Ord 108-96 7/16/1996THE STATE OF TEXAS
COUNTY OF WICHITA
CITY OF WICHITA FALLS
CERTIFICATE FOR ORDINANCE
We, the undersigned officers of said City, hereby certify as follows:
1. The City Council of said City convened in REGULAR MEETING ON THE 16TH DAY
OF JULY, 1996, and the roll was called of the duly constituted officers and members of said City
Council, to -wit: _
Kathryn A. Yeager,
Mayor
Angus Thompson,
Mayor Pro Tem
Bill Daniel,
Councilor
Harold Hawkins,
Councilor
J. Don Johnson,
Councilor
J.W. Martin,
Councilor
Dan Shine,
Councilor
Lydia Torres,
City Clerk
and all of said persons were present, except the following absentees: NONE , thus
constituting a quorum. Whereupon, among other business, the following was transacted at said
Meeting: a written
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF WICHITA FALLS, TEXAS WATER AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE BONDS, SERIES
1996; AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT; AND AUTHORIZING
OTHER MATTERS RELATED 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 passed; and, after due discussion, said motion, carrying
with it the passage of said Ordinance, prevailed and carried by the following vote:
AYES
NOES:
Ary - 2715.014\ordin.crt - PAGE I
All members present voted "Aye ".
None
-2-
2. That a true, full, and correct copy of the aforesaid Ordinance passed at the Meeting
described in the above and foregoing paragraph is attached to and follows this Certificate; that said
Ordinance has been duly recorded in said City Council's minutes of said Meeting; that the above and
foregoing paragraph is a true, full, and correct excerpt from said City Council's minutes of said
Meeting pertaining to the passage 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 time, place, and purpose of the
aforesaid Meeting, and that said Ordinance would be introduced and considered for passage at said
Meeting, and each of said officers and members consented, in advance, to the holding of said Meeting
for such purpose; and that said Meeting was open to the public, and public notice of the time, place,
and purpose of said Meeting was given, all as required by Chapter 551, Texas Government Code.
3. That the Mayor of said City has approved, and hereby approves, the aforesaid Ordinance;
that the Mayor and the City Clerk of said City have duly signed said Ordinance; and that the Mayor
and the City Clerk of said City hereby declare that their signing of this Certificate shall constitute the
signing of the attached and following copy of said Ordinance for all purposes.
4. That the Ordinance has not been modified, amended or repealed and is in full force and
effect on and as of the date hereof.
SIGNED AND SEALED this
•' u�J IXL.�
City Clerk
(SEAL)
/Icy - 2715.014\oMkcri - PAGE 2
J-1v
Mayor
ORDINANCE NO. 108 -96
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF WICHITA FALLS, TEXAS WATER AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE BONDS, SERIES
1996; AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT; AND AUTHORIZING
OTHER MATTERS RELATED THERETO.
(/ky: 2715.014\ordin -.sub - 7/16/96)
ORDINANCE NO. 108 -96
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF WICHITA FALLS, TEXAS WATER' AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE BONDS, SERIES
1996; AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT; AND AUTHORIZING
OTHER MATTERS RELATED THERETO.
TABLE OF CONTENTS
(/ky: 2715.014brdin -.sub - 7/16/96) i
Pace
PREAMBLE...............
...............................
1
Section 1.
AMOUNT AND PURPOSE OF THE BONDS .................
2
Section 2.
DESIGNATION, DENOMINATIONS AND
NUMBERS OF BONDS ...............................
3
Section 3.
PRINCIPAL AND INTEREST ............................
3
Section 4.
SALE OF BONDS ....... ...............................
3
Section 5.
CHARACTERISTICS OF THE BONDS ......................
4
(a) Registration, Transfer, and Exchange; Authentication .....
4
(b) Book -Entry Only System ..........................
5
(c) Successor Securities Depository; Transfers Outside
Book -Entry Only System .........................
5
(d) Payments to Cede & Co . ...........................
6
(e) In General ....... ...............................
6
(f) Notices of Redemption and Defeasance ...............
6
Section 6.
PAYING AGENT/REGISTRAR ...........................
7
(a) Payment of Bonds and Interest ......................
7
(b) Substitute Paying Agent/Registrar ....................
7
Section 7.
FORM OF BOND ........ ...............................
7
Section 8.
DEFINITIONS .......... ...............................
17
Section 9.
PLEDGE .............. ...............................
21
Section 10.
SYSTEM FUND ........ ...............................
21
Section 11.
'DEBT SERVICE FUND ... ...............................
21
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Page
Section 12. RESERVE FUND ........ ............................... 22
Section 13. SUBORDINATE OBLIGATIONS FUND .................... 22
Section 14. INVESTMENTS ........ ............................... 22
Section 15. FUNDS SECURED ...... ............................... 23
Section 16. APPLICATION OF BOND PROCEEDS ..................... 23
Section 17. FLOW OF FUNDS ....... ............................... 23
(a) Debt Service Fund ............................... 23
(b) Reserve Fund .... ............................... 24
(c) Subordinate Obligations Fund ....................... 24
(d) Surplus ......... ............................... 24
Section 18. DEFICIENCIES ........ ............................... 24
Section 19. PAYMENT OF PRIORITY BONDS ........................ 25
Section 20. FINAL DEPOSITS; GOVERNMENT OBLIGATIONS .......... 25
Section 21. ISSUANCE OF PRIORITY AND SUBORDINATE LIEN BONDS . 26
Section 22. FURTHER REQUIREMENTS FOR ADDITIONAL BONDS ..... 27
Section 23. GENERAL COVENANTS . ...............................
31
(a)
Performance ..... ...............................
31
(b)
City's Legal Authority .............................
31
(c)
Acquisition and Construction, Operation and Maintenance .
31
(d)
Title ........... ...............................
32
(e)'
Liens .......... ...............................
32
(f)
No Free Service ......................... . .......
32
(g)
Further Encumbrance .............................
32
(h)
Sale, Lease or Disposal of Property ..................
32
(i)
Books, Records, and Accounts ......................
33
0)
Insurance ....... ...............................
33
(k)
Rate Covenant ... ...............................
34
(1)
Audits .......... ...............................
34
(m)
Governmental Agencies ...........................
34
(n)
No Competition .. ...............................
34
(o)
Rights of Inspection ..............................
34
Section 24. AMENDMENT OF ORDINANCE .......................... 35
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Page
Section 25. DAMAGED, MUTILATED, LOST, STOLEN OR
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111
DESTROYED BONDS . ...............................
37
Section 26.
COVENANTS REGARDING TAX - EXEMPTION
OF INTEREST ON THE BONDS .......................
38
Section 27.
CUSTODY, APPROVAL, AND REGISTRATION OF BONDS;
BOND COUNSEL'S OPINION, AND CUSIP NUMBERS ....
40
Section 28.
PAYING AGENT AGREEMENT ..........................
40
Section 29.
CONTINUING DISCLOSURE UNDERTAKING ..............
40
(a) Annual Reports ... ...............................
40
(b) Material Event Notices ............................
41
(c) Limitations, Disclaimers, and Amendments .............
41
Section 30.
REPEAL OF SERIES 1990 -B AND 1990 -C SUBORDINATE
LIEN BONDS ........ ...............................
42
Section 31.
ESCROW AGREEMENT AND CONSTRUCTION FUND .......
43
Section 32.
FINAL ACCOUNTING ... ...............................
43
Section 33.
SURPLUS BOND PROCEEDS ............................
43
Section 34.
ANNUAL AND MONTHLY REPORTS .....................
43
Section 35.
COMPLIANCE WITH THE
TEXAS WATER DEVELOPMENT BOARD ...............
43
Section 36.
PAYMENT PROCEDURE PURSUANT TO MUNICIPAL
BOND INSURANCE POLICY ..........................
44
Section 37.
NOTICES TO BE GIVEN TO AMBAC INDEMNITY ..........
45
Section 38.
APPROVAL OF INSURANCE ............................
46
Section 39.
FURTHER PROCEDURES ...............................
46
Section 40.
SEVERABILITY ........ ...............................
46
Section 41.
NO PERSONAL LIABILITY ..............................
46
Section 42.
OPEN MEETING ........ ...............................
47
(/ky: 2715.014\ordin -.sub - 7/16/96)
111
Pajae
Section 43. EMERGENCY .......... ............................... 47
Section 44. IMMEDIATE EFFECT .... ............................... 47
Exhibit A - Description of Annual Financial Information
Exhibit B - Form of Escrow Agreement
(/ky: 2715.014brdin -.sub - 7/16196) iv
ORDINANCE NO. 108 -96
ORDINANCE AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF WICHITA FALLS, TEXAS WATER AND SEWER
SYSTEM SUBORDINATE LIEN REVENUE BONDS, SERIES 1996;
AUTHORIZING THE EXECUTION OF A PAYING
AGENT/REGISTRAR AGREEMENT; AND AUTHORIZING
OTHER MATTERS RELATED THERETO.
THE STATE OF TEXAS §
COUNTY OF WICHITA §
CITY OF WICHITA FALLS §
WHEREAS, the City of Wichita Falls, Texas (the "City ") has outstanding the following
utilities system revenue bonds secured by a first lien on and pledge of the "Pledged Revenues "of the
City's Water and Sewer System (the "System ") pursuant to the ordinances (the "Priority Ordinances ")
of the City Council authorizing their issuance (hereinafter defined as the "Priority Bonds "), to wit:
City of Wichita Falls, Texas Water and Sewer System Refunding
Revenue Bonds, Series 1986, dated July 1, 1986 currently outstanding
in the aggregate principal amount of $6,165,000 (the "Series 1986
Bonds ") and
City of Wichita Falls, Texas Water and Sewer System Refunding
Revenue Bonds, Series 1995, dated June 1, 1995 currently outstanding
in the aggregate principal amount of $12,830,000 (the "Series 1995
Bonds ") and
City of Wichita Falls, Texas Water and Sewer System Refunding
Revenue Bonds, Series 1996, dated April 1, 1996 currently outstanding
in the aggregate principal amount of $5,360,000 (the "Series 1996
Bonds "); and
WHEREAS, the City also has outstanding the following utilities system revenue bonds
(hereinafter defined as the "Series 1990 Subordinate Lien Bonds ") which were authorized by an
ordinance (the "Subordinate Lien Ordinance ") of the City Council passed pursuant to the Priority
Bond Ordinance, to wit:
City of Wichita Falls, Texas Water and Sewer Subordinate Lien
Revenue Bonds, Series 1990 -A, dated July 1, 1990, currently
outstanding in the aggregate principal amount of $23,230,000; and
(/ky: 2715.014\ordin -.sub - 7/16/96) 1
WHEREAS, the Series 1990 Subordinate Lien Bonds are secured by a lien on and pledge of
the Pledged Revenues of the System subordinate only to the lien on and pledge of the Pledged
Revenues for the benefit of the Priority Bonds; and
WHEREAS, the Priority Ordinances and the Subordinate Lien Ordinance authorize the City
to issue its "Subordinate Lien Bonds" on a parity with and equally secured by the lien on and pledge
of the Pledged Revenues securing the Series 1990 Subordinate Lien Bonds for the purpose of paying
the cost of "Capital Improvements " to the System; and
WHEREAS, the City Council of the City has heretofore on the 27th day of June, 1996
adopted a resolution authorizing and directing notice of its intention to issue the revenue bonds herein
authorized to be issued, pursuant to Article 2368a, V.A.T.C.S. and Chapter 252 of the Local
Government Code; and
WHEREAS, said notice was published as required by said Article 2368a in the "Wichita Falls
Record News ", which is a newspaper of general circulation in and is published in the City, in the
issues of June 30, 1996 and July 7, 1996; and
WHEREAS, the City received no petition from the qualified electors of the City protesting
the issuance of such revenue bonds; and
WHEREAS, the conditions set forth in the Priority Ordinances and the Subordinate Lien
Ordinance for the issuance of the Bonds as Subordinate Lien Bonds have been met; and
WHEREAS, it is now deemed necessary and advisable that said bonds be issued at this time,
in the amounts and for the purposes as herein shown; and
WHEREAS, the bonds hereinafter authorized are to be issued and delivered pursuant to
Articles 1111 through 1118 V.A.T.C.S., as amended and the Charter of said City;
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS:
Section 1. AMOUNT AND PURPOSE OF THE BONDS. The bonds of the City of Wichita
Falls, Texas (the "City ") are hereby authorized to be issued and delivered in the aggregate principal
amount of $11,420,000 FOR THE PURPOSE OF PROVIDING FUNDS FOR CAPITAL
IMPROVEMENTS TO THE CITY'S COMBINED WATER AND SEWER SYSTEM AND TO
PAY THE COSTS OF ISSUANCE RELATED THERETO.
Section 2. DESIGNATION, DENOMINATIONS AND NUMBERS OF BONDS. Each
Bond issued pursuant to this Ordinance shall be designated: "CITY OF WICHITA FALLS, TEXAS
WATER AND SEWER SYSTEM SUBORDINATE LIEN REVENUE BONDS, SERIES 1996 ",
and initially there shall be issued, sold and delivered hereunder fully registered Bonds, with the Bonds
being dated June 1, 1996 in the respective denominations and principal amounts hereinafter stated,
with the Bonds being numbered consecutively from R -1 upward, payable to the initial registered
(/ky: 2715.014brdin -.sub - 7/16/96) 2
owner thereof (as hereinafter designated), or to the registered assignee or assignees of said Bonds
or any portion or portions thereof (in each case, the "Registered Owner ").
Section 3. PRINCIPAL AND INTEREST. The Bonds shall mature and be payable serially
on August 1 in each of the years and in the principal amounts, respectively, and shall bear interest
calculated on the basis of a 360 -day year composed of twelve 30 -day months from the dates specified
in the FORM OF BOND set forth in this Ordinance to their respective dates of maturity at the rates
per annum as follows:
Date
Maturing Principal
Interest Rate
August 1, 1998
$ 100,000
3.350%
August 1, 1999
100,000
3.600%
August 1, 2000
105,000
3.750%
August 1, 2001
110,000
3.850%
August 1, 2002
115,000
3.950%
August 1, 2003
125,000
4.050%
August 1, 2004
135,000
4.150%
August 1, 2005
135,000
4.250%
August 1, 2006
145,000
4.350%
August 1, 2007
150,000
4.450%
August 1, 2008
25,000
4.550%
August 1, 2009
25,000
4.650%
August 1, 2010
25,000
4.700%
August 1, 2011
25,000
4.750%
August 1, 2012
25,000
4.800%
August 1, 2013
2,300,000
4.850%
August 1, 2014
2,440,000
4.900%
August 1, 2015
2,585,000
4.950%
August 1, 2016
2,750,000
4.950%
Said principal and interest shall be payable in the manner provided and on the dates stated in the
FORM OF BOND set forth in this Ordinance; provided, however, that the principal of and interest
on the Bonds shall be paid by wire transfer to the account requested by the owner of the Bonds and,
at no cost to the owner, as long as the Texas Water Development Board is the owner of the Bonds.
Section 4. SALE OF BONDS. (a) The Bonds are hereby sold and shall be delivered to the
Texas Water Development Board in accordance with law at a price equal to the principal amount of
the Bonds. It is hereby found and determined by the City Council that the price and terms for the
sale of the Bonds are the most advantageous reasonably obtainable. The Bonds shall initially be
registered in the name of the Texas Water Development Board.
(b) The City Council hereby approves the form and content of the Official Statement filed.
with the Texas Water Development Board, which describes the Bonds, the security therefor, and the
financial condition of the City.
