HomeMy WebLinkAbout032117-B ORD - 05/19/2020 FINAL
ORDINANCE NO. 032117-8
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF CORPUS
CHRISTI, TEXAS AUTHORIZING THE ISSUANCE OF ITS UTILITY
SYSTEM JUNIOR LIEN REVENUE IMPROVEMENT AND/OR
REFUNDING BONDS IN ONE OR MORE SERIES (AS DESIGNATED BY
PURPOSE AND SERIES); MAKING PROVISIONS FOR THE PAYMENT
AND SECURITY THEREOF BY A JUNIOR AND INFERIOR LIEN ON
AND PLEDGE OF THE NET REVENUES OF THE CITY'S UTILITY
SYSTEM ON A PARITY WITH CERTAIN CURRENTLY OUTSTANDING
UTILITY SYSTEM REVENUE OBLIGATIONS; STIPULATING THE
TERMS AND CONDITIONS FOR THE ISSUANCE OF ADDITIONAL
REVENUE BONDS ON A PARITY THEREWITH; PRESCRIBING THE
FORM, TERMS, CONDITIONS, AND RESOLVING OTHER MATTERS
INCIDENT AND RELATED TO THE ISSUANCE,SALE,AND DELIVERY
OF ONE OR MORE SERIES OF BONDS, INCLUDING THE APPROVAL
AND DISTRIBUTION OF ONE OR MORE OFFICIAL STATEMENTS
PERTAINING THERETO; AUTHORIZING THE EXECUTION OF ONE
OR MORE PAYING AGENT/REGISTRAR AGREEMENTS, ONE OR
MORE ESCROW AGREEMENTS, AND ONE OR MORE PURCHASE
CONTRACTS; 'COMPLYING WITH THE REQUIREMENTS IMPOSED
BY THE"LETTER OF REPRESENTATIONS PREVIOUSLY EXECUTED
WITH THE DEPOSITORY TRUST COMPANY; DELEGATING THE
AUTHORITY TO CITY STAFF TO EXECUTE CERTAIN DOCUMENTS
RELATING TO THE SALE OF EACH SERIES OF BONDS; AND
PROVIDING AN EFFECTIVE DATE
WHEREAS,the City Council (the City Council) of the City of Corpus Christi, Texas (the
City) has heretofore issued, and there are currently Outstanding, revenue bonds (the Previously
Issued Priority Bonds) secured by a first and prior lien on and pledge of the Net Revenues
(hereinafter defined) of the City's combined utility systems (as further described and defined
herein,the System); and
WHEREAS, in the City ordinances authorizing the issuance of the Previously Issued
Priority Bonds,the City reserved the right to issue revenue bonds on parity with the Priority Bonds
(hereinafter defined); and
WHEREAS, the City Council has heretofore issued, and there are currently outstanding
revenue bonds (the Previously Issued Junior Lien Obligations) secured by a lien on and pledge of
Net Revenues that is junior and inferior to the lien thereon and pledge thereof securing the
repayment of the Priority Bonds; and
100107157.3
SCANNED
WHEREAS,in the City ordinances authorizing the issuance of the Previously Issued Junior
Lien Obligations, the City reserved the right to issue revenue bonds on a parity with the Junior
Lien Obligations (hereinafter defined) from time to time outstanding; and
WHEREAS, the City Council has heretofore issued, and there are currently outstanding,
obligations supported by a lien on and pledge of the Net Revenues of the System that are inferior
to the lien thereon and pledge thereof securing the Priority Bonds and the Junior Lien Obligations
(the Previously Issued Subordinate Lien Obligations); and
WHEREAS, the City Council has determined for the purpose of improving the credit
quality of its Junior Lien Obligations,which has become its primary lien for issuing System debt,
that it will no longer issue obligations secured by a first and prior lien on and pledge of the Net
Revenues of the System referred to herein as "Priority Bonds", on parity with the lien thereon and
pledge thereof securing the Previously Issued Priority Bonds,for new money purposes and,at such
time as no Priority Bonds remain outstanding,all System revenue obligations now subordinate and
inferior to the Priority Bonds in priority of lien on and pledge of Net Revenues shall be elevated
in kind in priority of lien and payment so that when there are no longer any Priority Bonds
outstanding, the Junior Lien Obligations (defined herein) will enjoy a first and prior lien on and
pledge of the Net Revenues of the System; and
WHEREAS,the City is empowered by the provisions of Chapter.1371, as amended,Texas
Government Code (Chapter 1371) and Chapter 1502, as amended, Texas Government Code
(Chapter 1502), and the City's Home Rule Charter to issue revenue bonds in the manner herein
contemplated; and
WHEREAS,there are currently outstanding obligations in the aggregate principal amount
of at least$163,240,000,being the obligations set forth on Schedule I hereto which is incorporated
by reference for all purposes to this ordinance(the Refunded Obligations); and
WHEREAS, pursuant to the provisions of Chapter 1207, as amended, Texas Government
Code, as amended(Chapter 1207),the City Council is authorized to issue revenue and refunding
bonds and deposit the proceeds of sale under an escrow agreement to provide for the payment of
the Refunded Obligations, and such deposit, when made in accordance with the Act, shall
constitute the making of firm banking and financial arrangements for the discharge and fmal
payment of the Refunded Obligations; and
WHEREAS, Chapter 1207 requires that the deposit of the proceeds from the sale of the
revenue and refunding bonds be deposited directly with any designated escrow agent for the
Refunded Obligations that is not the depository bank of the City; and
WHEREAS,The Bank of New York Mellon Trust Company,N.A.,Dallas,Texas currently
serves as the paying agent for the Refunded Obligations disclosed on Schedule I hereto; and
WHEREAS, The Bank of New York Mellon Trust Company,N.A., Dallas, Texas, which
is not a depository bank of the City, is appointed and will serve as the Paying Agent/Registrar
(hereinafter defined); and
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WHEREAS, The Bank of New York Mellon Trust Company, N.A., Dallas, Texas, which
is not a depository bank of the City, is appointed and will serve as the Escrow Agent (hereinafter
defined) for the revenue and refunding bonds; and
WHEREAS, the City Council also hereby finds and determines that the Refunded
Obligations are scheduled to mature or are subject to being redeemed, not more than twenty(20)
years from the date of the Bonds herein authorized and such refunding will result in a net present
value savings of$27,414,796.74 (16.794166%),which is more than 3.00%, and a gross savings of
$31,258,966.95, including the City's cash contribution of$157,301.06;
WHEREAS, the City Council hereby finds and determines that, pursuant to applicable
Texas law,the delegation to a Pricing Officer with the authority to execute an Approval Certificate
(a form of which is attached hereto as Schedule II) to approve the final terms of each series of
Bonds as set forth in respective Approval Certificate is in the best interest of the City; and
WHEREAS, the revenue and refunding bonds hereinafter authorized are to be issued and
delivered pursuant to the laws of the State of Texas, including the Act (defined herein), and the
terms of this Ordinance(hereinafter defined),for the purposes set forth in this Ordinance;and now
therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI,
TEXAS:
SECTION 1. Authorization - Designation - Principal Amount - Purpose. Revenue
refunding bonds of the City shall be and are hereby authorized to be issued in the aggregate
principal amount of ONE HUNDRED EIGHTY THREE MILLION SIX HUNDRED THIRTY
FIVE THOUSAND AND NO/100 DOLLARS ($183,635,000),to be designated and bear the title
of CITY OF CORPUS CHRISTI, TEXAS UTILITY SYSTEM JUNIOR LIEN REVENUE
REFUNDING BONDS, TAXABLE SERIES 2020B (the Bonds), pursuant to this ordinance
adopted by the City Council (the Ordinance) for the purpose of(i) discharging and making final
payment of the Refunded Obligations, and (ii)paying the costs of issuance relating thereto. The
Bonds shall be payable from and equally and ratably secured solely by a lien on and pledge of the
Junior Lien Pledged Revenues,which includes a lien on and pledge of Net Revenues that is senior
and superior to the lien thereon and pledge thereof securing the repayment of the Subordinate Lien
Obligations and the Inferior Lien Obligations. The Bonds are authorized to be issued pursuant to
the authority conferred by and in conformity with the laws of the State of Texas, including
(particularly) Chapter 1207, Chapter 1371, and Chapter 1502 (collectively,the Act).
As authorized by the Act, the Pricing Officer is hereby authorized, appointed, and
designated as the officer of the City authorized to individually act on behalf of the City in selling
and delivering one or more series of revenue improvement and/or refunding bonds authorized
herein and carrying out the procedures specified in this Ordinance, including approval of the
following terms and provisions for each series of revenue improvement and/or refunding bonds:
A. whether such series of bonds shall be issued as revenue improvement, refunding,
or revenue improvement and refunding bonds, and if refunding or revenue improvement and
refunding bonds,the identification and selection from the Refunding Candidates (defined herein)
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of those City obligations to be included as the Refunded Obligations refunded with the proceeds
of such series of bonds;
B. the style of each series of bonds, which style indicates (with respect to each series
of bonds) the use of proceeds thereof, calendar year of issuance, and (if necessary or desired) a
letter or other sequential identification indicating that multiple series of bonds of the same or
similar type have been or will be issued hereunder during a particular calendar year;
C. the aggregate principal amount of each series of bonds, as well as the principal
amount of each stated maturity within a series of bonds;
D. the rate of interest to be borne on the principal amount of each stated maturity
within a series of bonds and the interest payment dates for such series of bonds;
E. the Dated Date for each series of bonds;
F. whether such series of bonds is sold pursuant to a competitive or negotiated sale
based upon the advice of the City's financial advisor;
G. the optional, extraordinary optional, and mandatory redemption provisions
applicable, if at all, to each series of bonds;
H. whether or not to issue such series of bonds on a taxable or tax-exempt basis and,
if on a tax-exempt basis, subject to market conditions at the time of pricing and sale of such series
of bonds;
I. the pricing of each series of bonds, including use of premium, discount,
underwriters' compensation, and costs of issuance;
J. the selection of the bond insurer and/or debt service reserve fund surety provider,
if any, with respect to the Bonds. If the Pricing Officer chooses to purchase a debt service reserve
surety policy or similar credit facility relating to the Bonds, then the Pricing Officer shall be
permitted to execute an insurance or similar reimbursement agreement in substantially the form
attached hereto as Exhibit F (which form is hereby approved) in connection with such purchase;
K. approval, replacement, or confirmation, as applicable, of the underwriting
syndicate of the applicable series of bonds, to consist of one (1) or more financial institutions
included in the City's approved underwriters pool, and the establishment or confirmation, as
applicable, of the respective roles of the members of such syndicate,which approval,replacement,
and establishment (if any) shall supersede prior action or actions of the City Council concerning
the same.
The Bonds shall be issued within the following parameters:
A. the principal amount of the Bonds issued hereunder shall not exceed$350,000,000,
being the sum of"new money" Bonds in the principal amount not to exceed $110,000,000, and
"refunding"Bonds(determined as the amount of principal of such Bonds allocated to the refunding
of the Refunded Obligations) in the principal amount not to exceed$240,000,000;
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B. the maximum maturity of any series of Bonds shall not occur later than July 15,
2050;
C. the true interest cost on each series of Bonds shall not exceed a rate greater than
5.0%per annum;
D. the refunding of the Refunded Obligations by the Bonds shall produce net present
value savings,determined on a comparative basis to the prior debt service on Refunded Obligations
then being refunded by the Bonds, of at least 3.0%; and
E. the final series of Bonds hereunder issued shall be sold on or before May 19, 2021
(though the initial delivery of a particular series of Bonds may occur within a reasonable period of
time occurring thereafter, as determined by the Pricing Officer).
The Pricing Officer, acting for and on behalf of the City, is authorized, with respect to a
series of bonds,to complete and execute an Approval Certificate,in substantially the form attached
hereto as Schedule II. The execution of the Approval Certificate shall evidence the sale date of
each series of Bonds by the City to the initial purchasers thereof in accordance with the provisions
of Chapter 1207 and Chapter 1371 and as set forth in Schedule II. Upon execution of an Approval
Certificate, Bond Counsel is authorized to complete a copy of this Ordinance as evidence of the
issuance of a series of Bonds pursuant to the delegated authority granted hereunder and to reflect
such final terms for such series of Bonds, which includes (A) completion of the preamble to this
Ordinance, included deletion of those recitals that are not applicable to the particular series of
Bonds then being issued, (B) selection of the appropriate terms to reflect the final transaction
structure and terms of sale evidenced in an applicable Approval Certificate, (C) if applicable,
completion of Schedule I with those Refunding Candidates selected as Refunded Obligations to
be refunded with the proceeds a particular series of Bonds issued as refunding bonds or refunding
and revenue improvement bonds, and (D) such other necessary technical modifications to this
Ordinance (including the renumbering of sections hereof) to accommodate all other terms and
provisions of this Section 1. In addition to the foregoing, the Pricing Officer is authorized to
execute,as the act and deed of the City and on behalf of the Governing Body,any and all contracts,
agreements, letters, and certificates, relative to any series of Bonds that may be required by this
Ordinance, as supplemented in the manner described above, or determined to be necessary or
advisable in connection with an issuance of Bonds hereunder. It is further provided,however,that
notwithstanding the foregoing provisions,the Bonds shall not be delivered unless prior to delivery,
the Bonds have been rated by a nationally recognized rating agency for municipal securities in one
(1)of the four(4)highest rating categories for long term obligations,as required by Chapter 1371.
SECTION 2. Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Interest Rates - Dated Date. The Bonds are issuable in fully registered form only;
shall be dated July 15, 2020 (the Dated Date); shall be in denominations of$5,000 or any integral
multiple thereof, shall be lettered "R-" and numbered consecutively from One (1) upward; and
principal shall become due and payable on July.15 in each of the years and in principal amounts
(the Stated Maturities) and bear interest on the unpaid principal amounts from the Closing Date
(anticipated to occur on July 22, 2020), or the most recent Interest Payment Date (hereinafter
defined)to which interest has been paid or duly provided for,to the earlier of redemption or Stated
Maturity, at the rates per annum in accordance with the following schedule:
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Stated Maturities
(July 15) Principal Amounts ($) Interest Rates (%)
2021 3,625,000 0.550
2022 960,000 0.700
2023 605,000 0.820
2024 9,230,000 1.035
2025 5,200,000 1.135
2026 5,090,000 1.389
2027 9,335,000 1.489
2028 9,470,000 1.706
2029 9,635,000 1.806
2030 9,810,000 1.966
2031 10,000,000 2.066
2032 5,390,000 2.166
2033 10,475,000 2.306
2034 10,720,000 2.356
2035 10,970,000 2.406
*** *** ***
2040 48,830,000 2.809
*** *** ***
2043 24,290,000 2.859
The Bonds shall bear interest on the unpaid principal amount thereof at the per annum rates
shown above, computed on the basis of a 360-day year of twelve 30-day months, and interest
thereon shall be payable semiannually on January 15 and July 15 of each year (each, an Interest
Payment Date), commencing January 15, 2021,while the Bonds are Outstanding.
SECTION 3. Payment of Bonds - Interest Payments - Paying Agent/Registrar. The
principal of, premium, if any, and interest on the Bonds, due and payable by reason of Stated
Maturity, redemption, or otherwise, shall be payable in any coin or currency of the United States
of America which at the time of payment is legal tender for the payment of public and private
debts, and such payment of principal of and interest on the Bonds shall be without exchange or
collection charges to the Holder(hereinafter defined) of the Bonds.
•
The selection and appointment of The Bank of New York Mellon Trust Company, N.A.,
Dallas, Texas, to serve as the initial Paying Agent/Registrar(the Paying Agent/Registrar) for the
Bonds is hereby approved and confirmed, and the City agrees and covenants to cause to be kept
and maintained at the corporate trust office of the Paying Agent/Registrar books and records (the
Security Register) for the registration,payment, and transfer of the Bonds, all as provided herein,
in accordance with the terms and provisions of a Paying Agent/Registrar Agreement, attached, in
substantially final form, as Exhibit A hereto, and such reasonable rules and regulations as the
Paying Agent/Registrar and the City may prescribe. The City covenants to maintain and provide
a Paying Agent/Registrar at all times while the Bonds are Outstanding, and any successor Paying
Agent/Registrar shall be (i) a national or state banking institution or (ii) an association or a
corporation organized and doing business under the laws of the United States of America or of any
state, authorized under such laws to exercise trust powers. Such Paying Agent/Registrar shall be
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subject to supervision or examination by state authority and authorized by law to serve as a Paying
Agent/Registrar.
The City reserves the right to appoint a successor Paying Agent/Registrar upon providing
the previous Paying Agent/Registrar with a certified copy of a resolution or ordinance terminating
such agency. Additionally,the City agrees to promptly cause a written notice of this substitution
to be sent to each Holder of the Bonds by United States mail, first-class postage prepaid, which
notice shall also give the address of the new Paying Agent/Registrar.
Both principal of,premium, if any, and interest on the Bonds, due and payable by reason
of Stated Maturity, redemption or otherwise, shall be payable only to the registered owner of the
Bonds appearing on the Security Register(the Holder or Holders)maintained on behalf of the City
by the Paying Agent/Registrar as hereinafter provided(i) on the Record Date(defined herein) for
purposes of payment of interest thereon and(ii)on the date of surrender of the Bonds for purposes
of receiving payment of principal thereof at the Bonds' Stated Maturity or upon prior redemption
of the Bonds. The City and the Paying Agent/Registrar, and any agent of either, shall treat the
Holder as the owner of a Bond for purposes of receiving payment and all other purposes
whatsoever, and neither the City nor the Paying Agent/Registrar, or any agent of either, shall be
affected by notice to the contrary.
Principal of, and premium, if any, on the Bonds shall be payable only upon presentation
and surrender of the Bonds to the Paying Agent/Registrar at its corporate trust office. Interest on
the Bonds shall be paid to the Holder whose name appears in the Security Register at the close of
business on the last business day of the month next preceding an Interest Payment Date for the
Bonds (the Record Date) and shall be paid (i)by check sent by United States mail, first-class
postage prepaid, by the Paying Agent/Registrar, to the address of the Holder appearing in the
Security Register or(ii)by such other method,acceptable to the Paying Agent/Registrar,requested
in writing by the Holder at the Holder's risk and expense.
