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INTEROFFICE MEMORANDUM
Date: 05/29/2025
To: The Honorable Mayor and City Council
Through: Ronald Burton, CPM, City Manager
From: Lynda"Lyn"Boswell, M.A., ICMA-CM, Finance Director
RE: P.O. 7338— Solid Waste Equipment Tax Note
Introduction:
The Solid Waste Division is in need of equipment to replace and update the current fleet.
Background:
The Council has expressed its desire for improvements to the trash collection efforts throughout
the City. Recently,the Director of Public Works presented on the state of the equipment,or lack
of working equipment that is adding to the difficulties of fulfilling the Council's goals. A list of
needs and equipment was provided to the City Manager, and the Tax Note would allow the
Director of Public Works to purchase the needed equipment and update the fleet.
Budget Impact:
With new contracts for services and upcoming construction of a new cell at the landfill in
FY2025, the current state of cash flow is steady and forecasted to remain that way, thus the
additional debt payment arrangements would be manageable and reasonable.
Recommendation:
It is recommended that the City Council approve Proposed Ordinance 7338 to authorize the
principal amount of$6,460,000 for the purchase of Solid Waste Equipment..
"Remember, we are here to serve the Citizens of Port Arthur"
P.O.Box 1089 X Port Arthur,Texas 77641-1089 X 409.983.8101 X FAX 409.982.6743
Lynda Boswell
From: Flozelle C. Roberts
Sent: Monday, April 21, 2025 3:28 PM
To: Ron Burton; Pamela Langford; Albert Thigpen; Lynda Boswell
Cc: Glen White; Flozelle C. Roberts
Subject: Request for Solid Waste Equipment
Good Afternoon, Mr. Burton,
Pursuant to our conversation regarding the Solid Waste Division's needs, I present the following information:
Need Number 1Q2025 Cost (each) 1Q2025 Cost+ Extended Cost
_ .. Requested - -. . Benefits
Commercial Trucks ; 6 f $400,000.00 $2,400,000.00
Garbage Trucks 5 $400,000.00 _ $2,000,000.00
Trash Trucks 1 4 $335,000.00 -1:j $1,340,000.00
EO II (Commercial) 1 $48,446.08 I $63,464.36 $63,464.36
EO I (Residential 3 $43,958.33 $57,585.41 $172,756.24
Garbage)
a
EO I (Trash) 1 7 I $43,958.33 $57,585.41 $403,097.89
TOTAL _ _ ^[_„ $6,379,318.49
Please let me know if additional information is warranted.
Thank you,
Flozelle C. Roberts,
ElT. MEng, MBA, CPM
(she/her)
C: i Director of Public Works
"'r r r i,, ` 1, 0 i4091983-8182
�" 0 ftozeUe.roberts@portarthirtx.gov
0 444 4th Street
P.O.Box 1089
Port Arthur.Texas 77640
Communications to and from this email address are subject to the State of Texas Public Information Act.
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNT OF JEFFERSON §
I, the undersigned City Secretary of the City of Port Arthur, Texas (the "City"), hereby certify as
follows:
1. The City Council of the City convened in regular meeting on June 4, 2025, at the place
stated in the notice of such meeting given as stated below, and the roll was called of the duly constituted
official and members of said City Council,to wit:
Thurman Bartie Mayor
Willie Bae Lewis, Jr. Councilmember, District 1
Tiffany Hamilton Everfield Councilmember, District 2
Doneane Beckcom Councilmember, District 3
Harold Doucet, Sr. Councilmember, District 4-Mayor Pro Tem
Thomas Kinlaw, III Councilmember,At Large Position 5
Donald Frank, Sr. Councilmember,At Large Position 6
and all of said persons were present, except , thus constituting a quorum.
Whereupon, among other business,the following was transacted at said meeting: a written
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR,
TEXAS AUTHORIZING THE ISSUANCE OF "CITY OF PORT ARTHUR, TEXAS
TAX NOTES, SERIES 2025" IN THE PRINCIPAL AMOUNT OF $6,460,000;
LEVYING A CONTINUING DIRECT ANNUAL AD VALOREM TAX FOR THE
PAYMENT OF THE NOTES; PRESCRIBING THE FORM, TERMS, CONDITIONS,
AND RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE
ISSUANCE, SALE, AND DELIVERY OF THE NOTES, AUTHORIZING THE
EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT AND A
PURCHASER LETTER; AWARDING SUCH SALE TO A PURCHASER,
DELEGATING THE AUTHORITY TO CERTAIN CITY OFFICIALS AND STAFF
TO ESTABLISH TERMS OF SALE OF THE NOTES AND TO EXECUTE CERTAIN
DOCUMENTS RELATING TO THE SALE THEREOF; ENACTING OTHER
PROVISIONS INCIDENT AND RELATED TO THE SUBJECT AND PURPOSE OF
THIS ORDINANCE; AND PROVIDING FOR AN EFFECTIVE DATE
Was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said Resolution be adopted;and,after due discussion„ said motion,carrying with
it the adoption of said Resolution, prevailed and carried by the following vote:
AYES: voted"aye"
NOES: voted"No"
ABSTENTIONS:
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2. That 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 the 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 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 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 the Texas Open Meetings
Act.
SIGNED AND SEALED this June 4th, 2025.
City Secretary
City of Port Arthur, Texas
[Seal]
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P.O. 7338
5/29/2025 DM
ORDINANCE NO.
AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR, TEXAS AUTHORIZING THE ISSUANCE OF"CITY OF PORT
ARTHUR, TEXAS TAX NOTES, SERIES 2025" IN THE PRINCIPAL
AMOUNT OF $6,460,000; LEVYING A CONTINUING DIRECT ANNUAL
AD VALOREM TAX FOR THE PAYMENT OF THE NOTES;
PRESCRIBING THE FORM, TERMS, CONDITIONS, AND RESOLVING
OTHER MATTERS INCIDENT AND RELATED TO THE ISSUANCE,
SALE, AND DELIVERY OF THE NOTES, AUTHORIZING THE
EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT AND A
PURCHASE CONTRACT; AWARDING SUCH SALE TO AN
UNDERWRITING, DELEGATING THE AUTHORITY TO CERTAIN
CITY OFFICIALS AND STAFF TO ESTABLISH TERMS OF SALE OF
THE NOTES AND TO EXECUTE CERTAIN DOCUMENTS RELATING
TO THE SALE THEREOF;ENACTING OTHER PROVISIONS INCIDENT
AND RELATED TO THE SUBJECT AND PURPOSE OF THIS
ORDINANCE; AND PROVIDING FOR AN EFFECTIVE DATE
WHEREAS,pursuant to the provisions of Chapter 1431, as amended, Texas Government
Code(the Act),the City Council(the Governing Body)of the City of Port Arthur,Texas(the Issuer
or the City)is authorized and empowered to issue anticipation notes to pay contractual obligations
incurred or to be incurred for the construction of any public works, for the purchase of materials,
supplies, equipment, machinery, buildings, lands, and rights-of-way for the Issuer's authorized
needs and purposes, and for professional services, including services provided by tax appraisers,
engineers, architects, attorneys, auditors,mapmakers, financial advisors, and fiscal agents; and
WHEREAS, in accordance with the provisions of the Act, the Governing Body hereby
finds and determines that anticipation notes should be issued and sold at this time to finance the
costs of paying contractual obligations to be incurred for(i)solid waste equipment,(ii)the payment
of professional services related to the design, construction, installation, and financing of the
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aforementioned project; and (iii) paying the costs of issuance of the 2025 Notes (together, the
Project); and
WHEREAS, the Governing Body hereby finds and determines that the issuance of
anticipation notes is in the best interests of the residents of the Issuer.
NOW THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF PORT ARTHUR, TEXAS:
Section 1. Authorization—Designation—Principal Amount—Purpose. General obligation
notes of the Issuer shall be and are hereby authorized to be issued in the aggregate principal amount
of six million four hundred sixty thousand and no/100 ($6,460,000) to be designated and bear the
title of"CITY OF PORT ARTHUR, TEXAS TAX NOTES, SERIES 2025" (the Notes), for the
purpose of providing funds for(i) solid waste equipment, (ii)the payment of professional services
related to the design, construction, installation, and financing of the aforementioned project; and
(iii) paying the costs of issuance of the 2025 Notes, all in conformity with the laws of the State of
Texas,particularly Chapters 1371 and 1431, as amended,Texas Government Code,this ordinance
(the Ordinance) adopted by the Governing Body on June 4, 2025, and the Issuer's Home Rule
Charter.
Section 2. Fully Registered Notes — Authorized Denominations — Stated Maturities —
Interest Rates — Dated Date. The Notes shall be issued as fully registered obligations, without
coupons, shall be dated June 1, 2025 (the Dated Date) and shall be issued in authorized
denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), shall be
lettered "R-" and numbered consecutively from one (1) upward. The principal shall become due
and payable on February 1 in each of the years (the Stated Maturities)and in the amounts and bear
interest at the rates per annum, in accordance with the following schedule:
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Years of Stated Principal Interest
Maturity (6/15) Amounts Rates
8/15/2025 $1,420,000 4.500%
6/15/2026 640,000 4.500
6/15/2027 655,000 4.500
6/15/2028 685,000 4.500
6/15/2029 715,000 4.500
6/15/2030 750,000 4.500
6/15/2031 780,000 4.500
6/15/2032 815,000 4.500
The Notes shall bear interest on the unpaid principal amounts from the Closing Date
(anticipated to occur on or about July 1, 2025), or from the most recent Interest Payment Date
(hereinafter defined)to which interest has been paid or duly provided for,to Stated Maturity,while
Outstanding, at the rates per annum shown in the above schedule(calculated on the basis of a 360-
day year of twelve 30-day months). Interest on the Notes shall be payable on June 15 and
December 15 in each year (each, an Interest Payment Date), commencing December 15, 2025,
except for the first interest payment which shall be payable on August 15, 2025, while the Notes
are Outstanding.
Section 3: Payment of Notes — Paying Agent/Registrar. The principal and the interest on
the Notes, due and payable by reason of Stated Maturity or otherwise, shall be payable, without
exchange or collection charges to the Holders (as hereinafter defined), appearing on the Security
Register(as hereinafter defined)maintained by the Paying Agent/Registrar(as hereinafter defined)
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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 and interest on
the Notes shall be without exchange or collection charges to the Holder of the Notes.
