HomeMy WebLinkAbout024163 ORD - 08/22/2000CERTIFICATE FOR ORDINANCE
'I'FIE STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO
CITY OF CORPUS CHRISTI
On this the 22nd day of August, 2000, the City Council of the City of Corpus Christi, Texas
convened in Regular Meeting, with the following members of said Council present, to-wit:
Samuel L. Neal, Jr.
Betty Jean Longoria,
Melody Cooper,
Arnold Gonzales, Ph.D.,
Rex Kinnison,
Henry Garrett,
John Longoria,
Javier D. Colmenero,
Mark Scott
David Garcia,
James Bray,
Jorge Cruz-Aedo,
Armando Chapa,
with the following absent: C0t31)('¥
among other business was transacted:
Mayor
Councilmembers
City Manager,
City Attorney,
Director of Finance,
City Secretary
, constituting a quorum, at which time the following
City Manager David Garcia presented for the consideration of the Council an ordinance
authorizing the establishment of the general airport revenue financing program. The ordinance was
read by the City Secretary. The motion to pass the ordinance was carried by the following vote.
AYES: All members of the City Council shown present above voted "Aye".
NAYS: None.
ABSENT WHEN VOTING: None.
The Mayor announced that the ordinance had been passed. The ordinance is as follows:
INDeXeD
Adopted 8/22/00
MASTER ORDINANCE
ESTABLISHING THE GENERAL AIRPORT REVENUE BOND
FINANCING PROGRAM WITH RESPECT TO THE ISSUANCE OF
OBLIGATIONS BY THE CITY OF CORPUS CHRISTI, TEXAS
PAYABLE FROM GENERAL AIRPORT REVENUES
0 2 ,t 1. 6 3
PREAMBLE
Section 1.
Section 2.
Section 3.
Section 4.
Section 5.
Section 6.
Section 7.
Section 8.
Section 9.
Section 10.
Section 11.
Section 12.
Section 13.
Section 14.
Section 15.
MASTER ORDINANCE
ESTABLISHING THE GENERAL AIRPORT REVENUE BOND
FINANCING PROGRAM WITH RESPECT TO THE ISSUANCE OF
OBLIGATIONS BY THE CITY OF CORPUS CHRISTI, TEXAS
PAYABLE FROM GENERAL AIRPORT REVENUES
TABLE OF CONTENTS
ESTABLISHMENT OF REVENUE FINANCING
PROGRAM AND ISSUANCE OF PARITY
OBLIGATIONS ............................................................................................... 2
SECURITY AND PLEDGE ........................................................................... 2
RATE COVENANT ...................................................................................... 2
GENERAL COVENANTS ............................................................................ 3
AIRPORT FUND ........................................................................................... 8
DEBT SERVICE FUND ................................................................................. 8
DEBT SERVICE RESERVE FUND .............................................................. 8
OPERATING RESERVE FUND; AVIATION CAPITAL
RESERVE FUND ....................................................................................... 10
SUBORDINATED DEBT FUND ............................................................... 11
CONSTRUCTION FUND AND REBATE FUND .................................. 12
FLOW OF FUNDS ........................................................................................ 12
ISSUANCE OF ADDITIONAL OBLIGATIONS .................................... 14
DEFEASANCE ............................................................................................. 17
AMENDMENT OF ORDINANCE ............................................................ 17
DEFICIENCIES; EXCESS NET REVENUES ............................................. 19
Section 16.
Section 17.
Section 18.
Section 19.
Section 20.
Section 21.
Section 22.
FUNDS SECURED ........................................................................................ 20
INVESTMENTS ............................................................................................ 20
PREAMBLE ................................................................................................... 20
RULES OF CONSTRUCTION ................................................................... 20
INTERPRETATIONS .................................................................................. 21
DELEGATION OF AUTHORITY .............................................................. 21
IMMEDIATE EFFECT ................................................................................. 21
EXHIBITA DEFINITIONS ............................................................................................ A-1
ORDINANCE NO.
MASTER ORDINANCE ESTABLISHING THE
GENERAL AIRPORT REVENUE BOND FINANCING PROGRAM
WITH RESPECT TO THE ISSUANCE OF OBLIGATIONS
BY THE CITY OF CORPUS CHRISTI, TEXAS
PAYABLE FROM GENERAL AIRPORT REVENUES
THE STATE OF TEXAS :
COLrNTY OF NUECES :
CITY OF CORPUS CHRISTI :
WHEREAS, the City of Corpus Christi, Texas (the "City" or the "Issuer"), is a "home-rule
municipality" operating under a home-rule charter adopted pursuant to Section 5 of Article XI of the
Texas Constitution, with a population, according to the latest federal decennial census, in excess of
50,000; and
WHEREAS, the City possesses the legal authority under Chapter 22, Texas Transportation
Code, to plan, establish, construct, improve, equip, maintain, operate, regulate, protect and police
an airport and air navigation facilities in or outside of the City; and
WHEREAS, the City currently owns and opera tes the "Corpus Christi International Airport"
(the "Airport"), which constitutes an "airport" as defined in Section 22.001, Texas Transportation
Code; and
WHEREAS, Subchapter C of Chapter 22, Texas Transportation Code, authorizes the City
to issue bonds for the purpose of paying, in whole or in part, the cost of planning, acquiring,
establishing, constructing, improving, or equipping an airport or air navigation facility or the site of
an air navigation facility or acquiring or eliminating airport hazards; and
WHEREAS, Chapter 1371, Texas Government Code, authorizes the City to issue obligations
to pay the project costs associated with the acquisition or construction of or an improvement,
addition, or extension to a public works, including a capital asset or facility incident and related to
the operation, maintenance, or administration of the public works; and
WHEREAS, "public works" is defined in Section 1371.001, Texas Government Code, to
include an "airport" as defined in Section 22.001, Texas Transportation Code; and
WHEREAS, in order to reduce costs, increase borrowing capacity, provide additional security
to the credit markets, and provide the City with greater financial flexibility to meet the financing
needs of the Airport, the City deems it necessary and desirable to establish a financing structure for
revenue supported indebtedness issued or incurred for the development of the Airport; and
WHEREAS, the terms used in this Ordinance and not otherwise defined shall have the
meaning given in Exhibit A to this Ordinance attached hereto and made a part hereof;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS THAT:
Section 1. ESTABLISHMENT OF REVENUE FINANCING PROGRAM AND
ISSUANCE OF PARITY OBLIGATIONS. There is hereby established the City of Corpus Christi,
Texas General Airport Revenue Bond Financing Program for the purpose of providing a financing
structure for revenue supported indebtedness issued or incurred for the development of the Airport.
This Ordinance is intended to establish a master program under which revenue supported
indebtedness attributable to the Airport and payable from Net Revenues can be incurred. It is hereby
authorized that revenue supported indebtedness may be issued, incurred or assumed pursuant to the
terms of a Supplement. Each Supplement shall provide for the authorization, issuance, sale, delivery,
form, characteristics, provisions of payment and redemption, security, and any other matters related
to Parity Obligations not inconsistent with the Constitution and laws of the State of Texas or the
provisions of this Ordinance.
Section 2. SECURITY AND PLEDGE. The Parity Obligations are and shall be secured
by and payable from a first lien on and pledge of the Net Revenues, in accordance with the terms of
this Ordinance and any Supplement; and the Net Revenues are further pledged to the establishment
and maintenance of the Debt Service Fund as provided in accordance with the terms of this
Ordinance and the Funds and Accounts as provided in accordance with the terms of any
Supplement. The Parity Obligations are and will be secured by and payable only from the Net
Revenues, and are and will not be secured by or payable from a mortgage or deed of trust on any
properties, whether real, personal, or mixed, constituting any portion of the Airport. The owners of
the Parity Obligations shall never have the right to demand payment out of funds raised or to be
raised by taxation, or from any source other than specified in this Ordinance or any Supplement.
Section 3. RATE COVENANT. The City covenants that it will at all times fix, charge,
impose and collect rentals, rates, fees and other charges for the use of the Airport and, to the extent
it legally may do so, revise the same as may be necessary or appropriate, in order that in each Fiscal
Year the Net Revenues will be at least sufficient to equal the greater of either:
(i)
all amounts required to be deposited in such Fiscal Year to the credit of (A) the Debt
Service Fund, (B) the Debt Service Reserve Fund, (C) the Operating Reserve Fund
and (D) the Subordinated Debt Fund, or
(ii)
an amount not less than 1.25 times the Annual Debt Service Requirements for the
Panty Obligations for such Fiscal Year.
If the Net Revenues in any Fiscal Year are less than the amounts specified above, the City, promptly
upon receipt of the annual audit for such Fiscal Year, shall request an Airport Consultant to make
its recommendations, if any, as to a revision of the City's rentals, rates, fees and other charges, its
Operating Expenses, or the method of operation of the Airport in order to satisfy as quickly as
practicable the foregoing rate covenant. Copies of such request and the recommendation of the
Airport Consultant, if any, shall be filed with the City Secretary. So long as the City substantially
complies in a timely fashion with the recommendation of the Airport Consultant, the City will not
be deemed to have defaulted in the performance of its duties under this Ordinance even if the
resulting Net Revenues are not sufficient to be in compliance with the rate covenant set forth above,
so long as the Annual Debt Service Requirements on the Parity Obligations are paid when due.
Section 4. GENERAL COVENANTS. While any Parity Obligation is Outstanding, the
City further covenants and agrees that in accordance with and to the extent required or permitted
by law:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance and any Supplement; it will promptly pay
or cause to be paid the principal amount of and interest on every Parity Obligation, on the dates and
in the places and manner prescribed in a Supplement and such Parity Obligations; and it will, at the
time and in the manner prescribed, deposit or cause to be deposited the amounts required to be
deposited into the Funds and Accounts as provided in accordance with this Ordinance and any
Supplement.
(b) City's Lega/Authority. It is a duly created and existing home rule municipality and is
duly authorized under the laws of the State of Texas to issue and incur Parity Obligations; that all
action on its part to issue or incur Parity Obligations shall have been duly and effectively taken, and
that the Parity Obligations in the hands of the owners thereof are and will be valid and enforceable
special obligations of the City in accordance with their terms.
(c) Title. It has or will obtain lawful title, whether such title is in fee or lesser interest, to the
lands, buildings, structures and facilities constituting the Airport, that it warrants that it will defend
the title to all the aforesaid lands, buildings, structures and facilities, and every part thereof, for the
benefit of the owners of the Parity Obligations, against the claims and demands of all Persons
whomsoever, that it is lawfully qualified to pledge the Net Revenues to the payment of the Parity
Obligations in the manner prescribed herein, and has lawfully exercised such rights.
