HomeMy WebLinkAboutPO 6453: ISSUANCE, COMBINATION TAX & REVENUE CERTIFICATES OF OBLIGATION, SERIES 2015B P.O. Box 6453
05/16/2015 gt
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE ISSUANCE OF CITY OF PORT
ARTHUR,TEXAS,COMBINATION TAX&REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2015B
THE STATE OF TEXAS §
COUNTIES OF JEFFERSON AND ORANGE §
CITY OF PORT ARTHUR §
WHEREAS,the City Council of the City of Port Arthur, Texas (the"City"), authorized the
publication of a notice of intention to issue Combination Tax&Revenue Certificates of Obligation to
the effect that the City Council would meet on May 12, 2015, to adopt an ordinance and take such
other action as may be deemed necessary to authorize the issuance of Combination Tax&Revenue
Certificates of Obligation(the"Certificates")payable from City ad valorem taxes and from a limited
pledge of a subordinate lien on the net revenues of the City's waterworks and sanitary sewer system,
collected by the City,for the purpose of evidencing the indebtedness of the City for all or any part of
the costs associated with (i) water and sewer system improvements, including the planning,
acquisition and design of a new wastewater treatment plant;and(ii)the cost of professional services
incurred in connection therewith; and
WHEREAS, such notice was published at the times and in the manner required by the
Constitution and laws of the State of Texas,particularly Subchapter C of Chapter 271,Texas Local
Government Code; and
WHEREAS,no petition or other request has been filed with or presented to any official of the
City requesting that any of the proceedings authorizing the Certificates be submitted to a referendum
or other election;
WHEREAS,the Certificates herein authorized for issuance are to be delivered to the Texas
Water Development Board (the "TWDB" or the "Purchaser") in evidence of a loan commitment
received in the aggregate amount of the Certificates.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR:
1. Recitals. It is hereby found and determined that the matters and facts set out in the
preamble to this Ordinance are true and correct.
2. Definitions. Throughout this ordinance the following terms and expressions as used
herein shall have the meanings set forth below:
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"Acts" means Subchapter C of Chapter 271, Texas Local Government Code and Chapter
1502, Texas Government Code.
"Business Day"means any day which is not a Saturday, Sunday,a day on which the Registrar
is authorized by law or executive order to close, or a legal holiday.
"Certificate" or "Certificates" means the City of Port Arthur, Texas, Combination Tax &
Revenue Certificates of Obligation, Series 2015B authorized in this Ordinance, unless the context
clearly indicates otherwise.
"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.
"Comptroller"means the Comptroller of Public Accounts of the State of Texas.
"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.
"Interest and Sinking Fund" means the interest and sinking fund for payment of the
Certificates established by the City in Section 20 of this Ordinance.
"Interest Payment Date", when used in connection with any Certificate, means [August 15,
2015], and each [February 15] and [August 15] thereafter until maturity or earlier redemption.
"Initial Certificate"means the Initial Certificate authorized by Section 6(d).
"Ordinance" as used herein and in the Certificates means this ordinance authorizing the
Certificates.
"Owner"means any person who shall be the registered owner of any outstanding Certificate.
"Purchaser"means the initial purchaser of the Certificates, as specified in Section 24.
"Record Date"means,for any Interest Payment Date,the close of business on the last day of
the month next preceding such Interest Payment Date.
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"Register"means the books of registration kept by the Registrar in which are maintained the
names and addresses of and the principal amounts registered to each Owner.
"Registrar"means The Bank of New York Mellon Trust Company,N.A.,Dallas,Texas,and
its successors in that capacity.
3. Authorization. The Certificates shall be issued pursuant to the Acts in fully registered
form, without coupons, in the total authorized principal amount of$[2,250,000] for the purpose of
evidencing the indebtedness of the City for all or any part of the costs associated with(i)water and
sewer system improvements, including the planning, acquisition and design of a new wastewater
treatment plant; and(ii)the cost of professional services incurred in connection therewith.
4. Designation,Date,and Interest Payment Dates. The Certificates shall be designated as
the"CITY OF PORT ARTHUR,TEXAS, COMBINATION TAX&REVENUE CERTIFICATES
OF OBLIGATION, SERIES 2015B", and shall be dated June 1, 2015. The Certificates shall bear
interest at the rates set forth in Section 5 of this Ordinance from the later of the date of delivery of the
Certificates to the Purchaser,or the most recent Interest Payment Date to which such interest has been
paid or duly provided for,calculated on the basis of a 360-day year of twelve 30-day months,interest
payable on each Interest Payment Date.
5. Initial Certificates; Numbers and Denominations. The Certificates shall be initially
issued in the principal amounts and bearing interest at the rates set forth in the following schedule,
and may be transferred and exchanged as set out in this Ordinance. The Certificates shall mature on
[February 15] in each of the years and in the amounts set out in such schedule. The Initial Certificate
shall be numbered I-1 and all other Certificates shall be numbered in sequence beginning with R-1.
Certificates delivered on transfer of or in exchange for other Certificates shall be numbered in order
of their authentication by the Registrar, shall be in the denomination of$5,000 or integral multiples
thereof, and shall mature on the same date and bear interest at the same rate as the Certificate or
Certificates in lieu of which they are delivered.
Year Principal Amount Interest Rate
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6. Execution of Certificates; Seal. (a) The Certificates shall be signed on behalf of the
City by the Mayor and countersigned by the City Secretary, by their manual, lithographed, or
facsimile signatures,and the official seal of the City shall be impressed or placed in facsimile thereon.
Such facsimile signatures on the Certificates shall have the same effect as if each of the Certificates
had been signed manually and in person by each of said officers, and such facsimile seal on the
Certificates shall have the same effect as if the official seal of the City had been manually impressed
upon each of the Certificates.
(b) If any officer of the City whose manual or facsimile signature shall appear on the
Certificates shall cease to be such officer before the authentication of such Certificates or before the
delivery of such Certificates, such manual or facsimile signature shall nevertheless be valid and
sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below,no Certificate shall be valid or obligatory for any purpose
or be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Registrar's Authentication Certificate substantially in the form provided herein,duly authenticated by
manual execution by an officer or duly authorized signatory of the Registrar. In lieu of the executed
Registrar's Authentication Certificate described above,the Initial Certificate delivered at the Closing
Date shall have attached hereto the Comptroller's Registration Certificate substantially in the form
provided herein, manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Certificate has been duly approved by the Attorney
General of the State of Texas and that it is a valid and binding obligation of the City, and has been
registered by the Comptroller.
(d) On the Closing Date,the Initial Certificate,being a single certificate representing the
entire principal amount of the Certificates, payable in stated installments to the Purchaser or its
designee, executed by manual or facsimile signature of the Mayor and City Secretary of the City,
approved by the Attorney General, and registered and manually signed by the Comptroller, shall be
delivered to the Purchaser or its designee. Upon payment for the Initial Certificate,the Registrar shall
cancel the Initial Certificate and deliver definitive Certificates to DTC.
7. Payment of Principal and Interest. The Registrar is hereby appointed as the paying
agent for the Certificates pursuant to the Paying Agent/Registrar Agreement, which is hereby
authorized and approved. The principal of the Certificates shall be payable, without exchange or
collection charges, in any coin or currency of the United States of America which, on the date of
payment, is legal tender for the payment of debts due the United States of America, upon their
presentation and surrender as they become due and payable at the principal payment office of the
Registrar in Dallas,Texas. The interest on each Certificate shall be payable by check payable on the
Interest Payment Date,mailed by the Registrar on or before each Interest Payment Date to the Owner
of record as of the Record Date, to the address of such Owner as shown on the Register.
