HomeMy WebLinkAboutPO 6849: TAX AND REVENUE CERTIFICATES OF OBLIGATION, SERIES 2020B P.O.NO.6849
03/27/20 updated dm/kd
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PORT
ARTHUR, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES
OF OBLIGATION, SERIES 2020B IN A PRINCIPAL AMOUNT NOT TO
EXCEED $60,560,000 FOR THE CONSTRUCTION OF PUBLIC WORKS AND
ANY ITEMS RELATED THERETO AND FOR THE PAYMENT OF
CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES;
AUTHORIZING EXECUTION AND DELIVERY OF A PAYING
AGENT/REGISTRAR AGREEMENT AND AN ESCROW AGREEMENT
RELATING TO SUCH CERTIFICATES; PRESCRIBING THE FORM OF SAID
CERTIFICATES; LEVYING A TAX AND PLEDGING SURPLUS REVENUES
OF THE WATER AND SEWER SYSTEM IN PAYMENT THEREOF; AND
ENACTING OTHER PROVISIONS RELATING THERETO
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
CITY OF PORT ARTHUR §
WHEREAS, the City Council of the City of Port Arthur, Texas (the "City"), authorized the
publication of a notice of intention to issue certificates of obligation to the effect that the City Council
would meet on March 31, 2020 to adopt an ordinance and take such other action as may be deemed
necessary to authorize the issuance of certificates of obligation payable from the City's ad valorem taxes
and from a pledge of and lien on the surplus revenues of the City's water and sewer system,for the purpose
of evidencing the indebtedness of the City for all or any part of the costs associated with the construction
and equipment of wastewater system improvements and the cost of professional services incurred in
connection therewith; and
WHEREAS,such notice was published at the times and in the manner required by the Constitution
and laws of the State of Texas,particularly Subchapter C, Chapter 271,Texas Local Government Code,as
amended; and
WHEREAS,no petition or other request has been filed with or presented to any official of the City
requesting that any of the proceedings authorizing such Certificates be submitted to a referendum or other
election;and
WHEREAS, the City is authorized to make the pledge of Surplus Revenues (as defined herein)
pursuant to Chapter 1502,Texas Government Code; and
WHEREAS, the City is now authorized and empowered to proceed with the issuance and sale of
the Certificates, and has found and determined that it is necessary and in the best interests of the City and
its citizens that it issue the Certificates in accordance with the terms and provisions of this Ordinance; and
WHEREAS, the meeting at which this Ordinance is being considered is open to the public as
required by law,and the public notice of the time,place and purpose of said meeting was given as required
by Chapter 551,Texas Government Code;Now, Therefore
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BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR,TEXAS:
1. Recitals.It is hereby found and determined that the matters and facts set out in the preamble
to this Ordinance are true and correct and incorporated herein for all purposes.
2. Definitions. Unless otherwise expressly provided or unless the context clearly requires
otherwise in this Ordinance,the following terms shall have the same meanings specified below:
"Act"means Chapter 271,Texas Local Government Code, as amended.
"Attorney General"means the Attorney General of the State of Texas.
"Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations
between the City,the Paying Agent/Registrar and OTC.
"Bond Counsel"means Holland&Knight LLP.
"Business Day" means any day which is not a Saturday, Sunday, or a day on which the Paying
Agent/Registrar is authorized by law or executive order to close,or a legal holiday.
"Certificate"or"Certificates"means the City of Port Arthur,Texas,Combination Tax and Revenue
Certificates of Obligation, Series 2020B authorized in this Ordinance, unless the context clearly indicates
otherwise.
"City"means the City of Port Arthur,Texas.
"Code"means the Internal Revenue Code of 1986,as amended.
"Comptroller"means the Comptroller of Public Accounts of the State of Texas.
"OTC"means The Depository Trust Company of New York,New York,or any successor securities
depository.
"OTC Participant" means brokers and dealers, banks, trust companies, clearing corporations and
certain other organizations on whose behalf OTC was created to hold securities to facilitate the clearance
and settlement of securities transactions among OTC Participants.
"Escrow Agent"means UMB Bank,National Association, Houston,Texas, and its successors and
assigns,or such other escrow agent as may be approved by the Mayor or Mayor Pro Tern and acceptable to
the TWDB.
"Escrow Agreement"means the escrow agreement by and between the City and the Escrow Agent
pertaining to the deposit of the proceeds of the Certificates.
"Fiscal Year"means such fiscal year as shall from time to time be set by the City Council.
"Initial Certificate"means the Initial Certificate authorized by Section 6(d)of this Ordinance.
"Interest and Sinking Fund" means the interest and sinking fund for payment of the Certificates
established by the City in Section 18 of this Ordinance.
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"Interest Payment Date," when used in connection with any Certificate, means August 15, 2021
and each February 15 and August 15 thereafter until maturity.
"Issuance Date," with respect to the Certificates initially delivered to the TWDB, shall mean the
date on which each such Certificate is authenticated by the Paying Agent/Registrar and delivered to and
paid for by the TWDB. Certificates delivered on transfer of or in exchange for other Certificates shall bear
the same Issuance Date as the Certificate or Certificates in lieu of or in exchange for which the new
Certificate is delivered.
"MSRB"means the Municipal Securities Rulemaking Board.
"Ordinance" as used herein and in the Certificates means this ordinance authorizing the
Certificates.
"Owner"means any person who shall be the registered owner of any outstanding Certificate.
"Paying Agent/Registrar" means UMB Bank, National Association, Houston, Texas, and its
successors in that capacity.
"Project" means the construction and equipment of wastewater system improvements, including
the rehabilitation, repair and modification of the City's wastewater treatment plant and the cost of
professional services incurred in connection therewith
"Project Fund" shall mean the project fund established by the City pursuant to Section 27 of this
Ordinance.
"Record Date"means,for any Interest Payment Date,the fifteenth day of the month next preceding
such Interest Payment Date.
"Register" means the books of registration kept by the Paying Agent/Registrar in which are
maintained the names and addresses of and the principal amounts registered to each Owner.
"Rule"means SEC Rule 15c2-12, as amended from time to time.
"SEC"means the United States Securities and Exchange Commission.
"Surplus Revenues"means the revenues available after the payment of operation and maintenance
expenses of the System and the debt service payable from gross revenues or net revenues of the System, if
any, as well as any other payments, costs or expenses designated in an ordinance authorizing the issuance
of System revenue obligations.
"System"means the City's water and sewer system.
"TWDB"means the Texas Water Development Board.
3. Authorization.The Certificates shall be issued pursuant to the Act in fully registered form,
without coupons, in the total authorized principal amount of$56,310,000 for the purpose of evidencing the
indebtedness of the City for all or any part of the costs associated with the Project. In addition, pursuant to
a resolution authorized by the City and dated even date with this Ordinance, the City will enter into the
Principal Forgiveness Agreement with TWDB and will receive funds from TWDB in the amount of
$4,250,000 to be used for all or any part of the costs associated with the Project.
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4. Designation and Date. The Certificates shall be designated as the "CITY OF PORT
ARTHUR, TEXAS, COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2020B," and shall be dated April 15,2020.The Certificates shall bear interest at
the rates set out in Section 5 of this Ordinance,from the later of the Issuance Date or the most recent Interest
Payment Date to which interest has been paid or duly provided for, calculated on the basis of a 360-day
year of twelve 30-day months.
5. Initial Certificates: Numbers and Denominations. The Certificates shall be issued in the
principal amounts and bearing interest at the rates set forth in the following schedule,and may be transferred
and exchanged as set out in this Ordinance.The Certificates shall mature on August 15 in each of the years
and in the amounts set out in such schedule. The Initial Certificate shall be numbered I-1 and all other
Certificates shall be numbered in sequence beginning with R-1 . Certificates delivered on transfer of or in
exchange for other Certificates shall be numbered in order of their authentication by the Paying
Agent/Registrar, shall be in the denomination of$5,000 or integral multiples thereof, and shall mature on
the same date and bear interest at the same rate as the Certificate or Certificates in lieu of which they are
delivered.
