HomeMy WebLinkAbout026270 RES - 05/24/2005
RESOLUTION AUTHORIZING THE CITY MANAGER TO TAKE
ACTIONS NECESSARY TO APPROVE THE ISSUANCE OF
REFUNDING BONDS BY LA V ACA-NA VIDAD RIVER
AUTHORITY IN RESPECT TO THE
CITY OF CORPUS CHRISTI LAKE TEXANA PROJECT
WHEREAS, the City of Corpus Christi, Texas (the "City") approved the issuance of bonds
by Lavaea-Navidad River Authority (the "LNRA") captioned "Lavaea-Navidad River Authority
Water Supply Facilities Revenue Bonds (City of Corpus Christi Lake Texana Project) Series 1997",
in the aggregate principal amount 01'$8,970,000 (the "LNRA Bonds"); and
WHEREAS, the LNRA Bonds arc currently outstanding in the aggregate principal amount
01'$6,950,000; and
WHEREAS, the City has executed contracts with the LNRA, pursuant to which the City is
obligated to make payments sufficient to pay the debt service due and payable on the LNRA Bonds;
and
WHEREAS, the City has requested that the LNRA consider the issuance of refunding bonds
to produce a debt service savings on the LNRA Bonds that arc subject to redemption prior to their
scheduled maturities; and
WHEREAS, the City has been advised by representatives of the LNRA that it is willing to
proceed with the issuance of such refunding bonds; and
WHEREAS, the documents governing the issuance of the LNRA Bonds each provide that
refunding bonds may be issued subject to the approval of the terms of the refunding bonds by the
City; and
WHEREAS, because ornuctuating conditions in the municipal bond market, the City Council
has determined to delegate to the City Manager the authority to approve the terms of the refunding
bonds that may be issued by the LNRA, subject to the parameters hereinafter described.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF CORPUS CHRISTI, TEXAS:
Section I. That the City Manager is hereby authorized to act on behalfofthe City to approve
the terms of the retunding bonds to be issued by LNRA to refund a portion of the outstanding LNRA
Bonds. The City Manager may evidence such approval on behalf of the City by executing the bond
purchase agreement prepared in connection with the sale and delivery of the refunding bonds issued
by LNRA, or by executing a certificate evidencing the approval of the terms of the refunding bonds
issued by LNRA, as the City Manager in his discretion may determine.
026270
Section 2. That the City Manager is authorized to consult with M.E. Allison & Co., Ine" the
City's financial advisor, to determine that the sale of the refunding bonds by the LNRA occurs on
such terms that arc consistent with the conditions in the municipal bond market at the time such
retunding bonds arc priced for sale by the LNRA.
Section 3. That the City Manager shall be and is hereby expressly authorized, empowered
and directed from time to time and at any time to do and perform all such acts and things and to
execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the City
all such instruments, whether herein mentioned, as may he necessary or desirable in order to carry out
the terms and provisions of this Resolution, including, but not limited to. approving the form of the
notice of redemption calling the LNRA Bonds for redemption prior to their scheduled maturities, and
such instruments as may be necessary to effect the issuanee of refunding bonds by the LNRA. A
detennination by the City Manager that the fmal forms of said instruments, including specifically, but
not by way oflimitation, the bond purchase agreement relating to the refunding bonds issued by the
LNRA, comply with the authorizing documents relating to the LNRA Bonds and applicable State
law, shall have the same force and dfeet as a finding or determination made by the City Council.
Section 4, That the toregoing notwithstanding, the City Manager shall not approve the sale
of refunding bonds by the LNRA if( i) the debt serviee savings to be generated by the issuance of sueh
retunding bonds by the LNRA docs not generate at least a three pereent (3%) net present value
savings to the City or (ii) the sale of refunding bonds by the LNRA results in bonds having a maturity
beyond the tinal maturity of the outstanding LNRA Bonds. Prior to the delivery of any refunding
bonds by the LNRA, the City Manager shall execute and dcliver to the City Council a eertifieate
setting forth the terms of such refunding bonds, and in such certificate the City Manager shall state
that the terms of such refunding bonds conform to the parameters set forth in this Resolution.
Section 5. That the authority dclegated to the City Manager to approve the sale of refunding
bonds by the LNRA shall expire on Friday, Septcmber 30, 2005.
Section 6. That this Resolution shall become effective immcdiately upon its adoption by the
City Council. This Resolution supersedes any prior rcsolutions adopted by the City Council with
respcct to the refunding of the LNRA Bonds,
':JJ;;, ~;' <he 2'" ill, ofM." 2005
City of Corpus Christi, Texas
ATTEST:
~-,
Armando Chapa, City Secretary
(SEAL)
APPROVED THIS Irs*' DAY OF MAY, 2005:
Corpus Christi, Texas
~~-ti- Day of IY\.~ ,2005
The above resolution was passed by the following vote:
Henry Garrett ~
Brent Chesney ~
Melody Cooper
Jerry Garcia OAf
Bill Kelly ~
Rex Kinnison ~
John E. Marez Wj
Jesse Noyola 0Jj
Mark Scott ~/
02{)270
GENERAL CERTIFICATE OF CITY OF CORPUS CHRISTI, TEXAS
THE STATE OF TEXAS ~
COUNTY OF NUECES ~
CITY OF CORPUS CHRISTI ~
We, the undersigned Mayor and City Secretary of the City of Corpus Christi, Texas
(the "City"), hereby certify that
1 This Certificate is executed for and on behalf of the City with reference to the
Issuance of that series of bonds by the Lavaca-Navidad River Authority (the "Authority")
styled "Lavaca-Navidad River AuthorityWater Supply Facilities Revenue Refunding Bonds
(City of Corpus Christi Lake Texana Project). Series 2005." dated June 1, 2005, in the
aggregate principal amount of $5,160,000 (the "Bonds").