If the date for the payment of the principal of, premium, if any, or interest on the Bonds
shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city
where the corporate trust office of the Paying Agent/Registrar is located are authorized by law or
executive order to close,then the date for such payment shall be the next succeeding day which is
not such a day. The payment on such date shall have the same force and effect as if made on the
original date any such payment on the Bonds was due.
In the event of a non-payment of interest on a scheduled payment date, and for thirty(30)
days thereafter, a new record date for such interest payment (a Special Record Date) will be
established by the Paying Agent/Registrar,if and when funds for the payment of such interest have
been received from the City. Notice of the Special Record Date and of the scheduled payment
date of the past due interest(the Special Payment Date - which shall be fifteen(15) days after the
Special Record Date) shall be sent at least five (5) business days prior to the Special Record Date
by United States Mail, first-class postage prepaid, to the address of each.Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of mailing
of such notice.
100107157.3 -7-
SECTION 4. Redemption.
A. Mandatory Redemption. The Bonds stated to mature on July 15,2040 and July 15,
2043 are referred to herein as the "Term Bonds". The Term Bonds are subject to mandatory
sinking fund redemption prior to their stated maturities from money required to be deposited in
the Bond Fund for such purpose and shall be redeemed in part,by lot or other customary method,
at the principal amount thereof plus accrued interest to the date of redemption in the following
principal amounts on July 15 in each of the years as set forth below:
Term Bonds Term Bonds
Stated to Mature on Stated to Mature on
July 15, 2040 July 15,2043
Principal Principal
Year Amount($) Year Amount($)
2036 11,235,000 2041 9,185,000
2037 11,540,000 2042 9,435,000
2038 8,445,000 2043 5,670,000*
2039 8,680,000
2040 8,930,000*
*Payable at Stated Maturity.
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the City, by the
principal amount of any Term Bonds of such Stated Maturity which, at least fifty (50) days prior
to the mandatory redemption date (i) shall have been defeased or acquired by the City and
delivered to the Paying Agent/Registrar for cancellation, (ii) shall have been purchased and
canceled by the Paying Agent/Registrar at the request of the City with money in the Bond Fund,
or (iii) shall have been redeemed pursuant to the optional redemption provisions set forth below
and not theretofore credited against a mandatory redemption requirement.
B. Optional Redemption. The Bonds having Stated Maturities on and after July 15,
2030 shall be subject to redemption prior to Stated Maturity, at the option of the City, on July 15,
2029, or any date thereafter, as a whole or in part, in principal amounts of$5,000 or any integral
multiple thereof (and if within a Stated Maturity selected at random and by lot by the Paying
Agent/Registrar), at the redemption price of par plus accrued interest to the date of redemption.
C. Exercise of Redemption Option. At least forty-five(45) days prior to a date set for
the redemption of Bonds (unless a shorter notification period shall be satisfactory to the Paying
Agent/Registrar), the City shall notify the Paying Agent/Registrar of its decision to exercise the
right to redeem Bonds, the principal amount of each Stated Maturity to be redeemed, and the date
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set for the redemption thereof. The decision of the City to exercise the right to redeem Bonds shall
be entered in the minutes of the City Council.
D. Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same
Stated Maturity are to be redeemed on a redemption date, the Paying Agent/Registrar shall select
at random and by lot the Bonds to be redeemed, provided that if less than the entire principal
amount of a Bond is to be redeemed,the Paying Agent/Registrar shall treat such Bond then subject
to redemption as representing the number of Bonds Outstanding which is obtained by dividing the
principal amount of such Bond by$5,000.
E. Notice of Redemption. Not less than thirty(30)days prior to a redemption date for
the Bonds, a notice of redemption shall be sent by United States Mail, first-class postage prepaid,
in the name of the City and at the City's expense,by the Paying Agent/Registrar to each Holder of
a Bond to be redeemed, in whole or in part, at the address of the Holder appearing on the Security
Register at the close of business on the business day next preceding the date of mailing such notice,
and any notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder. This notice may also be published once in a
financial publication,journal,or reporter of general circulation among securities dealers in the City
of New York, New York (including, but not limited to, The Bond Buyer and The Wall Street
Journal), or in the State of Texas (including,but not limited to, The Texas Bond Reporter).
All notices of redemption shall(i) specify the date of redemption for the Bonds,(ii) identify
the Bonds to be redeemed and, in the case of a portion of the principal amount to be redeemed,the
principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state that the Bonds,
or the portion of the principal amount thereof to be redeemed, shall become due and payable on
the redemption date specified, and the interest thereon, or on the portion of the principal amount
thereof to be redeemed, shall cease to accrue from and after the redemption date, and (v) specify
that payment of the redemption price for the Bonds, or the principal amount thereof to be
redeemed, shall be made at the corporate trust office of the Paying Agent/Registrar only upon
presentation and surrender thereof by the Holder. If a Bond is subject by its terms to redemption
and has been called for redemption and notice of redemption thereof has been duly given or waived
as herein provided, such Bond (or the principal amount thereof to be redeemed) so called for
redemption shall become due and payable, and if money sufficient for the payment of such Bonds
(or of the principal amount thereof to be redeemed)at the then applicable redemption price is held
for the purpose of such payment by the Paying Agent/Registrar, then on the redemption date
designated in such notice, interest on said Bonds (or the principal amount thereof to be redeemed)
called for redemption shall cease to accrue, and such Bonds shall not be deemed to be Outstanding
in accordance with the provisions of this Ordinance.
F. Transfer/Exchange. Neither the City nor the Paying Agent/Registrar shall be
required(i)to transfer or exchange any Bond during a period beginning forty-five (45) days prior
to the date fixed for redemption of the Bonds or(ii)to transfer or exchange any Bond selected for
redemption,provided; however, such limitation of transfer shall not be applicable to an exchange
by the Holder of the unredeemed balance of a Bond which is subject to redemption in part.
SECTION 5. Execution-Registration. The Bonds shall be executed on behalf of the City
by its Mayor, its seal reproduced or impressed thereon, and attested by the City Secretary. The
signature of either officer on the Bonds may be manual or facsimile. Bonds bearing the manual
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or facsimile signatures of individuals who were, at the time of the Dated Date, the proper officers
of the City shall bind the City, notwithstanding that such individuals or either of them shall cease
to hold such offices prior to the delivery of the Bonds to the Purchasers (defined herein), all as
authorized and provided in Chapter 1201, as amended, Texas Government Code.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8C, executed by the Comptroller of Public Accounts
of the State of Texas or his duly authorized agent by manual signature, or a certificate of
registration substantially in the form provided in Section 8D, executed by the Paying
Agent/Registrar by manual signature,and either such certificate upon any Bond shall be conclusive
evidence,and the only evidence,that such Bond has been duly certified or registered and delivered.
SECTION 6. Registration - Transfer - Exchange of Bonds - Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of every owner of the Bonds, or, if appropriate, the nominee thereof. Any Bond may, in
accordance with its terms and the terms hereof, be transferred or exchanged for Bonds of other
authorized denominations upon the Security Register by the Holder, in person or by his duly
authorized agent, upon surrender of such Bond to the Paying Agent/Registrar for cancellation,
accompanied by a written instrument of transfer or request for exchange duly executed by the
Holder or by his duly authorized agent, in form satisfactory to the Paying Agent/Registrar.
Upon surrender for transfer of any Bond at the corporate trust office of the Paying
Agent/Registrar, the City shall execute and the Paying Agent/Registrar shall register and deliver,
in the name of the designated transferee or transferees, one or more new Bonds of authorized
denomination and having the same Stated Maturity and of a like interest rate and aggregate
principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds may be exchanged for other Bonds of the same series
and of authorized denominations and having the same Stated Maturity, bearing the same rate of
interest and of like aggregate principal amount as the Bonds surrendered for exchange upon
surrender of the Bonds to be exchanged at the corporate trust office of the Paying Agent/Registrar.
Whenever any Bonds are so surrendered for exchange, the City shall execute, and the Paying
Agent/Registrar shall register and deliver,the Bonds,to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the corporate
trust office of the Paying Agent/Registrar,or be sent by registered mail to the Holder at his request,
risk,and expense,and upon the delivery thereof,the same shall be the valid and binding obligations
of the City, evidencing the same obligation to pay, and entitled to the same benefits under this
Ordinance, as the Bonds surrendered upon such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without expense
or service charge to the Holder, except as otherwise herein provided, and except that the Paying
Agent/Registrar shall require payment by the Holder requesting such transfer or exchange of any
fee, tax or other governmental charges required to be paid with respect to such transfer or
exchange.
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Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are
hereby defined to be Predecessor Bonds, evidencing all or a portion, as the case may be, of the
same debt evidenced by the new Bond or Bonds registered and delivered in the exchange or
transfer therefor. Additionally,the term Predecessor Bonds shall include any Bond registered and
delivered pursuant to Section 27 in lieu of a mutilated, lost, destroyed, or stolen Bond which shall
be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond.
SECTION 7. Initial Bond. The Bonds herein authorized shall be issued initially either
(i) as a single fully-registered Bond in the total principal amount of$183,635,000 with principal
installments to become due and payable as provided in Section 2 and numbered T-1,or(ii) as one
(1) fully-registered Bond for each year of Stated Maturity in the applicable principal amount and
denomination and to be numbered consecutively from T-1 and upward (the Initial Bond) and, in
either case,the Initial Bond shall be registered in the name of the initial purchasers or the designee
thereof. The Initial Bond shall be the Bond submitted to the Office of the Attorney General of the
State of Texas for approval, certified and registered by the Office of the Comptroller of Public
Accounts of the State of Texas and delivered to the initial purchasers. Any time after the delivery
of the Initial Bond, the Paying Agent/Registrar shall cancel the Initial Bond delivered hereunder
and exchange therefor defmitive Bonds of authorized denominations, Stated Maturities,principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at the
addresses identified therefor; all pursuant to and in accordance with such written instructions from
the initial purchasers, or the designee thereof, and such other information and documentation as
the Paying Agent/Registrar may reasonably require.
SECTION 8. Forms.
A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Certificate of Paying Agent/Registrar, and the form of
Assignment to be printed on each of the Bonds shall be substantially in the forms set forth in this
Section with such appropriate insertions, omissions, substitutions, and other variations as are
permitted or required by this Ordinance and may have such letters, numbers, or other marks of
identification(including insurance legends in the event the Bonds,or any Stated Maturities thereof,
are insured and identifying numbers and letters of the Committee on Uniform Securities
Identification Procedures of the American Bankers Association) and such legends and
endorsements(including any reproduction of an opinion of Bond Counsel(hereinafter referenced))
thereon as may, consistent herewith, be established by the City or determined by the officers
executing the Bonds as evidenced by their execution thereof. Any portion of the text of any Bond
may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the
Bond.
The defmitive Bonds shall be printed, lithographed, or engraved, produced by any
combination of these methods, or produced in any other similar manner, all as determined by the
officers executing the Bonds as evidenced by their execution thereof, but the Initial Bond
submitted to the Attorney General of Texas may be typewritten or photocopied or otherwise
reproduced.
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100107157.3 -11-
B. Form of Definitive Bond.
REGISTERED
REGISTERED PRINCIPAL AMOUNT
NO. $
United States of America
State of Texas
Counties of Nueces,Aransas, Kleberg, and San Patricio
CITY OF CORPUS CHRISTI, TEXAS UTILITY SYSTEM
JUNIOR LIEN REVENUE REFUNDING BONDS,
TAXABLE SERIES 2020B
Dated Date: Interest Rate: Stated Maturity: CUSIP NO:
July 15, 2020
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Corpus Christi,Texas(the City),a body corporate and a municipal corporation
located in the Counties of Nueces, Aransas, Kleberg, and San Patricio, State of Texas, for value
received, hereby promises to pay to the order of the Registered Owner specified above, or the
registered assigns thereof, on the Stated Maturity date specified above, the Principal Amount
specified above (or so much thereof as shall not have been paid upon prior redemption), and to
pay interest on the unpaid Principal Amount hereof from the Closing Date(anticipated to occur on
July 22,2020)or from the most recent Interest Payment Date(hereinafter defined)to which interest
has been paid or duly provided for,to the earlier of redemption or Stated Maturity,at the per annum
rate of interest specified above computed on the basis of a 360-day year of 30-day months; such
interest being payable on January 15 and July 15 of each year (each, an Interest Payment Date),
commencing January 15, 2021.
Principal and premium,if any,of the Bond shall be payable to the Registered Owner hereof
(the Holder) upon presentation and surrender, at the corporate trust office of the Paying
Agent/Registrar executing the registration certificate appearing hereon or a successor thereof.
Interest shall be payable to the Holder of this Bond(or one or more Predecessor Bonds, as defined
in the Ordinance hereinafter referenced)whose name appears on the Security Register maintained
by the Paying Agent/Registrar at the close of business on the Record Date, which is the last
business day of the month next preceding each Interest Payment Date. All payments of principal
of and interest on this Bond shall be in any coin or currency of the United States of America which
at the time of payment is legal tender for the payment of public and private debts. Interest shall
be paid by the Paying Agent/Registrar by check sent on the appropriate date of payment by United
States Mail, first-class postage prepaid, to the Holder hereof at the address appearing in the
Security Register or by such other method,acceptable to the Paying Agent/Registrar,requested by
the Holder hereof at the Holder's risk and expense.
This Bond is one of the series specified in its title issued in the aggregate principal amount
of$183,635,000 (the Bonds)pursuant to an ordinance adopted by the governing body of the City
100107157.3 -12-
(the Ordinance), for the purpose of(i) discharging and making final payment of the Refunded
Obligations, and (ii) paying the costs of issuance related thereto, all in conformity with the laws
of the State of Texas, particularly the City's Home Rule Charter and the Act, and the Ordinance.
The Bonds shall be payable from and equally and ratably secured solely by a lien on and pledge
of the Junior Lien Pledged Revenues,which includes a lien on and pledge of Net Revenues that is
senior and superior to the lien thereon and pledge thereof securing the repayment of the
Subordinate Lien Obligations and the Inferior Lien Obligations.
The Bonds stated to mature on July 15,2040 and July 15,2043 are referred to herein as the
"Term Bonds". The Term Bonds are subject to mandatory sinking fund redemption prior to their
stated maturities from money required to be deposited in the Bond Fund for such purpose and shall
be redeemed in part,by lot or other customary method,at the principal amount thereof plus accrued •
interest to the date of redemption in the following principal amounts on July 15 in each of the years
as set forth below:
Term Bonds Term Bonds
Stated to Mature on Stated to Mature on
July 15, 2040 July 15, 2043
Principal Principal
Year Amount($) Year Amount($)
2036 11,235,000 2041 9,185,000
2037 11,540,000 2042 9,435,000
2038 8,445,000 2043 5,670,000*
2039 8,680,000
2040 8,930,000*
*Payable at Stated Maturity.
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the City, by the
principal amount of any Term Bonds of such Stated Maturity which, at least fifty(50) days prior
to the mandatory redemption date (i) shall have been defeased or acquired by the City and
delivered to the Paying Agent/Registrar for cancellation, (ii) shall have been purchased and
canceled by the Paying Agent/Registrar at the request of the City with money in the Bond Fund,
or (iii) shall have been redeemed pursuant to the optional redemption provisions set forth below
and not theretofore credited against a mandatory redemption requirement.
The Bonds stated to mature on and after July 15, 2030 may be redeemed prior to their
Stated Maturities, at the option of the City, on July 15, 2029 or on any date, in whole or in part in
principal amounts of $5,000 or any integral multiple thereof (and if within a Stated Maturity
selected at random and by lot by the Paying Agent/Registrar) at the redemption price of par,
together with accrued interest to the date of redemption, and upon thirty (30) days prior written
notice being given by United States mail, first-class postage prepaid, to Holders of the Bonds to
be redeemed, and subject to the terms and provisions relating thereto contained in the Ordinance.
If this Bond is subject to redemption prior to Stated Maturity and is in a denomination in excess
100107157.3 -13-
of$5,000, portions of the principal sum hereof in installments of$5,000 or any integral multiple
thereof may be redeemed, and, if less than all of the principal sum hereof is to be redeemed, there
shall be issued, without charge therefor, to the Holder hereof, upon the surrender of this Bond to
the Paying Agent/Registrar at its corporate trust office, a new Bond or Bonds of like Stated
Maturity and interest rate in any authorized denominations provided in the Ordinance for the then
unredeemed balance of the principal sum hereof.
If this Bond (or any portion of the principal sum hereof) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date this Bond
(or the portion of the principal sum hereof to be redeemed) shall become due and payable, and, if
money for the payment of the redemption price and the interest accrued on the principal amount
to be redeemed to the date of redemption is held for the purpose of such payment by the Paying
Agent/Registrar,interest shall cease to accrue and be payable hereon from and after the redemption
date on the principal amount hereof to be redeemed. In the event of a partial redemption of the
principal amount of this Bond,payment of the redemption price of such principal amount shall be
made to the registered owner only upon presentation and surrender of this Bond to the corporate
trust office of the Paying Agent/Registrar and,there shall be issued to the registered owner hereof,
without charge, a new Bond or Bonds of like maturity and interest rate in any authorized
denominations provided in the Ordinance for the then unredeemed balance of the principal sum
hereof. If this Bond is called for redemption, in whole or in part, the City or the Paying
Agent/Registrar shall not be required to issue, transfer, or exchange this Bond within forty-five
(45)days of the date fixed for redemption;provided,however, such limitation of transfer shall not
be applicable to an exchange by the Holder of the unredeemed balance hereof in the event of its
redemption in part.
The Bonds of this series are special obligations of the City, issued as Junior Lien
Obligations, payable from and equally and ratably secured by a lien on and pledge of the Junior
Lien Pledged Revenues, being (primarily) a lien on and pledge of the Net Revenues derived from
the operation of the City's combined utility systems (as further described in the Ordinance, the
System), that is senior and superior to the lien thereon and pledge thereof securing the repayment
of the Subordinate Lien Obligations and the Inferior Lien Obligations. In the Ordinance,the City
reserves and retains the right to issue Additional Junior Lien Obligations,Additional Subordinate
Lien Obligations, and Inferior Lien Obligations without limitation as to principal amount but
subjectto any terms, conditions, or restrictions set forth in the Ordinance or as may be applicable
thereto under law or otherwise. The Bonds do not constitute a legal or equitable pledge, charge,
lien, or encumbrance upon any property of the City or System, except with respect to the Junior
Lien Pledged Revenues.