(d) Liens. It will from time to time and before the same become delinquent pay and
discharge all taxes, assessments and governmental charges, if any, which shall be lawfully imposed
upon it, or the Airport; it will pay all lawful claims for rents, royalties, labor, materials and supplies
which if unpaid might by law become a lien or charge thereon, the lien of which would be prior to
or interfere with the liens granted in accordance with the terms of this Ordinance, so that the priority
of the liens granted in accordance with the terms of this Ordinance shall be fully preserved in the
manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's,
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materialman's or other lien or charge which might or could be prior to the liens granted in
accordance with the terms of this Ordinance, or do or suffer any matter or thing whereby the liens
granted in accordance with the terms of this Ordinance might or could be impaired; provided
however, that no such tax, assessment or charge, and that no such claims which might be used as the
basis of a mechanic's, laborer's, materialman's or other lien or charge, shall be required to be paid so
long as the validity of the same shall be contested in good faith by the City.
(e) Further Encumbrance. It will not additionally encumber the Net Revenues in any
manner, except as permitted in this Ordinance and any Supplement in connection with Parity
Obligations, unless said encumbrance is made junior and subordinate in all respects to the liens, pled-
ges, covenants and agreements of this Ordinance and any Supplement; but the right of the City to
issue or incur Subordinated Debt payable in whole or in part from a subordinate lien on the Net
Revenues is specifically recognized and retained.
(0 Sale, Lease, or Encumbrance of Airport. Except for the use of the Airport or services
pertaining thereto in the normal course of business, neither all nor a substantial part of the Airport
shall be sold, leased, mortgaged, pledged, encumbered, alienated, or otherwise disposed of until all
Parity Obligations have been paid in full, or unless provision has been made therefor, and the City
shall not dispose of its title to the Airport or to any useful part thereof, including, without limitation,
any property necessary to the operation and use of the Airport, other than (i) in connection with the
execution of leases, licenses, easements, or other agreements in connection with the operation of the
Airport by the City, or in connection with any Special Facilities thereat, (ii) in connection with any
pledges of and liens on revenues derived from the operation and use of the Airport or any part
thereof, or any Special Facilities pertaining thereto, for the payment of Parity Obligations,
Subordinated Debt, Special Facilities Debt, and any other obligations pertaining to the Airport and
(iii) except as otherwise provided in the next three paragraphs.
The City may sell, exchange, lease, or otherwise dispose of, or exclude from the Airport any
property constituting a part of the Airport which the Aviation Director certifies (i) to be no longer
useful in the construction or operation of the Airport, or (ii) to be no longer necessary for the
efficient operation of the Airport, or (iii) to have been replaced by other property of at least equal
value. The net proceeds of the sale or disposition of any Airport property (or the fair market value
of any property so excluded) pursuant to this paragraph shall be used for the purpose of replacing
properties at the Airport, shall be paid into the Airport Fund, or shall be applied to retire or pay
Annual Debt Service Requirements of Parity Obligations.
The preceding provisions to the contrary notwithstanding, the City will not enter into any
lease of, or sell or otherwise dispose of, any part of the Airport or enter into a management or other
similar operating agreement for the operation of any part of the Airport if, as a result of such lease,
sale or other disposition, the interest income on any of the Parity Obligations would become
includable in gross income of the recipients thereof for federal income tax purposes. Without
limiting the generality of the foregoing, the City (i) will not take any action that would cause any part
of the Airport financed with the proceeds of Tax-Exempt Debt to cease to be "owned by" the City
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(as the term "owned by" is used in section 142 (b) (1) (A) of the Code), (ii) will require, as a condition
to the leasing of any part of the Airport, or the entering into of any management or other similar
operating agreement for the operation of any part of the Airport, that the lessee or the other party
to such management or other similar operating agreement, as the case may be, make an irrevocable
election, in accordance with the provisions of section 142 (b) (1) (B) of the Code and the regulations
issued thereunder, not to claim depreciation or an investment credit with respect to the property
leased to it by the City, or in the case of a management or other similar operating agreement, the
property managed or operated by it, (iii) will not enter into any lease, management or other similar
operating agreement with respect to any portion of the Airport if such lease, management or other
operating agreement has a term of eighty percent ($0%) or more of the reasonably expected
economic life of the property subject to such lease, management or other similar operating agreement
within the meaning of section 142 (b) (1) (B) (ii) of the Code, and (iv) will not enter into any lease,
management or other similar operating agreement if the lessee or other party to a management or
other similar operating agreement has an option to purchase any portion of the Airport for a price
other than the fair market value of such property at the time such option is exercised. The foregoing
notwithstanding, the City shall not be obliged to comply with the aforesaid requirements of the Code
during the term of Tax-Exempt Debt if the failure to comply with such requirements would not
adversely affect the tax-exempt status of such Debt.
Nothing herein prevents any transfer of all or a substantial part of the Airport to another
body corporate and politic (including, but not necessarily limited to, a joint action agency or an
airport authority) which assumes the City's obligations under this Ordinance andin any Supplement,
in whole or in part, if (i) in the written opinion of an Airport Consultant, the ability to meet the rate
covenant under this Ordinance and in any Supplement are not materially and adversely affected and
(ii) in the written opinion of Bond Counsel, such transfer and assumption will not cause the interest
on any Outstanding Parity Obligations that are Tax-Exempt Debt to be includable in gross income
of the owners thereof for federal income tax purposes. In such event, following such transfer and
assumption, all references to the City, any City officials, City ordinances, City budgetary procedures
and any other officials, actions, powers or characteristics of the City shall be deemed references to
the transferee entity and comparable officials, actions, powers or characteristics of such entity. In
the event of any such transfer and assumption, nothing therein shall prevent the retention by the
City of any facility of the Airport if, in the written opinion of an Airport Consultant, such retention
will not materially and adversely affect nor unreasonably restrict the transferee entity's ability to
comply with the requirements of the rate covenant and the other covenants of this Ordinance and
any Supplement.
(g) Special Facilities. The City may finance Special Facilities from the proceeds of Special
Facilities Debt issued by or on behalf of the City without regard to any requirements of this
Ordinance with respect to the issuance of Parity Obligations, subject, however, to the following
conditions:
(i) Such Special Facilities Debt shall be payable solely from rentals derived by or on
behalf of the City under a lease entered into between the City (or an entity acting on behalf
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of the City) and the person, firm or corporation which will be utilizing the Special Facihties
to be financed; and
(ii) In addition to all rentals with respect to the Special Facilities to be financed, a fair
and reasonable rental for the land upon which said Special Facilities are to be constructed
shall be charged by the City, and said ground rent shall be deemed Gross Revenues not
available for the payment of such Special Facilities Debt.
(h) Books, Records and Accounts. It shall keep proper books, records and accounts relating
to the Airport separate and apart from all other records and accounts of the City, in which complete
and correct entries shall be made of all transactions relating to the Airport, and the City shall cause
said books and accounts to be audited annually as of the close of each Fiscal Year by an Accountant
(which may be part of the City's comprehensive annual financial report).
(i) Audits. After the close of each Fiscal Year while any Parity Obligation is Outstanding,
an audit will be made by an Accountant of the books and accounts relating to the Airport and the
Net Revenues (which may be includedin the City's comprehensive annual financialreport). As soon
as practicable after the dose of each such Fiscal Year, and when said audit has been completed and
made available to the City, a copy of such audit for the preceding Fiscal Year shall be mailed to the
Municipal Advisory Council of Texas, any Bond Insurer or Credit Provider, and to any owner of any
then Outstanding Parity Obligations who shall so request in writing promptly after it is readily
available to the general public. Such annual audit reports shall be open to the inspection of the
owners of the Parity Obligations and their agents and representatives at all reasonable times during
regular business hours of the City.
(j) Annual Budget. Not less than five Business Days prior to the beginning of each Fiscal
Year, the City will adopt an Annual Budget for the Airport (which may be included in the City's
general annual budget) for the ensuing Fiscal Year. Such budget is required to contain, amongother
items, the following: estimated Gross Revenues, Operating Expenses and Net Revenues for such
Fiscal Year, the estimated amounts to be deposited during such Fiscal Year in each of the Funds and
Accounts established in this Ordinance and any Supplement, and the estimated expenditures during
such Fiscal Year for the replacement of Capital Improvements. A copy of the Annual Budget shall
be filed with any Bond Insurer or Credit Provider promptly after it is readily available to the general
public.
(k) Insurance. (1) It shall cause to be insured such parts of the Airport as would usually be
insured by corporations operating like properties, with a responsible insurance company or
companies, against risks, accidents or casualties against which and to the extent insurance is usually
carried by corporations operating like properties, including, to the extent reasonably obtainable, fire
and extended coverage insurance, insurance against damage by hurricanes, floods, tornados and
windstorms and use and occupancy insurance. Public liability and property damage insurance shall
also be carried unless the City Attorney gives a written opinion to the effect that the Cityis not liable
for claims which would be protected by such insurance. Notwithstanding the foregoing, in the event
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the City determines that any policy of insurance required by this Ordinance is not reasonably
available, the City may elect to be self-insured in whole or in part against the risk or loss that would
otherwise be covered by such policy, in which case the City will establish a reserve for such risk or
loss in such amount as the City deems appropriate. At any time while any contractor engaged in
construction work shall be fully responsible therefor, the City shall not be required to carry insurance
on the work being constructed if the contractor is required to carry appropriate insurance. All such
policies shall be open to the inspection of the Holders and their representatives at all reasonable
times during regular business hours of the City. Upon the happening of any loss or damage covered
by insurance from one or more of said causes, the City shall make due proof of loss and shall do all
things necessary or desirable to cause the insuring companies to make payment in full directly to the
City. The proceeds ofinsurance coveringsuch property, together with any other funds necessary and
available for such purpose, shall be used forthwith by the City for repairing the property damaged or
replacing the property destroyed.
(2) The annual audit required by this Ordinance shall contain a section commenting on
whether the City has complied with the requirements of this subsection (k) with respect to the
maintenance of insurance, and listing the areas of insurance for which the City is self-insuring, all
policies carried, and whether all insurance premiums upon the insurance policies to which reference
is hereinbefore made have been paid.
(3) For purposes of this subsection (k), a series of Parity Obligations shall include any Credit
Agreement declared by the City to be a Parity Obligation.
(l) Governmenta/Agendes. It will comply with all of the terms and conditions of any and
all grants and assurances, franchises, permits and authorizations applicable to or necessary with
respect to the Airport, and which have been obtained from any governmental agency; and the City
has or will obtain and keep in full force and effect all franchises, permits, authorization and other
requirements applicable to or necessary with respect to the acquisition, construction, equipment,
operation and maintenance of the Airport.
(m) Rights of Inspection. The owner of $100,000 in Outstanding Principal Amount of Parity
Obligations shall have the right at all reasonable times during regular business hours of the City to
inspect all records, accounts and data of the City relating to the Airport, and upon request the City
shall furnish to such owner, at the cost of such owner, such financial statements, reports and other
information relating to the City and the Airport as such owner may from time to time reasonably
request.