2 That said City IS a duly Incorporated Home Rule City, having more than 5,000
Inhabitants, operating and existing under the Constitution and laws of the State of Texas
and the duly adopted Home Rule Charter of said City, which Charter has not been
changed or amended since the date of delivery of the City's Utility System Revenue
Refunding Bonds, Series 2005
.:: With the exception of the validation lawsuit in which the Water Conveyance
and Delivery Contract dated December 14, 1993 between the City and the Authority (the
"Contract) was validated by the Third Court of Appeals in Lavaca Navidad River Authority,
et al. ,/, City of Corpus Christi ex reI Berryhill. et a/., No 03-94-00306 (Tex, App.--1995, writ
denied, unpublished), no litigation of any nature has ever been filed pertaining to, affecting,
questioning, or contesting
(a) The authonty of the City Council of the City and the undersigned
officers of the City (1) to authorize, execute, and attest the Contract
which Contract provides for payment by the City to the Authority of
revenues sufficient to pay the principal, interest, premium (if any) and
reserve fund payments (if any), due on the Bonds; or (2) to adopt the
Resolution dated May 24, 2005, confirming the request that the
Authority refund the Lavaca-Navidad River Authority Water Supply
Facilities Revenue Bonds (City of Corpus Christi Lake Texana
Projectl Series 1997, and authorizing the City Manager to approve
the Bonds
(b) the validity of the Contract or the corporate existence of the City;
(c) the validity of the Lavaca-Navidad River Authority Water Supply
Facilities Revenue Bonds (City of Corpus Christi Lake Texana
Project), Series 1997, or
(d) the validity of the Lavaca-Navidad River Authority Water Supply
Facilities Revenue Refunding Bonds (City of Corpus Christi Lake
Texana Project), Series 2005.
4 As of the date of sale of the Bonds, the undersigned are the duly elected and
qualified Mayor and City Secretary of the City and are authorized to execute this
Certificate. No litigation of any nature has ever been filed pertaining to, affecting, or
contesting our titles to such offices, and our signatures subscribed below are hereby
certified to be true and genuine
5 As of the date ofthis Certificate, Ordinance No, 025866, dated July 27,2004,
establishing the rates, charges, and fees in connection with the City's Combined
Waterworks, Sewer and Gas Utility System (the "City's Combined System") is in full force
and effect.
6 Attached hereto as Exhibit A is a true, correct, and complete statement of the
principal and interest requirements of all outstanding indebtedness of the City payable out
of revenues of the City's Combined System
7 The Pledged Revenues for the payment of the Bonds are from the revenues
of the City's Combined Water, Wastewater and Gas Utility Systems. Under the Contract,
these payments are operating expenses of the Combined System. Attached hereto as
Exhibit B are pages from the City's annual audit for fiscal years 2002,2003 and 2004, The
revenues and expenses for the Combined System are found under the heading Utility
System Fund.
8 The City has not defaulted on any prior bond issue payable all or in part from
the revenues of the City's Combined System In more than fifty years.
9 The City Manager of the City is authorized to acknowledge the First
Supplemental I ndenture between the Authority and Wells Fargo Bank, National Association
relating to the Bonds,
10 The City Manager of the City is authorized to execute the Continuing
Disclosure and Fiscal Responsibilities Agreement between the City and the Authority on
behalf of the City
[The remainder of this page intentionally left blank.]
-2-
WITNESS OUR HANDS AND THE OFFICIAL SEAL OF THE CITY, this
JUN il6 L'u". ,
[S EAL]
hristi , Texas
~
City Secretary
City of Corpus Christi, Texas
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EXHIBIT B
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ti.
tile eln OF CORPUS CflRISTI, TE\'AS
PROPRIETARY FUNDS
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS
YEAR ENDED JUt i 31,2002
Exhibit 4-C
Enterprise Funds
lJlility Other Internal
SY>ltm EDlerprl~ Service
Fund Fund! Total Funds
Operating ftHIIUU
Charges for services - nel .$ /10.532,224 $ [2,067,752 S 122,599,976 .$ 42,267,538
Opera line cxI,enses
Personal scrvi""s 15,594,490 8,466,! 62 24,060,652 9,317 ,333
Materials ar,d supplies 22,421,IM 933,033 23,354, 197 1,034,749
Contractual services 15,877,026 2,843,004 18,720,030 8,543,900
Other operating t)(penses 13,937,782 868,009 14,805,791 1,597,039
Uncollectible accounts 3.291,083 73,000 3,364,083 141,480
D<:prcciaJion 14,307.545 2,350,009 16,657,554 4,084,593
Self-msurame claims 23,797,552
Total opcraJing e)(pensts 85,429,090 15,533,217 100,962,307 48,516,646
Op~ratmg income llOS:Cif ~s 103. r~~ (3,465.465) 2 J ,637.669 (6,249,l08)
"'ono~r81ing revtnue. (rx~nS6)
Investment income ),45",4-,~ 83.431 5,540,869 765,161
[nterest c)(pensc and fiscal charges (20,449,4921 (163,508) (20,613,000) (73,651)
Passenger fad! Ity charges 997,770 997,770
