HomeMy WebLinkAboutPO 7407: AUTHORIZING THE ISSUANCE AND SALE OF THE CITY OF PORT ARTHUR, TEXAS COMBINATION TAX AND SURPLUS REVENUE CERTIFICATES OF OBLIGATION, SERIES 2026A PO 7407
CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS §
COUNTY 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 a regular meeting on April 21, 2026, at the
place stated in the notice of such meeting given as stated below, and the roll was called of the duly
constituted officials and members of said City Council,to wit:
Charlotte M. Moses Mayor
Willie Lewis, Jr. Councilmember, District 1
Tiffany L. Hamilton Everfield Councilmember, District 2
Doneane Beckcom Councilmember, District 3
Harold L. Doucet, Sr. Councilmember, District 4
Thomas Kinlaw, III Councilmember, At Large—Position 5
Donald Frank, Sr. Councilmembers, 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
ORDINANCE OF THE CITY OF PORT ARTHUR, TEXAS, AUTHORIZING THE
ISSUANCE AND SALE OF CITY OF PORT ARTHUR, TEXAS, COMBINATION TAX
AND SURPLUS REVENUE,CERTIFICATES OF OBLIGATION,SERIES 2026A IN THE
AGGREGATE PRINCIPAL AMOUNT OF $12,415,000 LEVYING A TAX IN PAYMENT
THEREOF; MAKING OTHER PROVISIONS REGARDING SUCH CERTIFICATES OF
OBLIGATION, INCLUDING AUTHORIZING THE PREPARATION AND
DISTRIBUTION OF ONE OR MORE PRELIMINARY OFFICIAL STATEMENTS AND
AUTHORIZING THE PREPARATION AND DISTRIBUTION OF ONE OR MORE
OFFICIAL STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING THE
SALE OF THE CERTIFICATES; AUTHORIZING THE EXECUTION AND DELIVERY
OF ONE OR MORE PURCHASE AGREEMENTS; AUTHORIZING THE EXECUTION
AND DELIVERY OF ONE OR MORE LOAN AGREEMENTS AND PROMISSORY
NOTES; AUTHORIZING THE EXECUTION AND DELIVERY OF A PAYING
AGENT/REGISTRAR AGREEMENT; AUTHORIZING THE EXECUTION AND
DELIVERY OF A ESCROW AGREEMENT AUTHORIZING AND CONFIRMING THE
ENGAGEMENT OF CERTAIN PROFESSIONALS IN CONNECTION WITH THE
ISSUANCE OF THE CERTIFICATES OF OBLIGATION; FINDING AND
DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE IS PASSED IS
OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND ENACTING OTHER
PROVISIONS RELATING THERETO
was duly introduced for the consideration of said City Council and read in full. It was then duly
moved and seconded that said ordinance be adopted; and after due discussion, such motion,
carrying with it the adoption of said ordinance,prevailed and carried by the following vote:
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AYES:
NOES:
ABSTENTIONS:
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.
[Signature Page to Follow]
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PO 7407
SIGNED AND SEALED this April 21, 2026.
Sherri Bellard, City Secretary
City of Port Arthur, Texas
(SEAL)
Signature Page to Certified Ordinance Certificate
P.O. NO. 7407
4/13/26 LB
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF PORT ARTHUR, TEXAS,
AUTHORIZING THE ISSUANCE AND SALE OF CITY OF PORT
ARTHUR, TEXAS, COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATES OF OBLIGATION, SERIES 2026A IN THE
AGGREGATE PRINCIPAL AMOUNT OF $12,415,000; LEVYING A TAX
IN PAYMENT THEREOF;MAKING OTHER PROVISIONS REGARDING
SUCH CERTIFICATES OF OBLIGATION, INCLUDING AUTHORIZING
THE PREPARATION AND DISTRIBUTION OF ONE OR MORE
PRELIMINARY OFFICIAL STATEMENTS AND AUTHORIZING THE
PREPARATION AND DISTRIBUTION OF ONE OR MORE OFFICIAL
STATEMENTS AND MATTERS INCIDENT THERETO; AWARDING
THE SALE OF THE CERTIFICATES; AUTHORIZING THE EXECUTION
AND DELIVERY OF ONE OR MORE PURCHASE AGREEMENTS;
AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE
LOAN AGREEMENTS AND PROMISSORY NOTES; AUTHORIZING
THE EXECUTION AND DELIVERY OF A PAYING AGENT/REGISTRAR
AGREEMENT; AUTHORIZING AND CONFIRMING THE
ENGAGEMENT OF CERTAIN PROFESSIONALS IN CONNECTION
WITH THE ISSUANCE OF THE CERTIFICATES OF OBLIGATION;
FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS
ORDINANCE IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY
LAW; AND ENACTING OTHER PROVISIONS RELATING THERETO.
* * * * * *
WHEREAS,under the provisions of Subchapter C, Chapter 271, Texas Local Government
Code, as amended(the "Act"),the City of Port Arthur, Texas, is authorized to issue certificates of
obligation for the purposes specified in this Ordinance and for the payment of all or a portion of
the contractual obligations for professional services, including that of engineers, attorneys, and
financial advisors in connection therewith, and to sell the same for cash as herein provided; and
WHEREAS, the City is authorized to provide that such obligations will be payable from
and secured by the levy of a direct and continuing ad valorem tax, within the limits prescribed by
law, against all taxable property within the City, in combination with a pledge of a surplus lien on
the net revenues of the City's waterworks and sewer system in an amount not to exceed the amount
authorized by the Act and Chapter 1502, Texas Government Code; and
WHEREAS,the City Council has found and determined that it is necessary and in the best
interests of the City and its citizens that it issue such certificates of obligation authorized by this
Ordinance; and
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WHEREAS, pursuant to a resolution therefore passed by this governing body, notice of
intention to issue certificates of obligation of the City payable as provided in this Ordinance was
published in the Port Arthur News, a newspaper of general circulation of the City in accordance
with the laws of the State of Texas; and
WHEREAS,no petition of any kind has been filed with the City Secretary, any member of
the City Council or any other official of the City, protesting the issuance of such certificates of
obligation; and
WHEREAS, this City Council is now authorized and empowered to proceed with the
issuance of said certificates of obligation and to sell the same for cash; and
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and public notice of the time, place, and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended; now therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR,
TEXAS:
ARTICLE I.
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01 Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in this
Ordinance, the following terms shall have the meanings specified below:
"Business Day" means any day which is not a Saturday, Sunday or legal holiday, or day
on which banking institutions in the State of Texas or the city in which the Designated
Payment/Transfer Office is located are generally authorized or obligated by law or executive order
to close.
"Certificate"means any of the Certificates.
"Certificate Date" means the date designated as the initial date of the Certificates by
Section 3.02(a)of this Ordinance.
"Certificates" mean the certificates of obligation authorized to be issued by Section 3.01
of this Ordinance and designated as "City of Port Arthur, Texas, Combination Tax and Surplus
Revenue Certificates of Obligation, Series 2026A."
"City"means the City of Port Arthur, Texas.
"Closing Date"means the date of the initial delivery of and payment for the Certificates.
"Code" means the Internal Revenue Code of 1986, as amended, including applicable
regulations, published rulings, and court decisions.
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"Dated Date" means May 1, 2026.
"Delivery Date"means May 18, 2026.
"Designated Payment/Transfer Office" means (i) with respect to the initial Paying
Agent/Registrar named herein,its office in Austin,Texas,or at such other location designated by the
Paying Agent/Registrar and (ii) with respect to any successor Paying Agent/Registrar, the office
of such successor designated and located as may be agreed upon by the City and such successor.
"DTC"means The Depository Trust Company of New York,New York, or any successor
securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities to
facilitate the clearance and settlement of securities transactions among DTC Participants.
"Event of Default" means any event of default as defined in Section 11.01 of this
Ordinance.
"Fiscal Year"means such fiscal year as shall from time to time be set by the City Council.
"Initial Certificate" means the initial certificate authorized by Section 3.04 of this
Ordinance.
"Interest and Sinking Fund" means the interest and sinking fund established by Section
2.02 of this Ordinance.
"MSRB"means the Municipal Securities Rulemaking Board.
"Net Revenues"means the gross revenues of the System less the expenses of operation and
maintenance as said expenses are defined in Chapter 1502,Texas Government Code, as amended.
"Ordinance" as used herein and in the Certificates means this ordinance authorizing the
Certificates.
"Owner" means the person who is the registered owner of a Certificate or Certificates, as
shown in the Register.
"Paying Agent/Registrar" means initially UMB Bank, N.A., Austin, Texas, or any
successor thereto as provided in this Ordinance.
"Paying Agent/Registrar Agreement" means the Paying Agent/Registrar Agreement
between the Paying Agent/Registrar and the City relating to the Certificates.
"Project" means the purposes for which the Certificates are issued as set forth in Section
3.01.
"Purchaser"means the Texas Water Development Board.
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"Register"means the bond register specified in Section 3.06(a) of this Ordinance.
"Representation Letter"means the Blanket Letter of Representations between the City and
DTC.
"Rule"means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Special Payment Date"means the Special Payment Date prescribed by Section 3.03(b)of
this Ordinance.
"Special Record Date" means the Special Record Date prescribed by Section 3.03(b) of
this Ordinance.
"Surplus Revenues" means the revenues of the System in an amount not to exceed the
amount remaining after payment of all operation and maintenance expenses thereof
"System" as used in this Ordinance means the City's combined waterworks and sewer
system, including all present and future additions, extensions, replacements, and improvements
thereto.
"Unclaimed Payments" means money deposited with the Paying Agent/Registrar for the
payment of principal of, and redemption premium, if any, on the Certificates as the same becomes
due and payable or money set aside for the payment of Certificates duly called for redemption
prior to maturity and remaining unclaimed by the Owners of such Certificates for 90 days after the
applicable payment or redemption date.