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Notwithstanding the foregoing, while the Certificates are held by the Purchaser, payment of the
principal of and interest on the Certificates shall be made by federal funds wire transfer,at no cost to
the Purchaser, to an account at a financial institution located in the United States designated by the
Purchaser.
If the date for payment of the principal of or interest on any Certificate is not a Business Day,
then the date for such payment shall be the next succeeding Business Day, with the same force and
effect as if made on the original date payment was due.
8. Successor Registrars. The City covenants that at all times while any Certificates are
outstanding it will provide a commercial bank or trust company organized under the laws of the
United States or any state and duly qualified and legally authorized to serve as Registrar for the
Certificates. The City reserves the right to change the Registrar on not less than sixty (60) days
written notice to the Registrar, so long as any such notice is effective not less than sixty (60) days
prior to the next succeeding principal or interest payment date on the Certificates. Promptly upon the
appointment of any successor Registrar, the previous Registrar shall deliver the Register or copies
thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States mail,
first class postage prepaid, of such change and of the address of the new Registrar. Each Registrar
hereunder,by acting in that capacity,shall be deemed to have agreed to the provisions of this Section.
9. Special Record Date. If interest on any Certificate is not paid on any Interest Payment
Date and continues unpaid for thirty(30) days thereafter, the Registrar shall establish a new record
date for the payment of such interest, to be known as a Special Record Date. The Registrar shall
establish a Special Record Date when funds to make such interest payment are received from or on
behalf of the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed for
payment of such past due interest, and notice of the date of payment and the Special Record Date
shall be sent by United States mail,first class postage prepaid,not later than five(5)days prior to the
Special Record Date,to each affected Owner of record as of the close of business on the day prior to
the mailing of such notice.
10. Ownership; Unclaimed Principal and Interest. The City,the Registrar and any other
person may treat the person in whose name any Certificate is registered as the absolute Owner of such
Certificate for the purpose of making payment of principal or interest on such Certificate,and for all
other purposes,whether or not such Certificate is overdue,and neither the City nor the Registrar shall
be bound by any notice or knowledge to the contrary. All payments made to the person deemed to be
the Owner of any Certificate in accordance with this Section shall be valid and effectual and shall
discharge the liability of the City and the Registrar upon such Certificate to the extent of the sums
paid.
Amounts held by the Registrar which represent principal of and interest on the Certificates
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas
Property Code, as amended.
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11. Registration,Transfer,and Exchange. So long as any Certificates remain outstanding,
the Registrar shall keep the Register at its principal payment office in Dallas, Texas,and, subject to
such reasonable regulations as it may prescribe, the Registrar shall provide for the registration and
transfer of Certificates in accordance with the terms of this Ordinance.
Each Certificate shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Registrar in Dallas,Texas,duly endorsed for transfer,or accompanied
by an assignment duly executed by the registered Owner or his authorized representative in form
satisfactory to the Registrar. Upon due presentation of any Certificate in proper form for transfer,the
Registrar shall authenticate and deliver in exchange therefor,within three Business Days after such
presentation,a new Certificate or Certificates,registered in the name of the transferee or transferees,
in authorized denominations and of the same maturity and aggregate principal amount and bearing
interest at the same rate as the Certificate or Certificates so presented.
All Certificates shall be exchangeable upon presentation and surrender at the principal
payment office of the Registrar in Dallas,Texas,for a Certificate or Certificates of like maturity and
interest rate and in any authorized denomination,in an aggregate amount equal to the unpaid principal
amount of the Certificate or Certificates presented for exchange. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Certificates in accordance with the provisions of this
Section. Each Certificate delivered in accordance with this Section shall be entitled to the benefits
and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of which
such Certificate is delivered.
The City or the Registrar may require the Owner of any Certificate to pay a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection with the transfer or
exchange of such Certificate. Any fee or charge of the Registrar for such transfer or exchange shall
be paid by the City.
12. Mutilated, Lost, or Stolen Certificates. Upon the presentation and surrender to the
Registrar of a mutilated Certificate,the Registrar shall authenticate and deliver in exchange therefor a
replacement Certificate of like maturity, interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Certificate is lost,apparently destroyed,or wrongfully taken,
the City, pursuant to the applicable laws of the State of Texas and in the absence of notice or
knowledge that such Certificate has been acquired by a bona fide purchaser, shall authorize and the
Registrar shall authenticate and deliver a replacement Certificate of like maturity, interest rate and
principal amount, bearing a number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Certificate to pay a sum
sufficient to cover any tax or other governmental charge that maybe imposed in connection therewith
and any other expenses connected therewith, including the fees and expenses of the Registrar.
The City or the Registrar may require the Owner of a lost,apparently destroyed or wrongfully
taken Certificate, before any replacement Certificate is issued,to:
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(1) furnish to the City and the Registrar satisfactory evidence of the
ownership of and the circumstances of the loss, destruction or theft of such
Certificate;
(2) furnish such security or indemnity as may be required by the Registrar
and the City to save them harmless;
(3) pay all expenses and charges in connection therewith, including, but
not limited to, printing costs, legal fees, fees of the Registrar and any tax or other
governmental charge that may be imposed; and
(4) meet any other reasonable requirements of the City and the Registrar.
If,after the delivery of such replacement Certificate,a bona fide purchaser of the original Certificate
in lieu of which such replacement Certificate was issued presents for payment such original
Certificate,the City and the 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 Registrar in connection therewith.
If any such mutilated,lost,apparently destroyed or wrongfully taken Certificate has become or
is about to become due and payable,the City in its discretion may, instead of issuing a replacement
Certificate, authorize the Registrar to pay such Certificate.
Each replacement Certificate delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Certificate or Certificates in lieu of
which such replacement Certificate is delivered.
13. Cancellation of Certificates. All Certificates paid in accordance with this Ordinance,
and all Certificates in lieu of which exchange Certificates or replacement Certificates are
authenticated and delivered in accordance herewith,shall be canceled and destroyed upon the making
of proper records regarding such payment. The Registrar shall furnish the City with appropriate
certificates of destruction of such Certificates.
14. Book-Entry System. (a) The Initial Certificate shall be registered in the name of the
Purchaser or its designee. Except as provided in Section 15 hereof, all other 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 Registrar shall have no responsibility or obligation to any DTC Participant or to any
person on behalf of whom such DTC Participant holds an interest in the Certificates, except as
provided in this Ordinance. Without limiting the immediately preceding sentence,the City and the
Registrar shall have no responsibility or obligation with respect to (i)the accuracy of the records of
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DTC, Cede&Co. or any DTC Participant with respect to any ownership interest in the Certificates,
(ii)the delivery to any DTC Participant or any other person, other than 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 on the Register,
of any amount with respect to principal of, premium, if any, or interest on the Certificates.
Notwithstanding any other provision of this Ordinance to the contrary,the City and the 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
interest 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 Registrar shall pay all principal of, premium, if any, and
interest 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 payments of principal,premium,if any,and interest 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 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 of this
Ordinance with respect to interest checks being mailed to the Owner of record as of the Record Date,
the phrase"Cede & Co."in this Ordinance shall refer to such new nominee of DTC.