The selection and appointment of UMB Bank, N.A., Austin Texas, as Paying
Agent/Registrar (the Paying Agent/Registrar), to serve as the initial Paying Agent/Registrar for
the Notes is hereby approved and confirmed, and the Issuer 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 Notes, 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 Issuer may prescribe. The Issuer covenants to maintain and
provide a Paying Agent/Registrar at all times while the Notes 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 subject to supervision or examination by federal or state authority and authorized by law to
serve as a Paying Agent/Registrar.
The Issuer 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 Issuer agrees to promptly cause a written notice of this substitution
to be sent to each Holder of the Notes by United States mail, first-class postage prepaid, which
notice shall also give the address of the new Paying Agent/Registrar.
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Principal and interest on the Notes, due and payable by reason of Stated Maturity or
otherwise, shall be payable only to the registered owner of the Notes appearing on the Security
Register(the Holder or Holders)maintained on behalf of the Issuer by the Paying Agent/Registrar
as hereinafter provided (i) on the Record Date (hereinafter defined) for purposes of payment of
interest on the Notes, (ii) on the date of surrender of the Notes for purposes of receiving payment
of principal thereof at the Notes' Stated Maturity, and(iii)on any other date for any other purpose.
The Issuer and the Paying Agent/Registrar, and any agent of either, shall treat the Holder as the
owner of a Note for purposes of receiving payment and all other purposes whatsoever, and neither
the Issuer nor the Paying Agent/Registrar, or any agent of either, shall be affected by notice to the
contrary.
Principal on the Notes shall be payable only upon presentation and surrender of the Notes
to the Paying Agent/Registrar at its corporate trust office. Interest on the Notes shall be paid to the
Holder whose name appears in the Security Register at the close of business on the 15th day of the
month next preceding an Interest Payment Date for the Notes (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 or interest on the Notes shall be a Saturday, a
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
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payment on such date shall have the same force and effect as if made on the original date any such
payment on the Notes was due.
In the event of a non-payment of interest on a scheduled payment date, and for 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 Issuer. Notice of the Special Record Date and of the scheduled payment date of
the past due interest (the Special Payment Date - which shall be 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 of a Note appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of such
notice.
Section 4. Redemption. The Notes are subject to redemption prior to Stated Maturity on
any business day in whole or in part, without penalty upon at least 30 days' prior notice.
Section 5. Execution — Registration. The Notes shall be executed on behalf of the Issuer
by its Mayor under the seal of the Issuer reproduced or impressed thereon and attested by its City
Secretary. The signature of any of said officers on the Notes may be manual, electronic or
facsimile. Notes bearing the manual, electronic or facsimile signatures of individuals who were, at
the time of the Dated Date, the proper officers of the Issuer shall bind the Issuer, notwithstanding
that such individuals or either of them shall cease to hold such offices prior to the delivery of the
Notes to the Purchasers (hereinafter defined), all as authorized and provided in Chapter 1201, as
amended, Texas Government Code.
No Note shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Note either a certificate of registration
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4522392314_v1
substantially in the form provided in Section 8B herein, 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 8C herein, executed by the Paying
Agent/Registrar by manual signature,and either such certificate upon any Note shall be conclusive
evidence, and the only evidence,that such Note has been duly certified or registered and delivered.
Section 6. Registration— Transfer—Exchange of Notes—Predecessor Notes. The Paying
Agent/Registrar shall obtain, record, and maintain in the Security Register the name and address
of every owner of the Notes or, if appropriate, the nominee thereof. Any Note may, in accordance
with its terms and the terms hereof, be transferred or exchanged for Notes of other authorized
denominations upon the Security Register by the Holder,in person or by his duly authorized agent,
upon surrender of such Note 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 Note at the corporate trust office of the Paying
Agent/Registrar,the Issuer shall execute and the Paying Agent/Registrar shall register and deliver,
in the name of the designated transferee or transferees, one or more new Notes of authorized
denomination and having the same Stated Maturity and of a like interest rate and aggregate
principal amount as the Note or Notes surrendered for transfer.
At the option of the Holder, Notes may be exchanged for other Notes of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest and of like
aggregate principal amount as the Notes surrendered for exchange upon surrender of the Notes to
be exchanged at the corporate trust office of the Paying Agent/Registrar. Whenever any Notes are
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so surrendered for exchange,the Issuer shall execute,and the Paying Agent/Registrar shall register
and deliver, the Notes to the Holder requesting the exchange.
All Notes issued upon any transfer or exchange of Notes shall be delivered at the corporate
trust or other 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 Issuer, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Notes surrendered upon such transfer or exchange.
All transfers or exchanges of Notes 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
tax or other governmental charges required to be paid with respect to such transfer or exchange.
Notes canceled by reason of an exchange or transfer pursuant to the provisions hereof are
hereby defined to be "Predecessor Notes", evidencing all or a portion, as the case may be, of the
same debt evidenced by the new Note or Notes registered and delivered in the exchange or transfer
therefor. Additionally,the term Predecessor Notes shall include any Note registered and delivered
pursuant to Section 17 herein in lieu of a mutilated, lost, destroyed, or stolen Note which shall be
deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Note.
Section 7. Initial Note. The Notes herein authorized shall be initially issued as a single
fully registered Note in the aggregate principal amount of$6,460,000 with principal installments
to become due and payable as provided in Section 2 hereof and numbered T-1 (the Initial Note),
and the Initial Note shall be registered in the name of the Purchasers or the designee thereof. The
Initial Note shall be the Note 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
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State of Texas and delivered to the Purchasers. Any time after the delivery of the Initial Note, the
Paying Agent/Registrar, pursuant to written instructions from the Purchasers, or the designee
thereof, shall cancel the Initial Note delivered hereunder and exchange therefor definitive Notes
of like kind and 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 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 Notes, the Registration Certificate of Comptroller of Public
Accounts of the State of Texas, the Registration Certificate of Paying Agent/Registrar, and the
form of Assignment to be printed on each of the Notes 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 Notes,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) thereon as may,
consistent herewith, be established by the Issuer or determined by the officers executing the Notes
as evidenced by their execution thereof Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the Note.
The definitive Notes 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
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officers executing the Notes as evidenced by their execution thereof,but the Initial Note submitted
to the Attorney General of the State of Texas may be typewritten or photocopied or otherwise
reproduced.
[The remainder of this page intentionally left blank]
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B. Form of Definitive Note.
REGISTERED NO. REGISTERED PRINCIPAL
R- AMOUNT
UNITED STATES OF AMERICA
STATES OF TEXAS
COUNTY OF JEFFERSON
CITY OF PORT ARTHUR, TEXAS
TAX NOTE, SERIES 2025
Dated Date: Interest Rate: Stated Maturity: CUSIP No.:
July 1, 2025
REGISTERED OWNER:
PRINCIPAL AMOUNT: AND NO/100 DOLLARS
The City of Port Arthur, Texas (the Issuer), a body corporate and a municipal corporation
in the County of Jefferson, State of Texas, for value received, acknowledges itself indebted to and
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
and to pay interest on the unpaid Principal Amount hereof from the Closing Date (anticipated to
occur on or about July 1, 2025), or from the most recent Interest Payment Date (hereinafter
defined) to which interest has been paid or duly provided for until such Principal Amount has
become due and payment thereof has been made or duly provided for, to Stated Maturity, while
Outstanding, at the per annum rate of interest specified above computed on the basis of a 360-day
year of twelve 30-day months; such first interest and principal payment will be on August 15,
2025,thereafter interest being payable on December 15 and June 15 of each year(each, an Interest
Payment Date), commencing December 15, 2025, with principal payments being payable June 15
annually until final maturity or prior redemption, commencing June 15, 2026.
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Principal on this Note 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 Note (or one or more Predecessor Notes, 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 15th day of the month
next preceding each Interest Payment Date. All payments of principal of and interest on this Note
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 the Holder hereof
at the Holder's risk and expense.
This Note is one of the series specified in its title issued in the aggregate principal amount
of$6,460,000 (the Notes) pursuant to an ordinance adopted by the Governing Body of the Issuer
(the Ordinance), for the purpose of providing funds for (i) street improvements (and ancillary
improvements necessary or incidental thereto); (ii) information technology improvements; (iii)
purchasing,improving,constructing,renovating,enlarging,extending,equipping,and/or repairing
City public safety, administrative,parks, bridges, and other municipal facilities and infrastructure;
and (iv) the payment of professional services related to the design, construction, installation, and
financing of the aforementioned projects, all in conformity with the laws of the State of Texas,
including Chapters 1371 and 1431, as amended, Texas Government Code, the Ordinance, and the
Issuer's Home Rule Charter.
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As provided in the Ordinance, the Notes are not subject to redemption prior to Stated
Maturity.
The Notes of this series are payable from the proceeds of an annual ad valorem tax levied,
within the limitations prescribed by law, upon all taxable property within the Issuer.
Reference is hereby made to the Ordinance, a copy of which is on file in the corporate trust
or other 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 of and the nature and
extent of the tax levied for the payment of the Notes; the terms and conditions relating to the
transfer or exchange of the Notes; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the rights, duties, and obligations of the
Issuer and the Paying Agent/Registrar; the terms and provisions upon which this Note may be
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 without definition have the same meanings assigned in the Ordinance.
This Note, 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 Notes 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 Issuer 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
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for purposes of receiving payment of interest hereon, (ii) on the date of surrender of this Note as
the owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity, and
(iii) on any other date as the owner hereof for all other purposes, and neither the Issuer 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 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 Issuer. Notice of the Special Record Date and of the scheduled payment date of the past
due interest (the Special Payment Date - which shall be 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 Note in order to
render the same a legal,valid, and binding obligation of the Issuer have been performed, exist, and
have been done, in regular and due time, form, and manner, as required by the laws of the State of
Texas and the Ordinance, and that the issuance of the Notes does not exceed any constitutional or
statutory limitation; and that due provision has been made for the payment of the principal and
interest on the Notes by the levy of a tax as aforestated. In case any provision in this Note 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 Note 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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IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed under its
official seal.