(/ky: 2715.014brdin -.sub - 7/16/96) 3
(c) The Paying Agent/Registrar shall complete the "Delivery Certificate" on the Bonds so
delivered to the Texas Water Development Board, and interest on the Bonds so delivered shall
commence from such date.
Section 5. CHARACTERISTICS OF THE BONDS. (a) Registration Transfer, and
Exchange. Authentication. The City shall keep or cause to be kept at the corporate trust office of
Norwest Bank Texas, N.A. (the "Paying Agent/Registrar ") books or records for the registration of
the transfer and exchange of the Bonds (the "Registration Books "), and the City hereby appoints the
Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make
such registrations of transfers and exchanges under such reasonable regulations as the City and Paying
Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations,
transfers and exchanges as herein provided. The Paying Agent/Registrar shall obtain and record in
the Registration Books the address of the registered owner of each Bond to which payments with
respect to the Bonds shall be mailed, as herein provided; but it shall be the duty of each registered
owner to notify the Paying Agent/Registrar in writing of the address to which payments shall be
mailed, and such interest payments shall not be mailed unless such notice has been given. To the
extent possible and under reasonable circumstances, all transfers of Bonds shall be made within three
business days after request and presentation thereof. The City shall have the right to inspect the
Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the
Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required
by law, shall not permit their inspection by any other entity. The Paying Agent/Registrar's standard
or customary fees and charges for making such registration, transfer, exchange and delivery of a
substitute Bond or Bonds shall be paid as provided in the FORM OF BOND set forth in this
Ordinance. Registration of assignments, transfers and exchanges of Bonds shall be made in the
manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance. Each
substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
Except as provided in (e) below, an authorized representative of the Paying Agent/Registrar
shall, before the delivery of any such Bond, date and manually sign the Paying Agent/Registrar's
Authentication Certificate, and no such Bond shall be deemed to be issued or outstanding unless such
Certificate is so executed. The Paying Agent/Registrar promptly shall cancel all paid Bonds and
Bonds surrendered for transfer and exchange. No additional ordinances, orders, or resolutions need
be passed or adopted by the governing body of the City or any other body or person so as to
accomplish the foregoing transfer and exchange of any Bond or portion thereof, and the Paying
Agent/ Registrar shall provide for the printing, execution, and delivery of the substitute Bonds in the
manner prescribed herein. Pursuant to Vernon's Ann. Tex. Civ. St. Art. 717k -6, and particularly
Section 5 thereof, the duty of transfer and exchange of Bonds as aforesaid is hereby imposed upon
the Paying Agent/Registrar, and, upon the execution of said Certificate, the transferred and
exchanged Bond shall be valid, incontestable, and enforceable in the same manner and with the same
effect as the Bonds which initially were issued and delivered pursuant to this Ordinance, approved
by the Attorney General, and registered by the Comptroller of Public Accounts.
(b) Book -Entry Only System. If requested by the Texas Water Development Board, the
Bonds issued in exchange for the Bonds initially issued to the purchaser specified herein shall be
initially issued in the form of a separate single fully registered Bond for each of the maturities thereof.
(/ky: 2715.014\ordin- .sub - 7/16/96) 4
If so requested, upon initial issuance, the ownership of each such Bond shall be registered in the name
of Cede & Co., as nominee of Depository Trust Company of New York ( "DTC "), and except as
provided in subsection (c) hereof; all of the outstanding Bonds shall be registered in the name of Cede
& Co., as nominee of DTC.
With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the City
and the Paying Agent/Registrar shall have no responsibility or obligation to any DTC Participant or
to any person on behalf of whom such a DTC Participant holds an interest on the Bonds. 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 interest in the Bonds, (ii) the delivery to any DTC
Participant or any other person, other than a Bondholder, as shown on the Registration Books, of any
notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any DTC
Participant or any other person, other than a Bondholder, as shown in the Registration Books of any
amount with respect to principal of, premium, if any, or interest on the Bonds. 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 Bond is registered in the Registration
Books as the absolute owner of such Bond for the purpose of payment of principal, premium, if any,
and interest on such Bond, for the purpose of giving notices of redemption and other matters with
respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for all
other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if any,
and interest on the Bonds only to or upon the order of the respective owners, as shown in the
Registration Books 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, premium, if any, and interest on the Bonds to the
extent of the sum or sums so paid. No person other than an owner, as shown in the Registration
Books, shall receive a Bond certificate evidencing the obligation of the City to make payments of
principal, premium, if any, and interest pursuant to this Ordinance. Upon delivery by DTC to the
Paying Agent/Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to
interest checks 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) Successor Securities Depository; Transfers Outside Book -Entry Only System. In the
event that the City determines to discontinue the use of the Book -Entry Only System through DTC
or DTC determines to discontinue providing its services with respect to the Bonds, 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 Bonds to such
successor securities depository or (ii) notify DTC and DTC Participants of the availability through
DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds credited
to their DTC accounts. In such event, the Bonds shall no longer be restricted to being registered in
the Registration Books 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
(/ky: 2715.014brdin -.sub - 7/16/96) 5
Bondholders transferring or exchanging Bonds shall designate in accordance with the provisions of
this Ordinance.
(d) Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to the
contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of premium, if any, and interest on such Bond and all notices with
respect to such Bond shall be made and given, respectively, in the manner provided in the
representation letter of the City to DTC.
(e) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be payable only to the registered owners
thereof, (ii) may be transferred and assigned, (iii) may be exchanged for other Bonds, (iv) shall have
the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi) the principal of and
interest on the Bonds shall be payable, (vii) may be redeemed prior to their scheduled maturities
(notice of which shall be given to the Paying Agent/Registrar at least 50 days prior to the date of
redemption), and (viii) shall be administered and the Paying Agent/Registrar and the City shall have
certain duties and responsibilities with respect to the Bonds, all as provided, and in the manner and
to the effect as required or indicated, in the FORM OF BOND set forth in this Ordinance and in the
Certificate of City Manager. The Bonds initially issued and delivered pursuant to this Ordinance are
not required to be, and shall not be, authenticated by the Paying Agent/ Registrar, but on each
substitute Bond issued in exchange for any Bond or Bonds issued under this Ordinance the Paying
Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTBENTICATION
CERTIFICATE, in the form set forth in the FORM OF BOND.
(0 Notices of Redemption and Defeasance. (i) In addition to the Notice of Redemption set
forth in the FORM OF BOND, the City shall give notice of redemption or defeasance to the Paying
Agent/Registrar at least 50 days prior to a redemption date in the case of a redemption and on the
defeasance date in the case of a defeasance and the Paying Agent/Registrar shall give notice of
redemption or of defeasance of Bonds by mail, first -class postage prepaid at least thirty (30) days
prior to a redemption date and within thirty (30) days after a defeasance date to each registered
securities depository and to any national information service that disseminates such notices. In
addition, in the event of a redemption caused by an advance refunding of the Bonds, the Paying
Agent/Registrar shall send a second notice of redemption to the persons specified in the immediately
preceding sentence at least thirty (30) days but not more than ninety (90) days prior to the actual
redemption date. Any notice sent to the registered securities depositories or such national
information services shall be sent so that they are received at least two (2) days prior to the general
mailing or publication date of such notice. The Paying Agent/Registrar shall also send a notice of
prepayment or redemption to the registered owner of any Bond who has not sent the Bonds in for
redemption sixty (60) days after the redemption date.
(ii) Each Notice of Redemption or Defeasance, whether required in the FORM OF BOND
or in this Section, shall contain a description of the Bonds to be redeemed or defeased including the
complete name of the Bonds, the Series, the date of issue, the interest rate, the maturity date, the
CUSIP number, the certificate numbers, the amounts called of each certificate, the publication and
mailing date for the notice, the date of redemption or defeasance, the redemption price, if any, the
(/ky: 2715.014brdin -.sub - 7/16/96) 6
name of the Paying Agent/Registrar and the address at which the Bonds may be redeemed or paid,
including a contact person and telephone number.
(iii) All redemption payments made by the Paying Agent/Registrar to the registered owners
of the Bonds shall include a CUSIP number relating to each amount paid to such registered owner.
Section 6. PAYING AGENT/REGISTRAR. (a) Payment of Bonds and Interest. The City
hereby further appoints the Paying Agent/Registrar to act as the paying agent for paying the principal
of and interest on the Bonds, all as provided in this Ordinance. The Paying Agent/ Registrar shall
keep proper records of all payments made by the City and the Paying Agent/Registrar with respect
to the Bonds. However, in the event of a nonpayment of interest on a scheduled payment date, and
for thirty (30) days thereafter, a new record date for such interest payment (a "Special Record Date ")
will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest
have been received from the City. Notice of the Special Record Date and of the scheduled payment
date of the past due interest (the "Special Payment Date ", which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by United
States mail, first -class postage prepaid, to the address of each Holder of a Bond appearing on the
Registration Books of the Paying Agent/Registrar at the close of business on the last business day
next preceding the date of mailing of such notice.
(b) Substitute Paying Agent/Registrar. The City covenants with the registered owners of the
Bonds that at all times while the Bonds are outstanding the City will provide a competent and legally
qualified bank, trust company, financial institution, or other agency to act as and perform the services
of Paying Agent/Registrar for the Bonds under this Ordinance, and that the Paying Agent/Registrar
will be one entity. The City reserves the right to, and may, at its option, change the Paying
Agent/Registrar upon not less than 120 days written notice to the Paying Agent/Registrar, effective
not later than 60 days prior to the next principal or interest payment date after such notice. In the
event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger,
acquisition, or other method) should resign or otherwise cease to act as such, the City covenants that
promptly it will appoint a competent and legally qualified bank, trust company, financial institution,
or other agency to act as Paying Agent/Registrar under this Ordinance. Upon any change in the
Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the
Registration Books (or a copy thereof), along with all other pertinent books and records relating to
the Bonds, to the new Paying Agent/Registrar designated and appointed by the City. Upon any
change in the Paying Agent/Registrar, the City promptly will cause a written notice thereof to be sent
by the new Paying Agent/Registrar to each registered owner of the Bonds, by United States mail,
first -class postage prepaid, which notice also shall give the address of the new Paying
Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar
shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this
Ordinance shall be delivered to each Paying Agent/Registrar.
Section 7. FORM OF BONDS. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate, the form of Assignment and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas to be attached only to the
Bonds initially issued and delivered pursuant to this Ordinance, shall be, respectively, substantially
(/ky: 2715.014\ordin -.sub - 7/16/96) 7
as follows, with such appropriate variations, omissions, or insertions as are permitted or required by
this Ordinance and the Certificate of City Manager.
[remainder of this page is intentionally left blank]
(/ky: 2713.014\ordin -.sub - 7/16/96) 8
FORM OF BOND:
NO. R- $.
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTY OF WICHITA
CITY OF WICHITA FALLS, TEXAS
WATER AND SEWER SYSTEM SUBORDINATE LIEN
REVENUE BOND, SERIES 1996
INTEREST RATE MATURITY DATE BOND DATE CUSIP
REGISTERED OWNER:
PRINCIPAL AMOUNT:
August 1, June 1, 1996
AND 00 /100 DOLLARS
ON THE MATURITY DATE SPECIFIED ABOVE, THE CITY OF WICHITA FALLS, IN
WICHITA COUNTY, TEXAS, a municipal corporation of the State of Texas (the "Issuer "), hereby
promises to pay to the Registered Owner specified above, or to the registered assignee thereof (either
being hereinafter called the "registered owner ") the Principal Amount specified above and to pay
interest thereon, from the date of delivery of this Bond to the initial purchased as shown below in the
Delivery Certificate to the date of its scheduled maturity or the date of its redemption prior to
scheduled maturity, at the rate of interest per annum specified above, with said interest being payable
on February 1, 1997, and semiannually on each August 1 and February 1 thereafter; except that if this
Bond is required to be authenticated and the date of its authentication is later than the first Record
Date, such Principal Amount shall bear interest from the interest payment date next preceding the
date of authentication, unless such date of authentication is after any Record Date (hereinafter
defined) but on or before the next following interest payment date, in which case such Principal
Amount shall bear interest from such next following interest payment date; provided, however, that
if on the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond
is being exchanged or converted from is due but has not been paid, then this Bond shall bear interest
from the date to which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON this Bond are payable in lawful money of the
United States of America, without exchange or collection charges. The principal of this Bond shall
be paid to the registered owner hereof upon presentation and surrender of this Bond at maturity or
upon the date fixed for its redemption prior to maturity, at the corporate office of Norwest Bank
Texas, N.A., in Dallas, Texas which is the "Paying Agent/Registrar" for this Bond. The payment of
interest on this Bond shall be made by the Paying Agent/Registrar to the registered owner hereof on
each interest payment date by check dated as of such interest payment date, drawn by the Paying
(/ky: 2715.014brdin -.sub - 7/16/96) 9
Agent/Registrar on, and payable solely from, funds of the Issuer required by the ordinance authorizing
the issuance of the bonds (the "Bond Ordinance ") to be on deposit with the Paying Agent/Registrar
for such purpose as hereinafter provided; and such check shall be sent by the Paying Agent/Registrar
by United States mail, first class postage prepaid, on each such interest payment date, to the
registered owner hereof, at its address as it appeared on the fifteenth (15th) day of the month next
preceding each such date (the "Record Date ") on the Registration Books kept by the Paying
Agent/Registrar, as hereinafter described. In addition, interest payments may be made by such other
methods, acceptable to the Paying Agent/Registrar, requested by and at the risk and expense of the
registered owner. Any accrued interest due at maturity shall be paid to the registered owner upon
presentation and surrender of this Bond for payment at the principal corporate trust office of the
Paying Agent/Registrar. The Issuer covenants with the registered owner of this Bond that on or
before each principal payment date and interest payment date for this Bond it will make available to
the Paying Agent/Registrar, from the "Debt Service Fund" created by the Priority Ordinance, the
amounts required to provide for the payment, in immediately available funds, of all principal of and
interest on the Bonds, when due. Notwithstanding the foregoing, during any period in which
ownership of the Bonds is determined by a book entry at a securities depository for the Bonds,
payments made to the securities depository, or its nominee, shall be made in accordance with
arrangements between the Issuer and the securities depository.
IF THE DATE for any payment due on this Bond shall be a Saturday, Sunday, a legal holiday,
or a day on which banking institutions in the city where the principal corporate office of the Paying
Agent/Registrar is located are authorized by law or executive order to close, or the United States
Postal Service is not open for business, then the date for such payment shall be the next succeeding
day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are
authorized to close, or the United States Postal Service is not open for business; and payment on such
date shall have the same force and effect as if made on the original date payment was due.
THIS BOND is one of a series of bonds of like tenor and effect except as to number, principal
amount, right of prior redemption and maturity, aggregating Eleven Million Four Hundred Twenty
Thousand Dollars ($11,420,000) (herein sometimes called the "Bonds "), issued for the purpose of
improving and extending the Issuer's combined Water and Sewer System by acquiring and
constructing Capital Improvements thereto and to pay the costs of issuance related thereto all in
accordance with the Constitution and laws of the State of Texas, particularly Articles 1111 through
1118, V.A.T.C.S., and the Charter of the Issuer and pursuant to the Bond Ordinance. The Bonds
are issuable solely as fully registered bonds, without interest coupons, in the denomination of any
integral multiple of $5,000. Terms used in this Bond and not otherwise defined have the meaning
given in the Bond Ordinance.