Passenger fadlity charges mteres! 173.526 173,526
Recovery of prior years e)(penses 48,722 9,291 108,013 168,823
Recovery of prior years revenues 2,4b8 2,758 5,226 608
Refund of prior years revenue, 14'7260) (60.132) (497,392) (283,680)
Net gain on sale of assets 9,750 9,750 227,041
Recovery on damage claims 119,542
Developer depoSit' 1,50,089 650,089
Contribution:; from developers } 194,239 3, (94,239
Reimbursements to developers (I i 8,4591 (118,459)
Contribution,; from other governmental agencies 104,2;7 8,407,588 8,811,825
MIScellaneous j 70,40J 56,494 226,895 12,064
Total non(lp~r.jting reYenu~..... (t:xpenses) (1/,027,617) 9,516,968 (1,510,649) 935,908
Income lIoss) before transfers 14,075,517 6,051.503 20,127,020 (5,313,200)
Transfers in 2,103,719 2,103,7 J 9 2,307,012
Transfers out (6,782, J 741 (1,675,339) (8,457,513) (224,608)
I otal transfe!; (6,782,174) 428,380 (6,353,794) 2,082,404
Nel Ilcume (loSS! ::.'9\,34.1 6,479,883 13,773,226 (3.230,796 )
Net assets at beginning of year as restated (Nole l-QI 503,829,359 65,167,063 568,996,421 18,981,270
Nc! assets at end 0 t \ ear .$ 511,122,702 $ 71 ,646,946 S 582,769,648 .$ 15,750,474
~'hr notes to the !ir;ancial statements are an integral part of this statement
34
Corpua ChrlaU COrpUI Chrlatt
" the City of Corpus Christi, Texas "
200"' 2003
Exhibl14-C
PROPRIETARY FUNDS
STATEMENT OF ~EVENUES, EXPENSES, AND CHANGES IN NET ASSETS
YEAR ENDED JUL Y 31, lOll3
Enlerprise Funds
lltility Othn Inlern.1
System Enterprise Service
Fund Funds Totll Funds
Openllnl revenues
Charges for sen- ices, net S 125,533.120 $ 13,280,935 $ 138,814,055 $ 46,836,237
Opentine npen~
Personal services 19,144,965 8,966,358 28,111,323 10,338,815
Materials and su ppl ies 32,646,919 806,334 33,453,253 J ,285,237
C ontraClual se/V ices 14.883,439 2,815,302 17,698,741 8,615,682
Other operating expenses 18.084,068 1,259,815 19,343,883 1,572,742
Uncoll<<tible sccounts 1.287,760 199,141 1,486,901 108,156
Depreciation 15127,213 3,008,315 18,135,528 4,050,34 J
Self-Insurance claltTlS 25,813,891
Tolal oP<'rat!rlg e'~nse' 101,174,364 17,055,265 118,229,629 5 I, 7M,8M
Opera!!llg Income (loss I ~4 1\8 '\0 (3,774,330) 20,584,426 (4,948,627)
Nonoptrltillg reHRues (cxpensC3)
Investment inC<Jme 3.338,832 179,018 3,517,850 326,658
Interest expense and fiscal charges (21. \07,671) (583,657) (23,891,328) (242,299)
PBSSenger facility charges 1,178,259 I, I 78,259
PBSSenger facility charges onterest 37,511 37,511
Net gain on sale or assets 6, '42 ',829 12,571 89,494
Recovery on damage clllUlli 26,422 26,422 39,080
Developer clcJXls its 'J76,o2Q 976,629
U:llll1ibutions f.om developers ;.650,624 3,650,624
Reimbursements to developers (,' 5 8 ,894) (258,894)
Conl1lbutions from other gov.-mmenlal agenCies 171,403 3,406,924 3,578,327
Nel C<lntribution of assets from other funds 580,984 580,984 203,525
Total nonoptraling revenues (expenses I (14,814.929) 4,223,884 (10,591,045) 416,458
Income (loss) before transfer> 9,543.827 449.554 9,993,381 (4,532,169)
Transfers III 728.793 2,724.113 3,452,906 3.596,500
Transfers oul (6,326.953) (1,523,856) (7,850,809) (J,7OO,029)
Total tr1Insfers (5,598.160) 1,200,257 (4,397,903) 1,896,47 ]
Net IIlcome (Joss) 1.(4).667 1,649.8J I 5,595,478 (2,635,698)
f\.el assels at begonning of year 511,112.702 71,646,946 582,769,648 15,750,474
Net assets st end of ,eM S 515,068369 S 73,296,757 $ 588,365,126 S 13,114,776
;'he nOles to the financial statements are an mtesraJ p8l1 of thiS statement
:10
the Cit)' of Corpus Christi, Texas
Exhibit .f.e
PROPRIETARY FUNDS
STATEMENT 0 F R [vENUES, EXPENSES, AND CHANGES IN Nf:T ASSETS
YEAR ENDED ,niL Y 31, 2004
Enterprise Funtls
(Ilility Olher lnlernul
SYslem Enterprise Service
Fund Funds Tol~l Funds
Operatin& revenues
Charge, for servic~, . nel S t J1.J53, 790 $ 13,843,901 $ 146,1Y?,697 S 51,51,7,\197
OperaliDI openses
Personal services 22,004,986 9,220,494 JI,225,480 11,473,932
Malerials and supplies 32,794,346 928,499 33,722,845 1,741,366
ConUKtuaJ seIV Kes 16.848.539 2,790,456 19.638,995 9,567,415
Other operating expenses IU61,171 1,251,025 19.812,196 1,699,355
Uncollectible accounts 1,440,959 9,211 1,450,170
Depreciation 19,494,011 3,832,193 23,326,204 4,()89,789
Self-insurance ;Iaims 18,322,753
TotAl operallOg expenses 111,144,012 18,03 1,878 129,175,890 46,894,610
(:Ip<=rJllflg InCOI'l'H: \Ioss) C 1.10Y, 784 (4187,977) 17,021,807 4,673,387
NODoperating rneDU" (expeDst!1
Investment income 1,080,325 206,781 2,287,106 280,767
Interest expense and fiscal ella/ges (24,177.796) (1,232,501) (25,410,297) (2J9,813 )
Passenger facility charges 1,561,016 1,561,016
Net gain on sale of assets 9.292 3,409 12,701 69,162
Recovery on damage clalln> 69 J04 1.012 70,316 159.684
Developer deposits 1308,033 1,308,OJJ
Contributions from developer. 8.113,)09 8,3 13.309
Reimbunemen15 to developers \299.026) (299,026)
Contributions from other governmental ag.;nCles 175,557 2,8U5,987 1,981,544
Net contribution of assets from other fund, 451,468 22,375 473,843
MiscellllleOus
Total nooof\('rating revenuel (expenses I ( 12,069,534) 3,368,079 (8,701,455) 269,800