CITY OF PORT ARTHUR, TEXAS
By
Mayor
ATTEST:
City Secretary
(CITY SEAL)
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C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Note 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 Note 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: Do Not Print on Definitive Notes.
D. *Form of Registration Certificate of Paying Agent/Registrar to Appear on
Definitive Notes only.
REGISTRATION CERTIFICATE OF PAYING AGENT/REGISTRAR
This Note has been duly issued under the provisions of the within-mentioned Ordinance;
the Note or Notes 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: UMB Bank,N.A., Austin, Texas,
as Paying Agent/Registrar
By:
Authorized Signature
4
*NOTE TO PRINTER: Print on Definitive Notes.
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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 Note and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Note 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 Note in every
particular.
Signature guaranteed:
[The remainder of this page intentionally left blank.]
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F. Form of Initial Note. The Initial Note shall be in the form set forth in subsection B
of this Section, except that the form of a single fully registered Initial Note shall be modified as
follows:
(i) immediately under the name of the Note the headings "Interest Rate
and"Stated Maturity " shall both be completed"as shown below"; and
(ii) the first 2 paragraphs shall read as follows:
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Port Arthur,Texas(the Issuer), a body corporate and municipal corporation in
the County of Jefferson, State of Texas, for value received, acknowledges itself indebted to and
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 15th of June each of the years and in principal
amounts and bearing interest at per annum rates in accordance with the following schedule(other
than the first principal payment which will be on August 15,2025:
Years of Stated Principal Interest
Maturity Amounts($) Rates(%)
(Information to be inserted from schedule in Section 2 hereof).
and to pay interest on the unpaid Principal Amount hereof from the Closing Date (anticipated to
occur on July 1, 2025) or from the most recent Interest Payment Date (hereinafter defined) to
which interest has been paid or duly provided for until the Principal Amount has become due and
payment thereof has been made or duly provided for, at the per annum rates of interest specified
above computed on the basis of a 360-day year of twelve 30-day months; such interest being
payable on June 15 and December 15 of each year(each, an Interest Payment Date), commencing
June 15, 2026, other than the first interest payment which is payable on August 15, 2025.
Principal of this Note shall be payable to the Registered Owner hereof(the Holder), upon
its presentation and surrender to Stated Maturity, while Outstanding, at the corporate trust office
of UMB Bank, N.A., Austin Texas, (the Paying Agent/Registrar). Interest shall be payable to the
Holder of this Note 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 15th day of the month
next preceding each interest payment date. All payments of principal of and interest on this Note
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.
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G. Insurance Legend. If bond insurance is obtained by the Issuer or the Purchasers for
the Notes,the definitive Notes and the Initial Note shall bear an appropriate legend as provided by
the bond insurer.
[BOND INSURANCE] or [STATEMENT OF INSURANCE]
Section 9. Definitions. For all purposes of this Ordinance (as defined below), 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 Section 36
of this Ordinance have the meanings assigned to them in such Section, 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.
H. The term Authorized Officials shall mean the Mayor, the City Manager, the Chief
Financial Officer, the City Secretary, or the Deputy Chief Financial Officer.
I. The term Closing Date shall mean the date of physical delivery of the Initial Note
in exchange for the payment in full by the Purchasers.
J. 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 Issuer 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 at the maximum rate permitted by the terms thereof and further assuming in the case of
obligations required to be redeemed or prepaid as to principal prior to Stated Maturity,the principal
amounts thereof will be redeemed prior to Stated Maturity in accordance with the mandatory
redemption provisions applicable thereto.
K. The term Depository shall mean an official depository bank of the Issuer.
L. The term Government Securities, as used herein, shall mean: (i) direct noncallable
obligations of the United States, including obligations that are unconditionally guaranteed by, the
United States of America; and (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.
M. The term Holder or Holders shall mean the registered owner, whose name appears
in the Security Register, for any Note.
N. The term Interest Payment Date shall mean the date interest is payable on the Notes,
such first interest payment being on August 15, 2025, thereafter interest being payable on
21
Pr
December 15 and June 15 of each year(each, an Interest Payment Date), commencing December
15, 2025 while any of the Notes remain Outstanding.
O. The term Issuer shall mean the City of Port Arthur, Texas located in the County of
Jefferson,Texas and,where appropriate, the Governing Body of the Issuer.
P. The term Note Fund shall mean the special fund created and established by the
provisions of Section 10 of this Ordinance.
Q. The term Notes shall mean the $6,460,000 "CITY OF PORT ARTHUR, TEXAS
TAX NOTES, SERIES 2025" authorized by this Ordinance.
R. The term Ordinance shall mean this ordinance finally adopted by the Governing
Body of the Issuer on July 1, 2025.
S. The term Outstanding when used in this Ordinance with respect to Notes shall
mean,as of the date of determination,all Notes issued and delivered under this Ordinance, except:
(1) those Notes canceled by the Paying Agent/Registrar or delivered to the
Paying Agent/Registrar for cancellation;
(2) those Notes for which payment has been duly provided by the Issuer in
accordance with the provisions of Section 21 of this Ordinance; and
(3) those Notes that have been mutilated, destroyed, lost, or stolen and
replacement Notes have been registered and delivered in lieu thereof as provided in Section
17 of this Ordinance.
T. The term Purchasers shall mean the initial purchasers of the Notes named in
Section 18 of this Ordinance.
U. The term Stated Maturity shall mean the annual principal payments of the Notes
payable on February 1 of each year, as set forth in Section 2 of this Ordinance.
Section 10: Note Fund — Investments. For the purpose of paying the interest on and to
provide a sinking fund for the payment and retirement of the Notes, there shall be and is hereby
created a special fund to be designated "CITY OF PORT ARTHUR, TEXAS TAX NOTES,
SERIES 2025 INTEREST AND SINKING FUND"(the Note Fund),which fund shall be kept and
maintained at the Depository,and money deposited in such fund shall be used for no other purpose
and shall be maintained as provided in Section 19. Authorized Officials of the Issuer are hereby
authorized and directed to make withdrawals from the Note Fund sufficient to pay the principal
and interest on the Notes as the same become due and payable and shall cause to be transferred to
the Paying Agent/Registrar from money on deposit in the Note Fund an amount sufficient to pay
the amount of principal and/or interest stated to mature on the Notes, such transfer of funds to the
Paying Agent/Registrar to be made in such manner as will cause immediately available funds to
be deposited with the Paying Agent/Registrar on or before the business day next preceding each
interest and principal payment date for the Notes.
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Pending the transfer of funds to the Paying Agent/Registrar, money deposited in any fund
created and established by this Ordinance, at the option of the Issuer, may 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, secured(to the extent not insured by the Federal Deposit
Insurance Corporation) by obligations of the type hereinafter described, or be invested, as
authorized by any law, 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, Farmers Home Administration, Federal Home Loan
Mortgage Association, Small Business Administration, or Federal Housing Association;provided
that all such deposits and investments shall be made in such a manner that the money required to
be expended from such fund will be available at the proper time or times. All interest and income
derived from deposits and investments in such fund shall be credited to, and any losses debited to,
such fund. All such investments shall be sold promptly when necessary to prevent any default in
connection with the Notes.
Section 11: Tax Levy. To provide for the payment of the Debt Service Requirements on
the Notes being (i) the interest on the Notes and (ii) a sinking fund for their redemption at Stated
Maturity or a sinking fund of two percent(2%)(whichever amount shall be the greater),there shall
be and there is hereby levied for the fiscal year commencing October 1, 2025 and each succeeding
year thereafter while the Notes or any interest thereon shall remain Outstanding, a sufficient tax,
within the limitations prescribed by law, on each$100 valuation of taxable property in the Issuer,
adequate to pay such Debt Service Requirements,full allowance being made for delinquencies and
costs of collection; said tax shall be assessed and collected each year and applied to the payment
of the Debt Service Requirements, and the same shall not be diverted to any other purpose. The
taxes so levied and collected shall be paid into the Note Fund and are thereafter pledged to the
payment of the Notes. The Governing Body hereby declares its purpose and intent to provide and
levy a tax legally and fully sufficient to pay such Debt Service Requirements, it having been
determined that the existing and available taxing authority of the Issuer for such purpose is
adequate to permit a legally sufficient tax in consideration of all other outstanding indebtedness
and other obligations of the Issuer.
Section 12: Deposits to Note Fund—Surplus Note Proceeds. The Issuer hereby covenants
and agrees to cause to be deposited in the Note Fund prior to a principal and interest payment date
for the Notes, from the annual levy of an ad valorem tax or from other lawfully available funds,
amounts sufficient to fully pay and discharge promptly each installment of interest and principal
of the Notes as the same accrues or matures or comes due by reason of Stated Maturity.
Accrued interest, if any, received from the Purchasers of the Notes shall be deposited to
the Note Fund. In addition, any surplus proceeds from the sale of the Notes, including investment
income thereon, not expended for authorized purposes, as described in Section 1 hereof, shall be
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deposited in the Note Fund, and such amounts so deposited shall reduce the sums otherwise
required to be deposited in said fund from ad valorem taxes.
Section 13: Security of Funds.All money on deposit in the funds 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 the State of
Texas for the security of public funds, and money on deposit in such funds shall be used only for
the purposes permitted by this Ordinance.
Section 14: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas,the Issuer covenants and agrees particularly that in the
event the Issuer (i) defaults in the payments to be made to the Note Fund or (ii) 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 Notes shall be entitled to seek a writ of mandamus issued
by a court of proper jurisdiction compelling and requiring the Governing Body of the Issuer and
other officers of the Issuer 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 remedies herein provided shall be cumulative of all other
existing remedies and the specification of such remedies shall not be deemed to be exclusive.
Section 15: 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 at the close of business on the business day
next preceding the mailing of such notice.
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 16: Cancellation. All Notes surrendered for payment, transfer, exchange, or
replacement,if surrendered to the Paying Agent/Registrar, shall be promptly canceled by it and, if
surrendered to the Issuer, shall be delivered to the Paying Agent/Registrar and, if not already
canceled, shall be promptly canceled by the Paying Agent/Registrar. The Issuer may at any time
deliver to the Paying Agent/Registrar for cancellation any Notes previously certified or registered
and delivered which the Issuer may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Paying Agent/Registrar. All canceled Notes held by
the Paying Agent/Registrar shall be destroyed as directed by the Issuer.