THE ISSUER reserves the right to redeem the Bonds maturing on and after August 1, 2006
in whole or in part in inverse order of maturity and in principal amounts of $5,000 or integral
multiples thereof on any date on and after August 1, 2005, at the redemption price equal to the
principal amount thereof plus accrued interest to the redemption date. If less than all of the Bonds
of a maturity are to be redeemed, the Issuer shall direct the Paying Agent/Registrar to call by lot
(/ky: 2715.014brdin -.sub - 7/16/96) 10
Bonds, or portions thereof, within such maturity or maturities and in such principal amounts, for
redemption; provided that during any period in which ownership of the Bonds is determined by a
book entry at a securities depository for the Bonds, if fewer than all of the Bonds of the same
maturity and bearing the same interest rate are to be redeemed, the particular Bonds of such maturity
and bearing such interest rate shall be selected in accordance with the arrangements between the
Issuer and the securities depository.
AT LEAST 30 days prior to the date fixed for any redemption of Bonds or portions thereof
prior to maturity, a written notice of such redemption shall be sent by the Paying Agent/Registrar by
United States mail, first -class postage prepaid, to the registered owner of each Bond to be redeemed
at its address as it appeared on the business day next preceding the date of mailing such notice;
provided, however, that the failure to send, mail or receive such notice, or any defect therein or in
the sending or mailing thereof, shall not affect the validity or effectiveness of the proceedings for the
redemption of any Bond, and it is hereby specifically provided that the delivery of such notice to the
Paying Agent Registrar as required by the Bond Ordinance shall be the only notice actually required
in connection with or as a prerequisite to the redemption of any Bonds or portions thereof. By the
date fixed for any such redemption, due provision shall be made with the Paying Agent/Registrar for
the payment of the required redemption price for the Bonds or portions thereof which are to be so
redeemed. If such notice of redemption is given and if due provision for such payment is made, all
as provided above, the Bonds or portions thereof which are to be so redeemed thereby automatically
shall be treated as redeemed prior to their scheduled maturities, and they shall not bear interest after
the date fixed for redemption, and they shall not be regarded as being outstanding except for the right
of the registered owner to receive the redemption price from the Paying Agent/Registrar out of the
funds provided for such payment. If a portion of any Bond shall be redeemed, a substitute Bond or
Bonds having the same maturity date, bearing interest at the same rate, in any denomination or
denominations in any integral multiple of $5,000, at the written request of the registered owner, and
in an aggregate principal amount equal to the unredeemed portion thereof, will be issued to the
registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as
provided in the Bond Ordinance.
ALL BONDS OF THIS SERIES are issuable solely as fully registered Bonds, without interest
coupons, in the denomination of any integral multiple of $5,000. As provided in the Bond Ordinance,
this Bond may, at the request of the registered owner or the assignee or assignees hereof, be assigned,
transferred and exchanged for a like aggregate amount of fully registered Bonds, without interest
coupons, payable to the appropriate registered owner, assignee or assignees, 'as the case may be,
having any authorized denomination or denominations as requested in writing by the appropriate
registered owner, assignee or assignees, as the case may be, upon surrender of this Bond to the
Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in
the Bond Ordinance. Among other requirements for such assignment and transfer, this Bond must
be presented and surrendered to the Paying Agent/Registrar, together with proper instruments of
assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar,
evidencing assignment of this Bond or any portion or portions hereof in any authorized denomination
to the assignee or assignees in whose name or names this Bond or any such portion or portions hereof
(/ky: 2715.014\ordin -.sub - 7/16/96) 11
is or are to be registered. The Form of Assignment printed or endorsed on this Bond may be
executed by the registered owner to evidence the assignment hereof, but such method is not
exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be
used to evidence the assignment of this Bond or any portion or portions hereof from time to time by
the registered owner. The Issuer shall pay the Paying Agent/Registrar's reasonable standard or
customary fees and charges for transferring and exchanging any Bond or portion thereof. Any taxes
or governmental charges required to be paid with respect thereto shall be paid by the one requesting
such assignment, transfer or exchange, as a condition precedent to the exercise of such privilege. The
Paying Agent/Registrar shall not be required to make any such transfer or exchange with respect to
any Bond or any portion thereof called for redemption prior to maturity, within 45 days prior to its
redemption date; provided, however, such limitation of transfer shall not be applicable to an exchange
by the Registered Owner of an unredeemed balance of a Bond called for redemption in part.
WHENEVER the beneficial ownership of this Bond is determined by a book entry at a
securities depository for the Bonds, the foregoing requirements of holding, delivering, or transferring
this Bond shall be modified to require the appropriate person or entity to meet the requirements of
the securities depository as to registering or transferring the book entry to produce the same effect.
IN THE EVENT any Paying Agent/Registrar for the Bonds is changed by the Issuer, resigns,
or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptly will
appoint a competent and legally qualified substitute therefor, and promptly will cause written notice
thereof to be mailed to the registered owners of the Bonds.
BY BECOMING the registered owner of this Bond, the registered owner thereby
acknowledges all of the terms and provisions of the Bond Ordinance, agrees to be bound by such
terms and provisions, acknowledges that the Bond Ordinance is duly recorded and available for
inspection in the official minutes and records of the Issuer, and agrees that the terms and provisions
of this Bond and the Bond Ordinance constitute a contract between each registered owner hereof and
the Issuer. The Issuer has reserved the rights in the Bond Ordinance to issue additional Priority
Bonds and additional parity obligations to the Bonds and to amend the provisions of the Bond
Ordinance under the conditions set forth in the Bond Ordinance.
THE BONDS are special obligations of the Issuer payable, together with the Issuer's
Series 1990 Subordinate Lien Bonds, solely from and equally secured by a lien on and pledge of the
"Pledged Revenues" of the Issuer's combined Water and Sewer System on a parity with the Issuer's
Subordinate Lien Bonds now outstanding or hereafter issued. Such lien and pledge, however, being
subordinate to the lien and pledge securing the Issuer's Priority Bonds now outstanding or hereafter
issued.
THE REGISTERED OWNER HEREOF shall never have the right to demand payment of this
obligation out of any funds raised or to be raised by taxation.
(/ky: 2715.014brdin -.sub - 7/16/96) 12
IT IS HEREBY certified, recited, and covenanted that this Bond has been duly and validly
authorized, issued, and delivered; that all acts, conditions, and things required or proper to be
performed, exist, and be done precedent to or in the authorization, issuance, and delivery of this Bond
have been performed, existed, and been done in accordance with law.
IN TESTIMONY WHEREOF, the City Council of the City of Wichita Falls, Texas, in
accordance with the provisions of Article 717j -1, V.A.T.C.S., has caused the seal of said Issuer to
be impressed or a facsimile thereof to be printed hereon, and this Bond to be executed with the
manual or imprinted facsimile signatures of the Mayor and City Clerk of said Issuer.
CITY OF WICHITA FALLS, TEXAS
Mayor, City of Wichita Falls, Texas
COUNTERSIGNED:
City Clerk, City of Wichita Falls, Texas
(SEAL)
(/ky: 2715.014\ordin -.sub - 7/16/96) 13
[FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE]
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been issued under the provisions of the Bond
Ordinance described on the face of this Bond; and that this Bond has been issued in exchange for or
replacement of a bond, bonds, or a portion of a bond or bonds of an issue which originally was
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas.
Dated
Norwest Bank Texas, N.A., Dallas, Texas
Paying Agent/Registrar
LM
Authorized Representative
[FORM OF DELIVERY CERTIFICATE]
DELIVERY CERTIFICATE
THIS BOND was delivered to the initial purchaser hereof on
Norwest Bank Texas, N.A., Dallas, Texas
Paying Agent/Registrar
(/ky: 2715.014\ordin -.sub - 7/16/96) 14
Authorized Representative
[FORM OF ASSIGNMENT] .
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned registered owner of this Bond, or duly
authorized representative or attorney thereof, hereby assigns this Bond to
(Assignee's Social Security or
Taxpayer Identification Number)
hereby irrevocably constitutes and appoints
(print or typewrite Assignee's name and
address, including zip code)
and
attorney to transfer the registration of this Bond on the Paying Agent/Registrar's Registration Books
with full power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: This signature must be
guaranteed by a member of the
New York Stock Exchange or a
commercial bank or trust company.
(/ky: 2715.014 \ordin -.sub - 7/16/96) 15
Registered Owner
NOTICE: This signature must
correspond with the name of the
Registered Owner appearing on the
face of this Bond.
[FORM OF COMPTROLLER'S CERTIFICATE ATTACHED TO
THE BONDS UPON INITIAL DELIVERY THEREOF]
OFFICE OF COMPTROLLER
REGISTER NO.
STATE OF TEXAS
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been examined by him as required by
law, and 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 special obligation of the City of Wichita Falls, Texas,
payable in the manner provided by and in the ordinance authorizing same, and said Bond has this day
been registered by me.
WITNESS MY HAND and seal of office at Austin, Texas
(SEAL)
Comptroller of Public Accounts of
the State of Texas
[FORM OF INSURANCE LEGEND, IF REQUIRED]
** *END OF BOND FORM * **
(/ky: 2715.014\ordin -.sub - 7/16/96) 16
Section 8. DEFINITIONS. That, as used in this Ordinance, the following terms shall have
the meanings set forth below, unless the text hereof specifically indicates otherwise:
(a) The term "Accountant" shall mean a nationally recognized independent certified public
accountant, or an independent firm of certified public accountants.
(b) The term "Additional Bonds" shall mean the additional revenue bonds on a parity with
the Series 1990 Subordinate Lien Bonds and the Bonds which the City reserves the right to issue in
the future, as provided in this Ordinance.
(c) The term " AMBAC Indemnity" shall mean AMBAC Indemnity Corporation, a Wisconsin -
Domiciled stock insurance company.
(d) The term "Average Annual Principal and Interest Requirements" shall mean that amount
equal to the average annual principal and interest requirements (including Amortization Installments)
of all Priority Bonds and Subordinate Lien Bonds outstanding. With respect to Priority Bonds or
Subordinate Lien Bonds, as the case may be, that bear interest at a rate which is not established at
the time of issuance at a single numerical rate for each maturity of such series, Average Annual
Principal and Interest Requirements shall be calculated by (i) assuming that the interest rate for every
12 -month period on such bonds is equal to the rate of interest reported in the most recently published
edition of The Bond Buyer (or its successor) at the time of calculation as the Revenue Bond Index
or, if such Revenue Bond Index is no longer being maintained by The Bond Buyer (or its successor)
at the time of calculation, such interest rate shall be assumed to be 80% of the rate of interest then
being paid on United States Treasury Obligations of like maturity, and (ii) that the principal of such
bonds is amortized such that annual debt service is substantially level over the remaining stated life
of the bonds.
(e) The term 'Bonds" shall mean, collectively, the Bonds initially issued and delivered
pursuant to this Ordinance and all substitute obligations exchanged therefor, as well as all other
substitute bonds and replacement bonds issued pursuant hereto, and the term 'Bond" shall mean any
of the Bonds.
(f) The term "Capital Additions" shall mean a reservoir or an interest therein, a water
treatment plant or an interest therein and a wastewater treatment plant or an interest therein and
associated transmission facilities with respect to each and any combination thereof, which shall
become a part of the System.
(g) The term "Capital Improvements" shall mean any capital extensions, improvements and
additions to the System other than Capital Additions.
(h) The terms "City" and "Issuer" shall mean the City of Wichita Falls, in Wichita County,
Texas.
(/ky: 2715.014\ordin -.sub - 7/16/96) 17
(i) The term "Credit Obligation" shall mean, to the extent permitted by law, any obligation
of the City under a contract, lease, installment sales agreement, or other instrument, with another
entity to make payments out of revenues of the System for power, energy, water or other property,
services or commodities for the benefit of the System, on a basis that such must be paid for whether
or not the same are made available, furnished or received and whether or not the entity selling such
services or commodities is amortizing its capital costs with such payments.
(j) The term "DTC" shall mean The Depository Trust Company of New York, New York,
New York, or any successor securities depository.
(k) The term "DTC Participant" shall mean securities 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.
(1) The term "Engineer of Record" shall mean the independent engineer or firm at the time
employed by the City to perform and carry out the duties imposed on such engineer or firm by this
Ordinance and having a favorable reputation nationally for skill and experience in the engineering of
water and sewer systems of comparable size and character as those forming parts of the System.
(m) The term "Gross Revenues" shall mean all revenues, income, and receipts of every nature
derived or received by the City from the operation and ownership of the System (other than grants,
contributions in aid of construction, and meter deposits and amounts received pursuant to the Water
Supply Contract between the City and West Texas Utilities dated January 1, 1977), including the
interest income from the investment or deposit of money in any Fund created by this Ordinance, or
maintained by the City in connection with the System.
(n) The term "MSRB" shall mean the Municipal Securities Rulemaking Board.
(o) The term "Municipal Bond Insurance Policy" shall mean the municipal bond insurance
policy issued by AMBAC Indemnity insuring the payment when due of the principal and interest on
the Bonds as provided therein.
(p) The term "NRMSIR" shall mean each person whom the SEC or its staff has determined
to be a nationally recognized municipal securities information repository within the meaning of the
Rule from time to time.
(q) The term "Net Revenues of the City's Combined Water and Sewer System ", and "Net
Revenues" shall mean all Gross Revenues less Operating Expenses.
(r) The term "Operating Expenses" shall mean the expenses of operation and maintenance
of the System, including all salaries, labor, materials, repairs, and extensions necessary to render
efficient service, provided, however, that only such repairs and extensions, as in the judgment of the
(/ky: 2715.014brdin -.sub - 7/16/96) 18
City, reasonably and fairly exercised by the passage of appropriate ordinances, are necessary to render
adequate service, or such as might be necessary to meet some physical accident or condition which
would otherwise impair the Priority Bonds or Subordinate Lien Bonds. Operating Expenses shall
include the purchase of electric power, water and sewer services as received from other entities and
the expenses related thereto, and, to the extent permitted by law, Operating Expenses may include
payments made on or in respect of Credit Obligations. Depreciation, and payments from the System
Fund to other funds established in this Ordinance, shall never be considered as expenses of operation
and maintenance.
(s) The term "Paying Agent/Registrar" shall mean the financial institution specified in
Section 5(a) hereof, or its herein permitted successors and assigns;
(t) The term "Pledged Revenues" shall mean
(1) the Net Revenues, plus
(2) any additional revenues, income, receipts, or other resources, including, without
limitation, any grants, donations, or income received or to be received from the United
States Government, or any other public or private source, whether pursuant to an
agreement or otherwise, which hereafter are pledged to the payment of the Priority
Bonds and Subordinate Lien Bonds.
(u) The term "Priority Bonds" shall mean the Series 1986 Bonds, the Series 1995 Bonds, the
Series 1996 Bonds, and any additional Priority Bonds hereafter issued.
(v) The term "Priority Ordinance" or "Priority Bond Ordinance" shall mean collectively the
ordinances authorizing the Priority Bonds.
(w) The term "Prudent Utility Practice" shall mean any of the practices, methods and acts,
in the exercise of reasonable judgment, in the light of the facts, including but not limited to the
practices, methods and acts engaged in or approved by a significant portion of the public utility
industry prior thereto, known at the time the decision was made, would have been expected to
accomplish the desired result at the lowest reasonable cost consistent with reliability, safety and
expedition. It is recognized that Prudent Utility Practice is not intended to be limited to the optimum
practice, method or act at the exclusion of all others, but rather is a spectrum of possible practices,
methods or acts which could have been expected to accomplish the desired result at the lowest
reasonable cost consistent with reliability, safety and expedition. In the case of any facility included
in the System which is owned in common with one or more other entities, the term "Prudent Utility
Practice ", as applied to such facility, shall have the meaning set forth in the agreement governing the
operation of such facility.
