annexed areas west of S.H.288, (iii)for renovations, improvements, modifications and repairs to the Barry Rose wastewater treatment plant, (iv)for expansion, renovations, improvements, modification and repairs to the Longwood wastewater treatment plant,and(v)for professional services. THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit under the Ordinance unless this Certificate either(i) is registered by the Comptroller of Public Accounts of the State of Texas by due execution of the registration certificate endorsed hereon or(ii) is authenticated by the Paying Agent/Registrar by due execution of the authentication certificate endorsed hereon. THE CITY RESERVES THE RIGHT, at its option, to redeem, prior to their maturity, Certificates maturing on and after March 1, 2009, in whole or in part, and if in part in inverse order of maturity on September 1,2008,or any date thereafter, at par plus accrued inter•. • the date fixed for redemption. CERTIFICATES MAY BE REDEEMED IN P,,{ '". ",{; tegral multiples of $5,000. If a f'+ Certificate subject to redemption is in a denominatio ; . ,t'�: ,•00, a portion of such Certificate may be redeemed, but only in integral multiples of,: ;,:` ` 1 ng portions of Certificates for redemption, each Certificate shall be treated as represe.,;, ';"� � `It','•f Certificates of$5,000 denomination which is obtained by dividing the principal a s !t,, ficate by$5,000. Upon surrender of any Certificate for redemption in part,the Paying Ag -;.<:tr. in accordance with the provisions of the Ordinance, shall authenticate and deliver in exchange th- ti$; `'Certificate or Certificates of like maturity and interest rate in an aggregate principal amount equal to the unredeemed portion of the Certificate so surrendered. [7: NOTICE OF ANY SUCH REDEMPTION, identifying the Certificates or portions thereof to be redeemed, shall be sent by United States mail, first class, postage prepaid, to the Registered Owners thereof at their addresses as shown on the books of registration kept by the Paying Agent/Registrar, not less than thirty(30) days before the date fixed for such redemption. By the date fixed for redemption, due provision l_ shall be made with the Paying Agent/Registrar for the payment of the redemption price of the Certificates called for redemption. If such notice of redemption is given,and if due provision for such payment is made, all as provided above, the Certificates which are to be so redeemed thereby automatically shall be redeemed prior to their scheduled maturities, they shall not bear interest after the date fixed for redemption, and they shall not be regarded as being outstanding except for the purpose of being paid with the funds so provided for such payment. THIS CERTIFICATE IS TRANSFERABLE only upon presentation and surrender at the principal corporate trust office of the Paying Agent/Registrar, accompanied by an assignment duly executed by the Registered Owner or its authorized representative,subject to the terms and conditions of the Ordinance. Page 2 of 7 1I; i THIS CERTIFICATE IS EXCHANGEABLE at the principal corporate trust office of the Paying Agent/Registrar for a Certificate or Certificates of the same maturity and interest rate and in the principal amount of$5,000 or any integral multiple thereof, subject to the terms and conditions of the Ordinance. "'" THE PAYING AGENT/REGISTRAR is not required to accept for transfer or exchange any Certificate called for redemption, in whole or in part, during the forty-five(45)day period immediately prior to the date fixed for redemption; provided, however, that such limitation shall not apply to the transfer or exchange by the Registered Owner of an unredeemed portion of a Certificate called for redemption in part. ETHE CITY OR PAYING AGENT/REGISTRAR may require the Registered Owner of any Certificate to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer or exchange of a Certificate. Any fee or charge of the Paying Agent/Registrar for a transfer or exchange shall be paid by the City. THE REGISTERED OWNER of this Certificate by acceptance hereof, acknowledges and agrees to be bound by all the terms and conditions of the Ordinance. IT IS HEREBY DECLARED AND REPRESENTED that this Certificate has been duly and validly issued and delivered; that all acts, conditions and things require proper to be performed, exist and to be done precedent to or in the issuance and delivery of this Ce e been performed,exist and have been done in accordance with law; that the Certificates do k.' �. onstitutional or statutory limitation; and that annual ad valorem taxes sufficient to provi,; ` ' t`,' • t of the interest on and principal of this Certificate,as such interest comes due and such t ",,.: . s,have been levied and ordered to be levied, l.