15. Successor Securities Depository; Transfer Outside Book-Entry Only System. In the
event that the City in its sole discretion,determines that the beneficial owners of the Certificates shall
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, as identified by DTC, 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, as identified by DTC, of the availability through DTC of Certificates and
transfer one or more separate Certificates to DTC Participants having Certificates credited to their
DTC accounts,as identified by DTC. In such event,the Certificates shall not 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 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.
16. Payments to Cede&Co. Notwithstanding any other provision of this Ordinance to the
contrary,so long as any Certificates are registered in the name of Cede&Co.,as nominee of DTC,all
payments with respect to principal of, premium, if any, and interest on such Certificates, and all
notices with respect to such Certificates, shall be made and given, respectively, in the manner
provided in the Blanket Letter of Representations.
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17. Optional and/or Mandatory Redemption. The Certificates are subject to optional
and/or mandatory redemption as set forth in the Form of Certificate in this Ordinance.
Principal amounts may be redeemed only in integral multiples of$5,000. If a Certificate
subject to redemption is in a denomination larger than$5,000, a portion of such Certificate may be
redeemed,but only in integral multiples of$5,000. Upon surrender of any Certificate for redemption
in part,the Registrar,in accordance with Section 11 hereof,shall authenticate and deliver in exchange
therefor a Certificate or Certificates of like maturity,Issuance Date,and interest rate in an aggregate
principal amount equal to the unredeemed portion of the Certificate so surrendered.
Notice of any redemption identifying the Certificates to be redeemed in whole or in part shall
be given by the Registrar at least thirty (30) days prior to the date fixed for redemption by sending
written notice by first class mail,postage prepaid,to the Owner of each Certificate to be redeemed in
whole or in part at the address shown on the Register. Such notices shall state the redemption date,
the redemption price, the place at which Certificates are to be surrendered for payment and, if less
than all Certificates outstanding of a particular maturity are to be redeemed, the numbers of the
Certificates or portions thereof of such maturity to be redeemed. Any notice given as provided in this
Section shall be conclusively presumed to have been duly given,whether or not the Owner receives
such notice. By the date fixed for redemption, due provision shall be made with the Registrar for
payment of the redemption price of the Certificates or portions thereof to be redeemed,plus accrued
interest to the date fixed for redemption. When Certificates have been called for redemption in whole
or in part and due provision has been made to redeem the same as herein provided,the Certificates or
portions thereof so redeemed shall no longer be regarded as outstanding except for the purpose of
receiving payment solely from the funds so provided for redemption,and the rights of the Owners to
collect interest which would otherwise accrue after the redemption date on any Certificate or portion
thereof called for redemption shall terminate on the date fixed for redemption.
The Certificates may be discharged, defeased, redeemed or refunded in any manner now or
hereafter permitted by law.
18. Forms. The form of the Certificates,including the form of Registration Certificate of
the Comptroller of Public Accounts,which shall be attached or affixed to the Initial Certificate,the
form of the Registrar's Authentication Certificate,and the form of Assignment,shall be,respectively,
substantially as follows, with such additions, deletions and variations as may be necessary or
desirable and not prohibited by this Ordinance,including any legend regarding bond insurance if such
insurance is obtained by the Purchaser:
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(a) Form of Certificate.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF JEFFERSON AND ORANGE
REGISTERED REGISTERED
NUMBER DENOMINATION
CITY OF PORT ARTHUR, TEXAS
COMBINATION TAX AND REVENUE
CERTIFICATES OF OBLIGATION
SERIES 2015B
INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP:
[ February 15], 20_ June 1, 2015
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLLARS
The City of Port Arthur,Texas(the"City")promises to pay to the registered owner identified
above,or registered assigns,on the maturity date specified above,upon presentation and surrender of
this Certificate at The Bank of New York Mellon Trust Company, N.A. (the "Registrar") at its
principal payment office in Dallas,Texas,the principal amount identified above,payable in any coin
or currency of the United States of America which on the date of payment of such principal is legal
tender for the payment of debts due the United States of America, and to pay interest thereon at the
rate shown above,calculated on the basis of a 360-day year of twelve 30-day months, from the later
of the date of delivery of the Certificates to the Purchaser,or the most recent interest payment date to
which interest has been paid or duly provided for. Interest on this Certificate is payable by check on
February 15 and August 15,beginning on August 15,2015,mailed to the registered owner of record
as of the close of business on the 15th day of the month next preceding each interest payment date.
While the Certificates are held by the Purchaser, payment of principal of and interest on the
Certificates shall be made by federal funds wire transfer,at no cost to the Purchaser,to an account at
a financial institution located in the United States designated by the Purchaser.
THIS CERTIFICATE is one of a duly authorized issue of Combination Tax & Revenue
Certificates of Obligation, aggregating $[2,250,000] (the"Certificates"), issued in accordance with
the Constitution and laws of the State of Texas, particularly Subchapter C of Chapter 271, Texas
Local Government Code,as amended and Chapter 1502,Texas Government Code,for the purpose of
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evidencing the indebtedness of the City for all or any part of the costs associated with (i)water and
sewer system improvements, including the planning, acquisition and design of a new wastewater
treatment plant; and (ii) the cost of professional services incurred in connection therewith and
pursuant to an ordinance duly adopted by the City Council of the City (the "Ordinance"), which
Ordinance is of record in the official minutes of the City Council.
THE CITY RESERVES THE RIGHT to redeem Certificates maturing on and after
[February 15], 2026, prior to their scheduled maturities, in whole or in part in inverse order of
maturity, in integral multiples of$5,000, on [August 15], 2025, or any date thereafter at par plus
accrued interest on the principal amounts called for redemption to the date fixed for redemption.
Reference is made to the Ordinance for complete details concerning the manner of redeeming the
Certificates.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date
fixed for redemption by first class mail, addressed to the registered owner of each Certificate to be
redeemed in whole or in part at the address shown on the books of registration kept by the Registrar.
When Certificates or portions thereof have been called for redemption, and due provision has been
made to redeem the same,the principal amounts so redeemed shall be payable solely from the funds
provided for redemption, and interest which would otherwise accrue on the amounts called for
redemption shall terminate on the date fixed for redemption.
THIS CERTIFICATE is transferable only upon presentation and surrender at the principal
payment office of the Registrar in Dallas, Texas, duly endorsed for transfer or accompanied by an
assignment duly executed by the registered owner or his authorized representative, subject to the
terms and conditions of the Ordinance.
THE CERTIFICATES are exchangeable at the principal payment office of the Registrar in
Dallas, Texas, for Certificates in the principal amount of$5,000 or any integral multiple thereof,
subject to the terms and conditions of the Ordinance.
THIS CERTIFICATE shall not be valid or obligatory for any purpose or be entitled to any
benefit under the Ordinance unless this Certificate is either(i)registered by the Comptroller of Public
Accounts of the State of Texas by registration certificate attached or affixed hereto or (ii)
authenticated by the Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Certificate, by acceptance hereof, acknowledges and
agrees to be bound by all the terms and conditions of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
registrar for the Certificates and will cause notice of any change of registrar to be mailed to each
registered owner.
IT IS HEREBY certified, recited and covenanted that this Certificate has been duly and
validly issued and delivered;that all acts,conditions and things required or proper to be performed,to
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exist and to be done precedent to or in the issuance and delivery of this Certificate have been
performed, exist and have been done in accordance with law; and that annual ad valorem taxes,
within the limits prescribed by law, sufficient to provide for the payment of the interest on and
principal of this Certificate,as such interest comes due and such principal matures,have been levied
and ordered to be levied against all taxable property in the City.