Section 1.02 Findings.
The declarations, determinations and findings declared, made and found in the preamble
to this Ordinance are hereby adopted, restated and made a part of the operative provisions hereof
Section 1.03 Titles and Headings.
The titles and headings of the Articles and Sections of this Ordinance have been inserted
for convenience of reference only and are not to be considered a part hereof and shall not in any
way modify or restrict any of the terms or provisions hereof and shall never be considered or given
any effect in construing this Ordinance or any provision hereof or in ascertaining intent, if any
question of intent should arise.
Section 1.04 Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall
be construed to include correlative words of the feminine and neuter genders and vice
versa, and words of the singular number shall be construed to include correlative words of
the plural number and vice versa.
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V
(b) This Ordinance and all the terms and provisions hereof shall be liberally
construed to effectuate the purposes set forth herein.
ARTICLE II.
SECURITY FOR THE CERTIFICATES; INTEREST AND SINKING FUND
Section 2.01 Tax Levy.
(a) Pursuant to the authority granted by the Texas Constitution and the laws of
the State of Texas, there shall be levied and there is hereby levied for the current year and
for each succeeding year thereafter while any of the Certificates is outstanding and unpaid,
an ad valorem tax on each one hundred dollars valuation of taxable property within the
City, at a rate sufficient, within the limit prescribed by law, to pay the debt service
requirements of the Certificates, being a sinking fund for their redemption at maturity or a
sinking fund of 2%per annum (whichever amount is greater), when due and payable, full
allowance being made for delinquencies and costs of collection.
(b) The ad valorem tax thus levied shall be assessed and collected each year
against all property appearing on the tax rolls of the City most recently approved in
accordance with law, and the money thus collected shall be deposited as collected to the
Interest and Sinking Fund.
(c) Said ad valorem tax, the collections therefrom, and all amounts on deposit
in or required hereby to be deposited to the Interest and Sinking Fund are hereby pledged
and committed irrevocably to the payment of the principal of and interest on the
Certificates when and as due and payable in accordance with their terms and this
Ordinance.
(d) The City hereby covenants and agrees that the Surplus Revenues are hereby
irrevocably pledged equally and ratably to the payment of the principal of the Certificates,
as the same become due. The Surplus Revenues shall be deposited to the Interest and
Sinking Fund at such time as the Surplus Revenues are to be applied to the payment of the
Certificates.
(e) If the liens and provisions of this Ordinance shall be released in a manner
permitted by Article XIII hereof, then the collection of such ad valorem tax may be
suspended or appropriately reduced, as the facts may permit, and further deposits to the
Interest and Sinking Fund may be suspended or appropriately reduced, as the facts may
permit. In determining the aggregate principal amount of outstanding Certificates, there
shall be subtracted the amount of any Certificates that have been duly called for redemption
and for which money has been deposited with the Paying Agent/Registrar for such
redemption.
Section 2.02 Interest and Sinking Fund.
(a) The City hereby establishes special funds or accounts to be designated"City
of Port Arthur, Texas, Combination Tax and Surplus Revenue, Certificates of Obligation,
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ilr
Series 2026A"Interest and Sinking Fund" (the "Interest and Sinking Fund"), said funds to
be maintained at an official depository bank of the City separate and apart from all other
funds and accounts of the City.
(b) Money on deposit in or required by this Ordinance to be deposited to the
Interest and Sinking Fund shall be used solely for the purpose of paying the principal of
the Certificates when and as due and payable in accordance with their terms and this
Ordinance.
Section 2.03 Pledge of Revenues.
(a) The Surplus Revenues to be derived from the operation of the System are
hereby pledged to the payment of the principal of the Certificates as the same come due;
provided, however, that such pledge is and shall be junior and subordinate in all respects
to the pledge of the Surplus Revenues to the payment of all outstanding obligations of the
City and any obligation of the City, whether authorized heretofore or hereafter, which the
City designates as having a pledge senior to the pledge of the Surplus Revenues to the
payment of the Certificates. The City also reserves the right to issue,for any lawful purpose
at any time, in one or more installments, bonds, certificates of obligation and other
obligations of any kind payable in whole or in part from the Surplus Revenues, secured by
a pledge of the Surplus Revenues that may be prior and superior in right to, on a parity
with,or junior and subordinate to the pledge of Surplus Revenues securing the Certificates.
(b) If system revenues are actually on deposit in the Interest and Sinking Fund
in advance of the time when ad valorem taxes are scheduled to be levied for any year,then
the amount of taxes which otherwise would have been required to be levied and collected
may be reduced to the extent and by the amount of revenues then on deposit in the Interest
and Sinking Fund; or
(c) If Surplus Revenues are based upon budgeted amounts:
i.the City shall transfer and deposit in the Interest and Sinking Fund
each month an amount of not less than 1/12th of the annual debt service on the Certificates until
the amount on deposit in the Interest and Sinking Fund equals the amount required for annual debt
service on the Certificates; further, the City shall not transfer any funds from the City's pledged
system revenues to any fund other than the Interest and Sinking Fund until an amount equal to the
annual debt service on the Certificates for the then-current fiscal year has been deposited in the
Interest and Sinking Fund;
ii. Each year the Certificates are outstanding, and before the time
taxes are to be levied for that year, the City shall establish, adopt, and maintain an annual budget
that provides for either the monthly deposit of sufficient surplus pledged revenues or tax revenues
or both,the monthly deposit of any other legally available funds on hand at the time of the adoption
of the annual budget, or a combination of these, into the Interest and Sinking Fund for the
repayment of the Certificates; and
iii.the City shall at all times maintain and collect sufficient rates and
charges in conjunction with any other legally available funds so that after payment of the costs of
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operating and maintaining the system, it produces revenues in an amount not less than 1.10 times
debt service requirements of all outstanding Certificates of the City and other obligations of the
City which are secured in whole or in part by the pledged revenues,for which the City is budgeting
the repayment of the Certificates, or the City shall provide documentation which evidences the
levy and collection of an ad valorem tax rate dedicated to the Interest and Sinking Fund, in
conjunction with any other legally available funds, sufficient for the repayment of debt service
requirements.
ARTICLE III.
AUTHORIZATION; GENERAL TERMS AND PROVISIONS REGARDING THE
CERTIFICATES
Section 3.01 Authorization.
(a) The City's certificates of obligation to be designated "City of Port Arthur,
Texas, Combination Tax and Surplus Revenue, Certificates of Obligation, Series 2026A,"
are hereby authorized to be issued and delivered in accordance with the Constitution and
laws of the State of Texas, specifically §271.041-063, Local Government Code, V.T.C.A,
as amended, and principal amount of$12,415,000 for the purpose of paying contractual
obligations to be incurred for the following purposes, to wit: (1) to pay the costs for the
City to finance the design and construction of certain water system improvements and items
related thereto, and(2) for the payment of contractual obligations for professional services
incurred in connection with the construction of such public works.
(b) The issuance of the Certificates is hereby authorized under and in
accordance with the provisions hereof, the officers of the City are each hereby authorized
to execute, attest, and affix the City's seal to the Certificates and to deliver the Certificates
to the Attorney General of the State of Texas for approval, the Comptroller of Public
Accounts for registration and the Paying Agent/Registrar for authentication, and thereafter
to deliver such Certificates to the Underwriter pursuant to the Purchase Agreement
authorized in Section 7.01 herein.
Section 3.02 Date, Denomination, Maturities, and Interest.
(a) The Certificates shall be dated as of the Dated Date. The Certificates shall
be in fully registered form, without coupons, in the denomination of 5,000 or any integral
multiple thereof and shall be numbered separately from one upward, except the Initial
Certificate, which shall each be numbered T-1.
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(b) The Certificates shall mature on August 15,in the years and in the principal
amounts set forth in the following schedule:
Princiapl
Years Amount Rate
8/15/2027 S 275.000 3.500%
8/15/2028 250.000 3.500%
8/15/2029 255,000 3.500%
8/15/2030 265,000 3.500%
8/15/2031 275,000 3.500%
8/15/2032 285,000 3.500%
815/2033 295,000 3.500%
8/15/2034 305,000 3.500%
8/15/2035 315,000 3.500%
8/15/2036 325,000 3.500%
8/152037 340,000 3.500%
8/15/2038 350,000 3.500%
8/15/2039 365,000 3.500%
81152040 375,000 3.500%
8/15/2041 390,000 3.500%
8/15/2042 400.000 3.500%
8/15/2043 415.000 3.500%
8/15/2044 430,000 3.500%
8/152045 445,000 3.500%
8/15/2046 460.000 3.500%
8/15/2047 480,000 3.500%
8/15/2048 495,000 3.500%
8/15/2049 510,000 3.500%
8/15/2050 530,000 3.500%
8/15/2051 550,000 3.500%
8/15/2052 565.000 3.500%
8/15/2053 585,000 3.500%
8/152054 605,000 3.500%
8/152055 630,000 3.500%
8/15/2056 650.000 3.500%
Section 3.03 Medium, Method, and Place of Payment.
(a) The principal of the Certificates shall be paid in lawful money of the United
States of America.
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(b) The principal of each Certificate shall be paid to the Owner thereof on the
due date, whether at the maturity date or the date of prior redemption thereof, upon
presentation and surrender of such Certificate at the Designated Payment/Transfer Office.
(c) If the date for the payment of the principal of the Certificates is not a
Business Day, then the date for such payment shall be the next succeeding Business Day,
and payment on such date shall have the same force and effect as if made on the original
date payment was due and no additional interest shall be due by reason of nonpayment on
the date on which such payment is otherwise stated to be due and payable.
(d) Unclaimed Payments of amounts due hereunder shall be segregated in a
special escrow account and held in trust,uninvested by the Paying Agent/Registrar, for the
account of the Owner of the Certificates to which such Unclaimed Payments pertain.