The Holder hereof shall never have the right to demand payment of this obligation out of
any funds raised or to be raised by taxation.
Reference is hereby made to the Ordinance,a copy of which is on file in the corporate trust
office of the Paying Agent/Registrar, and to all of the provisions of which the Holder by his
acceptance hereof hereby assents, for definitions of terms;the description and nature of the Junior
Lien Pledged Revenues pledged for the payment of the Bonds; the terms and conditions under
which the City may issue Additional Junior Lien Obligations, Additional Subordinate Lien
Obligations, and Inferior Lien Obligations; the terms and conditions relating to the transfer or
exchange of the Bonds; the conditions upon which the Ordinance may be amended or
100107157.3 -14-
supplemented with or without the consent of the Holders;the rights, duties, and obligations of the
City and the Paying Agent/Registrar; the terms and provisions upon which this Bond may be
redeemed or discharged at or prior to the Stated Maturity thereof, and deemed to be no longer
Outstanding thereunder; and for the other terms and provisions specified in the Ordinance.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance,may be transferred on
the Security Register upon presentation and surrender at the corporate trust office of the Paying
Agent/Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Paying Agent/Registrar duly executed by the Holder hereof, or his duly
authorized agent, and thereupon one or more new fully registered Bonds of the same Stated
Maturity,of authorized denominations,bearing the same rate of interest,and of the same aggregate
principal amount will be issued to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, shall treat the Holder
hereof whose name appears on the Security Register (i) on the Record Date as the owner hereof
for purposes of receiving payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity, or
its redemption, in whole or in part, and (iii)on any other date as the owner hereof for all other
purposes, and neither the City nor the Paying Agent/Registrar,or any such agent of either, shall be
affected by notice to the contrary. In the event of a non-payment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a
Special Record Date)will be established by the Paying Agent/Registrar, if and when funds for the
payment of such interest have been received from the City. Notice of the Special Record Date and
of the scheduled payment date of the past due interest(the Special Payment Date -which shall be
fifteen (15) days after the Special Record Date) shall be sent at least five (5) business days prior
to the Special Record Date by United States mail,first-class postage prepaid,to the address of each
Holder appearing on the Security Register at the close of business on the last business day next
preceding the date of mailing of such notice.
It is hereby certified, covenanted, and represented that all acts, conditions, and things
required to be performed, exist, and be done precedent to the issuance of this Bond in order to
render the same a legal, valid, and binding special obligation of the City have been performed,
exist, and have been done, in regular and due time, form, and manner, as required by law, and that
issuance of the Bonds does not exceed any constitutional or statutory limitation; and that due
provision has been made for the payment of the principal of and interest on the Bonds by a pledge
of and lien on the Junior Lien Pledged Revenues. In case any provision in this Bond or any
application thereof shall be deemed invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions and applications shall not in any way be affected or
impaired thereby. The terms and provisions of this Bond and the Ordinance shall be construed in
accordance with and shall be governed by the laws of the State of Texas.
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100107157.3 -15-
IN WITNESS WHEREOF, this Bond has been signed with the imprinted or lithographed
facsimile signature of the Mayor of the City, attested by the imprinted or lithographed facsimile
signature of the City Secretary, and the official seal of the City has been duly affixed to, printed,
lithographed or impressed on this Bond.
CITY OF CORPUS CHRISTI, TEXAS
Mayor
ATTEST:
City Secretary
(SEAL)
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100107157.3 -16-
C. Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bond Only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER OF §
PUBLIC ACCOUNTS §
§ REGISTER NO.
THE STATE OF TEXAS §
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 duly registered by the Comptroller of
Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
Comptroller of Public Accounts
of the State of Texas
(SEAL)
*Note to Printer:Not to appear on printed Bonds
D. Form of Certificate of Paying Agent/Registrar to Appear on Definitive Bonds Only.
CERTIFICATE OF PAYING AGENT/REGISTRAR
This Bond has been duly issued under the provisions of the within-mentioned Ordinance;
the Bond or Bonds of the above-entitled and designated series originally delivered having been
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts, as shown by the records of the Paying Agent/Registrar.
Registered this date: THE BANK OF NEW YORK MELLON
TRUST COMPANY,N.A., Dallas, Texas, as
Paying Agent/Registrar
By:
Authorized Signature
*Note to Printer: to appear on printed Bonds
100107157.3 -17-
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto (Print
or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number):
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration
thereof,with full power of substitution in the premises.
DATED:
NOTICE: The signature on this assignment must correspond
with the name of the registered owner as it appears on the
face of the within Bond in every particular.
Signature guaranteed:
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100107157.3 -18-
F. Form of Initial Bond. The Initial Bond shall be in the form set forth in paragraph
B of this Section, except that the form of a single fully registered Initial Bond shall be modified as
follows:
(1) immediately under the name of the Bond(s) the headings "Interest Rate"
and"Stated Maturity" shall both be.completed"as shown below";
(2) the first two paragraphs shall read as follows:
The City of Corpus Christi,Texas(the City),a body corporate and a municipal corporation
located in the Counties of Nueces, Aransas, Kleberg, and San Patricio, State of Texas, for value
received, hereby promises to pay to the order of the Registered Owner named above, or the
registered assigns thereof, the Principal Amount specified above on the fifteenth day of July in
each of the years and in principal amounts and bearing interest at per annum rates in accordance
with the following schedule:
Years of Principal Interest
Stated Maturity Amounts ($) Rates (%)
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the
unpaid Principal Amount hereof from the Closing Date(anticipated to occur on July 22, 2020), or
from the most recent Interest Payment Date (hereinafter defined) to which interest has been paid
or duly provided for, to the earlier of redemption or Stated Maturity, at the per annum rate of
interest specified above computed on the basis of a 360-day year of 30-day months; such interest
being payable on January 15 and July 15 of each year (each, an Interest Payment Date),
commencing January 15, 2021.
Principal of this Bond shall be payable to the Registered Owner hereof(the Holder), upon
its presentation and surrender,at the corporate trust office of The Bank of New York Mellon Trust
Company, N.A., Dallas, Texas (the Paying Agent/Registrar). Interest shall be payable to the
Holder of this Bond whose name appears on the Security Register maintained by the Paying
Agent/Registrar at the close of business on the Record Date,which is the last business day of the
month next preceding each interest payment date. All payments of principal of and interest on this
Bond shall be in any coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts. Interest shall be paid by the Paying
Agent/Registrar by check sent on or prior to the appropriate date of payment by United States mail,
first-class postage prepaid, to the Holder hereof at the address appearing in the Security Register
or by such other method, acceptable to the Paying Agent/Registrar, requested by, and at the risk
and expense of,the Holder hereof.
[END OF FORMS]
100107157.3 -19-
G. Insurance Legend. If bond insurance is obtained by the Purchasers or the City for
the Bonds, the definitive Bonds and the Initial Bond shall bear an appropriate legend as provided
by the bond insurer,to appear under the following header:
[BOND INSURANCE]
SECTION 9. Definitions. For all purposes of this Ordinance, except as otherwise
expressly provided or unless the context otherwise requires: (i)the terms defined in this Section
have the meanings assigned to them in this Section, and certain terms used in Sections 32 and 46
of this Ordinance have the meanings assigned to them in such Sections, and all such terms include
the plural as well as the singular; (ii) all references in this Ordinance to designated"Sections" and
other subdivisions are to the designated Sections and other subdivisions of this Ordinance as
originally adopted; and (iii)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.
A. The term Accountant shall mean a nationally recognized independent certified
public accountant, or an independent firm of certified public accountants.
B. The term Additional Junior Lien Obligations shall mean (i) any bonds, notes,
warrants, or any similar obligations hereafter issued by the City that are payable wholly or in part
from and equally and ratably secured by a lien and pledge of the Junior Lien Pledged Revenues,
such pledge to include a pledge of Net Revenues that is senior and superior to the lien thereon and
pledge thereof that is or will be pledged to the payment of the Subordinate Lien Obligations and
the Inferior Lien Obligations now Outstanding or hereafter issued by the City, and(ii)obligations
hereafter issued to refund any of the foregoing that are payable from and equally and ratably
secured solely by a lien on and pledge of the Junior Lien Pledged Revenues, as determined by the
City Council in accordance with applicable law.
C. The term Additional Subordinate Lien Obligations shall mean(i) any bonds,notes,
warrants, or any similar obligations hereafter issued by the City that are payable wholly or in part
from and equally and ratably secured by a lien and pledge of the Net Revenues, such pledge being
subordinate and inferior to the lien on and pledge of the Net Revenues that is included in Junior
Lien Pledged Revenues, but senior and superior to the lien thereon and pledge thereof that is or
will be pledged to the payment of the Inferior Lien Obligations now Outstanding or hereafter
issued by the City, and on parity with the lien on and pledge of the Net Revenues securing the
payment of the then-Outstanding Subordinate Lien Obligations and (ii) obligations hereafter
issued to refund any of the foregoing that are payable from and equally and ratably secured by
100107157.3 -20-
such subordinate and inferior lien on and pledge of the Net Revenues as determined by the City
Council in accordance with applicable law.
D. The term Approval Certificate shall mean a written instrument from time to time
executed by the Authorized Official in accordance with Section 1 of this Ordinance.
E. The term Authorized Official shall mean the City Manager, each Assistant City
Manager, Chief Financial Officer, Director of Financial Services, City Secretary, and City
Attorney of the City.
F. The term Average Annual Debt Service Requirements shall mean that average
amount which, at the time of computation,will be required to pay the Debt Service Requirements
of obligations when due and derived by dividing the total of such Debt Service Requirements by
the number of years then remaining before final Stated Maturity. -The calculation of Average
Annual Debt Service Requirements shall be net of(1)capitalized interest from bond proceeds and
(2) the receipt or anticipated receipt of a refundable tax credit or similar payment relating to a
series of Junior Lien Obligations irrevocably designated as refundable tax credit bonds, which
payment shall be treated as one offset to regularly scheduled debt service of the series of Junior
Lien Obligations to which it relates.
G. The term Bonds shall mean the $183,635,000 "CITY OF CORPUS CHRISTI,
TEXAS UTILITY SYSTEM JUNIOR LIEN REVENUE REFUNDING BONDS, TAXABLE
SERIES 2020B", dated July 15, 2020, authorized by this Ordinance.
H. The term Bond Fund shall mean the special Fund or account created and established
by the provisions of Section 13 of this Ordinance.
I. The term Capital Additions shall mean a reservoir or other water storage facilities,
a water or wastewater treatment plant or an interest therein, an electric generation facility and/or
distribution system or an interest therein, a gas distribution system or an interest therein and
associated transmission facilities with respect to each and any combination thereof, which shall
become a part of the System.
J. The term Capital Improvements shall mean any capital extensions, improvements
and betterments to the System other than Capital Additions.
K. The term City shall mean the City of Corpus Christi,Texas and,where appropriate,
the City Council of the City.
L. The term Closing Date shall mean the date of physical delivery of the Initial Bond
in exchange for the payment in full by the Purchasers.
M. The term Credit Agreement shall mean a loan agreement, revolving credit
agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement,
insurance contract,commitments to purchase Debt,purchase or sale agreements,interest rate swap
agreements, or commitments or other contracts or agreements authorized, recognized, and
approved by the City as a Credit Agreement in connection with the authorization, issuance,
100107157.3 -21-
security, or payment of any obligation authorized by Chapter 1371, and which includes any Credit
Facility.
N. The term Credit Facility shall mean(i)a policy of insurance or a surety bond,issued
by an issuer of policies of insurance insuring the timely payment of debt service on governmental
obligations, or(ii) a letter or line of credit issued by any financial institution.
0. The term Credit Provider shall mean any bank, financial institution, insurance
company, surety bond provider, or other institution which provides, executes, issues, or otherwise
is a party to or provider of a Credit Agreement or Credit Facility.
P. The term Debt shall mean
(1) all indebtedness payable from Net Revenues and/or Junior Lien Pledged
Revenues incurred or assumed by the City for borrowed money (including indebtedness
payable from Net Revenues and/or Junior Lien Pledged Revenues arising under Credit
Agreements) and all other financing obligations of the System payable from Net Revenues
and/or Junior Lien Pledged Revenues that, in accordance with generally accepted
accounting principles, are shown on the liability side of a balance sheet; and
(2) all other indebtedness payable from Junior Lien Pledged Revenues and/or
Net Revenues (except indebtedness not treated as Debt hereunder) for borrowed money or
for the acquisition, construction, or improvement of property or capitalized lease
obligations pertaining to the System that is guaranteed,directly or indirectly,in any manner
by the City, or that is in effect guaranteed, directly or indirectly, by the City through an
agreement, contingent or otherwise, to purchase any such indebtedness or to advance or
supply funds for the payment or purchase of any such indebtedness or to purchase property
or services primarily for the purpose of enabling the debtor or seller to make payment of
such indebtedness, or to assure the owner of the indebtedness against loss, or to supply
funds to or in any other manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether or not such property is delivered or such
services are rendered), or otherwise.
For the purpose of determining Debt, there shall be excluded any particular Debt if, upon
or prior to the maturity thereof, there shall have been deposited with the proper depository (i) in
trust the necessary funds (or investments that will provide sufficient funds, if permitted by the
instrument creating such Debt) for the payment, redemption, or satisfaction of such Debt or (ii)
evidence of such Debt deposited for cancellation; and thereafter it shall not be considered Debt.
No item shall be considered Debt unless such item constitutes indebtedness under generally
accepted accounting principles applied on a basis consistent with the financial statements of the
System in prior Fiscal Years.
Q. The term Debt Service Requirements shall mean, as of any particular date of
computation, with respect to any obligations and with respect to any period, the aggregate of the
amounts to be paid or set aside by the City as of such date or in such period for the payment of the
principal of, premium, if any, and interest (to the extent not capitalized) on such obligations;
assuming, in the case of obligations without a fixed numerical rate, that such obligations bear
interest calculated by assuming (i) that the interest rate for every 12-month period on such bonds
100107157.3 -22-
is equal to the rate of interest reported in the most recently published edition of The Bond Buyer
(or its successor)at the time of calculation as the"Revenue Bond Index"or,if such Revenue Bond
Index is no longer being maintained by The Bond Buyer(or its successor)at the time of calculation,
such interest rate shall be assumed to be 80% of the rate of interest then being paid on United
States Treasury obligations of like maturity and (ii)that, in the case of bonds not subject to fixed
scheduled mandatory sinking fund redemptions,that the principal of such bonds is amortized such
that annual debt service is substantially level over the remaining stated life of such bonds or in the
manner permitted under Section 1371.057(c), as amended, Texas Government Code as the same
relates to interim or non permanent indebtedness, and in the case of obligations required to be
redeemed or prepaid as to principal prior to Stated Maturity according to a fixed schedule, the
principal amounts thereof will be redeemed prior to Stated Maturity in accordance with the
mandatory redemption provisions applicable thereto(in each case notwithstanding any contingent
obligation to redeem bonds more rapidly). For the term of any Credit Agreement in the form of
an interest rate hedge agreement entered into in connection with any such obligations,Debt Service
Requirements shall be computed by netting the amounts payable to the City under such hedge
agreement from the amounts payable by the City under such hedge agreement and such
obligations.
R. The term Depository shall mean an official depository bank of the City.
S. The term Engineer shall mean an individual, firm, or corporation engaged in the
engineering profession, being a registered professional engineer under the laws of the State of
Texas, having specific experience with respect to a combined municipal utility system similar to
the System and such individual,firm, or corporation may be employed by, or may be an employee
of,the City.
T. The term Fiscal Year shall mean the twelve month accounting period used by the
City in connection with the operation of the System which may be any twelve consecutive month
period established by the City,presently being that period commencing on October 1 of each year
and ending on the following September 30.
U. The term Government Securities shall mean: (i) direct noncallable obligations of
the United States, including obligations that are unconditionally guaranteed by,the United States
of America, or (ii) noncallable obligations of an agency or instrumentality of the United States,
including obligations that are unconditionally guaranteed or insured by the agency or
instrumentality and that, on the date the governing body of the issuer adopts or approves the
proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a
nationally recognized investment rating firm not less than AAA or its equivalent.
V. The term Gross Revenues shall mean all revenues, income, and receipts derived or
received by the City from the operation and ownership of the System,including the interest income
from the investment or deposit of money in any Fund created or confirmed by this Ordinance or
100107157.3 -23-
maintained by the City in connection with the System,other than those amounts subject to payment
to the United States of America as rebate pursuant to section 148 of the Code.
W. The term Holder or Holders shall mean the registered owner,whose name appears
in the Security Register, for any Bond.
X. The term Inferior Lien Obligations shall mean (i) any bonds, notes, warrants, or
any similar obligations hereafter issued by the City that are payable wholly or in part from and
equally and ratably secured by a lien and pledge of the Net Revenues,which pledge is subordinate
and inferior to the lien on and pledge of the Net Revenues that is included in Junior Lien Pledged
Revenues, that is or will be pledged to the payment of the Subordinate Lien Obligations, and that
is on parity with the lien on and pledge of the Net Revenues securing the payment of the then-
Outstanding Inferior Lien Obligations and (ii) obligations hereafter issued to refund any of the
foregoing that are payable from and equally and ratably secured by such subordinate and inferior
lien on and pledge of the Net Revenues as determined by the City Council in accordance with
applicable law.
Y. The term Interest Payment Date shall mean the date semiannual interest is payable
on the Bonds, being January 15 and July 15 of each year, commencing January 15, 2021, while
any of the Bonds remain Outstanding.
Z. The term Junior Lien Obligations shall mean(i)the Previously Issued.Junior Lien
Obligations, (ii) any Additional Junior Lien Obligations, and (iii) obligations hereafter issued_to
refund any of the foregoing that are payable from and equally and ratably secured solely by a lien
on and pledge of the Junior Lien Pledged Revenues, which includes a lien on and pledge of Net
Revenues that is senior and superior to the lien thereon and pledge thereof securing the repayment
of the Subordinate Lien Obligations and the Inferior Lien Obligations, as determined by the City
Council in accordance with applicable law.