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Section 17: Mutilated, Destroyed, Lost, and Stolen Notes. If (i) any mutilated Note is
surrendered to the Paying Agent/Registrar, or the Issuer and the Paying Agent/Registrar receive
evidence to their satisfaction of the destruction, loss, or theft of any Note, and (ii) there is
delivered to the Issuer 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 Issuer or the Paying
Agent/Registrar that such Note has been acquired by a bona fide purchaser, the Issuer 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 Note, a new Note 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 Note has become or is about to become
due and payable, the Issuer in its discretion may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note, or payment in lieu thereof,under this Section,the Issuer 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 Note issued pursuant to
this Section in lieu of any mutilated, destroyed, lost, or stolen Note shall constitute a replacement
of the prior obligation of the Issuer, whether or not the mutilated, destroyed, lost, or stolen Note
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 Notes. 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 Notes.
Section 18: Sale of Notes—Approval of Purchaser—Use of Proceeds. The Note is hereby
initially sold and shall be delivered to (the"Purchaser"),for cash for the par value
thereof and no accrued interest, pursuant to a Purchase Letter, in substantially the form attached
hereto as Exhibit B, which the Mayor and Mayor Pro-Tem are each hereby authorized to accept,
approve all changes, and execute on behalf of the City. In satisfaction of Section 1201.022(a)(3),
Texas Government Code the City Council hereby determines that the final terms of the Note as set
forth in this Ordinance are in the City's best interests. The Note initially shall be registered in the
name of
Proceeds from the sale of the Notes shall be applied as follows:
(1) The Issuer received a reoffering premium from the sale of the Notes of
$ , which is hereby allocated by the Issuer in the following manner: (i)
$ shall be used to pay costs of issuance; (ii) $ shall be used to
pay the Purchasers' discount; (iii) $ shall be deposited to the Note Fund as the rounding
amount; and(iv) $ shall be deposited into the special construction account or accounts
as described in subsection(2)below.
(2) $ (representing $ .00 of principal and
$ of the reoffering premium) shall be deposited into the special construction
account or accounts created for the projects to be constructed with the proceeds of the
Notes. This special construction account shall be established and maintained at the
Depository and shall be invested in accordance with the provisions of Section 10 of this
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Ordinance.Interest earned on the proceeds of the Notes pending completion of construction
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 12 of this Ordinance.
Section 19: Covenants Regarding Tax Exemption of Interest on the Notes.
V. Covenants. The City covenants to take any action necessary to assure, or refrain
from any action which would adversely affect,the treatment of the Notes as obligations described
in section 103 of the Internal Revenue Code of 1986,as amended(the Code),the interest on which
is not includable in the "gross income" of the holder for purposes of federal income taxation. In
furtherance thereof, the City covenants as follows:
(1) to take any action to assure that no more than 10% of the proceeds of the
Notes or the projects financed or refinanced therewith(less amounts deposited to a reserve
fund,if any) are used for any"private business use,"as defined in section 141(b)(6)of the
Code or, if more than 10% of the proceeds of the Notes or the projects financed or
refinanced therewith are so used, such amounts, whether or not received by the City, with
respect to such private business use, do not, under the terms of this Ordinance or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more
than 10% of the debt service on the Notes, in contravention of section 141(b)(2) of the
Code;
(2) to take any action to assure that in the event that the"private business use"
described in subsection(1) hereof exceeds 5 percent (5%) of the proceeds of the Notes or
the projects financed or refinanced therewith (less amounts deposited into a reserve fund,
if any) then the amount in excess of 5 percent (5%) is used for a "private business use"
which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of
the Code,to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser
of$5,000,000, or 5 percent(5%) of the proceeds of the Notes(less amounts deposited into
a reserve fund, if any) is directly or indirectly used to finance loans to persons, other than
state or local governmental units,in contravention of section 141(c)of the Code;
(4) to refrain from taking any action which would otherwise result in the Notes
being treated as"private activity bonds"within the meaning of section 141(b)of the Code;
(5) to refrain from taking any action that would result in the Notes being
"federally guaranteed"within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of the Notes, directly or
indirectly,to acquire or to replace funds which were used, directly or indirectly,to acquire
investment property (as defined in section 148(b)(2) of the Code) which produces a
materially higher yield over the term of the Notes,other than investment property acquired
with--
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(A) proceeds of the Notes invested for a reasonable temporary period of
3 years or less or, in the case of a refunding bond, for a period of 90 days or less
until such proceeds are needed for the purpose for which the Notes are issued,
(B) amounts invested in a bona fide debt service fund, within the
meaning of section 1.148-1(b)of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed 10%of the proceeds of
the Notes;
(7) to otherwise restrict the use of the proceeds of the Notes or amounts treated
as proceeds of the Notes, as may be necessary, so that the Notes do not otherwise
contravene the requirements of section 148 of the Code(relating to arbitrage);
(8) refrain from using the proceeds of the Notes or proceeds of any prior bonds
to pay debt service on another issue more than 90 days after the date of issue of the Notes
in contravention of the requirements of section 149(d) of the Code (relating to advance
refundings); and
(9) to pay to the United States of America at least once during each five-year
(5)period(beginning on the date of delivery of the Notes) an amount that is at least equal
to 90%of the"Excess Earnings,"within the meaning of section 148(f) of the Code and to
pay to the United States of America, not later than 60 days after the Notes have been paid
in full, 100% of the amount then required to be paid as a result of Excess Earnings under
section 148(f) of the Code.
W. Rebate Fund. In order to facilitate compliance with the above covenant (9), a
"Rebate Fund" is hereby established by the City for the sole benefit of the United States of
America, and such fund shall not be subject to the claim of any other person, including without
limitation the noteholders.The Rebate Fund is established for the additional purpose of compliance
with section 148 of the Code.
X. Proceeds. The City understands that the term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds(if any) and proceeds of the refunded bonds expended prior to the date of issuance of the
Notes. It is the understanding of the City that the covenants contained herein are intended to assure
compliance with the Code and any regulations or rulings promulgated by the U.S. Department of
the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated
which modify or expand provisions of the Code, as applicable to the Notes, the City will not be
required to comply with any covenant contained herein to the extent that such failure to comply,
in the opinion of nationally recognized bond counsel,will not adversely affect the exemption from
federal income taxation of interest on the Notes under section 103 of the Code. In the event that
regulations or rulings are hereafter promulgated which impose additional requirements which are
applicable to the Notes, the City agrees to comply with the additional requirements to the extent
necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from
federal income taxation of interest on the Notes under section 103 of the Code. In furtherance of
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such intention, the City hereby authorizes and directs the Mayor,the City Manager and the Chief
Financial Officer of the City to execute any documents,certificates or reports required by the Code
and to make such elections, on behalf of the City, which may be permitted by the Code as are
consistent with the purpose for the issuance of the Notes.
Y. Allocation of, and Limitation on,Expenditures for the Project. The City covenants
to account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance on its books and records in accordance with the
requirements of the Internal Revenue Code. The City recognizes that in order for the proceeds to
be considered used for the reimbursement of costs,the proceeds must be allocated to expenditures
within 18 months of the later of the date that (1) the expenditure is made, or (2) the project is
completed; but in no event later than 3 years after the date on which the original expenditure is
paid. The foregoing notwithstanding, the Issuer recognizes that in order for proceeds to be
expended under the Internal Revenue Code, the sale proceeds or investment earnings must be
expended no more than 60 days after the earlier of(1)the fifth(5th) anniversary of the delivery of
the Notes, or(2)the date the Notes are retired. The City agrees to obtain the advice of nationally-
recognized bond counsel if such expenditure fails to comply with the foregoing to assure that such
expenditure will not adversely affect the tax-exempt status of the Notes. For purposes hereof, the
City shall not be obligated to comply with this covenant if it obtains an opinion that such failure
to comply will not adversely affect the excludability for federal income tax purposes from gross
income of the interest.
Z. Disposition of Project. The City covenants that the property constituting the
projects financed or refinanced with the proceeds of the Notes will not be sold or otherwise
disposed in a transaction resulting in the receipt by the City of cash or other compensation,unless
the City obtains an opinion of nationally-recognized bond counsel that such sale or other
disposition will not adversely affect the tax-exempt status of the Notes. For purposes of the
foregoing, the portion of the property comprising personal property and disposed in the ordinary
course shall not be treated as a transaction resulting in the receipt of cash or other compensation.
For purposes hereof, the City shall not be obligated to comply with this covenant if it obtains an
opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the interest.
AA. Written Procedures. Unless superseded by another action of the City, to ensure
compliance with the covenants contained herein regarding private business use,remedial actions,
arbitrage and rebate, the City Council hereby adopts and establishes the instructions attached
hereto as Exhibit C as the City's written procedures.
Section 20: Control and Custody of Notes.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 Notes 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 Notes to the Purchasers.
Section 21: Satisfaction of Obligation of Issuer. If the Issuer shall pay or cause to be paid,
or there shall otherwise be paid to the Holders,the principal and interest on the Notes, at the times
and in the manner stipulated in this Ordinance,then the pledge of taxes levied under this Ordinance
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and all covenants, agreements, and other obligations of the Issuer to the Holders shall thereupon
cease, terminate, and be discharged and satisfied.
Notes, 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 Notes or the principal amount(s)thereof at Stated Maturity,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 Notes, or the
principal amount(s) thereof, at the Stated Maturity thereof. In the event of a defeasance of the
Notes, the Issuer shall deliver a certificate from its financial advisors,the Paying Agent/Registrar,
an independent accounting firm, or another qualified third party concerning the deposit of cash
and/or Government Securities to pay, when due, the principal of and interest due on any defeased
Notes. To the extent applicable, if at all, the Issuer 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 Notes to be treated as arbitrage bonds within the meaning of section 148 of the
Code(as defined in Section 19 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 Notes, or any principal
amount(s) thereof, or interest thereon with respect to which such money has been so deposited
shall be remitted to the Issuer or deposited as directed by the Issuer. Furthermore, any money held
by the Paying Agent/Registrar for the payment of the principal of and interest on the Notes and
remaining unclaimed for a period of three (3) years after the Stated Maturity of the Notes such
money was deposited and is held in trust to pay shall upon the request of the Issuer be remitted to
the Issuer against a written receipt therefor, subject to the unclaimed property laws of the State of
Texas.