(n) Lega/Holidays. In any case where the date of maturity of interest on or principal of the
Parity Obligations or the date fixed for redemption of any Parity Obligations or any other payment
obligation under a Parity Obligation not be a Business Day, then payment of interest or principal
need not be made on such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for redemption and no interest
shall accrue for the period from the date of maturity or redemption to the date of actual payment.
(o) Bondholders' Remedies. This Ordinance and any Supplement shall constitute a contract
between the City and the owners of the Parity Obligations from time to time outstanding and this
Ordinance and the Supplement authorizing the issuance of Parity Obligations shall be and remain
irrepealable until the Parity Obligations and any interest thereon shall be fully paid or discharged or
provision therefor shall have been made as provided in a Supplement. In the event of a default in
the payment of the principal of or interest on any Parity Obligation or a default in the performance
of any duty or covenant provided by law or in this Ordinance, the owner or owners of any Parity
Obligation may pursue all legal remedies afforded by the Constitution and laws of the State of Texas
to compel the City to remedy such default and to prevent further default or defaults. Without in any
way limiting the generality of the foregoing, it is expressly provided that any owner of any Parity
Obligation may at law or in equity, by suit, action, mandamus, or other proceedings filed in any court
of competent jurisdiction, enforce and compel performance of all duties required to be performed by
the City under this Ordinance and any Supplement, including the making of reasonably required
rates and charges for the use and services of the Airport, the deposit of the Gross Revenues into the
Funds and Accounts provided in this Ordinance and any Supplement, and the application of such
Gross Revenues in the manner required in this Ordinance and any Supplement.
Section 5. AIRPORT FUND. There has been estabhshed and maintained on the books of
the City, and accounted for separate and apart from all other funds of the City, a separate fund
designated as the Airport Fund. All Gross Revenues shall be credited to the Airport Fund
immediately upon receipt. All Operating Expenses shall be paid (to the extent permitted) from the
Gross Revenues credited to the Airport Fund as a first charge against same.
Section 6. DEBT SERVICE FUND. (a) Debt Service Fund Established. For the sole
purpose of paying the principal amount of, premium, if any, and interest on, and other payments
(other than Operating Expenses) incurred in connection with Parity Obligations, there is hereby
created and there shall be established and maintained on the books of the City, and accounted for
separate and apart from all other funds of the City, a separate fund designated as the Debt Service
Fund. Moneys in the Debt Service Fund shall be deposited and maintained in an official depository
bank of the City.
(b) Supplement May Contain Addit/ona/Terms and Condlt/ons. The City reserves the
right in any Supplement to (i) establish within the Debt Service Fund various Accounts to facilitate
the timely payment of Parity Obligations as the same become due and owing and (ii) provide other
terms and conditions with respect to payment obligations with respect to a Parity Obligation not
inconsistent with the provisions of Section 11 of this Ordinance.
Section 7. DEBT SERVICE RESERVE FUND. (a) Debt Service Reserve Fund
Established. There is hereby created and there shall be established and maintained on the books of
the City, and accounted for separate and apart from all other funds of the City, a separate fund
designated as the Debt Service Reserve Fund. Except as provided below, the Debt Service Reserve
Fund shall be maintained for the benefit of the owners of Parity Obligations. There shall be
deposited into the Debt Service Reserve Fund any Reserve Fund Obligations so designated by the
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City. Reserve Fund Obligations in the Debt Service Reserve Fund shall be deposited and maintained
in an official depository bank of the City. Reserve Fund Obligations in the Debt Service Reserve
Fund shall be used for the purpose of retiring the last of the Parity Obligations to which the City
designates Reserve Fund Obligations, in accordance with the terms of a Supplement, as they become
due, or for paying principal of and interest on the Parity Obligations to which the City designates
Reserve Fund Obligations, in accordance with the terms of a Supplement, when and to the extent
the amounts in the Debt Service Fund are insufficient for such purpose. The Debt Service Reserve
Fund shall be maintained in an amount equal to the Required Reserve Amount. The Designated
Financial Officer, acting on behalf of the City may, at the option thereof, withdraw and transfer to
the Airport Fund all surplus in the Debt Service Reserve Fund over the Required Reserve Amount.
The City, in accordance with the terms of a Supplement, may establish that the Debt Service Reserve
Fund shall not secure the Parity Obligations to be issued or incurred under such Supplement.
(b) Use of Credit Facility. The City may satisfy its covenant to maintain the Debt Service
Reserve Fund in an amount equal to the Required Reserve Amount with a Credit Facility that will
provide funds, together with other Reserve Fund Obligations, if any, credited to the Debt Service
Reserve Fund, at least equal to the Required Reserve Amount. The City may replace or substitute
a Credit Facility for all or a portion of the cash or Eligible Investments on deposit in the Debt Service
Reserve Fund or in substitution for or replacement of any existing Credit Facility. Upon such
replacement or substitution, cash or Eligible Investments on deposit in the Debt Service Reserve
Fund which, taken together with the face amount of any existing Credit Facilities, are in excess of
the Required Reserve Amount may be withdrawn by the City, at the option of the Designated
Financial Officer, and transferred to the Airport Fund; provided that at the option of the Designated
Financial Officer, acting on behalf of the City, the face amount of any Credit Facility may be reduced
in lieu of such transfer.
(c) Withdrawals from Debt Sewlce Reserve Fund. If the City is required to make a
withdrawal from the Debt Service Reserve Fund for any of the purposes described in this Section, the
Designated Financial Officer, acting on behalf of the City, shall promptly notify the issuer of such
Credit Facility of the necessity for a withdrawal from the Debt Service Reserve Fund for any such
purposes, and shall make such withdrawal FIRST from available moneys or Eligible Investments then
on deposit in the Debt Service Reserve Fund, and NEXT from a drawing under any Credit Facility
to the extent of such deficiency. Should there be more than one provider of Credit Facilities that are
on deposit in the Debt Service Reserve Fund, the order of priority with respect to the drawings on
such Credit Facilities shall be determined by the City and the providers of the Credit Facilities prior
to any such drawings being made thereunder.
(d) Deficiencies. In the event of a deficiency in the Debt Service Reserve Fund, such that
the De bt Service Reserve Fund contains less than the Required Reserve Amount, then the City shall,
after making required deposits to the Debt Service Fund in accordance with the terms of this
Ordinance and any Supplement, shall satisfy the Required Reserve Amount by depositing Reserve
Fund Obligations into the Debt Service Reserve Fund in no more than twelve (12) monthly
installments of not less than one-twelfth (1/12th) of the amount of such deficiency on or before the
15th day of each month following such deficiency to restore the Debt Service Reserve Fund to the
Required Reserve Amount. In the event the Required Reserve Amount is funded through the use
of a Credit Facility, and the Credit Facility specifies a termination or expiration date that is prior to
the final maturity of the Parity Obligations so secured thereby, the City shall provide that such Credit
Facility shall be renewed at least twelve (12) months prior to the specified termination or expiration
date or in the alternative provide that any deficiency that will result upon the termination or
expiration of such Credit Facility will be accounted for either by (i) obtaining a substitute Credit
Facility no sooner than twenty-four (24') months or no later than twelve (12) months prior to the
specified termination or expiration date of the then existing Credit Facility or (ii) by depositing cash
into the Debt Service Reserve Fund in no more than twenty-four (24') monthly installments of not
less than one-twenty fourth (1/24th) of the amount of such deficiency on or before the 15th day of
each month, commencing on the 15th day of the month which is twelve (12) months prior to such
termination or expiration date, to restore the Debt Service Reserve Fund to the Required Reserve
Amount.
(e) Redemption or Defeasance. In the event of the redemption or defeasance of any Parity
Obligation, any Reserve Fund Obligations on deposit in the Debt Service Reserve Fund in excess of
the Required Reserve Amount may be withdrawn and transferred, at the option of the City, to the
Airport Fund, as a result of (i) the redemption of the Parity Obligations, or (ii) funds for the payment
of the Parity Obligations having been deposited irrevocably with the paying agent or place of
payment therefor in the manner describedin a Supplement, the result of such deposit being that such
Parity Obligations no longer are deemed to be Outstanding under the terms of this Ordinance and
such Supplement.
(f) Credit Facility Draws. In the event there is a draw upon the Credit Facility, the City
shall reimburse the issuer of such Credit Facility for such draw, in accordance with the terms of any
agreement pursuant to which the Credit Facility is issued, from Net Revenues, however, such
reimbursement from Net Revenues shall be subject to the provisions of Section 7 (d) hereof and shall
be subordinate and junior in tight of payment to the payment of principal of and premium, if any, and
interest on Parity Obligations.
Section 8. OPERATING RESERVE FUND; AVIATION CAPITAL RESERVE FUND.
(a) Operating Reserve Fund. For the purposes hereinafter described, there is hereby created and
there shall be established and maintained on the books of the City, and accounted for separate and
apart from the other funds of the City, a separate fund designated as the Operating Reserve Fund.
There shall be credited to the Operating Reserve Fund cash and Eligible Investments so designated
by the Designated Financial Officer, acting on behalf of the City, and such cash and Eligible
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Investments shall be deposited and maintained in an official depository bank of the City. Moneys
credited to the Operating Reserve Fund shall be applied (i) to the payment of Operating Expenses
to the extent that sufficient funds are not otherwise available in the Airport Fund to pay all
Operating Expenses when due or (ii) to the payment of the principal of or the interest then due on
Parity Obligations or the redemption price then due with respect to any Parity Obligations subject
to a mandatory sinking fund redemption, as provided in any Supplement, but only to the extent that
amounts credited to the Debt Service Fund and the Debt Service Reserve Fund, in the order named,
shall not be sufficient to pay such principal, interest or redemption price.
(b) Aviation Capital Reserve Fund. There has been established and maintained on the
books of the City, and accounted for separate and apart from all other funds of the City, a separate
fund designated as the Capital Reserve Fund. The Capital Reserve Fund shall be maintained in an
amount at least equal to the Minimum Capital Reserve, andis available solely for major construction
projects at the Airport or for the replacement of large equipment used at the Airport. The Capital
Reserve Fund shall be funded as provided in Section 11 (e) hereof, to the extent Net Revenues are
available after making the transfers describedin subsections (a), (b), (c) and (d) of Section 1 ! hereof.
The City hereby represents that the Capital Reserve Fund is funded in an amount at least equal to
the Minimum Capital Reserve.
Section 9. SUBORDINATED DEBT FUND. (a) Subordinated Debt Fund Established.
For the sole purpose of paying the principal amount of, premium, if any, and interest on, and other
payments (other than Operating Expenses) incurred in connection with Subordinated Debt, there
is hereby created and there shall be established and maintained on the books of the City, and
accounted for separate and apart from all other funds of the City, a separate fund designated as the
Subordinated Debt Fund. Moneys in the Subordinated Debt Fund shall be deposited and maintained
in an official depository bank of the City.