(x) The term "Rule" shall mean SEC Rule 15c2 -12, as amended from time to time.
(/ky: 2715.014brdin -.sub - 7/16/96) 19
(y) The term "SEC" shall mean the United States Securities and Exchange Commission.
(z) The term "Series 1986 Bonds" shall mean the City of Wichita Falls, Texas Water and
Sewer Refunding Revenue Bonds, Series 1986.
(aa) The term "Series 1995 Bonds" shall mean the City of Wichita Falls, Texas Water and
Sewer System Refunding Revenue Bonds, Series 1995.
(bb) The term "Series 1996 Bonds" shall mean the City of Wichita Falls, Texas Water and
Sewer System Refunding Revenue Bonds, Series 1996.
(cc) The term "Series 1990 Subordinate Lien Bonds" shall mean the City of Wichita Falls,
Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1990 -A.
(dd) The term "SID" shall mean any person designated by the State of Texas or an authorized
department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state
information depository within the meaning of the Rule from time to time.
(ee) The term "Subordinate Lien Bond" shall mean Series 1990 Subordinate Lien Bonds, the
Bonds, and all Additional Bonds which from time to time may hereafter be issued and incurred on
a parity therewith in accordance with the provisions of Section 21 hereof, and secured in whole or
in part by a lien on and pledge of the Pledged Revenues subordinate only to the Priority Bonds.
(ff) The term "Subordinated Obligations" shall mean any bonds, notes, or other obligations
issued pursuant to law payable in whole or in part from the Pledged Revenues and subordinate to the
Priority Bonds and Subordinate Lien Bonds.
(gg) The term "System" shall mean and include the City's existing combined waterworks
system and sewer system, together with all future extensions, improvements, enlargements, and
additions thereto, and all replacements thereof, provided that, notwithstanding the foregoing, and to
the extent now or hereafter authorized or permitted by law, the term System shall not include any
water or sewer facilities which are declared by the City not to be a part of the System and which are
hereafter acquired or constructed by the City with the proceeds from the issuance of "Special
Facilities Bonds ", which are hereby defined as being special revenue obligations of the City which are
not secured by or payable from the Pledged Revenues, but which are secured by and payable solely
from special contract revenues or payments received from the System, any other legal entity, or any
combination thereof, in connection with such facilities; and such revenues or payments shall not be
considered as or constitute Gross Revenues of the System, unless and to the extent otherwise
provided in the ordinance or ordinances authorizing the issuance of such "Special Facilities Bonds ".
(hh) The term "Value of Investment Securities" and words of like import shall mean the
amortized value thereof, provided, however, that all United States of America, United States
Treasury Obligations- -State and Local Government Series shall be valued at par and those obligations
(/ky: 2715.014brdin -.sub - 7/16/96) 20 '
which are redeemable at the option of the holder shall be valued at the price at which such obligations
are then redeemable. The computations made under this paragraph shall include accrued interest on
the investment securities paid as a part of the purchase price thereof and not collected. For the
purposes of this definition "amortized value ", when used with respect to a security purchased at par
means the purchase price of such security and when used with respect to a security purchased at a
premium above or discount below par, means as of any subsequent date of valuation, the value
obtained by dividing the total premium or discount by the number of interest payment dates remaining
to maturity on any such security after such purchase and by multiplying the amount as calculated by
the number of interest payment dates having passed since the date of purchase and (i) in the case of
a security purchased at a premium, by deducting the product thus obtained from the purchase price,
and (ii) in the case of a security purchased at a discount, by adding the product thus obtained to the
purchase price.
(ii) The term "Year" shall mean the regular fiscal year used by the City in connection with the
operation of the System, which may be any twelve consecutive months period established by the City.
Section 9. PLEDGE. Subject only to the lien and pledge securing the Priority Bonds, the
Series 1990 Subordinate Lien Bonds, the Bonds and any Subordinate Lien Bonds hereafter issued
are and shall be secured by and payable from a lien on and pledge of the Pledged Revenues including
such revenues within the System Fund and the funds created in the Priority Bond Ordinance; and the
Pledged Revenues are further pledged to the establishment and maintenance of the Debt Service Fund
and the Reserve Fund as hereinafter provided. The Series 1990 Subordinate Lien Bonds, the Bonds
and any Additional Bonds are and will be secured by and payable only from the Pledged Revenues,
and are not secured by or payable from a mortgage or deed of trust on any properties, whether real,
personal, or mixed, constituting the System.
Section 10. SYSTEM FUND. That there shall continue to be established and maintained on
the books of the City, and accounted for separate and apart from all other funds of the City, a special
fund to be entitled the "City of Wichita Falls Water and Sewer Fund" (the "System Fund "). All Gross
Revenues shall be credited to the System Fund immediately upon receipt, unless otherwise provided
in this Ordinance. All current expenses of operation and maintenance of the System shall be paid
from such Gross Revenues credited to the System Fund as a first charge against same. Before making
any deposits hereinafter required to be made from the System Fund, the City shall retain in the System
Fund at all times an amount at least equal to one -sixth of the amount budgeted for the then current
fiscal year for the current operation and maintenance expenses of the System.
Section 11. DEBT SERVICE FUND. (a) That for the sole purpose of paying the principal
amount of, premium, if any, and interest on all Priority Bonds or Subordinate Lien Bonds, as the same
come due, there shall continue to be established and maintained on the books of the City a separate
fund to be entitled the "City of Wichita Falls, Texas Water and Sewer Revenue Bonds Debt Service
Fund" (hereinafter called the "Debt Service Fund "). Monies in said Fund shall be deposited and
maintained in an official depository bank of the City.
(/ky: 2715.014\ordin -.sub - 7/16/96) 21
(b) That within the Debt Service Fund there is hereby established the Capitalized Interest
Account. The proceeds of Priority Bonds and Subordinate Lien Bonds representing Capitalized
Interest may be deposited into the Capitalized Interest Account. On or before the day next preceding
any interest payment date of bonds for which any interest has been capitalized, the City shall use the
monies in the Capitalized Interest Account to pay such interest to the extent of the amounts therein
representing such capitalized interest.
Section 12. RESERVE FUND. That there shall continue to be established and maintained
on the books of the City a separate fund to be entitled the "City of Wichita Falls, Texas Water and
Sewer Revenue Bonds Reserve Fund" (hereinafter called the "Reserve Fund "). Monies in said Fund
shall be used solely for the purpose of retiring the last of any Priority Bonds or Subordinate Lien
Bonds as they become due or paying principal of and interest on any Priority Bonds or Subordinate
Lien Bonds when and to the extent the amounts in the Debt Service Fund are insufficient for such
purpose. The Reserve Fund shall be maintained in an amount equal to the Average Annual Principal
and Interest Requirements of the outstanding Priority Bonds and Subordinate Lien Bonds (the
"Required Amount "). Upon the issuance of Additional Priority Bonds or Subordinate Lien Bonds
the monies in the Reserve Fund shall be increased to the newly established Required Amount in
accordance with the provisions of Section 21(b) of the Ordinance authorizing the Series 1986 Bonds.
The City may, at its option, withdraw and transfer to the System Fund, all surplus in the Reserve
Fund over the Required Amount. Monies in said Fund shall be deposited and maintained in an official
depository bank of the City.
Section 13. SUBORDINATE OBLIGATIONS FUND. That there shall continue to be
established and maintained on the books of the City a separate fund to be entitled the "City of Wichita
Falls, Texas Water and Sewer Revenue Bonds Subordinated Obligations Fund" (herein defined as the
"Subordinated Obligations Fund "). Monies in said Fund shall be maintained in an official depository
bank of the City. Monies in the Subordinated Obligations Fund shall be withdrawn to pay the
principal of and interest on Subordinated Obligations and shall be paid over to the Paying
Agent/Registrar to make the payments required in clauses (a) and (b) of Section 17 in the event that
monies are not available in the System Fund for that purpose.
Section 14. INVESTMENTS. That money in any Fund established pursuant to this
Ordinance may, at the option of the City, be (A) placed in time deposits or certificates of deposit
which (to the extent not insured by the Federal Deposit Insurance Corporation) are secured by
obligations of the type described in (B) hereinbelow, or (B) invested, including investments held in
book -entry form, in (i) direct obligations of the United States of America, (ii) obligations guaranteed
or insured by the United States of America, which, in the opinion of the Attorney General of the
United States, are backed by its full faith and credit or represent its general obligations, or, (iii) to the
extent permitted by law, evidences of indebtedness and repurchase agreements issued, insured or
guaranteed by such governmental agencies as the Federal Land Banks, Federal Intermediate Credit
Banks, Banks for Cooperatives, Federal Home Loan Banks, Government National Mortgage
Association, United States Postal Service, Farmers Home Administration, Federal Home Loan
Mortgage Association; provided that all money required to be expended from any Fund will be
(/ky: 2715.014\ordin -.sub - 7/16/96) 22
available at the proper time or times. Money in the Reserve Fund shall not be invested in securities
maturing later than the final maturity of the Priority Bonds and Subordinate Lien Bonds. If monies
in a Fund herein established are permitted to be invested the value of any such Fund shall be
established by adding the monies therein to the Value of Investment Securities. The value of each
such Fund shall be established annually during the last month of each Year and in addition thereto,
with respect to the Reserve Fund, value shall be established within thirty days prior to the issuance
of Priority Bonds or Additional Bonds and at the time or times withdrawals are made therefrom.
Such investments shall be sold promptly when necessary to prevent any default in connection with
the Priority Bonds or Subordinate Lien Bonds.
Section 15. FUNDS SECURED. That monies in the System Fund and all Funds created by
this Ordinance, to the extent not invested, shall be secured in the manner prescribed by law for
securing funds of the City.
Section 16. APPLICATION OF BOND PROCEEDS. Concurrently with the delivery of the
Bonds, the proceeds thereof shall be applied in the various amounts and for the purposes described
in a certificate of the City, to be delivered by the City upon delivery of the Bonds.
Section 17. FLOW OF FUNDS. That all monies in the System Fund not required for paying
Operating Expenses during each month shall be applied by the City, on or before the 25th day of the
following month, commencing during the months and in the order of priority with respect to the
Funds and Accounts that such applications are hereinafter set forth in this Section.
(a) Debt Service Fund - To the credit of the Debt Service Fund without priority among the
deposits except that the deposits set forth in (1), (2), (3) and (4) shall have priority over the other
deposits in this paragraph (a), to -wit:
(1) such amounts, deposited in approximately equal monthly installments, commencing
during the month in which the Priority Bonds are delivered, or the month thereafter if delivery
is made after the 25th day thereof, as will be sufficient, together with other amounts, if any,
in the Debt Service Fund available for such purpose, to pay the interest scheduled to come
due on Priority Bonds on the next succeeding interest payment date;
(2) such amounts, deposited in approximately equal monthly installments, commencing
during the month which shall be the later to occur of, (i) the twelfth month before the first
maturity date of Priority Bonds, or (ii) the month in which Priority Bonds are delivered, or
the month thereafter if delivery is made after the 25th day thereof, as will be sufficient,
together with other amounts, if any, in the Debt Service Fund available for such purpose, to
pay the principal scheduled to mature on Priority Bonds on the next succeeding principal
payment date;
(3) such amounts, deposited in approximately equal monthly installments, commencing
during the month which the Subordinate Lien Bonds are delivered, or the month thereafter
(/ky: 2715.014brdin -.sub - 7/16/96) 23
if delivery is made after the 25th day thereof, as will be sufficient, together with other
amounts, if any, in the Debt Service Fund available for such purpose, to pay the interest
scheduled to come due on the Subordinate Lien Bonds on the next succeeding interest
payment date;
(4) such amounts, deposited in approximately equal monthly installments, commencing
during the month which shall be the later to occur of, (i) the twelfth month before the first
maturity date of the Subordinate Lien Bonds, or (ii) the month during which the Subordinate
Lien Bonds are delivered, or the month thereafter if delivery is made after the 25th day
thereof, as will be sufficient, together with other amounts, if any, in the Debt Service Fund
available for such purpose, to pay the principal scheduled to mature on the Subordinate Lien
Bonds on the next succeeding principal payment date; and
(b) Reserve Fund. The additional amount required to be on deposit in the Reserve Fund as
a result of the issuance of the Bonds shall be accumulated by the deposit of said required additional
amount in approximately sixty (60) equal monthly installments made on or before August 25, 1996
and on or before the 25th day of each month thereafter.
When and so long as the sum of money and the Value of Investment Securities in the Reserve
Fund are not less than the Required Amount, no deposits need be made to the credit of the Reserve
Fund. When and if the Reserve Fund at any time contains less than the Required Amount due to any
cause or condition other than the issuance of Priority Bonds or Subordinate Lien Bonds, then, subject
and subordinate to making the required deposits to the credit of the Debt Service Fund, commencing
with the month during which such deficiency occurs, such deficiency shall be made up from the next
available Pledged Revenues, or from any other sources available for such purpose. If the Reserve
Fund contains less than the Required Amount due to the issuance of Priority Bonds or Subordinate
Lien Bonds deposits shall be made to the Reserve Fund commencing during the month and in the
amounts required by Section 21(b).
(c) Subordinate Obligations Fund. Commencing during the month Subordinated Obligations
are delivered, or the month thereafter if delivery is made after the 25th day thereof, the City shall
deposit to the credit of the Subordinated Obligations Fund the amount in cash accruing in such
calendar month for payment of the debt service requirements on any Subordinated Obligations. Such
payments shall be subordinate and junior in right of payment to the payment of principal of and
premium, if any, and interest on the Priority Bonds or Subordinate Lien Bonds.
(d) Surplus. The balance of any monies remaining in the System Fund following such
transfers shall be used by the City for any lawful purpose.
Section 18. DEFICIENCIES. That if on any occasion there shall not be sufficient Pledged
Revenues to make the deposits and other applications of monies required by Section 17 with respect
to the various Funds as provided therein, any such deficiencies shall be made up (in the order that
(/ky: 2715.014\ordin -.sub - 7/16/96) 24
each such Fund is provided for in Section 17) as soon as possible from the next available Pledged
Revenues, or from any other sources available for such purpose.
Section 19. PAYMENT OF SUBORDINATE LIEN BONDS. That on or before each
August 1 and February 1 while any of the Subordinate Lien Bonds are outstanding and unpaid, the
City shall make available to the Paying Agent/Registrar therefor, out of the Debt Service Fund (and
the other funds, if necessary, in the order of priority set forth herein) monies sufficient to pay such
interest on and such principal amount of the Subordinate Lien Bonds as shall become due and mature
on such dates, respectively, at maturity or by redemption prior to maturity. The Paying
Agent/Registrar shall destroy all paid Subordinate Lien Bonds and furnish the City with an
appropriate certificate of cancellation or destruction.