Incorn~ (loss) before transfers 9,140,250 (819,898) 8,320,352 4,943,187
Tmnsfen in 2,390,000 2,390,000 2,384,300
Transfers OUI (6,946,247) (1,55l,J 17) (8,497,564) (382,774)
fotallransfcrs (6,946,247) 838,683 (6, I 07,564) 2,00 I ,526
Net ine Jme 2, j 94,003 18.785 2,212,788 6,944,713
Net assets at begifllllng of year 515,068,369 73,296,757 588,365,126 13,114,776
Net assets at end ,,1 year 1 517,262,372 S 73,315,542 $ 590,577,914 20,059,489
The notes 10 the finanCial statements are an Integral part orthis statement
32
CONTINUING DISCLOSURE AND
FISCAL RESPONSIBILITIES AGREEMENT
This Continuing Disclosureand Fiscal Responsibilities Agreement (the "Agreement")
dated as of June 1, 2005, is between the LAVACA-NAVIDAD RIVER AUTHORITY, a
conservation and reclamation district, a body politic and corporate and a governmental
agency of the State of Texas (herein, together with any successor to its duties and
functions, called "LNRA"), organized and existing under the provisions of a series of acts
formally compiled as Article 8280-131, Tex. Civ, Stat. Ann., as amended (the "Act"), and
the CITY OF CORPUS CHRISTL TEXAS, a Home Rule City (herein, together with any
permitted successor or assign called the "City")
RECIT ALS
WHEREAS, the City and the LNRA have previously entered into a Water Delivery
and Conveyance Contract, dated as of December 14, 1993 (the "Contract") to provide
additional supplies of water to better meet projected demands for water for municipal and
industrial purposes within its boundaries, and existing and potential service areas; and
\tVHEREAS, In order to implement the delivery of water under the Contract, the
LNRA WIll need to construct intake structure, pipc!i,le, pumps, meter, and related facilities
as specified in the Contract. the LNRA Facilities, at the LNRA Site in order to deliver the
water to the City referred to in the Contract as the LNRA Project; and
WHEREAS, the Contract provides that the LNRA will issue bonds if requested by
the City to construct the LNRA Facilities; and
WHEREAS, subsequent to the entry into the Contract. the United States Securities
and Exchange Commission has imposed new requirements relating to certain disclosures
that must be made in the issuance of certain municipal securities, such as the Bonds. In
order for the LNRA to issue bonds for the LNRA Project, the City and the LNRA must enter
Into a Continuing Disclosure Agreement to meet the new continuing disclosure
requirements; and
WHEREAS, the City requested that the LNRA did issue the bonds to construct the
LNRA Project to permit the delivery of the water the City has purchased such bonds to
permit the delivery of the water to the City (such bonds herein referred to as the "Series
1997 Bonds"), and both the City and the LNRA entered into a formal continuing disclosure
agreement incident to the issuance of the Series 1997 Bonds; and
WHEREAS, the City has requested that the LNRA issue the bonds to refund a
portion of the outstanding Series 1997 Bonds, and the LNRA desires to issue such bonds
to permit the City to benefit from the savings from the refunding (such bonds herein
referred to as the "Series 2005 Bonds"), and both the City and the LNRA understand that
a formal continuing disclosure agreement is required as an incident to the issuance of the
Series 2005 Bonds; and
WHEREAS, insofar as the principal amount of the Series 2005 Bonds will be in
excess of $5,000,000, and the City understands that it will need to make certain
computations to provide the information necessary to ensure the continued tax exempt
status of the Series 2005 Bonds, and
IN CONSIDERATION of the foregoing and the mutual benefits, covenants and
agreements herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the LNRA and the City agree as follows:
ARTICLE I
TERM
Section 1.01. Term, This Agreement shall remain in effect as long as the Bonds,
including the Series 2005 Bonds, remain outstanding.
ARTICLE"
DEFINITIONS AND INTERPRETATION
Section 201. Definitions Applicable to All Series of Bonds. Each of the following
terms shall have the meaning assigned to them in this Section 2.01 whenever they are
used in this Agreement, unless the context in which they are used clearly requires
otherwise:
"Bond Payments" means the payments required to be made by the City to the LNRA
or to the Trustee on behalf of the LNRA to allow the LNRA to meet its obligations with
respect to the Bonds, including the payment to repay the Bonds, as provided for in the
Indenture and In Section 3.01 of the Contract, including the principal of, premium, if any
(whether at stated maturity, upon redemption prior to stated maturity, or upon acceleration
of stated maturity), and interest on the Bonds when due as specified in Section 4.03 of the
Contract
"Bonds" means. collectively, the Series 1997 Bonds, the Series 2005 Bonds and
any Additional Bonds executed and delivered pursuant to the Indenture and the Contract
"City" means the City of Corpus Christi, Texas and its lawful successors and
assigns
"Code" means the Internal Revenue Code of 1986.