(b) Airport GO Debt Account Established. Within the Subordinated Debt Fund there is
hereby created and there shall be established and maintained on the books of the City, and
accounted for separate and apart from the other funds of the City, an account designated as the
Airport GO Debt Account. On the first Business Day of each Fiscal Year, for so long as the Airport
GO Debt is outstanding, the Designated Financial Officer shall certify in writing to the City Council
the aggregate debt service on the Airport GO Debt payable in such Fiscal Year. Upon receipt of such
certification, the City shall cause Net Revenues to be credited to the Airport GO Debt Account, on
the dates andin the manner describedin Section 1 ! hereof, to the extent Net Revenues are available
after making the transfers described in subsections (a), (b) and (c) of Section ! ! hereof. Moneys in
the Airport GO Debt Account shall be used for the payment of scheduled debt service on the Airport
GO Debt as the same shall come due. Once the Airport GO Debt is no longer outstanding in
accordance with its terms, the Designated Financial Officer shall promptly deliver a written
certificate to the City Council stating that transfers of Net Revenues to the credit of the Airport GO
Debt Account are no longer required to contribute toward the payment of debt service on Airport
GO Debt. If moneys are on deposit in the Airport GO Debt Account after such certificate is
delivered, such moneys shall be transferred to the credit of the Airport Fund. The City hereby
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declares that the transfer of Net Revenues in support of Airport GO Debt constitutes a Subordinated
Debt for purposes of this Ordinance.
(c) Addit/ona/Accounts. The City may create, establish and maintain on the books of the
City additional Accounts within the Subordinated Debt Fund from which moneys can be withdrawn
to pay the principal of and interest on Subordinated Debt which hereafter may be issued or incurred.
Section 10. CONSTRUCTION FUND AND REBATE FUND. The City, in a
Supplement, hereafter may create, establish and maintain on the books of the City a separate Fund
or Account for use by the City for payment of all lawful costs associated with the construction,
improvement and equipping of the Airport, and for making payments to the United States of
America pursuant to section 148 of the Code.
Section 11. FLOW OF FUNDS. Moneys in the Airport Fund not required for paying
Operating Expenses during each month shall be applied by the City in the order of priority with
respect to the Funds and Accounts that such applications are hereinafter set forth in this Section.
(a) Debt Service Fund - To the credit of the Debt Service Fund, in the following order of
priority, to-wit:
(i) such amounts, as more fully describedin the Supplement authorizing the issuance
or incurrence of Parity Obligations, as will be sufficient, together with other amounts, if any,
in the Debt Service Fund available for such purpose (including specifically moneys on deposit
in an Account in which capitalized interest is deposited and dedicated thereto), to pay the
interest scheduled to come due on Parity Obligations on the next succeeding interest
payment date;
(ii) such amounts, as more fully describedin the Supplement authorizing the issuance
or incurrence of Parity Obligations,as will be sufficient, together with other amounts, if any,
in the Debt Service Fund available for such purpose, to pay the principal scheduled to mature
on Parity Obligations on the next succeeding principal payment date; and
(iii) such amounts, as more fully described in the Supplement authorizing the
issuance or incurrence of Parity Obligations, to pay scheduled mandatory sinking redemption
amounts of such Parity Obligations which constitute "Term Bonds" to be redeemed in
accordance with the terms of such Supplement.
(b) Debt Service Reserve Fund. To the credit of the Debt Service Reserve Fund, in the
event the Debt Service Reserve Fund is not fully funded on the date of issuance or incurrence of
Parity Obligations, as more fully described in the Supplement authorizing such Parity Obligations,
such amounts, deposited in no more than sixty approximately equal monthly installments,
commencing during the month in which the Parity Obligations are delivered or the month thereafter
if delivery is made after the 15th day thereof, equal to not less than one-sixtieth (1/60th) of the
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Required Reserve Amount, until such time as such amounts together with other amounts, if any, in
the Debt Service Reserve Fund, equal the Required Reserve Amount. When and so long as the
Reserve Fund Obligations in the Debt Service Reserve Fund are not less than the Required Reserve
Amount, no deposits need be made to the credit of the Debt Service Reserve Fund. When and if the
Debt Service Reserve Fund at any time contains less than the Required Reserve Amount due to any
cause or condition other than the issuance of Parity Obligations then, subject and subordinate to
making the required deposits to the credit of the Debt Service Fund, commencing with the month
during which such deficiency occurs, such deficiency shall be made up from the next available Net
Revenues or from any other sources available for such purpose, in the manner provided in Section
7(d) of this Ordinance. Reimbursements to a provider of a Credit Facility made in accordance with
the terms of Section 7 (f) of this Ordinance shall constitute the making up of a deficiency to the
extent that such reimbursements result in the reinstatement, in whole or in part, as the case may be,
of the amount of the Credit Facility. If the Debt Service Reserve Fund contains less than the
Required Reserve Amount due to the issuance of Parity Obligations, monthly deposits shall be made
to the Debt Service Reserve Fund in the manner described in the first sentence of this subsection,
commencing during the month and in the amounts required by this Ordinance and the Supplement
pursuant to which such Parity Obligations are to be issued or incurred, unless Reserve Fund
Obligations are credited to the Debt Service Reserve Fund in an amount necessary to cause the sum
of money and the Value of Investment Securities and any other Credit Facilities in the Debt Service
Reserve Fund to equal the Required Reserve Amount.
(c) Operating Reserve Fund. If on the 15th day of any month, there is on deposit in the
Operating Reserve Fund an amount less than one-sixth (1/6th) of the estimated total Operating
Expenses for the then current Fiscal Year as set forth in the then current Annual Budget, the City
shall credit to the Operating Reserve Fund, out of moneys in the Airport Fund after paying Operating
Expenses and making the required payments for such month into the Debt Service Fund and the
Debt Service Reserve Fund as described above, there shall be deposited to the credit of the Operating
Reserve Fund, in no more than twelve (12) monthly installments, an amount equal to not less than
one-twelfth (1/12th) of the difference between one-sixth (1/6th) of the estimated total Operating
Expenses for said Fiscal Year as set forth in the then current Annual Budget and the amount then
on deposit in the Operating Reserve Fund.
(d) Subordinated Debt Fund. To the credit of the Subordinated Debt Fund, for deposit in
any Account established therein, including specifically the Airport GO Debt Account, such amounts,
as more fully described in any ordinance hereafter adopted authorizing the issuance or incurrence
of Subordinated Debt, as will be sufficient, together with other amounts, if any, in the Subordinated
Debt Fund available for such purpose, to make scheduled payments with respect to Subordinated
Debt on the next succeeding date payment is due. The foregoing notwithstanding, with respect to
deposits to the credit of the Airport GO Debt Account, such deposits shall commence during the
month in which the first issue of Parity Obligations issued under this Ordinance and the Supplement
authorizing such Parity Obligations is delivered or the month thereafter if delivery of such Parity
Obligations is made after the 15th day thereof.
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(e) Surplus. Should there be any surplus moneys available in the Airport Fund from Gross
Revenues deposited to the credit of the Airport Fund during the then current Fiscal Year, following
the payment in such Fiscal Year of Operating Expenses and such payments and transfers to the Debt
Service Fund, the Debt Service Reserve Fund, the Operating Reserve Fund and the Subordinated
Debt Fund as described above, such surplus may be used by the City, at the discretion of the Aviation
Director (consistent with the terms of the use agreements with the airlines operating at the Airport),
for any lawful purpose relating to the ownership and operation of the Airport including, without
limitation, funding any deficiencies in the Capital Reserve Fund and the payment of future debt
service on Parity Obligations and Subordinated Debt.
Section 12. ISSUANCE OF ADDITIONAL OBLIGATIONS. (a) Par/t3, Obligations.
The City reserves the right to issue or incur, for any lawful purpose, pursuant to this Ordinance and
a Supplement (other than a Supplement adopted concurrently with this Ordinance), additional
Parity Obligations; provided, however, that no such Parity Obligations shall be delivered unless:
(i)
No Default. The Designated Financial Officer and the Aviation Director certify that,
upon incurring, issuing or otherwise becoming liable in respect to such Parity
Obligations, the City will not be in default under any term or provision of this
Ordinance, any Parity Obligations then Outstanding or any Supplement pursuant to
which any of such Parity Obligations were issued or incurred.
(ii)
Proper Fund Balances. The Designated Financial Officer certifies that, upon the
issuance of such Parity Obligations, the Debt Service Fund will have the required
amounts on deposit therein and that the Debt Service Reserve Fund will contain the
applicable Required Reserve Amount or so much thereof as is required to be funded
at such time. Upon the issuance of such Parity Obligations, any additional amounts
necessary to cause the Debt Service Reserve Fund to be funded in the Required
Reserve Amount may be funded over a 60-month period in the manner provided for
in Section 11 (b) of this Ordinance.
(iii)
Proiected Coverage. An Airport Consultant provides a written report setting forth
projections which indicate that the estimated Net Revenues of the Airport for each
of three consecutive Fiscal Years beginning in the earlier of
(A)
the first Fiscal Year following the estimated date of completion and initial use
of all revenue producing facilities to be financed with Parity Obligations,
based upon a certified written estimated completion date by the consulting
engineer for such facility or facilities, or
(B)
the first Fiscal Year in which the City will have scheduled payments of
interest on or principal of the Parity Obligations to be issued for the payment
of which provision has not been made as indicated in the report of such
Airport Consultant from proceeds of such Parity Obligations, investment
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income thereon or from other appropriated sources (other than Net
Revenues).
are equal to at least 1.25 times of the Annual Debt Service Requirements on all Parity
Obligations scheduled to occur during each such respective Fiscal Year after taking
into consideration the additional Annual Debt Service Requirements for the Parity
Obligations then being issued or incurred.
(iv)
Alternative Coverage (or Parity Obligations. In lieu of the certification in clause (iii)
above, the Designated Financial Officer may provide a certificate showing that, for
either the City's most recent complete Fiscal Year or for any consecutive 12 out of the
most recent 18 months, the Net Revenues of the Airport were equal to at least 1.25
times of the maximum Annual Debt Service Requirements on all Parity Obligations
scheduled to occur in the then current or any future Fiscal Year after taking into
consideration the Parity Obligations proposed to be issued or incurred.
(b) Refunding Obligations. If Parity Obligations are being issued for the purpose of
refunding less than all Outstanding Parity Obligations, neither of the certifications described in
subsections (a) (iii) or (a) (iv) of this Section are required so long as the Designated Financial Officer
provides a certificate showing that the aggregate debt service requirements of such refunding Parity
Obligations will not exceed the aggregate debt service requirements of the Parity Obligations being
refunded.
(c) Completion Obligations. The City reserves the right to issue or incur Parity
Obligations to pay the cost of completing any Capital Improvements for which Parity Obligations
have previously been issued.