Subject to Title 6 of the Texas Property Code, any Unclaimed Payments remaining
unclaimed by the Owners entitled thereto for three years after the applicable payment or
redemption date shall be applied to the next payment or payments on the Certificates
thereafter coming due and, to the extent any such money remains three years after the
retirement of all outstanding Certificates, such money shall be paid to the City to be used
for any lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar, nor any
other person shall be liable or responsible to any Owners of such Certificates for any further
payment of such unclaimed moneys or on account of any such Certificates, subject to Title
6 of the Texas Property Code.
Section 3.04 Execution and Registration of Certificates.
(a) The Certificates shall be executed on behalf of the City by the Mayor and
the City Secretary,by their manual or electronic signatures, and the official seal of the City
shall be impressed or placed in electronic form thereon. Such electronic signatures on the
Certificates shall have the same effect as if each of the Certificates had been signed
manually and in person by each of said officers,and such electronic seal on the Certificates
shall have the same effect as if the official seal of the City had been manually impressed
upon each of the Certificates.
(b) In the event that any officer of the City whose manual or electronic signature
appears on the Certificates ceases to be such officer before the authentication of such
Certificates or before the delivery thereof, such manual or electronic signature nevertheless
shall be valid and sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below,no Certificate shall be valid or obligatory for any
purpose or be entitled to any security or benefit of this Ordinance unless and until there
appears thereon the Certificate of Paying Agent/Registrar substantially in the form
provided herein, duly authenticated by manual execution by an officer or duly authorized
signatory of the Paying Agent/Registrar. It shall not be required that the same officer or
authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Certificates. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Certificate delivered at the Closing Date shall
have attached thereto the Comptroller's Registration Certificate substantially in the form
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provided in the Form of Certificates, manually executed by the Comptroller of Public
Accounts of the State of Texas(the"Comptroller"),or by his duly authorized agent,which
certificate is evidence that such Initial Certificate has been duly approved by the Attorney
General of the State of Texas (the "Attorney General") and that it is a valid and binding
obligation of the City, and has been registered by the Comptroller.
(d) On the Closing Date, one Initial Certificate representing the entire principal
amount of all Certificates, payable in stated installments to the Initial Purchaser, or its
designee, executed by the manual or electronic signatures of the Mayor and City Secretary
of the City, approved by the Attorney General, and registered and manually signed by the
Comptroller, will be delivered to the Initial Purchaser or its designee. Upon payment for
the Initial Certificate, the Paying Agent/Registrar shall cancel the Initial Certificate and
deliver to DTC on behalf of the Initial Purchaser one registered definitive Certificate for
each year of maturity of the Certificates in the aggregate principal amount of all Certificates
for such maturity, registered in the name of Cede & Co., as nominee of DTC.
Section 3.05 Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the
person in whose name any Certificate is registered as the absolute owner of such Certificate
for the purpose of making and receiving payment of the principal thereof, and for all other
purposes, whether or not such Certificate is overdue, and neither the City nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the Owner of a Certificate shall be valid and effectual
and shall discharge the liability of the City and the Paying Agent/Registrar upon such
Certificate to the extent of the sums paid.
Section 3.06 Registration, Transfer and Exchange.
(a) So long as any Certificates remain outstanding, the City shall cause the
Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the
"Register")in which, subject to such reasonable regulations as it may prescribe,the Paying
Agent/Registrar shall provide for the registration and transfer of Certificates in accordance
with this Ordinance.
(b) The ownership of a Certificate may be transferred only upon the
presentation and surrender of the Certificate at the Designated Payment/Transfer Office
with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar. No transfer of any Certificate shall be effective until entered in the
Register.
(c) The Certificates shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office for a Certificate or Certificates of the
same maturity and in any denomination or denominations of any integral multiple of
$5,000 and in an aggregate principal amount equal to the unpaid principal amount of the
Certificates presented for exchange. The Paying Agent/Registrar is hereby authorized to
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authenticate and deliver Certificates exchanged for other Certificates in accordance with
this Section.
(d) Each exchange Certificate delivered by the Paying Agent/Registrar in
accordance with this Section shall constitute an original contractual obligation of the City
and shall be entitled to the benefits and security of this Ordinance to the same extent as the
Certificate or Certificates in lieu of which such exchange Certificate is delivered.
(e) No service charge shall be made to the Owner for the initial registration,
subsequent transfer, or exchange for a different denomination of any of the Certificates.
The Paying Agent/Registrar, however, may require the Owner to pay a sum sufficient to
cover any tax or other governmental charge that is authorized to be imposed in connection
with the registration, transfer, or exchange of a Certificate.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue,
transfer, or exchange any Certificate called for redemption, in whole or in part, within 45
calendar days prior to the date fixed for redemption;provided,however,such limitation shall
not be applicable to an exchange by the Owner of the uncalled principal balance of a
Certificate.
Section 3.07 Cancellation.
All Certificates paid or redeemed before scheduled maturity in accordance with this
Ordinance, and all Certificates in lieu of which exchange Certificates or replacement Certificates
are authenticated and delivered in accordance with this Ordinance, shall be cancelled and proper
records shall be made regarding such payment,redemption,exchange or replacement. The Paying
Agent/Registrar shall dispose of cancelled Certificates in accordance with the Securities Exchange
Act of 1934.
Section 3.08 Replacement Certificates.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a
mutilated Certificate, the Paying Agent/Registrar shall authenticate and deliver in
exchange therefor a replacement Certificate of like tenor and principal amount, bearing a
number not contemporaneously outstanding. The City or the Paying Agent/Registrar may
require the Owner of such Certificate to pay a sum sufficient to cover any tax or other
governmental charge that is authorized to be imposed in connection therewith and any other
expenses connected therewith.
(b) In the event that any Certificate is lost, apparently destroyed or wrongfully
taken, the Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas
and in the absence of notice or knowledge that such Certificate has been acquired by a bona
fide purchaser, shall authenticate and deliver a replacement Certificate of like tenor and
principal amount, bearing a number not contemporaneously outstanding,provided that the
Owner first:
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(I) furnishes to the Paying Agent/Registrar satisfactory evidence of his
or her ownership of and the circumstances of the loss, destruction or theft of such
Certificate;
(ii) furnishes such security or indemnity as may be required by the
Paying Agent/Registrar to save it and the City harmless;
(iii) pays all expenses and charges in connection therewith, including,
but not limited to,printing costs, legal fees, fees of the Paying Agent/Registrar and
any tax or other governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and
the Paying Agent/Registrar.
(c) If, after the delivery of such replacement Certificate, a bona fide purchaser
of the original Certificate in lieu of which such replacement Certificate was issued presents
for payment such original Certificate, the City and the Paying Agent/Registrar shall be
entitled to recover such replacement Certificate from the person to whom it was delivered
or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss,damage,
cost or expense incurred by the City or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed or
wrongfully taken Certificate has become or is about to become due and payable,the Paying
Agent/Registrar, in its discretion, instead of issuing a replacement Certificate, may pay
such Certificate if it has become due and payable or may pay such Certificate when it
becomes due and payable.
(e) Each replacement Certificate delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to
the benefits and security of this Ordinance to the same extent as the Certificate or
Certificates in lieu of which such replacement Certificate is delivered.
Section 3.09 Book-Entry Only System.
(a) The definitive Certificates shall be initially issued in the form of a separate
single fully registered Certificate for each maturity. Upon initial issuance, the ownership
of each such Certificate shall be registered in the name of Cede&Co.,as nominee of DTC,
and except as provided in Section 3.10 hereof, all of the outstanding Certificates shall be
registered in the name of Cede & Co., as nominee of DTC.
(b) With respect to Certificates registered in the name of Cede & Co., as
nominee of DTC, the City and the Paying Agent/Registrar shall have no responsibility or
obligation to any DTC Participant or to any person on behalf of whom such a DTC
Participant holds an interest in the Certificates, except as provided in this Ordinance.
Without limiting the immediately preceding sentence, the City and the Paying
Agent/Registrar shall have no responsibility or obligation with respect to (i) the accuracy
of the records of DTC, Cede & Co. or any DTC Participant with respect to any ownership
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interest in the Certificates, (ii) the delivery to any DTC Participant or any other person,
other than an Owner, as shown on the Register, of any notice with respect to the
Certificates, including any notice of redemption, or (iii) the payment to any DTC
Participant or any other person, other than an Owner, as shown in the Register of any
amount with respect to principal of, and premium, if any, on the Certificates.
Notwithstanding any other provision of this Ordinance to the contrary, the City and the
Paying Agent/Registrar shall be entitled to treat and consider the person in whose name
each Certificate is registered in the Register as the absolute Owner of such Certificate for
the purpose of payment of principal of, and premium, if any, on the Certificates, for the
purpose of giving notices of redemption and other matters with respect to such Certificate,
for the purpose of registering transfer with respect to such Certificate, and for all other
purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, and premium,
if any, on the Certificates only to or upon the order of the respective Owners, as shown in
the Register as provided in this Ordinance, or their respective attorneys duly authorized in
writing, and all such payments shall be valid and effective to fully satisfy and discharge
the City's obligations with respect to payment of principal of, and premium, if any, on the
Certificates to the extent of the sum or sums so paid. No person other than an Owner, as
shown in the Register, shall receive a certificate evidencing the obligation of the City to
make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute
a new nominee in place of Cede&Co.,and subject to the provisions in this Ordinance with
respect to drafts being mailed to the registered Owner at the close of business on the Record
Date, the word"Cede& Co."in this Ordinance shall refer to such new nominee of DTC.
(c) The Representation Letter previously executed and delivered by the City,
and applicable to the City's obligations delivered in book entry only form to DTC as
securities depository, is hereby ratified and approved for the Certificates.