"Contract" means such term as it is defined in the preamble hereof.
"Fiscal Year" means the twelve-month period at the end of which financial position
and results of operations are determined, which, as of the date this Agreement initially is
delivered, is the twelve-month period that expires on July 31 for the City and September
30 for the Authority,
"Indenture" means the Trust Indenture entered into by the LNRA to issue the LNRA
Bonds as provided in the Contract, as originally executed and as amended, modified, or
supplemented thereafter in accordance with the terms in such Indenture.
"MSRB" means the Municipal Securities Rulemaking Board.
, "LNRA" means the Lavaca-Navidad River Authority and its lawful successors and
assigns
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"LNRA Facilities" has the meaning assigned to it in the Contract.
"LNRA Site" has the meaning assigned to it in the Contract.
"MSRB" means the Municipal Securities Rulemaking Board,
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information depository within the meaning of the
Rule from time to time
"Rebate Fund" means the special fund of that name created pursuant to Section
3.21 of the Indenture.
"Rule" means SEC Rule 15c2-12, as amended from time to time_
"Sale and Offering Documents" means the Official Statement and documents used
to market the Bonds to purchasers
"SEC" means the United States Securities and Exchange Commission.
"Series 1997 Bonds" means the Lavaca-Navidad River Authority Water Supply
Facilities Revenue Bonds (City of Corpus Christi Lake Texana Project), Series 1997, dated
March 1 1997
"Series 1997 Rebate Fund" means that portion of the special fund of the Rebate
Fund created pursuant to the Indenture and established forthe purpose of complying with
Section 148 of the Code and the Regulations promulgated pursuant thereto which is to be
held In trust by the Trustee for the sole benefit of the United States of America and shall
not be subject to the claim of any other person, including without limitation the Bondholders
in connection with the Series 1997 Bonds.
"Series 2005 Bonds' means the Lavaca-Navidad River Authority Water Supply
Facilities Revenue Refunding Bonds (City of Corpus Christi Lake Texana Project), Series
2005 dated June 1 2005
"Series 2005 Rebate Fund" means that portion of the special fund of the Rebate
Fund created pursuant to the Indenture and established for the purpose of complying with
Section 148 of the Code and the Regulations promulgated pursuant thereto which is to be
held in trust by the Trustee for the sole benefit of the United States of America and shall
not be subject to the claim of any other person, including without limitation the Bondholders
in connection with the Series 2005 Bonds.
"SID" means any person designated by the State of Texas or an authorized
department, officer or agency thereof as, and determined by the SEC or its staff to be, a
state information depository within the meaning of the Rule from time to time.
Section 202. Article and Section Headings. The headings or titles of the several
Articles and Sections of this Agreement, and the Table of Contents appended hereto, are
solely for convenience of reference and shall not affect the meaning or construction of the
provisions hereof,
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Section 2.03. Interpretation. The singular form of any word used herein shall
include the plural, and vice versa, if applicable, The use of a word of any gender shall
include all genders, if applicable, This Agreement and all of the terms and provisions
hereof shall be construed so as to effectuate the purposes contemplated hereby and to
sustain the validity hereof, All references to any person or entity defined in Section 1.01
shall be deemed to include any person or entity succeeding to the rights, duties and
obligations of such person or entity. Capitalized terms not defined in Section 2.01 hereof
shall have the meaning ascribed to them in the Indenture. Unless otherwise specified
herein, all references to specific times shall be deemed to refer to Corpus Christi, Texas
time
ARTICLE III
CONTINUING DISCLOSURE
Section 3.01. Annual Reports. Following the issuance of Bonds of any series, the
offer or sale of which is not exempt from the Rule and, until the City is no longer obligated,
contingently or otherwise, to make Bond Payments in respect of the Bonds of such series,
the City undertakes to and shall provide annually to each NRMSIR and any SID, within six
months after the end of each Fiscal Year, (1) financial information and operating data of
the general type included in the Sale and Offering Documents for the Bonds of such series,
including such tables and portions as specifically identified as provided to the City for
review and comment pursuant to Section 3,01 of the Contract and (2) audited general
purpose financial statements of the City, if then available, such information being identified
In Exhibit A, hereto. Any financial statements so to be provided shall be (1) prepared in
accordance with generally accepted accounting principles for governmental agencies or
such other accounting principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (2) audited, if the City commissions an audit of
such statements and the audit is completed within the period during which it must be
proVided If the audit of such financial statements is not complete within such period, then
the City shall provide unaudited financial statements within the required period, and shall
provide audited financial statements for the applicable Fiscal Year to each NRMSIR and
any SID when and if such audited financial statements become available.
If the City changes its Fiscal Year, it will notify the Trustee, each NRMSIR, and any
SID In writing of the change (and of the date of the new Fiscal Year end) prior to the next
date by which the City otherwise would be required to provide financial information and
operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be incorporated by specific
reference to any document or specific part thereby (including an official statement or other
offering document, if it is available from the MSRB) that theretofore has been provided to
each NRMSIR and any SID or filed with the SEC, Copies of such information and
operating data shall be furnished to the LNRA at the same time the information and data
are furnished to any NRMSIR or SID
Section 3.02. Material Event Notices, (a) The following are the events with respect
to the Bonds which the LNRA must agree to disclose in a timely manner pursuant to the
Rule, if "material" under applicable federal securities laws and regulations promulgated
thereunder.