Maturity
Date Amount Rate
08/15/2021 5,000 0.030%
08/15/2022 50,000 0.110%
08/15/2023 500,000 0.160%
08/15/2024 1,000,000 0.210%
08/15/2025 2,000,000 0.280%
08/15/2026 2,950,000 0.350%
08/15/2027 2,960,000 0.410%
08/15/2028 2,975,000 0.460%
08/15/2029 2,990,000 0.500%
08/15/2030 3,005,000 0.580%
08/15/2031 3,020,000 0.630%
08/15/2032 3,040,000 0.710%
08/15/2033 3,060,000 0.750%
08/15/2034 3,085,000 0.770%
08/15/2035 3,110,000 0.810%
08/15/2036 3,135,000 0.860%
08/15/2037 3,160,000 0.900%
08/15/2038 3,190,000 0.940%
08/15/2039 3,220,000 0.990%
08/15/2040 3,250,000 1.030%
08/15/2041 3,285,000 1.060%
08/15/2042 3,320,000 1.090%
6. Execution and Registration of Certificates.
(a) The Certificates shall be signed on behalf of the City by the Mayor or Mayor Pro Tem and
countersigned by the City Secretary,by their manual, lithographed,or facsimile signatures,and the official
seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures on the
Certificates shall have the same effect as if each of the Certificates had been signed manually and in person
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by each of said officers, and such facsimile seal on the Certificates shall have the same effect as if the
official seal of the City had been manually impressed upon each of the Certificates.
(b) If any officer of the City whose manual or facsimile signature shall appear on the
Certificates shall cease to be such officer before the authentication of such Certificates or before the delivery
of such Certificates, such manual or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
(c) Except as provided below,no Certificate shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Ordinance unless and until there appears thereon the Paying
Agent/Registrar's Authentication Certificate substantially in the form provided herein, duly authenticated
by manual execution by an officer or duly authorized signatory of the Paying Agent/Registrar. In lieu of
the executed Registrar's Authentication Certificate described above,the Initial Certificate delivered at the
Issuance Date shall have attached hereto the Comptroller's Registration Certificate substantially in the form
provided herein, manually executed by the Comptroller, or by his duly authorized agent, which certificate
shall be evidence that the Initial Certificate has been duly approved by the Attorney General of the State of
Texas and that it is a valid and binding obligation of the City,and has been registered by the Comptroller.
(d) On the Issuance Date, the Initial Certificate, being a single certificate representing the
entire principal amount of the Certificates, payable in stated installments to the TWDB or its designee,
executed by manual or facsimile signature of the Mayor or Mayor Pro Tern and City Secretary, approved
by the Attorney General, and registered and manually signed by the Comptroller, shall be delivered to the
TWDB or its designee. Upon payment for the Initial Certificate, the Paying Agent/Registrar shall cancel
the Initial Certificate and deliver definitive Certificates to OTC.
7. Payment of Principal and Interest. The Paying Agent/Registrar is hereby appointed as the
initial paying agent for the Certificates.The principal of the Certificates shall be payable,without exchange
or collection charges,in any coin or currency of the United States of America which,on the date of payment,
is legal tender for the payment of debts due the United States of America, upon their presentation and
surrender as they become due and payable at the principal payment office of the Paying Agent/Registrar in
Austin, Texas. The interest on each Certificate shall be payable by check mailed by the Paying
Agent/Registrar on or before each Interest Payment Date to the Owner of record as of the Record Date,to
the address of such Owner as shown on the Register; provided, however, that for so long as the TWDB is
the Owner of the Certificates, all payments of principal and interest will be made in wire transfer form at
no cost to the TWDB.
If the date for payment of the principal of or interest on any Certificate is not a Business Day,then
the date for such payment shall be the next succeeding Business Day, with the same force and effect as if
made on the original date payment was due.
8. Successor Paying Agent/Registrars. The City covenants that at all times while any
Certificates are outstanding it will provide a commercial bank or trust company, organized under the laws
of the United States or any which is duly qualified and legally authorized to serve as and perform the duties
and services of Paying Agent/Registrar for the Certificates.The City reserves the right to change the Paying
Agent/Registrar on not less than 45 days written notice to the Paying Agent/Registrar, so long as any such
notice is effective not less than 45 days prior to the next succeeding principal or interest payment date on
the Certificates. Promptly upon the appointment of any successor Paying Agent/Registrar, the previous
Paying Agent/Registrar shall deliver the Register or copies thereof to the new Paying Agent/Registrar, and
the new Paying Agent/Registrar shall notify each Owner, by United States mail,first class postage prepaid,
of such change and of the address of the new Paying Agent/Registrar. Each Paying Agent/Registrar
hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this Section.
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9. Special Record Date.If interest on any Certificate is not paid on any Interest Payment Date
and continues unpaid for 30 days thereafter, the Paying Agent/Registrar shall establish a new record date
for the payment of such interest,to be known as a Special Record Date. The Paying Agent/Registrar shall
establish a Special Record Date when funds to make such interest payment are received from or on behalf
of the City. Such Special Record Date shall be 15 days prior to the date fixed for payment of such past due
interest,and notice of the date of payment and the Special Record Date shall be sent by United States mail,
first class postage prepaid, not later than five (5) days prior to the Special Record Date, to each affected
Owner of record as of the close of business on the day prior to the mailing of such notice.
10. Ownership; Unclaimed Principal and Interest. The City, the Paying Agent/Registrar and
any other person may treat the person in whose name any Certificate is registered as the absolute Owner of
such Certificate for the purpose of making payment of principal or interest on such Certificate, and for all
other purposes, whether or not such Certificate is overdue, and neither the City nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the
person deemed to be the Owner of any Certificate in accordance with this Section shall be valid and
effectual and shall discharge the liability of the City and the Paying Agent/Registrar upon such Certificate
to the extent of the sums paid.
Amounts held by the Paying Agent/Registrar which represent principal of and interest on the
Certificates remaining unclaimed by the Owner after the expiration of three years from the date such
amounts have become due and payable shall be reported and disposed of by the Paying Agent/Registrar in
accordance with the applicable provisions of Texas law including, to the extent applicable, Title 6 of the
Texas Property Code,as amended.
11. Registration. Transfer. and Exchange. So long as any Certificates remain outstanding, the
Paying Agent/Registrar shall keep the Register at its principal payment office in Austin,Texas and, subject
to such reasonable regulations as it may prescribe, the Paying Agent/Registrar shall provide for the
registration and transfer of Certificates in accordance with the terms of this Ordinance. The Issuance Date
of each Certificate originally delivered to and paid for by the TWDB shall be recorded in the Register.
Each Certificate shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Paying Agent/Registrar in Austin, Texas, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered Owner or his authorized representative in
form satisfactory to the Paying Agent/Registrar. Upon due presentation of any Certificate for transfer, the
Paying Agent/Registrar shall authenticate and deliver in exchange therefor,within three(3)Business Days
after such presentation, a new Certificate or Certificates, registered in the name of the transferee or
transferees, in authorized denominations and of the same maturity, aggregate principal amount, and
Issuance Date, bearing interest at the same rate as the Certificate or Certificates so presented.
All Certificates shall be exchangeable upon presentation and surrender thereof at the principal
payment office of the Paying Agent/Registrar in Austin,Texas,for a Certificate or Certificates of the same
maturity, Issuance Date, and interest rate and in any authorized denomination, in an aggregate principal
amount equal to the unpaid principal amount of the Certificate or Certificates presented for exchange. The
Paying Agent/Registrar shall be and is hereby authorized to authenticate and deliver exchange Certificates
in accordance with the provisions of this Section.Each Certificate delivered in accordance with this Section
shall be entitled to the benefits and security of this Ordinance to the same extent as the Certificate or
Certificates in lieu of which such Certificate is delivered.
The City or the Paying Agent/Registrar may require the Owner of any Certificate to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in connection with the transfer
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or exchange of such Certificate. Any fee or charge of the Paying Agent/Registrar for such transfer or
exchange shall be paid by the City.
12. Mutilated, Lost,or Stolen Certificates. Upon the presentation and surrender to the Paying
Agent/Registrar of a mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in
exchange therefor a replacement Certificate of like maturity, Issuance Date, interest rate and principal
amount, bearing a number not contemporaneously outstanding. If any Certificate is lost, apparently
destroyed, or wrongfully taken, the City, pursuant to the applicable laws of the State of Texas and in the
absence of notice or knowledge that such Certificate has been acquired by a bona fide purchaser, shall
authorize and the Paying Agent/Registrar shall authenticate and deliver a replacement Certificate of like
maturity, Issuance Date, interest rate and principal amount, bearing a number not contemporaneously
outstanding.