IT IS FURTHER certified, recited and represented that the revenues, in an amount not to
exceed$10,000,to be derived from the operation of the City's waterworks and sanitary sewer system,
collected by the City,after the payment of all operation and maintenance expenses thereof(the"Net
Revenues"),are pledged to the payment of the principal of and interest on the Certificates;provided,
however, that such pledge is and shall be junior and subordinate in all respects to the pledge of the
Net 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 Net 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, Combination Tax &
Revenue Certificates of Obligation and other obligations of any kind payable in whole or in part from
the Net Revenues,secured by a pledge of the Net Revenues that may be prior and superior in right to,
on a parity with,or junior and subordinate to the pledge of the Net Revenues securing the Certificates.
IN WITNESS WHEREOF, this Certificate has been signed with the manual or facsimile
signature of the Mayor and countersigned with the manual or facsimile signature of the City
Secretary, and the official seal of the City has been duly impressed, or placed in facsimile, on this
Certificate.
(AUTHENTICATION (SEAL) CITY OF PORT ARTHUR, TEXAS
CERTIFICATE)
Mayor
City Secretary
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(b) Form of Registration Certificate.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Certificate has been examined,certified as to validity,and approved
by the Attorney General of the State of Texas, and that this Certificate has been registered by the
Comptroller of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
Comptroller of Public Accounts
(SEAL) of the State of Texas
(c) Form of Registrar's Authentication Certificate.
AUTHENTICATION CERTIFICATE
It is hereby certified that this Certificate has been delivered pursuant
to the Ordinance described in the text of this Certificate.
The Bank of New York Mellon Trust Company,N.A.
As Paying Agent/Registrar
By
Authorized Signature
Date of Authentication
(d) Form of Assignment.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Certificate and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said Certificate on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
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Signature Guaranteed:
Registered Owner
NOTICE: The signature above must correspond
to the name of the registered owner as shown
on the face of this Certificate in every particular,
NOTICE: Signature must be guaranteed without any alteration, enlargement or change
by a member firm of the New York Stock whatsoever.
Exchange or a commercial bank or trust
company.
(e) The Initial Certificate shall be in the form set forth in paragraphs(a),(b)and(d)of this
Section, except for the following alterations:
(i) immediately under the name of the Certificate, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be
completed with the words"As Shown Below"and the word"CUSIP"
deleted;
(ii) in the first paragraph of the Certificate,the words"on the maturity
date specified above" and"at the rate shown above" shall be deleted
and the following shall be inserted at the end of the first sentence"...,
with such principal to be paid in installments on February 15 in each
of the years and in the principal amounts identified in the following
schedule and with such installments bearing interest at the per annum
rates set forth in the following schedule:
[Information to be inserted from schedule in Section 5]
(iii) the Initial Certificate shall be numbered I-1.
19. CUSIP Numbers; Bond Insurance. CUSIP Numbers may be printed on the
Certificates, but errors or omissions in the printing of such numbers shall have no effect on the
validity of the Certificates. If bond insurance is obtained by the Purchaser,the Certificates may bear
an appropriate legend as provided by the insurer.
20. Interest and Sinking Fund; Tax Levy. There is hereby established a separate fund of
the City to be known as the City of Port Arthur Combination Tax & Revenue Certificates of
Obligation,Series 2015B Interest and Sinking Fund(the"Interest and Sinking Fund"),which shall be
kept separate and apart from all other funds of the City. The proceeds from all taxes levied,assessed
and collected for and on account of the Certificates authorized by this Ordinance shall be deposited,
as collected, in the Interest and Sinking Fund. While the Certificates or any part of the principal
thereof or interest thereon remain outstanding and unpaid, there is hereby levied and there shall be
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annually assessed and collected in due time, form and manner, and at the same time as other City
taxes are assessed, levied and collected, in each year, an annual ad valorem tax, within the limits
prescribed by law, upon all taxable property in the City, sufficient to pay the current interest on the
Certificates as the same becomes due and to provide and maintain a sinking fund of not less than two
percent of the principal amount of the Certificates or the amount required to pay each installment of
principal of the Certificates as the same matures,whichever is greater,full allowance being made for
delinquencies and costs of collection,and said taxes are hereby irrevocably pledged to the payment of
the interest on and principal of the Certificates.
21. Pledge of Revenues. (a) Revenues,in an amount not to exceed$10,000,to be derived
from the operation of the City's waterworks and sanitary sewer system,collected by the City,after the
payment of all operation and maintenance expenses thereof(the"Net Revenues"),are hereby pledged
to the payment of the principal of and interest on 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
Net 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 Net Revenues to the payment of the Certificates. The City reserves the right to issue,
for any lawful purpose at any time,in one or more installments,bonds,Combination Tax&Revenue
Certificates of Obligation and other obligations of any kind payable in whole or in part from the Net
Revenues, secured by a pledge of the Net Revenues that may be prior and superior in right to, on a
parity with, or junior and subordinate to the pledge of Net Revenues securing the Certificates.
(b) If Net Revenues are actually on deposit in the Interest and Sinking Fund prior to the
annual tax levy,the City shall reduce the amount of the tax levy by the amount of Net Revenues on
deposit in the Interest and Sinking Fund (as hereinafter defined) on such date. However, if the
determination of Net Revenues to be deposited in the Interest and Sinking Fund is based on budgeted
amounts, (i) the City shall transfer and deposit in the Interest and Sinking Fund each month an
amount 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; (ii) the City shall not transfer any pledged Net Revenues to any fund other than the
Interest and Sinking Funds until such time as an amount equal to the annual debt service on the
Certificate for the then current fiscal year has been deposited in the Interest and Sinking Fund; (iii)
each year that the Certificates are outstanding, and prior to the time taxes are to be levied for such
year, the City shall establish, adopt, and maintain an annual budget that provides for either the
monthly deposit of sufficient Net Revenues,ad valorem tax revenues or other legally available funds,
or a combination thereof,into the Interest and Sinking Fund for the repayment of the Certificates;and
(iv) the City will either maintain and collect sufficient rates and charges to produce revenues in an
amount not less than 1.10 times debt service requirements for all outstanding obligations of the City
secured by Net Revenues,or shall provide documentation evidencing the levy and collection of an ad
valorem tax rate sufficient to provide for the payment of annual debt service requirements.
22. Application of Chapter 1208, Government Code. Chapter 1208, Government Code,
applies to the issuance of the Certificates and the pledge of the taxes and revenues granted by the City
under Sections 20 and 21 of this Ordinance, and such pledge is therefore valid, effective and
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HOU:3538423.2
perfected. If Texas law is amended at any time while the Certificates are outstanding an unpaid such
that the pledge of the taxes and revenues granted by the City under Sections 20 and 21 of this
Ordinance is to be subject to the filing requirements of Chapter 9,Business&Commerce Code,then
in order to preserve to the registered owners of the Certificates the perfection of the security interest
in said pledge, the City agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9,Business&Commerce Code
and enable a filing to perfect the security interest in said pledge to occur.
23. Further Proceedings. After the Initial Certificate has been executed,it shall be the duty
of the Mayor and other appropriate officials and agents of the City to deliver the Initial Certificate and
all pertinent records and proceedings to the Attorney General of the State of Texas,for examination
and approval. After the Initial Certificate has been approved by the Attorney General, it shall be
delivered to the Comptroller for registration. Upon registration of the Initial Certificate, the
Comptroller(or the Comptroller's bond clerk or an assistant bond clerk lawfully designated in writing
to act for the Comptroller)shall manually sign the Comptroller's Registration Certificate prescribed
herein and the seal of said Comptroller shall be impressed, or placed in facsimile, thereon.