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(1) Principal and interest payment delinquencies;
(2) Non-payment related defaults;
(3) Unscheduled draws on debt service reserves reflecting financial
d ifficu Ities:
(4) Unscheduled draws on credit enhancements reflecting financial
difficulties:
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions or events affecting the tax-exempt status of the
Bonds,
(7) Modifications to rights of holders of the Bonds;
(8) Bond calls:
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Bonds: and
( 11 ) Rating changes
(b) The City shall, promptly after obtaining actual knowledge of the occurrence
of any of the events enumerated in (a) above, notify the LNRA of such event and provide
all information in the format required to satisfy the requirements of the Rule. Further, the
City shall provide, in a timely manner, notice of any failure by the City to provide audited
financial statements, financial information, and operating data in accordance with Section
301 hereof to each NRMSIR and each SID
Section 303. Limitations, Disclaimers, and Amendments, Notwithstandinganything
contained in this Agreement to the contrary, the City shall be obligated to observe and
perform the covenants specified in this Article in respect of the Bonds of any series for so
long as, but only for so long as, the City remains an "obligated person" with respect to the
Bonds of such series within the meaning of the Rule, except that the City in any event will
give notice of any deposit made in accordance with the Indenture that causes Bonds of
such series no longer to be Outstanding.
The provisions of this Article are for the sole benefit of (and may be enforced by)
the owners and beneficial owners of the Bonds, and nothing in this Article, express or
implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder
to any other person, The City undertakes to provide only the financial information,
operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Article and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation of the City's financial results,
condition. or prospects or hereby undertake to update any information provided in
accordance with this Article or otherwise, except as expressly provided herein. The City
makes no representation or warranty concerning such information or its usefulness to a
deciSion to invest in or sell Bonds at any future date
-5-
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND ORANY OTHER PERSON, IN CONTRACT OR
TORT. FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART. OF ANY
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Article
shall comprise a breach of or default under the Contract except for purposes of this
Agreement
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit
the duties of the LNRA or the City under federal and state securities laws.
The provisions of this Article may be amended by the LNRA and the City from time
to time to adapt to changed circumstances that arise from a change in legal requirements.
a change in law, or a change in the identity, nature, status, or type of operations of the
LNRA or the City, but only if (1) the provisions of this Article. as so amended, would have
permitted an underwriter to purchase or sell Bonds of the applicable series in the primary
offering of the Bonds of such series in compliance with the Rule. taking into account any
amendments or interpretations of the Rule since such offering as well as such changed
circumstances, and (2) either (a) the owners of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Contract that authorizes
such an amendment) of the outstanding Bonds of each such series affected consent to
such amendment or (b) an entity that is unaffiliated with the LNRA or the City (such as
nationally recognized bond counsel) determines that such amendment will not materially
Impair the interest of the owners and beneficial owners of the Bonds of such series and is
permitted by the terms of the Article If the LNRA and the City so amend the provisions of
thiS Article in connection with the financial or operating data which the City is required to
disclose under Section 301 hereof, the City shall provide a notice of such amendment to
be filed In accordance with Section 3.02(b) hereof, together with an explanation, in
narrative form of the reason for the amendment and the impact of any change in the type
of financial information or operating data to be so provided, The LNRA and the City may
also amend or repeal the provisions of this Article if the SEC amends or repeals the
applicable provision of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the
primary offering of the Bonds
ARTICLE IV
CONTINUING DISCLOSURE--LNRA
Section 4 01, Annual Reports. Following the issuance of Bonds of any series, the
offer or sale of which is not exempt from the Rule and, until the LNRA is no longer
obligated, contingently or otherwise, to make Bond Payments in respect of the Bonds of
such series, the LNRA undertakes to and shall provide annually to each NRMSIR and any
SID, within six months after the end of each Fiscal Year, (1) financial information and
operating data of the general type included in the Sale and Offering Documents for the
Bonds of such series, including such tables and portions as specifically identified therein,
-6-
and (2) audited general purpose financial statements of the LNRA, if then available, such
items being identified in Exhibit B, hereto. Any financial statements so to be provided shall
be (1) prepared in accordance with generally accepted accounting principles for
governmental agencies or such other accounting principles as the LNRA may be required
to employ from time to time pursuant to state law or regulation, and (2) audited, if the
LNRA commissions an audit of such statements and the audit is completed within the
period during which it must be provided. If the audit of such financial statements is not
complete within such period, then the LNRA shall provide unaudited financial statements
within the required period, and shall provide audited financial statements for the applicable
Fiscal Year to each NRMSIR and any SID, when and if such audited financial statements
become available,
If the LNRA changes Its Fiscal Year, it will notify the Trustee, the City, each
NRMSIR, and any SID in writing of the change (and of the date of the new Fiscal Year end)
prior to the next date by which the LNRA otherwise would be required to provide financial
information and operating data pursuant to this Section.
The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be incorporated by specific
reference to any document or specific part thereby (including an official statement or other
offering document, if it is available from the MSRB) that theretofore has been provided to
each NRMSIR and any SID or filed with the SEC. Copies of such information and
operating data shall be furnished to the LNRA at the same time the information and data
are furnished to any NRMSIR or SID
Section 402 Matenal Event Notices Shall be provided as specified in Section
10 01(b) of the Indenture.
Section403. Limitations, Disclaimers, and Amendments. Notwithstandinganything
contained in this Agreement to the contrary, the LNRA shall be obligated to observe and
perform the covenants specified in this Article in respect of the Bonds of any series for so
long as. but only for so long as, the LNRA remains an "obligated person" with respect to
the Bonds of such series within the meaning of the Rule, except that the LNRA in any
event will give notice of any deposit made in accordance with the Bond Resolution that
causes Bonds of such series no longer to be Outstanding.
The proviSions of this Article are for the sole benefit of (and may be enforced by)
the owners and beneficial owners of the Bonds, and nothing in this Article, express or
Implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder
to any other person The LNRA undertakes to provide only the financial information,
operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Article and does not hereby undertake to provide any other information
that may be relevant or material to a complete presentation ofthe LNRA's financial results,
condition, or prospects or hereby undertake to update any information provided in
accordance with this Article or otherwise, except as expressly provided herein, The LNRA
makes no representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE LNRA BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE LNRA WHETHER NEGLIGENT OR VVITHOUT FAULT ON ITS PART, OF ANY
- I -
COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND REMEDY OF ANY
SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the LNRA in observing or performing its obligations under this Article
shall comprise a breach of or default under the Contract except for purposes of this
Agreement.
Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit
the duties of the LNRA or the City under federal and state securities laws.
The provisions of this Article may be amended by the LNRA and the City from time
to time to adapt to changed circumstances that arise from a change in legal requirements,
a change in law, or a change in the identity, nature, status, or type of operations of the
LNRA or the City, but only if (1) the provisions of this Article, as so amended, would have
permitted an underwriter to purchase or sell Bonds of the applicable series in the primary
offering of the Bonds of such series in compliance with the Rule, taking into account any
amendments or interpretations of the Rule since such offering as well as such changed
circumstances, and (2) either (a) the owners of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Contract that authorizes
such an amendment) of the outstanding Bonds of each such series affected consent to
such amendment or (b) an entity that is IJnaffiliated with the LNRA or the City (such as
nationally recognized bond counsel) determines that such amendment will not materially
impair the interest of the owners and beneficial owners of the Bonds of such series and is
permitted by the terms of the Article. If the LNRA and the City so amend the provisions of
this Article in connection with the financial or operating data which the LNRA is required
to disclose under Section 4.01 hereof, the LNRA shall provide a notice of such amendment
to be filed in accordance with Section 10,01 of the Indenture, together with an explanation,
In narrative form, of the reason for the amendment and the impact of any change in the
type of financialmformation or operating data to be so provided. The LNRA and the City
may also amend or repeal the provisions of this Article if the SEC amends or repeals the
applicable provision of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this
sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the
primary offering of the Bonds
ARTICLE V
ARBITRAGE REBA TE CALCULATION
Section 501. City to Provide Information, The Series 2005 Bonds to be issued by
the LNRA pursuant to the Contract will be in excess of $5,000,000. Consequently, the
LNRA will need to determine whether there are excess earnings that will need to be paid
to the United States under Section 148 of the Code, This will require certain calculations
to be made. In order to make the calculations, the LNRA will need certain information from
the City as the City will retain control of this investment of the Bond Proceeds. The City
agrees to provide the requisite information and to make the necessary calculations to
determine if a payment must be made to the United States, all as further provided in
Section 5 02
-8-
Section 5.02. City to Provide Computation. The parties hereto agree that the City
shall provide to the Trustee, on behalf of the LNRA, within fifty (50) days after the close of
each "Bond Year," a computation in the form of a certificate of an Authorized
Representative of the City, on behalf of the LNRA, of the amount of "Excess Earnings," if
any, for the period beginning on the date of delivery of the Series 2005 Bonds and ending
at the close of such "Bond Year." In delivering the certificate to the LNRA, the Authorized
Representative may state that the computations made therein have been calculated and
determined by a recognized rebate consultation firm or accounting firm, as described in
the next succeeding paragraph below, and that the City has relied upon such computations
In delivering such certificate to the LNRA.
The Indenture requires that the Trustee shall deposit into the Series 2005 Rebate
Fund, to the extent and from amounts to be received from the City, an amount equal to the
difference, if any, between the amount then in the Series 2005 Rebate Fund and the
Excess Earnings so computed. The computation must be made by a recognized rebate
consultation firm or accounting firm The term "Bond Year" means with respect to the
Series 2005 Bonds each one-year period ending on the anniversary of the date of delivery
of the Series 2005 Bonds or such other period as may be elected by the LNRA, at the
direction of the City, in accordance with the Regulations and notice of which election has
been given to the Trustee. If, at the close of any Bond Year, the amount in the Rebate
Fund exceeds the amount that would be required to be paid to the United States of
America if the Series 2005 Bonds had been paid in full, such excess may, at the written
request of the LNRA. at the direction of the City. be transferred from the Rebate Fund and
paid to the City
Section 5 03 Exces~~j3rnings In general, "Excess Earnings" for any period of
time means the sum of
(i) the excess of--
(A) the aggregate amount earned during such period oftime on all
"Nonpurpose Investments" (including gains on the disposition of such
Obligations) in which "Gross Proceeds" of the issue are invested (other than
amounts attributable to an excess described in this subparagraph (i)(A)),
over
(B) the amount that would have been earned during such period
of time if the "Yield" on such Nonpurpose Investments (other than amounts
attributable to an excess described in this subparagraph (i)(B)) had been
equal to the yield on the issue, plus
(il) any income during such period of time attributable to the excess
described In subparagraph (i)(A) above
The term Nonpurpose Investments, Gross Proceeds, and Yield shall have the
meanings given to such terms in Section 148 of the Code and the Regulations
promulgated pursuant to such section
Section 504. Trustee to Pay. The Indenture requires the Trustee to pay to the
United States of America at least once every five years, to the extent that funds are
available in the Rebate Fund or otherwise provided by the LNRA an amount that ensures