AA. The term Junior Lien Pledged Revenues shall mean (i) the Net Revenues that
remain after payment of all amounts,and funding of all funds,relating to any Priority Bonds,plus
(ii)any additional revenues, income,receipts,or other resources including,without limitation, any
grants,donations,or income received or to be received from the United States Government,or any
other public or private source,whether pursuant to an agreement or otherwise,which hereafter are
pledged by the City to the payment of the Bonds,and at the City's discretion,any Additional Junior
Lien Obligations, and excluding those revenues excluded from Gross Revenues.
BB. The term Net Revenues shall mean all Gross Revenues less Operating Expenses.
CC. The term Operating Expenses shall mean the expenses of operation and
maintenance of the System, including all salaries, labor, materials, repairs, and extensions
necessary to render efficient service;provided, however,that only such repairs and extensions, as
in the judgment of the City, reasonably and fairly exercised by the passage of appropriate
ordinances, are necessary to render adequate service, or such as might be necessary to meet some
physical accident or condition which would otherwise impair any Priority Bonds, Junior Lien
Obligations, Subordinate Lien Obligations,Inferior Lien Obligations,or other Debt of the System.
Operating Expenses shall include the purchase of water, sewer and gas services as received from
other entities and the expenses related thereto and,to the extent permitted by a change in law(and
100107157.3 -24-
receipt of an opinion as to legality from a firm of nationally recognized bond counsel), Operating
Expenses may include payments made on or in respect of obtaining and maintaining any Credit
Facility. Operating Expenses shall never include any allowance for depreciation, property
retirement,depletion,obsolescence,and other items not requiring an outlay of cash and any interest
on the Bonds or any Debt.
DD. The term Ordinance shall mean this Ordinance adopted by the City Council on May
19, 2020 authorizing the issuance of the Bonds.
EE. The term Outstanding,shall mean when used in this Ordinance with respect to all
Debt means, as of the date of determination, all Debt except:
(1) those Priority Bonds, Junior Lien Obligations, Subordinate Lien
Obligations, and Inferior Lien Obligations canceled by the Paying Agent/Registrar or
delivered to the Paying Agent/Registrar for cancellation;
(2) those Priority Bonds, Junior Lien Obligations, Subordinate Lien
Obligations, and Inferior Lien Obligations for which payment has been duly provided by
the City in accordance with the provisions of Section 34 of this Ordinance; and
(3) those Priority Bonds, Junior Lien Obligations, Subordinate Lien
Obligations, and Inferior Lien Obligations that have been mutilated, destroyed, lost, or
stolen and replacement Bonds have been registered and delivered in lieu thereof as
provided in Section 27 of this Ordinance.
FF. The term Paying Agent/Registrar shall mean the financial institution specified in
Section 3 of this Ordinance, or its herein-permitted successors and assigns.
GG. The term Previously Issued Junior Lien Obligations shall mean, as of the Closing
Date the Outstanding and unpaid obligations of the City that are payable solely from and equally
and ratably secured by a lien on and pledge of the Junior Lien Pledged Revenues which includes
a lien on and pledge of Net Revenues of the System that is superior to the lien thereon and pledge
thereof securing the Subordinate Lien Obligations and Inferior Lien Obligations, identified as
follows:
(1) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2012", dated November 15, 2012, in the original principal
amount of$69,085,000;
(2) "City of Corpus Christi, Texas Utility System Junior Lien Revenue and
Refunding Bonds, Series 2012", dated November 15, 2012, in the original principal
amount of$155,660,000;
(3) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2013", dated November 1, 2013, in the original principal
amount of$97,930,000;
100107157.3 -25-
(4) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Refunding Bonds, Series 2015", dated July 1, 2015, in the original principal amount of
$46,990,000;
(5) • "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2015A",dated March 1,2015,in the original principal amount
of$93,600,000;
(6) "City of Corpus Christi, Texas Utility System Rate Junior Lien Revenue
Improvement Bonds, Series 2015C", dated July 1, 2015, in the original principal amount
of$101,385,000;
(7) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Refunding Bonds, Series 2016", dated August 1, 2016, in the original principal amount of
$80,415,000;
(8) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Refunding Bonds, Series 2017",dated March 15,2017, in the original principal amount of
$51,215,000;
(9) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Refunding Bonds, Series 2017A", dated May 1, 2017, in the original principal amount of
$27,670,000;
(10) "City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2017",dated October 1,2017, in the original principal amount
of$2,750,000;
(11) "City of Corpus Christi, Texas Utility System Junior Lien Revenue and
Improvement Refunding Bonds, Series 2019", dated September 15, 2019, in the original
principal amount of$93,425,000; and
(12) Upon issuance,the Bonds and the Series 2020A Bonds.
HH. The term Previously Issued Priority Bonds shall mean obligations of the City that
are payable solely from and equally and ratably secured by a prior and first lien on and pledge of
the Net Revenues of the System, identified as follows:
(1) "City of Corpus Christi, Texas Utility System Revenue Improvement
Bonds, Series 2010",dated March 1,2010, in the original principal amount of$8,000,000;
(2) "City of Corpus Christi, Texas Utility System Revenue Improvement
Bonds, Taxable Series 2010 (Direct Subsidy-Build America Bonds)", dated July 1, 2010,
in the original principal amount of$60,625,000; and
(3) "City of Corpus Christi, Texas Utility System Revenue Improvement
Bonds, Series 2012",dated April 1,2012, in the original principal amount of$52,500,000;
provided, however, as of the Closing Date and concurrent defeasance of the Refunded
Obligations,no Previously Issued Priority Bonds shall remain outstanding.
100107157.3 -26-
II. The term Previously Issued Subordinate Lien Obligations shall mean the "City of
Corpus Christi, Texas Utility System Subordinate Lien Revenue Refunding Bonds, Series 2018",
dated February 15, 2018, in the original principal amount of$34,835,000.
JJ. The term Pricing Officer shall mean either of the City Manager,the Chief Financial
Officer,or Director of Financial Services,respectively,of the City(which shall include any person
serving in the foregoing capacity on an interim or non-permanent basis).
KK. The term Priority Bonds shall mean the Previously Issued Priority Bonds.
LL. The term Prudent Utility Practice shall mean any of the practices, methods and
acts, in the exercise of reasonable judgment, in the light of the facts, including but not limited to
the practices,methods and acts engaged in or approved by a significant portion of the public utility
industry prior thereto, known at the time the decision was made, would have been expected to
accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and
expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the
optimum practice,method or act at the exclusion of all others, but rather is a spectrum of possible
practices, methods or acts which could have been expected to accomplish the desired result at the
lowest reasonable cost consistent with reliability, safety and expedition. In the case of any facility
included in the System which is owned in common with one or more other entities, the term
"Prudent Utility Practice", as applied to such facility, shall have the meaning set forth in the
agreement governing the operation of such facility.
MM. The term Purchasers shall mean the initial purchaser or purchasers of the Bonds
named in Section 28 of this Ordinance.
NN. The term Refunding Candidates shall mean the following obligations of the City
from which the Refunded Obligations are selected by the Pricing Officer:
(1) City of Corpus Christi,Texas Utility System Revenue Improvement Bonds,
Series 2010,dated March 1,2010,in the original principal amount of$8,00,000,and stated
to mature on July 15 in each of the years 2021 through 2029, in the aggregate principal
amount of$7,270,000,to be redeemed on August 7, 2020;
(2) City of Corpus Christi,Texas Utility System Revenue Improvement Bonds,
Series 2012, dated April 1, 2012, in the original principal amount of $52,500,000, and
stated to mature on July 15 in each of the years 2023 through 2032,July 15, 2037,and July
15, 2042, in the aggregate principal amount of$45,150,000, to be redeemed on August 7,
2020;
(3) City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2012, dated November 15, 2012, in the original principal
amount of$69,085,000, and stated to mature on July 15 in each of the years 2021 through
2032,July 15,2037, and July 15, 2042, in the aggregate principal amount of$54,345,000,
to be redeemed on July 15, 2022;
(4) City of Corpus Christi, Texas Utility System Junior Lien Revenue and
Refunding Bonds, Series 2012,dated November 15,2012, in the original principal amount
100107157.3 -27-
of$155,660,000, and stated to mature on July 15 in each of the years 2023 through 2032,
July 15, 2037, and July 15, 2042, in the aggregate principal amount of$65,945,000, to be
redeemed on July 15,2022; and
(5) City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2013, dated November 1, 2013, in the original principal
amount of$97,930,000, and stated to mature on July 15 in each of the years 2024 through
2031, July 15, 2033, July 15, 2038, and July 15, 2043, in the aggregate principal amount
of$84,845,000,to be redeemed on July 15, 2023.
00. The term Required Reserve Amount shall have the meaning given such term in
Section 14 of this Ordinance.
PP. The term Reserve Fund shall have the meaning given such term in Section 14 of
this Ordinance.
QQ. The term Reserve Fund Deposits shall have the meaning given such term in Section
14 of this Ordinance.
RR. The term Series 2020A Bonds means the City's "Utility System Junior Lien
Revenue Improvement and Refunding Bonds, Series 2020A", to be issued concurrently with the
issuance of the Bonds.
SS. The term Special Project shall mean, to the extent permitted by law, any water,
sewer,wastewater reuse,or municipal drainage system property,improvement,or facility declared
by the City,upon the recommendation of the City Council,not to be part of the System, for which
the costs of acquisition, construction, and installation are paid from proceeds of Special Project
Bonds(hereinafter defined)being a financing transaction other than the issuance of bonds payable
from ad valorem taxes, Net Revenues, or Junior Lien Pledged Revenues, and for which all
maintenance and operation expenses are payable from sources other than ad valorem taxes, Net
Revenues, or Junior Lien Pledged Revenues, but only to the extent that and for so long as all or
any part of the revenues or proceeds of which are or will be pledged to secure the payment or
repayment of such costs of acquisition, construction, and installation under such Special Project
Bonds.
TT. The term Stated Maturity shall mean the annual principal payments of the Bonds
payable on July 15 of each year, as set forth in Section 2 of this Ordinance.
UU. The term Subordinate Lien Obligations shall mean (i) the Previously Issued
Subordinate Lien Obligations, (ii) any Additional Subordinate Lien Obligations, and (iii) any
obligations issued to refund the foregoing payable and equally and ratably secured from a lien on
and pledge of the Net Revenues that is subordinate and inferior to the lien thereon and pledge
thereof securing the payment of the Junior Lien Obligations but superior to the lien thereon and
pledge thereof securing the payment of the Inferior Lien Obligations, as determined by the City
Council in accordance with any applicable law.
VV. The term System shall mean and include,whether now existing or hereinafter added
(including additions made from time to time in accordance with the provisions of the City
100107157.3 -28-
ordinances authorizing the issuance of the Outstanding Priority Bonds), the City's existing
combined waterworks system,wastewater disposal system and gas system,together with all future
extensions, improvements, enlargements, and additions thereto including, to the extent permitted
by law (and to be added at the sole discretion of the City), storm sewer and drainage within the
waterworks system, solid waste disposal system, additional utility (including electricity),
telecommunications, technology, and any other similar enterprise services, and all replacements,
additions, and improvements to any of the foregoing, within or without the City limits; provided
that, notwithstanding the foregoing, and to the extent now or hereafter authorized or permitted by
law, the term System shall not include any waterworks, wastewater or gas facilities which are
declared by the City to be a Special Project and not a part of the System and which are hereafter
acquired or constructed by the City with the proceeds from the issuance of Special Project Bonds,
which are hereby defined as being special revenue obligations of the City which are not secured
by or payable from all or part of the Net Revenues and/or Junior Lien Pledged Revenues,but which
are secured by and payable solely from special contract revenues, or payments received from the
City or any other legal entity, or any combination thereof, in connection with such facilities; and
such revenues or payments shall not be considered as or constitute Gross Revenues of the System,
unless and to the extent otherwise provided in the ordinance or ordinances authorizing the issuance
of such Special Project Bonds.
WW. The term System Fund shall have the meaning given such term in Section 12 of this
Ordinance.
SECTION 10. Pledge of Junior Lien Pledged Revenues.
A. The City hereby covenants and agrees that the Junior Lien Pledged Revenues of the
System are hereby irrevocably pledged to the payment and security of the Junior Lien Obligations,
including the establishment and maintenance of the special funds or accounts created for the
payment and security thereof, all as hereinafter provided; and it is hereby resolved that the Junior
Lien Obligations, and the interest thereon, shall constitute a lien on and pledge of the Junior Lien
Pledged Revenues and be valid and binding without any physical delivery thereof or further act by
the City, and the lien created hereby on the Junior Lien Pledged Revenues for the payment and
security of the Junior Lien Obligations,shall be,subject to the subordinate lien nature of the Junior
Lien Pledged Revenues as herein described otherwise, prior in right and claim as to any other
indebtedness, liability, or obligation of the City or the System. The Junior Lien Obligations are
and will be secured by and payable only from the Junior Lien Pledged Revenues, and are not
secured by or payable from a mortgage or deed of trust on any properties whether real, personal,
or mixed, constituting the System.
B. Chapter 1208, as amended, Texas Government Code, applies to the issuance of the
Bonds and the pledge of Junior Lien Pledged Revenues granted by the City under subsection A of
this Section, and such pledge is therefore valid, effective, and perfected. If Texas law is amended
at any time while the Junior Lien Obligations are Outstanding and unpaid such that the pledge of
the Junior Lien Pledged 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 Junior Lien Obligations the perfection of the security interest in this pledge,the City Council
agrees to take such measures as it determines are reasonable and necessary under Texas law to
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comply with the applicable provisions of Chapter 9, as amended, Texas Business & Commerce
Code and enable a filing to perfect the security interest in this pledge to occur.
SECTION 11. Rates and Charges. For the benefit of the Holders of the Bonds and in
addition to all provisions and covenants in the laws of the State of Texas and in this Ordinance,
the City hereby expressly stipulates and agrees, while any of the Junior Lien Obligations are
Outstanding,to establish and maintain rates and charges for facilities and services afforded by the
System that are reasonably expected,on the basis of available information and experience and with
due allowance for contingencies,to produce Gross Revenues in each Fiscal Year sufficient:
A. To pay all Operating Expenses, or any expenses required by statute to be a first
claim on and charge against the Gross Revenues of the System.
B. To produce Net Revenues, together with any other lawfully available funds,
sufficient to satisfy the rate covenant contained in the ordinances authorizing the issuance of the
Priority Bonds and to pay the principal of and interest on the Priority Bonds and the amounts
required to be deposited in any reserve or contingency fund or account created for the payment
and security of the Priority Bonds, and any other obligations or evidences of indebtedness issued
or incurred that are payable from and secured solely by a prior and first lien on an pledge of the
Net Revenues of the System;
C. To produce Net Revenues, together with any other lawfully available funds, equal
to at least 1.15 times Average Annual Debt Service Requirements on the then-Outstanding Junior
Lien Obligations and to deposit the amounts required to be deposited in any reserve or contingency
fund or account created for the payment and security of the Junior Lien Obligations,and any other
obligations or evidences of indebtedness issued or incurred that are payable from and secured
solely by a lien on and pledge of the Net Revenues, including the Junior Lien Pledged Revenues,
that is junior and inferior to the lien thereon and pledge thereof securing the repayment of the
Priority Bonds but senior and superior to the lien thereon and pledge thereof securing the
repayment of the Subordinate Lien Obligations and the Inferior Lien Obligations;
D. To produce Net Revenues, together with any other lawfully available funds,
sufficient to pay the amounts that may be deposited in the special funds established for the payment
of the Subordinate Lien Obligations;
E. To produce Net Revenues, together with any other lawfully available funds,
sufficient to pay the principal of and interest on the Inferior Lien Obligations as the same become
due and payable and to deposit the amounts required to be deposited in any reserve or contingency
fund or account created for the payment and security of the Inferior Lien Obligations, and any
other obligations or evidences of indebtedness issued or incurred that are payable from and secured
solely by a lien on and pledge of the Net Revenues that is subordinate and inferior to the lien
100107157.3 -30-
thereon and pledge thereof securing the repayment of the Priority Bonds, the Junior Lien
Obligations, and the Subordinate Lien Obligations; and
F. To pay,together with any other lawfully available funds,any other legally incurred
Debt payable from the Net Revenues of the System and/or secured by a lien on any part of the
System.
The determination of the amount of principal of and interest on any obligations identified
in this Section for the purpose of confirming the sufficiency of System rates and charges shall be
made after giving consideration as an offset to debt service the receipt or anticipated receipt of a
refundable tax credit or similar payment relating to any series of obligations irrevocably designated
as refundable tax credit bonds pursuant to the City ordinance authorizing their issuance or
otherwise relating thereto.
SECTION 12. System Fund. The City hereby covenants, agrees, and ratifies its prior
covenants and agreements that the Gross Revenues of the System shall be deposited, as collected
and received, into a separate Fund or account (previously created and established and to be
maintained with the Depository) known as the "City of Corpus Christi, Texas Utility System
Revenue Fund"(the System Fund)and that the Gross Revenues of the System shall be kept separate
and apart from all other funds of the City. All Gross Revenues deposited into the System Fund
shall be pledged and appropriated to the extent required for the following uses and in the order of
priority shown:
A. First: To the payment of all necessary and reasonable Operating Expenses or other
expenses required by statute to be a first charge on and claim against the revenues of the System.
B. Second: To the payment of the amounts required to be deposited into the special
funds and accounts created and established for the payment, security and benefit of the Previously
Issued Priority Bonds.
C. Third: To the payment of the amounts required to be deposited into the special
funds and accounts created and established for the payment,security and benefit of the Previously
Issued Junior Lien Obligations, the Bonds, and any Additional Junior Lien Obligations hereafter
issued by the City.
D. Fourth: To the payment of the amounts required to be deposited into the special
funds and accounts created and established for the payment, security and benefit of the Previously
Issued Subordinate Lien Obligations and any Additional Subordinate Lien Obligations hereafter
issued by the City.
E. Fifth: To the payment of the amounts that must be deposited in any special funds
and accounts created and established for the payment, security, and benefit of any Inferior Lien
Obligations hereafter issued by the City.
Any Net Revenues remaining in the System Fund following such transfers may be used by
the City for payment of other obligations of the System, and for any other lawful purpose;
provided, however,that for so long as any Priority Bonds remain Outstanding,transfers made for
purposes other than for payment of obligations of the System shall be made only at the end of the
100107157.3 -31-
Fiscal Year (if such limitation is imposed, and then, only to the extent imposed in the City
ordinances authorizing the issuance of the Priority Bonds).