{ within the limits prescribed by law, agai a' .' , .roperty in the City and have been irrevocably pledged for such payment.IT IS FURTHER DECLA' =� REPRESENTED that the revenues to be derived from the City's waterworks and sanitary sewer s -m, after the payment of all operation and maintenance expenses thereof (the "Net Revenues"), in an amount not to exceed $10,000, are pledged to the payment of the principal of and interest on the Certificates to the extent that ad valorem taxes may ever be insufficient or i7 unavailable for such purpose,provided that the pledge of Net Revenues is and shall be junior and subordinate in all respects to the pledge of Net Revenues to the payment of any obligation of the City,whether authorized heretofore or hereafter, which the City designates as having a pledge senior to the pledge of the Net Revenues to the payment of the Certificates. The City also reserves the right to issue, for any lawful purpose at any time, in one or more installments, bonds, certificates of obligation and other obligations of any kind, secured in whole or in part by a pledge of Net Revenues, that may be prior and superior in right to, on a parity with,or junior and subordinate to the pledge of Net Revenues securing the Certificates. ' REFERENCE IS HEREBY MADE TO THE ORDINANCE, a copy of which is filed with the Paying Agent/Registrar, for the full provisions thereof, to all of which the Registered Owners of the Certificates assent by acceptance of the Certificates. 0 p Page 3 of 7 0 p [I" IN WITNESS WHEREOF, the City has caused its corporate seal to be impressed or placed in facsimile hereon and this Certificate to be signed by the Mayor and countersigned by the City Secretary by their manual, lithographed or printed facsimile signatures. 1 CITY OF PEARLAND,TEXAS LL- Mayor r+s (SEAL) COUNTERSIGN, <4,Y; , , e::4?) • 1A ti -17 si �l e 4;:•r'1 iA MINI it�►A4°t��a\�.. III III UI U Page 4 of 7 L AUTHENTICATION CERTIFICATE [A This Certificate is one of the Certificates described in and delivered pursuant to the within- mentioned Ordinance; and, except for the Certificates initially delivered, this Certificate has been issued in exchange for or replacement of a Certificate, Certificates, or a portion of a Certificate or Certificates of an L ! 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. CHASE BANK OF TEXAS,NATIONAL W ASSOCIATION LI! By Authorized Signature ' 1 Date of Authentication: s1 y; : .. • 7t' r L E L ' Page 5 of 7 L E ASSIGNMENT For value received,the undersigned hereby sells, assigns and transfers unto (Please print or type name,address,and zip code of'I ransferee) (Please msert Social Security or'1"axpayer Identification Number of Transferee) the within certificate and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer such certificate on the books kept for registration thereof,with full power of substitution in the premises. DATED: Registered Owner Signature Guaranteed: NOTICE: The signature above must correspond rI' to the.,: e of the registered owner as shown on th h this certificate in every particular, ;f'alteration, enlargement or change •r. • NO 1"10E: Signature must be guaranteed b �� { firm of the New York Stock E. .43% 'pQ ` • commercial bank or trust company. 4.. • p Page 6 of 7 1.4 STATEMENT OF INSURANCE Financial Security Assurance Inc. ("Financial Security"),New York,New York, has delivered its municipal bond insurance policy with respect to the scheduled payments due of principal of and interest on this Certificate to Chase Bank of Texas, National Association, Houston, Texas, or its successor, as paying agent for the Certificates(the"Paying Agent"). Said Policy is on file and unavailable for inspection at the principal office of the Paying Agent and a copy thereof may be obtained from Financial Security or the Paying Agent. 11 41. I I • • t. '11 u 9 7 L. ::ODMA\PCDOCS\HOUSTON\574423\1 Page 7 of 7 r