Prior to the delivery of Completion Obligations, the City must provide, in addition to all of
the applicable certificates required by subsection (a) of this Section (other than the certificates not
required under the circumstances described below), the following documents:
(i)
a certificate of the consulting engineer engaged by the City to design the
Capital Improvement for which the Completion Obligations are to be
delivered stating that such Capital Improvement has not materially changed
in scope since the most recent series of Parity Obligations was issued or
incurred for such purpose (except as permittedin the Supplement authorizing
such Parity Obligations) and setting forth the aggregate cost of the Capital
Improvement which, in the opinion of such consulting engineer, has been or
will be incurred; and
(ii)
a certificate of the Aviation Director (A) stating that all amounts allocated
to pay costs of the Capital Improvement from the proceeds of the most recent
series of Parity Obligations issued or incurred in connection with the Capital
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Improvement for which the Completion Obhgations are being issued or
incurred were used or are still available to be used to.pay costs of such Capital
Improvement; (B) containing a calculation of the amount by which the
aggregate cost of that Capital Improvement (furnished in the consulting
engineer's certificate described above) exceeds the sum of the costs of the
Capital Improvement paid to such date plus the moneys available at such date
within any construction fund or other like account applicable to the Capita[
Improvement plus any other moneys which the Aviation Director, in the
discretion thereof, has determined are available to pay such costs in any other
fund; and (C) certifying that, in the opinion of the Aviation Director, it is
necessary to issue or incur the Completion Obligations to provide funds for
the completion of the Capital Improvement.
Completion Obligations may be issued or incurred for any Airport facility or project which
shall be declared in the Supplement to be a Capital Improvement. Any such Supplement may
contain such further provisions as the City shall deem appropriate with regard to the use, completion,
modification or abandonment of such Capital Improvement. Anything herein to the contrary, the
provisions of subsections (a) (iii) and (a) (iv) of this Section do not apply to Completion Obligations
if the aggregate principal amount of the Completion Obligations then to be issued does not exceed
15% of the aggregate principal amount of the Parity Obligations initially issued to pay the cost of
such Capital Improvement.
(d) Subordinated Debt and Special Facilities Debt. Subordinated Debt and Special
Facilities Debt may be issued or incurred by the City without limitation. Subordinated Debt shall be
payable from moneys deposited to the credit of the Subordinated Debt Fund. Special Facilities Debt
is permitted to be issued, as described in Section 4(g) hereof, and shall not be secured by a lien on
and pledge of Net Revenues.
(e) Credit Agreements. Payments to be made under a Credit Agreement may be treated
as Parity Obligations if the governing body of the City makes a findingin the Supplement authorizing
the treatment of the obligations of the City incurred under a Credit Agreement as a Parity Obligation
that, based upon the findings contained in a certificate executed and delivered by a Designated
Financial Officer, the City will have sufficient funds to meet the financial obligations of the Airport,
including sufficient Net Revenues to satisfy the Annual Debt Service Requirements of the Airport
and the financial obligations of the City relating to the Airport after giving effect to the treatment
of the Credit Agreement as a Parity Obligation.
(t3 Determination of Net Revenues. In making a determination of Net Revenues for any
of the purposes described in this Section, the Airport Consultant or the Designated Financial Officer
may take into consideration a change in the rates and charges for services and facilities afforded by
the Airport that became effective at least 30 days prior to the last day of the period for which Net
Revenues are determined and, for purposes of satisfying the Net Revenues tests described above,
make a pro forma determination of the Net Revenues of the Airport for the period of time covered
16
by the certification or opinion based on such change in rates and charges being in effect for the entire
period covered by the certificate or opinion.
Section 13. DEFEASANCE. The provisions relating to the terms and conditions upon
which a defeasance of Parity Obligations shall be effected shall be contained in the Supplement
authorizing such Parity Obligations.
Section 14. AMENDMENT OF ORDINANCE. (a) Approval of Amendments. The
owners of a majority in Outstanding Principal Amount of the Parity Obligations shall have the right
from time to time to approve any amendment to this Ordinance which may be deemed necessary or
desirable by the City; provided, however, that nothing herein contained shall permit or be construed
to permit the amendment of the terms and conditions in this Ordinance or in the Parity Obligations
SO as to:
(i) Make any change in the maturity of any of the Outstanding Parity Obligations;
(ii) Reduce the rate of interest borne by any of the Outstanding Parity Obligations;
(iii) Reduce the amount of the principal payable on the Outstanding Parity Obligations;
(iv) Modify the terms of payment of principal of, premium, if any, or interest on the
Outstanding Parity Obligations or impose any conditions with respect to such
payment;
(v) Affect the rights of the owners of less than all of the Parity Obligations then
Outstanding;
(vi) Amend this subsection (a) of this Section; or
(vii) Change the minimum percentage of the principal amount of Parity Obligations
necessary for consent to any amendment;
unless such amendment or amendments be approved by the owners of all of the Parity Obligations
then Outstanding.
(b) Notice. If at any time the City shall desire to amend this Ordinance under this Section,
the City shall cause notice of the proposed amendment to be published in a financial newspaper or
journal published in The City of New York, New York, and a newspaper of general circulation in the
City, once dunng each calendar week for at least two successive calendar weeks. Such notice shall
briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file
at the City and at the principal office of each Paying Agent or Registrar, as the case may be, for the
Parity Obligations for inspection by all Holders of Parity Obligations. Such publication is not
required, however, if notice in writing is given to each owner of Parity Obligations.
(c) Adoption. Whenever at any time not less than 30 days, and within one year, from the
date of the first publication of said notice or other service of written notice the City shall receive an
instrument or instruments executed by the owners of at least a majority in Outstanding Principal
Amount of the Parity Obligations then Outstanding, which instrument or instruments shall refer to
the proposed amendment described in said notice and which specifically consent to and approve such
17
amendment in substantially the form of the copy thereof on file with each Paying Agent or Registrar,
as the case may be, for the Parity Obligations, the governing body of the City may pass the
amendatory ordinance in substantially the same form.
(d) Ordinance Deemed Amended. Upon the passage of any amendatory ordinance pursuant
to the provisions of this Section, this Ordinance shall be deemed to be amended in accordance with
such amendatory ordinance, and the respective rights, duties and obligations under this Ordinance
of the City and all the owners of then Outstanding Parity Obligations and all future Parity
Obligations shall thereafter be determined, exercised and enforced hereunder, subject in all respects
to such amendments.
(e) Consent Irrevocable. Any consent given by the owner of a Parity Obligation pursuant to
the provisions of this Section shall be irrevocable for a period of six months from the date of the first
publication of the notice provided for in this Section, and shall be conclusive and Nnding upon all
future owners of the same Parity Obligation during such period. Such consent may be revoked at any
time after six months from the date of the first publication of such notice by the owner who gave such
consent, or by a successor in title, by filing written notice thereof with the Paying Agent or Registrar,
as the case may be, for such Parity Obligation and the City, but such revocation shall not be effective
if the owners of at least a majority in Outstanding Principal Amount of the then Outstanding Parity
Obligations as determined in accordance with this Section have, prior to the attempted revocation,
consented to and approved the amendment.
(0 Amendments Without Consent. The foregoing provisions of this Section notwithstanding,
the City by action of its governing body may amend this Ordinance without the consent of any owner
of a Parity Obligation for any one or more of the following purposes:
(i) To addto the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies
to the owners of the Parity Obligations or to surrender, restrict or limit any right or power
herein reserved to or conferred upon the City;
(ii) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, as are necessary or desirable
and not contrary to or inconsistent with this Ordinance and which shall not adversely affect
the interests of the owners of the Parity Obligations then Outstanding;
(iii) To modify any of the provisions of this Ordinance in any other respect
whatsoever, provided that (A) such modification shall be, and be expressed to be, effective
only after all Parity Obligations outstanding at the date of the adoption of such modification
shall cease to be outstanding, and (B) such modification shall be specifically referred to in the
text of all Parity Obligations issued after the date of the adoption of such modification;
18
(iv) To make such amendments to this Ordinance as may be required, in the opinion
of Bond Counsel, to ensure compliance with sections 103 and 141 through 150 of the Code
and the regulations promulgated thereunder and applicable thereto;
(v) To make such changes, modifications or amendments as may be necessary or
desirable in order to allow the owners of the Parity Obligations to thereafter avail themselves
of a book-entry system for payments, transfers and other matters relating to the Parity
Obligations, which changes, modifications or amendments are not contrary to or inconsistent
with other provisions of this Ordinance and which shall not adversely affect the interests of
the owners of the Parity Obligations;
(vi) To make such changes, modifications or amendments as may be necessary or
desirable in order to obtain the approval of the Parity Obligations by the Office of the
Attorney General of the State of Texas, to the extent such approval is required by law, or to
obtain or maintain the granting of a rating on the Parity Obligations by a Credit Rating
Agency, or to obtain or maintain a Credit Agreement or a Credit Facility; and
(vii) To make such changes, modifications or amendments as may be necessary or
desirable, which shall not adversely affect the interests of the owners of the Parity
Obligations, in order, to the extent permitted by law, to facilitate the economic and practical
utilization of interest rate swap agreements, foreign currency exchange agreements, or similar
types of agreements with respect to the Parity Obligations.
Notice of any such amendment of the nature described in this subsection may be published by the
City in the manner described in subsection (b) of this Section; provided, however, that the
publication of such notice shall not constitute a condition precedent to the adoption of such
amendatory ordinance and the failure to publish such notice shall not adversely affect the
implementation of such amendment as adopted pursuant to such amendatory ordinance.
(g) Ownership. For the purpose ofthis Section, the ownership andother matters relating
to all Parity Obligations shall be determined as provided in each Supplement.
(h) Amendments o/~ Supplements. Each Supplement shall contain provisions governing
the ability of the City to amend such Supplement; provided, however, that no amendment may be
ma de to any Supplement for the purpose of granting to the owners of Outstanding Parity Obligations
under such Supplement a priority over the owners of any other Outstanding Parity Obligations.
Section 15. DEFICIENCIES; EXCESS NET REVENUES. (a) Deficiencies. If on any
occasion there shall not be sufficient Net Revenues to make the required deposits into the Funds and
Accounts establishedin accordance with this Ordinance and any Supplement, then such deficiency
shall be made up as soon as possible from the next available Net Revenues, or from any other source
available for such purpose.
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(b) Surplus. Subject to making the required deposits to the credit of the Funds and
Accounts established in accordance with this Ordinance and any Supplement, when and as required
by this Ordinance and any Supplement, the excess Net Revenues may be used by the City for any
lawful purpose, consistent with the provisions of Section 11 of this Ordinance and applicable
provisions of federal law.
Section 16. FUNDS SECURED. Moneys in all Funds and Accounts created in accordance
with this Ordinance and any Supplement shall be secured in the manner prescribed by law for
securing funds of the City.