Section 22: Printed Opinion. The Purchasers' obligation to accept delivery of the Notes is
subject to its being furnished a final opinion of Holland&Knight LLP as Bond Counsel,approving
certain legal matters as to the Notes, said opinion to be dated and delivered as of the date of initial
delivery and payment for such Notes. Printing of a true and correct copy of this opinion on the
reverse side of each of the Notes, with appropriate certificate pertaining thereto executed by
facsimile signature of the City Secretary of the Issuer is hereby approved and authorized.
Section 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive
Notes. It is expressly provided, however, that the presence or absence of CUSIP numbers on the
definitive Notes shall be of no significance or effect as regards the legality thereof, and neither the
Issuer nor attorneys approving said Notes as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Notes.
Section 24: Effect of Headings. The Section headings herein are for convenience only and
shall not affect the construction hereof.
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Section 25: Ordinance a Contract — Amendments — Outstanding Notes. The Issuer
acknowledges that the covenants and obligations of the Issuer herein contained are a material
inducement to the purchase of the Notes. This Ordinance shall constitute a contract with the
Holders from time to time, shall be binding on the Issuer and its successors and assigns, and shall
not be amended or repealed by the Issuer so long as any Note remains Outstanding except as
permitted in this Section. The Issuer 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 Issuer may, with the written consent of Holders holding a majority in
aggregate principal amount of the Notes then Outstanding affected thereby, amend, add to, or
rescind any of the provisions of this Ordinance; provided, however that, without the consent of
all Holders of Outstanding Notes,no such amendment, addition, or rescission shall(1)extend the
time or times of payment of the principal of,and interest on the Notes,reduce the principal amount
thereof, or the rate of interest thereon, or in any other way modify the terms of payment of the
principal of, or interest on the Notes, (2) give any preference to any Note over any other Note, or
(3)reduce the aggregate principal amount of Notes required for consent to any such amendment,
addition, or rescission.
Section 26: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the Issuer, Bond Counsel,
Paying Agent/Registrar, the Purchasers, 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 Issuer, Bond
Counsel, the Paying Agent/Registrar, the Purchasers, and the Holders.
Section 27: Inconsistent Provisions.All ordinances and resolutions,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 ordained herein.
Section 28: 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 29: 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 30: 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 Governing Body hereby declares that this Ordinance would have been enacted without such
invalid provision.
Section 31: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 Governing Body.
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Section 32: [Reserved-,
Section 33: 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 34: 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 Issuer 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 35:No Recourse Against Issuer Officials.No recourse shall be had for the payment
of principal or interest on any Note or for any claim based thereon or on this Ordinance against
any official of the Issuer or any person executing any Note.
Section 36: Continuing Disclosure Undertaking—Annual Reports.
BB. 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
"financial obligation"shall not include municipal securities(as defined in the Securities Exchange
Act of 1934, as amended) as to which a final 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 Issuer's continuing disclosure undertaking, described in
subsections B through F below,hereunder accepted and entered into by the Issuer for the purpose
of compliance with the Rule.
CC. Annual Reports. The Issuer shall file annually with the MSRB (1) within six
(6) months after the end of each fiscal year of the Issuer ending in or after 2025, financial
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information and operating data with respect to the Issuer of the general type included in the final
Official Statement authorized by Section 18 of this Ordinance,being the information described in
Exhibit D hereto, and (2) if not provided as part such financial information and operating data,
audited financial statements of the Issuer, when and if available. Any financial statements so to be
provided shall be(i)prepared in accordance with the accounting principles described in Exhibit D
hereto, or such other accounting principles as the Issuer may be required to employ from time to
time pursuant to state law or regulation,and(ii)audited,if the Issuer 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
Issuer 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 financial statements
becomes available. Under current Texas law, including, but not limited to, Chapter 103, as
amended, Texas Local Government Code, the Issuer must have its records and accounts audited
annually and shall have an annual financial statement prepared based on the audit. The annual
financial statement, including the auditor's opinion on the statement, shall be filed in the office of
the City Secretary within 180 days after the last day of the Issuer's fiscal year. Additionally,upon
the filing of this financial statement and the annual audit,these documents are subject to the Texas
Open Records Act, as amended, Texas Government Code, Chapter 552.
If the Issuer changes its fiscal year, it will file notice of such change(and of the date of the
new fiscal year end)with the MSRB prior to the next date by which the Issuer otherwise would be
required to provide financial information and operating data pursuant to this Section.
DD. Notice of Certain Events. The Issuer shall file notice of any of the following events
with respect to the Notes 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;
(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 exempt status of
the Notes, or other material events affecting the tax status of the Notes;
(7) modifications to rights of Holders of the Notes, if material;
(8) Note calls, if material, and tender offers;
(9) defeasances;
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(10) release, substitution, or sale of property securing repayment of the Notes, if
material;
(11) rating changes;
(12) bankruptcy, insolvency, receivership, or similar event of the Issuer, 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 Issuer, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the Issuer, 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 Issuer, 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 Issuer 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 Issuer, 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 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
Issuer, and(b)the Issuer 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 Issuer shall file notice with the MSRB,in a timely manner,of any failure by the Issuer
to provide financial information or operating data in accordance with this Section by the time
required by this Section.
EE. Limitations, Disclaimers, and Amendments. The Issuer shall be obligated to
observe and perform the covenants specified in this Section for so long as,but only for so long as,
the Issuer remains an"obligated person"with respect to the Notes within the meaning of the Rule,
except that the Issuer in any event will give notice of any deposit that causes the Notes to be no
longer Outstanding.
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The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Notes, 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 Issuer 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 Issuer'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 Issuer does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Notes at any future date.
UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY NOTE OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE ISSUER,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 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 Issuer in observing or performing their 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 Issuer under federal and state securities laws.
The provisions of this Section may be amended by the Issuer 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 Issuer, but only if(i) the provisions of
this Section, as so amended,would have permitted an underwriter to purchase or sell Notes in the
primary offering of the Notes 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 (or any
greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the Outstanding Notes consent to such amendment or (b) a person that is
unaffiliated with the Issuer (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holders and beneficial owners of the
Notes. The Issuer 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 Issuer 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 Notes in the primary offering of the Notes,giving effect to(i)such provisions
as so amended and(ii) any amendments or interpretations of the Rule. If the Issuer so amends the
provisions of this Section, the Issuer shall include with any amended financial information or
operating data next provided in accordance with this Section an explanation, in narrative form, of
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the reasons for the amendment and of the impact of any change in the type of financial information
or operating data so provided.
FF. Information Format—Incorporation by Reference. The Issuer 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 SEC.
GG. General Policies and Procedures Concerning Compliance with the Rule. Because
the issuance of the Notes is subject to the provisions of the Rule and because the potential
"underwriters" in a negotiated sale of the Notes or the initial purchasers in a competitive sale of
the Notes may be subject to MSRB rules and regulations with respect to such sale (including
certain due diligence and suitability requirements, among others), the Issuer hereby adopts the
General Policies and Procedures Concerning Compliance with the Rule (the Policies and
Procedures), attached hereto as Exhibit E,with which the Issuer shall follow to assure compliance
with the Undertaking. The Issuer 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 Issuer's financial affairs,its co-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 Issuer and any such amendment will not be deemed to be an
amendment to the Undertaking. Each Authorized Official is hereby authorized to amend the
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 37: Reserved.
Section 38: Further Procedures. The officers and employees of the Issuer 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 Issuer 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 Notes,the Paying Agent/Registrar Agreement,the Purchase Contract, and
the Official Statement. In addition, prior to the initial delivery of the Notes, 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
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Fir
described in the Official Statement, (ii) obtain a rating from any of the national bond rating
agencies, or(iii) obtain the approval of the Notes by the Texas Attorney General's office. In case
any officer of the Issuer 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 39: Ancillary Bond Contracts. Though such parties may be identified, and the
entry into a particular form of contract may be authorized herein, pursuant to Chapter 1371, and
any other applicable law, the Governing Body, hereby delegates to each Authorized Official
(other than the Mayor) the authority to independently select the counterparty to any agreement
with any paying agent/registrar, rating agency, securities depository,or any other contract that is
determined by an Authorized Official(other than the Mayor),the City's Financial Advisor,or the
City's Bond Counsel to be necessary or incidental to the issuance of the Notes 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. As a result of such
delegation, the provisions of Section 2252.908, as amended, Texas Government Code, are not
applicable to the Ancillary Bond Contracts pursuant to 1 Texas Administrative Code Section
46.1(c).
Section 40: Perfection of Security Interest. Chapter 1208, Texas Government Code,
applies to the issuance of the Notes and the pledge of ad valorem taxes granted by the Issuer in
Section 11, and such pledge is therefore valid, effective, and perfected. If Texas law is amended
at any time while the Notes are outstanding and unpaid such that the pledge of ad valorem taxes
granted by the Issuer 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 Notes the perfection of
the security interest in this pledge, the Issuer agrees to take such measures as it determines are
reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9,
Texas Business&Commerce Code and enable a filing to perfect the security interest in this pledge
to occur.
Section 41: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 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 any 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 Notes; 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 Notes.
Section 42: Effective Date. 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, this 4th day of June, 2025, A.D., 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
Signature Page- 1
APPROVED AS TO FORM:
Roxann Pais Cotroneo
City Attorney
APPROVED FOR ADMINISTRATION:
Ronald Burton, CPM, City Manager
Lynda Boswell, Director of Finance
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INDEX OF SCHEDULES AND EXHIBITS
Schedule I—Approval Certificate
Exhibit A—Paying Agent/Registrar Agreement
Exhibit B—Purchaser Letter
Exhibit C—Written Procedures Relating to Continuing Compliance with Federal Tax Covenants
Exhibit D—Description of Annual Financial Information
Exhibit E—General Policies and Procedures Concerning Compliance With the Rule
[The remainder of this page intentionally left blank]
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p
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab No.