24. Sale. The sale of the Certificates to the Texas Water Development Board (the
"Purchaser")at a price of par pursuant to a loan commitment received from the Purchaser is hereby
approved. It is hereby found,determined and declared that the price and terms of the Certificates are
the most advantageous reasonably obtainable by the City. The Mayor and all other officers, agents
and representatives of the City are hereby authorized to do any and all things necessary to provide for
the issuance and delivery of the Certificates.
25. Covenants to Maintain Tax-Exempt Status.
(a) Definitions. When used in this Section, the following terms have the following
meanings:
"Code" means the Internal Revenue Code of 1986, as amended by all
legislation, if any, enacted on or before the Issue Date.
"Computation Date" has the meaning stated in Section 1.148-1(b) of the
Regulations.
"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the
Regulations.
"Investment"has the meaning stated in Section 1.148-1(b)of the Regulations.
"Issue Date" for each series or sub-series of the Certificates or other
obligations of the City is the respective date on which such series or sub-series of the
Certificates or other obligations of the City is delivered against payment therefor.
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HOU:3538423.2
"Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the
Regulations.
"Nonpurpose Investment"has the meaning stated in Section 1.148-1(b)of the
Regulations.
"Proceeds"has the meaning stated in Section 1.148-1(b) of the Regulations.
"Rebate Amount" has the meaning stated in Section 1.148-3 of the
Regulations.
"Regulations" means the temporary or final Income Tax Regulations
applicable to the Certificates issued pursuant to Sections 141 through 150 of the Code.
Any reference to a section of the Regulations shall also refer to any successor
provision to such section hereafter promulgated by the Internal Revenue Service
pursuant to Sections 141 through 150 of the Code and applicable to the Certificates.
"Yield of'
(1) any Investment shall be computed in accordance with Section 1.148-5
of the Regulations, and
(2) the Certificates shall be computed in accordance with Section 1.148-4
of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use,permit the use of or
omit to use Gross Proceeds of the Certificates or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with Gross Proceeds)in a
manner which,if made or omitted,respectively,would cause the interest on any Certificate to become
includable in the gross income, as defined in Section 61 of the Code, of the owner thereof for federal
income tax purposes. Without limiting the generality of the foregoing,unless and until the City shall
have received a written opinion of counsel nationally recognized in the field of municipal bond law to
the effect that failure to comply with such covenant will not adversely affect the exemption from
federal income tax of the interest on any Certificate, the City shall comply with each of the specific
covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the Code
and the regulations and rulings thereunder, the City shall, at all times after the Issue Date of any
Certificate and prior to the last stated maturity of the Certificates,
(i) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with
Gross Proceeds of the Certificates and not use or permit the use of such Gross
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Proceeds or any property acquired, constructed, or improved with such Gross
Proceeds in any activity carried on by any person or entity other than a state or local
government, unless such use is solely as a member of the general public, or
(ii) not directly or indirectly impose or accept any charge or other payment
for use of Gross Proceeds of the Certificates or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with
such Gross Proceeds other than taxes of general application and interest earned on
investments acquired with such Gross Proceeds pending application for their intended
purposes.
(d) No Private Loan. Except to the extent permitted by section 141 of the Code and the
regulations and rulings relating to section 141 of the Code,the City shall not use Gross Proceeds of the
Certificates to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant,Gross Proceeds are considered to be"loaned"to a person or entity
if(1)property acquired,constructed or improved with Gross Proceeds is sold or leased to such person
or entity in a transaction which creates a debt for federal income tax purposes,(2)capacity in or service
from such property is committed to such person or entity under a take or pay,output,or similar contract
or arrangement,or(3)indirect benefits,or burdens and benefits of ownership,of such Gross Proceeds
or such property are otherwise transferred in a transaction which is the economic equivalent of a loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by Section 148 of the
Code and the regulations and rulings thereunder,the City shall not,at any time prior to the earlier of the
final stated maturity or final payment of the Certificates,directly or indirectly invest Gross Proceeds of
the Certificates in any Investment(or use such Gross Proceeds to replace money so invested), if as a
result of such investment the Yield of all Investments allocated to such Gross Proceeds whether then
held or previously disposed of, exceeds the Yield on the Certificates.
(f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b)of the Code
and the regulations and rulings thereunder, the City shall not take or omit to take any action which
would cause the Certificates to be federally guaranteed within the meaning of Section 149(b) of the
Code and the regulations and rulings thereunder.
(g) Information Report. The City shall timely file with the Secretary of the Treasury the
information required by Section 149(e)of the Code with respect to the Certificates on such forms and
in such place as such Secretary may prescribe.
(h) Payment of Rebate Amount. Except to the extent otherwise provided in Section 148(f)
of the Code and the regulations and rulings thereunder,the City shall:
(i) account for all Gross Proceeds of the Certificates (including all
receipts,expenditures and investments thereof)on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof) and
shall retain all records of such accounting for at least nine years after the final
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HOU:3538423.2
Computation Date. The City may, however, to the extent permitted by law,
commingle Gross Proceeds of the Certificates with other money of the City,provided
that the City separately accounts for each receipt and expenditure of such Gross
Proceeds and the obligations acquired therewith,
(ii) calculate the Rebate Amount with respect to the Certificates not less
frequently than each Computation Date,in accordance with rules set forth in Section
148(f) of the Code, Section 1.148-3 of the Regulations, and the rulings thereunder.
The City shall maintain a copy of such calculations for at least six years after the final
Computation Date,
(iii) as additional consideration for the purchase of the Certificates by the
initial purchasers thereof and the loan of the money represented thereby,and in order
to induce such purchase by measures designed to ensure the excludability of the
interest thereon from the gross income of the owners thereof for federal income tax
purposes,pay to the United States the amount described in paragraph(2)above at the
times,in the installments,to the place,in the manner and accompanied by such forms
or other information as is or may be required by Section 148(f) of the Code and the
regulations and rulings thereunder, and
(iv) exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (ii) and, if such error is made, to discover and
promptly to correct such error within a reasonable amount of time thereafter,
including payment to the United States of any interest and any penalty required by the
Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by Section 148 of the
Code and the regulations and rulings thereunder,the City shall not, at any time after the Issue Date of
the Certificates and prior to the earlier of the final stated maturity or final payment of the Certificates,
enter into any transaction that reduces the amount required to be paid to the United States pursuant to
Subsection(h)of this Section because such transaction results in a smaller profit or a larger loss than
would have resulted if the transaction had been at arm's length and had the Yield of the Certificates not
been relevant to either party.
(j) Not Hedge Bonds. The City will not invest more than 50 percent of the Proceeds of
the Certificates in Nonpurpose Investments having a guaranteed yield for four years or more. On the
Issue Date, the City will reasonably expect that at least 85 percent of the Net Sale Proceeds of the
Certificates will be used to carry out the governmental purpose of such series within three years after
the Issue Date.
26. Use of Proceeds;Escrow Agreement. Proceeds from the sale of the Certificates shall
be deposited to the Construction Fund established pursuant to Section 29(b) of this Ordinance and
used only for the purposes set forth in Section 3 of this Ordinance and to pay all expenses arising in
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connection with the issuance of the Certificates.
