HomeMy WebLinkAbout026783 ORD - 05/18/2006CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO :
CITY OF CORPUS CHRISTI
On this the 18th day of May, 2006, the City Council of the City of Corpus Christi, Texas
convened in Special Meeting, with the following members of said City Council present, to -wit:
Henry Garrett
Brent Chesney,
Melody Cooper,
Jerry Garcia,
Bill Kelly,
Rex A. Kinnison,
John Marez,
Jesse Noyola,
Mark Scott
George K. Noe,
Mary Kay Fischer,
Cindy O'Brien,
Armando Chapa,
Mayor
Councilmembers
City Manager,
City Attorney,
Director of Financial Services,
City Secretary
with Chesney absent, thus constituting a quorum, at which time the following among other business
was transacted:
City Manager George K. Noe presented for the consideration of the Council an ordinance
authorizing the sale of certificates of obligation for landfill projects. 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.
ABSTAIN: None.
ABSENT WHEN VOTING: None.
The Mayor announced that the ordinance had been passed. The ordinance is as follows:
626783
INDEXED
ORDINANCE NO.
C7S3
ORDINANCE BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS,
PROVIDING FOR THE ISSUANCE OF CITY OF CORPUS CHRISTI, TEXAS,
COMBINATION TAX AND SOLID WASTE REVENUE CERTIFICATES OF OBLIGA-
TION, SERIES 2006, IN AN AGGREGATE PRINCIPAL AMOUNT NOT IN EXCESS
OF $20,000,000, AND ORDAINING OTHER MATTERS RELATING TO THE SUBJECT
WHEREAS, on the 25th day of April, 2006, the City Council of the City of Corpus Christi,
Texas (the "City" or the "Issuer ") passed a resolution authorizing and directing notice of its intention
to issue the Certificates of Obligation herein authorized to be issued in an aggregate principal amount
not to exceed $20,000,000, to be published in a newspaper as required by Section 271.049 of the
Texas Local Government Code; and
WHEREAS, said notice was published on April 30, 2006 and May 7, 2006 in the Corpus
Christi Caller - limes, a "newspaper" as described in Section 2051.044, Texas Government Code, all
as required by Section 271.049 of the Texas Local Government Code ( "Section 271.049 "); and
WHEREAS, due to a clerical error, the sale of the Certificates of Obligation was not posted
on the agenda of the City Council meeting scheduled for May 16, 2006, the date shown in said notice
as the date on which the Certificates of Obligation were to be sold; and
WHEREAS, at the City Council meeting held May 16, 2006, it was announced that the sale
of the Certificates of Obligation would be held at a special meeting of the City Council of the City
to be held on May 18, 2006, at 2:00 p.m. in the City Council chambers; and
WHEREAS, no petition, signed by 5% of the qualified electors of said City as permitted by
Section 271.049 protesting the issuance of such Certificates of Obligation, has been filed with the
City; and
WHEREAS, the Certificates of Obligation hereinafter authorized are to be issued and
delivered pursuant to Subchapter C of Chapter 271 of the Texas Local Government Code;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
TEXAS:
Section 1. AUTHORIZATION OF CERTIFICATES OF OBLIGATION. That the
Certificates of Obligation to be issued by the City, designated the "City of Corpus Christi, Texas
Combination Tax and Solid Waste Revenue Certificates of Obligation, Series 2006 ", are hereby
authorized to be issued and delivered in the principal amount of $18,605,000, for the purpose of
providing part of the funds for paying contractual obligations to be incurred by the City, to -wit: the
construction of improvements to the City's solid waste facilities, including, without limitation, paying
contractual obligations to be incurred with respect to the development of the Cefe Valenzuela landfill
in the vicinity of County Road 20 and FM 2444, for the acquisition and construction of municipal
landfill waste disposal cells, cover systems, gas collection systems, equipment, drainage facilities,
maintenance facilities, leachate collection systems, liners, environmental monitoring equipment, and
other improvements necessary to operate said landfill, and improvements to the J.C. Elliott landfill
in the vicinity of SH 286 (Chapman Ranch Road) and SH 357 (Saratoga Boulevard) including the
acquisition and construction of final cover systems, gas collection system modifications, ground water
monitoring, transfer station improvements and equipment, and other improvements necessary to
operate said landfill, and the payment of fiscal, engineering and legal fees incurred in connection
therewith. The term "Certificates" as used in this Ordinance shall mean and include collectively the
Certificates of Obligation initially issued and delivered pursuant to this Ordinance and all substitute
Certificates of Obligation exchanged therefor, as well as all other substitute Certificates of Obligation
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and replacement Certificates of Obligation issued pursuant hereto, and the term "Certificate" shall
mean any of the Certificates.
Section 2. DATE, DENOMINATIONS, NUMBERS AND MATURITIES. That the
Certificates shall initially be issued, sold and delivered hereunder as fully registered certificates,
without interest coupons, dated May 1, 2006, in the respective principal amounts set forth in
Schedule I to this Ordinance. The Certificates shall be in denominations of $5,000 or any integral
multiple thereof (an "Authorized Denomination "), numbered consecutively from R -1 upward, payable
to the respective initial registered owners thereof (as designated in Section 18 hereof) upon the initial
delivery of the Certificates, and thereafter to the registered assignee or assignees of the Certificates
or any portion or portions thereof (in each case, the "Registered Owner "), and the Certificates shall
mature on the maturity date, in each of the years and in the amounts as set forth in Schedule I to this
Ordinance. For purposes of this Ordinance, the Certificates maturing on March 1, 2029 and March
1, 2036 are hereby designated as "Term Certificates ".
Section 3. REDEMPTION. (a) Optional Redemption. That the City reserves the right to
redeem the Certificates maturing on or after March 1, 2017, in whole or in part, in the principal
amount of $5,000 or any integral multiple thereof, on March 1, 2016, and on any date thereafter, at
the par value thereof plus accrued interest to the redemption date. The years of maturity of the
Certificates called for redemption at the option of the City prior to stated maturity shall be selected
by the City. The Certificates or portions thereof redeemed within a maturity shall be selected at
random and by lot by the Paying Agent/Registrar.
(b) Mandatory Redemption. The Term Certificates are subject to mandatory sinking fund
redemption prior to their scheduled maturities as provided in the FORM OF CERTIFICATES.
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(c) Notice. At least 30 days prior to the date fixed for any such redemption, (i) a written
notice of such redemption shall be given to the registered owner of each Certificate or a portion
thereof being called for redemption by depositing such notice in the United States mail, first -class
postage prepaid, in the name of the City and at the City's expense addressed to each such registered
owner at his address shown on the registration books of the Paying Agent/Registrar and (ii) notice
of such redemption shall be published one (1) time in a financial journal or publication of general
circulation in the United States of America or the State of Texas carrying as a regular feature notices
of municipal bonds called for redemption; provided, however, that the failure to send, mail, or receive
such notice described in (i) above, or any defect therein or in the sending or mailing thereof, shall not
affect the validity or effectiveness of the proceedings for the redemption of any Certificate, and it is
hereby specifically provided that the publication of notice described in (ii) above shall be the only
notice actually required in connection with or as a prerequisite to the redemption of any Certificate.
By the date fixed for any such redemption due provision shall be made by the City with the Paying
Agent/Registrar for the payment of the required redemption price for the Certificates or the portions
thereof which are to be so redeemed, plus accrued interest thereon to the date fixed for redemption.
If such notice of redemption is given, and if due provision for such payment is made, all as
provided above, the Certificates, or the portions thereof, which are to be so redeemed, thereby
automatically shall be redeemed prior to their scheduled maturities, and shall not bear interest after
the date fixed for their redemption, and shall not be regarded as being outstanding except for the right
of the registered owner to receive the redemption price plus accrued interest to the date fixed for
redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying
Agent/Registrar shall record in the registration books all such redemptions of principal of the
Certificates or any portion thereof. If a portion of any Certificate shall be redeemed a substitute
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Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any
Authorized Denomination, at the written request of the registered owner, equal to the unredeemed
portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation,
at the expense of the City, all as provided in this Ordinance.
Section 4. INTEREST. That interest on the Certificates shall be payable on September 1,
2006, and semiannually thereafter on March 1 and September 1 of each year, until maturity or
redemption prior to maturity, to the registered owner of any such Certificate as of the Record Date
(as defined in the FORM OF CERTIFICATE) next preceding such interest payment date, in the man-
ner provided in the FORM OF CERTIFICATE, at the rates per annum as set forth in Schedule I to
this Ordinance. Interest on the Certificates shall be calculated on the basis of a 360 -day year
consisting of twelve 30 -day months.
Section 5. CHARACTERISTICS OF THE CERTIFICATES. (a) The City shall keep
or cause to be kept at the corporate trust office in Dallas, Texas (the "Designated Trust Office ") of
The Bank of New York Trust Company, N.A. (the "Paying Agent/Registrar "), or such other bank,
trust company, financial institution, or other agency named in accordance with the provisions of
subsection (g) of this Section hereof, books or records of the registration and transfer of the
Certificates (the "Registration Books "), and the City hereby appoints the Paying Agent/Registrar as
its registrar and transfer agent to keep such books or records and make such transfers and registra-
tions under such reasonable regulations as the City and Paying Agent/Registrar may prescribe; and
the Paying Agent/Registrar shall make such transfers and registrations as herein provided. The City
Manager or the designee thereof is hereby authorized to execute a "Paying Agent /Registrar
Agreement" in such form attached hereto as is approved by the City Attorney. It shall be the duty
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of the Paying Agent/Registrar to obtain from the registered owner and record in the Registration
Books the address of such registered owner of each certificate to which payments with respect to the
Certificates shall be mailed, as herein provided. The City or its designee shall have the right to inspect
the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise
the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise
required by law, shall not permit their inspection by any other entity. Registration of each Certificate
may be transferred in the Registration Books only upon presentation and surrender of such certificate
to the Paying Agent/Registrar at the Designated Trust Office for transfer of registration and cancella-
tion, together with proper written instruments of assignment, in form and with guarantee of signatures
satisfactory to the Paying Agent/Registrar, evidencing the assignment of such certificate, or any
portion thereof in any Authorized Denomination to the assignee or assignees thereof, and the right
of such assignee or assignees to have such certificate or any such portion thereof registered in the
name of such assignee or assignees. Upon the assignment and transfer of any Certificate or any
portion thereof, a new substitute Certificate or Certificates shall be issued in exchange therefor in the
manner herein provided.
(b) The entity in whose name any Certificate shall be registered in the Registration Books at
any time shall be treated as the absolute owner thereof for all purposes of this Ordinance, whether
or not such Certificate shall be overdue, and the City and the Paying Agent/Registrar shall not be
affected by any notice to the contrary; and payment of, or on account of, the principal of, premium,
if any, and interest on any such Certificate shall be made only to such registered owner. All such
payments shall be valid and effectual to satisfy and discharge the liability upon such certificate to the
extent of the sum or sums so paid.
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(c) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent
for paying the principal of and interest on the Certificates, and to act as its agent to exchange or
replace Certificates, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper
records of all payments made by the City and the Paying Agent/Registrar with respect to the
Certificates, and of all exchanges of such certificates, and all replacements of such Certificates, as
provided in this Ordinance.
(d) Each Certificate may be exchanged for fully registered certificates in the manner set forth
herein. Each Certificate issued and delivered pursuant to this Ordinance, to the extent of the unre-
deemed principal amount thereof, may, upon surrender of such Certificate at the Designated Trust
Office of the Paying Agent/Registrar, together with a written request therefor duly executed by the
registered owner or the assignee or assignees thereof, or its or their duly authorized attorneys or
representatives, with guarantee of signatures satisfactory to the Paying Agent/Registrar, at the option
of the registered owner or such assignee or assignees, as appropriate, be exchanged for fully regis-
tered Certificates, without interest coupons, in the form prescribed in the FORM OF CERTIFICATE,
in any Authorized Denomination (subject to the requirement hereinafter stated that each substitute
certificate shall have a single stated maturity date), as requested in writing by such registered owner
or such assignee or assignees, in an aggregate principal amount equal to the unredeemed principal
amount of any Certificate or Certificates so surrendered, and payable to the appropriate registered
owner, assignee, or assignees, as the case may be. If a portion of any Certificate shall be redeemed
prior to its scheduled maturity as provided herein, a substitute Certificate or Certificates having the
same maturity date, bearing interest at the same rate, in any Authorized Denomination at the request
of the registered owner, and in an aggregate principal amount equal to the unredeemed portion
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thereof, will be issued to the registered owner upon surrender thereof for cancellation. If any
Certificate or portion thereof is assigned and transferred, each Certificate issued in exchange therefor
shall have the same maturity date and bear interest at the same rate as the Certificate for which it is
being exchanged. Each substitute Certificate shall bear a letter and /or number to distinguish it from
each other Certificate. The Paying Agent/Registrar shall exchange or replace Certificates as provided
herein, and each fully registered certificate or certificates delivered in exchange for or replacement
of any Certificate or portion thereof as permitted or required by any provision of this Ordinance shall
constitute one of the Certificates for all purposes of this Ordinance, and may again be exchanged or
replaced. It is specifically provided, however, that any Certificate delivered in exchange for or
replacement of another Certificate prior to the first scheduled interest payment date on the
Certificates (as stated on the face thereof) shall be dated the same date as such Certificate, but each
substitute Certificate so delivered on or after such first scheduled interest payment date shall be dated
as of the interest payment date preceding the date on which such substitute Certificate is delivered,
unless such substitute Certificate is delivered on an interest payment date, in which case it shall be
dated as of such date of delivery; provided, however, that if at the time of delivery of any substitute
Certificate the interest on the Certificate for which it is being exchanged has not been paid, then such
substitute Certificate shall be dated as of the date to which such interest has been paid in full. On
each substitute Certificate issued in exchange for or replacement of any Certificate or Certificates
issued under this Ordinance there shall be printed thereon a Paying Agent/Registrar's Authentication
Certificate (the "Authentication Certificate "), in the form hereinafter set forth in the FORM OF
CERTIFICATE. An authorized representative of the Paying Agent/Registrar shall, before the
delivery of any such substitute Certificate, date such substitute Certificate in the manner set forth
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above, and manually sign and date the Authentication Certificate, and no such substitute Certificate
shall be deemed to be issued or outstanding unless the Authentication Certificate is so executed. The
Paying Agent/Registrar promptly shall cancel all Certificates surrendered for exchange or replace-
ment. No additional ordinances, orders, or resolutions need be passed or adopted by the City Council
or any other body or person so as to accomplish the foregoing exchange or replacement of any
Certificate or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execu-
tion, and delivery of the substitute Certificates in the manner prescribed herein. Pursuant to Chapter
1206, Texas Government Code, the duty of exchange or replacement of any Certificates as aforesaid
is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of the Authentication
Certificate, the exchanged or replaced certificate shall be valid, incontestable, and enforceable in the
same manner and with the same effect as the Certificates which originally were delivered pursuant
to this Ordinance, approved by the Attorney General of the State of Texas (the "Attorney General "),
and registered by the Comptroller of Public Accounts of the State of Texas (the "Comptroller ").
Neither the City nor the Paying Agent/Registrar shall be required (1) to issue, transfer, or exchange
any Certificate during a period beginning at the opening of business 30 days before the day of the first
mailing of a notice of redemption of Certificates and ending at the close of business on the day of
such mailing, or (2) to transfer or exchange any Certificate so selected for redemption in whole when
such redemption is scheduled to occur within 30 calendar days.
(e) All Certificates issued in exchange or replacement of any other Certificate or portion
thereof (i) shall be issued in fully registered form, without interest coupons, with the principal of and
interest on such Certificates to be payable only to the registered owners thereof, (ii) may be redeemed
prior to their scheduled maturities, (iii) may be transferred and assigned, (iv) may be exchanged for
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other Certificates, (v) shall have the characteristics, (vi) shall be signed and sealed, and (vii) the
principal of and interest on the Certificates shall be payable, all as provided, and in the manner re-
quired or indicated, in the FORM OF CERTIFICATE.
(f) The City shall pay all of the Paying Agent/Registrar's reasonable and customary fees and
charges for making transfers and exchanges of Certificates, but the registered owner of any Certificate
requesting such transfer shall pay any taxes or other governmental charges required to be paid with
respect thereto. In addition, the City hereby covenants with the registered owners of the Certificates
that it will (i) pay the reasonable and standard or customary fees and charges of the Paying
Agent/Registrar for its services with respect to the payment of the principal of and interest on the
Certificates, when due, and (ii) pay the fees and charges of the Paying Agent/Registrar for services
with respect to the transfer or registration of Certificates solely to the extent above provided, and
with respect to the exchange of Certificates solely to the extent above provided.
(g) The City covenants with the registered owners of the Certificates that at all times while
the Certificates are outstanding the City will provide a competent and legally qualified bank, trust
company, financial institution, or other agency to act as and perform the services of Paying
Agent/Registrar for the Certificates under this Ordinance, and that the Paying Agent/Registrar will
be one entity. The City reserves the right to, and may, at its option, change the Paying Agent/Regis-
trar upon not less than 60 days written notice to the Paying Agent/Registrar. In the event that the
entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other
method) should resign or otherwise cease to act as such, the City covenants that promptly it will
appoint a competent and legally qualified national or state banking institution which shall be a
corporation organized and doing business under the laws of the United States of America or of any
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state, authorized under such laws to exercise trust powers, subject to supervision or examination by
federal or state authority, and whose qualifications substantially are similar to the previous Paying
Agent/Registrar to act as Paying Agent/Registrar under this Ordinance. Upon any change in the
Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
registration books (or a copy thereof), along with all other pertinent books and records relating to
the Certificates, to the new Paying Agent/Registrar designated and appointed by the City. Upon any
change in the Paying Agent /Registrar, the City promptly will cause a written notice thereofto be sent
by the new Paying Agent/Registrar to each registered owner of the Certificates, by United States
mail, first -class postage prepaid, which notice also shall give the address of the new Paying
Agent /Registrar. By accepting the position and performing as such, each Paying Agent/Registrar
shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
Section 6. FORM OF CERTIFICATES. That the form of the Certificates, including the
form of the Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller (the "Comptroller's Certificate ") to be attached to the Certificates
initially issued and delivered pursuant to this Ordinance, shall be in substantially the form as set forth
in Exhibit A to this Ordinance, with such appropriate variations, omissions, or insertions as are
permitted or required by this Ordinance. The printer of the Certificates is hereby authorized to print
on the Certificates (i) the form of bond counsel's opinion relating to the Certificates, and (ii) an
appropriate statement of insurance furnished by a municipal bond insurance company providing
municipal bond insurance, if any, covering all or any part of the Certificates.
Section 7. DEFINITIONS. That the term "Series 2000 Certificates of Obligation" shall
mean the City of Corpus Christi, Texas, Combination Tax and Revenue Certificates of Obligation,
Series 2000, dated September 1, 2000, and currently outstanding in the aggregate principal amount
of $12,155,000; the term "Series 2004 Certificates of Obligation" shall mean the City of Corpus
Christi, Texas, Combination Tax and Solid Waste Revenue Certificates of Obligation, Series 2004,
dated July 1, 2004, and currently outstanding in the aggregate principal amount of $6,640,000; the
term "Series 2005 Certificates of Obligation" shall mean the City of Corpus Christi, Texas,
Combination Tax and Revenue Certificates of Obligation, Series 2005 (Landfill Project), dated June
1, 2005, and currently outstanding in the aggregate principal amount of $14,520,000; and the term
"Code" shall mean the Internal Revenue Code of 1986, and any amendment thereto.
Section 8. INTEREST AND SINKING FUND. That a special fund or account, to be
designated the "City of Corpus Christi, Texas Series 2006 Combination Tax and Solid Waste
Revenue Certificate of Obligation Interest and Sinking Fund" (the "Interest and Sinking Fund ") is
hereby created and shall be established and maintained by the City at its official depository. The
Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the
City, and shall be used only for paying the interest on and principal of the Certificates. Any accrued
interest derived from the sale of the Certificates shall be deposited to the credit of the Interest and
Sinking Fund. All ad valorem taxes levied and collected for and on account of the Certificates shall
be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any
of the Certificates are outstanding and unpaid, the governing body of the City shall compute and as-
certain the rate and amount of ad valorem tax, based on the latest approved tax rolls of the City, with
full allowances being made for tax delinquencies and the cost of tax collections, which will be suffi-
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cient to raise and produce the money required to pay the interest on the Certificates as such interest
comes due, and to provide a sinking fund to pay the principal of the Certificates as such principal ma-
tures, but never less than 2% of the original amount of the Certificates as a sinking fund each year.
The rate and amount of ad valorem tax is hereby ordered to be levied against all taxable property in
the City for each year while any of the Certificates are outstanding and unpaid, and said ad valorem
tax shall be assessed and collected each such year and deposited to the credit of the Interest and
Sinking Fund. The ad valorem taxes necessary to pay the interest on and principal of the Certificates,
as such interest comes due and such principal matures or comes due through operation of the
mandatory sinking fund redemption to the extent provided in the FORM OF CERTIFICATE, are
hereby levied and ordered to be levied and pledged for such payment, within the limit prescribed by
law. There shall be appropriated from the General Fund to deposit into the Interest and Sinking Fund
moneys as may be necessary to pay the first scheduled interest payment on the Certificates.
Section 9. REVENUES. That the Certificates are additionally secured by and shall be
payable from and secured by the revenues from the Issuer's Solid Waste System remaining after
payment of all maintenance and operation expenses thereof, and all other obligations now or hereafter
payable therefrom (including, without limitation, the Series 2000 Certificates of Obligation, the Series
2004 Certificates of Obligation and the Series 2005 Certificates of Obligation), constituting "Surplus
Revenues ". The Surplus Revenues are pledged by the City pursuant to authority of Chapter 363,
Texas Health and Safety Code, particularly Subchapter G thereof The Issuer shall deposit such
Surplus Revenues to the credit of the Interest and Sinking Fund created pursuant to Section 8, to the
extent necessary to pay the principal and interest on the Certificates. Notwithstanding the require-
ments of Section 8, if Surplus Revenues are actually on deposit or budgeted for deposit in the Interest
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and Sinking Fund in advance of the time when ad valorem taxes are scheduled to be levied for any
year, then the amount of taxes which otherwise would have been required to be levied pursuant to
Section 8 may be reduced to the extent and by the amount of the Surplus Revenues then on deposit
in the Interest and Sinking Fund or budgeted for deposit herein. The City anticipates that the Surplus
Revenues shall be sufficient to meet the annual debt service requirements of the Certificates and
intends to use Surplus Revenues to pay such debt service.
Section 10. TRANSFER. That the City shall do any and all things necessary to accomplish
the transfer of monies to the Interest and Sinking Fund of this issue in ample time to pay such items
of principal and interest.
Section 11. SECURITY FOR FUNDS. That the Interest and Sinking Fund created by this
Ordinance shall be secured in the manner and to the fullest extent permitted or required by law for
the security of public funds, and the Interest and Sinking Fund shall be used only for the purposes and
in the manner permitted or required by this Ordinance. Chapter 1208, Texas Government Code,
applies to the issuance of the Certificates and the pledge of ad valorem taxes and the Surplus
Revenues granted by the City under Sections 8 and 9, and such pledge is therefore valid, effective,
and perfected. If Texas law is amended at any time while the Certificates are outstanding and unpaid
such that the pledge of the ad valorem taxes and Surplus Revenues granted by the City is to be
subject to the filing requirements of Chapter 9, Texas Business & Commerce Code, then in order to
preserve to the registered owners of the Certificates the perfection of the security interest in said
pledge, the City agrees to take such measures as it determines are reasonable and necessary under
Texas law to comply with the applicable provisions of Chapter 9, Texas Business & Commerce Code
and enable a filing to perfect the security interest in said pledge to occur.
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Section 12. DEFEASANCE OF CERTIFICATES. (a) Defeased Certificates. That any
Certificate and the interest thereon shall be deemed to be paid, retired and no longer outstanding (a
"Defeased Certificate ") within the meaning of this Ordinance, except to the extent provided in
subsection (d) of this Section, when payment of the principal of such Certificate, plus interest thereon
to the due date (whether such due date be by reason of maturity or otherwise) either (i) shall have
been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided
for on or before such due date by irrevocably depositing with or making available to the Paying
Agent/Registrar in accordance with an escrow agreement or other instrument (the "Future Escrow
Agreement ") for such payment (1) lawful money of the United States of America sufficient to make
such payment or (2) Defeasance Securities that mature as to principal and interest in such amounts
and at such times as will insure the availability, without reinvestment, of sufficient money to provide
for such payment, and when proper arrangements have been made by the Issuer with the Paying
Agent/Registrar for the payment of its services until all Defeased Certificates shall have become due
and payable. At such time as a Certificate shall be deemed to be a Defeased Certificate hereunder,
as aforesaid, such Certificate and the interest thereon shall no longer be secured by, payable from, or
entitled to the benefits of, the ad valorem taxes or revenues herein levied and pledged as provided in
this Ordinance, and such principal and interest shall be payable solely from such money or Defeasance
Securities. Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem Defeased Certificates that is made in conjunction with
the payment arrangements specified in subsection 12(a)(i) or (ii) shall not be irrevocable, provided
that in the proceedings providing for such payment arrangements, the Issuer expressly (1) reserves
the right to call the Defeased Certificates for redemption; (2) gives notice of the reservation of that
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right to the owners of the Defeased Certificates immediately following the making of the payment
arrangements; and (3) directs that notice of the reservation be included in any redemption notices that
it authorizes.
(b) Investment in Defeasance Securities. Any moneys so deposited with the Paying
Agent/Registrar may at the written direction of the Issuer be invested in Defeasance Securities,
maturing in the amounts and times as hereinbefore set forth, and all income from such Defeasance
Securities received by the Paying Agent/Registrar that is not required for the payment of the
Certificates and interest thereon, with respect to which such money has been so deposited, shall be
turned over to the Issuer, or deposited as directed in writing by the Issuer. Any Future Escrow
Agreement pursuant to which the money and /or Defeasance Securities are held for the payment of
Defeased Certificates may contain provisions permitting the investment or reinvestment of such
moneys in Defeasance Securities or the substitution of other Defeasance Securities upon the
satisfaction of the requirements specified in subsection 12(a)(i) or (ii). All income from such
Defeasance Securities received by the Paying Agent/Registrar which is not required for the payment
of the Defeased Certificates, with respect to which such money has been so deposited, shall be
remitted to the Issuer or deposited as directed in writing by the Issuer.
(c) Defeasance Securities Defined. The term "Defeasance Securities" means (i) direct,
noncallable obligations ofthe United States of America, including obligations that are unconditionally
guaranteed by the United States of America, (ii) noncallable obligations of an agency or
instrumentality of the United States of America, including obligations that are unconditionally
guaranteed or insured by the agency or instrumentality and that, on the date of the purchase thereof
are rated as to investment quality by a nationally recognized investment rating firm not less than AAA
or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality,
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or other political subdivision of a state that have been refunded and that, on the date on the date the
governing body of the Issuer adopts or approves the proceedings authorizing the financial
arrangements are rated as to investment quality by a nationally recognized investment rating firm not
less than AAA or its equivalent.
(d) Paying Agent /Registrar Services. Until all Defeased Certificates shall have become
due and payable, the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for
such Defeased Certificates the same as if they had not been defeased, and the Issuer shall make proper
arrangements to provide and pay for such services as required by this Ordinance.
Section 13. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
CERTIFICATES. (a) Replacement Certificates. That in the event any outstanding Certificate is
damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed,
executed, and delivered, a new certificate of the same principal amount, maturity, and interest rate,
as the damaged, mutilated, lost, stolen, or destroyed Certificate, in replacement for such Certificate
in the manner hereinafter provided.
(b) Application for Replacement Certificates. That application for replacement of damaged,
mutilated, lost, stolen, or destroyed Certificates shall be made by the registered owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Certificate, the registered
owner applying for a replacement certificate shall furnish to the City and to the Paying
Agent/Registrar such security or indemnity as may be required by them to save each of them harmless
from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a
Certificate, the registered owner shall furnish to the City and to the Paying Agent/Registrar evidence
to their satisfaction of the loss, theft, or destruction of such Certificate, as the case may be. In every
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case of damage or mutilation of a Certificate, the registered owner shall surrender to the Paying
Agent/Registrar for cancellation the Certificate so damaged or mutilated.
(c) No Default Occurred. That notwithstanding the foregoing provisions of this Section, in
the event any such Certificate shall have matured, and no default has occurred which is then
continuing in the payment of the principal of or interest on this Certificate, the City may authorize the
payment of the same (without surrender thereof except in the case of a damaged or mutilated
Certificate) instead of issuing a replacement certificate, provided security or indemnity is furnished
as above provided in this Section.
(d) Charge for Issuing Replacement Certificates. That prior to the issuance of any
replacement certificate, the Paying Agent/Registrar shall charge the registered owner of such
Certificate with all legal, printing, and other expenses in connection therewith. Every replacement
Certificate issued pursuant to the provisions of this Section by virtue of the fact that any Certificate
is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen, or destroyed Certificate shall be found at any time, or be enforceable by anyone, and shall
be entitled to all the benefits of this Ordinance equally and proportionately with any and all other
Certificates duly issued under this Ordinance.
(e) Authority for Issuing Replacement Certificates. That in accordance with Chapter 1206,
Texas Government Code, this Section of this Ordinance shall constitute authority for the issuance of
any such replacement Certificate without necessity of further action by the City or any other body or
person, and the duty of the replacement of such Certificates is hereby authorized and imposed upon
the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such
Certificates in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance
for Certificates issued in conversion and exchange of other Certificates.
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Section 14. COVENANTS REGARDING TAX EXEMPTION. That the City covenants
to refrain from any action which would adversely affect, or to take such action as to ensure, the
treatment of the Certificates as obligations described in Section 103 of the Code, the interest on
which is not includable in the "gross income" of the holder for purposes of federal income taxation.
In furtherance thereof, the City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of
the Certificates (less amounts deposited to a reserve fund, if any) are used for any "private
business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds are so used, that amounts, whether or not received by the City, with respect to such
private business use, do not, under the terms of this Ordinance or any underlying
arrangement, directly or indirectly, secure or provide for the payment of more than 10 percent
of the debt service on the Certificates, in contravention of Section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use"
described in subsection (a) hereof exceeds 5 percent of the proceeds of the Certificates (less
amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent is used
for a "private business use" which is "related" and not "disproportionate ", within the meaning
of Section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of
$5,000,000, or five percent of the proceeds of the Certificates (less amounts deposited into
a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units, in contravention of Section 141(c) of the Code;
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(d) to refrain from taking any action which would otherwise result in the
Certificates being treated as "specified private activity bonds" within the meaning of Section
141(b) of the Code;
(e) to refrain from taking any action that would result in the Certificates being
"federally guaranteed" within the meaning of section 149(b) of the Code;
(0 to refrain from using any portion of the proceeds of the Certificates, directly
or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire
investment property (as defined in Section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Certificates, other than investment property
acquired with --
(1) proceeds ofthe Certificates invested for a reasonable temporary period
of three years or less until such proceeds are needed for the purpose for which the
Certificates are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning
of Section 1.148 -1(b) of the Treasury Regulations, and
(3)
amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Certificates;
(g)
to otherwise restrict the use of the proceeds of the Certificates or amounts
treated as proceeds of the Certificates, as may be necessary, so that the Certificates do not
otherwise contravene the requirements of Section 148 of the Code (relating to arbitrage) and,
to the extent applicable, Section 149(d) of the Code (relating to advance refundings); and
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(h) to pay to the United States of America at least once during each five -year
period (beginning on the date of delivery of the Certificates) an amount that is at least equal
to 90 percent of the "Excess Earnings," within the meaning of Section 148(0 of the Code and
to pay to the United States of America, not later than 60 days after the Certificates have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings
under Section 148(0 of the Code.
For purposes of the foregoing (a) and (b), the Issuer understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Certificates. It is the understanding of the City that the covenants contained herein
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 ruling are
hereafter promulgated which modify or expand provisions of the Code, as applicable to the
Certificates, 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 Certificates 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 Certificates, the City agrees to comply with the
additional requirements to the extent necessary, in the opinion ofnationally- recognized bond counsel,
to preserve the exemption from federal income taxation of interest on the Certificates under Section
103 of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor,
the City Manager and the Director of Financial Services to execute any documents, certificates or
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reports required by the Code, and to make such elections on behalf of the City which may be
permitted by the Code as are consistent with the purpose for the issuance of the Certificates.
In order to facilitate compliance with clause (h) above, a "Rebate Fund" is hereby established
by the City for the sole benefit of the United States of America, and the Rebate Fund shall not be
subject to the claim of any other person, including without limitation the holders of the Certificates.
The Rebate Fund is established for the additional purpose of compliance with Section 148 of the
Code.
Section 15. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR TIIE
PROJECT. That the Issuer covenants to account for the expenditure of proceeds from the sale of
the Certificates and any investment earnings thereon to be used for the purposes described in Section
1 of this Ordinance (such purpose referred to herein and Section 16 hereof as a "Project ") on its
books and records by allocating proceeds to expenditures within 18 months of the later of the date
that (a) the expenditure on a Project is made or (b) such Project is completed. The foregoing
notwithstanding, the Issuer shall not expend such proceeds or investment earnings more than 60 days
after the earlier of (a) the fifth anniversary of the date of delivery of the Certificates or (b) the date
the Certificates are retired, unless the Issuer obtains an opinion of nationally - recognized bond counsel
substantially to the effect that such expenditure will not adversely affect the tax - exempt status of the
Certificates. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if
it obtains an opinion that such failure to comply will not adversely affect the excludability for federal
income tax purposes from gross income of the interest.
Section 16. DISPOSITION OF PROJECT. That the Issuer covenants that the property
constituting a Project will not be sold or otherwise disposed in a transaction resulting in the receipt
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by the Issuer of cash or other compensation, unless the Issuer obtains an opinion of nationally -
recognized bond counsel substantially to the effect that such sale or other disposition will not
adversely affect the tax - exempt status of the Certificates. For purposes of the foregoing, the portion
of the property comprising personal property and disposed in the ordinary course shall not be treated
as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the
Issuer shall not be obligated to comply with this covenant if it obtains an opinion that such failure to
comply will not adversely affect the excludability for federal income tax purposes from gross income
of the interest.
Section 17. CUSTODY, APPROVAL, AND REGISTRATION OF CERTIFICATES.
That the Mayor of the City is hereby authorized to have control of the Certificates initially issued and
delivered hereunder and all necessary records and proceedings pertaining to the Certificates pending
their delivery and their investigation, examination, and approval by the Attorney General, and their
registration by the Comptroller. Upon registration of the Certificates the Comptroller (or a deputy
designated in writing to act for the Comptroller) shall manually sign the Comptroller's Certificate
attached to such Certificates, and the seal of the Comptroller shall be impressed, or placed in
facsimile, on the Comptroller's Certificate. The City Council hereby authorizes the payment of the
fee of the Office of the Attorney General for the examination of the proceedings relating to the
issuance of the Certificates, in the amount determined in accordance with the provisions of Section
1202.004, Texas Government Code.
Section 18. SALE OF CERTIFICATES. (a) Sale to Underwriters. That the sale of the
Certificates to Coastal Securities, as representative for the underwriters named in the Purchase
Contract (the "Purchase Contract ") between the City and the underwriters named therein (the
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"Underwriters "), at the purchase price described in the Purchase Contract, is hereby authorized,
ratified and confirmed. One Certificate in the principal amount maturing on each maturity date as set
forth in Schedule I attached to this Ordinance shall be delivered to the Underwriters, and the
Underwriters shall have the right to exchange such Certificates as provided in Section 5 hereof
without cost.
(b) Execution of Purchase Contract. That the Purchase Contract setting forth the terms of
the sale of the Certificates to the Underwriters, in substantially the form attached to this Ordinance,
is hereby accepted, approved and authorized to be delivered in executed form to the Underwriters.
(c) Bond Insurance. The Mayor, City Manager and the Director of Fiscal Services each is
authorized, in connection with effecting the sale of the Certificates, to obtain from XL Capital
Assurance Inc. (the "Insurer ") a municipal bond insurance policy in support of the Certificates. To
that end, for so long as such policy is in effect, the requirements of the Insurer relating to the issuance
of said policy is incorporated by reference into this Ordinance and made a part hereof for all purposes,
notwithstanding any other provision of this Ordinance to the contrary.
Section 19. APPROVAL OF OFFICIAL STATEMENT. That the "Official Statement"
prepared in connection with the sale of the Certificates, in substantially the form attached to this
Ordinance, is hereby accepted, approved and authorized to be delivered in executed form to the
Underwriters. The use of the "Preliminary Official Statement" prepared in connection with the sale
of the Certificates is hereby ratified.
Section 20. CONTINUING DISCLOSURE OBLIGATION. (a) Definitions. That as
used in this Section, the following terms have the meanings ascribed to such terms below:
"MAC" means the Muncipal Advisory Council of Texas.
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"MSRB" means the Municipal Securities Rulemaking Board.
" NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning ofthe Rule from
time to time.
"Rule" means SEC Rule 15c2 -12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(b) Annual Reports. (i) The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year ending in or after 2006, financial information and
operating data with respect to the City of the general type included in the final Official Statement
authorized by Section 19 of this Ordinance, being the information described in Exhibit B hereto. Any
financial statements so to be provided shall be (1) prepared in accordance with the accounting
principles described in Exhibit B hereto, 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
they must be provided. If the audit of such financial statements is not complete within such period,
then the City shall provide unaudited financial statements by the required time, and shall provide
audited financial statements for the applicable fiscal year to each NRMSIR and any SID, when and
if the audit report on such statements become available.
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L
(ii) If the City changes its fiscal year, it will notify each NRMSIR and any SID of the change
(and of the date of the new fiscal year end) prior to the next date by which the City otherwise would
be required to provide financial information and operating data pursuant to this Section. The financial
information and operating data to be provided pursuant to this Section may be set forth in full in one
or more documents or may be included by specific reference to any document (including an official
statement or other offering document, if it is available from the MSRB) that theretofore has been
provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Certificates of
Obligation, if such event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non - payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
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
Certificates;
7. Modifications to rights of holders of the Certificates;
8. Certificate calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the
Certificates; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any
failure by the City to provide financial information or operating data in accordance with subsection
(b) of this Section by the time required by such subsection. Any filing under this Section may be
made solely by transmitting such filing to the MAC as provided at http: / /www.disclosureusa.org,
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unless the SEC has withdrawn the interpretive advice stated in its letter to the MAC dated September
7, 2004.
(d) Limitations, Disclaimers, and Amendments. (i) The City shall be obligated to observe
and perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Certificates within the meaning of the Rule, except
that the City in any event will give notice of any deposit made in accordance with this Ordinance or
applicable law that causes Certificates no longer to be outstanding.
(ii) The provisions of this Section are for the sole benefit of the registered owners and
beneficial owners of the Certificates, and nothing in this Section, 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 Section 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 Section or otherwise, except as expressly provided herein. The City does not
make any representation or warranty concerning such information or its usefulness to a decision to
invest in or sell Certificates at any future date.
(iii) UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE
REGISTERED OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY 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 SECTION, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
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ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
(iv) No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
(v) The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Certificates in the
primary offering of the Certificates 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 registered owners of a majority in aggregate principal amount (or any greater amount required
by any other provision of this Ordinance that authorizes such an amendment) of the outstanding
Certificates consent to such amendment or (b) a person that is unaffiliated with the City (such as
nationally recognized bond counsel) determined that such amendment will not materially impair the
interest of the registered owners and beneficial owners of the Certificates. If the City so amends the
provisions of this Section, it shall include with any amended financial information or operating data
next provided in accordance with subsection (b) of this Section an explanation, in narrative form, of
the reason for the amendment and of the impact of any change in the type of financial information or
operating data so provided. The City may also amend or repeal the provisions of this continuing
disclosure agreement 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
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extent that the provisions ofthis sentence would not prevent an underwriter from lawfully purchasing
or selling Certificates in the primary offering of the Certificates.
Section 21. DTC REGISTRATION. That the Certificates initially shall be issued and
delivered in such manner that no physical distribution of the Certificates will be made to the public,
and The Depository Trust Company ("DTC"), New York, New York, initially will act as depository
for the Certificates. DTC has represented that it is a limited purpose trust company incorporated
under the laws of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered under Section 17A of the Securities Exchange Act of 1934, as amended, and the
City accepts, but in no way verifies, such representations. The Certificates initially authorized by this
Ordinance shall be delivered to and registered in the name of CEDE & CO., the nominee of DTC.
It is expected that DTC will hold the Certificates on behalf of the Underwriters and their respective
participants. So long as each Certificate is registered in the name of CEDE & CO., the Paying
Agent /Registrar shall treat and deal with DTC the same in all respects as if it were the actual and
beneficial owner thereof. It is expected that DTC will maintain a book -entry system which will
identify ownership ofthe Certificates in Authorized Denominations, with transfers of ownership being
effected on the records of DTC and its participants pursuant to rules and regulations established by
them, and that the Certificates initially deposited with DTC shall be immobilized and not be further
exchanged for substitute Certificates except as hereinafter provided. The City is not responsible or
liable for any functions of DTC, will not be responsible for paying any fees or charges with respect
to its services, will not be responsible or liable for maintaining, supervising, or reviewing the records
of DTC or its participants, or protecting any interests or rights of the beneficial owners of the
Certificates. It shall be the duty of the DTC Participants, as defined in the Official Statement herein
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approved, to make all arrangements with DTC to establish this book -entry system, the beneficial
ownership of the Certificates, and the method of paying the fees and charges of DTC. The City does
not represent, nor does it in any way covenant that the initial book -entry system established with DTC
will be maintained in the future. Notwithstanding the initial establishment of the foregoing book -entry
system with DTC, if for any reason any of the originally delivered Certificates is duly filed with the
Paying Agent/Registrar with proper request for transfer and substitution, as provided for in this
Ordinance, substitute Certificates will be duly delivered as provided in this Ordinance, and there will
be no assurance or representation that any book -entry system will be maintained for such Certificates.
In connection with the initial establishment of the foregoing book -entry system with DTC, the City
heretofore has executed a "Blanket Letter of Representations" prepared by DTC in order to
implement the book -entry system described above.
Section 22. INTEREST EARNINGS; PREMIUM. That interest earnings derived from the
investment of proceeds from the sale of the Certificates shall be used along with other proceeds for
the construction of the permanent improvements set forth in Section 1 hereof for which the
Certificates are issued; provided that after completion of such permanent improvements, if any of
such interest earnings remain on hand, such interest earnings shall be deposited in the Interest and
Sinking Fund. It is further provided, however, that any interest earnings on proceeds which are
required to be rebated to the United States of America pursuant to this Ordinance hereof in order to
prevent the Certificates from being arbitrage bonds shall be so rebated and not considered as interest
earnings for the purposes of this Section. All premium received in connection with the sale of the
Certificates shall be used in a manner consistent with the provisions of Section 1201.042, Texas
Government Code. The City Council hereby finds that the sum of the aggregate principal amount of
the Certificates and premium, if any, received as part of the purchase price for the Certificates to be
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expended for the construction of the permanent improvements set forth in Section 1 hereof will not
exceed the maximum amount of Certificates authorized to be sold in the notice of intention published
in connection with the sale of the Certificates.
Section 23. CONFLICTING PROCEEDINGS. That all ordinances and resolutions or
parts thereof in conflict herewith are hereby repealed.
Section 24. OFFICIALS AUTHORIZED TO ACT ON BEHALF OF THE CITY. That
the Mayor, the City Secretary, the City Manager, any Assistant City Manager or the Director of
Financial Services of the City, and all other officers, employees, and agents of the City, and each of
them, shall be and they are 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 seal and on behalf of the City all such instruments, whether or not herein
mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this
Ordinance, the Certificates, the offering documents prepared in connection with the sale of the
Certificates, or the Paying Agent/Registrar Agreement. In case any officer whose signature appears
on any Certificate shall cease to be such officer before the delivery of such Certificate, such signature
shall nevertheless be valid and sufficient for all purposes the same as if he or she had remained in
office until such delivery.
Section 25. RULES OF CONSTRUCTION. That for all purposes of this Ordinance, unless
the context requires otherwise, all references to designated Sections and subsections are to the
Sections and subsections 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
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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 any
mandatory sinking fund redemption payments as described herein. Any reference to "FORM OF
CERTIFICATE" shall refer to the form of the Certificates set forth in Exhibit A to this Ordinance.
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. The findings set forth in the preamble to this
Ordinance are hereby incorporated into the body of this Ordinance and made a part hereof for all
purposes.
Section 26. IMMEDIATE EFFECT. That in accordance with the provisions of V.T.C.A.,
Government Code, Section 1201.028, this Ordinance shall be effective immediately upon its adoption
by the City Council.
[Execution page follows]
ADOPTED this 18th day of May, 2006.
Mayor, ity of Co pus Christi, Texas
ATTEST:
City Secretary, City of Corpus hristi, Texas
APPROVED THIS 18TH DAY OF MAY, 2006:
MARY KAY FISCHER, CITY ATTORNEY
(SEAL)
SCHEDULE I
The Certificates shall mature on March 1 in each of the years, in the amounts, and bear interest at the
interest rates per annum, as set forth in the following schedule:
YEARS AMOUNTS ($) INTEREST RATES ( %)
2009 350,000 4.000
2010 365,000 4.000
2011 380,000 4.000
2012 395,000 4.000
2013 410,000 4.000
2014 425,000 4.250
2015 445,000 4.250
2016 465,000 4.250
2017 485,000 4.375
2018 505,000 4.375
2019 525,000 4.500
2020 550,000 4.500
2021 575,000 4.625
2022 600,000 4.625
2023 630,000 4.750
2024 660,000 4.750
* * ** * * ** * * **
2029 3,800,000 4.750
* * ** * * ** * * **
2036 7,040,000 4.750
NO. R-
FORM OF CERTIFICATE
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF NUECES AND SAN PATRICIO
CITY OF CORPUS CHRISTI, TEXAS
COMBINATION TAX AND SOLID WASTE REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2006
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP
May 1, 2006
ON THE MATURITY DATE specified above, THE CITY OF CORPUS CHRISTI,
TEXAS (the "City" or the "Issuer "), being a political subdivision of the State of Texas, hereby
promises to pay to (hereinafter called the "registered owner ") the
principal amount of
DOLLARS
and to pay interest thereon from the Original Issue Date specified above, on September 1, 2006,
and semiannually on each March 1 and September 1 thereafter to the maturity date specified
above or the date of its redemption prior to scheduled maturity, at the interest rate per annum
specified above; except that if this Certificate is required to be authenticated and the date of its
authentication is later than September 1, 2006, such interest is payable semiannually on each
March 1 and September 1 following such date.
THE PRINCIPAL OF AND INTEREST ON this Certificate are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of this
Certificate shall be paid to the registered owner hereof upon presentation and surrender of this
Certificate at maturity, or upon the date fixed for its redemption prior to maturity, at the
corporate trust office in Dallas, Texas (the "Designated Trust Office ") of The Bank of New York
Trust Company, N.A. (the "Paying Agent/Registrar "). The payment of interest on this Certificate
shall be made by the Paying Agent/Registrar to the registered owner hereof as shown by the
Registration Books kept by the Paying Agent/Registrar at the close of business on the 15th day of
the month next preceding such interest payment date by check drawn by the Paying
Agent/Registrar on, and payable solely from, funds of the Issuer required to be on deposit with
the Paying Agent/Registrar for such purpose as hereinafter provided; and such check shall be sent
by the Paying Agent /Registrar by United States mail, first -class postage prepaid, on each such in-
terest payment date, to the registered owner hereof at its address as it appears on the Registration
Books kept by the Paying Agent /Registrar, as hereinafter described, or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. The Issuer covenants with the registered owner of this Certificate that no later
than each principal payment and /or interest payment date for this Certificate it will make available
to the Paying Agent/Registrar from the Interest and Sinking Fund as defined by the ordinance
authorizing the Certificates (the "Certificate Ordinance ") the amounts required to provide for the
payment, in immediately available funds, of all principal of and interest on the Certificates, when
due.
IF THE DATE for the payment of the principal of or interest on this Certificate shall be a
Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where the
Designated Trust Office of the Paying Agent/Registrar is located are authorized by law or ex-
ecutive order to close, or the United States Postal Service is not open for business, then the date
for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to close, or the United States Postal
Service is not open for business; and payment on such date shall have the same force and effect as
if made on the original date payment was due. Notwithstanding the foregoing, during any period
in which ownership of the Certificates is determined only by a book entry at a securities
depository for the Certificates, any payment to the securities depository, or its nominee or
registered assigns, shall be made in accordance with existing arrangements between the Issuer and
the securities depository.
THIS CERTIFICATE is one of a Series of Certificates (the "Certificates ") dated the
Original Issue Date specified above, authorized in accordance with the Constitution and laws of
the State of Texas in the principal amount of $18,605,000 FOR THE PURPOSE OF
PROVIDING PART OF THE FUNDS FOR PAYING CONTRACTUAL OBLIGATIONS TO
BE INCURRED FOR THE CITY, TO -WIT: the construction of improvements to the City's solid
waste facilities, including, without limitation, paying contractual obligations to be incurred with
respect to the development of the Cefe Valenzuela landfill in the vicinity of County Road 20 and
FM 2444, for the acquisition and construction of municipal landfill waste disposal cells, cover
systems, gas collection systems, equipment, drainage facilities, maintenance facilities, leachate
collection systems, liners, environmental monitoring equipment, and other improvements
necessary to operate said landfill, and improvements to the J.C. Elliott landfill in the vicinity of SH
286 (Chapman Ranch Road) and SH 357 (Saratoga Boulevard) including the acquisition and
construction of final cover systems, gas collection system modifications, ground water
monitoring, transfer station improvements and equipment, and other improvements necessary to
operate said landfill, and the payment of fiscal, engineering and legal fees incurred in connection
therewith.
ON MARCH 1, 2016, or on any date thereafter, the Certificates of this Series maturing on
March 1, 2017 and thereafter may be redeemed prior to their scheduled maturities, at the option
of the Issuer, with funds derived from any available and lawful source, as a whole, or in part
(provided that a portion of a Certificate may be redeemed only in an integral multiple of $5,000),
at par and accrued interest to the date fixed for redemption. The years of maturity of the
Certificates called for redemption at the option of the Issuer prior to stated maturity shall be
selected by the Issuer. The Certificates or portions thereof redeemed within a maturity shall be
selected at random and by lot by the Paying Agent/Registrar; provided, that during any period in
which ownership of the Certificates is determined only by a book entry at a securities depository
for the Certificates, if fewer than all of the Certificates of the same maturity and bearing the same
interest rate are to be redeemed, the particular Certificates of such maturity and bearing such
interest rate shall be selected in accordance with the arrangements between the Issuer and the
securities depository .
THE CERTIFICATES are also subject to mandatory redemption in part by lot pursuant to
the terms of the Certificate Ordinance, on March 1 in each of the years 2025 through 2028, with
respect to Certificates maturing March 1, 2029, and on March 1 in each of the years 2030 through
2035, with respect to Certificates maturing March 1, 2036, in the following years and in the
following amounts, at a price equal to the principal amount thereof and accrued and unpaid
interest to the date of redemption, without premium:
Year Principal Amount ($)
2025 690,000
2026 725,000
2027 760,000
2028 795,000
2029* 830,000
2030 870,000
2031 915,000
2032 955,000
2033 1,000,000
2034 1,050,000
2035 1,100,000
2036* 1,150,000
*Final Maturity
To the extent, however, that Certificates subject to sinking fund redemption have been previously
purchased or called for redemption in part and otherwise than from a sinking fund redemption
payment, each annual sinking fund payment for such Certificate shall be reduced by the amount
obtained by multiplying the principal amount of Certificates so purchased or redeemed by the ratio
which each remaining sinking fund redemption payment for such Certificates bears to the total
remaining sinking fund payments, and by rounding each such payment to the nearest $5,000
integral; provided, that during any period in which ownership of the Certificates is determined
only by a book entry at a securities depository for the Certificates, the particular Certificates to be
called for mandatory redemption shall be selected in accordance with the arrangements between
the Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any such redemption, (a) a written notice of
such redemption shall be given to the registered owner of each Certificate or a portion thereof
being called for redemption by depositing such notice in the United States mail, first -class postage
prepaid, addressed to each such registered owner at his address shown on the Registration Books
of the Paying Agent/Registrar and (b) notice of such redemption shall be published one (1) time in
a financial journal or publication of general circulation in the United States of America or the
State of Texas carrying as a regular feature notices of municipal bonds called for redemption,
provided, however, that the failure to send, mail, or receive such notice described in (a) above, or
any defect therein or in the sending or mailing thereof, shall not affect the validity or effectiveness
of the proceedings for the redemption of any Certificate, and the Certificate Ordinance provides
that the publication of notice as described in (b) above shall be the only notice actually required in
connection with or as a prerequisite to the redemption of any Certificates. By the date fixed for
any such redemption due provision shall be made by the Issuer with the Paying Agent/Registrar
for the payment of the required redemption price for this Certificate or the portion hereof which is
to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice
of redemption is given, and if due provision for such payment is made, all as provided above, this
Certificate, or the portion hereof which is to be so redeemed, thereby automatically shall be
redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its
redemption, and shall not be regarded as being outstanding except for the right of the registered
owner to receive the redemption price plus accrued interest to the date fixed for redemption from
the Paying Agent/Registrar out of the funds provided for such payment. The Paying
Agent/Registrar shall record in the Registration Books all such redemptions of principal of this
Certificate or any portion hereof. If a portion of any Certificate shall be redeemed a substitute
Certificate or Certificates having the same maturity date, bearing interest at the same rate, in any
denomination or denominations in any integral multiple of $5,000, at the written request of the
registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will
be issuedto the registered owner upon the surrender thereof for cancellation, at the expense of the
Issuer, all as provided in the Certificate Ordinance.
ALL CERTIFICATES OF THIS SERIES are issuable solely as fully registered
certificates, without interest coupons, in the denomination of any integral multiple of $5,000. As
provided in the Certificate Ordinance, this Certificate, or any unredeemed portion hereof may, at
the request of the registered owner or the assignee or assignees hereof, be assigned, transferred,
and exchanged for a like aggregate principal amount of fully registered certificates, without
interest coupons, payable to the appropriate registered owner, assignee, or assignees, as the case
may be, having the same maturity date, and bearing interest at the same rate, in any denomination
or denominations in any integral multiple of $5,000 as requested in writing by the appropriate
registered owner, assignee, or assignees, as the case may be, upon surrender of this Certificate to
the Paying Agent/Registrar at its Designated Trust Office for cancellation, all in accordance with
the form and procedures set forth in the Certificate Ordinance. Among other requirements for
such assignment and transfer, this Certificate must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Certificate or
any portion or portions hereof in any integral multiple of $5,000 to the assignee or assignees in
whose name or names this Certificate or any such portion or portions hereof is or are to be
transferred and registered. The form of Assignment printed or endorsed on this Certificate may
be executed by the registered owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Certificate or any portion or portions hereof from time to
time by the registered owner. The Issuer shall pay the Paying Agent/Registrar's reasonable
standard or customary fees and charges for transferring and exchanging any Certificate or portion
thereof. In any circumstance, any taxes or governmental charges required to be paid with respect
thereto shall be paid by the one requesting such assignment, transfer, or exchange as a condition
precedent to the exercise of such privilege. In any circumstance, neither the Issuer nor the Paying
Agent/Registrar shall be required (1) to make any transfer or exchange during a period beginning
at the opening of business 30 days before the day of the first mailing of a notice of redemption of
certificates and ending at the close of business on the day of such mailing, or (2) to transfer or
exchange any certificates so selected for redemption when such redemption is scheduled to occur
within 30 calendar days.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Certificates, the foregoing requirements of holding, delivering or
transferring this Certificate shall be modified to require the appropriate person or entity to meet
the requirements of the securities depository as to registering or transferring the book entry to
produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Certificates is changed by the Issuer,
resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Certificate Ordinance
that it promptly will appoint a competent and legally qualified substitute therefor, and cause
written notice thereof to be mailed to the registered owners of the Certificates.
BY BECOMING the registered owner of this Certificate, the registered owner thereby
acknowledges all of the terms and provisions of the Certificate Ordinance, agrees to be bound by
such terms and provisions, acknowledges that the Certificate Ordinance is duly recorded and
available for inspection in the official minutes and records of the Issuer, and agrees that the terms
and provisions of this Certificate and the Certificate Ordinance constitute a contract between each
registered owner hereof and the Issuer.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly authorized, issued, and delivered; that all acts, conditions, and things required or proper to
be performed, exist, and be done precedent to or in the authorization, issuance, and delivery of
this Certificate have been performed, existed, and been done in accordance with law; that this
Certificate is a direct obligation of the City, issued on the full faith and credit thereof; that annual
ad valorem taxes sufficient to provide for the payment of the interest on and principal of this
Certificate, as such interest comes due and such principal matures, have been levied and ordered
to be levied against all taxable property in the City, and have been pledged for such payment,
within the limit prescribed by law; and that the "Surplus Revenues" (as defined in the Certificate
Ordinance) of the City's Solid Waste System remaining after payment of all maintenance and
operation expenses thereof, and all other obligations now or hereafter payable therefrom, as
provided in the Certificate Ordinance, have been pledged as additional security for the
Certificates.
IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor of the City, attested by the manual or facsimile signature of the City
Secretary of the City, and the official seal of the City has been duly affixed to, impressed, or
placed in facsimile, on this Certificate.
City Secretary, City of
Corpus Christi, Texas
(SEAL)
Mayor, City of Corpus Christi, Texas
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate of Obligation has been issued under the provisions
of the Certificate Ordinance described on the face of this Certificate of Obligation; and that this
Certificate of Obligation has been issued in exchange for or replacement of a certificate of
obligation, certificates of obligation, or a portion of a certificate of obligation or certificates of
obligation of an issue which originally was approved by the Attorney General of the State of
Texas and registered by the Comptroller of Public Accounts of the State of Texas.
Dated
THE BANK OF NEW YORK TRUST
COMPANY, N.A.
By
Authorized Representative
FORM OF ASSIGNMENT
AS SIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
(Please insert Social Security or Taxpayer Identification Number of Transferee)
(Please print or typewrite name and address, including
zip code of Transferee)
the within Certificate of Obligation and all rights
thereunder, and hereby irrevocably constitutes and appoints
attorney to register the transfer of the within Certificate
of Obligation on books kept for registration thereof, with
full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must
be guaranteed by a member
firm of the New York Stock
Exchange or a commercial
bank or trust company.
NOTICE: The signature above must
correspond with the name of the
Registered Owner as it appears upon
the front of this Certificate of Obligation
in every particular, without alteration or
or enlargement or any change whatsoever.
*FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE CERTIFICATES UPON INITIAL DELIVERY THEREOF
OFFICE OF COMPTROLLER
STATE OF TEXAS
REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by the
Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY HAND and seal of office at Austin, Texas this
Comptroller of Public Accounts of
(SEAL) the State of Texas
NOTE TO PRINTER:
*¶ not to be on certificate
Exhibit B
to
Ordinance
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
The following information is referred to in Section 20 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or under
the headings of the Official Statement referred to) below:
1. Appendix A, under the headings: "Debt Payable from Taxes ", "General Fund Revenues ",
"General Expenses ", "Ad Valorem Taxes ", "Municipal Hotel Occupancy Taxes ", "Solid
Waste Operations ", and "The Tax Increment Financing Act "; and
Appendix C, "Combined Financial Statements of the City of Corpus Christi, Texas for the
Fiscal Year ended July 31, 2005.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 2 above.
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 18th
day of May, 2006, authorizing the issuance of $18,605,000 Combination Tax and Solid Waste
Revenue Certificates of Obligation, Series 2006, which ordinance is duly of record in the minutes
of said City Council, and said meeting was open to the public, and public notice of the time, place
and purpose of said meeting was given, all as required by Texas Government Code, Chapter 551.
EXECUTED UNDER MY HAND AND SEAL of said City, this the 18th day of May,
2006.
City Secretary, City of '•. rpus Christi, Texas
(SEAL)