A- 1
Pr-
EXHIBIT B
[address]
PURCHASE LETTER
June 4, 2025
City of Port Arthur, Texas
444 4th Street
Port Arthur, Texas 77640
Re: $6,460,000 City of Port Arthur,Texas Tax Note, Series 2025 (the"Note")
The undersigned (the "Bank"), as purchaser of $6,460,000 in principal amount of the
captioned obligation (the "Note"), hereby acknowledges and confirms that it has been furnished
such financial, statistical and other information with respect to the City of Port Arthur, Texas(the
"Issuer")and the Note,including a certified copy of the ordinance of the City Council of the Issuer
which authorized the issuance of the Note(the"Ordinance"), as the Bank has requested as a result
of it having attached significance thereto to enable it to make an informed decision with respect to
the purchase of the Note. All terms not otherwise defined herein shall have the meaning assigned
to such term in the Ordinance.
The Bank understands that the Note is a general obligation of the Issuer, issued on the full
faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of
the interest on and principal of the Note, as such interest comes due and such principal matures,
have been levied and ordered to be levied against all taxable property in the Issuer, and will be
pledged for such payment, within limits provided by law, all as provided in the Ordinance. All
terms not otherwise defined herein shall have the meaning assigned to such term in the Ordinance.
In connection with its purchase of the Note, the Bank agrees as follows:
A. Delivery of the Note to the Bank(the"Closing")shall be made at the Bank on July 2,2025,
it being understood that this delivery date may be extended by mutual consent of the Bank
and the Issuer.
B. Principal installments of the Note shall (i) be payable on June 15 in each of the years and
in the respective principal amounts, except the first principal payment which shall be
August 15, 2025, and(ii)bear interest from Closing to their respective date of payment at
the respective interest rates, all as set forth below:
Years of Stated Principal Interest
Maturity(6/15) Amounts Rates
8/15/2025 $1,420,000 4.500%
Signature Page to the Purchase Letter Relating to
City of Port Arthur,Texas Tax Note,Series 2025
#522392314_v1
6/15/2026 640,000 4.500
6/15/2027 655,000 4.500
6/15/2028 685,000 4.500
6/15/2029 715,000 4.500
6/15/2030 750,000 4.500
6/15/2031 780,000 4.500
6/15/2032 815,000 4.500
C. Interest on the Note shall be payable on each June 15 and December 15, commencing on
June 15, 2026, except for the first interest payment date which shall be August 15, 2025,
until stated maturity or prior redemption. The Note is subject to redemption prior to stated
maturity on any day at par, with thirty(30) day's written notice to the registered owner.
D. The Note will be fully registered as to principal and interest, and UMB Bank,N.A.Austin,
Texas shall serve as the initial paying agent and registrar for the Note at no cost.
E. In regard to its purchase of the Note, the Bank acknowledges that no prospectus or other
offering document has been prepared; however, the Issuer has furnished the Bank with a
term sheet and all information requested by the Bank to permit the Bank to make an
informed decision concerning its purchase of the Note, and the Bank has made such
inspections and investigations as it has deemed necessary to determine the credit quality of
the Note and to assess the risk factors associated with the purchase and ownership of the
Note. The Bank hereby acknowledges and represents that it is familiar with the financial
condition of the Issuer and the ability of the Issuer to timely pay the principal of and interest
on the Note. The Bank has been furnished with such financial information relating to the
Issuer as it has requested for the purposes of making its assessment of the purchase of the
Note. The Bank has had a reasonable opportunity to request and review such other
information as it needs from the Issuer in order to enable it to make its purchase decision.
The Bank is not relying on Holland & Knight LLP, the Issuer's Bond Counsel, as to the
completeness or accuracy of any financial information provided to the Bank by the Issuer
in connection with its determination to purchase the Note. In connection with the purchase
of the Note,the Bank is not acting in a fiduciary capacity to the Issuer or in the capacity of
a broker, dealer, municipal securities underwriter, financial advisor or municipal advisor.
F. The Note is being purchased by the Bank for the account of the Bank as evidence of a loan
(and not on behalf of another), and the Bank has no present intention of reselling such Note
or dividing its interest therein (other than to a wholly-owned affiliate of the Bank), either
currently or after the passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or circumstance; provided,
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however, that the Bank reserves the right to sell, pledge, transfer, convey, hypothecate,
participate interests in or dispose of the Note at some future date.
G. The Bank acknowledges that the Note will not be listed on any securities exchange.
Further, no trading market now exists for the Note, and none may exist in the future.
Accordingly,the Bank understands that it may need to bear the risks of the purchase for an
indefinite time,since any sale prior to the maturity for the Note may not be possible or may
be at a price below that which the Bank is paying for the Note.
H. It is understood and agreed that the Bank is buying the Note in a private placement by the
Issuer to the Bank. The Issuer has not undertaken to make any on-going disclosures for
the benefit of the registered owner of the Note in accordance with Rule 15c2-12 of the
Securities and Exchange Commission.
The Bank hereby represents and warrants that it is exempt from the requirements of Section
2252.908 of the Texas Government Code, as amended, pursuant to subsection (c)(4)
thereof. Accordingly, it is not required to file a Certificate of Interested Party Form 1295.
J. The Bank makes the following representations and covenants pursuant to Chapters 2252,
2271, 2274, and 2276, Texas Government Code, as heretofore amended (the "Covered
Verifications"), in entering into this agreement. As used in such verifications, "affiliate"
means an entity that controls, is controlled by, or is under common control with the Bank
within the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit.
Liability for breach of any such verification during the term of this agreement shall survive
until barred by the applicable statute of limitations,and shall not be liquidated or otherwise
limited by any provision of this agreement, notwithstanding anything in this agreement to
the contrary. In addition,the City reserves and retains all rights and remedies at law and in
equity for pursuit and recovery of damages, if any, relating to the Covered Verifications.
i. Not a Sanctioned Company. The Bank represents that neither it nor any of its parent
company,wholly-or majority-owned subsidiaries,and other affiliates is a company
identified on a list prepared and maintained by the Texas Comptroller of Public
Accounts under Section 2252.153 or Section 2270.0201, Government Code, as
amended. The foregoing representation excludes the Bank and each of its parent
company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that
the United States government has affirmatively declared to be excluded from its
federal sanctions regime relating to Sudan or Iran or any federal sanctions regime
relating to a foreign terrorist organization.
ii. No Boycott of Israel. The Bank hereby verifies that it and its parent company,
wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott
Israel and will not boycott Israel during the term of this agreement. As used in the
foregoing verification, "boycott Israel" has the meaning provided in Section
2271.001, Government Code, as amended.
iii. No Discrimination Against Firearm Entities. The Bank hereby verifies that it and
its parent company, wholly-or majority-owned subsidiaries, and other affiliates, if
3
#522392314_v1
any,do not have a practice,policy,guidance,or directive that discriminates against
a firearm entity or firearm trade association and will not discriminate against a
firearm entity or firearm trade association during the term of this agreement. As
used in the foregoing verification, "discriminate against a firearm entity or firearm
trade association"has the meaning provided in Section 2274.001(3), Government
Code, as amended.
iv. No Boycott of Energy Companies. The Bank hereby verifies that it and its parent
company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do
not boycott energy companies and will not boycott energy companies during the
term of this agreement. As used in the foregoing verification, "boycott energy
companies"has the meaning provided in Section 2276.001(1), Government Code,
as amended.
K. The Bank represents that it has on file with the Attorney General of the State(the"Attorney
General") a standing letter in substantially the form included as Exhibit A in the All Bond
Counsel Letter of the Attorney General dated 1, 2025. The Bank will provide
such other representations, certifications, or assurances required by the Issuer or the
Attorney General to evidence compliance with State law.
L. The Issuer covenants that it will deliver to the Bank its audited financial statements within
270 days after each fiscal year end, commencing with the fiscal year ending on September
30, 2025.
The Bank's obligation to purchase the Note is conditioned on the Bank's receipt of following
items:
(i) an opinion of Holland&Knight LLP, as Bond Counsel to the Issuer, as to the validity and
enforceability of the Note and the excludability of interest on the Note from federal income
taxation;
(ii) an unqualified opinion of the Attorney General of the State, relating to the legality and
validity of the Note and approving the Note as required by law;
(iii) evidence reflecting the registration of the Note by the Comptroller of Public Accounts of
the State of Texas as required by law; and
(iv) a certificate or certificates, dated the date of closing, of appropriate officials of the Issuer,
to the effect that (a) the Issuer is not a party to any litigation or other proceeding pending
or,to such official's knowledge,threatened which,if decided adversely to the Issuer,would
have a materially adverse effect on the financial condition of the Issuer, and (b) there has
not been any materially adverse change in the financial condition of the Issuer since
September 30, 2022,the latest date as of which audited financial information is available.
(v) from the time of the execution and delivery of this letter to the date of delivery of the Note
to Purchaser, there shall not have occurred(i) any material adverse change in the financial
condition or general affairs of the Issuer affecting, in Purchaser's reasonable opinion, the
ability of the Issuer to issue its proposed notes and repay the Note and accrued interest
4
#522392314_v1
thereon in full at maturity or upon prior redemption with the proceeds of such notes; (ii)an
event, court decision, proposed law or rule negatively effecting the tax status of the Note
under the Code; or (iii) any material market disruption, including but not limited to
international or national crisis, suspension of stock exchange trading, or banking
moratorium negatively and materially affecting, in Purchaser's reasonable opinion, the
market price of the Note.
(Execution Page Follows)
5
#522392314 v1
Very truly yours,
By:
Name:
Title:
AGREED TO AND ACCEPTED
this day of , 2025.
CITY OF PORT ARTHUR,TEXAS
By:
Name:
Title:
C- 1
EXHIBIT C
WRITTEN PROCEDURES RELATING TO
CONTINUING COMPLIANCE WITH FEDERAL TAX COVENANTS
A. Arbitrage. With respect to the investment and expenditure of the proceeds of the
Notes, the City's Chief Financial Officer, or its designee, (the Responsible Person)will:
(i) monitor all amounts deposited into a sinking fund or funds(e.g.,the Interest
and Sinking Fund),to assure that the maximum amount invested at a yield higher than the
yield on the Notes does not exceed an amount equal to the debt service on the Notes in
the succeeding 12 month period plus a carryover amount equal to one-twelfth (1/12) of
the principal and interest payable on the Notes for the immediately preceding 12-month
period;
(ii) ensure that the applicable information return(e.g.,IRS Form 8038-G, 8038-
GC, or any successor forms)is timely filed with the IRS; and
(iii) assure that, unless excepted from rebate and yield restriction under section
148(f) of the Code, excess investment earnings are computed and paid to the U.S.
government at such time and in such manner as directed by the IRS (A) at least every 5
years after the date of delivery of the Notes (the Issue Date), and(B)within 30 days after
the date the Notes are retired.