Notwithstanding the foregoing, immediately following the delivery of the Certificates and
prior to the deposit of the proceeds from the sale of such Certificates in the Construction Fund,such
proceeds shall be held in trust and in escrow pursuant to the written escrow agreement described
below at an official depository of the City pending written authorization to release said proceeds. The
Bank of New York Mellon Trust Company,N.A.,Dallas,Texas,shall be the official depository and is
hereby appointed as the escrow agent for the proceeds of the Certificates. A"Special Escrow Deposit
Agreement" by and between the City and the official depository, attached hereto as Exhibit A and
incorporated herein by reference as a part of this Resolution for all purposes,is hereby approved as to
form and content, and the Mayor and City Secretary are hereby authorized and directed to execute
such Agreement in substantially the same form and content herein approved.
27. Investment and Security of Funds. Money in the Interest and Sinking Fund and the
Construction Fund(hereinafter defined)may,at the option of the City,be invested in time deposits or
certificates of deposit secured in the manner required by law for public funds,or be invested in direct
obligations of,or obligations the principal of and interest on which are unconditionally guaranteed by,
the United States of America,in obligations of any agencies or instrumentalities of the United States
of America or as otherwise permitted by state law, including the Public Funds Investment Act;
provided that all such deposits and investments shall be made in such manner that the money required
to be expended from any Fund will be available at the proper time or times. If necessary, such
investments shall be promptly sold to prevent any default. Any of such moneys which are not
invested shall be held at a designated state depository institution or other properly chartered and
authorized institution in accordance with the Public Funds Investment Act, and the Public Funds
Collateral Act.
28. Private Placement Memorandum. The City hereby approves the form and content and
distribution of the Private Placement Memorandum prepared in connection with the sale of the
Certificates. Authorized and the proper officials of the City are authorized to sign such Private
Placement Memorandum.
29. Compliance with the Texas Water Development Board's Rules and Regulations.
The City will comply with all of the requirements contained in the resolution or resolutions adopted
by the TWDB with respect to the issuance of the Certificates. In addition, in compliance with the
TWDB's Drinking Water State Revolving Fund Loan Program Rules,the City agrees and covenants:
(a) to keep and maintain full and complete records and accounts pertaining to the
construction of the project financed with the proceeds of sale of the Certificates, including the
construction fund account created below, in accordance with the standards set forth by the
Government Accounting Standard Board;
(b) to create and establish at an official depository of the City a "City of Port Arthur
Drinking Water State Revolving Fund Program Loan Construction Fund"(the"Construction Fund")
for the receipt and disbursement of all proceeds from the sale of the Certificates and all other funds
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HOU:3538423.2
acquired by the City in connection with the planning and construction of the projects financed, in
whole or in part, by the Purchaser pursuant to the loan evidenced by the Certificates and all funds
deposited to the credit of the Construction Fund shall be disbursed in a timely and expeditious manner
only for the payment of costs and expenses incurred in connection with the planning and building of
such projects as approved by the TWDB in accordance with a project scheduled approved by the
Executive Administrator of the TWDB which shall not be altered except for good cause shown and
only with the written approval of the Executive Administrator);and as otherwise allowed by the rules
and in accordance with the provisions of Chapter 15 or 17 of the Texas Water Code, as amended;
(c) to provide the TWDB with copies of "as built plans" pertaining to the projects
financed, in whole or in part, with any funds of the TWDB;
(d) upon completion of the construction of the projects financed, in whole or in part,by
the loan evidenced by the Certificates,to provide a final accounting to the TWDB of the total costs of
the projects. Any loan proceeds that are determined to be surplus funds remaining after completion of
the projects will be used for the following purposes as approved by the Executive Director: (1) to
redeem the Bond in inverse annual order, (2) deposit into the Interest and Sinking Fund for the
payment of interest or principal on the Certificates; or(3)eligible project costs as authorized by the
Executive Administrator;
(e) to maintain adequate insurance coverage on the projects financed with the proceeds of
the Certificates in amounts adequate to protect the TWDB's interest;
(f) to maintain current, accurate, and complete records and accounts necessary to
demonstrate compliance with financial assistance related legal and contractual provisions;
(g) to implement any water conservation program required by the TWDB until all
financial obligations to the TWDB have been discharged;
(h) to ensure (i) that all laborers and mechanics employed by contractors and
subcontractors for projects be paid wages at rates not less than those prevailing on projects of a
similar character in the City in accordance with the Davis-Bacon Act, and the U.S. Department of
Labor's implementing regulations and (ii) that all project contracts mandate compliance with the
Davis-Bacon Act;
(i) to (i)provide the TWDB with all information required to be reported in accordance
with the Federal Funding Accountability and Transparency Act of 2006,Pub.L. 109-282,(ii)obtain a
Data Universal Numbering System Number, and (iii) register with the System for Award
Management and maintain such registration while the Certificates are outstanding;
(j) to timely and expeditiously use all loan proceeds, as required by federal statute and
EPA regulations;
(k) to comply with any special conditions specified by the TWDB's environmental
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determination until all financial obligations to the TWDB have been discharged;
(1) it will not use Certificate proceeds to acquire or replace funds which were used,
directly or indirectly, to acquire Nonpurpose Investments which produce a yield materially higher
than the yield on the TWDB's Bonds that were issued to provide financing for the loan of the TWDB
(the "Source Series Bonds") to the City, evidenced by the Certificates, other than Nonpurpose
Investments acquired with:
a. proceeds of Source Series Bonds invested for a reasonable temporary
of up to three (3)years (reduced by the period of investment by the TWDB)until such
proceeds are need for the facilities to be financed;
b. amounts invested in a bona fide debt service fund, within the meaning of
§1.148-1(b) of
c. amounts deposited in any reasonably required reserve or replacement fund to
the extent such amounts do not exceed the least of the maximum annual debt service on the
Certificates, 125% of average annual debt service on the Certificates, or 10 percent of the
stated principal amount(or, in the case of a discount,the issue price) of the Certificates;
(m) so long as any Certificates are held by the TWDB, to provide to the TWDB's
Executive Administrator, within 180 days of the end of the City's fiscal year, a copy of each of its
annual audited financial statements, to be submitted without charge;
(n) to abide by the TWDB's rules and relevant state statutes;
(o) to pay a 2.25% origination fee to the TWDB prior to or at the delivery of the
Certificates;
(p) to provide documentation, prior to the release of Certificate proceeds for goods or
professional services,that the City has met the procurement requirements under the Disadvantaged
Business Enterprises Program;
(q) to indemnify,hold harmless and protect the TWDB from any and all claims,causes of
action or damages to the person or property of third parties arising from the sampling, analysis,
transport, storage, treatment and disposition of any contaminated sewage sludge, contaminated
sediments and/or contaminated media that may be generated by the City,its contractors,consultants,
agents,officials and employees as a result of activities relating to the project to the extent permitted
by law;
(r) to abide by all applicable construction contract requirements related to the use of iron
and steel products produced in the United States,as required by the 2014 Federal Appropriations Act
and related State Revolving Fund Policy Guidelines;
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(s) to notify the Executive Administrator prior to taking any actions to alter its legal status
in any manner, such as by conversion to a conservation and reclamation district or a sale-transfer-
merger with another retail public utility;
(t) that, prior to any action by the City to convey its Certificates held by the TWDB to
another entity, the conveyance and the assumption of the Certificates must be approved by the
TWDB;
(u) that neither the City nor any related party thereto will acquire any of the TWDB's
Source Series Bonds in an amount related to the amount of the Certificates to be acquired from the
City by the TWDB; and
(v) that the TWDB may exercise all remedies available to it in law or equiety, and any
provision of this Ordinance or the Certificates that restricts or limits the TWDB's full exercise of
these remedies shall be of no force and effect.