Section 3.10 Successor Securities Depository; Transfer Outside Book-Entry-Only
System.
In the event that the City determines that it is in the best interest of the City and the
beneficial owners of the Certificates that they be able to obtain certificated Certificates, or in the
event DTC discontinues the services described herein, the City shall (i) appoint a successor
securities depository, qualified to act as such under Section 17(a) of the Securities and Exchange
Act of 1934, as amended, notify DTC and DTC Participants of the appointment of such successor
securities depository and transfer one or more separate Certificates to such successor securities
depository;or(ii)notify DTC and DTC Participants of the availability through DTC of certificated
Certificates and cause the Paying Agent/Registrar to transfer one or more separate registered
Certificates to DTC Participants having Certificates credited to their DTC accounts. In such event,
the Certificates shall no longer be restricted to being registered in the Register in the name of Cede
& Co., as nominee of DTC, but may be registered in the name of the successor securities
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depository, or its nominee, or in whatever name or names Owners transferring or exchanging
Certificates shall designate, in accordance with the provisions of this Ordinance.
Section 3.11 Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as the
Certificates are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of, and premium, if any, on such Certificates, and all notices with respect to
such Certificates shall be made and given, respectively, in the manner provided in the
Representation Letter of the City to DTC.
ARTICLE IV.
REDEMPTION OF CERTIFICATES BEFORE MATURITY
Section 4.01 Redemption Before Maturity.
The Certificates shall be subject to redemption before their scheduled maturity only as
provided in this article.
Section 4.02 Optional Redemption.
(a) The Certificates maturing on or after August 15, 2037 are subject to
redemption at the option of the City on August 15, 2036 or on any date thereafter,in whole
or in part, at a redemption price of par.
(b) The City,at least 45 days before the redemption date,unless a shorter period
shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar
of such redemption date and of the principal amount of Certificates to be redeemed.
Section 4.03 Partial Redemption.
(a) If less than all of the Certificates are to be redeemed pursuant to Section
4.02, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot the Certificates, or
portions thereof, within such maturity or maturities and in such principal amounts for
redemption at the close of business on the Business Day next preceding the date of mailing
such notice.
(b) A portion of a single Certificate of a denomination greater than$5,000 may
be redeemed, but only in a principal amount equal to $5,000 or any integral multiple
thereof. If such a Certificate is to be partially redeemed, the Paying Agent/Registrar shall
treat each$5,000 portion of a Certificate as though it were a single certificate for purposes
of selection for redemption.
(c) Upon surrender of any Certificate for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and
deliver an exchange Certificate or Certificates in an aggregate principal amount equal to
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the unredeemed portion of the Certificate so surrendered, such exchange being without
charge, notwithstanding any provision of Section 3.06 to the contrary.
Section 4.04 Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of
Certificates by sending notice by United States mail, first class, postage prepaid, not less
than 30 days before the date fixed for redemption,to the Owner of each Certificate(or part
thereof) to be redeemed, at the address shown in the Register at the close of business on
the Business Day next preceding the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place
at which the Certificates are to be surrendered for payment, and, if less than all the
Certificates outstanding are to be redeemed,an identification of the Certificates or portions
thereof to be redeemed.
(c) The City reserves the right to give notice of its election or direction to
redeem Certificates under Section 4.02 conditioned upon the occurrence of subsequent
events. Such notice may state (i) that the redemption is conditioned upon the deposit of
moneys and/or authorized securities, in an amount equal to the amount necessary to effect
the redemption,with the Paying Agent/Registrar, or such other entity as may be authorized
by law,no later than the redemption date or(ii)that the City retains the right to rescind such
notice at any time on or prior to the scheduled redemption date if the City delivers a
certificate of the City to the Paying Agent/Registrar instructing the Paying Agent/Registrar
to rescind the redemption notice, and such notice and redemption shall be of no effect if
such moneys and/or authorized securities are not so deposited or if the notice is rescinded.
The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional
notice of redemption to the affected Owners. Any Certificates subject to conditional
redemption where redemption has been rescinded shall remain Outstanding, and the
rescission of such redemption shall not constitute an Event of Default. Further, in the case
of a conditional redemption, the failure of the City to make moneys and/or authorized
securities available in part or in whole on or before the redemption date shall not constitute
an Event of Default.
(d) Any notice given as provided in this Section shall be conclusively presumed
to have been duly given, whether or not the Owner receives such notice.
Section 4.05 Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the
Paying Agent/Registrar shall make provision for the payment of the Certificates to be
redeemed on such date by setting aside and holding in trust an amount from the Interest
and Sinking Fund or otherwise received by the Paying Agent/Registrar from the City and
shall use such funds solely for the purpose of paying the principal of the Certificates being
redeemed.
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(b) Upon presentation and surrender of any Certificate called for redemption at
the Designated Payment/Transfer Office on or after the date fixed for redemption, the
Paying Agent/Registrar shall pay the principal of,and redemption premium,if any,on such
Certificate to the date of redemption from the money set aside for such purpose.
Section 4.06 Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.05 of this
Ordinance and, subject, in the case of an optional redemption under Section 4.02, to any
conditions or rights reserved by the City under Section 4.05(c),the Certificates or portions
thereof called for redemption shall become due and payable on the date fixed for
redemption and, unless the City fails to make provision for the payment of the principal
thereof
ARTICLE V.
PAYING AGENT/REGISTRAR
Section 5.01 Appointment of Initial Paying Agent/Registrar.
UMB Bank,N.A.,Austin, Texas,is hereby appointed as the initial Paying Agent/Registrar
for the Certificates. The Paying Agent/Registrar Agreement submitted to this City Council, the
form of which is attached hereto as Exhibit A,is hereby approved. The Mayor is hereby authorized
to amend, complete or modify such agreement as necessary and is further authorized to execute
such agreement and the City Secretary is hereby authorized to attest such agreement.
Section 5.02 Qualifications.
Each Paying Agent/Registrar shall be a commercial bank,a trust company organized under
the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as
and perform the duties and services of paying agent and registrar for the Certificates.
Section 5.03 Maintaining Paving Agent/Registrar.
(a) At all times while any of the Certificates are outstanding, the City will
maintain a Paying Agent/Registrar that is qualified under Section 5.02 of this Ordinance.
The Mayor is hereby authorized and directed to execute an agreement with the Paying
Agent/Registrar specifying the duties and responsibilities of the City and the Paying
Agent/Registrar. The signature of the Mayor shall be attested by the City Secretary of the
City.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such,
the City will promptly appoint a replacement, provided, that no such resignation shall be
effective until a successor Paying Agent/Registrar has been appointed and has accepted the
duties of Paying Agent/Registrar for the Certificates.
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Section 5.04 Termination.
The City, upon not less than sixty (60) days notice, reserves the right to terminate the
appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be
terminated written notice of such termination,provided,that no such termination shall be effective
until a successor Paying Agent/Registrar has been appointed and has accepted the duties of Paying
Agent/Registrar for the Certificates.
Section 5.05 Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class, postage
prepaid,at the address thereof in the Register,stating the effective date of the change and the name
and mailing address of the replacement Paying Agent/Registrar.
Section 5.06 Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar and executing the Paying
Agent/Registrar Agreement,the Paying Agent/Registrar is deemed to have agreed to the provisions
of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar
prescribed thereby.
Section 5.07 Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Certificates to the successor Paying Agent/Registrar.
ARTICLE VI.
ESCROW AGREEMENT
Section 6.01 Appointment of Escrow Agent; Approval of Escrow Agreement.
UMB Bank, N.A., Austin, Texas, is hereby appointed as the Escrow Agent. The Escrow
Agreement submitted to this City Council, the form of which is attached hereto as Exhibit C, is
hereby approved. The Mayor and the City Secretary are hereby authorized and directed to execute
the Escrow Agreement on behalf of the City, the term and provisions of which are hereby
approved.
ARTICLE VII.
FORM OF THE CERTIFICATES
Section 7.01 Form Generally.
(a) The Certificates, including the Registration Certificate of the Comptroller
of Public Accounts of the State of Texas,the Certificate of the Paying Agent/Registrar,and
the Assignment form to appear on each of the Certificates, (i) shall be substantially in the
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form set forth in this Article,with such appropriate insertions,omissions,substitutions,and
other variations as are permitted or required by this Ordinance, and (ii) may have such
letters,numbers,or other marks of identification(including 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 counsel)thereon as,consistently herewith,may be determined by the City or
by the officers executing such Certificates, as evidenced by their execution thereof.
(b) Any portion of the text of any Certificates may be set forth on the reverse
side thereof, with an appropriate reference thereto on the face of the Certificates.
(c) The definitive Certificates, if any, shall be typewritten, photocopied,
printed, lithographed, or engraved, and may be produced by any combination of these
methods or produced in any other similar manner, all as determined by the officers
executing such Certificates, as evidenced by their execution thereof.
(d) The Initial Certificate submitted to the Attorney General of the State of
Texas may be typewritten and photocopied or otherwise reproduced.
Section 7.02 Form of the Certificates.
The form of the Certificates, including the form of the Registration Certificate of the
Comptroller of Public Accounts of the State of Texas, the form of Certificate of the Paying
Agent/Registrar and the form of Assignment appearing on the Certificates, shall be substantially as
follows:
(a) Form of Certificates.
REGISTERED REGISTERED
No. $
United States of America
State of Texas
CITY OF PORT ARTHUR,TEXAS,
COMBINATION TAX AND SURPLUS REVENUE
CERTIFICATES OF OBLIGATION,
SERIES 2026A
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INTEREST RATE: MATURITY DATE: CERTIFICATE CUSIP NUMBER:
DATE:
% August 15, April 1, 2026
The City of Port Arthur, Texas (the "City"), in Jefferson County, State of Texas, for value
received, hereby promises to pay to
[ ]
or registered assigns, on the Maturity Date specified above, the sum of
DOLLARS
unless this Certificate shall have been sooner called for redemption and the payment of the
principal hereof shall have been paid or provided for from the later of the Delivery Date or
provided for until payment of such principal amount has been paid or provided for.