B. Private Business Use.With respect to the use of the facilities financed or refinanced
with the proceeds of the Notes the Responsible Person will:
(i) monitor the date on which the facilities are substantially complete and
available to be used for the purpose intended;
(ii) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has any contractual right (such as a lease, purchase, management or other service
agreement)with respect to any portion of the facilities;
(iii) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has a right to use the output of the facilities(e.g., water, gas, electricity);
(iv) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has a right to use the facilities to conduct or to direct the conduct of research;
(v) determine whether,at any time the Notes are outstanding,any person, other
than the City, has a naming right for the facilities or any other contractual right granting
an intangible benefit;
C-2
#522392314_v1
(vi) determine whether, at any time the Notes are outstanding, the facilities are
sold or otherwise disposed of; and
(vii) take such action as is necessary to remediate any failure to maintain
compliance with the covenants contained in the Ordinance related to the public use of the
facilities.
C. Record Retention.The Responsible Person will maintain or cause to be maintained
all records relating to the investment and expenditure of the proceeds of the Notes and the use of
the facilities financed or refinanced thereby for a period ending three (3) years after the complete
extinguishment of the Notes. If any portion of the Notes is refunded with the proceeds of another
series of tax-exempt obligations, such records shall be maintained until the three(3)years after the
refunding obligations are completely extinguished. Such records can be maintained in paper or
electronic format.
D. Responsible Person. The Responsible Person shall receive appropriate training
regarding the City's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use of the
facilities financed or refinanced with the proceeds of the Notes. The foregoing notwithstanding,
the Responsible Person is authorized and instructed to retain such experienced advisors and agents
as may be necessary to carry out the purposes of these instructions.
[The remainder of this page intentionally left blank.]
•
C-3
#522392314_v1
EXHIBIT D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
Information and Data with Respect to the Issuer
The information and data with respect to the Issuer referred to in Section 36 of this
' information and operating data specified and included in
Ordinance are the quantitative financial p g p �
the Appendix or under the headings of the Official Statement referred to)below:
1. The Issuer's audited financial statements for the most recently concluded fiscal year
or to the extent these audited financial statements are not available, the unaudited financial
statements of the Issuer for the most recently concluded fiscal year.
2. The quantitative financial information and operating data of the Issuer of the
general type included in Appendix A, of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board
from time to time.
[The remainder of this page is intentionally left blank.]
E- 1
EXHIBIT E
GENERAL POLICIES AND PROCEDURES CONCERNING COMPLIANCE WITH THE
RULE
I. Capitalized terms used in this Exhibit have the meanings ascribed thereto in Section 36 of
the Ordinance.Notes refer to the Notes that are the subject of the Ordinance to which this Exhibit
is attached.
II. As a capital markets participant, the Issuer 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 nonexempt
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 Issuer's compliance with the Rule.
III. The Issuer 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 36C of the Ordinance, which provisions are a part of the Undertaking.
IV. The Issuer is aware that "participating underwriters" (as such term is defined in the Rule)
of the Notes must make inquiry and reasonably believe that the Issuer 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 Issuer 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 Issuer's informal policies,procedures, and processes
utilized prior to the Effective Date for compliance with the Issuer's obligations under the Rule,the
advice from and discussions with the Issuer's internal senior staff(including staff charged with
administering the Issuer'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 Chief Financial Officer (the Compliance Officer) shall be responsible for
satisfying the Issuer'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 Issuer's
information of the type described in Section 36B of the Ordinance;
3. the Compliance Officer shall promptly determine the occurrence of any of the
events described in Section 36C of the Ordinance;
F- 1
4. the Compliance Officer shall work with external consultants of the Issuer, as and
to the extent necessary, to timely prepare and file with the MSRB the annual information of the
Issuer 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 Issuer, and (upon
to materiallyimpact the
identification) determiningif such Financial Obligation has the potential p
g
security or source of repayment of the Notes;
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 Issuer 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 financial
difficulties of the Issuer; 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
Issuer's internal staff identified by the Compliance Officer to assist with the Issuer's satisfaction
of the terms and provisions of the Undertaking.
F-2
#522392314_v1
READ, ADOPTED, AND APPROVED, this 4th day of June, 2025, A.D., 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
Signature Page - I
APPROVED AS TO FORM:
° Roxann Pais Cotroneo
City Attorney
APPROVED FOR ADMINISTRATION:
Ronald Burton, , ity Manager
A(6, eLe_di
Lynda Boswell, Director of Finance
2
#l522392314_v1
INDEX OF SCHEDULES AND EXHIBITS
Schedule I—Approval Certificate
Exhibit A—Paying Agent/Registrar Agreement
Exhibit B —Purchaser Letter
Exhibit C—Written Procedures Relating to Continuing Compliance with Federal Tax Covenants
Exhibit D—Description of Annual Financial Information
Exhibit E—General Policies and Procedures Concerning Compliance With the Rule
[The remainder of this page intentionally left blank.]
3
4522392314_v1
EXHIBIT A
PAYING AGENT/REGISTRAR AGREEMENT
See Tab No.
A- 1
r
EXHIBIT B
[address]
PURCHASE LETTER
June 4, 2025
City of Port Arthur, Texas
444 4th Street
Port Arthur, Texas 77640
Re: $6,460,000 City of Port Arthur, Texas Tax Note, Series 2025 (the "Note")
The undersigned (the "Bank"), as purchaser of $6,460,000 in principal amount of the
captioned obligation (the "Note"), hereby acknowledges and confirms that it has been furnished
such financial, statistical and other information with respect to the City of Port Arthur, Texas (the
"Issuer")and the Note, including a certified copy of the ordinance of the City Council of the Issuer
which authorized the issuance of the Note (the "Ordinance"), as the Bank has requested as a result
of it having attached significance thereto to enable it to make an informed decision with respect to
the purchase of the Note. All terms not otherwise defined herein shall have the meaning assigned
to such term in the Ordinance.
The Bank understands that the Note is a general obligation of the Issuer, issued on the full
faith and credit thereof; and that annual ad valorem taxes sufficient to provide for the payment of
the interest on and principal of the Note, as such interest comes due and such principal matures,
have been levied and ordered to be levied against all taxable property in the Issuer, and will be
pledged for such payment, within limits provided by law, all as provided in the Ordinance. All
terms not otherwise defined herein shall have the meaning assigned to such term in the Ordinance.
In connection with its purchase of the Note, the Bank agrees as follows:
A. Delivery of the Note to the Bank(the"Closing")shall be made at the Bank on July 2,2025,
it being understood that this delivery date may be extended by mutual consent of the Bank
and the Issuer.
B. Principal installments of the Note shall (i) be payable on June 15 in each of the years and
in the respective principal amounts, except the first principal payment which shall be
August 15, 2025, and (ii) bear interest from Closing to their respective date of payment at
the respective interest rates, all as set forth below:
Years of Stated Principal Interest
Maturity (6/15) Amounts Rates
8/15/2025 $1,420,000 4.500%
Signature Page to the Purchase Letter Relating to
City of Port Arthur, Texas Tax Note, Series 2025
#522392314_v1
6/15/2026 640,000 4.500
6/15/2027 655,000 4.500
6/15/2028 685,000 4.500
6/15/2029 715,000 4.500
6/15/2030 750,000 4.500
6/15/2031 780,000 4.500
6/15/2032 815,000 4.500
C. Interest on the Note shall be payable on each June 15 and December 15, commencing on
June 15, 2026, except for the first interest payment date which shall be August 15, 2025,
until stated maturity or prior redemption. The Note is subject to redemption prior to stated
maturity on any day at par, with thirty (30) day's written notice to the registered owner.
D. The Note will be fully registered as to principal and interest, and UMB Bank,N.A. Austin,
Texas shall serve as the initial paying agent and registrar for the Note at no cost.
E. In regard to its purchase of the Note, the Bank acknowledges that no prospectus or other
offering document has been prepared; however, the Issuer has furnished the Bank with a
term sheet and all information requested by the Bank to permit the Bank to make an
informed decision concerning its purchase of the Note, and the Bank has made such
inspections and investigations as it has deemed necessary to determine the credit quality of
the Note and to assess the risk factors associated with the purchase and ownership of the
Note. The Bank hereby acknowledges and represents that it is familiar with the financial
condition of the Issuer and the ability of the Issuer to timely pay the principal of and interest
on the Note. The Bank has been furnished with such financial information relating to the
Issuer as it has requested for the purposes of making its assessment of the purchase of the
Note. The Bank has had a reasonable opportunity to request and review such other
information as it needs from the Issuer in order to enable it to make its purchase decision.
The Bank is not relying on Holland & Knight LLP, the Issuer's Bond Counsel, as to the
completeness or accuracy of any financial information provided to the Bank by the Issuer
in connection with its determination to purchase the Note. In connection with the purchase
of the Note,the Bank is not acting in a fiduciary capacity to the Issuer or in the capacity of
a broker, dealer, municipal securities underwriter, financial advisor or municipal advisor.
F. The Note is being purchased by the Bank for the account of the Bank as evidence of a loan
(and not on behalf of another), and the Bank has no present intention of reselling such Note
or dividing its interest therein (other than to a wholly-owned affiliate of the Bank), either
currently or after the passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or circumstance; provided,
2
#522392314_v1
however, that the Bank reserves the right to sell, pledge, transfer, convey, hypothecate,
participate interests in or dispose of the Note at some future date.
G. The Bank acknowledges that the Note will not be listed on any securities exchange.
Further, no trading market now exists for the Note, and none may exist in the future.
Accordingly,the Bank understands that it may need to bear the risks of the purchase for an
indefinite time, since any sale prior to the maturity for the Note may not be possible or may
be at a price below that which the Bank is paying for the Note.
H. It is understood and agreed that the Bank is buying the Note in a private placement by the
Issuer to the Bank. The Issuer has not undertaken to make any on-going disclosures for
the benefit of the registered owner of the Note in accordance with Rule 15c2-12 of the
Securities and Exchange Commission.