The City or the Paying Agent/Registrar may require the Owner of a mutilated Certificate to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith
and any other expenses connected therewith,including the fees and expenses of the Paying Agent/Registrar.
The City or the Paying Agent/Registrar may require the Owner of a lost, apparently destroyed or
wrongfully taken Certificate, before any replacement Certificate is issued,to:
(i) furnish to the City and the Paying Agent/Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such Certificate;
(ii) furnish such security or indemnity as may be required by the Paying
Agent/Registrar and the City to save them harmless;
(iii) pay all expenses and charges in connection therewith, including, but not limited
to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other governmental
charge that may be imposed; and
(iv) meet any other reasonable requirements of the City and the Paying
Agent/Registrar.
If,after the delivery of such replacement Certificate,a bona fide purchaser of the original Certificate in lieu
of which such replacement Certificate was issued presents for payment such original Certificate, the City
and the Paying Agent/Registrar shall be entitled to recover such replacement Certificate from the person to
whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Paying Agent/Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Certificate has become or is
about to become due and payable,the City in its discretion may,instead of issuing a replacement Certificate,
authorize the Paying Agent/Registrar to pay such Certificate.
Each replacement Certificate delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which
such replacement Certificate is delivered.
13. Cancellation of Certificates. All Certificates paid in accordance with this Ordinance, and
all Certificates in lieu of which exchange Certificates or replacement Certificates are authenticated and
delivered in accordance herewith, shall be canceled and destroyed upon the making of proper records
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regarding such payment. The Paying Agent/Registrar shall furnish the City with appropriate certificates of
destruction of such Certificates.
14. Book-Entry System. The Initial Certificates shall be delivered against payment to the
TWDB. The TWDB shall be required to promptly surrender the Initial Certificates to the Paying
Agent/Registrar for exchange. Certificates issued in exchange shall be registered in the name of Cede &
Co., as nominee of OTC, as registered owner of the Certificates, and held in the custody of OTC. Unless
otherwise requested by OTC, a single certificate will be issued and delivered to OTC for each maturity of
the Certificates. Beneficial owners of Certificates will not receive physical delivery of Certificates except
as provided hereinafter. For so long as OTC shall continue to serve as securities depository for the
certificates as provided herein, all transfers of beneficial ownership interest will be made by book-entry
only, and no investor or other party purchasing, selling or otherwise transferring beneficial ownership of
Certificates is to receive,hold or deliver any Certificate.
With respect to Certificates registered in the name of Cede & Co., as nominee of OTC, the City
and the Paying Agent/Registrar shall have no responsibility or obligation to any OTC participant or any
person on whose behalf a OTC participant holds an interest in the Certificates. Without limiting the
immediately preceding sentence, the City and the Paying Agent/Registrar shall have no responsibility or
obligation with respect to(i)the accuracy of the records of OTC,Cede&Co.,or any DTC participant with
respect to any ownership interest in the Certificates, (ii) the delivery to any DTC participant or any other
person,other than a registered owner of the Certificates,as shown on the Register,of any notice with respect
to the Certificates, including any notice of redemption,and(iii)the payment of any DTC participant or any
other person, other than a registered owner of the Certificates, as shown on the Register, of any amount
with respect to principal of or premium, if any,or interest on the Certificates.
Replacement Certificates may be issued directly to beneficial owners of Certificates other than
OTC, or its nominee, but only in the event that (i) DTC determines not to continue to act as securities
depository for the Certificates (which determination shall become effective no less than 90 days after
written notice to such effect to the City and the Paying Agent/Registrar); or(ii)the City has advised OTC
of its determination (which determination is conclusive as to DTC and the beneficial owners of the
Certificates) that the interests of the beneficial owners of the Certificates might be adversely affected if
such book-entry only system of transfer is continued. Upon occurrence of any of the foregoing events, the
City shall use its best efforts to attempt to locate another qualified securities depository. If the City fails to
locate another qualified securities depository to replace DTC, the City shall cause to be authenticated and
delivered replacement Certificates, in certificate form, to the beneficial owners of the Certificates. In the
event that the City makes the determination noted in (ii) above (provided that the City undertakes no
obligation to make any investigation to determine the occurrence of any events that would permit the City
to make any such determination), and has made provisions to notify the beneficial owners of Certificates
of such determination by mailing an appropriate notice to DTC, it shall cause to be issued replacement
Certificates in certificate form to beneficial owners of the Certificates as shown on the records of DTC
provided to the City.
Whenever,during the term of the Certificates, the beneficial ownership thereof is determined by a
book entry at OTC, the requirements in this Ordinance of holding, delivering or transferring Certificates
shall be deemed modified to require the appropriate person or entity to meet the requirements of OTC as to
registering or transferring the book entry to produce the same effect.
If at any time, DTC ceases to hold the Certificates as securities depository, all references herein to
OTC shall be of no further force or effect.
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Before the City can discontinue the book-entry-only system of registration through DTC, notice
must be given to the TWDB and prior written consent of the TWDB must be received by the City.
15. Optional Redemption; Defeasance. (a)The Certificates are subject to optional redemption
as set forth in the Form of Certificate in this Ordinance.
Principal amounts may be redeemed only in integral multiples of $5,000. If a Certificate subject to
redemption is in a denomination larger than $5,000, a portion of such Certificate may be redeemed, but
only in integral multiples of$5,000. Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar shall authenticate and deliver in exchange therefor a Certificate or Certificates of like
maturity,Issuance Date,and interest rate in an aggregate principal amount equal to the unredeemed portion
of the Certificate so surrendered.
Notice of any redemption identifying the Certificates to be redeemed in whole or i n part shall be given by
the Paying Agent/Registrar at least thirty days prior to the date fixed for redemption by sending written
notice by first class mail, postage prepaid, to the Owner of each Certificate to be redeemed in whole or in
part at the address shown on the Register. Such notices shall state the redemption date, the redemption
price, the place at which Certificates are to be surrendered for payment and, if less than all Certificates
outstanding of a particular maturity are to be redeemed, the numbers of the Certificates or portions thereof
of such maturity to be redeemed. Any notice given as provided in this Section shall be conclusively
presumed to have been duly given, whether or not the Owner receives such notice. By the date fixed for
redemption, due provision shall be made with the Paying Agent/Registrar for payment of the redemption
price of the Certificates or portions thereof to be redeemed, plus accrued interest to the date fixed for
redemption. When Certificates have been called for redemption in whole or in part and due provision has
been made to redeem the same as herein provided,the Certificates or portions thereof so redeemed shall no
longer be regarded as outstanding except for the purpose of receiving payment solely from the funds so
provided for redemption, and the rights of the Owners to collect interest which would otherwise accrue
after the redemption date on any Certificate or portion thereof called for redemption shall terminate on the
date fixed for redemption.
The City reserves the right, in the case of a redemption,to give notice of its election or direction to redeem
Certificates conditioned upon the occurrence of subsequent events. Such notice may state (i) that the
redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount equal to
the amount necessary to effect the redemption,with the Paying Agent/Registrar,or such other entity as may
be authorized by law,no later than the redemption date,or(ii)that the City retains the right to rescind such
notice at any time on or prior to the scheduled redemption date if the City delivers a certificate of the City
to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the redemption notice and
such notice and redemption shall be of no effect if such moneys and/or authorized securities are not so
deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. Any Certificate subject to
conditional redemption and such redemption has been rescinded shall remain outstanding.
(b) The Certificates may be discharged, defeased, redeemed or refunded m any manner now
or hereafter permitted by law.