Section 20. FINAL DEPOSITS; GOVERNMENT OBLIGATIONS. (a) That any Priority
Bond shall be deemed to be paid, retired and no longer outstanding within the meaning of this
Ordinance when payment of the principal amount of, redemption premium, if any, on such Priority
Bond, plus interest thereon to the due date thereof (whether such due date be by reason of maturity,
upon redemption, or otherwise) either (i) shall have been made in accordance with the terms thereof
or (ii) shall have been provided for by irrevocably depositing with, or making available to, a paying
agent (or escrow agent) therefor, in trust and irrevocably set aside exclusively for such payment,
(1) money sufficient to make such payment or (2) Government Obligations, as hereinafter defined in
this Section, certified by an independent public accounting firm of national reputation, to mature as
to principal and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money to make such payment, and all necessary and proper fees,
compensation, and expenses of such paying agent pertaining to the Priority Bonds with respect to
which such deposit is made shall have been paid or the payment thereof provided for (and irrevocable
instructions shall have been given by the City to such paying agent of such bonds to give notice of
such redemption in the manner required by the ordinance or ordinances authorizing the issuance of
such bonds) to the satisfaction of such paying agent. Such paying agent shall give notice to each
registered owner of any Priority Bond that such deposit as described above has been made, in the
same manner as described in Section 3. In addition, in connection with a defeasance, such paying
agent shall give notice of redemption, if necessary, to the registered owners of any Priority Bonds in
the manner described in such Priority Bonds and as directed in the redemption instructions delivered
by the City to such paying agent. At such time as a Priority Bond shall be deemed to be paid
hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance
or a lien on and pledge of the Pledged Revenues, and shall be entitled to payment solely from such
money or Government Obligations.
(b) That any moneys so deposited with a paying agent (or escrow agent) may, at the direction
of the City, also be invested in Government Obligations, maturing in the amounts and times as
hereinbefore set forth, and all income from all Government Obligations in the hands of the paying
agent pursuant to this Section which is not required for the payment of the Priority Bonds, the
redemption premium, if any, and interest thereon, with respect to which such money has been so
deposited, shall be remitted to the City for deposit into the System Fund.
(/k-y: 2715.014brdin -.sub - 7/16/96) 25
(c) That the City covenants that no deposit will be made or accepted under clause (a)(ii) of
this Section and no use made of any such deposit which would cause the Bonds or any Priority Bonds
to be treated as arbitrage bonds within the meaning of Section 103(c) of the Internal Revenue Code
of 1954, as amended.
(d) That for the purpose of this Section, the term "Government Obligations" shall mean
noncallable and nonprepayable direct obligations of the United States of America, including
obligations the principal of and interest on which are unconditionally guaranteed by the United States
of America.
(e) Except as provided in clause (b) of this Section, all money or Government Obligations
set aside and held in trust pursuant to the provisions of this Section for the payment of Priority
Bonds, the redemption premium, if any, and interest thereon, shall be applied solely to and used solely
for the payment of such Priority Bonds, the redemption premium, if any, and interest thereon.
Section 21. ISSUANCE OF PRIORITY AND SUBORDINATE LIEN BONDS. (a) That
subject to the provisions hereinafter appearing as conditions precedent which must first be satisfied,
the City reserves the right to issue, from time to time as needed, Priority Bonds and Additional
Bonds, either or both, for any lawful purpose relating to the System. Such Priority Bonds and
Additional Bonds may be issued in such form and manner as now or hereafter authorized by the laws
of the State of Texas for the issuance of evidences of indebtedness or other instruments, and should
new methods or financing techniques be developed that differ from those now available and in normal
use, the City reserves the right to employ the same in its financing arrangements provided only that
the same conditions precedent herein required for the authorization and issuance of Priority Bonds
and Additional Bonds are satisfied.
(b) That the Debt Service Fund and the Reserve Fund established by this Ordinance shall
secure and be used to pay all Priority Bonds and Subordinate Lien Bonds as well as the Bonds. Upon
the issuance and delivery of Priority Bonds or Additional Bonds, the additional amount required to
be deposited in the Reserve Fund shall be so accumulated by the deposit in the Reserve Fund of all
or any part of said required additional amount in cash immediately after the delivery of such Priority
Bonds or Additional Bonds, or, at the option of the City, by the deposit of said required additional
amount (or any balance of said required additional amount not deposited in cash as permitted above)
in approximately equal monthly installments, made on or before the 25th day of each month following
the delivery of such Priority Bonds or Additional Bonds, of not less than 1/60 of said required
additional amount (or 1/60 of the balance of said required additional amount not deposited in cash
as permitted above).
(c) That all calculations of Average Annual Principal and Interest Requirements made
pursuant to this Section shall be made as of and from the date of the Priority Bonds or Additional
Bonds then proposed to be issued.
(/ky: 2715.014brdin -.sub - 7/16/96) 26
(d) That the principal of all Priority Bonds or Additional Bonds (except such obligations
scheduled to mature within twelve months from the date of issuance thereof) must be scheduled to
be paid or mature on August 1 of the years in which such principal is scheduled to be paid or mature;
and all interest thereon must be payable on February 1 and August 1.
Section 22. FURTBER REQUIREMENTS FOR ADDITIONAL BONDS. (a) Conditions
Precedent for Issuance of Additional Bonds - General. That as a condition precedent to the issuance
of any Additional Bonds, the City Manager (or other officer of the City then having the responsibility
for the financial affairs of the City) shall have executed a certificate stating (i) that the City is not then
in default as to any covenant, obligation or agreement contained in any ordinance or other proceeding
relating to any obligations of the City payable from and secured by a lien on and pledge of the
Pledged Revenues, and (ii) all payments into all funds or accounts created and established for the
payment and security of all outstanding obligations payable from and secured by a lien on and pledge
of the Pledged Revenues have been made in full and that the amounts on deposit in such funds or
accounts are the amounts then required to be deposited therein. Such certificate shall be dated as of
the date of delivery of such Additional Bonds.
(b) Conditions Precedent for Issuance of Additional Bonds - Capital Improvements and for
any other lawful purpose except for Capital Additions or for refunding. Except as otherwise provided
in clause (c) of this Section, the City covenants and agrees that Additional Bonds will not be issued
for the purpose of financing Capital Improvements, or for any other lawful purpose (except for
Capital Additions or for refunding, which are to be issued in accordance with the provisions of
clauses (d), (e) or (f) of this Section) unless and until the conditions precedent in clause (a) above
have been satisfied and, in addition thereto, the City has secured a certificate or opinion of the
Accountant to the effect that, according to the books and records of the City, the Net Earnings for
the preceding Year or for 12 consecutive months out of the 15 months immediately preceding the
month the ordinance authorizing the Additional Bonds is adopted are at least equal to the sum of (1)
1.10 times the Average Annual Principal and Interest Requirements for the Subordinate Lien Bonds
outstanding (except Priority Bonds) that are payable from and secured by a lien on and pledge of the
Pledged Revenues of the System, including Subordinate Lien Bonds then proposed and (2) 1.25 times
the Average Annual Principal and Interest Requirements for all outstanding Priority Bonds. In
making a determination of the Net Earnings, the Accountant may take into consideration a change
in the rates and charges for services and facilities afforded by the System that became effective at least
sixty (60) days prior to the last day of the period for which Net Earnings are determined and, for
purposes of satisfying the above Net Earnings test, make a pro forma determination of the Net
Earnings of the System for the period of time covered by his certification or opinion based on such
change in rates and charges being in effect for the entire period covered by the Accountant's
certificate or opinion.
As used in this Section, the term "Net Earnings" shall mean the Gross Revenues of the
System after deducting the Operating Expenses of the System, but not expenditures which,
under standard accounting practice, should be charged to capital expenditures.
(/ky: 2715.014\ordin -.sub - 7/16/96) 27
(c) The City covenants and agrees that Additional Bonds may not be issued for the purpose
of financing Capital Improvements when other outstanding Priority Bonds or Subordinate Lien Bonds
have been issued for Capital Additions and capitalized interest for such other Priority Bonds or
Subordinate Lien Bonds has been provided for at least the twelve months subsequent to the date of
issuance of the new Subordinate Lien Bonds being issued, unless the conditions precedent in clause
(a) above have been satisfied and, in addition thereto, the City has either (1) complied with the
conditions of clause (b) of this Section, or (2) has satisfied the conditions precedent in clauses (d)(i)
and (d)(n) of this Section (but, for purposes of such clauses, the term Capital Improvements shall be
substituted for the term Capital Additions where the term Capital Additions appears therein to the
extent necessary to give recognition to the fact that Capital Improvements, rather than Capital
Additions, are then to be financed) and has secured a certificate or opinion of the Accountant to the
effect that, according to the books and records of the City, the Net Earnings for the preceding Year
or for 12 consecutive months out of the 15 months immediately preceding the month the ordinance
authorizing the Additional Bonds is adopted are at least equal to the sum of (a) 1.10 times the
Average Annual Principal and Interest Requirement for the Subordinate Lien Bonds outstanding
other than any Subordinate Lien Bonds issued for Capital Additions for which capitalized interest has
been provided for at least twelve months subsequent to the date of issuance of the new Subordinate
Lien Bonds being issued that are payable from and secured by a lien on and pledge of the Pledged
Revenues of the System, including Subordinate Lien Bonds then proposed and (b) 1.25 times the
Average Annual Principal and Interest Requirements for all outstanding Priority Bonds other than any
Priority Bonds issued for Capital Additions for which capitalized interest has been provided for at
least twelve months subsequent to the date of the new Subordinate Lien Bonds being issued. In
making a determination of the Net Earnings, the Accountant may take into consideration a change
in the rates and charges for services and facilities afforded by the System that became effective at least
sixty (60) days prior to the last day of the period for which Net Earnings are determined and, for
purposes of satisfying the above Net Earnings test, make a pro forma determination of the Net
Earnings of the System for the period of time covered by his certification or opinion based on such
change in rates and charges being in effect for the entire period covered by the Accountant's
certificate or opinion.
(d) Conditions Precedent for Issuance of Additional Bonds - Capital Additions: Initial Issue.
The City covenants and agrees that Additional Bonds will not be issued for the purpose of financing
Capital Additions, unless the same conditions precedent specified in clause (a) above have been
satisfied and, in addition thereto, the conditions precedent specified in clause (b) above are satisfied
or, in the alternative, the City shall have obtained:
(i) from the Engineer of Record a comprehensive Engineering Report for each Capital
Addition to be financed, which report shall (A) contain (1) detailed estimates of the cost of
acquiring and constructing the Capital Addition, (2) the estimated date the acquisition and
construction of the Capital Addition will be completed and commercially operative, and (3)
a detailed analysis of the impact of the Capital Addition on the financial operations of the
system for which the Capital Addition is to be integrated and to the System as a whole during
the construction thereof and for at least five Years after the date the Capital Addition
(/ky: 2715.014brdin -.sub - 7/16/96) 28
becomes commercially operative, and (B) conclude that (1) the Capital Addition is necessary
and will substantially increase the capacity, or is needed to replace existing facilities, to meet
current and projected demands for the service or product to be provided thereby, and (2) the
estimated cost of providing the service or product from the Capital Addition will be
reasonable in comparison with projected costs for furnishing such service or product from
other reasonably available sources; and
(ii) a certificate of the Engineer of Record to the effect that, based on the Engineering
Report prepared for each Capital Addition, the projected Net Earnings for each of the five
years subsequent to the date the Capital Addition becomes commercially operative (as
estimated in the Engineering Report) will be equal to at least the sum of (A) 1.25 times the
Average Annual Principal and Interest Requirements for Priority Bonds then outstanding or
incurred and all Priority Bonds estimated to be issued, if any, for all Capital Improvements
and for all Capital Additions then in progress or then being initiated, during the period from
the date the first series of obligations for the Capital Additions is to be delivered through the
fifth year subsequent to the date the Capital Addition is estimated to become commercially
operative, and (B) 1.10 times the Average Annual Principal and Interest Requirements for
Subordinate Lien Bonds (other than Priority Bonds) payable from the Pledged Revenues,
which are then outstanding or incurred and all Subordinate Lien Bonds estimated to be issued,
if any, for all Capital Improvements and for all Capital Additions then in progress or then
being initiated, during the period from the date the first series of obligations for the Capital
Addition is to be delivered through the fifth year subsequent to the date the Capital Addition
is estimated to become commercially operative.
(e) Subsequent Issues. Once a Capital Addition has been initiated by meeting the conditions
precedent specified in clauses (d)(i) and (d)(ii) above and the initial Priority Bonds or Subordinate
Lien Bonds delivered therefor, the City reserves the right to issue Priority Bonds and Subordinate
Lien Bonds, as the case may be, to finance the remaining costs of such Capital Addition in such
amounts as may be necessary to complete the acquisition and construction thereof and make the same
commercially operative without satisfaction of any condition precedent under clauses (d)(i) and (d)(ii)
or clause (b) of this Section but subject to satisfaction of the following conditions precedent:
(i) the City makes a forecast (the "Forecast ") of the operations of the System
demonstrating the System's ability to pay all obligations, payable from the Pledged Revenues
of the System to be outstanding after the issuance of the Priority Bonds or Subordinate Lien
Bonds then being issued for the period (the "Forecast Period ") of each ensuing year through
the fifth year subsequent to the latest estimated date such Capital Addition is expected to be
commercially operative, and
(ii) the Engineer of Record reviews such Forecast and executes a certificate to the
effect that such Forecast is reasonable, and based thereon (and such other factors deemed to
be relevant), the Pledged Revenues of the System will be adequate to pay all the obligations,
(/ky: 2715.014\ordin -.sub - 7/16/96) 29
payable from the Pledged Revenues of the System to be outstanding after the issuance of the
Priority Bonds or Subordinate Lien Bonds then being issued for the Forecast Period.
(f) The City reserves the right to issue Additional Bonds to refund all or any part of the
outstanding Priority Bonds or Subordinate Lien Bonds (pursuant to any law then available), upon
such terms and conditions as the City Council of the City may deem to be in the best interest of the
City and its inhabitants, and if less than all such outstanding Priority Bonds or Subordinate Lien
Bonds are refunded, the conditions precedent prescribed (for the issuance of Priority Bonds or
Subordinate Lien Bonds) set forth in clauses (a) and (b) of this Section shall be satisfied and the
Accountant's certificate or opinion required by clause (b) shall give effect to the issuance of the
proposed refunding bonds (and shall not give effect to the Priority Bonds or Subordinate Lien Bonds
being refunded following their cancellation or provision being made for their payment). No
Accountant's certificate otherwise required by clause (b) will be required for refunding bonds, after
giving effect to such proposed refunding, if there is no increase in debt service for any Year before
or including any Year in which there will be debt service on Priority Bonds or Subordinate Lien
Bonds outstanding both before and after such refunding and any such refunding bond does not have
a lien on Pledged Revenues superior to the obligation which it refunds.
(g) With reference to Priority Bonds and Subordinate Lien Bonds anticipated and estimated
to be issued or incurred, the Average Annual Principal and Interest Requirements therefor shall be
those reasonably estimated and computed by the City's Director of Finance (or other officer of the
City then having the primary responsibility for the financial affairs of the City). In the preparation of
the Engineering Report required in clause (d)(i) above, the Engineer of Record may rely on other
experts or professionals, including those in the employment of the City, provided such Engineering
Report discloses the extent of such reliance and concludes it is reasonable so to rely. In connection
with the issuance of Subordinate Lien Bonds or Priority Bonds for Capital Additions, the certificate
of the City's Director of Finance and Engineer of Record, together with the Engineering Report for
the initial issue and the Forecast for a subsequent issue, shall be conclusive evidence and the only
evidence required to show compliance with the provisions and requirements and this clause of this
Section.
(h) Priority Bonds or Subordinate Lien Bonds for Capital Additions may be combined in a
single issue with Priority Bonds or Subordinate Lien Bonds, as the case may be, for Capital
Improvements or for any lawful purpose provided the conditions precedent set forth in clauses (b)
through (f) are complied with as the same relate to the appropriate purpose.