Section 17. INVESTMENTS. Moneys in any Fund or Account established pursuant to this
Ordinance and any Supplement nmy, at the option of the City, be placed or invested in Eligible
Investments. The value of any such Fund or Account shall be established by adding any money
therein to the Value of Investment Securities. The value of each such Fund or Account shall be
established no less frequently than annually during the last month of each Fiscal Year. Earnings
derived from the investment of moneys on deposit in the various Funds and Accounts shall be
credited to the Fund or Account from which moneys used to acquire such investment shall have
come; provided, however, that transfers from the Debt Service Reserve Fund to the Airport Fund as
describedin Section 7 (b) shall be made at the discretion of the Designated Financial Officer. Eligible
Investments credited to the Debt Service Reserve Fund shall have stated maturities, or be redeemable
at the option of the holder thereof at a statedprice and time, not later than seven years after the date
of the investment therein or the date of last maturity of Parity Obligations, whichever date is earlier.
Eligible Investments credited to the Debt Service Fund and the Operating Reserve Fund shall have
stated maturiries, or be redeemable at the option of the holder thereof at a stated price and time, not
later than the date such moneys shall be needed to pay principal (including scheduled mandatory
sinking fund re demption payments) and interest on Parity Obligations, or to pay Opera ting Expenses,
as the case may be.
Section 18. PREAMBLE. The preamble of this Ordinance is hereby incorporated by
reference, and is to be considered a part of the operative text of this Ordinance.
Section 19. RULES OF CONSTRUCTION. For all purposes of this Ordinance, unless
the context requires otherwise, all references to designated Sections and other subdivisions are to the
Sections and other subdivisions of this Ordinance. The words "herein", "hereof' and "hereunder"
and other words of similar import refer to this Ordinance as a whole and not to any particular
Section or other subdivision. Except where the context otherwise requires, terms defined in this
Ordinance to impart the singular number shall be considered to include the plural number and vice
versa. References to any named Person means that party and its successors and assigns. References
to any constitutional, statutory or regulatory provision means such provision as it exists on the date
this Ordinance is adopted by the City and any future amendments thereto or successor provisions
thereof. Any reference to the payment of principal in this Ordinance shall be deemed to include the
payment of mandatory sinking fund redemption payments as described in a Supplement.
20
Section 20. INTERPRETATIONS. The titles and headings of the Sections and
subsections of this Ordinance have been inserted for convenience of reference only and are not to
be considered a part hereof and shall not in any way modify or restrict any of the terms or provisions
hereof.
Section 21. DELEGATION OF AUTHORITY. In respect to the delegation by the City
of any authority to an officer or employee of the City under Chapter 1371 to perform any duty or
responsibility hereunder or in a Supplement, the City hereby finds that a finding or determination
made by such officer or employee has the same force and effect as a finding or determination made
by the governing body of the City.
Section 22. IMMEDIATE EFFECT. On request of the Mayor to find and declare an
emergency due to the immediate need for the efficient and effective administration of City affairs by
establishing the airport revenue bond financing program in conjunction with authorizing the issuance
of Parity Obligations, such finding of an emergency is hereby specifically made and declared,
requiring suspension of the Charter rule as to consideration and voting upon ordinances or
resolutions at two regular Tneetings so that this Ordinance be passed and take effect upon first
reading.
ADOPTED this 22nd day of August, 2000.
ATTEST:
City Secretary
Mayor
(SEAL)
APPROVED AS TO FORM:
City A~torney ~
21
EXHIBIT A
DEFINITIONS
As used in the Ordinance, the following terms and expressions shall have the meanings set
forth below, unless the text hereof specifically indicates otherwise:
"Account" means any account created, established and maintained under the terms of any
Supplement.
"Accountant" means a nationally recognized independent certified public accountant, or an
independent firm of certified public accountants.
"Airport" means the Corpus Christi International Airport, together with all properties,
facilities and services thereof, all additions, extensions, replacements, andimprovements thereto, as
well as any other facility that qualifies as an airport or an air navigation facility under Chapter 22
that the City hereafter declares to the within the meaning of "Airport" under the Ordinance;
provided, however, the term "Airport" shall not include (a) the Industrial Properties and (b) the
Special Facilities Properties.
"Airport Consultant" means an airport consultant or airport consultant firm or corporation
having a wide and favorable reputation for skill and experience with respect to the operation and
maintenance of airports, in recommending rental and other charges for use of airport facilities and
in projecting revenues to be derived from the operation of airports, and not a full time employee of
the City.
"Airport Fund" means the "City of Corpus Christi, Texas Airport Fund", the existence of
which is confirmed in Section 5 of this Ordinance.
"Airport GO Debt" means the indebtedness of the City, supported by a pledge of ad valorem
taxes of the City, for which the City transfers moneys from the Airport Fund in support of the
payment thereof, including, but not limited to, certain of the debt service payments attributable to
the City's General Improvement Bonds, Series 1986, Series 1987, Series 1990, Series 1992, Series
1993 and Seties 1995. The transfers of Net Revenues in support of the Airport GO Debt constitutes
Subordinated Debt under this Ordinance.
"Airport GO Debt Account" means the "City of Corpus Christi, Texas Airport GO Debt
Account" within the Subordinated Debt Fund established pursuant to Section 9 of this Ordinance.
"Annual Budget" means the annual budget of the Airport (which may be included in the
City's general annual budget), as amended and supplemented, adopted or in effect for a particular
Fiscal Year.
"Annual Debt Service Requirements" means, for any Fiscal Year, the principal of and
interest on all Parity Obligations coming due at Maturity or Stated Maturity (or that could come due
on demand of the owner thereof other than by acceleration or other demand conditioned upon
default by the City on such Debt, or be payable in respect of any required purchase of such Debt by
the City) in such Fiscal Year, less and except any such principal or interest for the payment of which
provision has been made by (i) appropriating for such purpose amounts sufficient to provide for the
full and timely payment of such interest or principal either from proceeds of bonds, notes or other
obligations, from interest earned or to be earned thereon, from Airport funds other than Net
Revenues, or from any combination of such sources and (ii) depositing such amounts (except in the
case of interest to be earned, which shall be deposited as received) into a dedicated Fund or Account,
the proceeds of which are required to be transferred as needed into the Debt Service Fund or directly
to the Paying Agent for such Parity Obligations; and, for such purposes, any one or more of the
following rules shall apply at the election of the City
(1) Committed Take Out. If the City has entered into a Credit Agreement
constituting a binding commitment within normal commercial practice, from any
bank, savings and loan association, insurance company, or similar institution to
discharge any of its Funded Debt at its Stated Maturity (or, if due on demand, at any
date on which demand may be made) or to purchase any of its Funded Debt at any
date on which such Debt is subject to required purchase, all under arrangements
whereby the City's obligation to repay the amounts advanced for such discharge or
purchase constitutes Funded Debt, then the portion of the Funded Debt committed
to be discharged or purchased shall be excluded from such calculation and the
principal of and interest on the Funded Debt incurred for such discharging or
purchase that would be due in the Fiscal Year for which the calculation is being
made, if incurred at the Stated Maturity or purchase date of the Funded Debt to be
discharged or purchased, shall be added;
(2) Balloon Debt. If the principal (including the accretion of interest
resulting from original issue discount or compounding of interest) of any series or
issue of Funded Debt due (or payable in respect of any required purchase of such
Funded Debt by the City) in any Fiscal Year either is equal to at least 25% of the total
principal (including the accretion of interest resulting from originalissue discount or
compounding of interest) of such Funded Debt or exceeds by more than 50% the
greatest amount of principal of such series or issue of Funded Debt due in any
preceding or succeeding Fiscal Year (such principal due in such Fiscal Year for such
series or issue of Funded Debt being referred to herein and throughout this Exhibit
A as "Balloon Debt"), the amount of principal of such Balloon Debt taken into
account during any Fiscal Year shall be equal to the debt service calculated using the
original principal amount of such Balloon Debt amortized over the Term of Issue on
a level debt service basis at an assumed interest rate equal to the rate borne by such
Balloon Debt on the date of calculation;
2
(3) Consent Sinking Fund. In the case of Balloon Debt, if a Designated
Financial Officer shall deliver to the City a certificate providing for the retirement
of (and the instrument creating such Balloon Debt shall permit the retirement of),
or for the accumulation of a sinking fund for (and the instrument creating such
Balloon Debt shall permit the accumulation of a sinking fund for), such Balloon Debt
according to a fixed schedule stated in such certificate ending on or before the Fiscal
Year in which such principal (and premium, if any) is due, then the principal of (and,
in the case of retirement, or to the extent provided for by the sinking fund
accumulation, the premium, if any, and interest and other debt service charges on)
such Balloon Debt shall be computed as if the same were due in accordance with such
schedule, provided that this clause (3) shall apply only to Balloon Debt for which the
installments previously scheduled have been paid or deposited to the sinking fund
established with respect to such Debt on or before the times required by such
schedule; and provided further that this ctause (3) shall not apply where the City has
elected to apply the rule set forth in clause (2) above;
(4) Prepaid Debt. Principal of and interest on Parity Obligations, or portions
thereof, shall not be included in the computation of the Annual Debt Service
Requirements for any Fiscal Year for which such principal or interest are payable from
funds on deposit or set aside in trust for the payment thereof at the time of such
calculations (including without limitation capitalized interest and accrued interest
so deposited or set aside in trust) with a financial institution acting as fiduciary with
respect to the payment of such Debt;
(5) VariaNe Rate.
(A) Except as hereinafter provided in this subparagraph, the rate of
interest on Variable Rate Obligations then proposed to be issued shall be
deemed to be the average for the then immediately preceding five years of the
BMA Index, plus 20 basis points; provided, however, that (i) if, after the
issuance of the Variable Rate obligations then proposed to be issued, more
than 20% of the aggregate of the Parity Obligations Outstanding will bear
interest at a variable rate and (ii) any Parity Obligation is then insured by a
Bond Insurer, the rate of interest on Variable Rate Obligations then proposed
to be issued shall be deemed to be the greater of (x) the most recently
announced 30-year Revenue Bond Index published by The Bond Buyer, a
financial journal published, as of the date the Ordinance was adopted, in The
City of New York, New York, (y) the rate of interest then borne by any
Variable Rate Obligations then Outstanding, and (z) 1.25 times the average
variable rate borne by any Variable Rate Obligations then Outstanding during
the then immediately preceding twelve-month period, or if no Variable Rate
Obligations are then Outstanding, 1.25 times the average variable rate for
similarly rated obligations with comparable maturities during the then
immediately preceding twelve-month period, and
(B) Except as hereinafter provided in this subparagraph, the rate of
interest on Variable Rate Obligations outstanding at the time of such
calculation shall be deemed to be the lesser of (i) the then current per annum
rate of interest borne by such Variable Rate Obligations or (ii) the average
per annum rate of interest borne by such Variable Rate Obligations during
the then immediately preceding twelve-month period; provided, however,
that for any period during which (a) more then 20% of the aggregate of the
Parity Obligations then Outstanding bear interest at a variable rate and (b)
any Parity Obligation is then insured by a Bond Insurer, the rate of interest
on such Variable Rate Obligations shall be the greater of (x) the most
recently announced 30 year Revenue Bond Index published by The Bond
Buyer, a financial journal published, as of the date the Ordinance was
adopted, in The City of New York, New York, (y) the rate of interest then in
effect with respect to such Variable Rate Obligations in accordance with their
terms, and (z) 1.25 times the average variable rate borne by such Variable
Rate Obligations during the then immediately preceding twelve-month
period;
(6) Credit Agreement Payments. If the City has entered into a Credit
Agreement in connection with an issue of Debt, payments due under the Credit
Agreement (other than payments made by the City in connection with the
termination or unwinding of a Credit Agreement), from either the City or the Credit
Provider, shall be included in such calculation except to the extent that the payments
are already taken into account under (1) through (5) above and any payments
otherwise included above under (1) through (5) which are to be replaced by
payments under a Credit Agreement, from either the City or the Credit Provider,
shall be excluded from such calculation. With respect to any calculation of historic
data, only those payments actually made in the subject period shall be taken into
account in making such calculation and, with respect to prospective calculations,
only those payments reasonably expected to be made in the subject period shall be
taken into account in making the calculation.