16. Forms. The form of the Certificates, including the form of the Paying Agent/Registrar's
Authentication Certificate, the form of Assignment, and the form of Registration Certificate of the
Comptroller shall be,respectively,substantially as follows,with such additions,deletions and variations as
may be necessary or desirable and not prohibited by this Ordinance:
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(a) Form of Certificate.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF JEFFERSON
REGISTERED REGISTERED
NUMBER DENOMINATION
CITY OF PORT ARTHUR,TEXAS
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATE OF OBLIGATION
SERIES 2020
INTEREST MATURITY DATED ISSUANCE
RATE: DATE: DATE: DATE: CUSIP NO.:
April 15,2020 April 29,2020
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
THE CITY OF PORT ARTHUR, TEXAS (the "City") promises to pay to the registered owner
identified above, or registered assigns, on the maturity date specified above, upon presentation and
surrender of this Certificate at UMB Bank, National Association (the "Paying Agent/Registrar"), at its
principal payment office in Austin, Texas, the principal amount identified above, payable in any coin or
currency of the United States of America which on the date of payment of such principal is legal tender for
the payment of debts due the United States of America,and to pay interest thereon at the rate shown above,
calculated on the basis of a 360-day year of twelve 30-day months, from the later of the Issuance Date
identified above,or the most recent interest payment date to which interest has been paid or duly provided
for. Interest on this Certificate is payable by check on February 15 and August 15,beginning on August 15,
2021, mailed to the registered owner as shown on the books of registration kept by the Paying
Agent/Registrar as of the fifteenth day of the month next preceding each interest payment date; provided,
however, that for so long as the Texas Water Development Board ("TWDB") is the Owner of the
Certificates, all payments of principal and interest will be made in wire transfer form at no cost to the
TWDB.
THIS CERTIFICATE is dated April 15, 2020 and is one of a series of fully registered certificates
specified in the title hereof issued in the aggregate principal amount of$56,310,000 (herein referred to as
the"Certificates"),for the purpose of evidencing the indebtedness of the City for all or any part of the costs
associated with the construction and equipment of wastewater system improvements and the cost of
professional services incurred in connection therewith,issued in accordance with the Constitution and laws
of the State of Texas,particularly Subchapter C,Chapter 271,Texas Local Government Code,as amended,
pursuant to an ordinance duly adopted by the City Council of the City(the"Ordinance"),which Ordinance
is of record in the official minutes of the City Council.
#72485079_v2 12
THE CITY RESERVES THE RIGHT to redeem Certificates maturing on and after August 15,
2031,prior to their scheduled maturities, in whole or from time to time in part,in inverse order of maturity,
in integral multiples of$5,000, on August 15, 2030, or any date thereafter at par plus accrued interest on
the principal amounts called for redemption to the date fixed for redemption. Reference is made to the
Ordinance for complete details concerning the manner of redeeming the Certificates.
NOTICE OF ANY REDEMPTION shall be given at least 30 days prior to the date fixed for
redemption by first class mail, addressed to the registered owner of each Certificate to be redeemed in
whole or in part at the address shown on the books of registration kept by the Paying Agent/Registrar.When
Certificates or portions thereof have been called for redemption,and due provision has been made to redeem
the same, the principal amounts so redeemed shall be payable solely from the funds provided for
redemption, and interest which would otherwise accrue on the amounts called for redemption shall
terminate on the date fixed for redemption.
THE CITY RESERVES THE RIGHT, in the case of a redemption,to give notice of its election or
direction to redeem Certificates conditioned upon the occurrence of subsequent events. Such notice may
state(i)that the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an
amount equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such
other entity as may be authorized by law, no later than the redemption date, or(ii)that the City retains the
right to rescind such notice at any time on or prior to the scheduled redemption date if the City delivers a
bond of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the
redemption notice and such notice and redemption shall be of no effect if such moneys and/or authorized
securities are not so deposited or if the notice is rescinded. The Paying Agent/Registrar shall give prompt
notice of any such rescission of a conditional notice of redemption to the affected Owners.Any Certificates
subject to conditional redemption and such redemption has been rescinded shall remain outstanding.
THIS CERTIFICATE is transferable only upon presentation and surrender at the principal payment
office of the Paying Agent/Registrar in Houston, Texas, duly endorsed for transfer or accompanied by an
assignment duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
THIS CERTIFICATE is exchangeable at the principal payment office of the Paying
Agent/Registrar in Austin,Texas,for certificates in the principal amount of$5,000 or any integral multiple
thereof, subject to the terms and conditions of the Ordinance.
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Certificate is either(i)registered by the Comptroller of Public Accounts of
the State of Texas by registration certificate attached or affixed hereto or(ii) authenticated by the Paying
Agent/Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Certificate, by acceptance hereof, acknowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
paying agent/registrar for the Certificates and will cause notice of any change of paying agent/registrar to
be mailed to each registered owner.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and validly
issued and delivered;that all acts,conditions and things required or proper to be performed,to exist and to
be done precedent to or in the issuance and delivery of this Certificate have been performed,exist and have
been done in accordance with law; and that annual ad valorem taxes, within the limits prescribed by law,
#72485079_v2 13
sufficient to provide for the payment of the interest on and principal of this Certificate, as such interest
comes due and such principal matures,have been levied and ordered to be levied against all taxable property
in the City.
IT IS FURTHER certified, recited and represented that the Surplus Revenues (as defined in the
Ordinance)to be derived from the operation of the City's System(as defined in the Ordinance),are pledged
to the payment of the Certificates. The City reserves the right to issue, for any lawful purpose at any time,
i n one or more installments, bonds, certificates of obligation and other obligations of any kind payable in
whole or in part from the Surplus Revenues,secured by a pledge of the Surplus Revenues that may be on a
parity with,or junior and subordinate to the pledge of Surplus Revenues securing the Certificates.
IN WITNESS WHEREOF,this Certificate has been signed with the manual or facsimile signature
of the Mayor or Mayor Pro Tern of the City and countersigned with the manual or facsimile signature of
the City Secretary of the City, and the official seal of the City has been duly impressed, or placed in
facsimile,on this Certificate.
City Secretary Mayor[Pro Tem]'
City of Port Arthur,Texas City of Port Arthur,Texas
[SEAL]
(b) Form of Registration Certificate of Comptroller.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas,and that this Certificate has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts of
the State of Texas
(SEAL)
(c) Form of Paying Agent/Registrar's Authentication Certificate.
AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been delivered pursuant to the Ordinance described in
the text of this Certificate.
UMB Bank,National Association,
as Paying Agent/Registrar
' Delete if the Mayor executes the Certificates.
#72485079_v2 14
By:
Authorized Signature
Date of Authentication:
(d) Form of Assignment.
ASSIGNMENT
For value received. the undersigned hereby sells,assigns, and transfers unto
(Please print or type name,address,and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Certificate and all rights thereunder,and hereby irrevocably constitutes and appoints
attorney to transfer said Certificate on the books kept for
registration thereof, with full power of substitution in the premises.
DATED:
Signature Guaranteed:
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered
owner as shown on the face of this Certificate
in every particular, without any alteration,
enlargement or change whatsoever.
NOTICE: Signature must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or trust
company.
(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Certificate,the headings"INTEREST RATE"
and "MATURITY DATE" shall both be completed with the words "As Shown Below" and the
words"CUSIP NO."deleted;
#72485079_v2 15
(ii) in the first paragraph of the Certificate,the words"on the maturity date specified
above"and"at the rate shown above"shall be deleted and the following shall be inserted at the end
of the first sentence"..., with such principal to be paid in installments on August 15 in each of the
years and in the principal amounts identified in the following schedule and with such installments
bearing interest at the per annum rates set forth in the following schedule:"
Maturity
Date Amount Rate
08/15/2021 5,000 0.030%
08/15/2022 50,000 0.110%
08/15/2023 500,000 0.160%
08/15/2024 1,000,000 0.210%
08/15/2025 2,000,000 0.280%
08/15/2026 2,950,000 0.350%
08/15/2027 2,960,000 0.410%
08/15/2028 2,975,000 0.460%
08/15/2029 2,990,000 0.500%
08/15/2030 3,005,000 0.580%
08/15/2031 3,020,000 0.630%
08/15/2032 3,040,000 0.710%
08/15/2033 3,060,000 0.750%
08/15/2034 3,085,000 0.770%
08/15/2035 3,110,000 0.810%
08/15/2036 3,135,000 0.860%
08/15/2037 3,160,000 0.900%
08/15/2038 3,190,000 0.940%
08/15/2039 3,220,000 0.990%
08/15/2040 3,250,000 1.030%
08/15/2041 3,285,000 1.060%
08/15/2042 3,320,000 1.090%
(iii) the Initial Certificate shall be numbered I-1.
17. CUSIP Numbers. CUSIP Numbers may be printed on the Certificates, but errors or
omissions in the printing of such numbers shall have no effect on the validity of the Certificates.
18. Interest and Sinking Fund: Tax Levy. The proceeds from all taxes levied, assessed and
collected for and on account of the Certificates authorized by this Ordinance shall be deposited,as collected,
in a special fund to be designated "City of Port Arthur, Texas, Combination Tax and Surplus Revenue
Certificates of Obligation, Series 2020B Interest and Sinking Fund". While the Certificates or any part of
the principal thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there
shall be annually levied, assessed and collected in due time, form and manner, and at the same time other
City taxes are levied,assessed and collected, in each year,a continuing direct annual ad valorem tax,within
the limits prescribed by law, upon all taxable property in the City sufficient to pay the current interest on
the Certificates as the same becomes due, and to provide and maintain a sinking fund adequate to pay the
principal of the Certificates as such principal matures, but never less than two percent(2%)of the original
principal amount of the Certificates each year, full allowance being made for delinquencies and costs of
#72485079.2/2 16
collection,and such taxes when collected shall be applied to the payment of the interest on and principal of
the Certificates and to no other purpose.
To pay the debt service coming due on the Certificates prior to the receipt of the taxes levied to pay
such debt serviced,there is hereby appropriated from current funds on hand, which are hereby certified to
be on hand and available for such purpose,an amount sufficient to pay such debt service, and such amount
shall be used for no other purpose.
19. Pledge of Revenues.
(a) The Surplus Revenues to be derived from the operation of the System are hereby pledged
to the payment of the principal of and interest on the Certificates as the same come due. The City also
reserves the right to issue,for any lawful purpose at any time,in one or more installments,bonds,certificates
of obligation and other obligations of any kind payable in •whole or in part from the Surplus Revenues,
secured by a pledge of the Surplus Revenues that may be on a parity with,or junior and subordinate to the
pledge of Surplus Revenues securing the Certificates.
(b) While the Certificates are outstanding, the City will at all times maintain sufficient rates
and charges for the payment of the maintenance and operation expenses of the System and, to the extent
that ad valorem taxes are not available for such purpose,the City will at all times maintain sufficient rates
and charges to produce revenues not less than 1.10 times the annual debt service obligations of all
outstanding obligations of the City secured in whole or in part by the Surplus Revenues of the System for
which the City is budgeting to make payments from Surplus Revenues, for the payment of debt service on
the Certificates. Upon the written request of the TWDB, the City shall provide documentation that
evidences the levy of ad valorem taxes for the payment of debt service on the Certificates or information
demonstrating that the City has budgeted Surplus Revenues of the system or other lawfully available
revenues sufficient for the payment of debt service on the Certificates.
(c) If System revenues are actually on deposit in the Interest and Sinking Fund in advance of
the time when ad valorem taxes are scheduled to be levied for any year,the amount of taxes that otherwise
would have been required to be levied may be reduced to the extent and by the amount of revenues then on
deposit in the Interest and Sinking Fund.
(d) If the City does not levy taxes in any year as provided in Section 18 and Section 19(c)
above, the City shall transfer and deposit in the Interest and Sinking Fund each month an amount of not
less than 1/12th of the annual debt service on the Certificates until the amount on deposit in the Interest and
Sinking Fund equals the amount required for annual debt service on the Certificates and the City shall not
transfer any funds from the City water and sewer fund to any fund other than the Interest and Sinking Fund
until such times as an amount equal to the annual debt service on the Certificates for the then current fiscal
year has been deposited in the Interest and Sinking Fund.
(e) Each year that the Certificates are outstanding, and prior to the time taxes are to be levied
for such year,the City shall establish, adopt, and maintain an annual budget that provides for the monthly
deposit of sufficient Surplus Revenues,the monthly deposit of any other legally available funds on hand at
the time of the adoption of the annual budget, the deposit of tax revenues, or a combination thereof, into
the Interest and Sinking Fund for the payment of debt service on the Certificates.
20. Application of Chapter 1208.Government Code.Chapter 1208,Government Code,applies
to the issuance of the Certificates and the pledge of the taxes and revenues granted by the City under
Sections 18 and 19 of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas
law is amended at any time while the Certificates are outstanding and unpaid such that the pledge of the
#72485079_v2 17
taxes and revenues granted by the City under Sections 18 and 19 of this Ordinance is to be subject to the
filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered
owners of the Certificates the perfection of the security interest in said pledge,the City agrees to take such
measures as it determines are reasonable and necessary under Texas law to comply with the applicable
provisions of Chapter 9, Business& Commerce Code and enable a filing to perfect the security interest in
said pledge to occur.
21. Further Proceedings. After the Initial Certificate has been executed, it shall be the duty of
the Mayor or Mayor Pro Tem of the City to deliver the Initial Certificate and all pertinent records and
proceedings to the Attorney General of Texas, for examination and approval. After the Initial Certificate
has been approved by the Attorney General, it shall be delivered to the Comptroller for registration. Upon
registration of the Initial Certificate,the Comptroller(or a deputy lawfully designated in writing to act for
the Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed herein to be
affixed or attached to the Certificates to be initially issued, and the seal of said Comptroller shall be
impressed,or placed in facsimile,thereon.
22. Sale. The Certificates are hereby sold and shall be delivered to the TWDB, as soon as
practicable after adoption of this Ordinance,at a price of par,subject to the approval of the Attorney General
of Texas and Bond Counsel. At the time the Certificates are delivered to the TWDB,the City shall pay an
origination fee to the TWDB equal to 1 .75%($1,059,800)of the Project costs,in accordance with the rules
of the TWDB. The Mayor or Mayor Pro Tern and other appropriate officers, agents and representatives of
the City are hereby authorized to do any and all things necessary or desirable to provide for the issuance
and delivery of the Certificates.
23. Books and Records. So long as any of the Certificates are outstanding the City covenants
and agrees that it will keep proper books of record and account in which full, true and correct entries will
be made of all transactions relating to the Certificates and the funds created pursuant to this Ordinance,and
all books, documents and vouchers relating thereto shall at all reasonable times be made available for
inspection upon request of any Owner.
24. Federal Income Tax Exclusion.
(a) General Tax Covenant. The City intends that the interest on the Certificates will be
excludable from gross income for purposes of federal income taxation pursuant to Sections 103 and 141
through 150 of the Code, and the applicable regulations promulgated thereunder(the"Regulations"). The
City covenants and agrees not to take any action, or knowingly omit to take any action within its control,
that if taken or omitted, respectively,would(i)cause the interest on the Certificates to be includable in the
gross income, as defined in Section 61 of the Code, of the holders thereof for purposes of federal income
taxation or(ii) result in the violation of or failure to satisfy any provision of Section 103 and 141 through
150 of the Code and the applicable Regulations that is applicable to the Certificates. In particular,the City
covenants and agrees to comply with each requirement of this Section 24;provided, however,that the City
will not be required to comply with any particular requirement of this Section 24 if the City has received
an opinion of nationally recognized bond counsel ("Counsel's Opinion")that(i) such noncompliance will
not adversely affect the exclusion from gross income for federal income tax purposes of interest on the
Certificates or (ii) compliance with some other requirement set forth in this Section 24 will satisfy the
applicable requirements of the Code, in which case compliance with such other requirement specified in
such Counsel's Opinion will constitute compliance with the corresponding requirement specified in this
Section 24.
(b) No Private Use or Payment and No Private Loan Financing.The City will certify,through
an authorized officer, employee or agent, that, based upon all facts and estimates known or reasonably
#72485079_v2 18
expected to be in existence on the date the Certificates are delivered, the proceeds of the Certificates will
not be used in a manner that would cause the Certificates to be"private activity bonds"within the meaning
of Section 141 of the Code and the Regulations. The City covenants and agrees that it will make such use
of the proceeds of the Certificates, including interest or other investment income derived from Certificate
proceeds, regulate the use of property financed, directly or indirectly, with such proceeds, and take such
other and further action as may be required so that the bonds will not be"private activity bonds"within the
meaning of Section 141 of the Code and the Regulations.
(c) No Federal Guarantee.The City covenants and agrees not to take any action,or knowingly
omit to take any action within its control,that,if taken or omitted,respectively,would cause the Certificates
to be"federally guaranteed"within the meaning of Section 149(b)of the Code and the Regulations,except
as permitted by Section 149(bX3)of the Code and the Regulations.
(d) Certificates Are Not Hedge Bonds. The City covenants and agrees not to take any action,
or knowingly omit to take any action, and has not knowingly omitted and will not knowingly omit to take
any action, within its control, that, if taken or omitted, respectively, would cause the Certificates to be
"hedge bonds"within the meaning of Section 1 49(g)of the Code and the Regulations.
(e) No Arbitrage Covenant. The City will certify, through an authorized officer, employee or
agent,that, based upon all facts and estimates known or reasonably expected to be in existence on the date
the Certificates are delivered, that the proceeds of the Certificates will not be used in a manner that would
cause the Certificates to be "arbitrage bonds" within the meaning of Section 148(a) of the Code and the
Regulations. Moreover, the City covenants and agrees that it will make such use of the proceeds of the
Certificates including interest or other investment income derived from Certificate proceeds, regulate
investments of proceeds of the Certificates, and take such other and further action as may be required so
that the Certificates will not be"arbitrage bonds"within the meaning of Section 148(a)of the Code and the
Regulations,including,specifically,that no portion of the proceeds of the Certificate will be used to acquire
or to replace funds which were used,directly or indirectly,to acquire Nonpurpose Investments(as defined
in the Code and Regulations)which produce a yield materially higher than the yield on the TWDB's bonds
that are issued to provide financing for the loan ("Source Series Bonds"), other than Nonpurpose
Investments acquired with:
(1) proceeds of the TWDB's Source Series Bonds invested for a reasonable
temporary period of up to three (3) years after the issue date of the Source Series Bonds
until such proceeds are needed for the facilities to be financed;
(2) amounts invested in a bona fide debt service fund, within the meaning of
Section 1.148-1 (b)of the Regulations; and
(3) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed the least of maximum annual debt service on the
Certificates, 1 25%of average annual debt service on the Certificates,or 10%of the stated
principal amount(or, in the case of a discount,the issue price)of the Certificates.
(f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of
Section I 48(t)of the Code,the City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the "gross proceeds" of the Certificates (within the
meaning of Section I 48(f)(6)(B)of the Code), be rebated to the federal government. Specifically,the City
will (i) maintain records regarding the investment of the gross proceeds of the Certificates as may be
required to calculate the amount earned on the investment of the gross proceeds of the Certificates
separately from records of amounts on deposit in the funds and accounts of the City allocable to other bond
#72485079_1,12 19
issues of the City or moneys which do not represent gross proceeds of any Certificates of the City,
(ii)calculate at such times as are required by the Regulations, the amount earned from the investment of
the gross proceeds of the Certificates that is required to be rebated to the federal government, and(iii)pay,
not less often than every fifth anniversary date of the delivery of the Certificates or on such other dates as
may be permitted under the Regulations, all amounts required to be rebated to the federal government.
Further,the City will not indirectly pay any amount otherwise payable to the federal government pursuant
to the foregoing requirements to any person other than the federal government by entering into any
investment arrangement with respect to the gross proceeds of the Certificates that might result in a reduction
in the amount required to be paid to the federal government because such arrangement results in a smaller
profit or a larger loss than would have resulted if the arrangement had been at arm's length and had the
yield on the issue not been relevant to either party. The City will exercise reasonable diligence to assure
that no errors are made in the calculations of any amounts required to be rebated to the federal government,
and, if such error is made,will discover and promptly correct such error within a reasonable time thereafter,
including paying any interest and any penalty required by the Regulations.
(g) Information Reporting. The City covenants and agrees to file or cause to be filed with the
Secretary of the Treasury, not later than the 15th day of the second calendar month after the close of the
calendar quarter in which the Certificates are issued,an information statement concerning the Certificates,
all under and in accordance with Section I 49(e)of the Code and the Regulations.
(h) Record Retention.The City will retain all pertinent and material records relating to the use
and expenditure of the proceeds of the Certificates until six(6)years after the last Certificate is redeemed,
or such shorter period as authorized by subsequent guidance issued by the Department of the Treasury, if
applicable.All records will be kept in a manner that ensures their complete access throughout the retention
period. For this purpose, it is acceptable that such records are kept either as hardcopy books and records or
in an electronic storage and retrieval system, provided that such electronic system includes reasonable
controls and quality assurance programs that assure the ability of the City to retrieve and reproduce such
books and records in the event of an examination of the Certificates by the Internal Revenue Service.
(i) Registration.The Certificates will be issued in registered form.
(j) Continuing Obligation.Notwithstanding any other provision of this Ordinance,the City's
obligations under the covenants and provisions of this Section 24 will survive the defeasance and discharge
of the Certificates for so long as such matters are relevant to the exclusion from gross income of interest on
the Certificates for federal income tax purposes.
(k) Source Series Bonds. The City covenants that neither the City nor a related party thereto
will acquire any of the TWDB's Source Series Bonds in an amount related to the amount of the Certificates
to be acquired from the City by the TWDB.
25. Escrow Agreement. To facilitate the delivery of and payment for the Certificates pending
completion of review of plans and specifications,the City Council hereby authorizes an Escrow Agreement
to be entered into by and between the City and the Escrow Agent, the terms and conditions of which are
hereby approved, subject to such insertions, additions, and modifications as shall be necessary to comply
with all applicable laws, regulations, and procedures and to carry out the intent and purposes of this
Ordinance.The Mayor or Mayor Pro Tem and the City Secretary are authorized to execute and deliver such
Escrow Agreement in multiple counterparts on behalf of the City.
26. Project Fund. There is hereby created and established a special fund of the City, to be
known as the "City of Port Arthur, Texas, Combination Tax and Surplus •Revenue Certificates of
Obligation,Series 2020B Project Fund,"which shall be established at an official depository of the City and
#72485079_v2 20
kept separate and apart from other funds of the City. The proceeds of the Certificates,shall be deposited in
the escrow account for the Certificates that is maintained by the Escrow Agent for benefit of the City and
TWDB under and as more specifically provided by the Escrow Agreement. Upon release from the escrow
account, such proceeds shall be deposited and held in the Project Fund until used for authorized purposes.
The proceeds of the Certificates, as received, shall be deposited in the Project Fund. Money on deposit in
the Project Fund and all interest and income derived therefrom shall be used only for the purposes set forth
in Section 3 of this Ordinance and to pay costs of issuance. Money on deposit in the Project Fund, may, at
the option of the City,be invested as permitted by Texas law including,without limitation,the Public Funds
Investment Act, Texas Government Code, Chapter 2256, and the Public Funds Collateral Act, Texas
Government Code, Chapter 2257; provided that all such deposits and investments shall be made in such
manner that the money required to be expended from the Project Fund will be available at the proper time
or times.
27. Use of Proceeds. Certificate proceeds deposited in the Project Fund shall be timely and
expeditiously used, in accordance with the schedule for the Project approved by the TWDB,and as may be
amended from time to time.The City shall not use the proceeds from the Certificates or the proceeds of any
prior bonds to pay debt service on another issue more than 90 days after the date of issue of the Certificates
in contravention of the requirements of section 149(d)of the Code.
28. TWDB Rules. In compliance with the published rules and regulations of the TWDB, the
City covenants and agrees that upon final completion of the project to be financed with the proceeds of the
Certificates, and if all or any portion of the Certificates shall be held by or on account of the TWDB or the
State of Texas, the proper officials of the City shall render due and final accounting to the TWDB of the
total cost of the Project and provide a copy of as-built plans for the Project. If,following completion of the
Project,funds remain on hand in the Project Fund,or if the TWDB Executive Administrator(the"Executive
Administrator")disapproves construction of any portion of the Project as not being in accordance with the
plans and specifications, the City shall use any remaining funds for enhancements to the Project that are
approved by the Executive Administrator, or, if no enhancements are authorized by the Executive
Administrator,the City shall submit to the TWDB a final accounting and describe the proposed disposition
of the any unused funds. If any funds are determined to be surplus funds remaining after the completion of
the Project and the completion of a final accounting, such surplus funds shall be used for the following
purposes, as approved by the Executive Administrator: (i)to redeem, in inverse order of or maturity, the
Certificates owned by the TWDB or(ii)to be deposited by the City into the Interest and Sinking Fund and
applied to the payment of the principal of and interest on the Certificates. Unless otherwise stated in the
loan commitment of the TWDB with respect to the purchase of the Certificates, in determining the amount
of available funds for constructing the Project to be financed, the City shall account for all monies in the
Project Fund, including all loan funds extended by the TWDB,all other funds available from the Project as
described in the Project engineer's sufficiency of funds statement required for closing the TWDB's loan
and all interest earned by the City on money in the Project Fund. This requirement shall not be interpreted
as prohibiting the TWDB from enforcing such other rights as it may have under law.
29. Outlay Reports.The City agrees to submit outlay reports with sufficient documentation on
costs on a quarterly or monthly basis in accordance with TWDB outlay report guidelines.
30. Environmental Indemnification. The City shall not use proceeds from the sale of the
Certificates for sampling,testing, removing or disposing of contaminated soils and/or media at the Project
site. To the extent permitted by law, the City agrees to indemnify, hold harmless and protect the TWDB
from any and all claims,causes of action or damages to the person or property of third parties arising from
the sampling, analysis, transport, storage, treatment and disposition of any contaminated sewage sludge,
contaminated sediments and/or contaminated media that may be generated by the City, its contractors,
consultants,agents,officials and employees as a result of activities relating to the Project.
#72485079_v2 21
31. Insurance.The City covenants that the Project will be kept continually insured against such
perils in an amount sufficient to protect the TWDB's interest in the Project,to the extent that insurance is
customarily carried by cities operating similar facilities in similar locations; provided, however, that the
City shall not be required to maintain such insurance so long as builders risk insurance covering such
facilities during the period of construction is in effect.
32. Compliance with Rules. Statutes and Determinations of the TW DB. The City covenants
that it will comply with the TWDB's rules and relevant state statutes in connection with the sale of the
Certificates to the TWDB and the use of the proceeds in connection with the Project approved by the
TWDB. The City covenants to comply with the standard emergency discovery conditions for threatened
and endangered species and cultural resources, as more fully specified in the final environmental finding
of the Executive Administrator.
33. Compliance with Davis-Bacon and Federal Disadvantaged Business Enterprises Program.
Laborers and mechanics employed by contractors and subcontractors for the Project shall be paid wages at
rates not less than those prevailing on projects of a similar character in the locality in accordance with the
Davis-Bacon Act,and the U.S. Department of Labor's implementing regulations.The City,all contractors,
and all sub-contractors shall ensure that all Project contracts mandate compliance with the Davis-Bacon
Act. All contracts and subcontracts for the construction of the Project carried out in whole or in part with
Certificate proceeds shall insert in full in any contract in excess of$2,000 the contracts clauses as provided
by the TWDB. The City covenants to comply with all applicable State and federal procurement
requirements, including the federal procurement requirements under the Disadvantaged Business
Enterprises program.
34. Federal Funding Accountability and Transparency Act.The City shall provide the TWDB
with all information required to be reported in accordance with the Federal Funding Accountability and
Transparency Act of 2006, Pub. L. I 09-282,as amended by Pub. L. 1 10-252. The City shall obtain a Data
Universal Numbering System (DUNS) Number and shall register with System for Award Management
{SAM),and maintain current registration at all times during which the Certificates are outstanding.
35. Use of Iron and Steel Products. The City covenants that it will abide by all applicable
construction contract requirements related to the use of iron and steel products produced in the United
States, as required by 31 TAC § 375.3, 33 U.S.C. § 1388, and related State Revolving Fund Policy
Guidelines.
36. Maintenance of Project Fund. The City covenants that it will maintain the Project Fund in
accordance with generally accepted government accounting principles.
37. Continuing Disclosure Undertaking.
(a) Annual Reports. The City agrees to provide to the MSRB, in electronic format,
accompanied by identifying information as prescribed by the MSRB, within six months after the end of
each fiscal year, financial information and operating data with respect to the City of the general type
included in the City's annual financial statements. The information will also include the audited financial
statements of the City, if the City commissions an audit and it is completed within the required time. If the
audit of such financial statements is not complete within such period, then the City will provide unaudited
financial statements within such six month period to the MSRB, and audited financial statements if and
when the audit report on such statements becomes available. Any financial statements so to be provided
shall be prepared in accordance with the accounting principles the City may be required to employ from
time to time pursuant to State law or regulation. All such information and operating data shall be provided
to the MSRB, in an electronic format,accompanied by identifying information,as prescribed by the MSRB,
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and will be available via the Electronic Municipal Market Access ("EMMA") System at
www.emma.msrb.org.
If the City changes its fiscal year, the City will notify the MSRB of any such change (and of the
date of the new fiscal year end) prior to the next date by which the City would otherwise be required to
provide financial information and operating data pursuant to this Section.
All such information and operating data may be provided to the MSRB in full in one or more
documents, or may be included by specific reference to documents available to the public (including an
Official Statement or other offering document, if it is available from the MSRB).
(b) Material Event Notices.The City shall provide the following to the MSRB,in an electronic
format as prescribed by the MSRB, in a timely manner not in excess of ten (10) business days after the
occurrence of the event,notice of any of the following events with respect to the Certificates:
(1) Principal and interest payment delinquencies;
(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 cred it 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
Certificates,or other material events affecting the tax status of the Certificates;
(7) Modifications to rights of the holders of the Certificates, if material;
(8) Certificate calls, if material,and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(11) Rating changes;
(12) Bankruptcy, insolvency,receivership or similar event of the City;
Note to paragraph 12: For the purposes of the event identified in paragraph 12 of this
section,the event 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 U.S.
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 been assumed by leaving the existing
governing body and officials or officers in possession but subject to the supervision and
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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.
(13) The consummation of a merger,consolidation,or acquisition involving the
City or the sale of all or substantially all of the assets of the City,other than in the ordinary
course of business,the entry into 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 successor or additional paying agent/registrar or the
change of name of a paying agent/registrar, if material;
(15) The incurrence of a financial obligation of the City, if material, or
an 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) A 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.
The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 13.01 of this
Ordinance by the time required by such Section.
The City reserves the right to file all information and notices required under this
Article through the facilities of DisclosureUSA or any other central post office approved
by the SEC for such purpose.
(c) 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 Certificates within the meaning of the Rule, except that the City in
any event will give notice of any deposit made in accordance with Texas law that causes Certificates no
longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of the
Certificates, and nothing in this Section,express or implied,shall give any benefit or any legal or equitable
right, remedy, or claim hereunder to any other person. The City undertakes to provide only the financial
information, operating data, financial statements, and notices which it has expressly agreed to provide
pursuant to this Section and does not hereby undertake to provide any other information that may be relevant
or material to a complete presentation of the City's financial results, condition, or prospects or hereby
undertake to update any information provided i n accordance with this Section or otherwise, except as
expressly provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE
CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN
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CONTRACT OR TORT,FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO
AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall comprise
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, change in law, or change in the identity,
nature, status or type of operations of the City, if(i)the agreement, as amended, would have permitted an
underwriter to purchase or sell Certificates in the original primary offering 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 (ii) either(a) the holders of a majority in aggregate principal amount
of the outstanding Certificates consent to such amendment, or (b) any person unaffiliated with the City
(such as nationally recognized Bond Counsel), determines that the amendment will not materially impair
the interests of the holders and beneficial owners of the Certificates. If any such amendment is made, the
City will include in its next annual update an explanation in narrative form of the reasons for the amendment
and its impact on the type of operating data or financial information being provided.
38. Delivery of Audit to TW DB. The City agrees to annually submit the TWDB an audit
prepared by a certified public accountant in accordance with the generally accepted accounting principles
applicable to the City following the completion of such audit.
39. Private Placement Memorandum. The form and substance of the Private Placement
Memorandum for the Certificates dated March 31, 2020, and any addenda, supplement or amendment
thereto(the"Private Placement Memorandum"),presented to and considered at this meeting,are hereby in
all respects approved and adopted. The proper officials of the City are hereby authorized to execute such
Private Placement Memorandum as prescribed therein.