The principal of this Certificate shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Certificate
at the corporate trust office in Austin,Texas(the"Designated Payment/Transfer Office"),of UMB
Bank, N.A., as Paying Agent/Registrar, or, with respect to a successor paying agent/registrar, at
the Designated Payment/Transfer Office of such successor.
If the date for the payment of the principal of this Certificate is not a Business Day, the
date for such payment shall be the next succeeding day which is not a Saturday, Sunday or legal
holiday, or day on which banking institutions in the State of Texas or the city in which the
Designated Payment/Transfer Office of the Paying Agent/Registrar is located are generally
authorized or obligated by law or executive order to close (a "Business Day"), and payment on
such date shall for all purposes be deemed to have been made on the original date payment was
due.
NOTWITHSTANDING ANY PROVISION,TERM,CONDITION OR REQUIREMENT
OF THIS CERTIFICATE OR THE CERTIFICATE ORDINANCE TO THE CONTRARY,
PAYMENTS TO THE INITIAL PURCHASER OF THE CERTIFICATES OF PRINCIPAL OF
THE CERTIFICATES SHALL BE MADE BY WIRE TRANSFER OF IMMEDIATELY
AVAILABLE FUNDS AT NO COST TO SUCH PURCHASER.
IN ADDITION, INTEREST MAY BE PAID by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of,the Registered Owner.
This Certificate is one of a series of fully registered Certificates specified in the title hereof
issued in the aggregate principal amount of$12,415,000 (herein referred to as the "Certificates"),
issued pursuant to a certain ordinance of the City (the "Ordinance") for the following purposes:
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(1) to pay the costs for the City to finance the design and construction of certain water system
improvements and items related thereto, and (2) for the payment of contractual obligations for
professional services incurred in connection with the construction of such public works.
The Certificates maturing on and after August, 15, 2037, are subject to redemption at the
option of the City on August 15, 2036 or on any date thereafter at a price of par. If less than all of
the Certificates are to be redeemed pursuant to an optional redemption,the City shall determine the
maturity or maturities and the amounts thereof to be redeemed and shall direct the Paying
Agent/Registrar to call by lot the Certificates,or portions thereof,within such maturity or maturities
and in such principal amounts, for redemption.
Notice of such redemption or redemptions shall be given by United States mail, first class,
postage prepaid,not less than 30 days before the date fixed for redemption,to the registered owner
of each of the Certificates to be redeemed in whole or in part. In the Ordinance, the City reserves
the right in the case of an optional redemption to give notice of its election or direction to redeem
Certificates conditioned upon the occurrence of subsequent events. Such notice may state (i) that
the redemption is conditioned upon the deposit of moneys and/or authorized securities, in an
amount equal to the amount necessary to effect the redemption,with the Paying Agent/Registrar, or
such other entity as may be authorized by law, no later than the redemption date or (ii) that the
City retains the right to rescind such notice at any time prior to the scheduled redemption date if
the City delivers a certificate of the City to the Paying Agent/Registrar instructing the Paying
Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no
effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded.
The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice
of redemption to the affected Owners. Any Certificates subject to conditional redemption where
redemption has been rescinded shall remain Outstanding, and the rescission of such redemption
shall not constitute an event of default. Further, in the case of a conditional redemption,the failure
of the City to make moneys and/or authorized securities available in part or in whole on or before
the redemption date shall not constitute an event of default.
Any notice so mailed shall be conclusively presumed to have been duly given, whether or
not the registered owner receives such notice.Notice having been so given and subject, in the case
of an optional redemption, to any rights or conditions reserved by the City in the notice, the
Certificates called for redemption shall become due and payable on the specified redemption date.
As provided in the Ordinance, and subject to certain limitations therein set forth, this
Certificate is transferable upon surrender of this Certificate for transfer at the Designated
Payment/Transfer Office of the Paying Agent/Registrar with such endorsement or other evidence of
transfer as is acceptable to the Paying Agent/Registrar;thereupon,one or more new fully registered
Certificates of the same stated maturity, of authorized denominations and for the same aggregate
principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Certificate called for redemption, in whole or in part, within 45 calendar days prior
to the date fixed for redemption; provided, however, such limitation shall not be applicable to an
exchange by the owner of the uncalled principal balance of a Certificate.
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The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Certificate is registered as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Certificate be overdue, and neither
the City nor the Paying Agent/Registrar shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED AND RECITED that the issuance of this Certificate and the
series of which it is a part is duly authorized by law; that all acts, conditions, and things required
to be done precedent to and in the issuance of the Certificates have been properly done and
performed and have happened in regular and due time, form, and manner as required by law; and
that ad valorem taxes upon all taxable property in the City have been levied for and pledged to the
payment of the debt service requirements of the Certificates within the limit prescribed by law;
that,in addition to said taxes,further provisions have been made for the payment of the debt service
requirements of the Certificates by pledging to such purpose Surplus Revenues, as defined in the
Ordinance, derived by the City from the operation of its combined waterworks and sewer system;
that when so collected, such taxes and Surplus Revenues shall be appropriated to such purposes;
and that the total indebtedness of the City, including the Certificates, does not exceed any
constitutional or statutory limitation.
IN WITNESS WHEREOF, the City has caused this Certificate to be executed by the
manual or electronic signature of the Mayor of the City and countersigned by the manual or
electronic signature of the City Secretary of the City,and the official seal of the City has been duly
impressed or placed in electronic form on this Certificate.
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Charlotte M. Moses, Mayor,
City of Port Arthur, Texas
Sheri Bellard, City Secretary,
City of Port Arthur, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate. The following
Comptroller's Registration Certificate may be deleted from the definitive Certificates if
such certificate on the Initial Certificate is fully executed.
CERTIFICATE OF COMPTROLLER
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS §
I hereby certify that there is on file and of record in my office an opinion of the Attorney
General of the State of Texas to the effect that this Certificate has been examined by him as
required by law, that he finds that it has been issued in conformity with the Constitution and laws
of the State of Texas, and that it is a valid and binding obligation of the City of Port Arthur, Texas,
and that this Certificate has this day been registered by me.
Witness my hand and seal of office at Austin, Texas, .
[Acting] Comptroller of Public Accounts
of the State of Texas
[SEAL]
(c) Form of Certificate of Paying Agent/Registrar. The following Certificate
of Paying Agent/Registrar may be deleted from the Initial Certificate if the executed
Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
The records of the Paying Agent/Registrar show that the Initial Certificate of this series of
Certificates was approved by the Attorney General of the State of Texas and registered by the
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Comptroller of Public Accounts of the State of Texas, and that this is one of the Certificates
referred to in the within-mentioned Ordinance.
UMB Bank,N.A., as Paying Agent/Registrar
B :
Dated: Authorized Signatory
(d) 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 Certificate and all rights
hereunder and hereby irrevocably constitutes and appoints attorney to
transfer the within Certificate on the books kept for registration hereof, 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
Certificate in every particular and must be
guaranteed in a manner acceptable to the Paying
Agent/Registrar.
Signature Guaranteed:
Authorized Signatory
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(e) The Initial Certificate shall be in the form set forth in paragraphs (a), (b)
and(d) of this Section, except for the following alterations:
(I) immediately under the name of the Certificate, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be completed with the
words "As shown below"and the words "CUSIP NUMBER" deleted; and
(ii) in the first paragraph of the Certificate, the words "on the Maturity
Date specified above," shall be deleted and the following will be inserted: "on
August 15 in each of the years, in the principal installments in accordance with the
following schedule:
Principal Interest
Years Installments Rate
(Information to be inserted from
schedule in Section 3.02 of this Ordinance)
Section 7.03 CUSIP Registration.
The City may secure identification numbers through the CUSIP Service Bureau Division
of Standard& Poor's Corporation,New York,New York, and may authorize the printing of such
numbers on the face of the Certificates. It is expressly provided, however, that the presence or
absence of CUSIP numbers on the Certificates shall be of no significance or effect as regards the
legality thereof and neither the City nor the attorneys approving said Certificates as to legality are
to be held responsible for CUSIP numbers incorrectly printed on the Certificates.
Section 7.04 Legal Opinion.
The approving legal opinion of Holland & Knight, Bond Counsel, may be printed on the
reverse side of or attached to each Certificate over the certification of the City Secretary of the
City,which may be executed in electronic form.
ARTICLE VIII.
SALE AND DELIVERY OF CERTIFICATES,DEPOSIT OF PROCEEDS; PRIVATE
PLACEMENT MEMORANDUM
Section 8.01 Sale of Certificates; Further Proceedings; and Private Placement
Memorandum.
(a) The Certificates are hereby officially sold and awarded to the initial
purchaser, the Texas Water Development Board(the"TWDB" or"Purchaser")), at a price
equal to the par amount thereof, pursuant to Texas Water Development Board Resolution
No. 25-144. It is hereby officially found, determined, and declared that the terms of this
sale are the most advantageous reasonably obtainable. The Certificates shall initially be
registered in the name of the Texas Water Development Board or its designee.
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(b) The Mayor, City Manager, City Secretary and Finance Director of the Issuer, and
each of them,shall be and they are hereby expressly authorized,empowered and directed from time
to time and at any time to do and perform all such acts and things and to execute,acknowledge and
deliver in the name and on behalf of the Issuer all such documents, certificates and other
instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry
out the terms and provisions of this Ordinance, the Certificates and the sale of the Certificates. In
case any officer 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
(c) All officers of the City are authorized to execute such documents,
certificates and receipts and to make such elections, as they may deem necessary to
consummate the delivery of the Certificates.