(i) The City may, at any time and from time to time, for any lawful purpose, issue
Subordinated Obligations, the principal of and redemption premium, if any, and interest on which is
payable from and secured by a pledge of and lien on the Pledged Revenues junior and subordinate to
the lien and pledge created hereby for the security of the Priority Bonds and Subordinate Lien Bonds,
the payments required to be made hereunder into the Debt Service Fund, the Reserve Fund and the
retained amount of Operating Expenses in accordance with Section 17(c); provided, however, that
any such pledge and lien securing the Subordinated Obligations shall be, and shall be expressed to be,
(/ky: 2715.014brdin -.sub - 7/16/96) 30
subordinate in all respects to the pledge of and lien on the Pledged Revenues as security for the
Priority Bonds and Subordinate Lien Bonds.
0) The City may, at any time and from time to time, for any lawful purpose, issue Priority
Bonds pursuant to the provisions of the Priority Bond Ordinance and any future ordinance
authorizing Priority Bonds.
Section 23. GENERAL COVENANTS. That the City further covenants and agrees that in
accordance with and to the extent required or permitted by law:
(a) Performance. It will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance, and each ordinance authorizing the issuance
of Priority Bonds or Subordinate Lien Bonds, and in each and every Priority Bond and Subordinate
Lien Bond; it will promptly pay or cause to be paid the principal amount of and interest on every
Priority Bond and Subordinate Lien Bond, on the dates and in the places and manner prescribed in
such ordinances and Priority Bonds or Subordinate Lien Bonds; and it will, at the time and in the
manner prescribed, deposit or cause to be deposited the amounts required to be deposited into the
System Fund and the Funds herein created; and any registered owner of any Priority Bond or
Subordinate Lien Bond may require the City, its officials and employees to carry out, respect or
enforce the covenants and obligations of this Ordinance, or any ordinance authorizing the issuance
of Priority Bonds or Subordinate Lien Bonds, by all legal and equitable means, including specifically,
but without limitation, the use and filing of mandamus proceedings, in any court of competent
jurisdiction, against the City, its officials and employees.
(b) City's Legal Authority. It is a duly created and existing home rule city of the State of
Texas, and is duly authorized under the laws of the State of Texas to issue the Bonds; that all action
on its part for the issuance of the Bonds has been duly and effectively taken, and that the Bonds in
the hands of the owners thereof are and will be valid and enforceable special obligations of the City
in accordance with their terms.
(c) Acquisition and Construction; Operation and Maintenance. (1) The City shall use its best
efforts in accordance with Prudent Utility Practice to acquire and construct, or cause to be acquired
and constructed, any Capital Additions or Capital Improvements, in accordance with the plans and
specifications therefor, as modified from time to time with due diligence and in a sound and
economical manner; and (2) the City shall at all times use its best efforts to operate or cause to be
operated the System properly and in an efficient manner, consistent with Prudent Utility Practice, and
shall use its best efforts to maintain, preserve, reconstruct and keep the same or cause the same to
be so maintained, preserved, reconstructed and kept, with the appurtenances and every part and
parcel thereof, in good repair, working order and condition, and shall from time to time make, or use
its best efforts to cause to be made, all necessary and proper repairs, replacement and renewals so that
at all times the operation of the System may be properly and advantageously conducted.
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(d) Title. It has or will obtain lawful title, whether such title is in fee or lesser interest, to the
lands, buildings, structures and facilities constituting the System, that it warrants that it will defend
the title to all the aforesaid lands, buildings, structures and facilities, and every part thereof, for the
benefit of the owners of the Priority Bonds and Subordinate Lien Bonds, against the claims and
demands of all persons whomsoever, that it is lawfully qualified to pledge the Pledged Revenues to
the payment of the Priority Bonds and Subordinate Lien Bonds in the manner prescribed herein, and
has lawfully exercised such rights.
(e) Liens. It will from time to time and before the same become delinquent pay and discharge
all taxes, assessments and governmental charges, if any, which shall be lawfully imposed upon it, or
the System; it will pay all lawful claims for rents, royalties, labor, materials and supplies which if
unpaid might by law become alien or charge thereon, the lien of which would be prior to or interfere
with the liens hereof so that the priority of the liens granted hereunder shall be fully preserved in the
manner provided herein, and it will not create or suffer to be created any mechanic's, laborer's,
materialman's or other lien or charge which might or could be prior to the liens hereof, or do or suffer
any matter or thing whereby the liens hereof might or could be impaired; provided however, that no
such tax, assessment or charge, and that no such claims which might be used as the basis of a
mechanic's, laborers, materialman's or other lien or charge, shall be required to be paid so long as the
validity of the same shall be contested in good faith by the City.
(f) No Free Service. No free service or service otherwise than in accordance with the
established rate schedule shall be furnished, directly or indirectly, by the System to any person, firm,
corporation or other entity. No part of the salary of any official or employee of the City or his
replacement shall be paid from Pledged Revenues unless and only to the extent the duties and
performances of such official or employee or his replacement appertain directly to the System. To
the extent the City receives the services of the System, such services shall be accounted for according
to the established rate schedule.
(g) Further Encumbrance. It will not additionally encumber the Pledged Revenues in any
manner, except as permitted in this Ordinance in connection with Priority Bonds and Subordinate
Lien Bonds, unless said encumbrance is made junior and subordinate in all respects to the liens,
pledges, covenants and agreements of this Ordinance; but the right of the City to issue obligations
payable from a subordinate lien on the Pledged Revenues is specifically recognized and retained.
(h) Sale, Lease or Disposal of Property. No part of the System shall be sold, leased,
mortgaged, demolished, removed or otherwise disposed of, except as follows:
(1) To the extent permitted by law, the City may sell or exchange at any time and from
time to time any property or facilities constituting part of the System only if (a) it shall
determine such property or facilities are not useful in the operation of the System, or (b) the
proceeds of such sale are $250,000 or less, or it shall have received a certificate of the
Engineer of Record and the City Manager stating, in the opinion of the signers, that the fair
market value of the property or facilities exchanged is $250,000 or less, or (c) if such
(/ky: 2715.014\or&n -.sub - 7/16/96) 32
proceeds or fair market value exceeds $250,000 it shall have received a certificate of the
Engineer of Record and the City Manager stating, in the opinion of the signers, that the sale
or exchange of such property or facilities will not impair the ability of the City to comply
during the current or any future year with the provisions of clause (1) of this Section. The
proceeds of any such sale or exchange not used to acquire other property necessary or
desirable for the safe or efficient operation of the System shall forthwith, at the option of the
City (i) be used to redeem or purchase Priority Bonds or any Subordinate Lien Bonds, or (ii)
otherwise be used to provide for the payment of Priority Bonds or any Subordinate Lien
Bonds; and
(2) To the extent permitted by law, the City may lease or make contracts or grant
licenses for the operation of, or make arrangements for the use of, or grant easements or
other rights with respect to, any part of the System, provided that any such lease, contract,
license, arrangement, easement or right (i) does not impede the operation by the City of the
System and (ii) does not in any manner impair or adversely affect the rights or security of the
owners of the Priority Bonds or any Subordinate Lien Bonds under this Ordinance; and
provided, further, that if the depreciated cost of the property to be covered by any such lease,
contract, license, arrangement, easement or other right is in excess of $500,000, the City shall
have received a certificate of the Engineer of Record and the City Manager that the action of
the City with respect thereto does not result in a breach of the conditions under this clause
(2). Any payments received by the City under or in connection with any such lease, contract,
license, arrangement, easement or right in respect of the System or any part thereof shall
constitute Gross Revenues.
(i) Books. Records and Accounts. The City shall keep proper books, records and accounts
separate and apart from all other records and accounts, in which complete and correct entries shall
be made of all transactions relating to the System and the City shall cause said books and accounts
to be audited annually as of the close of each Fiscal Year by the Accountant.
0) Insurance. (1) It shall cause to be insured such parts of the System as would usually be
insured by corporations operating like properties, with a responsible insurance company or
companies, against risks, accidents or casualties against which and to the extent insurance is usually
carried by corporations operating like properties, including, to the extent reasonably obtainable, fire
and extended coverage insurance, insurance against damage by floods, and use and occupancy
insurance. Public liability and property damage insurance shall also be carried unless the City
Attorney of the City gives a written opinion to the effect that the City is not liable for claims which
would be protected by such insurance. At any time while any contractor engaged in construction
work shall be fully responsible therefor, the City shall not be required to carry insurance on the work
being constructed if the contractor is required to carry appropriate insurance. All such policies shall
be open to the inspection of the bondholders and their representatives at all reasonable times.
(2) The annual audit hereinafter required shall contain a section commenting on whether or
not the City has complied with the requirements of this Section with respect to the maintenance of
(/ky: 2715.014 \ordin -.sub - 7/16/96) 33
insurance, and listing all policies carried, and whether or not all insurance premiums upon the
insurance policies to which reference is hereinbefore made have been paid.
(k) Rate Covenant. The City will fix, establish, maintain and collect such rates, charges and
fees for the use and availability of the System at all times as are necessary to produce Gross Revenues
and other Pledged Revenues equal to the greater of amounts sufficient (a) (1) to pay all current
Operating Expenses of the System, and (2) to produce Net Revenues for each Year at least equal to
the sum of (i) 1.25 times the Average Annual Principal and Interest Requirements of all then
outstanding Priority Bonds and (ii) 1.10 times the Average Annual Principal and Interest
Requirements of all then outstanding Subordinate Lien Bonds; or (b) to pay the sum of (i) all current
Operating Expenses, (ii) the Average Annual Principal and Interest Requirements on the then
outstanding Priority Bonds and Subordinate Lien Bonds, (iii) required deposits to the Reserve Fund
required for the Priority Bonds and Subordinate Lien Bonds, and (iv) amounts required to pay all
other obligations of the System reasonably anticipated to be paid from Gross Revenues during the
current Year. Average Annual Principal and Interest Requirements as used in this clause (4) shall
exclude debt service on any Priority Bonds or Subordinate Lien Bonds if capitalized interest for such
bonds has been provided for at least the next twelve months.
(1) Audits. After the close of each year while any Priority Bonds or any Subordinate Lien
Bonds are outstanding, an audit will be made of the books and accounts relating to the System and
the Pledged Revenues by the Accountant. As soon as practicable after the close of each such year,
and when said audit has been completed and made available to the City, a copy of such audit for the
preceding year shall be mailed to the Municipal Advisory Council of Texas and to any holder of 5%
or more in aggregate principal amount of the then outstanding Priority Bonds and Subordinate Lien
Bonds who shall so request in writing. Such annual audit reports shall be open to the inspection of
the registered owners of the Priority Bonds or any Subordinate Lien Bonds and their agents and
representatives at all reasonable times.
(m) Governmental Agencies. It will comply with all of the terms and conditions of any and
all franchises, permits and authorizations applicable to or necessary with respect to the System, and
which have been obtained from any governmental agency; and the City has or will obtain and keep
in full force and effect all franchises, permits, authorization and other requirements applicable to or
necessary with respect to the acquisition, construction, equipment, operation and maintenance of the
System.
(n) No Competition. To the extent it legally may, it will not grant any franchise or permit
for the acquisition, construction or operation of any competing facilities which might be used as a
substitute for the System's facilities, and, to the extent that it legally may, the City will prohibit any
such competing facilities.
(o) Rights of Inspection. The Texas Water Development Board, the Engineer of Record or
any registered owner of $100,000 in aggregate principal amount of the Priority Bonds or Subordinate
Lien Bonds then outstanding shall have the right at all reasonable times to inspect the System and all
(/ky: 2715.014\orain -.sub - 7/16/96) 34
records, accounts and data of the City relating thereto, and upon request the City shall furnish to the
Texas Water Development Board, the Engineer of Record or such registered owner, as the case may
be, such financial statements, reports and other information relating to the City and the System as the
Texas Water Development Board, the Engineer of Record or such registered owner may from time
to time reasonably request.
Section 24. AMENDMENT OF ORDINANCE. (a) That the registered owners of Priority
Bonds and Subordinate Lien Bonds aggregating in principal amount 51% of the aggregate principal
amount of the Priority Bonds and Subordinate Lien Bonds then outstanding shall have the right from
time to time to approve any amendment to this Ordinance which may be deemed necessary or
desirable by the City, provided, however, that without the consent of the registered owners of all of
the Priority Bonds and Subordinate Lien Bonds at the time outstanding, nothing herein contained
shall permit or be construed to permit the amendment of the terms and conditions in this Ordinance
or in the Priority Bonds or Subordinate Lien Bonds so as to:
(1) Make any change in the maturity of any of the outstanding Priority Bonds or
Subordinate Lien Bonds;
(2) Reduce the rate of interest borne by any of the outstanding Priority Bonds or
Subordinate Lien Bonds;
(3) Reduce the amount of the principal payable on the outstanding Priority Bonds or
Subordinate Lien Bonds;
(4) Modify the terms of payment of principal of, premium, if any, or interest on the
outstanding Priority Bonds or Subordinate Lien Bonds, or impose any conditions with respect
to such payment;
(5) Affect the rights of the registered owners of less than all of the Priority Bonds and
Subordinate Lien Bonds then outstanding;
(6) Amend this clause (a) of this Section; or
(7) Change the minimum percentage of the principal amount of Priority Bonds and
Subordinate Lien Bonds necessary for consent to any amendment;
unless such amendment or amendments be approved by the registered owners of all of the Priority
Bonds and Subordinate Lien Bonds then outstanding.
(b) That if at any time the City shall desire to amend the Ordinance under this Section, the
City shall cause notice of the proposed amendment to be published in - a financial newspaper or journal
published in The City of New York, New York, and a newspapers of general circulation in the City,
once during each calendar week for at least two successive calendar weeks. Such notice shall briefly
(/ky: 2715.014brdin -.sub - 7/16/96) 35
set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the
principal office of the Paying Agent/Registrar for inspection by all holders of Priority Bonds and
Subordinate Lien Bonds. Such publication is not required, however, if notice in writing is given to
each registered owner of Priority Bonds and Subordinate Lien Bonds.
(c) That whenever at any time not less than thirty days, and within one year, from the date
of the first publication of said notice or other service of written notice the City shall receive an
instrument or instruments executed by the registered owners of at least 51% in aggregate principal
amount of the Priority Bonds and Subordinate Lien Bonds then outstanding, which instrument or
instruments shall refer to the proposed amendment described in said notice and which specifically
consent to and approve such amendment in substantially the form of the copy thereof on file with the
Paying Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the
same form.
(d) That upon the passage of any amendatory ordinance pursuant to the provisions of this
Section, this Ordinance shall be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties and obligations under this Ordinance of the City and all
the registered owners of then outstanding Priority Bonds and Subordinate Lien Bonds and all future
Subordinate Lien Bonds and Priority Bonds shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such amendments.
(e) That any consent given by the registered owner of a Priority Bond or Subordinate Lien
Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from
the date of the first publication of the notice provided for in this Section, and shall be conclusive and
binding upon all future registered owners of the same Priority Bond or Subordinate Lien Bond during
such period. Such consent may be revoked at any time after six months from the date of the first
publication of such notice by the registered owner who gave such consent, or by a successor in title,
by filing notice thereof with the Paying Agent/Registrar and the City, but such revocation shall not
be effective if the registered owners of 51% in aggregate principal amount of the then outstanding
Priority Bonds and Subordinate Lien Bonds as in this Section defined have, prior to the attempted
revocation, consented to and approved the amendment.