SECTION 13. Bond Fund - Excess Funds. For purposes of providing funds to pay the
principal of and interest on the currently Outstanding Junior Lien Obligations as the same become
due and payable, the City agrees to maintain, at the Depository, a separate and special Fund or
account to be created and known as the"City of Corpus Christi, Texas Utility System Junior Lien
Revenue Refunding Bonds Interest and Sinking Fund" (the Bond Fund). The City covenants that
there shall be deposited by an Authorized Official into the Bond Fund prior to each principal and
interest payment date from the available Net Revenues an amount equal to one hundred per cent
(100%) of the amount required to fully pay the interest on and the principal of the currently
Outstanding Junior Lien Obligations then falling due and payable, such deposits to pay maturing
principal and accrued interest on the currently Outstanding Junior Lien Obligations to be made in
substantially equal monthly installments on or before the 10th day of each month, beginning on or
before the 10th day of the month next following the delivery of the Bonds to the Purchasers. As
described further in Section 15 hereof, if the Junior Lien Pledged Revenues in any month are
insufficient to make the required payments into the Bond Fund,then the amount of any deficiency
in such payment shall be added to the amount otherwise required to be paid into the Bond Fund in
the next month.
The required monthly deposits to the Bond Fund for the payment of principal of and interest
on the currently Outstanding Junior Lien Obligations shall continue to be made as hereinabove
provided until such time as (i)the total amount on deposit in the Bond Fund and Reserve Fund is
equal to the amount required to fully pay and discharge all Outstanding Junior Lien Obligations
(principal and interest) or(ii)the Junior Lien Obligations are no longer Outstanding.
Any proceeds of the Bonds, and investment income thereon, not expended for authorized
purposes shall be deposited into the Bond Fund and shall be taken into consideration and reduce
the amount of monthly deposits required to be deposited into the Bond Fund from the Net
Revenues of the System.
Any surplus proceeds from the sale of the Bonds, including investment income thereon,
not expended for authorized purposes shall be deposited in the Bond Fund, and such amounts so
deposited shall reduce the sums otherwise required to be deposited in such Fund from the Junior
Lien Pledged Revenues.
SECTION 14. Reserve Fund. To accumulate and maintain a reserve for the payment of
the Bonds equal to 100%of the Average Annual Debt Service Requirements or such lesser amount
as restricted by the Code (calculated by the City Council at the beginning of each Fiscal Year and
as of the date of issuance of the Bonds and each series of Additional Junior Lien Obligations) for
the Bonds (the Required Reserve Amount), the City hereby creates and establishes, and shall
maintain at a Depository a separate and special fund known as the "Corpus Christi, Texas Utility
System Junior Lien Revenue Improvement and Refunding Bonds Reserve Fund" (the Reserve
Fund). Earnings and income derived from the investment of amounts held for the credit of the
Reserve Fund shall be retained in the Reserve Fund until the Reserve Fund contains the Required
Reserve Amount; thereafter, such earnings and income shall be deposited to the credit of the
System Fund. All funds deposited into the Reserve Fund shall be used solely for the payment of
the principal of and interest on the Bonds, when and to the extent other funds available for such
100107157.3 -32-
purposes are insufficient and, in addition, may be used to retire the last Stated Maturity or Stated
Maturities of or interest on the Bonds.
The City may acquire a Credit Facility or Facilities issued by a Credit Provider in amounts
equal to all or part of the Required Reserve Amount for the Bonds in lieu of depositing cash into
the Reserve Fund; provided, however, that no such Credit Facility may be so substituted unless
the substitution of the Credit Facility will not, in and of itself, cause any ratings then assigned to
the Bonds by any nationally recognized rating agency to be lowered and the resolution authorizing
the substitution of the Credit Facility for all or part of the Required Reserve Amount for the Bonds
contains (i) a finding that such substitution is cost effective and (ii) a provision that the interest
due on any repayment obligation of the City by reason of payments made under such Credit
Facility does not exceed the highest lawful rate of interest which may be paid by the City at the
time of the delivery of the Credit Facility. The City reserves the right to use Junior Lien Pledged
Revenues to fund the payment of(1) periodic premiums on the Credit Facility as a part of the
payment of the City's Operating Expenses, and(2) any repayment obligation incurred by the City
(including interest)to the Credit Provider,the payment of which will result in the reinstatement of
such Credit Facility,prior to making payments required to be made to the Reserve Fund pursuant
to the provisions of this Section to restore the balance in such fund the Required Reserve Amount
for the Bonds.
Until the issuance of any Additional Junior Lien Obligations (or as from time to time
recalculated by the City as provided in the first paragraph of this Section), the Required Reserve
Amount is $49,929,572 (inclusive of the Bonds and the Series 2020A Bonds). Of this amount,
$5,101,495, representing the portion of the Required Reserve Amount attributable to the Bonds
and the Series 2020A Bonds, shall be deposited to the Reserve Fund at such time as may be
required pursuant to the provisions of this Section from Revenues,paid from the System Fund at
such level of priority as specified in Section 12, by the deposit of monthly installments,made on
or before the 10th day of each month following the month in which such obligation to fund the
Reserve Fund arises, of not less than 1/60th of the amount to be maintained in the Reserve Fund.
As and when Additional Junior Lien Obligations are delivered or incurred, the Required
Reserve Amount shall be increased, if required, to an amount calculated in the manner provided
in the first paragraph of this Section. Any additional amount required to be maintained in the
Reserve Fund shall be so accumulated by the deposit of all or a portion of the necessary amount
from the proceeds of the issue or other lawfully available funds in the Reserve Fund immediately
after the delivery of the then proposed Additional Junior Lien Obligations or, at the option of the
City, by the deposit of monthly installments, made on or before the business day before the 10th
day of each month following the month of delivery of the then proposed Additional Junior Lien
Obligations,of not less than 1/60th of the additional amount to be maintained in the Reserve Fund
by reason of the issuance of the Additional Junior Lien Obligations then being issued (or 1/60th
of the balance of the additional amount not deposited immediately in cash) (such deposits, the
Required Reserve Fund Deposits), thereby ensuring the accumulation in the Reserve Fund of the
appropriate Required Reserve Amount.
When and for so long as the cash and investments in the Reserve Fund equal the Required
Reserve Amount,no deposits need be made to the credit of the Reserve Fund;but, if and when the
Reserve Fund at any time contains less than the Required Reserve Amount(other than as the result
of the issuance of Additional Junior Lien Obligations as provided in the preceding paragraph),the
100107157 3 -33-
City covenants and agrees to cure the deficiency in the Required Reserve Amount by resuming the
Required Reserve Fund Deposits to the Reserve Fund from the Junior Lien Pledged Revenues in
monthly deposit amounts equal to not less than 1/60th of the Required Reserve Amount
covenanted by the City to be maintained in the Reserve Fund. Any such deficiency payments shall
be made on or before the 10th day of each month until the Required Reserve Amount has been fully
restored. The City further covenants and agrees that, subject only to the prior payments to be made
to the Bond Fund, the Junior Lien Pledged Revenues shall be applied and appropriated and used
to establish and maintain the Required Reserve Amount and to cure any deficiency in such amounts
as required by the terms of this Ordinance, any City ordinance authorizing the issuance of the
Priority Bonds, and any other ordinance pertaining to the issuance of Additional Junior Lien
Obligations.
During such time as the Reserve Fund contains the Required Reserve Amount, the City
Council may, at its option, withdraw all surplus funds in the Reserve Fund in excess of the
Required Reserve Amount. Any such withdrawn surplus shall be deposited to the Bond Fund or
used by the City for any other lawful purpose; provided, however, to the extent that such excess
amount represents Bond proceeds, then such amount must be transferred to the Bond Fund or be
otherwise used in accordance with then-applicable State law.
In the event a Credit Facility issued to satisfy all or a part of the City's obligation with
respect to the Reserve Fund causes the amount then on deposit in the Reserve Fund to exceed the
Required Reserve Amount for the Bonds, the City may transfer such excess amount to any fund
or funds established for the payment of or security for the Bonds(including any escrow established
for the final payment of any such obligations pursuant to the provisions of Chapter 1207), or be
used for any lawful purposes;provided,however,to the extent that such excess amount represents
Bond proceeds, then such amount must be transferred to the Bond Fund or be otherwise used in
accordance with then-applicable State law.
Notwithstanding anything to the contrary contained in this Section, the requirements set
forth above to fund the Reserve Fund in the amount of the Required Reserve Amount shall be
suspended for such time as the Junior Lien Pledged Revenues for each Fiscal Year are equal to at
least 110% of the Average Annual Debt Service Requirements. In the event that the Junior Lien
Pledged Revenues for any two consecutive Fiscal Years are less than 110% (unless such
percentage is below 100%in any Fiscal Year,in which case the hereinafter—specified requirements
will commence after such Fiscal Year) of the Average Annual Debt Service Requirements, the
City will be required to commence making the deposits to the Reserve Fund, as provided above,
and to continue making such deposits until the earlier of(i)such time as the Reserve Fund contains
the Required Reserve Amount or (ii) the Junior Lien Pledged Revenues for a Fiscal Year have
been equal to not less than 110%of the Average Annual Debt Service Requirements.
SECTION 15. Deficiencies-Excess Junior Lien Pledged Revenues.
A. If on any occasion there shall not be sufficient Junior Lien Pledged Revenues to
make the required deposits into the Bond Fund, then such deficiency shall be cured as soon as
possible from the next available unallocated Junior Lien Pledged Revenues, or from any other
100107157.3 -34-
sources available for such purpose,and such payments shall be in addition to the amounts required
to be paid into these Funds or accounts during such month or months.
B. Subject to making the required deposits to the Bond Fund when and as required by
any ordinance or resolution authorizing the issuance of the currently Outstanding Priority Bonds,
the Junior Lien Obligations, the Subordinate Lien Obligations and the Inferior Lien Obligations,
the excess Net Revenues of the System may be used by the City for any lawful purpose(as further
provided in Section 12 hereof).
SECTION 16. Payment of Bonds. While any of the Bonds are Outstanding,an Authorized
Official shall cause to be transferred to the Paying Agent/Registrar therefor,from funds on deposit
in the Bond Fund, amounts sufficient to fully pay and discharge promptly each installment of
interest on and principal of the Bonds as such installment accrues or matures; such transfer of
funds must be made in such manner as will cause immediately available funds to be deposited with
the Paying Agent/Registrar for the Bonds at the close of the business day next preceding the date
a debt service payment is due on the Bonds.
SECTION 17. Investments. Funds held in any Fund or account created, established, or
maintained pursuant to this Ordinance shall, at the option of the City, be placed in time deposits,
certificates of deposit, guaranteed investment contracts or similar contractual agreements as
permitted by the provisions of the Public Funds Investment Act,as amended,Chapter 2256,Texas
Government Code, or any other law, and secured(to the extent not insured by the Federal Deposit
Insurance Corporation) by obligations of the type hereinafter described, including investments
held in book-entry form, in securities including,but not limited to,direct obligations of the United
States of America, obligations guaranteed or insured by the United States of America, which, in
the opinion of the Attorney General of the United States, are backed by its full faith and credit or
represent its general obligations,or invested in indirect obligations of the United States of America
including, but not limited to, evidences of indebtedness issued, insured, or guaranteed by such
governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for
Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, Small
Business Administration, Federal National Mortgage Association, Federal Home Loan Mortgage
Corporation, or Federal Housing Administration; provided that all such deposits and investments
shall be made in such a manner that the money required to be expended from any Fund or account
will be available at the proper time or times. Such investments (except State and Local
Government Series investments held in book entry form,which shall at all times be valued at cost)
shall be valued in terms of current market value within 45 days of the close of each Fiscal Year.
All interest and income derived from deposits and investments in the Bond Fund immediately shall
be credited to, and any losses debited to, the Bond Fund. All such investments shall be sold
promptly when necessary to prevent any default in connection with the Bonds.
SECTION 18. Covenants. It is the intention of the City Council and accordingly hereby
recognized and stipulated that the provisions, agreements, and covenants contained herein bearing
upon the management and operations of the System, and the administering and application of
Gross Revenues derived from the operation thereof, shall to the extent possible be harmonized
with like provisions, agreements, and covenants contained in the City ordinances authorizing the
issuance of the Priority Bonds now or hereafter Outstanding,and to the extent of any irreconcilable
conflict between the provisions contained herein and in the City ordinances authorizing the
issuance of the Priority Bonds now or hereafter Outstanding, the provisions, agreements and
100107157.3 -35-
covenants contained therein shall prevail to the extent of such conflict and be applicable to this
Ordinance, especially the priority of rights and benefits conferred thereby to the holders of the
Priority Bonds now or hereafter Outstanding; provided, however, that the provisions of this
Ordinance concerning the issuance of Additional Priority Bonds shall control. It is expressly
recognized that prior to the issuance of any Additional Junior Lien Obligations, Additional
Subordinate Lien Obligations, or Inferior Lien Obligations, that the City must comply with each
of the conditions precedent contained in this Ordinance and the City ordinances authorizing the
issuance of the then-Outstanding Priority Bonds, as appropriate.
A. Performance. It will faithfully perform at all times any and all covenants,
undertakings, stipulations, and provisions contained in this Ordinance, and each ordinance
authorizing the issuance of Junior Lien Obligations; it will promptly pay or cause to be paid the
principal amount of and interest on all Debt, on the dates and in the places and manner prescribed
in such ordinances and such Debt; and it will, at the time and in the manner prescribed, deposit or
cause to be deposited the amounts required to be deposited into the System Fund and the Funds
herein created; and any registered owner of any Debt may require the City, its officials and
employees to carry out, respect or enforce the covenants and obligations of this Ordinance, or any
ordinance authorizing the issuance of Debt, by all legal and equitable means, including
specifically, but without limitation, the use and filing of mandamus proceedings, in any court of
competent jurisdiction, against the City, its officials and employees.
B. City's Legal Authority. It is a duly created and existing home rule city of the State
of Texas, and is duly authorized under the laws of the State of Texas to issue the Bonds; that all
action on its part for the issuance of the Bonds has been duly and effectively taken, and that the
Bonds in the hands of the owners thereof are and will be valid and enforceable special obligations
of the City in accordance with their terms.
C. Acquisition and Construction; Operation and Maintenance. (1)It shall use its best
efforts in accordance with Prudent Utility Practice to acquire and construct,or cause to be acquired
and constructed, any Capital Additions or Capital Improvements,in accordance with the plans and
specifications therefor, as modified from time to time, with due diligence and in a sound and
economical manner;and(2) it shall at all times use its best efforts to operate or cause to be operated
the System properly and in an efficient manner, consistent with Prudent Utility Practice, and shall
use its best efforts to maintain,preserve,reconstruct and keep the same or cause the same to be so
maintained, preserved, reconstructed and kept, with the appurtenances and every part and parcel
thereof, in good repair, working order and condition, and shall from time to time make, or use its
best efforts to cause to be made,all necessary and proper repairs,replacement and renewals so that
at all times the operation of the System may be properly and advantageously conducted.
D. Title. It has or will obtain lawful title,whether such title is in fee or lesser interest,
to the lands, buildings, structures and facilities constituting the System,that it warrants that it will
defend the title to all the aforesaid lands,buildings, structures and facilities,and every part thereof,
for the benefit of the owners of the Junior Lien Obligations, against the claims and demands of all
persons whomsoever, that it is lawfully qualified to pledge the Junior Lien Pledged Revenues to
the payment of the Junior Lien Obligations in the manner prescribed herein, and has lawfully
exercised such rights.
100107157.3 -36-
E. Liens. It will from time to time and before the same become delinquent pay and
discharge all taxes,assessments and governmental charges,if any,which shall be lawfully imposed
upon it,or the System;it will pay all lawful claims for rents,royalties,labor,materials and supplies
which if unpaid might by law become a lien or charge thereon,the lien of which would be prior to,
or interfere with the liens hereof, so that the priority of the liens granted hereunder shall be fully
preserved in the manner provided herein, and it will not create or suffer to be created any
mechanic's, laborer's, materialman's or other lien or charge which might or could be prior to the
liens hereof, or do or suffer any matter or thing whereby the liens hereof might or could be
impaired;provided however,that no such tax,assessment or charge,and that no such claims which
might be used as the basis of a mechanic's, laborer's, materialman's or other lien or charge, shall
be required to be paid so long as the validity of the same shall be contested in good faith by the
City.
F. No Free Service. No free service or service otherwise than in accordance with the
established rate schedule shall be furnished, directly or indirectly, by the System to any person,
firm, corporation or other entity, other than the City. No part of the salary of any official or
employee of the City or his replacement shall be paid from Junior Lien Pledged Revenues unless
and only to the extent the duties and performances of such official or employee or his replacement
appertain directly to the System. To the extent the City receives the services of the System, such
services shall be accounted for according to the established rate schedule.
G. Further Encumbrance. It will not additionally encumber the Net Revenues of the
System in any manner,except as permitted in the City ordinances authorizing the Previously Issued
Priority Bonds and in this Ordinance (which provisions are also included in other City ordinances
authorizing other series of Junior Lien Obligations).