The Bank hereby represents and warrants that it is exempt from the requirements of Section
2252.908 of the Texas Government Code, as amended, pursuant to subsection (c)(4)
thereof Accordingly, it is not required to file a Certificate of Interested Party Form 1295.
J. The Bank makes the following representations and covenants pursuant to Chapters 2252,
2271, 2274, and 2276, Texas Government Code, as heretofore amended (the "Covered
Verifications"), in entering into this agreement. As used in such verifications, "affiliate"
means an entity that controls, is controlled by, or is under common control with the Bank
within the meaning of SEC Rule 405, 17 C.F.R. § 230.405, and exists to make a profit.
Liability for breach of any such verification during the term of this agreement shall survive
until barred by the applicable statute of limitations, and shall not be liquidated or otherwise
limited by any provision of this agreement, notwithstanding anything in this agreement to
the contrary. In addition,the City reserves and retains all rights and remedies at law and in
equity for pursuit and recovery of damages, if any, relating to the Covered Verifications.
i. Not a Sanctioned Company. The Bank represents that neither it nor any of its parent
company,wholly-or majority-owned subsidiaries,and other affiliates is a company
identified on a list prepared and maintained by the Texas Comptroller of Public
Accounts under Section 2252.153 or Section 2270.0201, Government Code, as
amended. The foregoing representation excludes the Bank and each of its parent
company, wholly- or majority-owned subsidiaries, and other affiliates, if any, that
the United States government has affirmatively declared to be excluded from its
federal sanctions regime relating to Sudan or Iran or any federal sanctions regime
relating to a foreign terrorist organization.
ii. No Boycott of Israel. The Bank hereby verifies that it and its parent company,
wholly- or majority-owned subsidiaries, and other affiliates, if any, do not boycott
Israel and will not boycott Israel during the term of this agreement. As used in the
foregoing verification, "boycott Israel" has the meaning provided in Section
2271.001, Government Code, as amended.
iii. No Discrimination Against Firearm Entities. The Bank hereby verifies that it and
its parent company, wholly-or majority-owned subsidiaries, and other affiliates, if
3
#522392314_v1
any,do not have a practice,policy, guidance,or directive that discriminates against
a firearm entity or firearm trade association and will not discriminate against a
firearm entity or firearm trade association during the term of this agreement. As
used in the foregoing verification, "discriminate against a firearm entity or firearm
trade association" has the meaning provided in Section 2274.001(3), Government
Code, as amended.
iv. No Boycott of Energy Companies. The Bank hereby verifies that it and its parent
company, wholly- or majority-owned subsidiaries, and other affiliates, if any, do
not boycott energy companies and will not boycott energy companies during the
term of this agreement. As used in the foregoing verification, "boycott energy
companies" has the meaning provided in Section 2276.001(1), Government Code,
as amended.
K. The Bank represents that it has on file with the Attorney General of the State(the"Attorney
General") a standing letter in substantially the form included as Exhibit A in the All Bond
Counsel Letter of the Attorney General dated 1, 2025. The Bank will provide
such other representations, certifications, or assurances required by the Issuer or the
Attorney General to evidence compliance with State law.
L. The Issuer covenants that it will deliver to the Bank its audited financial statements within
270 days after each fiscal year end, commencing with the fiscal year ending on September
30, 2025.
The Bank's obligation to purchase the Note is conditioned on the Bank's receipt of following
items:
(i) an opinion of Holland& Knight LLP, as Bond Counsel to the Issuer, as to the validity and
enforceability of the Note and the excludability of interest on the Note from federal income
taxation;
(ii) an unqualified opinion of the Attorney General of the State, relating to the legality and
validity of the Note and approving the Note as required by law;
(iii) evidence reflecting the registration of the Note by the Comptroller of Public Accounts of
the State of Texas as required by law; and
(iv) a certificate or certificates, dated the date of closing, of appropriate officials of the Issuer,
to the effect that (a) the Issuer is not a party to any litigation or other proceeding pending
or,to such official's knowledge,threatened which,if decided adversely to the Issuer,would
have a materially adverse effect on the financial condition of the Issuer, and (b) there has
not been any materially adverse change in the financial condition of the Issuer since
September 30, 2022, the latest date as of which audited financial information is available.
(v) from the time of the execution and delivery of this letter to the date of delivery of the Note
to Purchaser, there shall not have occurred(i) any material adverse change in the financial
condition or general affairs of the Issuer affecting, in Purchaser's reasonable opinion, the
ability of the Issuer to issue its proposed notes and repay the Note and accrued interest
4
#522392314_v1
thereon in full at maturity or upon prior redemption with the proceeds of such notes; (ii) an
event, court decision, proposed law or rule negatively effecting the tax status of the Note
under the Code; or (iii) any material market disruption, including but not limited to
international or national crisis, suspension of stock exchange trading, or banking
moratorium negatively and materially affecting, in Purchaser's reasonable opinion, the
market price of the Note.
(Execution Page Follows)
5
#522392314 v1
Very truly yours,
By:
Name:
Title:
AGREED TO AND ACCEPTED
this day of , 2025.
CITY OF PORT ARTHUR, TEXAS
By:
Name:
Title:
C- 1
EXHIBIT C
WRITTEN PROCEDURES RELATING TO
CONTINUING COMPLIANCE WITH FEDERAL TAX COVENANTS
A. Arbitrage. With respect to the investment and expenditure of the proceeds of the
Notes,the City's Chief Financial Officer, or its designee, (the Responsible Person) will:
(i) monitor all amounts deposited into a sinking fund or funds(e.g.,the Interest
and Sinking Fund),to assure that the maximum amount invested at a yield higher than the
yield on the Notes does not exceed an amount equal to the debt service on the Notes in
the succeeding 12 month period plus a carryover amount equal to one-twelfth (1/12) of
the principal and interest payable on the Notes for the immediately preceding 12-month
period;
(ii) ensure that the applicable information return(e.g., IRS Form 8038-G, 803 8-
GC, or any successor forms) is timely filed with the IRS; and
(iii) assure that, unless excepted from rebate and yield restriction under section
148(f) of the Code, excess investment earnings are computed and paid to the U.S.
government at such time and in such manner as directed by the IRS (A) at least every 5
years after the date of delivery of the Notes (the Issue Date), and (B) within 30 days after
the date the Notes are retired.
B. Private Business Use. With respect to the use of the facilities financed or refinanced
with the proceeds of the Notes the Responsible Person will:
(i) monitor the date on which the facilities are substantially complete and
available to be used for the purpose intended;
(ii) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has any contractual right (such as a lease, purchase, management or other service
agreement) with respect to any portion of the facilities;
(iii) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has a right to use the output of the facilities (e.g., water, gas, electricity);
(iv) monitor whether, at any time the Notes are outstanding, any person, other
than the City,the employees of the City,the agents of the City or members of the general
public has a right to use the facilities to conduct or to direct the conduct of research;
(v) determine whether, at any time the Notes are outstanding, any person, other
than the City, has a naming right for the facilities or any other contractual right granting
an intangible benefit;
C-2
#522392314_v1
(vi) determine whether, at any time the Notes are outstanding, the facilities are
sold or otherwise disposed of; and
(vii) take such action as is necessary to remediate any failure to maintain
compliance with the covenants contained in the Ordinance related to the public use of the
facilities.
C. Record Retention. The Responsible Person will maintain or cause to be maintained
all records relating to the investment and expenditure of the proceeds of the Notes and the use of
the facilities financed or refinanced thereby for a period ending three (3) years after the complete
extinguishment of the Notes. If any portion of the Notes is refunded with the proceeds of another
series of tax-exempt obligations, such records shall be maintained until the three(3)years after the
refunding obligations are completely extinguished. Such records can be maintained in paper or
electronic format.
D. Responsible Person. The Responsible Person shall receive appropriate training
regarding the City's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use of the
facilities financed or refinanced with the proceeds of the Notes. The foregoing notwithstanding,
the Responsible Person is authorized and instructed to retain such experienced advisors and agents
as may be necessary to carry out the purposes of these instructions.
[The remainder of this page intentionally left blank]
C-3
#522392314 vl
EXHIBIT D
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
Information and Data with Respect to the Issuer
The information and data with respect to the Issuer referred to in Section 36 of this
Ordinance are the quantitative financial information and operating data specified(and included in
the Appendix or under the headings of the Official Statement referred to) below:
1. The Issuer's audited financial statements for the most recently concluded fiscal year
or to the extent these audited financial statements are not available, the unaudited financial
statements of the Issuer for the most recently concluded fiscal year.
2. The quantitative financial information and operating data of the Issuer of the
general type included in Appendix A, of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board
from time to time.
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EXHIBIT E
GENERAL POLICIES AND PROCEDURES CONCERNING COMPLIANCE WITH THE
RULE
I. Capitalized terms used in this Exhibit have the meanings ascribed thereto in Section 36 of
the Ordinance.Notes refer to the Notes that are the subject of the Ordinance to which this Exhibit
is attached.
II. As a capital markets participant, the Issuer 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 nonexempt
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 Issuer's compliance with the Rule.
III. The Issuer 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 36C of the Ordinance, which provisions are a part of the Undertaking.
IV. The Issuer is aware that "participating underwriters" (as such term is defined in the Rule)
of the Notes must make inquiry and reasonably believe that the Issuer 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 Issuer 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 Issuer's informal policies,procedures,and processes
utilized prior to the Effective Date for compliance with the Issuer's obligations under the Rule,the
advice from and discussions with the Issuer's internal senior staff(including staff charged with
administering the Issuer'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 Chief Financial Officer (the Compliance Officer) shall be responsible for
satisfying the Issuer'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 Issuer's
information of the type described in Section 36B of the Ordinance;
3. the Compliance Officer shall promptly determine the occurrence of any of the
events described in Section 36C of the Ordinance;
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4. the Compliance Officer shall work with external consultants of the Issuer, as and
to the extent necessary, to timely prepare and file with the MSRB the annual information of the
Issuer 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 Issuer, and (upon
identification) determining if such Financial Obligation has the potential to materially impact the
security or source of repayment of the Notes;
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 Issuer 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 financial
difficulties of the Issuer; 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
Issuer's internal staff identified by the Compliance Officer to assist with the Issuer's satisfaction
of the terms and provisions of the Undertaking.
I
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