that at least 90 percent of the Excess Earnings from the date of delivery of the Bonds to
-9-
the close of the period for which the payment is being made will have been paid, The
Indenture further provides that the Trustee shall pay to the United States of America not
later than 60 days after the Bonds have been paid in full, to the extent that funds are
available in the Rebate Fund or otherwise provided by the LNRA or the City, 100 percent
of the amount then required to be paid under Section 148(f) of the Code as a result of
Excess Earnings
Section 5.05, City to Notify. The amounts to be computed, paid, deposited or
disbursed under this section shall be determined by the City acting on behalf of the LNRA
within fifty (50) days after each Bond Year after the date of issuance of the Series 2005
Bonds. By such date, the City shall also notify, in writing, the Trustee and the LNRA of the
determinations the City has made and the payment to be made pursuant to the provisions
of this section. Upon written request of any Registered Owner of the Series 2005 Bonds,
the LNRA shall furnish to such Registered Owner of the Series 2005 Bonds a certificate
(supported by reasonable documentation, which may include calculation by Bond Counsel
or by some other service organization) showing compliance with this section and other
applicable provisions of Section 148 of the Code
Section 5.06. Records. The Indenture requires that the Trustee shall maintain a
record of the periodic determinations by the City of the Excess Earnings for a period
beginning on the first anniversary date of the issuance of the Series 2005 Bonds and
ending on the date six years after the final retirement of the Series 2005 Bonds. The
Indenture requires that such records shall state each such anniversary date and
summarize the manner in which the Excess Earnings, if any, was determined, Under the
Indenture, the Trustee further undertakes to provide to the LNRA and the City, upon
request any information in its possession which the LNRA or the City needs to comply with
the provisions of this Section
Section 507 Redemptions. The City acknowledges the Indenture requires that if
the Series 2005 Bonds are optionally or mandatorily prepaid or redeemed prior to maturity
as a whole in accordance With their terms, any amount remaining in any of the funds shall
be transferred to the Rebate Fund to the extent that the amount therein is less than the
Excess Earnings computed by the City as of the date of such redemption, and the balance
of such amount shall be used immediately by the Trustee for the purpose of paying
principal of, redemption premium, If any, and interest on the Series 2005 Bonds when due.
In furtherance of such Intention, the LNRA hereby authorizes and directs its Authorized
Representative to execute any documents, certificates or reports required by the Code and
to make such elections on behalf of the LNRA, which may be permitted by the Code as
are consistent with the purpose for the issuance of the Bonds
Section 5 08. Exception, The requirements contained in this Section relating to the
computation and payment of Excess Earnings shall not be applicable if all Gross Proceeds
of the Series 2005 Bonds are expended within 180 days of the Issue Date.
Section 5 09 Satisfaction of Requirements. The LNRA will be considered to have
satisfied the provisions of this Section if the City, on behalf of the LNRA and with notice to
the Trustee and the LNRA, performs the obligations imposed on the LNRA hereunder and
the LNRA exercises diligence in assuring that the City has complied with such covenants.
For purposes of the foregoing sentence, the LNRA shall be considered to have exercised
reasonable diligence, if upon reasonable notice from the Trustee that it has advised the
City of its failure to perform and the City continues not to perform, the LNRA notifies the
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City that it intends, at the expense of the City, to comply with the obligations setforth in this
Section on behalf of the City and. in fact, the LNRA makes such performance.
Section 5.10. Change in Law, It is the understanding of the City that the covenants
contained in this Article V are intended to assure compliance with the Code and any
regulations or rulings promulgated by the U.S. Department of the Treasury pursuant
thereto In the event that regulations or rulings are hereafter promulgated which modify
or expand provisions of the Code, as applicable to the Bonds of any series, including
specifically the Series 2005 Bonds, the City will not be required to comply with any
covenant contained herein to the extent that such failure to comply, in the opinion of
nationally-recognized bond counsel, will not adversely affect the exemption from federal
income taxation of interest on the Bonds of any series, including specifically the Series
2005 Bonds, under section 103 of the Code, In the event that regulations or rulings are
hereafter promulgated which impose additional requirements which are applicable to the
Bonds of any series, including specifically the Series 2005 Bonds, the City agrees to
comply with the additional requirements to the extent necessary, in the opinion of
nationally-recognized bond counsel, to preserve the exemption from federal income
taxation of interest on the Bonds of any series, including specifically the Series 2005
Bonds, under section 103 of the Code.
ARTICLE VI
GOVERNING L6,W, ENTIRE AGREEMENT
Section 6.01. Counterparts: Governing Law. This Agreement (a) may be executed
in several counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument; (b) constitutes the entire agreement between
LNRA and the City with respect to the subject matter hereof; (c) shall be governed in all
respects, including validity. interpretation and effect, by and shall be enforceable in
accordance with the laws of the United States and the State of Texas; (d) may be modified
only by an instrument signed by the duly Authorized Representative of each of the parties,
and (e) except as provided herein. shall not be construed as a contract for the benefit of
a third party other than a permitted successor or assignee of a party.
Section 6.02. Severability. In the event that any clause or provisions of this
Agreement shall be held to be invalid by any court of competent jurisdiction, the invalidity
of such clause or provision shall not affect any of the remaining provisions hereof.
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IN WITNESS WHEREOF, LNRA and the City have caused this Contract to be
executed in their behalf by their duly Authorized Representatives, as of the date first set
forth above.
[SEAL]
ATTEST:
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ORITY
By: _
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[SEAL]
ATTEST:
City Secretary
APPROVED AS TO FORM:
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CITY OF CORPUS CHRISTI, TEXAS
By:
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George Noe
City Manager