(d) The obligation of the Purchaser to accept delivery of the Certificates is
subject to the Purchaser being furnished with the final,approving opinion of Bond Counsel
for the City, which opinion shall be dated and delivered the
Section 8.02 Control and Delivery of Certificates.
(a) The Mayor of the City is hereby authorized to have control of the Initial
Certificate and all necessary records and proceedings pertaining thereto pending
investigation, examination, and approval of the Attorney General of the State of Texas,
registration by the Comptroller and registration with, and initial exchange or transfer by,
the Paying Agent/Registrar.
(b) After registration by the Comptroller, delivery of the Certificates shall be
made to the Underwriter under and subject to the general supervision and direction of the
Mayor, against receipt by the City of all amounts due to the City under the terms of sale.
(c) All officers of the City are authorized to execute such documents,
certificates and receipts and to make such elections, as they may deem necessary to
consummate the delivery of the Certificates.
Section 8.03 Construction Fund; Security for Deposits.
(a) The Issuer hereby creates and establishes and shall maintain on the books of the
Issuer a separate fund to be entitled the"Series 2026A Certificate of Obligation Construction Fund"
for use by the Issuer for payment of all lawful costs associated with the acquisition and construction
of the Project as hereinbefore provided, and to pay the costs of issuance of the Certificates. Upon
payment of all such costs, any moneys remaining on deposit in said Fund shall be disbursed as
provided in Section 18(f).
(b) The Issuer may place proceeds of the Certificates (including investment earnings
thereon) and amounts deposited into the Sinking Fund in investments authorized by the Public
Funds Investment Act, Chapter 2256, Texas Government Code, as amended; provided, however,
that the Issuer hereby covenants that the proceeds of the sale of the Certificates will be used as soon
as practicable for the purposes for which the Certificates are issued. (c)All deposits authorized or
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required by this Ordinance shall be secured to the fullest extent required by law for the security of
public funds as provided in Chapters 2256 and 2257, Texas Government Code, as amended.
ARTICLE IX.
INVESTMENTS
Section 9.01 Investments.
(a) Money in the Interest and Sinking Fund created by this Ordinance and any
of the funds to be deposited pursuant to Section 7.03(b) hereof, at the option of the City,
may be invested in such securities or obligations as permitted under applicable law as in
effect on the date of the investment.
(b) Any securities or obligations in which such money is so invested shall be
kept and held in trust for the benefit of the Owners and shall be sold and the proceeds of
sale shall be timely applied to the making of all payments required to be made from the fund
from which the investment was made.
Section 9.02 Investment Income.
(a) Interest and income derived from investment of the Interest and Sinking
Fund shall be credited to such fund.
(b) Interest and income derived from investment of the funds to be deposited
pursuant to Section 7.03(b)hereof shall be credited to the account where deposited until the
acquisition or construction of the Projects is completed and thereafter, to the extent such
interest and income are present, such interest and income shall be deposited to the Interest
and Sinking Fund.
Section 9.03 Engagement of Professionals.
The City Council hereby confirms the prior engagement of(1) Holland& Knight LLP, as
Bond Counsel to the City and (2) Hilltop Securities Inc., as Financial Advisor, to the City, in
connection with the issuance and sale of the Certificates and (3) approves the engagement of the
Texas Water Development Board, as the purchaser.
ARTICLE X.
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 10.01 Payment of the Certificates.
On or before any redemption date for the Certificates and while any of the Certificates are
outstanding and unpaid, there shall be made available to the Paying Agent/Registrar, out of the
Interest and Sinking Fund,money sufficient to pay such principal of the Certificates as will mature
on the applicable maturity date or date of prior redemption. Such transfer of funds shall be made in
such manner as will cause immediately available funds to be deposited with the Paying
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Agent/Registrar not later than the close of business on the Business Day next preceding the date of
payment for the Certificates.
Section 10.02 Other Representations and Covenants.
(a) The City will faithfully perform, at all times, any and all covenants,
undertakings, stipulations, and provisions contained in this Ordinance and in each
Certificate; the City will promptly pay or cause to be paid the principal of each Certificate
on the dates and at the places and manner prescribed in such Certificate; and the City will, at
the times and in the manner prescribed by this Ordinance, deposit or cause to be deposited
the amounts of money specified by this Ordinance.
(b) The City is duly authorized under the laws of the State of Texas to issue the
Certificates; all action on its part for the creation and issuance of the Certificates has been
duly and effectively taken; and the Certificates in the hands of the Owners thereof are and
will be valid and enforceable obligations of the City in accordance with their terms.
ARTICLE XI.
PROVISIONS CONCERNING FEDERAL INCOME TAX
Section 11.01 Provisions Concerning Federal Income Tax.
(a) General. The City intends that the interest on the Certificates be excludable
from gross income for federal income tax purposes pursuant to sections 103 and 141
through 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the
applicable Treasury Regulations (the "Regulations"). The City covenants and agrees not
to take any action, or omit to take any action within its control, that if taken or omitted,
respectively, would (i) cause the interest on the Certificates to be includable in gross
income, as defined in section 61 of the Code, for federal income tax purposes or(ii)result
in the violation of or failure to satisfy any provision of Section 103 and 141 through 150
of the Code and the applicable Regulations. In particular,the City covenants and agrees to
comply with each requirement of this Article X; provided, however, that the City will not
be required to comply with any particular requirement of this Article X if the City has
received an opinion of nationally recognized bond counsel ("Counsel's Opinion") that (i)
such noncompliance will not adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Certificates or (ii) compliance with some other
requirement set forth in this Article X will satisfy the applicable requirements of the Code
and the Regulations, in which case compliance with such other requirement specified in
such Counsel's Opinion will constitute compliance with the corresponding requirement
specified in this Article X.
(b) No Private Use or Payment and No Private Loan Financing. The City
covenants and agrees that it will make such use of the proceeds of the Certificates,
including interest or other investment income derived from Certificates proceeds, regulate
the use of property financed, directly or indirectly,with such proceeds, and take such other
and further action as may be required so that the Certificates will not be "private activity
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bonds" within the meaning of section 141 of the Code and the Regulations promulgated
thereunder. Moreover, the City will certify, through an authorized officer, employee or
agent, based upon all facts and estimates known or reasonably expected to be in existence
on the date the Certificates are delivered, that the proceeds of the Certificates will not be
used in a manner that would cause the Certificates to be"private activity bonds"within the
meaning of section 141 of the Code and the Regulations promulgated thereunder.
(c) No Federal Guarantee. The City covenants and agrees not to take any
action, or knowingly omit to take any action within its control, that if taken or omitted,
respectively, would cause the Certificates to be"federally guaranteed"within the meaning
of section 149(b) of the Code and the applicable Regulations thereunder, except as
permitted by section 149(b)(3) of the Code and such Regulations.
(d) No Hedge Bonds. The City covenants and agrees not to take any action, or
knowingly omit to take any action within its control, that if taken or omitted, respectively,
would cause the Certificates to be "hedge bonds" within the meaning of section 149(g) of
the Code and the applicable Regulations thereunder.
(e) No Arbitrage. The City covenants and agrees that it will make such use of
the proceeds of the Certificates,including interest or other investment income derived from
Certificate proceeds, regulate investments of proceeds of the Certificates, and take such
other and further action as may be required so that the Certificates will not be "arbitrage
bonds" within the meaning of section 148(a) of the Code and the applicable Regulations
promulgated thereunder. Moreover, the City will certify, through an authorized officer,
employee or agent,based upon all facts and estimates known or reasonably expected to be
in existence on the date the Certificates are delivered, that the proceeds of the Certificates
will not be used in a manner that would cause the Certificates to be "arbitrage bonds"
within the meaning of section 148(a) of the Code and the applicable Regulations
promulgated thereunder.
(f) Arbitrage Rebate. If the City does not qualify for an exception to the
requirements of section 148(f) of the Code relating to the required rebate to the United
States, the City will take all necessary steps to comply with the requirement that certain
amounts earned by the City on the investment of the "gross proceeds" of the Certificates
(within the meaning of section 148(f)(6)(B) of the Code), be rebated to the federal
government. Specifically, the City will (i) maintain records regarding the investment of
the gross proceeds of the Certificates as may be required to calculate the amount earned on
the investment of the gross proceeds of the Certificates separately from records of amounts
on deposit in the funds and accounts of the City allocable to other bond issues of the City
or moneys that do not represent gross proceeds of any bonds of the City, (ii) determine at
such times as are required by applicable Regulations, the amount earned from the
investment of the gross proceeds of the Certificates which is required to be rebated to the
federal government, and (iii) pay, not less often than every fifth anniversary date of the
delivery of the Certificates, or on such other dates as may be permitted under applicable
Regulations, all amounts required to be rebated to the federal government. Further, the
City will not indirectly pay any amount otherwise payable to the federal government
pursuant to the foregoing requirements to any person other than the federal government by
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entering into any investment arrangement with respect to the gross proceeds of the
Certificates that might result in a reduction in the amount required to be paid to the federal
government because such arrangement results in a smaller profit or a larger loss than would
have resulted if the arrangement had been at arm's length and had the yield on the issue
not been relevant to either party.
(g) Information Reporting. The City covenants and agrees to file or cause to
be filed with the Secretary of the Treasury, not later than the 15th day of the second
calendar month after the close of the calendar quarter in which the Certificates are issued,
an information statement concerning the Certificates, all under and in accordance with
section 149(e) of the Code and the applicable Regulations promulgated thereunder.
(h) Record Retention. The City will retain all pertinent and material records
relating to the use and expenditure of the proceeds of the Certificates until three years after
the last Certificate is redeemed, or such shorter period as authorized by subsequent
guidance issued by the Department of Treasury, if applicable. All records will be kept in
a manner that ensures their complete access throughout the retention period. For this
purpose, it is acceptable that such records are kept either as hardcopy books and records or
in an electronic storage and retrieval system,provided that such electronic system includes
reasonable controls and quality assurance programs that assure the ability of the City to
retrieve and reproduce such books and records in the event of an examination of the
Certificates by the Internal Revenue Service.
(i) Registration. The Certificates will be issued in registered form.
(j) Deliberate Actions. The City will not take a deliberate action(as defined in
section 1.141-2(d)(3) of the Regulations) that causes the Certificates to fail to meet any
requirement of section 141 of the Code after the issue date of the Certificates unless an
appropriate remedial action is permitted by section 1.141-12 of the Regulations and an
opinion of Bond Counsel is obtained that such remedial action cures any failure to meet
the requirements of section 141 of the Code.
(k) Continuing Obligation. Notwithstanding any other provision of this
Ordinance, the City obligations under the covenants and provisions of this Article X will
survive the defeasance and discharge of the Certificates for as long as such matters are
relevant to the exclusion from gross income of interest on the Certificates for federal
income tax purposes.
ARTICLE XII.
DEFAULT AND REMEDIES
Section 12.01 Events of Default.
Each of the following occurrences or events for the purpose of this Ordinance is hereby
declared to be an Event of Default:
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(a) the failure to make payment of the principal of, and redemption premium,
if any, on any of the Certificates when the same becomes due and payable; or
(b) default in the performance or observance of any other covenant, agreement,
or obligation of the City, which default materially and adversely affects the rights of the
Owners, including but not limited to their prospect or ability to be repaid in accordance
with this Ordinance,and the continuation thereof for a period of sixty(60)days after notice
of such default is given by any Owner to the City.
Section 12.02 Remedies for Default.
(a) Upon the happening of any Event of Default, any Owner or an authorized
representative thereof, including but not limited to a trustee or trustees therefor, may
proceed against the City for the purpose of protecting and enforcing the rights of the Owners
under this Ordinance by mandamus or other suit, action or special proceeding in equity or
at law in any court of competent jurisdiction for any relief permitted by law, including the
specific performance of any covenant or agreement contained herein, or thereby to enjoin
any act or thing that may be unlawful or in violation of any right of the Owners hereunder
or any combination o f such remedies.
(b) It is provided that all such proceedings shall be instituted and maintained
for the equal benefit of all Owners of Certificates then outstanding.
Section 12.03 Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any
other available remedy, but each and every such remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under the Certificates or now or
hereafter existing at law or in equity; provided, however, that notwithstanding any other
provision of this Ordinance, the right to accelerate the debt evidenced by the Certificates
shall not be available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be
deemed a waiver of any other available remedy.
ARTICLE XIII.
DISCHARGE
Section 13.01 Discharge.
The Certificates may be defeased, refunded or discharged in any manner permitted by
applicable law.
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ARTICLE XIV.
CONTINUING DISCLOSURE UNDERTAKING
Section 14.01 Annual Reports. The City shall provide annually to the MSRB, within six
(6)months after the end of each Fiscal Year, financial information and operating data with respect
to the City of the general type included in the final Official Statement, being the information
described in Exhibit B hereto. Any financial statements so to be provided shall be (i)prepared in
accordance with the accounting principles described in Exhibit B hereto, and (ii) audited, if the
City commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If the audit of such financial statements is not complete within such
period, then the City shall provide notice that audited financial statements are not available and
shall provide unaudited financial statements for the applicable Fiscal Year to the MSRB.
Thereafter, when and if audited financial statements become available,the City shall provide such
audited financial statements as required to the MSRB.
(a) If the City changes its Fiscal Year, it will notify each the MSRB of the
change(and of the date of the new Fiscal Year end)prior to the next date by which the City
otherwise would be required to provide financial information and operating data pursuant
to this Section.
(b) The financial information and operating data to be provided pursuant to this
Section may be set forth in full in one or more documents or may be included by specific
reference to any document(including an official statement or other offering document)that
theretofore has been provided to the MSRB or filed with the SEC.
Section 14.02 Material Event Notices
(a) The City shall notify the MSRB,in a timely manner,of any of the following
events with respect to the Certificates, if such event is material within the meaning of the
federal securities laws:
(i) principal delinquencies;
(ii) nonpayment related defaults;
(iii) unscheduled draws on debt service reserves reflecting financial
difficulties:
(iv) unscheduled draws on credit enhancements reflecting financial
difficulties;
(v) substitution of credit or liquidity providers, or their failure to
perform;
(vi) adverse tax opinions or events affecting the tax status of the
Certificates;
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(vii) modifications to rights of Owners;
(viii) bond calls;
(ix) defeasance;
(x) release, substitution, or sale of property securing repayment of the
Certificates;
(xi) rating changes;
(xii) bankruptcy, insolvency, receivership, or similar event of the
obligated person;
Note to paragraph (xii): For the purposes of the event identified in paragraph(xii)
of this section, the event is considered to occur when any of the following occur:
the appointment of a receiver,fiscal agent or similar officer for an obligated person
in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under
state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the obligated person,
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 obligated person.
(xiii) the consummation of a merger, consolidation, or acquisition
involving an obligated person or the sale of all or substantially all of the assets of
the obligated person, other than in the ordinary course of business, the entry into a
definitive agreement to undertake such an action, or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material;
(xiv) the appointment of a successor or additional trustee or the change in
the name of the trustee, if material;
(xv) the incurrence of a financial obligation of the City, if material, or
an agreement to covenants, events of default, remedies, priority rights, or other
similar terms of a financial obligation of the City, any of which affect security
holders, if material; and
(xvi) a default, event of acceleration, termination event, modification of
terms, or other similar events under the terms of a financial obligation of the City,
any of which reflect financial difficulties.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the
City to provide financial information or operating data in accordance with Section 13.01
of this Ordinance by the time required by such Section.
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(c) The City reserves the right to file all information and notices required under
this Article through the facilities of DisclosureUSA or any other central post office
approved by the SEC for such purpose.
Section 14.03 Limitations, Disclaimers and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Article
for so long as, but only for so long as the City remains an "obligated person" with respect to the
Certificates within the meaning of the Rule, except that the City in any event will give notice of
any redemption calls and any defeasances that cause the City to be no longer an"obligated person."
The provisions of this Article are for the sole benefit of the Owners and beneficial owners
of the Certificates, and nothing in this Article, express or implied, shall give any benefit or any
legal or equitable right, remedy, or claim hereunder to any other person. The City undertakes to
provide only the financial information, operating data, financial statements, and notices which it
has expressly agreed to provide pursuant to this Article and does not hereby undertake to provide
any other information that may be relevant or material to a complete presentation of the City's
financial results,condition,or prospects or hereby undertake to update any information provided in
accordance with this Article or otherwise, except as expressly provided herein. The City does not
make any representation or warranty concerning such information or its usefulness to a decision
to invest in or sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM
ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS
PART, OF ANY COVENANT SPECIFIED IN THIS ARTICLE, BUT EVERY RIGHT AND
REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF
ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR
SPECIFIC PERFORMANCE.
(a) No default by the City in observing or performing its obligations under this
Article shall constitute a breach of or default under the Ordinance for purposes of any other
provisions of this Ordinance.
(b) Nothing in this Article is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
(c) The provisions of this Article may be amended by the City from time to
time to adapt to changed circumstances that arise from a change in legal requirements, a
change in law, or a change in the identity, nature, status, or type of operations of the City,
but only if (i) the provisions of this Article, as so amended, would have permitted an
underwriter to purchase or sell Certificates in the primary offering of the Certificates in
compliance with the Rule, taking into account any amendments or interpretations of the
Rule to the date of such amendment, as well as such changed circumstances, and(ii)either
(A)the Owners of a majority in aggregate principal amount (or any greater amount required
by any other provisions of this Ordinance that authorizes such an amendment) of the
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Outstanding Certificates consent to such amendment or (B) an entity or individual person
that is unaffiliated with the City (such as nationally recognized bond counsel) determines
that such amendment will not materially impair the interests of the Owners and beneficial
owners of the Certificates. The provisions of this Article may also be amended from time
to time or repealed by the City if the SEC amends or repeals the applicable provisions of
the Rule or a court of final jurisdiction determines that such provisions are invalid, but only
if and to the extent that reservation of the City's right to do so would not prevent Purchaser
of the initial public offering of the Certificates from lawfully purchasing or selling
Certificates in such offering. If the City so amends the provisions of this Article, it shall
include with any amended financial information or operating data next provided in
accordance with Section 13.01 an explanation, in narrative form, of the reasons for the
amendment and of the impact of any change in the type of financial information or
operating data so provided.
ARTICLE XV.
TEXAS WATER DEVELOPMENT BOARD
Section 15.01 The provisions of this section shall apply so long as the Certificates,or any of
them, are owned by the TWDB. The City hereby agrees to comply with all conditions set forth in
TWDB Resolution approving TWDB's funding of the Certificates (the "TWDB Resolution"),
which conditions are incorporated herein.
(a) Compliance with 31 TAC Chapter 371. The City agrees and covenants that it will
comply with the requirements in accordance with Title 31, Texas Administrative Code, Chapter
371.
(b) Compliance with TWDB Resolution. The City agrees to comply with all the
conditions set forth in the TWDB Resolution.
(c) Redemption. The City shall provide that the Certificates may be called for early as set
forth in the Form of Certificate above.
(d) Rule 15c2-12 Compliance.The City agrees that it will comply with the provisions of
Rule 15c2-12 in accordance with Article 15 above.
(e) Covenant Regarding Taxes and System Rates. The City hereby agrees that, for so
long as the Certificates are outstanding,to levy a tax and/or maintain and collect sufficient rates and
charges to produce revenues in an amount necessary to meet the debt service requirements of all
outstanding obligations, to maintain the funds established and required by the Certificates and to
levy an interest and sinking fund tax rate in accordance with Article II above.
(f) Final Accounting and Unused or Surplus Funds. The City shall render a final
accounting of the cost of the Project to the TWDB within 60 days of the completion of the Project.
The City shall use all proceeds from the Certificates that are determined to be remaining unused
funds for enhancement to the Project that explicitly approved by executive administrator, or, if no
enhancements are authorized by the executive administrator, the City shall submit the final
accounting and disposition of any unused funds. "Unused funds" means those funds that remain
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unspent after the original approved project is completed. Any proceeds of the Certificates that are
determined to be surplus funds may be used in a manner approved by the executive administrator of
the TWDB. "Surplus funds" means those funds remaining after completion of the Project and
completion of a final accounting.
(g) Remedies. The TWDB may exercise all remedies available to it in law or equity,
and any provision of the Certificates that restricts or limits the TWDB's full exercise of such
remedies shall be of no force and effect.
(h) Public Funds. The City agrees that the Proceeds from the sale of the Certificates shall
be held at a designated state depository or other properly chartered and authorized institution in
accordance with the Public Funds Investment Act, Government Code, Chapter 2256, and the
Public Funds Collateral Act, Government Code, Chapter 2257.
(i) Indemnification. The City further agrees, to the extent permitted by law, to
indemnify, hold harmless and protect the TWDB from any and all claims or causes of action or
damages to the person or property of third parties arising from the sampling, analysis, transport,
storage,treatment,removal and off site disposition of any contaminated sewage sludge,contaminated
sediments and/or contaminated media that may be generated by the City,its contractors,consultants,
agents,officials and employees as a result of activities relating to the Project.
(j) Escrow/Trust Agreement. If any money is to be held in escrow or trust,the City shall
execute an escrow or trust agreement in the form approved by the executive administrator and
submit such executed agreement to the TWDB.
(k) Covenant to Comply with Applicable Law and TWDB Rules. The City will abide
with all applicable federal laws,the laws of the State of Texas and Rules of the TWDB relating to
the use of financial assistance, the loan of funds evidenced by the Certificates and the Project for
which the Certificates are issued, sold and delivered.
(1) Environmental Determinations. The City agrees and covenants that it will comply
with all conditions as specified in the final environmental finding of the executive administrator
when issued including the standard emergency discovery conditions for threatened and endangered
species and cultural resources.
(m) Insurance. Insurance coverage will be obtained and maintained by the City in an
amount sufficient to protect the interest of the TWDB in the Project.
(n) Lawsuits. The City will immediately notify TWDB in writing of any suit against
it by the Attorney General of Texas under Texas Government Code §2.103 and Texas Penal Code §
1.10(f)related to federal laws regulating firearms, firearm accessories, and firearm ammunition.
(o) Annual Audit Reporting. The City shall provide the TWDB with an annual audit
report prepared in accordance with generally accepted auditing standards by a certified public
accountant or licensed public accountant.
(p) Tax Exempt Status. As set forth in Article 11 above, the Certificates are not tax-
exempt obligations.
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(q) Outlay Reports. The City will submit outlay reports on a quarterly or monthly basis
with sufficient documentation on costs in accordance with TWDB outlay report guidelines
(r) Davis-Bacon Act Compliance. All laborers and mechanics employed by
contractors and subcontractors for the Project who are paid from proceeds of the Certificates on
deposit in the Construction Fund shall be paid wages at rates not less than those prevailing on
projects of a similar character in the locality of the City in accordance with the federal Davis-
Bacon Act and the U.S. Department of Labor's implementing regulations pertaining thereto.
(s) Federal Funding Accountability and Transparency Act. The City shall provide the
TWDB with all information required by the Federal Funding Accountability and Transparency Act
of 2006, Pub. L. 109-282, as amended by Pub. L. 110-252. The City shall obtain a Unique Entity
Identification Number and shall register with System for Award Management(SAM)and maintain
current registration at all times during which the Certificates are outstanding.
(t) Timely Expenditures. All proceeds of the Certificates will be timely and
expeditiously used, as required by applicable federal statutes, including 40 CFR § 35.135(d) and
the City shall adhere to the schedule for the Project.
(u) American Iron and Steel Requirements. The City will abide by all applicable
construction contract requirements related to the use of iron and steel products in the United States,
as required by the Federal Appropriations Act (31 TAC § 375.3, 33 U.S.C. § 1388) and related
State Revolving Fund Policy Guidelines.
(v) Build America,Buy America Act. The City will abide by all applicable requirements
related to the Build America, Buy America Act, Public Law 117-58.
(w) Project Accounts. The City will comply with the requirements set forth in 33
U.S.C. § 1382 related to maintaining project accounts containing financial assistance for planning,
design, acquisition, or construction in accordance with generally accepted accounting principles
(GAAP).
(x) Telecommunication. The City will abide by the prohibition on certain
telecommunications and video surveillance services or equipment as required by 2 CFR§200.216.
(y) Pledge Conditions. The City will deposit the funds in accordance with Article II
above.
(z) Payment Method. All payments,including the origination fee,must be made to the
Board via wire transfer at no cost to the Board.
(aa) The City agrees, and agrees to cause its construction contractors, to indemnify,
hold harmless and protect the TWDB from any and all claims,causes of action,or damages arising
from activities performed by the Issuer or its construction contractors, including their officials and
employees, in connection with the project, to the extent permitted by law.
(bb) Pursuant to 31 TAC §371.71(a)(2)(N), the City shall adopt and implement an
approved water conservation plan as long as the Certificates remain outstanding.
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ARTICLE XVI.
ESCROW AGREEMENT AND ESCROW FUND
(a) The Escrow Agreement between the City and the escrow agent named therein(the
"Escrow Agent") substantially in the form and content presented at this meeting, specifying the
duties and responsibilities of the City and the Escrow Agent, and creating the escrow fund ("the
"Escrow Fund"), is hereby approved and the Mayor, City Manager or Chief Financial Officer is
hereby authorized and directed to execute the Escrow Agreement on behalf of the City. The Escrow
Agent named in the Escrow Agreement is hereby appointed as the Escrow Agent pursuant to such
Escrow Agreement.
(b) On the closing date, the City shall cause the proceeds from the sale of the
Certificates to be deposited into the Escrow Fund or, if agreed to by the TWDB,all or a portion of
the proceeds of the proceeds of the Certificates may be deposited into the Construction Fund or as
otherwise directed by the City and the TWDB.
(c) Funds shall not be released from the Escrow Fund without written approval by the
executive administrator. Except as provided in Section 15(u), moneys disbursed from the Escrow
Fund shall be credit to the Construction Fund created by Section 8.04 hereof and shall be applied
only for the payment of costs of the Project.
(d) The security for,and the investment of,funds on deposit in the Escrow Fund shall be
governed by the provisions of the Escrow Agreement.
ARTICLE XVII.
MISCELLANEOUS
Section 17.01 Changes to Ordinance.
Bond Counsel is hereby authorized to make any changes to the terms of this Ordinance if
necessary or desirable to carry out the purposes hereof or in connection with the approval of the
issuance of the Certificates by the Attorney General of Texas.
Section 17.02 Partial Invalidity.
If any section,paragraph, clause or provision of this Ordinance shall for any reason be held
to be invalid or unenforceable,the invalidity or unenforceability of such section,paragraph,clause
or provision shall not affect any of the remaining provisions of this Ordinance.
Section 17.03 Repealer.
All ordinances or resolutions, or parts thereof, heretofore adopted by the City and
inconsistent with the provisions of this Ordinance are hereby repealed to the extent of such conflict.
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Section 17.04 Individuals Not Liable.
No covenant, stipulation, obligation or agreement herein contained shall be deemed to be
a covenant, stipulation, obligation or agreement of any member of City Council or agent or
employee of City Council or of the City in his or her individual capacity and neither the members
of City Council nor any officer thereof, nor any agent or employee of City Council or of the City,
shall be liable personally on the Certificates,or be subject to any personal liability or accountability
by reason of the issuance thereof.
Section 17.05 Related Matters.
To satisfy in a timely manner all of the City's obligations under this Ordinance,the Mayor
or Mayor Pro Tem, the City Secretary and all other appropriate officers and agents of the City are
hereby authorized and directed to do any and all things necessary and/or convenient in order to
consummate the delivery of the Certificates, pay the costs of issuance on the Certificates, and
effectuate the terms and purposes of this Ordinance.
Section 17.06 Force and Effect.
This Ordinance shall be in full force and effect from and after its final passage, and it is so
ordained.
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READ, ADOPTED AND APPROVED on first and final reading this 21th day of April
2026, with members voting yes, members voting no, and members abstaining.
Charlotte M. Moses, Mayor
ATTEST:
Sherri Bellard, City Secretary
APROVED AS TO FORM:
Roxann Cotroneo, City Attorney
APPROVED FOR ADMINISTRATION:
Pi)11
Ronald Burt. •, PM, City Manager
Ly da Boswell, Director of Finance
Signature Page to Certified Ordinance
EXHIBIT A
Paying Agent/Registrar Agreement
See Tab
A-1
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EXHIBIT B
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION
The following information is referred to in Article XIII of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Article are as specified (and included in the Appendix or other
headings of the Official Statement referred to)below:
1. The portions of the financial statements of the City appended to the Official
Statement as Appendix B, but for the most recently concluded Fiscal Year.
2. The quantitative financial information and operating data with respect to the City
of the general type included in the main text of the Official Statement is numbered
Tables 1 through 6 and 8 through 16, both inclusive.
Accounting Principles
The accounting principles referred to in such Article are the accounting principles
described in the notes to the financial statements referred to in Paragraph 1 above, as such
principles may be changed from time to time to comply with State law.
B-1
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EXHIBIT C
Escrow Agreement
See Tab
B-2
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