30. Continuing Disclosure Undertaking. As used in this Section,the following terms have
the meanings ascribed to such terms below:
"MSRB"means the Municipal Securities Rulemaking Board.
"Rule"means SEC Rule 15c2-12, as amended from time to time.
"SEC"means the United States Securities and Exchange Commission.
(a) The City will provide certain updated financial information and operating data to the
MSRB annually in an electronic format as prescribed by the MSRB and available via the Electronic
Municipal Market Access ("EMMA") system at www.emma.msrb.org. The information to be
updated includes all quantitative financial information and operating data with respect to the City of
the general type included in the City's audited financial statements. The City shall update such
information within six months after the end of each fiscal year. Any financial statements so to be
provided shall be(1)prepared in accordance with the accounting principles prescribed by the Texas
State Board of Education or such other accounting principles as the City may be required to employ
from time to time pursuant to State law or regulation and(2)audited,if the City commissions an audit
of such statements and the audit is completed within the period during which they must be provided.
If audited financial statements are not available by the required time,then the City shall provide those
portions of the unaudited financial statements of the City referenced in the City's application for
financial assistance but for the most recently concluded fiscal year by the required time,and audited
financial statements when and if audited financial statements become available.
If the City changes its fiscal year,it will notify 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.
The financial information and operating data to be provided pursuant to this Section may be
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set forth in full in one or more documents or may be included by specific reference to documents(i)
available to the public on the MSRB's internet web site or(ii)filed with the SEC. All filings shall be
made electronically, in the format specified by the MSRB.
(b) The City shall notify the MSRB in an electronic format prescribed by the MSRB,in a
timely manner (not in excess of ten (10) days after the occurrence of the event), of any of the
following events with respect to the Certificates:
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults, if material;
(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,the issuance by the Internal Revenue Service of
proposed or final determinations of taxability,Notices of Proposed Issue(IRS
Form 5701-TEB) or other material notices or determinations with respect to
the tax status of the Certificates, or other material events affecting the tax
status of the Certificates;
(vii) Modifications to rights of holders of the Certificates, if material;
(viii) Certificate calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the
Certificates, if material;
(xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the City;
(xiii) The consummation of a merger,consolidation,or acquisition involving
the City or the sale of all or substantially all of the assets of the City,other
than in the ordinary course of business,the entry into a definitive agreement to
undertake such an action or the termination of a definitive agreement relating
to any such actions, other than pursuant to its terms, if material; and
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(xiv) Appointment of a successor or additional trustee or the change of name
of a trustee, if material.
The City shall notify the MSRB in an electronic format prescribed by the MSRB,in a timely
manner, of any failure by the City to provide financial information or operating data in accordance
with this Section by the time required by this Section.
All documents provided to the MSRB shall be accompanied by identifying information, as
prescribed by the MSRB.
(c) The City shall be obligated to observe and perform the covenants specified in this
Section for so long as,but only for so long as,the City remains an"obligated person"with respect to
the Certificates within the meaning of the Rule,except that the City in any event will give the notice
required by this Section of any Certificate calls and defeasance that cause the City to be no longer
such an"obligated person."
The provisions of this Section are for the sole benefit of the Registered Owners and beneficial
owners of the Certificates, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right,remedy,or claim hereunder to any other person. The City undertakes to
provide only the financial information,operating data,financial statements,and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the City's financial
results,condition,or prospects or hereby undertake to update any information provided in accordance
with this Section or otherwise, except as expressly provided herein. The City does not make any
representation or warranty concerning such information or its usefulness to a decision to invest in or
sell Certificates at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE REGISTERED
OWNER OR BENEFICIAL OWNER OF ANY CERTIFICATE OR ANY OTHER PERSON, IN
CONTRACT OR TORT,FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY
BREACH BY THE CITY,WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended to or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
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(d) The provisions of this Section may be amended by the City from time to time to adapt
to changed circumstances that arise from a change in legal requirements,a change in law,or a change
in the identity,nature, status, or type of operations of the City, but only if(1)the provisions of this
Section,as so amended,would have permitted an purchaser to purchase or sell the 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(2)either(a)the Registered Owners of a majority in aggregate principal amount(or any greater
amount required by any other provision of this Ordinance that authorizes such an amendment)of the
Outstanding Certificates consent to such amendment or(b)a person that is unaffiliated with the City
(such as nationally recognized bond counsel) determines that such amendment will not materially
impair the interests of the Registered Owners and beneficial owners of the Certificates. If the City so
amends the provisions of this Section, it shall include with any amended financial information or
operating data next provided in accordance with this Section an explanation,in narrative form,of the
reasons for the amendment and of the impact of any change in the type of financial information or
operating data so provided. The City may also amend or repeal the provisions of this Section if the
SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction enters
judgment that such provisions of the Rule are invalid,and the City also may amend the provisions of
this Section in its discretion in any other manner or circumstance,but in any case only if and to the
extent that the provisions of this sentence would not have prevented an purchaser from lawfully
purchasing or selling Certificates in the primary offering of the Certificates,giving effect to(a)such
provisions as so amended and(b) any amendments or interpretations of the Rule.
31. Power to Revise Form of Documents. Notwithstanding any other provision of this
Ordinance,the Mayor is hereby authorized to make or approve such revisions, additions, deletions,
and variations to this Ordinance and in the form of the documents attached hereto as exhibits as, in
the judgment of the Mayor, and in the opinion of Bond Counsel to the City, may be necessary or
convenient to carry out or assist in carrying out the purposes of this Ordinance, the Preliminary
Official Statement,the final Official Statement,or as may be required for approval of the Certificates
by the Attorney General of Texas;provided,however,that any changes to such documents resulting
in substantive amendments to the terms and conditions of the Certificates or such documents shall be
subject to the prior approval of the City Council.
32. Related Matters. The Mayor, the City Manager, the City Secretary, the Finance
Director,and other appropriate officials of the City are hereby authorized and directed to do any and
all things necessary and/or convenient to carry out the terms of this Ordinance.
33. Registrar. The form of agreement setting forth the duties of the Registrar is hereby
approved,and the appropriate officials of the City are hereby authorized to execute such agreement
for and on behalf of the City.
34. No Personal Liability. No recourse shall be had for payment of the principal of or
interest on any Certificates or for any claim based thereon,or on this Ordinance,against any official
or employee of the City or any person executing any Certificates.
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35. Open Meeting. It is hereby officially found and determined that the meeting at which
this Ordinance was adopted was open to the public, and that public notice of the time, place and
purpose of said meeting was given, all as required by the Texas Open Meetings Act.