40. Appointment of Initial Paving Agent/Registrar: Paying Agent Registrar Agreement.
(a) UMB Bank, National Association, Houston, Texas, is hereby appointed as the initial
Paying Agent/Registrar for the Certificates.
(b) The Paying Agent/Registrar shall keep such books or records and make such transfers and
registrations under such reasonable regulations as the City and the Paying Agent/Registrar may prescribe;
and the Paying Agent/Registrar shall make such transfer and registrations as herein provided. It shall be the
duty of the Paying Agent/Registrar to obtain from the Owners and record in the Register the address of
such Owner of each Certificate to which payments with respect to the Certificates shall be mailed, as
provided herein.The City or its designee shall have the right to inspect the Register during regular business
hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Register
confidential and, unless otherwise required by law, shall not permit their inspection by any other entity.
(c) The City hereby further appoints the Paying Agent/Registrar to act as the paying agent for
paying the principal of and interest on the Certificates. The Paying Agent/Registrar shall keep proper
records of all payments made by the City and the Paying Agent/Registrar with respect to the Certificates,
and of all conversions,exchanges and replacements of such Certificates,as provided in the Ordinance.
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(d) The form of Paying Agent/Registrar Agreement setting forth the duties of the Paying
Agent/Registrar is hereby approved, and the appropriate officials of the City are hereby authorized to
execute such agreement for and on behalf of the City.
41. Maintenance,Termination and Replacement of Paying Agent/Registrar.
(a) At all times while any Certificates are outstanding, the City will maintain a Paying
Agent/Registrar that is qualified under this Section 41 of the Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City will
promptly appoint a replacement, provided no such resignation shall be effective until a successor Paying
Agent/Registrar has accepted the duties of Paying Agent/Registrar for the Certificates.
(c) Each Paying Agent/Registrar shall be a commercial bank or trust company organized under
the laws of the State, or any other entity duly qualified and legally authorized to serve as and perform the
duties and services of paying agent and registrar for the Certificates.
(d) The City reserves the right to terminate the appointment of any Paying Agent/Registrar by
(i)delivering to the entity whose appointment is to be terminated forty-five(45)days written notice of the
termination of the appointment and of the Paying Agent/Registrar Agreement, stating the effective date of
such termination, and (ii) appointing a successor Paying Agent/Registrar; provided, that, no such
termination shall be effective until a successor Paying Agent/Registrar has assumed the duties of Paying
Agent/Registrar for the Certificates.
(e) Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class, postage prepaid, at
the address in the Register,stating the effective date of the change and the name and mailing address of the
replacement Paying Agent/Registrar.
(f) By accepting the appointment as Paying Agent/Registrar, the Paying Agent/Registrar is
deemed to have agreed to the provisions of this Ordinance and that it will perform the duties and functions
of Paying Agent/Registrar prescribed hereby and under the Paying Agent/Registrar Agreement.
(g) If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor,will deliver the Register(or a copy thereof)and all other pertinent books and
records relating to the Certificates to the successor Paying Agent/Registrar.
42. Remedies. The TWDB shall have all remedies available in law or equity with respect to
the Certificates, and any provision of the Certificates that restricts or limits the TWDB's full exercise of
these remedies shall be of no force and effect.
43. Changes to Ordinance. Bond Counsel is hereby authorized to make changes to the terms
of this Ordinance if necessary or desirable to carry out the purposes hereof or in connection with the
approval of the issuance of the Certificates by the Attorney General of Texas.
44. Related Matters. To satisfy in a timely manner all of the City's obligations under this
Ordinance, the Mayor or Mayor Pro Tem, the City Secretary and all other appropriate officers and agents
of the City are hereby authorized and directed to do any and all things necessary and/or convenient to carry
out the terms and purposes of this Ordinance.
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45. Individuals Not Liable.No covenant,stipulation,obligation or agreement herein contained
shall be deemed to be a covenant, stipulation, obligation or agreement of any member of City Council or
agent or employee of City Council or of the City in his or her individual capacity and neither the members
of City Council nor any officer thereof, nor any agent or employee of City Council or of the City, shall be
liable personally on the Certificates, or be subject to any personal liability or accountability by reason of
the issuance thereof.
46. Severability and Savings. If any section, paragraph. clause or provision of this Ordinance
shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
Section, paragraph, clause or provision shall not affect any of the remaining provisions of this Ordinance.
47. Repealer. All ordinances or resolutions, or parts thereof, heretofore adopted by the City
and inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict.
48. Force and Effect. This Ordinance shall be in full force and effect from and after its final
passage,and it is so ordained .
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READ, ADOPTED AND APPROVED on this 31st day of March, A.D., 2020, at a Regular
Meeting of the City Council of the City of Port Arthur,Texas, by the following vote: AYES:
Mayor: ,
Councilmembers: ,
NOES:
Thurman Bill Bartie, Mayor
ATTEST:
Sherri Bellard,City Secretary
APPROVED AS TO FORM:
Valecia R. Tizeno, City Attorney
APPROVED FOR ADMINISTRATION:
Ronald Burton, City Manager
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
I, the undersigned officer of the City Council of the City of Port Arthur, Texas, hereby certify as
follows:
1. The City Council of the City of Port Arthur, Texas, convened in a regular meeting on the
31st day of March, 2020, at the regular meeting place thereof, within said City, and the roll was called of
the duly constituted officers and members of said City Council,to wit:
Thurman Bartie Mayor
Harold Doucet, Sr. Mayor Pro Tem, District 4
Raymond Scott, Jr. Councilmember, District 1
Cal J. Jones Councilmember, District 2
Thomas Kinlaw, III Councilmember, District 3
Charlotte Moses Councilmember, Position 7
Kaprina Richardson Frank Councilmember, Position 8
and all of said persons were present, except the following absentee(s): , thus constituting a
quorum. Whereupon,among other business,the following was transacted at said meeting, a written
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PORT
ARTHUR, TEXAS, COMBINATION TAX AND REVENUE CERTIFICATES
OF OBLIGATION, SERIES 2020B IN A PRINCIPAL AMOUNT NOT TO
EXCEED $60,560,000 FOR THE CONSTRUCTION OF PUBLIC WORKS AND
ANY ITEMS RELATED THERETO AND FOR THE PAYMENT OF
CONTRACTUAL OBLIGATIONS FOR PROFESSIONAL SERVICES;
AUTHORIZING EXECUTION AND DELIVERY OF A PAYING
AGENT/REGISTRAR AGREEMENT AND AN ESCROW AGREEMENT
RELATING TO SUCH CERTIFICATES; PRESCRIBING THE FORM OF SAID
CERTIFICATES; LEVYING A TAX AND PLEDGING SURPLUS REVENUES
OF THE WATER AND SEWER SYSTEM IN PAYMENT THEREOF; AND
ENACTING OTHER PROVISIONS RELATING THERETO
was duly introduced for the consideration of said City Council and read in full. It was then duly moved
and seconded that said ordinance be adopted ; and,after due discussion, said motion,carrying with it the
adoption of said ordinance,prevailed and carried by the following vote:
7 Member(s)of City Council shown present voted"Aye."
0 Member(s)of City Council shown present voted"No."
2. A true, full and correct copy of the aforesaid ordinance adopted at the meeting described
in the above and foregoing paragraph is attached to and follows this certificate;that said ordinance has been
duly recorded in said City Council's minutes of said meeting; that the above and foregoing paragraph is a
true, full and correct excerpt from said City Council's minutes of said meeting pertaining to the adoption
of said ordinance; that the persons named in the above and foregoing paragraph are the duly chosen,
qualified and acting officers and members of said City Council as indicated therein;that each of the officers
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and members of said City Council was duly and sufficiently notified officially and personally, in advance,
of the date, hour, place and purpose of the aforesaid meeting, and that said ordinance would be introduced
and considered for adoption at said meeting,and each of said officers and members consented, in advance,
to the holding of said meeting for such purpose; that said meeting was open to the public as required by
law; and that public notice of the date, hour, place and subject of said meeting was given as required by
Chapter 551,Texas Government Code.
SIGNED AND SEALED this 31st day of March, 2020.
Sherri Bellard
City Secretary
City of Port Arthur,Texas
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