(f) The foregoing provisions of this Section notwithstanding, the City by action of the City
Council may amend this Ordinance for any one or more of the following purposes:
(1) To add to the covenants and agreements of the City in this Ordinance contained,
other covenants and agreements thereafter to be observed, grant additional rights or remedies
to the registered owners of the Priority Bonds or Subordinate Lien Bonds or to surrender,
restrict or limit any right or power herein reserved to or conferred upon the City;
(2) To make such provisions for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or in regard
to clarifying matters or questions arising under this Ordinance, as are necessary or desirable
(/ky: 2715.014\ordin -.sub - 7/16/96) 36
and not contrary to or inconsistent with this Ordinance and which shall not adversely affect
the interests of the registered owners of the Priority Bonds or Subordinate Lien Bonds then
outstanding;
(3) To modify any of the provisions of this Ordinance in any other respect whatever,
provided that (i) such modification shall be, and be expressed to be, effective only after all
Priority Bonds and Subordinate Lien Bonds outstanding at the date of the adoption of such
modification shall cease to be outstanding, and (ii) such modification shall be specifically
referred to in the text of all Priority Bonds and Subordinate Lien Bonds issued after the date
of the adoption of such modification.
Section 25. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED BONDS.
(a) That in the event any outstanding Bond is damaged, mutilated, lost, stolen, or destroyed, the
Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new bond of the same
principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed
Bond, in replacement for such Bond in the manner hereinafter provided.
(b) Application for replacement of damaged, mutilated, lost, stolen, or destroyed Bonds shall
be made to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the
applicant for a replacement bond shall furnish to the City and to the Paying Agent/Registrar such
security or indemnity as may be required by them to save each of them harmless from any loss or
damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond, the
applicant shall furnish to the City and to the Paying Agent/Registrar evidence to their satisfaction of
the loss, theft, or destruction of such Bond, as the case may be. In every case of damage or
mutilation of a Bond, the applicant shall surrender to the Paying Agent/Registrar for cancellation the
Bond so damaged or mutilated.
(c) Notwithstanding the foregoing provisions of this Section, in the event any such Bond shall
have matured, and no default has occurred which is then continuing in the payment of the principal
of, redemption premium, if any, or interest on the Bond, the City may authorize the payment of the
same (without surrender thereof except in the case of a damaged or mutilated Bond) instead of
issuing a replacement Bond, provided security or indemnity is furnished as above provided in this
Section.
(d) Prior to the issuance of any replacement bond, the Paying Agent/Registrar shall charge
the owner of such Bond with all legal, printing, and other expenses in connection therewith. Every
replacement bond issued pursuant to the provisions of this Section by virtue of the fact that any Bond
is lost, stolen, or destroyed shall constitute a contractual obligation of the City whether or not the
lost, stolen, or destroyed Bond shall be found at any time, or be enforceable by anyone, and shall be
entitled to all the benefits of this Ordinance equally and proportionately with any and all other Bonds
duly issued under this Ordinance.
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(e) In accordance with Section 6 of Vernon's Ann. Tex. Civ. St. Art. 717k -6, this Section of
this Ordinance shall constitute authority for the issuance of any such replacement bond without
necessity of further action by the governing body of the City or any other body or person, and the
duty of the replacement of such bonds is hereby authorized and imposed upon the Paying
Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such bonds in the form
and manner and with the effect, as provided in Section 5(d) of this Ordinance for Bonds issued in
exchange for other Bonds.
Section 26. COVENANTS REGARDING TAX EXEMPTION OF INTEREST ON THE
BONDS. The City covenants to take any action necessary to assure, or refrain from any action which
would adversely affect, the treatment of the Bonds as obligations described in section 103 of the
Code, the interest on which is not includable in the "gross income" of the holder for purposes of
federal income taxation. In furtherance thereof, the City covenants as follows:
(a) to take any action to assure that no more than 10 percent of the proceeds of the Bonds
or the projects financed therewith (less amounts deposited to a reserve fund, if any) are used for any
"private business use," as defined in section 141(b)(6) of the Code or, if more than 10 percent of the
proceeds or the projects financed therewith are so used, such amounts, whether or not received by
the City, with respect to such private business use, do not, under the terms of this Ordinance or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more than 10
percent of the debt service on the Bonds, in contravention of section 141(b)(2) of the Code;
(b) to take any action to assure that in the event that the "private business use" described in
subsection (a) hereof exceeds 5 percent of the proceeds of the Bonds or the proceeds financed
therewith (less amounts deposited into a reserve fund, if any) then the amount in excess of 5 percent
is used for a "private business use" which is "related" and not "disproportionate," within the meaning
of section 141(b)(3) of the Code, to the governmental use;
(c) to take any action to assure that no amount which is greater than the lesser of $5,000,000,
or 5 percent of the proceeds of the Bonds (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to persons, other than state or local governmental units,
in contravention of section 141(c) of the Code;
(d) to refrain from taking any action which would otherwise result in the Bonds being treated
as "private activity bonds" within the meaning of section 141(b) of the Code;
(e) to refrain from taking any action that would result in the Bonds being "federally
guaranteed" within the meaning of section 149(b) of the Code;
(0 to refrain from using any portion of the proceeds of the Bonds, directly or indirectly, to
acquire or to replace funds which were used, directly or indirectly, to acquire investment property
(as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term
of the Bonds, other than investment property acquired with --
(/ky: 2715.014\ordin -.sub - 7/16/96) 38
(1) proceeds of the Bonds invested for a reasonable temporary period of 3 years or
less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are
needed for the purpose for which the bonds are issued,
(2) amounts invested in a bona fide debt service fund, within the meaning of
section 1.148 -1(b) of the Treasury Regulations, and
(3) amounts deposited in any reasonably required reserve or replacement fund to the
extent such amounts do not exceed 10 percent of the proceeds of the Bonds;
(g) to otherwise restrict the use of the proceeds of the Bonds or amounts treated as proceeds
of the Bonds, as may be necessary, so that the Bonds do not otherwise contravene the requirements
of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the
Code (relating to advance refundings); and
(h) to pay to the United States of America at least once during each five -year period
(beginning on the date of delivery of the Bonds) an amount that is at least equal to 90 percent of the
"Excess Earnings," within the meaning of section 148(f) of the Code and to pay to the United States
of America, not later than 60 days after the Bonds have been paid in full, 100 percent of the amount
then required to be paid as a result of Excess Earnings under section 148(f) of the Code.
For purposes of the foregoing (a) and (b), the City understands that the term "proceeds" includes
"disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds,
transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of
issuance of the Bonds. It is the understanding of the City that the covenants contained herein are
intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the Bonds, the City will
not be required to comply with any covenant contained herein to the extent that such failure to
comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption
from federal income taxation of interest on the Bonds under section 103 of the Code. In the event
that regulations or rulings are hereafter promulgated which impose additional requirements which are
applicable to the Bonds, the City agrees to comply with the additional requirements to the extent
necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from
federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of
such intention, the City hereby authorizes and directs the City Manager to execute any documents,
certificates or reports required by the Code and to make such elections, on behalf of the City, which
may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
In order to facilitate compliance with the above covenant (h), a "Rebate Fund" is hereby
established by the City for the sole benefit of the United States of America, and such fund shall not
be subject to the claim of any other person, including without limitation the bondholders. The Rebate.
Fund is established for the additional purpose of compliance with section 148 of the Code.
(/ky: 2715.014brdin -.sub - 7/16/96) 39
Furthermore, the City will take all reasonable actions specified in any written instructions
provided to the City by Texas Water Development Board to assure that the interest on said Bonds,
or any bonds issued to refund said Bonds, shall be excludable from the gross income of the holders
there for federal income tax purposes.
Section 27. CUSTODY, APPROVAL, AND REGISTRATION OF BONDS; BOND
COUNSEL'S OPINION, AND CUSIP NUMBERS. The Mayor of the City is hereby authorized to
have control of the Bonds initially issued and delivered hereunder and all necessary records and
proceedings pertaining to the Bonds pending their delivery and their investigation, examination, and
approval by the Attorney General of the State of Texas, and their registration by the Comptroller of
Public Accounts of the State of Texas. Upon registration of the Bonds said Comptroller of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall manually sign the
Comptroller's Registration Certificate attached to such Bonds, and the seal of said Comptroller shall
be impressed, or placed in facsimile, on such Certificate. The approving legal opinion of the City's
Bond Counsel, and the assigned CUSIP numbers issued with respect to the Bonds may be printed on
the Bonds issued and delivered under this Ordinance, but such information shall have no legal effect,
and shall be solely for the convenience and information of the registered owners of the Bonds.
Section 28. PAYING AGENT AGREEMENT. The City hereby appoints Norwest Bank
Texas, N.A. as Paying Agent/Registrar for the Bonds authorized hereby. The City Manager of the
City of Wichita Falls is hereby authorized to execute and deliver on behalf of the City a Paying
Agent/Registrar Agreement, dated as of the date of delivery of the Bonds in substantially the form
and substance presented at this meeting.
Section 29. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports. The
City shall provide annually to each NRMSIR and any SID, within six months after the end of each
fiscal year ending in or after 1996, financial information and operating data with respect to the City
of the general type included in the official statement of the City relating to the City's Series 1996
Bonds, being the information described in Exhibit A hereto. Any financial statements so to be
provided shall be (1) prepared in accordance with the accounting principles described in Exhibit A
hereto, or such other accounting principles as the City may be required to employ from time to time
pursuant to state law or regulation, and (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 the
audit of such financial statements is not complete within such period, then the City shall provide
unaudited financial statements by the required time, and will provide audited financial statements for
the applicable fiscal year to each NRMSIR and any SID, when and if the audit report on such
statements become available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID 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 City agrees
to provide financial information and operating data of a nature consistent with that provided by the
City in connection with the issuance of additional Priority Bonds to which the Rule applies.
(/ky: 2715.014\ordin -.sub - 7/16/96) 40
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, if it is available from the MSRB) that
theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the
MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event
is material within the meaning of the federal securities laws:
A. Principal and interest payment delinquencies;
B. Non - payment related defaults;
C. Unscheduled draws on debt service reserves reflecting financial difficulties;
D. Unscheduled draws on credit enhancements reflecting financial difficulties;
E. Substitution of credit or liquidity providers, or their failure to perform;
F. Adverse tax opinions or events affecting the tax- exempt status of the Bonds; .
G. Modifications to rights of holders of the Bonds;
H. Bond calls;
I. Defeasances;
I Release, substitution, or sale of property securing repayment of the [Bonds]; and
K. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of
any failure by the City to provide financial information or operating data in accordance with
subsection (a) of this Section of this Ordinance by the time required by such subsection.
(c) Limitations. Disclaimers. and Amendments. The City shall be obligated to observe and
perform the covenants specified in this Section for so long as, but only for so long as, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that
the City in any event will give notice of any deposit made in accordance with Section 20 that causes
the Bonds no longer to be outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners of
the Bonds and the beneficial owners of the Texas Water Development Board's Bonds under the Rule,
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 Bonds at any future
date.
(/ky: 2715.014\ordin -.sub - 7/16/96) 41
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR 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.
No default by the City in observing or performing its obligations under this Article shall
comprise a breach of or default under the Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties
of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the
primary offering of the Bonds in compliance with the Rule, taking into account any amendments or
interpretations of the Rule since such offering as well as such changed circumstances and (2) either
(a) the 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 Bonds
consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally
recognized bond counsel) determines that such amendment will not materially impair the interest of
the owners and beneficial owners of the Bonds. 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 reason 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 continuing disclosure agreement if the SEC amends or repeals
the applicable provision of the Rule or a court of final jurisdiction enters judgment that such
provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence
would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering
of the Bonds.
Section 30. REPEAL OF SERIES 1990 -B AND 1990 -C SUBORDINATE LIEN BONDS.
The authorization of the City of Wichita Falls, Texas Water and Sewer System Subordinate Lien
Revenue Bonds, Series 1990 -B and Series 1990 -C is hereby repealed and the provisions of Ordinance
No.48 -90 as it relates to such authorization are hereby so amended and such bonds shall not be
delivered. The Director of Finance shall cancel and destroy such bonds. Other than as amended by
the provisions of this Section, Ordinance No.48 -90 is not amended or supplemented in any other
manner and shall remain in full force and effect in accordance with its terms. The provisions of this
Section relating to the Series 1990 -B and Series 1990 -C Bonds shall have no effect on the City of
(/ky: 2715.014brdin -.sub - 7/16/96) 42
Wichita Falls, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1990 -A
which shall remain outstanding in accordance with their terms and continue to be secured by the
provisions of Ordinance No.48 -90.
Section 31. ESCROW AGREEMENT AND CONSTRUCTION FUND. (a) The City
Manager of the Issuer is hereby authorized and directed to execute and deliver and the City Clerk of
the Issuer is hereby authorized and directed to attest an Escrow Agreement in substantially the form
attached hereto as Exhibit B. The City shall cause the proceeds of the Bonds, less the costs of
issuance, to be deposited into an Escrow Account created by the Escrow Agreement pending
authorization from the Development Fund Manager on behalf of the Texas Water Development
Board.
(b) There shall be established a Construction Fund with the Issuer's depository bank and upon
the delivery of the purchase price for such Bonds, an amount equal to the costs of issuance of the
Bonds initially shall be deposited into this Construction Fund. The cost of issuance of the Bonds
include legal, fiscal and engineering fees which shall be paid from this Fund. There shall be deposited
into the Construction Fund all amounts released from the Escrow Account created by the Escrow
Agreement as provided in Section 2 of the Escrow Agreement. The cost of the construction of the
System improvements will be paid from this Construction Fund. All interest and profits from
investments made with moneys in the Construction Fund shall remain on deposit in the Construction
Fund as a part thereof. After completion of the payment of all costs of the acquisition and
improvements to the System, any residue remaining in the Construction Fund shall be applied in
accordance with Section 33 hereof.
Section 32. FINAL ACCOUNTING. The City shall render a final accounting to the Texas
Water Development Board in reference to the total cost incurred by the City for improvements and
extensions to the System together with a coy of "as built" plans of the project upon completion.
Section 33. SURPLUS BOND PROCEEDS. The City shall use any surplus proceeds from
the Bonds remaining after completion of the improvements and extensions of the System for the
purchase of the Bonds owned by the Texas Water Development Board in inverse order of maturity.
Section 34. ANNUAL AND MONTHLY REPORTS. Monthly operating statements and
annual audits of the City shall be delivered to the Texas Water Development Board as long as the
State of Texas owns any of the Bonds, and that the monthly operating statement shall be in such
detail as requested by the Development Fund Manager of the Texas Water Development Board.
Section 35. COMPLIANCE WITH THE TEXAS WATER DEVELOPMENT BOARD'S
RULES AND REGULATIONS. The City covenants to comply with the rules and regulations of the
Texas Development Board.
(/ky: 2713.014\ordin -.sub - 7/16/96) 43
Section 36. PAYMENT PROCEDURE PURSUANT TO MUNICIPAL BOND
INSURANCE POLICY. As long as the Municipal Bond Insurance Policy shall be in full force and
effect, the City and the Paying Agent/Registrar agree to comply with the following provisions:
(a) If payment of principal or interest due on the Bonds has not been made to the Paying
Agent/Registrar or any owner of Bonds to whom such payment is due, the Paying Agent/Registrar
shall so notify AMBAC Indemnity by telephonic or telegraphic notice, subsequently confirmed in
writing, or written notice by registered or certified mail. Such notice shall specify the amount of the
anticipated deficiency, the Bonds to which such deficiency is applicable, and whether such Bonds will
be deficient as to principal or interest, or both. AMBAC Indemnity, on the later of the date due for
payment or within one business day after receipt of notice of nonpayment, will deposit sufficient
moneys with United States Trust Company of New York, as insurance Trustee for AMBAC
Indemnity or any successor insurance trustee (the "Insurance Trustee ").