H. Sale, Lease or Disposal of Property. No part of the System shall be sold, leased,
mortgaged, demolished,removed or otherwise disposed of, except as follows:
(1) To the extent permitted by law, the City may sell or exchange at any time
and from time to time any property or facilities constituting part of the System only if(A)
it shall determine such property or facilities are not useful in the operation of the System,
or(B)the proceeds of such sale are $250,000 or less, or it shall have received a certificate
executed by an Engineer and the City Manager stating, in their opinion,that the fair market
value of the property or facilities exchanged is $250,000 or less, or(C) if such proceeds or
fair market value exceeds $250,000 it shall have received a certificate executed by an
Engineer and the City Manager stating (i) that system within the System of which the
property or facilities comprises a part thereof and (ii) in their opinion, that the sale or
exchange of such property or facilities will not impair the ability of the City to comply
during the current or any future Fiscal Year with the provisions of Subsection K of this
Section. The proceeds of any such sale or exchange not used to acquire other property
necessary or desirable for the safe or efficient operation of the System shall forthwith, at
the option of the City (i) be used to redeem or purchase Debt, or(ii) otherwise be used to
provide for the payment of Debt. The foregoing notwithstanding, if such property or
facilities sold or exchanged constituted property or facilities comprising all or a part of a
system within the System, the acquisition, improvement or extension of such system
having not been financed by the City in any manner with the proceeds of Debt, or with the
proceeds of obligations which were refunded in whole or in part with the proceeds of Debt,
100107157.3 -37-
then the City may utilize the proceeds of such sale or exchange for any lawful purpose;
and
(2) To the extent permitted by law, the City may lease or make contracts or
grant licenses for the operation of,or make arrangements for the use of,or grant easements
or other rights with respect to, any part of the System, provided that any such lease,
contract, license, arrangement, easement or right(A)does not impede the operation by the
City of the System and(B) does not in any manner impair or adversely affect the rights or
security of the owners of the Debt under this Ordinance; and provided, further, that if the
depreciated cost of the property to be covered by any such lease, contract, license,
arrangement, easement or other right is in excess of$500,000,the City shall have received
a certificate executed by an Engineer and the City Manager that the action of the City with
respect thereto does not result,in a breach of the conditions under this clause (2). Any
payments received by the City under or in connection with any such lease,contract,license,
arrangement,easement or right in respect of the System or any part thereof shall constitute
Gross Revenues.
I. Books, Records and Accounts. It shall keep proper books, records and accounts
separate and apart from all other records and accounts, in which complete and correct entries shall
be made of all transactions relating to the System and the City shall cause said books and accounts
to be audited annually as of the close of each Fiscal Year by the Accountant.
J. Insurance.
(1) Except as otherwise permitted in clause(2) below, it shall cause to be
insured such parts of the System as would usually be insured by corporations operating like
properties,with a responsible insurance company or companies, against risks, accidents or
casualties against which and to the extent insurance is usually carried by corporations
operating like properties including, to the extent reasonably obtainable, fire and extended
coverage insurance,insurance against damage by floods,and use and occupancy insurance.
Public liability and property damage insurance shall also be carried unless the City
Attorney gives a written opinion to the effect that the City is not liable for claims which
would be protected by such insurance. At any time while any contractor engaged in
construction work shall be fully responsible therefor,the City shall not be required to carry
insurance on the work being constructed if the contractor is required to carry appropriate
insurance. All such policies shall be open to the inspection of the bondholders and their
representatives at all reasonable times.
(2) In lieu of obtaining policies for insurance as provided above,the City may
self-insure against risks, accidents, claims or casualties described in clause (1) above.
(3) The annual audit hereinafter required shall contain a section commenting
on whether or not the City has complied with the requirements of this Section with respect
to the maintenance of insurance, and listing the areas of insurance for which the City is
self-insuring, all policies carried, and whether or not all insurance premiums upon the
insurance policies to which reference is hereinbefore made have been paid.
100107157.3 -38-
K. Audits. After the close of each Fiscal Year while any Debt is Outstanding, an audit
will be made of the books and accounts relating to the System and the Net Revenues by the
Accountant. Such annual audit reports shall be open to the inspection of the registered owners of
Debt and their agents and representatives at all reasonable times.
L. Governmental Agencies. It will comply with all of the terms and conditions of any
and all franchises,permits and authorizations applicable to or necessary with respect to the System,
and which have been obtained from any governmental agency; and the City has or will obtain and
keep in full force and effect all franchises,permits,authorization and other requirements applicable
to or necessary with respect to the acquisition,construction,equipment,operation and maintenance
of the System.
M. No Competition. To the extent it legally may, it will not grant any franchise or
permit for the acquisition, construction or operation of any competing facilities which might be
used as a substitute for the System's facilities, and, to the extent that it legally may, the City will
prohibit any such competing facilities.
N. Rights of Inspection. The Engineer or any registered owner of $100,000 in
aggregate principal amount of the Debt then Outstanding shall have the right at all reasonable
times to inspect the System and all records,accounts and data of the City relating thereto,and upon
request the City shall furnish to an Engineer or such registered owner, as the case may be, such
financial statements, reports and other information relating to the City and the System as an
Engineer or such registered owner may from time to time reasonably request.
SECTION 19. Issuance of Additional Junior Lien Obligations, Additional Subordinate
Lien Obligations, and Inferior Lien Obligations. The City hereby expressly reserves the right to
hereafter issue bonds, notes, warrants, certificates of obligation, or similar obligations, payable,
wholly or in part, as appropriate, from and secured by a pledge of and lien on the Net Revenues of
the System with the following priorities, without limitation as to principal amount, but subject to
any terms, conditions, or restrictions applicable thereto under existing ordinances, laws, or
otherwise:
A. The City hereby covenants to no longer issue Priority Bonds for any purpose.
B. Additional Junior Lien Obligations, secured by and payable from the Junior Lien
Pledged Revenues,which includes (primarily) a lien on and pledge of Net Revenues that is senior
and superior to the lien there on and pledge thereof securing the repayment of the Subordinate Lien
Obligations and the Inferior Lien Obligations, upon satisfying each of the following conditions
precedent:
(1) The City Manager(or other officer of the City then having the responsibility
for the financial affairs of the City) shall have executed a certificate stating(i)that the City
is not then in default as to any covenant, obligation or agreement contained in any
ordinance or other proceeding relating to any obligations of the City payable from and
secured by a lien on and pledge of the Net Revenues and (ii)that the amounts on deposit
in all Funds or Accounts created and established for the payment and security of all
Outstanding obligations payable from and secured by a lien on and pledge of the Net
Revenues are the amounts then required to be deposited therein. Such certificate shall be
100107157.3 -39-
dated on or before the date of delivery of such Additional Junior Lien Obligations,but such
certificate shall not be dated prior to the date an ordinance is passed authorizing the
issuance of such Additional Junior Lien Obligations.
(2) Conditions Precedent for Issuance of Additional Junior Lien Obligations -
Capital Improvements and for any other Lawful Purpose except for Capital Additions or
for Refunding. The City covenants and agrees that Additional Junior Lien Obligations will
not be issued for the purpose of financing Capital Improvements, or for any other lawful
purpose (except for Capital Additions or for refunding, which are to be issued in
accordance with the provisions of Subsection (3) of this Section and Section 20 hereof,
respectively) unless and until the conditions precedent in Subsection (1) above have been
satisfied and, in addition thereto, the City has secured a certification of the City Manager
to the effect that, according to the books and records of the City, the Net Earnings
(hereinafter defined) for the preceding Fiscal Year or for 12 consecutive months out of the
15 months immediately preceding the month the ordinance authorizing the Additional
Junior Lien Obligations is adopted are at least equal to 1.15 times the Average Annual Debt
Service Requirements for all then-Outstanding Priority Bonds and Junior Lien Obligations
after giving effect to the Additional Junior Lien Obligations then proposed. The foregoing
notwithstanding, the City covenants and agrees that Additional Junior Lien Obligations
may not be issued for the purpose of financing Capital Improvements when other
Outstanding Junior Lien Obligations which have been issued for the purpose of financing
Capital Additions and for which capitalized interest for such other Junior Lien Obligations
has been provided for at least the twelve months subsequent to the date of issuance of the
Additional Junior Lien Obligations then proposed to be issued, unless the conditions
precedent in Subsection(1)above have been satisfied and, in addition thereto,the City has
either (1) complied with the relevant conditions in this Subsection as set forth above, or
(2) if the relevant conditions of this Subsection (2) as set forth above cannot be satisfied,
the City has satisfied the conditions precedent in Subsection (3)(i) and (ii) of this Section
(but, for purposes of such clauses, the term Capital Improvements shall be substituted for
the term Capital Additions where the term Capital Additions appears therein to the extent
necessary to give recognition to the fact that Capital Improvements, rather than Capital
Additions, are then to be financed) and has secured a certification of the City Manager to
the effect that, according to the books and records of the City, the Net Earnings for the
preceding Fiscal Year or for 12 consecutive months out of the 15 months immediately
preceding the month the ordinance authorizing the Additional Junior Lien Obligations is
adopted are at least equal to 1.15 times the Average Annual Debt Service Requirements
for all then-Outstanding Priority Bonds and Junior Lien Obligations(other than Junior Lien
Obligations issued for Capital Additions for which capitalized interest has been provided
for at least the twelve months subsequent to the date of issuance of the Additional Junior
Lien Obligations proposed to be issued) after giving effect to the Additional Junior Lien
Obligations then proposed to be issued.
(3) Conditions Precedent for Issuance of Additional Junior Lien Obligations -
Capital Additions:Initial Issue. The City covenants and agrees that Additional Junior Lien
Obligations will not be issued for the purpose of financing Capital Additions, unless the
same conditions precedent specified in Subsection (1) above have been satisfied and, in
addition thereto, either the relevant conditions precedent specified in Subsection(1)above
100107157.3 -40-
are satisfied or, in the alternative, the City shall have obtained: (i) from an Engineer a
comprehensive engineering report for each Capital Addition to be financed, which report
shall(A)contain(1)detailed estimates of the cost of acquiring and constructing the Capital
Addition, (2) the estimated date the acquisition and construction of the Capital Addition
will be completed and commercially operative,and(3)a detailed analysis of the impact of
the Capital Addition on the financial operations of the system for which the Capital
Addition is to be integrated and to the System as a whole during the construction thereof
and for at least five Fiscal Years after the date the Capital Addition becomes commercially
operative,and(B)conclude that(1)the Capital Addition is necessary and will substantially
increase the capacity, or is needed to replace existing facilities, to meet current and
projected demands for the service or product to be provided thereby, and(2)the estimated
cost of providing the service or product from the Capital Addition will be reasonable in
comparison with projected costs for furnishing such service or product from other
reasonably available sources; and (ii) a certificate of an Engineer to the effect that, based
on an engineering report prepared thereby for each Capital Addition, the projected Net
Earnings for each of the five Fiscal Years subsequent to the date the Capital Addition
becomes commercially operative (as estimated in the engineering report) will be equal to
at least 1.15 times the Average Annual Debt Service Requirements for the currently
Outstanding Junior Lien Obligations or incurred and all Additional Junior Lien Obligations
estimated to be issued, if any, for all Capital Improvements and for all Capital Additions
then in progress or then being initiated, during the period from the date the first series of
obligations for the Capital Additions is to be delivered through the fifth Fiscal Year
subsequent to the date the Capital Addition is estimated to become commercially operative.
(4) Completion Issues. Once a Capital Addition has been initiated by meeting
the conditions precedent specified in Subsection(3)(i) and(ii) above and the initial Junior
Lien Obligations issued therefor are delivered, the City reserves the right to issue
Additional Junior Lien Obligations to finance the remaining costs of such Capital Addition
in such amounts as may be necessary to complete the acquisition and construction thereof
and make the same commercially operative without satisfaction of any condition precedent
under Subsection(3)(i) and(ii) or Subsection(1) of this Section but subject to satisfaction
of the following conditions precedent: (i)the City makes a forecast (the Forecast) of the
operations of the System demonstrating the System's ability to pay all obligations,payable
from the Net Revenues of the System to be Outstanding after the issuance of the Additional
Junior Lien Obligations then being issued for the period (the Forecast Period) of each
ensuing Fiscal Year through the fifth Fiscal Year subsequent to the latest estimated date
such Capital Addition is expected to be commercially operative; and (ii)an Engineer
reviews such Forecast and executes a certificate to the effect that (A) such Forecast is
reasonable, and based thereon (and such other factors deemed to be relevant), the Net
Revenues of the System will be adequate to pay all the obligations,payable from the Junior
Lien Pledged Revenues of the System to be Outstanding after the issuance of the Additional
Junior Lien Obligations then being issued for the Forecast Period and (B)the proceeds
from the sale of such Additional Junior Lien Obligations are estimated to be sufficient to
complete such acquisition and construction.
(5) Computations; Reports. With reference to Junior Lien Obligations
anticipated and estimated to be issued or incurred, the Average Annual Debt Service
100107157.3 -41-
Requirements therefor shall be those reasonably estimated and computed by the City's
Director of Financial Services (or other officer of the City then having the primary
responsibility for the financial affairs of the City) after giving effect to the receipt or
anticipated receipt of a refundable tax credit or similar payment relating to any series of
Junior Lien Obligations irrevocably designated as refundable tax credit bonds, which
payment shall be treated as an offset to regularly scheduled debt service of the series of
Junior Lien Obligations to which it relates. In the preparation of the engineering report
required in Subsection(3)(i)above,an Engineer may rely on other experts or professionals,
including those in the employment of the City,provided such engineering report discloses
the extent of such reliance and concludes it is reasonable so to rely. In connection with the
issuance of Junior Lien Obligations for Capital Additions, the certification of the City
Manager and an Engineer,together with the engineering report for the initial issue and the
Forecast for a subsequent issue, shall be conclusive evidence and the only evidence
required to show compliance with the provisions and requirements and this clause of this
Section.
(6) Combination Issues. Junior Lien Obligations for Capital Additions may be
combined in a single issue with Junior Lien Obligations for Capital Improvements or for
any lawful purpose provided the conditions precedent set forth in Subsection(2) through
(4)are complied with as the same relate to the appropriate purpose.
(7) Definition of Net Earnings. As used in this Section,the term Net Earnings
shall mean the Gross Revenues of the System after deducting the Operating Expenses of
the System and those items identified in the SECOND level of priority in Section 12 hereof,
but not expenditures which, under standard accounting practice, should be charged to
capital expenditures.
(8) Determination of Net Earnings. In making a determination of Net Earnings
for any of the purposes described in this Section, the City Manager may take into
consideration a change in the rates and charges for services and facilities afforded by the
System that became effective at least 60 days prior to the last day of the period for which
Net Earnings are determined and, for purposes of satisfying any of the Net Earnings test
described above, make a pro forma determination of the Net Earnings of the System for
the period of time covered by the City Manager's certification or opinion based on such
change in rates and charges being in effect for the entire period covered by the City
Manager's certificate or opinion.
C. The City may issue Additional Subordinate Lien Obligations secured by a lien on
and pledge of the Net Revenues of the System that is included in the Junior Lien Pledged Revenues,
respectively,but senior and superior to the lien there on and pledge thereof securing the repayment
of the Inferior Lien Obligations, on the terms and conditions desired by the City, subject only to
the limitations imposed by applicable law and upon satisfying each of the conditions precedent
contained in the ordinances authorizing the issuance of the currently-Outstanding Priority Bonds,
this Ordinance, and the Previously Issued Subordinate Lien Obligations.
D. The City may issue Inferior Lien Obligations secured by a lien on and pledge of the
Net Revenues of the System that is included in the Junior Lien Pledged Revenues, respectively,
on the terms and conditions desired by the City, subject only to the limitations imposed by
100107157.3 -42-
applicable law and upon satisfying each of the conditions precedent contained in the ordinances
authorizing the issuance of the currently-Outstanding Priority Bonds and this Ordinance.
SECTION 20. Refunding Bonds. The City reserves the right to issue refunding bonds to
refund all or any part of the currently Outstanding Debt, pursuant to any applicable law then
available,upon such terms and conditions as the City Council may deem to be in the best interest
of the City, and if less than all such currently Outstanding Debt are refunded, the conditions
precedent prescribed for the issuance of Additional Junior Lien Obligations set forth in Section 19
of this Ordinance shall be satisfied and the City Managers' certification required in Section 19
shall give effect to the Debt Service Requirements of the proposed refunding bonds (but shall not
give effect to the Debt Service Requirements of the obligations being refunded following their
cancellation or provision being made for their payment).
SECTION 21. Issuance of Special Project Bonds. Nothing in this Ordinance shall be
construed to deny the City the right and it shall retain the right to issue Special Project Bonds,
provided, however,the City will not issue Special Project Bonds unless the City concludes, upon
recommendation of the City Council, that (i)the plan for developing the Special Project is
consistent with sound planning, (ii)the Special Project would not materially and adversely
interfere with the operation of the System, (iii) the Special Project can be economically and
efficiently operated and maintained, and (iv)the Special Project can be economically and
efficiently utilized by the City to meet combined utility system requirements and the cost of such
will be reasonable.
SECTION 22. Security of Funds. All money on deposit in the funds or accounts for which
this Ordinance makes provision (except any portion thereof as may be at any time properly
invested as provided herein) shall be secured in the manner and to the fullest extent required by
the laws of Texas for the security of public funds,and money on deposit in such Funds or accounts
shall be used only for the purposes permitted by this Ordinance.
SECTION 23. Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (a)defaults in the payments to be made to the Bond Fund, or (b) defaults in the
observance or performance of any other of the covenants, conditions, or obligations set forth in
this Ordinance,the Holders of any of the Bonds shall be entitled to seek a writ of mandamus issued
by a court of proper jurisdiction compelling and requiring the governing body of the City and other
officers of the City to observe and perform any covenant, condition, or obligation prescribed in
this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver of any such default or acquiescence
therein, and every such right and power may be exercised from time to time and as often as may
be deemed expedient. The specific remedy herein provided shall be cumulative of all other
existing remedies and the specification of such remedy shall not be deemed to be exclusive.
For the avoidance of doubt,no default with respect to any obligation that is secured by and
payable from a lien on and pledge of Net Revenues that is junior and subordinate to the lien thereon
and pledge thereof securing the Priority Bonds shall ever be deemed to be a default with respect
to the Priority Bonds.
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SECTION 24. Notices to Holders Waiver. Wherever this Ordinance provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and sent by United States Mail, first-class postage prepaid, to the address
of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail,neither the failure to mail such notice
to any particular Holders, nor any defect in any notice so mailed, shall affect the sufficiency of
such notice with respect to all other Holders. Where this Ordinance provides for notice in any
manner, such notice may be waived in writing by the Holder entitled to receive such notice, either
before or after the event with respect to which such notice is given, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the Paying
Agent/Registrar, but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 25. Bonds Are Negotiable Instruments. Each of the Bonds authorized herein
shall be deemed and construed to be a "security" and as such a negotiable instrument with the
meaning of the Chapter 8 of the Texas Uniform Commercial Code.
SECTION 26. Cancellation. All Bonds surrendered for payment, transfer, redemption,
exchange,or replacement,if surrendered to the Paying Agent/Registrar,shall be promptly canceled
by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar and, if not
already canceled, shall be promptly canceled by the Paying Agent/Registrar. The City may at any
time deliver to the Paying Agent/Registrar for cancellation any Bonds previously certified or
registered and delivered which the City may have acquired in any manner whatsoever, and all
Bonds so delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Bonds
held by the Paying Agent/Registrar shall be destroyed as directed by the City.
SECTION 27. Mutilated,Destroyed,Lost, and Stolen Bonds. If(i) any mutilated Bond is
surrendered to the Paying Agent/Registrar, or the City and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction,loss,or theft of any Bond,and(ii)there is delivered
to the City and the Paying Agent/Registrar such security or indemnity as may be required to save
each of them harmless,then, in the absence of notice to the City or the Paying Agent/Registrar that
such Bond has been acquired by a bona fide purchaser,the City shall execute and,upon its request,
the Paying Agent/Registrar shall register and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost, or stolen Bond, a new Bond of the same Stated Maturity and interest
rate and of like tenor and principal amount,bearing a number not contemporaneously Outstanding.
In case any such mutilated, destroyed, lost, or stolen Bond has become or is about to
become due and payable, the City in its discretion may, instead of issuing a new Bond, pay such
Bond.
Upon the issuance of any new Bond or payment in lieu thereof,under this Section,the City
may require payment by the Holder of a sum sufficient to cover any tax or other governmental
charge imposed in relation thereto and any other expenses (including attorney's fees and the fees
and expenses of the Paying Agent/Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City,whether or not the
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mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 28. Sale of Bonds — Official Statement Approval — Approval of Purchase
Contract. The Bonds authorized by this Ordinance are hereby sold by the City to Citigroup Global
Markets Inc., San Antonio,Texas, as the authorized representative of a group of underwriters (the
Purchasers,and having all the rights,benefits,and obligations of a Holder)in accordance with the
provisions of a Purchase Contract dated June 30,2020 (the Purchase Contract) attached hereto as
Exhibit B and incorporated herein by reference as a part of this Ordinance for all purposes. The
pricing terms of the sale of the Bonds are hereby found and determined to be the most
advantageous reasonably obtainable by the City. The Initial Bond shall be registered in the name
of Citigroup Global Markets Inc. The Pricing Officer is hereby authorized and directed to execute
the Purchase Contract for and on behalf of the City and as the act and deed of the City Council,
and in regard to the approval and execution of the Purchase Contract, the City Council hereby
finds, determines and declares that the representations, warranties, and agreements of the City
contained in the Purchase Contract are true and correct in all material respects and shall be honored
by the City. Delivery of the Bonds to the Purchasers shall occur as soon as practicable after the
adoption of this Ordinance, upon payment therefor in accordance with the terms of the Purchase
Contract.
Furthermore, the City hereby ratifies, confirms, and approves in all respects (i)the City's
prior determination that the Preliminary Official Statement was, as of its date, "deemed final" in
accordance with the Rule(hereinafter defined) and(ii)the use and distribution of the Preliminary
Official Statement by the Purchasers in connection with the public offering and sale of the Bonds.
The final Official Statement, being a modification and amendment of the Preliminary Official
Statement to reflect the terms of sale (together with such changes approved by an Authorized
Official), shall be and is hereby in all respects approved and the Purchasers are hereby authorized
to use and distribute the final Official Statement, dated June 30, 2020, in the reoffering, sale and
delivery of the Bonds to the public. The Mayor and/or City Secretary are further authorized and
directed to manually execute and deliver for and on behalf of the City copies of the Official
Statement in final form as may be required by the Purchasers, and such final Official Statement in
the form and content manually executed by said officials shall be deemed to be approved by the
City Council and constitute the Official Statement authorized for distribution and use by the
Purchasers.
SECTION 29. Escrow and Trust Agreement - Approval and Execution. The Escrow and
Trust Agreement dated as of May 19,2020(the Agreement)by and between the City and The Bank
of New York Mellon Trust Company,N.A., Dallas, Texas (the Escrow Agent), attached hereto as
Exhibit C and incorporated herein by reference as a part of this Order for all purposes, is hereby
approved as to form and content, and such Agreement in substantially the form and substance
attached hereto, together with such changes or revisions as may be necessary to accomplish the
refunding or benefit the City, is hereby authorized to be executed by an Authorized Official for
and on behalf of the City and as the act and deed of this City Council; and such Agreement as
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executed by said officials shall be deemed approved by the City Council and constitute the
Agreement herein approved.
Furthermore, the Authorized Official and Bond Counsel, in cooperation with the Escrow
Agent,are hereby authorized and directed to make the necessary arrangements for the purchase of
the Escrowed Securities,if any,referenced in the Agreement and the delivery thereof to the Escrow
Agent on the day of delivery of the Bonds to the Purchasers for deposit to the credit of the "CITY
OF CORPUS CIRISTI,TEXAS JUNIOR LIEN REVENUE REFUNDING BONDS,TAXABLE
SERIES 2020B ESCROW FUND"(the Escrow Fund),including the execution of the subscription
forms, if any, for the purchase and issuance of the "United States Treasury Securities - State and
Local Government Series" for deposit to the Escrow Fund; all as contemplated and provided by
the provisions of the Act,this Ordinance, and the Agreement.
SECTION 30. Proceeds of Sale; Contribution from the City. Immediately following the
delivery of the Bonds,certain proceeds of sale along with a cash contribution,if any,from the City
(less certain costs of issuance and accrued interest, if any, received from the Purchasers of the
Bonds) shall be deposited with the Escrow Agent for application and disbursement in accordance
with the provisions of the Escrow Agreement. The proceeds of sale of the Bonds not so deposited
with the Escrow Agent for the refunding of the Refunded Obligations shall be deposited into the
construction account for the new money portion of the Bonds, shall be disbursed for payment of
costs of issuance, or deposited in the Bond Fund for the Bonds, all in accordance with written
instructions from an Authorized Official. Amounts held in the interest and sinking fund for the
Refunded Obligations and not used as part of the City's contribution to the Escrow Fund, if any,
shall be deposited into the Bond Fund and used to pay principal on the Bonds. This construction
account shall be established and maintained at the Depository and shall be invested in accordance
with the provisions of Section 17 of this Ordinance. Interest earned on the proceeds of the Bonds
pending completion of the projects financed with such proceeds shall be accounted for,maintained,
deposited, and expended as permitted by the provisions of Chapter 1201, as amended, Texas
Government Code, or as required by any other applicable law. Thereafter, such amounts shall be
expended in accordance with Section 13.
SECTION 31. Redemption of Refunded Obligations. The Refunded Obligations
referenced in the preamble hereof become subject to redemption prior to their stated maturities at
the price of par and accrued interest to their respective date of redemption. The City shall give
written notice to the paying agent/registrar for the Refunded Obligations that the Refunded
Obligations have been called for redemption,and the City Council orders that such obligations are
called for redemption on the redemption dates set forth on Schedule I attached hereto, and such
order to redeem the Refunded Obligations on such date shall be irrevocable upon the delivery of
the Bonds. A copy of the notice of redemption pertaining to each series of the Refunded
Obligations is attached to this Ordinance as Exhibit D and is incorporated herein by reference for
all purposes. The paying agent/registrar for the Refunded Obligations is authorized and instructed
to provide notice of this redemption to the holders of the Refunded Obligations in the form and
manner described in the City ordinance authorizing the issuance of the respective series of
Refunded Obligations.
SECTION 32. Taxable Obligations. The Bonds are not "state or local bonds" within the
meaning of section 103(a) and (c) of the Internal Revenue Code of 1986, as amended; therefore,
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the interest on the Bonds is not excludable from the gross income of the holders thereof for federal
income tax purposes.
SECTION 33. Control and Custody of Bonds. The Mayor shall be and is hereby
authorized to take and have charge of all necessary orders and records pending investigation by
the Attorney General of the State of Texas and shall take and have charge and control of the Bonds
pending their approval by the Attorney General of the State of Texas, the registration thereof by
the Comptroller of Public Accounts of the State of Texas and the delivery of the Bonds to the
Purchasers.
Furthermore, each Authorized Official is hereby authorized and directed to furnish and
execute such documents relating to the City and its financial affairs as may be necessary for the
issuance of the Bonds, the approval of the Attorney General and their registration by the
Comptroller of Public Accounts and, together with the City's Bond Counsel and the Paying
Agent/Registrar, make the necessary arrangements for the delivery of the Initial Bond to the
Purchasers.
SECTION 34. Satisfaction of Obligation of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance,then the lien on and pledge
of Junior Lien Pledged Revenues made under this Ordinance and all covenants, agreements, and
other obligations of the City to the Holders shall thereupon cease, terminate, and be discharged
and satisfied.
The Bonds, or any principal amount(s) thereof, shall be deemed to have been paid within
the meaning and with the effect expressed above in this Section when: (i)money sufficient to pay
in full such Bonds or the principal amount(s)thereof at Stated Maturity or to the redemption date
therefor,together with all interest due thereon,shall have been irrevocably deposited with and held
in trust by the Paying Agent/Registrar, or an authorized escrow agent; and/or (ii) Government
Securities shall have been irrevocably deposited in trust with the Paying Agent/Registrar, or an
authorized escrow agent, which Government Securities mature as to principal and interest in such
amounts and at such times as will insure the availability, without reinvestment, of sufficient
money,together with any money deposited therewith, if any,to pay when due the principal of and
interest on such Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity
thereof or (if notice of redemption has been duly given or waived or if irrevocable arrangements
therefor acceptable to the Paying Agent/Registrar have been made) the redemption date thereof.
In the event of a defeasance of the Bonds, the City shall deliver a certificate from its financial
advisor, the Paying Agent/Registrar, an independent accounting fine, or another qualified third
party concerning the deposit of cash and/or Government Securities to pay,when due,the principal
of,redemption premium(if any),and interest due on any defeased Bonds. To the extent applicable,
if at all,the City covenants that no deposit of money or Government Securities will be made under
this Section and no use made of any such deposit which would cause the Bonds to be treated as
arbitrage bonds within the meaning of section 148 of the Code(as defined in Section 32 hereof).
Any money so deposited with the Paying Agent/Registrar, and all income from
Government Securities held in trust by the Paying Agent/Registrar,or an authorized escrow agent,
pursuant to this Section which is not required for the payment of the Bonds, or any principal
amount(s) thereof, or interest thereon with respect to which such money has been so deposited
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shall be remitted to the City or deposited as directed by the City. Furthermore, any money held
by the Paying Agent/Registrar for the payment of the principal of and interest on the Bonds and
remaining unclaimed for a period of three (3) years after the Stated Maturity, or applicable
redemption date, of the Bonds such money was deposited and is held in trust to pay shall upon the
request of the City be remitted to the City against a written receipt therefor, subject to the
unclaimed property laws of the State of Texas.
Notwithstanding any other provision of this Ordinance to the contrary,it is hereby provided
that any determination not to redeem defeased Bonds that is made in conjunction with the payment
arrangements specified in subsection(i)or(ii) above shall not be irrevocable,provided that: (1)in
the proceedings providing for such defeasance, the City expressly reserves the right to call the
defeased Bonds for redemption; (2) gives notice of the reservation of that right to the owners of
the defeased Bonds immediately following the defeasance;(3)directs that notice of the reservation
be included in any redemption notices that it authorizes; and (4) at the time of the redemption,
satisfies the conditions of(i)or(ii)above with respect to such defeased debt as though it was being
defeased at the time of the exercise of the option to redeem the defeased Bonds, after taking the
redemption into account in determining the sufficiency of the provisions made for the payment of
the defeased Bonds.
SECTION 35. Ordinance a Contract; Amendments - Outstanding Bonds. The City
acknowledges that the covenants and obligations of the City herein contained are a material
inducement to the purchase of the Bonds. This Ordinance shall constitute a contract with the
Holders from time to time, binding on the City and its successors and assigns, and it shall not be
amended or repealed by the City so long as any Bond remains Outstanding except as permitted in
this Section. The City may,without the consent of or notice to any Holders,from time to time and
at any time, amend this Ordinance in any manner not detrimental to the interests of the Holders,
including the curing of any ambiguity, inconsistency, or formal defect or omission herein. In
addition, the City may, with the written consent of Holders holding a majority in aggregate
principal amount of the Bonds then Outstanding affected thereby,amend,add to,or rescind any of
the provisions of this Ordinance;provided that,without the consent of all Holders of Outstanding
Bonds, no such amendment, addition, or rescission shall (1) extend the time or times of payment
of the principal of and interest on the Bonds, reduce the principal amount thereof, the redemption
price therefor, or the rate of interest thereon, or in any other way modify the terms of payment of
the principal of or interest on the Bonds,(2)give any preference to any Bond over any other Bond,
or (3)reduce the aggregate principal amount of Bonds required for consent to any such
amendment, addition, or rescission.
SECTION 36. Printed Opinion. The Purchasers' obligation to accept delivery of the Bonds
is subject to their being furnished a fmal opinion of Norton Rose Fulbright US LLP, as Bond
Counsel, approving certain legal matters as to the Bonds, said opinion to be dated and delivered
as of the date of initial delivery and payment for such Bonds. Printing of a true and correct copy
of said opinion on the reverse side of each of said Bonds, with appropriate certificate pertaining
thereto executed by facsimile signature of the City's Secretary is hereby approved and authorized.
SECTION 37. CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive
Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the
defmitive Bonds shall be of no significance or effect as regards the legality thereof, and neither
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the City nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Bonds.
SECTION 38. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 39. Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City,Bond Counsel,Paying
Agent/Registrar, and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, Bond Counsel, Financial
Advisors, the Paying Agent/Registrar, and the Holders.
SECTION 40. Inconsistent Provisions. All resolutions and ordinances, or parts thereof,
which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed to
the extent of such conflict,and the provisions of this Ordinance shall be and remain controlling as
to the matters resolved herein.
SECTION 41. Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 42. Severability. If any provision of this Ordinance or the application thereof
to any person or circumstance shall be held to be invalid,the remainder of this Ordinance and the
application of such provision to other persons and circumstances shall nevertheless be valid, and
the City Council hereby declares that this Ordinance would have been enacted without such invalid
provision.
SECTION 43. Incorporation of Preamble Recitals. The recitals contained in the preamble
hereof are hereby found to be true, and such recitals are hereby made a part of this Ordinance for
all purposes and are adopted as a part of the judgment and findings of the City Council.
SECTION 44. Authorization of Paying Agent/Registrar Agreement. The City Council
hereby finds and determines that it is in the best interest of the City to authorize the execution of a
Paying Agent/Registrar Agreement concerning the payment, exchange, and transferability of the
Bonds. A copy of the Paying Agent/Registrar Agreement is attached hereto, in substantially final
form, as Exhibit A and is incorporated by reference to the provisions of this Ordinance.
SECTION 45. Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
place, and subject matter of the public business to be considered at such meeting, including this
Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code.
SECTION 46. Continuing Disclosure of Information.
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A. Definitions. As used in this Section, the following terms have the meanings
ascribed to such terms below:
EMMA means the MSRB's Electronic Municipal Market Access system, accessible by the
general public, without charge, on the internet through the uniform resource locator (URL)
http://www.emma.msrb.org.
Financial Obligation means a(a)debt obligation; (b) derivative instrument entered into in
connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or(c) guarantee of a debt obligation or any such derivative instrument; provided that
"fmancial obligation"shall not include municipal securities(as defined in the Securities Exchange
Act of 1934, as amended) as to which a fmal official statement(as defined in the Rule) has been
provided to the MSRB consistent with the Rule.
MSRB means the Municipal Securities Rulemaking Board.
Rule means SEC Rule 15c2-12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
Undertaking means the City's continuing disclosure undertaking,described in subsections
B through F below,hereunder accepted and entered into by the City for the purpose of compliance
with the Rule.
B. Annual Reports. The City shall file annually with the MSRB,(1)within six months
after the end of each Fiscal Year of the City ending in or after 2020, financial information and
operating data with respect to the System of the general type included in the final Official
Statement authorized by Section 28 of this Ordinance,being the information described in Exhibit E
hereto, and (2) if not provided as part such financial information and operating data, audited
financial statements of the City,when and if available. Any financial statements so to be provided
shall be(i)prepared in accordance with the accounting principles described in Exhibit E 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 (ii) audited, if the City commissions an audit of such financial
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 file
unaudited financial statements within such period and audited financial statements for the
applicable Fiscal Year to the MSRB, when and if the audit report on such statements becomes
available.
If the City changes its Fiscal Year, it will file notice thereof with the MSRB 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 fmancial information and operating data pursuant to this Section.
C. Notice of Certain Events. The City shall file notice of any of the following events
with respect to the Bonds to the MSRB in a timely manner and not more than 10 business days
after occurrence of the event:
(1) Principal and interest payment delinquencies;
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(2) Non-payment related defaults, if material;
(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, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability,Notices of Proposed Issue (IRS Form 5701-
TEB), or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of Holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds,
if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which
shall occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or the
termination of a definitive agreement relating to any such actions, other than pursuant to
its terms, if material;
(14) Appointment of a successor or additional Paying Agent/Registrar or the
change of name of a Paying Agent/Registrar, if material;
(15) Incurrence of a Financial Obligation of the City, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the City, any of which affect security holders, if material; and
(16) default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the City, any of which
reflect financial difficulties.
For these purposes,(a)any event described in the immediately preceding paragraph(12)is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has
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been assumed by leaving the existing governing body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement, or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the
City, and (b) the City intends the words used in the immediately preceding paragraphs (15) and
(16)and the definition of Financial Obligation in this Section to have the same meanings as when
they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018.
The City shall file notice with the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with this Section by the time
required by this Section.
D. Limitations,Disclaimers,and Amendments. 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 Bonds within the meaning of the Rule, except
that the City in any event will give notice of any deposit that causes the Bonds to be no longer
Outstanding.
The provisions of this Section are for the sole benefit of the Holders and beneficial owners
of the Bonds, 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 undertakesto 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 Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
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 CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION,BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CON TRACT 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 Section shall
constitute a breach of or default under this 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.
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
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Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
primary offering of the Bonds in compliance with the Rule, taking into account any amendments
or interpretations of the Rule to the date of such amendment, as well as such changed
circumstances, and (2) either (a)the Holders 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 Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the Holders and beneficial owners of the
Bonds. The City may also repeal or amend the provisions of this Section if the SEC amends or
repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that
such provisions of the Rule are invalid,and the City also may amend the provisions of this Section
in its discretion in any other manner or circumstance, but in either case only if and to the extent
that the provisions of this sentence would not have prevented an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (a) such
provisions as so amended and (b) any amendments or interpretations of the Rule. If the City so
amends the provisions of this Section, the City shall include with any amended financial
information or operating data next provided in accordance with this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
E. Information Format—Incorporation by Reference. The City information required
under this Section shall be filed with the MSRB through EMMA in such format and accompanied
by such identifying information as may be specified from time to time thereby. Under the current
rules of the MSRB, continuing disclosure documents submitted to EMMA must be in word-
searchable portable document format (PDF) files that permit the document to be saved, viewed,
printed, and retransmitted by electronic means and the series of obligations to which such
continuing disclosure documents relate must be identified by CUSIP number or numbers.
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)available to the public through EMMA
or filed with the United States Securities and Exchange Commission.
F. General Policies and Procedures Concerning Compliance with the Rule.
Because the issuance of the Bonds is subject to the provisions of the Rule and because the
potential"underwriters" in a negotiated sale of the Bonds or the initial purchasers in a competitive
sale of the Bonds may be subject to MSRB rules and regulations with respect to such sale
(including certain due diligence and suitability requirements, among others), the City hereby
adopts the General Policies and Procedures Concerning Compliance with the Rule (the Policies
and Procedures), attached hereto as Exhibit H, with which the City shall follow to assure
compliance with the Undertaking. The City has developed these Policies and Procedures for the
purpose of meeting its requirements of the Undertaking and, in connection therewith, has sought
the guidance from its internal staff charged with administering the City's financial affairs, its
municipal or financial advisors,its legal counsel(including its Bond Counsel),and its independent
accountants (to the extent determined to be necessary or advisable). The Policies and Procedures
can be amended at the sole discretion of the City and any such amendment will not be deemed to
be an amendment to the Undertaking. Each Authorized Official is hereby authorized to amend the
100107157.3 -53-
Policies and Procedures as a result of a change in law,a future issuance of indebtedness subject to
the Rule, or another purpose determined by the Authorized Official to be necessary or desirable
for or with respect to future compliance with the Undertaking.
SECTION 47. Book-Entry Only System. The Bonds are initially registered so as to
participate in a securities depository system(the DTC System)with the Depository Trust Company,
New York, New York, or any successor entity thereto (DTC), as set forth herein. Each Stated
Maturity of the Bonds shall be issued (following cancellation of the Initial Bond described in
Section 7) in the form of a separate single definitive Bond. Upon issuance,the ownership of each
such Bond shall be registered in the name of Cede & Co., as the nominee of DTC, and all of the
Outstanding Bonds shall be registered in the name of Cede & Co., as the nominee of DTC. The
City and the Paying Agent/Registrar are authorized to execute, deliver, and take the actions set
forth in such letters to or agreements with DTC as shall be necessary to effectuate the DTC System,
including the Letter of Representations attached hereto as Exhibit G(the Representation Letter).
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Paying Agent/Registrar shall have no responsibility or obligation to any broker-dealer,
bank, or other financial institution for which DTC holds the Bonds from time to time as securities
depository (a Depository Participant) or to any person on behalf of whom such a Depository
Participant holds an interest in the Bonds (an Indirect Participant). Without limiting the
immediately preceding sentence, the City and the Paying Agent/Registrar shall have no
responsibility or obligation with respect to (i)the accuracy of the records of DTC, Cede&Co., or
any Depository Participant with respect to any ownership interest in the Bonds, (ii)the delivery to
any Depository Participant or any other person, other than a registered owner of the Bonds, as
shown on the Security Register, of any notice with respect to the Bonds, including any notice of
redemption, or (iii)the delivery to any Depository Participant or any Indirect Participant or any
other Person, other than a Holder of a Bond, of any amount with respect to principal of,premium,
if any, or interest on the Bonds. While in the DTC System, no person other.than Cede & Co., or
any successor thereto, as nominee for DTC, shall receive a bond certificate evidencing the
obligation of the City to make payments of principal,premium, if any,and interest pursuant to this
Ordinance. Upon delivery by DTC to the Paying Agent/Registrar of written notice to the effect
that DTC has determined to substitute a new nominee in place of Cede & Co., and subject to the
provisions in this Ordinance with respect to interest checks or drafts being mailed to the Holder,
the word"Cede& Co." in this Ordinance shall refer to such new nominee of DTC.
In the event that (a) the City determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter, (b) the Representation Letter
shall be terminated for any reason, or(c) DTC or the City determines that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds,the City shall
notify the Paying Agent/Registrar,DTC, and the Depository Participants of the availability within
a reasonable period of time through DTC of bond certificates, and the Bonds shall no longer be
restricted to being registered in the name of Cede & Co., as nominee of DTC. At that time, the
City may determine that the Bonds shall be registered in the name of and deposited with a
successor depository operating a securities depository system, as may be acceptable to the City,or
such depository's agent or designee, and if the City and the Paying Agent/Registrar do not select
such alternate securities depository system then the Bonds may be registered in whatever name or
100107157.3 -54-
names the Holders of Bonds transferring or exchanging the Bonds shall designate, in accordance
with the provisions hereof.
Notwithstanding any other provision of this Ordinance to the contrary,so long as any Bond
is registered in the name of Cede&Co.,as nominee of DTC,all payments with respect to principal
of,premium, if any, and interest on such Bond and all notices with respect to such Bond shall be
made and given,respectively, in the manner provided in the Representation Letter.
SECTION 48. Further Procedures. The officers and employees of the City are hereby
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 or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the initial
sale and delivery of the Bonds, the Agreement, the Paying Agent/Registrar Agreement, and the
Purchase Contract. In addition,prior to the initial delivery of the Bonds,each Authorized Official
and Bond Counsel are hereby authorized and directed to approve any technical changes or
corrections to this Ordinance or to any of the instruments authorized and approved by this
Ordinance necessary in order to (i) correct any ambiguity or mistake or properly or more
completely document the transactions contemplated and approved by this Ordinance and as
described in the Official Statement, (ii) obtain a rating from any of the national bond rating
agencies, or(iii)obtain the approval of the Bonds by the Texas Attorney General's office. In case
any officer of the City whose signature shall appear 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 such officer had remained in office until such delivery.
SECTION 49. Unavailability of Authorized Publication. If, because of the temporary or
permanent suspension of any newspaper, journal, or other publication, or for any reason,
publication of notice cannot be made meeting any requirements herein established, any notice
required to be published by the provisions of this Ordinance shall be given in such other manner
and at such time or times as in the judgment of the City or of the Paying Agent/Registrar shall
most effectively approximate such required publication and the giving of such notice in such
manner shall for all purposes of this Ordinance be deemed to be in compliance with the
requirements for publication thereof.
SECTION 50. No Recourse Against City Officials. No recourse shall be had for the
payment of principal of,premium, if any, or interest on any Bond or for any claim based thereon
or on this Ordinance against any official of the City or any person executing any Bond.
SECTION 51. Automatic Budget Amendments to Reflect Final Debt Service Payments.
To the extent that the City Council has adopted an annual budget that includes payment of debt
service on any Bonds issued (or to be issued) pursuant to this Ordinance based on the City's
reasonable expectations and projections relative to those Bonds, such budget entries shall, upon
the issuance of Bonds, be automatically adjusted to reflect actual debt service payments on those
Bonds coming due during the period of time covered by such budget. The Authorized Official, or
the designee thereof, is authorized to make such necessary budget entries and/or adjustments to
reflect these final debt service amounts.
100107157.3 -55-
SECTION 52. Covenants of Compliance. The City shall faithfully and punctually perform
all duties with reference to the System required by the Act, all other applicable laws of the State
of Texas, and the provisions of this Ordinance and that the City shall render no free service to any
customers or other persons.
SECTION 53. Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural,words of the plural number
shall be considered to include the singular,and words of the masculine,feminine,or neuter gender
shall be considered to include the other genders.
SECTION 54. Ancillary Bond Contracts. Though such parties may be identified, and the
entry into a particular form of contract may be authorized herein,the City Council hereby delegates
to each Authorized Official the authority to independently select the counterparty to any agreement
with any paying agent/registrar, rating agency, securities depository, escrow agent, open market
securities bidding agent, verification agent or any other contract that is determined by an
Authorized Official, the City's Financial Advisor, or the City's Bond Counsel to be necessary or
incidental to the issuance of the Bonds as long as each of such contracts has a value of less than
the amount referenced in Section 2252.908 of the Texas Government Code (collectively, the
Ancillary Bond Contracts); and, as necessary, to execute the Ancillary Bond Contracts on behalf
and as the act and deed of the City. The City Council has not participated in the selection of any
of the business entities which are counterparties to the Ancillary Bond Contracts.
SECTION 55. City's Consent to Provide Information and Documentation to the Texas
MAC. The Municipal Advisory Council of Texas (the Texas MAC), a non-profit membership
corporation organized exclusively for non-profit purposes described in section 501(c)(6) of the
Internal Revenue Code and which serves as a comprehensive financial information repository
regarding municipal debt issuers in Texas, requires provision of written documentation regarding
the issuance of municipal debt by the issuers thereof. In support of the purpose of the Texas MAC
and in compliance with applicable law,the City hereby consents to and authorizes the Authorized
Official, the City's Bond Counsel, and/or the City's Financial Advisor to provide to the Texas
MAC information and documentation requested by the Texas MAC relating to the Certificates;
provided, however, that no such information and documentation shall be provided prior to the
Closing Date. This consent and authorization relates only to information and documentation that
is a part of the public record concerning the issuance of the Bonds.
SECTION 56. Effective Date. This Ordinance shall be in force and effect from and after
its final passage, and it is so resolved.
[The remainder of this page intentionally left blank.]
100107157.3 -56-
PASSED,APPROVED AND ADOPTED on the 19`h day of May, 2020.
CITY OF CORPUS CHRISTI,TEXAS
VIA. l-it.-G-vid.
MayiC\14-(
ATTEST:
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APPROVED THIS 19th DAY OF MAY,2020:
is:/..__2( eie
iles Risley, City ttorney�
[The remainder of this page intentionally left blank.)
S-I
THE STATE OF TEXAS §
§
COUNTY OF NUECES §
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 19th day of May,
2020, authorizing the issuance of one or more series of the City's general improvement and/or
refunding bonds, 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 j th day of May ,
2020.
v, ',1-it i, di'24,-e..(1. 47“.114C`i7"�J Cit , Secretary
sl
v, ,
A�
S-2
The foregoing ordinance was read for the first time and passed to its second reading on this the
12th day of May, 2020, by the following vote:
Joe McComb AQ___ Rudy Garza A.9,—
Paulette Guajardo A-61— Michael T. Hunter J� p
Everett Roy Az--- Ben Molina �
Roland BarreraA.9„ Greg Smith --21—*'—'
Gil Hernandez _A,2____
That the foregoing ordinance was read for the second time and passed finally on this the 19`h day
of May, 2020, by the following vote:
Joe McComb Rudy Garza _
Paulette Guajardo _At_ Michael T. Hunter
Everett Roy Ben Molina —A1.2,--
Roland Barrera ___A). Greg Smith _Alt_
Gil Hernandez
PASSED AND APPROVED, this the 19`h day of May, 2020.
ATTEST:
4 ' - . '.I G vvl
(A....„._„..k.
Re:-cca Huerta Joe Comb
City Secretary Ma,
S-3
INDEX TO SCHEDULES AND EXHIBITS
Schedule I Schedule of Refunded Obligations
Schedule II Approval Certificate
Exhibit A Paying Agent/Registrar Agreement
Exhibit B Purchase Contract
Exhibit C Escrow and Trust Agreement
Exhibit D Notices of Redemption
Exhibit E Description of Annual Financial Information
Exhibit F Form of Reimbursement Agreement
Exhibit G DTC Letter of Representations
Exhibit H General Policies and Procedures Concerning Compliance With the Rule
S-4
SCHEDULE I
Schedule of Refunded Obligations
1. City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2012,dated November 15,2012,in the original
principal amount of$69,085,000,and stated to mature on July 15 in each of
the years 2024 through 2031 and July 15, 2037, in the aggregate principal
amount of$31,675,000 and subject to redemption on July 15, 2022 are any
date thereafter. These obligations have been called for redemption on July
15, 2022.
2. City of Corpus Christi, Texas Utility System Junior Lien Revenue and
Refunding Bonds, Series 2012, dated November 15, 2012, in the original
principal amount of$155,660,000, and stated to mature on July 15 in each
of the years 2024 through 2031, July 15, 2037, and July 15, 2042, in the
aggregate principal amount of$54,920,000 and subject to redemption on
July 15, 2022 are any date thereafter. These obligations have been called
for redemption on July 15,2022.
3. City of Corpus Christi, Texas Utility System Junior Lien Revenue
Improvement Bonds, Series 2013, dated November 1, 2013, in the original
principal amount of$97,930,000,and stated to mature on July 15 in each of
the years 2027 through 2031, July 15, 2033, July 15, 2038, and July 15,
2043, in the aggregate principal amount of $76,645,000 and subject to
redemption on July 15,2023 are any date thereafter. These obligations have
been called for redemption on July 15,2023.
100107157.3 Schedule I-1
•
SCHEDULE II
Approval Certificate
See Tab No. 2
100107157.3 Schedule II-1
EXHIBIT A
Paying Agent/Registrar Agreement
See Tab No. 4
•
100107157.3 A-1
EXHIBIT B
Purchase Contract
See Tab No. 9
100107157.3 B-1
EXHIBIT C
Escrow and Trust Agreement
See Tab No. 5
100107157.3 C-1
EXHIBIT D
Notices of Redemption
See Tab No. 26
100107157.3 D-1
EXHIBIT E
Description of Annual Financial Information
The following information is referred to in Section 46 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. The City's audited financial statements for the most recently concluded Fiscal Year or
to the extent these audited fmancial statements are not available, unaudited financial
statements of the City for the most recently concluded Fiscal Year.
2. Tables 1 through 23 contained in the Official Statement; and the Audited Financial
Statement of the City, as set forth in Appendix B to the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to above.
100107157.3 E-1
•
EXHIBIT F
Form of Reimbursement Agreement
N/A
100107157.3 F-1
EXHIBIT G
DTC Letter of Representations
See Tab No. 6
100107157.3 G-1
EXHIBIT H
General Policies and Procedures
Concerning Compliance with the Rule
I. Capitalized terms used in this Exhibit have the meanings ascribed thereto in Section 46 of
the Ordinance. Bonds refer to the Bonds that are the subject of the Ordinance to which this Exhibit
is attached.
II. As a capital markets participant,the City is aware of its continuing disclosure requirements
and obligations existing under the Rule prior to February 27, 2019, the effective date of the most
recent amendment to the Rule (the Effective Date), and has implemented and maintained internal
policies, processes, and procedures to ensure compliance therewith. Adherence to these internal
policies,processes, and procedures has enabled underwriters in non-exempt negotiated sales and
initial purchasers in non-exempt competitive sales to comply with their obligations arising under
various MSRB rules and regulations concerning due diligence and findings of suitability, among
other matters, regarding the City's compliance with the Rule.
III. The City is aware that the Rule was amended as of the Effective Date(the Rule Amendment)
and has accommodated this amendment by adding subparagraphs (15) and(16)to Section 46C of
the Ordinance,which provisions are a part of the Undertaking.
IV. The City is aware that"participating underwriters" (as such term is defined in the Rule)of
the Bonds must make inquiry and reasonably believe that the City is likely to comply with the
Undertaking and that the standards for determining compliance have increased over time as a result
of, among others, the United States Securities and Exchange Commission's Municipalities
Continuing Disclosure Cooperation Initiative and regulatory commentary relating to the
effectiveness of the Rule Amendment.
V. The City now establishes the following general policies and procedures (the Policies and
Procedures) for satisfying its obligations pursuant to the Undertaking, which policies and
procedures have been developed based on the City's informal policies,procedures, and processes
utilized prior to the Effective Date for compliance with the City's obligations under the Rule, the
advice from and discussions with the City's internal senior staff (including staff charged with
administering the City's financial affairs), its co-municipal or financial advisors, its legal counsel
(including Bond Counsel), and its independent accountants, to the extent determined to be
necessary or advisable(collectively,the Compliance Team):
1. The Director of Finance (the Compliance Officer) shall be responsible for satisfying the
City's obligations pursuant to the Undertaking through adherence to these Policies and
Procedures;
2. the Compliance Officer shall establish reminder or "tickler" systems to identify and
timely report to the MSRB,in the format thereby prescribed from time to time,the City's
information of the type described in Section 46B of the Ordinance;
3. the Compliance Officer shall promptly determine the occurrence of any of the events
described in Section 46C of the Ordinance;
100107157 3 H-1
4. the Compliance Officer shall work with external consultants of the City, as and to the
extent necessary,to timely prepare and file with the MSRB the annual information of the
City and notice of the occurrence of any of the events referenced in Clauses 2 and 3
above,respectively,the foregoing being required to satisfy the terms of the Undertaking;
5. the Compliance Officer shall establish a system for identifying and monitoring any
Financial Obligations, whether now existing or hereafter entered into by the City, and
(upon identification) determining if such Financial Obligation has the potential to
materially impact the security or source of repayment of the Bonds;
6. upon identification of any Financial Obligation meeting the materiality standard
identified in Clause 5 above, the Compliance Officer shall establish a process for
identifying and monitoring any City agreement to covenants,events of default,remedies,
priority rights, or other similar terms under such Financial Obligation;
7. the Compliance Officer shall establish a process for identifying the occurrence of any
default, event of acceleration, termination event, modification of terms, or other similar
events under the terms of any Financial Obligation,the occurrence of any of which reflect
fmancial difficulties of the City; and •
8. the Compliance Officer shall annually review these Policies and Procedures with the
remainder of the Compliance Team, make any modifications on an internal document
retained by the Compliance Officer and available to any"participating underwriter" (as
defined in the Rule), if requested, and on the basis of this annual review (to the extent
determined to be necessary or desirable), seek additional training for herself or himself,
as well as other members of the City's internal staff identified by the Compliance Officer
to assist with the City's satisfaction of the terms and provisions of the Undertaking.
100107157.3 H-2