READ,ADOPTED AND APPROVED on this day of A.D.,2015,at a
Regular Meeting of the City Council of the City of Port Arthur,Texas,by the following vote: AYES:
Mayor:
Councilmembers:
•
NOES:
Deloris "Bobbie"Prince, Mayor
ATTEST:
Sherri Bellard, City Secretary
APPROVED AS TO FORM:
"V)--'
Valecia R. Ti no, City orney
APPROVED FOR ADMINISTRATION:
Brian McDougal, City Manager
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APPROVED AS TO LEGALITY:
Bond Attorney
ANDREWS KURTH LLP
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EXHIBIT A
Escrow Agreement
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ESCROW AGREEMENT
THIS ESCROW AGREEMENT (Agreement), made by and between the City of Port Arthur, Texas
(the "City), a political subdivision of the State of Texas in Jefferson and Orange Counties, Texas,
the City, and The Bank of New York Mellon Trust Company, N.A., as Escrow Agent together with
any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to an Ordinance finally adopted on May 12, 2015, the City of Port Arthur,
Texas authorized the issuance of $2,080,000 City of Port Arthur, Texas, Combination Tax and
Revenue Certificates of Obligation, Series 2015B, dated June 1, 2015, to obtain financial assistance
from the Texas Water Development Board(TWDB) for the purpose of funding water or wastewater
system improvements (Project); and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas Comptroller as a
state depository institution in accordance with Texas Government Code, Chapter 404, Subchapter
C, or is a designated custodian of collateral in accordance with Texas Government Code, Chapter
404, Subchapter D and is otherwise qualified and empowered to enter into this Agreement, and
hereby acknowledges its acceptance of the terms and provisions hereof; and
WHEREAS, a condition of the Obligations is the deposit of the proceeds of the Obligations
(Proceeds) in escrow subject to being withdrawn only with the approval of the Executive
Administrator or another designated representative; provided, however, the Proceeds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the City to the Escrow Agent, as set forth on
EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery of
the Obligations, the parties hereto mutually undertake, promise and agree for themselves, their
respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT(S). Upon the delivery of the Obligations described above,
the Proceeds identified under TWDB Commitment Number L10003319 shall be deposited to the
credit of a special escrow account or escrow subaccount(s) (Escrow Account) maintained at the
Escrow Agent on behalf of the City and the TWDB and shall not be commingled with any other
accounts or with any other proceeds or funds. The Proceeds received by the Escrow Agent under
this Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent
shall have no right to title with respect thereto except as Escrow Agent under the terms of this
Agreement.
The Escrow Account shall be entitled "City of Port Arthur, Texas, Combination Tax and Revenue
Certificates of Obligation, Series 2015B, Texas Water Development Board L10003319 Escrow
Account" and shall not be subject to warrants, drafts or checks drawn by the City but shall be
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disbursed or withdrawn to pay the costs of the Project for which the Obligations were issued or
other purposes in accordance with the Ordinance and solely upon written authorization from the
Executive Administrator or his/her designated representative. The Escrow Agent shall provide to
the City and to the TWDB the Escrow Account bank statements upon request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Account and any
accrued interest in excess of the amounts insured by the FDIC and remaining uninvested under the
terms of this Agreement shall be continuously secured by a valid pledge of direct obligations of the
United States of America or other collateral meeting the requirements of the Public Funds
Collateral Act, Texas Government Code, Chapter 2257.
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds Investment
Act, Texas Government Code, Chapter 2256 (PFIA). It is the City's responsibility to direct the
Escrow Agent to invest all public funds in a manner that is consistent not only with the PFIA but
also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from the
Escrow Account, or any portion thereof, unless and until it has been supplied with written approval
and consent by the Executive Administrator or his/her designated representative. However, no
written approval and consent by the Executive Administrator shall be required if the disbursement
involves transferring Proceeds from one investment to another within the Escrow Account(s)
provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS. Any Proceeds remaining unexpended in the Escrow
Account(s) after completion of the Project and after the final accounting has been submitted to and
approved by the TWDB shall be disposed of pursuant to the provisions of the Ordinance. The City
shall deliver a copy of such TWDB approval of the final accounting to the Escrow Agent together
with instructions concerning the disbursement of unexpended Proceeds hereunder. The Escrow
Agent shall have no obligation to ensure that such unexpended Proceeds are used as required by the
provisions of the Ordinance that being the sole obligation of the City.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely
upon the certifications and documents furnished to the Escrow Agent by the City and shall not be
liable for the payment of any funds made in reliance in good faith upon such certifications or other
documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the Escrow
Agent shall not be liable for any act done or step taken or omitted by it or any mistake of fact or
law, except for its negligence or default or failure in the performance of any obligation imposed
upon it hereunder. The Escrow Agent shall not be responsible in any manner for any proceedings
in connection with the Obligations or any recitation contained in the Obligations.
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record
and account relating to the receipts, disbursements, allocations and application of the money
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deposited to the Escrow Account, and investments of the Escrow Account and all proceeds thereof
The records shall be available for inspection and copying at reasonable hours and under reasonable
conditions by the City and the TWDB.
SECTION 9: MERGER/CONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate trust
business, then the successor bank shall be the successor Escrow Agent without the necessity of
further action as long as the successor bank is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code, Chapter
404, Subchapter C, or is a designated custodian of collateral in accordance with Texas Government
Code Chapter 404, Subchapter D. The Escrow Agent must provide the TWDB with written
notification within 30 days of acceptance of the merger, consolidation, or transfer. If the merger,
consolidation or other transfer has occurred between state banks, the newly-created entity shall
forward the certificate of merger or exchange issued by the Texas Department of Banking as well
as the statement filed with the pertinent chartering authority, if applicable, to the TWDB within five
business days following such merger, consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as
necessary with the written consent of the City and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
City or by the Escrow Agent, the Escrow Agent must report said termination in writing to the
TWDB within five business days of such termination. The City is responsible for ensuring that the
following criteria are satisfied in selecting the successor escrow agent and notifying the TWDB of
the change in escrow agents: (a) the successor escrow agent must be an FDIC-insured state or
national bank designated by the Texas Comptroller as a state depository; (b) the successor escrow
agent must be retained prior to or at the time of the termination; (c) an escrow agreement must be
executed by and between the City and the successor escrow agent and must contain the same or
substantially similar terms and conditions as are present in this Agreement; and (d) the City must
forward a copy of the executed escrow agreement with the successor escrow agent within five
business days of said termination. No funds shall be released by the TWDB until it has received,
reviewed and approved the escrow agreement with the successor escrow agent. If the City has not
appointed a successor escrow agent within thirty (30) days of the notice of termination, the Escrow
Agent may petition any court of competent jurisdiction in Texas for the appointment of a successor
escrow agent or for other appropriate relief, and any such resulting appointment shall be binding
upon the City. Whether appointed by the City or a court, the successor escrow agent and escrow
agreement must be approved by the TWDB for the appointment to be effective. The Escrow Agent
is responsible for performance under this Agreement until a successor has been approved by the
TWDB and has signed an acceptable escrow agreement.
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the funds in the
Escrow Account(s)to the City.
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SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent and the
TWDB are as follows:
The Bank of New York Mellon Trust Company. N.A. Executive Administrator
2001 Bryan St., 11th Floor Texas Water Development Board
Dallas, Texas 75201 1700 North Congress Avenue
Austin, Texas 78701
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the
applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County, Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties hereto,
in whole or in part, and any attempted assignment shall be void and of no force and effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow
Agreement between the Escrow Agent and the City and supersedes any other agreements, whether
oral or written, between the parties regarding the Proceeds or the Escrow Account(s). No
modification or amendment of this Agreement shall be valid unless the same is in writing and is
signed by the City and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or provision of
this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be
entitled to compensation for its services as stated in Exhibit A, which compensation shall be paid
by the City but may not be paid directly from the Escrow Account.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
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City of Port Arthur, Texas
By:
Authorized Representative
Date:
City of Port Arthur, Texas
(Seal)
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The Bank of New York Mellon Trust Company,N.A.,
as Escrow Agent
By:
Title:
Date:
Address: 2001 Bryan St., 1 1th Floor
Dallas, Texas 75201
(Bank Seal)
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EXHIBIT A
Fee Schedule
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