"Aviation Director" means the director of the City's Department of Aviation, or the
successor or person acting in such capacity.
'"BMA Index" means the "high grade" seven-day index made available by The Bond Markets
Association of New York, New York, or any successor thereto, based upon 30-day yield evaluation
at par of bonds, the interest income on which is excludable from gross income of the recipients
thereof for federal income tax purposes. In the event that neither The Bond Markets Association
nor any successor thereto makes available an index conforming to the requirements of the preceding
sentence, the term "BMA Index" shall mean an index determined by the City based upon the rate
4
for bonds rated in the highest short-term rating category by Moody's and Standard & Poor's, the
interest income on which is excludable from gross income of the recipients thereof for federal
income tax purposes, in respect of issuers most closely resembling the "high grade" component issuers
selected by "BMA Index".
"Bond Counsel" means McCall, Parkhurst & Horton L.L.P., or other independent counsel
selected by the City whose opinions respecting the legality or validity of securities issued by or on
behalf of states or political subdivisions thereof are nationally recognized.
'~ond Insurer" means any insurance company insuring payment of municipal bonds and
other similar obligations if such bond or obligations so insured by it are eligible for a rating by a Credit
Rating Agency, at the time of the delivery of a Municipal Bond Insurance Policy, in one of its two
highest rating categories.
'~3usiness Day" means any day other than a Saturday, a Sunday or a day on which the City
or the city in which the payment office of the Paying Agent is located is authorized by law to remain
closed and is closed.
"Capital Improvements" means improvements, extensions and additions to the Airport
(other than Special Facilities) that are properly chargeable to capital account by generally accepted
accounting practice and includes, without limitations, equipment and rolling stock so chargeable and
real estate (and easements and other interests therein) on, under or over which any such
improvements, extensions or additions are, or are proposed to be, located.
"Capital Reserve Fund" means the "City of Corpus Christi, Texas Aviation Capital Reserve
Fund", the existence of which is confirmed in Section 8 (b) of this Ordinance.
"Chapter 22" means Chapter 22, Texas Transportation Code.
"Chapter 1371" means Chapter 1371, Texas Government Code.
"Chapter 2256" means Chapter 2256, Texas Government Code.
"Ci~" and "Issuer" mean the City of Corpus Christi, Texas.
"Code" means the Internal Revenue Code of 1986, as amended, any successor federal income
tax laws or any regulations promulgated or rulings published pursuant thereto.
"Completion Obligations" means any bonds, notes or other obligations issued or incurred
by the City for the purpose of completing any Capital Improvement for which Parity Obligations have
previously been issued or incurred by the City, as described in Section 12 (c) of the Ordinance.
"Credit Agreement" means, collectively, a loan agreement, revolving credit agreement,
5
agreement establishing a line of credit, letter ofcre dit, reimbursement agreement, insurance contract,
commitments to purchase Parity Obligations, purchase or sale agreements, interest rate swap
agreements, or commitments or other contracts or agreements authorized, recognized and approved
by the City as a Credit Agreement in connection with the authorization, issuance, security, or
payment of Parity Obligations and on a parity therewith.
"Credit Facility" means (i) a policy of insurance or a surety bond, issued by a Bond Insurer
or an issuer of policies of insurance insuring the timely payment of debt service on governmental
obligations, provided that a Credit Rating Agency having an outstanding ra ting on Parity Obligations
would rate the Parity Obligations fully insured by a standard policy issued by the issuer in its highest
generic rating category for such obligations; and (ii) a letter of credit or line of credit issued by any
financial institution, provided that a Credit Rating Agency having an outstanding rating on the
Parity Obligations would rate the Parity Obligations in its two highest generic rating categories for
such obligations if the letter of credit or line of credit proposed to be issued by such financial
institution secured the timely payment of the entire principal amount of the Parity Obligations and
the interest thereon.
"Credit Provider" means any bank, financial institution, insurance company, surety bond
provider, or other institution which provides, executes, issues, or otherwise is a party to or provider
of a Credit Agreement.
"Credit Rating Agency" means (a) Moody's, (b) Standard & Poor's, (c) any successor to
either of the foregoing by merger, consolidation or otherwise, and (d) any other nationally recognized
municipal securities rating service from whom the City seeks and obtains a rating on any issue or
series of Parity Obligations.
"Debt" of the City payable from Net Revenues means all:
(1) indebtedness incurred or assumed by the City for borrowed money (including
indebtedness arising under Credit Agreements) and all other financing obligations of the City
issued or incurred for the Airport (including, without limitation, Airport GO Debt, for which
the Airport transfers funds to the City to make debt service payments thereon) that, in
accordance with generally accepted accounting principles, are shown on the liability side of
a balance sheet; and
(2) all other indebtedness (other than indebtedness otherwise treated as Debt
hereunder) for borrowed money or for the acquisition, construction, or improvement of
property or capitalized [ease obligations at the Airport that is guaranteed, directly or
indirectly, in any manner by the City, or that is in effect guaranteed, directly or indirectly, by
the City through an agreement, contingent or otherwise, to purchase any such indebtedness
or to advance or supply funds for the payment or purchase of any such indebtedness or to
purchase property or services primarily for the purpose of enabling the debtor or seller to
make payment of such indebtedness, or to assure the owner of the indebtedness against loss,
or to supply funds to or in any other manner invest in the debtor (including any agreement
to pay for property or services irrespective of whether or not such property is delivered or
such services are rendered), or otherwise.
For the purpose of determining the "Debt" payable from the Net Revenues, there shall be excluded
any particular Debt if, upon or prior to the Maturity thereof, there shall have been deposited with
the proper depository (a) in trust the necessary funds (or investments that will provide sufficient
funds, if permitted by the instrument creating such Debt) for the payment, redemption, or satisfaction
of such Debt or (b) evidence of such Debt deposited for cancellation; and thereafter it shall not be
considered Debt. Except as may be otherwise provided above, no item shall be considered Debt
unless such item constitutes indebtedness under generally accepted accounting principles applied on
a basis consistent with the financial statements of the City in prior Fiscal Years.
"Debt Service Fund" means the "City of Corpus Christi, Texas General Airport Revenue
Parity Obligations Debt Service Fund" established pursuant to Section 6 of the Ordinance.
"Debt Service Reserve Fund" means the "City of Corpus Christi, Texas General Airport
Revenue Parity Obligations Debt Service Reserve Fund" established pursuant to Section 7 of the
Ordinance.
"Designated Financial Officer" means the City Manager, the Director of Finance, or such
other financial or accounting official of the City so designated by the governing body of the City.
"Eligible Investments" means (i) those investments in which the City is now or hereafter
authorized by law, including, but not limited to, Chapter 2256, to purchase, sell and invest its funds
and funds under its control and (ii) any other investments not specifically authorized by Chapter
2256 but which may be designated by the terms of a Supplement as Eligible Investments under
authority granted by Chapter 1371.
'Tederal Payments" means those funds received by the Airport from the federal government
or any agency thereof as payments for the use of any facilities or services of the Airport.
"Fiscal Year" means the successive twelve-month period designated by the City as its fiscal
year of the City, which currently ends on July 31 of each calendar year.
"Fund" means any fund created, established and maintained under the terms of the
Ordinance and any Supplement.
"Funded Debt" of the Airport means all Parity Obligations (and, for purposes of Section
12 (d) of the Ordinance, all Subordinated Debt) created or assumed by the City and payable from Net
Revenues that mature by their terms (in the absence of the exercise of any earlier right of demand),
or that are renewable at the option of the City to a date, more than one year after the original
creation or assumption of such Debt by the City.
7
"Gross Revenues" means the revenues, receipts and funds now or hereafter derived by the
City from the operation, leasing or sale of the Airport, as determined in accordance with generally
accepted accounting principles applicable to the City as in effect from time to time, including,
without limitation, (a) all income, receipts and moneys derived from the rates, rentals, fees and
charges fixed, imposed and collected by the City for the use and services of the Airport or otherwise
derived from or arising through the ownership, use, operation and management of the Airport by the
City or derived from the rental by the City of all or any part of the Airport, or derived by the City
from the sale or rental by the City of any commodities or goods in connection with the Airport,
including specifically, but not by way of limitation, ground rental or other payments related to the
use of the Airport paid by the lessees of either Industrial Properties or Special Facilities Properties,
(b) proceeds of insurance or condemnation awards with respect to the Airport, to the extent the
same may be applied to the payment of Operating Expenses or to the payment of principal of,
premium, if any, and interest on the Parity Obligations, (c) grants, gifts and subsidies, to the extent
the same may be applied to the payment of Operating Expenses or to the payment of the principal
of, premium, if any, and interest on the Parity Obligations, (d) passenger facility charges or other
similar charges to the extent permitted by law, to the extent the same may be applied to the payment
of Operating Expenses or to the payment of principal of, premium, if any, and interest on the Parity
Obligations or other payments related to the use of the Airport, (e) the interest earnings from the
Airport Fund, the Debt Service Fund, the Debt Service Reserve Fund and the Operating Reserve
Fund, and (0 transfers to the Airport Fund from the general fund of the City for Airport purposes;
provided, however, that for the purpose of the definition of the term "Net Revenues", the term "Gross
Revenues" shall not include (i) proceeds from the sale of the Airport or any part thereof, (ii)
insurance or condemnation awards with respect to the Airport (except the proceeds of business
interruption insurance), (iii) grants, gifts and subsidies (other than those describedin (c) above), the
use of which is limited by the grantor or donor to the construction or acquisition of Airport facilities,
(iv) the interest earnings from any of the Debt Service Fund, the Debt Service Reserve Fund, the
Operating Reserve Fund or the Subordinated Debt Fund (except to the extent that such earnings are
deposited into the Airport Fund), (v) amounts credited to the Capital Reserve Fund or to a Rebate
Fund, (vi) a termination payment paid in connection with the termination or unwinding of a Credit
Agreement, (vii) sales and other taxes collected by the City on behalf of the State of Texas and any
other taxing entities, or (viii) proceeds of any Parity Obligations or Subordinated Debt.
"Holder" or "Bondholder" or "owner" means the registered owner of any Parity Obligation
registered as to ownership and the holder of any Parity Obligation payable to bearer, or as otherwise
provided for in a Supplement.
'~xtdustrlalProperties" means (a) the real and personal properties situated at and around the
Airport which are owned by the City and (i) leased to industrial or commercial tenants engaged in
activities which are unrelated to the City's public airport operations, or (ii) held by the City for future
industrial and commercial development and (b) any other real or personal property now owned or
hereafter acquired by the City which is unrelated to the City's public airport operations.
"Maturity" when usedwith respect to any Debt means the date on which the principal of such
8
Debt or any installment thereof becomes due and payable as therein provided, whether at the Stated
Maturity thereof or by declaration of acceleration, call for redemption, or otherwise.
"Minimum Capital Reserve" means $250,000.
"Moody's" means Moody's Investors Service, Inc.
"Net Revenues" means, for the period in question, Gross Revenues less Operating Expenses.
"Operating and Maintenance Expenses" or "Operating Expenses" means all reasonable and
necessary current expenses of the City, paid or accrued as determined in accordance with generally
accepted accounting principles applicable to the City as in effect from time to time, of operating,
maintaining and repairing the Airport including, without limitation, those reasonably allocated City
overhead expenses relating to the administration, operation and maintenance of the Airport;
insurance and fidelity bond premiums; payments to pension and other funds and to any self-insurance
fund; any general and excise taxes or other governmental charges imposed by entities other than the
City; any required rebate of any portion of interest income to the federal government which is
payable from Gross Revenues or the Airport Fund (other than any amounts deposited to a Rebate
Fund or otherwise subject to payment to the United States of America as rebate pursuant to Section
148 of the Code); costs of contractual and professional services, labor, materials and supplies for
current operations, including the costs of such direct City services rendered to the Airport as are
requested from the City by the Airport and as are reasonably necessary for the operation of the
Airport; costs of issuance of Debt for the airport (except to the extent paid from the proceeds
thereof); fiduciary costs, costs of collecting and refunding Gross Revenues; utility costs; any lawful
refunds of any Gross Revenues; and all other administrative, general and commercial expenses, but
excluding:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(s)
any allowances for depreciation;
costs of capital improvements;
reserves for major capital improvements, Airport operations, maintenance or repair;
any allowances for redemption of, or payment of interest or premium on, Debt;
any liabilities incurred in acquiring or improving properties of the Airport;
expenses of lessees under Special Facilities Leases and operation and maintenance
expenses pertaining to Special Facilities to the extent that they are required to be
paid by such lessees pursuant to the terms of the Special Facilities Leases;
liabilities based upon the City's negligence or other ground not based on contract;
and
to the extent Federal Payments may not be included as Gross Revenues, an amount
of expenses that would otherw/se constitute Operation and Maintenance Expenses
for such period equal to the Federal Payments for such period.
"Operating Reserve Fund" means the "City of Corpus Christi, Texas Airport Operating
Reserve Fund" established pursuant to Section 8 of this Ordinance.
"Opinion of Counsel" means a written opinion of counsel which shall be acceptable to the
City.
"Ordinance" means this master ordinance establishing the General Airport Revenue Bond
Financing Program.
"Outstanding" when used with respect to Parity Obligations means, as of the date of
determination, all Parity Obligations theretofore delivered under this Ordinance and any
Supplement, except:
(1) Parity Obligations theretofore cancelled and delivered to the City or delivered to
the Paying Agent or the Registrar for cancellation;
(2) Parity Obhgations deemed paid pursuant to the defeasance provisions as set forth
in any Supplement;
(3) Parity Obligations upon transfer of or in exchange for and in lieu of which other
Parity Obligations have been authenticated and delivered pursuant to the Ordinance and any
Supplement; and
(4) Parity Obligations under which the obligations of the City have been released,
discharged, or extinguished in accordance with the terms thereof;
provided, that, unless the same is acquired for purposes of cancellation, Parity Obligations owned by
the City shall be deemed to be Outstanding as though it was owned by any other owner.
"Outstanding Principal Amount" means, with respect to all Parity Obligations or to a series
of Parity Obligations, the outstanding and unpaid principal amount of such Parity Obligations paying
interest on a current basis and the outstanding and unpaid principal and compounded interest on
such Parity Obligations paying accrued, accreted, or compounded interest only at maturity as of any
"Record Date" established by a Registrar in a Supplement or in connection with a proposed
amendment of the Ordinance. For purposes of this definition, payment obligations of the City under
the terms of a Credit Agreement that is treated as a Parity Obligation shall be treated as outstanding
and unpaid principal.
"Parity Obligations" means all Debt of the City which may be issued, incurred or assumed
in accordance with the terms of the ordinance and a Supplement, and secured by a first lien on and
pledge of the Net Revenues.
"Paying Agent" means each entity designated in a Supplement as the place of payment of a
series or issue of Parity Obligations.
"Person" means any natural person, firm, partnership, association, corporation, or public
10
body.
'~Rebate Fund" means a Fund created pursuant to a Supplemental Ordinance for purposes
of making any payment to the United States in accordance with section 148 of the Code.
"Registrar" means each entity designated in a Supplement as the registrar of a series or issue
of Parity Obligations.
"Required Reserve Amount" means an amount equal to the lesser of (a) 125% of the
average Annual Debt Service Requirements of the Parity Obligations then Outstanding, (b) 100%
of the Annual Debt Service Requirements of the Parity Obligations to be Outstanding in the Fiscal
Year during which such Annual Debt Service Requirements are scheduled to be the greatest, or (c)
10% of the stated principal amount of the Parity Obligations, to the extent such Parity Obligations
are to be secured by the Debt Service Reserve Fund in accordance with the terms and provisions of
Section 7 of the Ordinance and any Supplement.
"Reserve Fund Obligations" means cash, Eligible Investments, any Credit Facility, or any
combination of the foregoing.
"Special Facilities" and "Special Facilities Properties" mean structures, hangars, aircraft
overhaul, maintenance or repair shops, heliports, hotels, storage facilities, garages, inflight kitchens,
training facilities and any and all other facilities and appurtenances being a part of or related to the
Airport the cost of the construction or other acquisitions of which is financed with the proceeds of
Special Facilities Debt. Upon the retirement of Special Facilities Debt, the City may declare such
facilities financed with such Special Facilities Debt to be within the meaning of "Airport," as
hereinabove defined.
"Special Facilities Debt" means those bonds, notes or other obligations from time to time
hereafter issued or incurred by or on behalf of the City pursuant to Section 12 (e) of this Ordinance.
"Special Facilities Lease" means any lease or agreement, howsoever denominated, pursuant
to which a Special Facility is leased by or on behalf of the City to the lessee in consideration for
which the lessee agrees to pay (i) all debt service on the Special Facilities Debt issued to finance the
Special Facility (which payments are pledged to secure the Special Facilities Debt) and (ii) the
operation and maintenance expenses of the Special Facility.
"Standard & Poor's means Standard & Poor's Rating Services, a division of The McGraw-
Hill Companies.
"Stated Maturity" means, when used with respect to any Debt or any installment of interest
thereon, any date specified in the instrument evidencing or authorizing such Debt or such installment
of interest as a fixed date on which the principal of such Debt or any installment thereof or the fixed
date on which such installment of interest is due and payable.
11
"Subordinated Debt" means any Debt which expressly provides that all payments thereon
shall be subordinated to the timely payment of all Parity Obligations then Outstanding or
subsequently issued.
"Subordinated Debt Fund" means the "City of Corpus Christi, Texas General Airport
Revenue Subordinated Debt Fund" established pursuant to Section 9 of this Ordinance.
"Supplement" or "Supplemental Ordinance" mean an ordinance supplemental to, and
authorized and executed pursuant to the terms of, the Ordinance.
"Tax-Exempt Debt" means Debt interest on which is excludable from the gross income of
the Holder for federal income tax purposes under section 103 of the Code.
"Term of Issue" means with respect to any Balloon Debt, a period of time equal to the greater
of (i) the period of time commencing on the date of issuance of such Balloon Debt and ending on
the final maturity date of such Balloon Debt or (ii) twenty-five years.
"Value of Investment Securities" and words of like import means the amortized value
thereof; provided, however, that all United States of America, United States Treasury Obligations--
State and Local Government Series shall be valued at par and those obligations which are
redeemable at the option of the holder shall be valued at the price at which such obligations are then
redeemable. The computations made under this paragraph shall include accrued interest on the
investment securities paid as a part of the purchase price thereof and not collected. For the purposes
of this definition "amortized value", when used with respect to a security purchased at par, means the
purchase price of such security.
"Variable Rate Obligations" means Parity Obligations that bear interest at a rate per annum
which is subject to adjustment so that the actual rate of interest is not ascertainable at the time such
Parity Obligations are issued; provided, however, that upon the conversion of the rate of interest on
a Variable Rate Obligation to a fixed rate of interest (whether or not the interest rate thereon is
subject to conversion back to a variable rate of interest), such Parity Obligation shall not be treated
as a "Variable Rate Obligation" for so long as such Parity Obligation bears interest at a fixed rate.
12
THE STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO
CITY OF CORPUS CHRISTI
I, the undersigned, City Secretary of the City of Corpus Christi, Texas, do hereby certify that
the above and foregoing is a true, full and correct copy of an Ordinance passed by the City Council
of the City of Corpus Christi, Texas (and of the minutes pertaining thereto) on the 22nd day of
August, 2000, authorizing the establishment of the general airport revenue financing system, which
ordinance is duly of record in the minutes of said City Council, and said meeting was open to the
public, and punic notice of the time, place and purpose of said meeting was given, all as required by
Chapter 551, Texas Government Code.
EXECUTED UNDER MY HAND AND SEAL of said City, this the 22nd day of August,
2000.
City Secretary, City of Corpus
Christi, Texas
(SEAL)
Corpus Chri~i, Texas
,~ Day of / ' ,2000
TO THE MEMBERS OF THE CITY COUNCIL
Corpus Christi, Texas
For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists
requiring suspension of the Charter rule as to consideration and voting upon ordinances at two
regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this
ordinance finally on the date it is introduced, or at the present meeting of the City Council.
Respectfully,
Respectfully,
~e-I L. ~N~'/o~, Jr., Iv~'y~7/
City of Corpus Christi
Council Members
The above ordinance was passed by the following vote:
Samuel L. Neal, Jr.
Javier D. Colmenero
Melody Cooper
Henry Garrett
Dr. Arnold Gonzales
Rex A. Kinnison
Betty Jean Longoria
John Longoria
Mark Scott
024163