(b) The Paying Agent/Registrar shall, after giving notice to AMBAC Indemnity as provided
in (a) above, make available to AMBAC Indemnity and, at AMBAC Indemnity's direction, to the
Insurance Trustee, the registration books of the City maintained by the Paying Agent/Registrar, and
all records relating to the Funds and Accounts maintained under this Ordinance.
(c) The Paying Agent/Registrar shall provide AMBAC Indemnity and the Insurance Trustee
with a list of registered owners of the Bonds entitled to receive principal or interest payments from
AMBAC Indemnity under the terms of the Municipal Bond Insurance Policy, and shall make
arrangements with the Insurance Trustee to (i) mail checks or drafts to the registered owners of
Bonds entitled to receive full or partial interest payments from AMBAC Indemnity and (ii) pay
principal upon Bonds surrendered to the Insurance Trustee by the registered owners of Bonds entitled
to receive full or partial principal payments from AMBAC Indemnity.
(d) The Paying Agent/Registrar shall, at the time it provides notice to AMBAC Indemnity
pursuant to (a) above, notify registered owners of Bonds entitled to receive the payment of principal
or interest thereon from AMBAC Indemnity (i) as to the fact of such entitlement, (ii) that AMBAC
Indemnity will remit to them all or a part of the interest payments next coming due, (iii) that should
they be entitled to receive full payment of principal from AMBAC Indemnity, they must present and
surrender their Bonds together with any appropriate instrument of assignment for payment to the
Insurance Trustee, and not the Paying Agent/Registrar, and (vi) that should they be entitled to receive
partial payment of principal from AMBAC Indemnity, they must present and surrender their Bonds
for payment thereon first to the Paying Agent/Registrar, who shall note on such Bonds the portion
of the principal paid by the Paying Agent/Registrar, and then, along with an appropriate instrument
of assignment, to the Insurance Trustee, which will then pay the unpaid portion of principal. The
Insurance Trustee shall disburse to the registered owners of Bonds, through the Paying
Agent/Registrar, the payment due less any amount held by the Paying Agent/Registrar for payment
of principal of or interest on Bonds and legally available therefor.
(/ky: 2715.014\orc in -.sub - 7/16/96) 44
(e) In the event that the Paying Agent/Registrar has notice that any payment of principal of
or interest on a Bond which has become due for payment and which is made to an owner of a Bond
by or on behalf of the City has been deemed a preferential transfer and theretofore recovered from
its registered owner pursuant to the United States Bankruptcy Code by a trustee in bankruptcy in
accordance with the final, nonappealable order of a court having competent jurisdiction, the Paying
Agent/Registrar shall at the time AMBAC Indemnity is notified pursuant to (a) above, notify all
registered owners that in the event that any registered owner's payment is so recovered, such
registered owner will be entitled to payment from AMBAC Indemnity to the extent of such recovery,
and the Paying Agent/Registrar shall furnish to AMBAC Indemnity its records evidencing the
payments of principal of and interest on the Bonds which have been made by the Paying
Agent/Registrar and subsequently recovered from registered owners and the dates on which such
payments were made.
(f) In addition to those rights granted AMBAC Indemnity under this Ordinance, AMBAC
Indemnity shall, upon remittance and transfer of Bonds or appropriate instruments of assignment,
become the owner thereof, and to evidence such ownership (i) in the case of claims for past due
interest, the Paying Agent/Registrar shall note AMBAC Indemnity's rights as owner on the
registration books of the City maintained by the Paying Agent/Registrar upon receipt from AMBAC
Indemnity of proof of the payment of interest thereon to the registered owners of the Bonds and (ii)
in the case of claims for past due principal, the Paying Agent/Registrar shall note AMBAC
Indemnity's rights as owner on the registration books of the City maintained by the Paying
Agent/Registrar upon surrender of the Bonds by the registered owners thereof together with proof
of the payment of principal thereof.
Section 37. NOTICES TO BE GIVEN TO AMBAC INDEMNITY. While the Municipal
Bond Insurance Policy is in effect, the City shall furnish to AMBAC Indemnity: (a) as soon as
practicable after filing thereof, a copy of any audit and annual report of the City; (b) a copy of any
notice to be given to the registered owners of the Bonds and any certificate rendered pursuant to this
Ordinance relating to the security for the Bonds; and (c) such additional information it may reasonably
request.
The City will permit AMBAC Indemnity to discuss the affairs, finances and accounts of the
City or any information AMBAC Indemnity may reasonably request regarding the security for the
Bonds with appropriate officers of the City. The City will permit AMBAC Indemnity to have access
to and to make copies of all books and records relating to the Bonds at any reasonable time.
AMBAC Indemnity shall have the right to direct an accounting at the City's expense, and the
City's failure to comply with such direction within 30 days after receipt of written notice of the
direction from AMBAC Indemnity shall be deemed a default hereunder; provided, however, that if
compliance cannot occur with such period, then such period will be extended so long as compliance
is begun within such period and diligently pursued, but only if such extension would not materially
adversely affect the interests of any owner of the Bonds.
(/ky: 2715.014\ordin -.sub - 7/16/96) 45
Notwithstanding any other provision of this Ordinance, the Paying Agent/Registrar shall
immediately notify AMBAC Indemnity if at any time there is insufficient money to make any
payments of principal and/or interest as required and immediately upon the occurrence of an event
of default hereunder.
Section 38. APPROVAL OF INSURANCE. The Commitment for Municipal Bond
Insurance from AMBAC Indemnity Corporation relating to the Bonds is hereby accepted and
approved. In addition, a copy of any notice required to be given by this Ordinance shall also be given
to AMBAC at the following address unless a different address is hereafter designated in writing to
the City:
AMBAC Indemnity Corporation
One State Street Plaza
New York, New York 10004
Section 39. FURTBER PROCEDURES. The Mayor, the City Clerk and the City Manager
of the City, and all other officers, employees, and agents of the City, 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
under the seal and on behalf of the City all such instruments, whether or not herein mentioned, as may
be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds,
the Paying Agent/Registrar Agreement or the application to or the approval of the Texas Water
Development Board. In addition, the Mayor is authorized to approve any changes to this Ordinance
necessary to comply with the application to or the approval of the Texas Water Development Board
or to secure the approval of the Bonds by the Texas Attorney General. In case any officer whose
signature appears on any Bond or other certificate shall cease to be such officer before the delivery
of the Bonds, such signature shall nevertheless be valid and sufficient for all purposes the same as if
he or she had remained in office until such delivery. In addition, the findings and recitals made in the
preamble to this Ordinance are hereby incorporated herein and made a part of this Ordinance for all
purposes.
Section 40. SEVERABILITY. 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 41. NO PERSONAL LIABILITY. No recourse shall be had for payment of the
principal of or interest on any Bonds or for any claim based thereon, or on this Ordinance, against any
official or employee of the City or any person executing any Bonds.
(/ky: 2715.014brdin -.sub - 7/16/96) 46
Section 42. 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 Chapter 551, Texas Government Code.
Section 43. EMERGENCY. It is hereby officially found and determined: that a case of
emergency or urgent public necessity exists which requires the holding of the meeting at which this
Ordinance is passed, such emergency or urgent public necessity being that it is necessary to receive
the proceeds from the sale of the Bonds as soon as possible and without delay to allow the City
to acquire and construct urgently needed public improvements; and that said meeting was open to the
public, and public notice of the time, place, and purpose of said meeting was given, all as required
by Texas Government Code, Chapter 551.
Section 44. IlvIlV1EDIATE EFFECT. This Ordinance shall take effect and be in force
immediately upon and after its passage in accordance with the provisions of the Charter of the City,
and it is accordingly so ordained.
inky: 2715.014\ordin -.s,b - 7i16/%> 47
EXHIBIT A
DESCRIPTION OF ANNUAL FINANCIAL INFORMATION
Pursuant to Section 29 of this Ordinance the City has undertaken to provide certain
information of the general type included in its Official Statement dated April 16, 1996 relating to the
City of Wichita Falls, Water and Sewer System Refunding Revenue Bonds, Series 1996 and described
as follows:
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the Issuer to be provided annually
in accordance with Section 29 are as specified (and included in Appendices or under the headings of
the Official Statement referred to) below:
-- TABLES 1 -9 in Appendix A to the Official Statement and entitled "FINANCIAL AND
SYSTEM INFORMATION OF THE CITY"
-- APPENDIX C to the Official Statement and entitled "AUDITED FINANCIAL
STATEMENTS FOR THE LAST COMPLETED FISCAL YEAR"
Accounting Principles
The accounting principles referred to in Section 29 are the accounting principles described
in the notes to the audited financial statements appearing in Appendix C referred to in paragraph
above.
(/ky: 2715.014brdin -.sub - 7/16/96)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of June 1, 1996 ( "Escrow Agreement'), together
with any amendments or supplements hereto, is entered into by and between the City of Wichita Falls,
Texas (the "Issuer ") and Bank One Texas, N.A., Wichita Falls, Texas, as Escrow Agent (the "Bank ")
together with any successor in such capacity.
WITNESSETH:
WHEREAS, the Issuer has authorized and sold to the Texas Water Development Board, City
of Wichita Falls, Texas Water and Sewer System Subordinate Lien Revenue Bonds, Series 1996, in
the aggregate principal amount of $11,420,000 (the Bonds "); and
WHEREAS, the Texas Water Development Board is initially depositing $ of the
Bond proceeds to be held by the Escrow Agent until the Development Fund Manager, or authorized
representative, of the Texas Water Development Board, on behalf of the Texas Water Development
Board, authorizes in written form the release of such funds from the Escrow Account into the
Construction Fund as established with the Issuer pursuant to the Ordinance that authorized such
Bonds; and
WHEREAS, the Bank is located in the State of Texas, is a member of the Federal Deposit
Insurance Corporation, and is otherwise qualified and empowered to enter into this Escrow
Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of Ten Dollars ($10.00) duly paid by the Issuer to the Bank concurrently herewith, the
receipt whereof is hereby acknowledged, and in order to secure the delivery of the Bonds, the parties
hereto mutually undertake, promise and agree for themselves, their respective representatives,
successors, and assigns, as follows:
1. That there is hereby deposited by the Issuer with the Bank, to be held in a special Escrow
Account designated as "City of Wichita Falls, Texas Water and Sewer System Subordinate Lien
Revenue Bonds, Series 1996 Escrow Account ('Escrow Account "), the sum of $ from
the sale of the Bonds, which sum will be held therein until the Development Fund Manager authorizes
the release of such monies from the Escrow Account as provided in Section 2 hereof.
2. That the Bank shall invest the monies in the Escrow Account for the benefit of the Issuer,
as directed in writing by the Issuer, and any income made from such investments shall be deposited
into the Escrow Account, and that the Development Fund Manager, or authorized representative, of
the Texas Water Development Board, on behalf of the Texas Water Development Board, may
authorize in written form the transfer of such monies from the Escrow Account into the Construction
Fund.
(/ky: 2715.014\ordin -.sub - 7/16/96)
ft
3. That monies in this Escrow Account shall be secured in the same manner as all other public
funds of the Issuer.
4. That upon notification of the approval of the release of those monies from the Escrow
Account by the Development Fund Manager, or authorized representative, of the Texas Water
Development Board, the Bank shall transfer such monies together with any interest earned on such
account as directed by the Issuer.
5. That the Bank 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 Bank shall not be responsible in any manner for any
proceedings in connection with the Bonds or any recitation contained in the Bonds.
6. That this Escrow Agreement shall expire upon transfer of the funds in the Escrow Account
to the Issuer.
IN WITNESS WHEREOF, the City Manager of said Issuer signed this instrument on behalf
of said Issuer, and the Issuer's official seal is affixed hereto, and the City Manager's signature is
attested to by the City Clerk of the Issuer and has caused this instrument to be signed by the Bank
in its corporate name by its President, or one of its Vice Presidents, and sealed with its corporate seal,
and attested to by a Vice President, or Cashier, all as of the 1 st day of June, 1996.
ATTEST:
City Clerk
City of Wichita Falls, Texas
(SEAL)
ATTEST:
Title:
(BANK SEAL)
(/ky: 2715.014\ordin -.sub - 7/16/96)
City Manager
City of Wichita Falls, Texas
Bank One Texas, N.A.
Vice President
ORDINANCE NO. 108-96
ORDINANCE AUTHORIZ-
ING THE ISSUANCE AND
SALE OF CITY OF WICHI-
TA FALLS, TEXAS WA- 1
T E R A N D S E W E R
�PSYSTEM SUBORDINATE
LIEN REVENUE BONDS, 1e
SERIES 1996; AUTHORIZ-
ING THE EXECUTION OF
A PAYING AGENT /'
REGISTRAR AGREE -',
MENT; AND AUTHORIZ-
ING OTHER MATTERS
RELATEDTHERETO.
ORDINANCE NO. 109-96
AN ORDINANCE OF THE
CITY COUNCIL OF THE
C I T Y OF W I C H I T A
FALLS, TEXAS, PERMIT-
TING AND REGULATING
CONSTRUCTION, MAIN-
TENANCE AND USE OF A
LONG DISTANCE TELE-
COMMUNICATIONS SYS-
TEM BY COMCELL, INC.,
ACROSS, OVER AND UN-
DER CERTAIN STREETS
AND PUBLIC RIGHTS -OF-
WAY OF THE CITY OF
WICHITA FALLS; PRO -
VIDING FOR PUBLICA-
TION; FINDING AND
DETERMINING THAT
THE MEETING AT
WHICH THIS ORDINANCE
WAS PASSED WAS OPEN
TO THE PUBLIC AS RE-
QUIRED BY LAW
ORDINANCE NO.110 -96
ORDINANCE WAIVING
APPENDIX A, SUBDIVI-
SION SECTION 9 (B) (2)
3 (a) OF THE CODE OF OR-
Nzv DINANCES WITH RE-
SPECT TO PLACING
i� CURB AND GUTTER ON
a THE EAST SIDE OF
STESCO AVENUE AND
? THE NORTH SIDE OF .'7V
�' STATE HIGHWAY 79 AD-
^+ JACENT TO THE WEST
AND SOUTH LINES OF '�
LOT 1, BLOCK 56 -B, EAST-
SIDEGARDENS
ORDINANCE NO. 111.96
ORDINANCE WAIVING
SECTION 27 -30 OF THE
CODE OF ORDINANCES
WITH RESPECT TO
PLACING A SIDEWALK
ON THE EAST SIDE OF
STESCO AVENUE AND
THE NORTH SIDE OF
STATE HIGHWAY 79 AD-
JACENT TO THE WEST
AND SOUTH LINES OF
LOT 1, BLOCK 56 -B, EAST-
SIDE GARDENS
Affidavit of Publication
THE STATE OF TEXAS
COUNTY OF WICHITA Ad #234510
On this 13 t h day of August
1996
A.D.............
Mary E.
personally appeared before me, the undersigned authority
Newel 1 bookkeeper
for the Times Publishing Company of Wichita Falls, publishers of the Wichita Falls
Times /Record News, a newspaper published at Wichita Falls in Wichita County,
Texas, and upon being duly sworn by me, on oath states that the attached
advertisement is a true and correct copy of advertising published
in one (1) issues thereof on the following dates:
August/%411, 1996
r
tid
Bookkeeper for i es Publishing Company
of Wichita Falls
Subscribed and sworn to before me this the day and year first above written: