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Ordinance No. 15,796 ORDINANCE NO. 15,796 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING A RESOLUTION OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE ISSUANCE OF BAYTOWN AREA WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS, SERIES 2024 (CITY OF BAYTOWN PROJECT); ACCEPTING THE TERMS AND CONDITIONS OF SUCH RESOLUTION; PROVIDING FOR CONTINUING DISCLOSURE WITH RESPECT TO SUCH BONDS; APPROVING AN AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY CONTRACT BETWEEN THE CITY AND THE BAYTOWN AREA WATER AUTHORITY; AND PROVIDING FOR AN EFFECTIVE DATE. ****************************************************************************** WHEREAS, the City Council (the "Council") of the City of Baytown, Texas (the"City") has entered into an Amended and Restated Water Supply Contract-Treated Water, originally dated January 31, 1977, as amended and restated as of October 23, 1997, and as further amended as of January 3, 2005, as of February 23, 2012, as of March 27, 2014, as of January 18, 2017, as of January 25, 2018 and as of May 9, 2024 (collectively, the "Contract"), with the Baytown Area Water Authority(the"Authority"); and WHEREAS, pursuant to Chapter 8104, Texas Special District Local Laws Code (the "Act"), and the Contract, the Authority now proposes to issue its bonds styled "Baytown Area Water Authority Water Supply Contract Revenue Bonds, Series 2024 (City of Baytown Project)" (the"Bonds"); and WHEREAS, the Council requests that the Authority proceed with the issuance and sale of the bonds and in accordance with the provisions of the Act is taking this action to approve the Authority's resolution authorizing issuance of the Bonds(the"Bond Resolution")prior to issuance and delivery of the Bonds. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: The findings,determinations and declarations set out in the preamble to this Ordinance are hereby found, determined and declared to be true and correct and are incorporated herein for all purposes. Capitalized terms shall have the meanings ascribed in the preamble to this Ordinance. All capitalized terms not defined herein shall have the meaning assigned in the Bond Resolution. Section 2: A copy of the Bond Resolution has been submitted to the Council. The Bond Resolution, including the principal amount of the Bonds, the purchase of a policy of municipal bond insurance from Build America Mutual Assurance Company, the sale of the bonds to the Underwriters, and all of the of the other terms and conditions thereof, is hereby approved, and the Bonds are hereby approved and authorized to be issued pursuant to the Bond Resolution. Section 3: In consideration of the issuance of the Bonds by the Authority, the City hereby makes the following agreement for the benefit of the Authority and the holders and beneficial owners of the Bonds. The City is required to observe the agreement for so long as it is an "obligated person" with respect to the Bonds within the meaning of Securities and Exchange Commission(the"SEC") Rule 15c2-12 (the"Rule"). (a) Annual Reports. The City shall provide annually to the Municipal Securities Rulemaking Board("MSRB"), (i) within six (6) months after the end of each Fiscal Year of the City ending in and after 2024, financial information and operating data with respect to the City of the general type included in the Official Statement, under Tables 3 through 6 and Appendix B thereto. Financial statements so to be provided shall be prepared in accordance with the accounting principles described in the notes to the financial statements for the most recently concluded Fiscal Year, and 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, the City shall provide unaudited financial statements for such Fiscal Year to the MSRB. Thereafter, when and if audited financial statements become available, the City shall provide such audited financial statements as required to the MSRB. (i) If the City changes its Fiscal Year, it will notify the MSRB of the change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section 3(a). (ii) The financial information and operating data to be provided pursuant to this Section 3(a) 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 the MSRB or filed with the SEC. The financial information or operating data shall be provided in an electronic format as prescribed by the MSRB. (iii) The term "Fiscal Year" shall mean the fiscal year of the City as set from time to time by the Council. (b) Event Notices. (i) The City shall provide the following to the MSRB, in an electronic format as prescribed by the MSRB,in a timely manner not in excess of ten(10)business days after the occurrence of the event,notice of any of the following events with respect to the Bonds: (1) Principal and interest payment delinquencies; (2) Non-payment related defaults, if material; (3) Unscheduled draws on debt service reserves reflecting financial difficulties; -2- (4) Unscheduled draws on credit enhancements reflecting financial difficulties; (5) Substitution of credit or liquidity providers, or their failure to perform; (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB)or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (7) Modifications to rights of the holders of the Bonds, if material; (8) Bond calls, if material, and tender offers; (9) Defeasances; (10) Release, substitution, or sale of property securing repayment of the Bonds, if material; (11) Rating changes; (12) Bankruptcy, insolvency, receivership or similar event of the City; Note to paragraph 12: For the purposes of the event identified in paragraph(12)of this section, the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the City in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material; -3- (15) Incurrence of a Financial Obligation of the City, if material, or agreement to covenants, events of default,remedies,priority rights,or other similar terms of a Financial Obligation of the City, any of which affect security holders, if material; and (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties. Note to paragraphs (15) and (16): As used in paragraphs (15) and (16) of this section, "Financial Obligation"means a(a)debt obligation; (b) derivative instrument entered into in connection with,or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that"financial obligation"shall not include municipal securities(as defined in the Securities Exchange Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule. For purposes of the events identified in paragraphs (15) and (16) of this section and in the definition of Financial Obligation, the City intends the words used in such paragraphs to have the meanings ascribed to them in SEC Release No. 34-83885 dated August 20, 2018 (the "2018 Release") and any further written guidance provided by the SEC or its staff with respect to the amendments to the Rule affected by the 2018 Release. (ii) The City shall provide to the MSRB, in an electronic format as prescribed by the MSRB,in a timely manner,notice of a failure by the City to provide required annual financial information in accordance with Section 3(a) above. All documents provided to the MSRB pursuant to this section shall be accompanied by identifying information as prescribed by the MSRB. (c) Limitations, Disclaimers and Amendments. (i) The City shall be obligated to observe and perform the covenants specified in this Section 3 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 bond calls and any defeasances that cause the City to be no longer an "obligated person." (ii) The provisions of this Section 3 are for the sole benefit of the Authority and the Owners and beneficial owners of the Bonds, 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 that it has expressly agreed to provide pursuant to this Section 3 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 -4- accordance with this Section 3 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. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER 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 WITH OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION 3, 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. (iii) No default by the City in observing or performing its obligations under this Section 3 shall constitute a breach of or default under this Ordinance or the Bond Resolution for purposes of any other provisions of this Ordinance or the Bond Resolution. (iv) Nothing in this Section 3 is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. (v) The provisions of this Section 3 may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if(i) the provisions of this Section 3, 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 to the date of such amendment, as well as such changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount (or any greater amount required by any other provisions of the Bond Resolution that authorizes such an amendment) of the Bonds then outstanding under the Bond Resolution consent to such amendment or(B) an entity or individual person that is unaffiliated with the City(such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the Owners and beneficial owners of the Bonds. The provisions of this Section 3 may also be amended from time to time or repealed by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final jurisdiction determines that such provisions are invalid,but only if and to the extent that reservation of the rights of the City to do so would not prevent underwriters of the initial public offering of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends the provisions of this Section 3, it shall include with any amended financial information or operating data next provided in accordance with Section 3(a) an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. Section 4: The sixth amendment to the to the Contract, dated as of May 9, 2024, 2024 (the"Contract Amendment') is hereby approved in substantially the form presented to the Council, with such changes as may be approved by the Mayor, with such approval evidenced by his execution of the Contract Amendment, and the Mayor is hereby authorized and directed to -5- execute and deliver, and the City Clerk or other appropriate official of the City is authorized to attest, the Contract Amendment. Section 5: This Ordinance shall become effective immediately upon passage by the Council. [Execution Page Follows] -6- INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the 91h day of May, 2024. NDON CAPETILLO, kayor ATTEST: �o�gQ'�70EhoG�, A 'ELA J CKSONf Cit rerk u �n'yU [SEAL] APPROVED AS O FORM: SCOTT LEM ND, City Attorney Signature Page to City of Baytown, Texas Ordinance No. CERTIFICATE FOR ORDINANCE THE STATE OF TEXAS § COUNTIES OF HARRIS AND CHAMBERS § I,the undersigned officer of the City Council of the City of Baytown,Texas,hereby certify as follows: 1. The City Council of the City of Baytown, Texas, convened in a regular meeting on the 91h day of May, 2024, at the regular meeting place thereof, within said City, and the roll was called of the duly constituted officers and members of said City Council, to wit: Brandon Capetillo Mayor Laura Alvarado Council Member, District 1 Sarah Graham Council Member, District 2 Ken Griffith Council Member, District 3 James Franco Council Member, District 4 Jacob Powell Council Member, District 5 Mike Lester Council Member, District 6 and all of said persons were present, except the following absentee(s): , thus constituting a quorum. Whereupon, among other business, the following was transacted at said meeting: ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING A RESOLUTION OF THE BAYTOWN AREA WATER AUTHORITY AUTHORIZING THE ISSUANCE OF BAYTOWN AREA WATER AUTHORITY WATER SUPPLY CONTRACT REVENUE BONDS, SERIES 2024 (CITY OF BAYTOWN PROJECT); ACCEPTING THE TERMS AND CONDITIONS OF SUCH RESOLUTION; PROVIDING FOR CONTINUING DISCLOSURE WITH RESPECT TO SUCH BONDS; APPROVING AN AMENDMENT TO THE AMENDED AND RESTATED WATER SUPPLY CONTRACT BETWEEN THE CITY AND THE BAYTOWN AREA WATER AUTHORITY; AND PROVIDING FOR AN EFFECTIVE DATE. was duly introduced for the consideration of said City Council. It was then duly moved and seconded that said ordinance be adopted; and, after due discussion, said motion, carrying with it the adoption of said ordinance, prevailed and carried by the following vote: Member(s) of City Council shown present voted"Aye." Member(s) of City Council shown present voted "No." Member(s) of City Council shown present abstained from voting. 2. A true, full and correct copy of the aforesaid ordinance adopted at the meeting described in the above and foregoing paragraph is attached to and follows this certificate; that said ordinance has been duly recorded in said City Council's minutes of said meeting; that the above and foregoing paragraph is a true, full and correct excerpt from said City Council's minutes of said meeting pertaining to the adoption of said ordinance; that the persons named in the above and foregoing paragraph are the duly chosen, qualified and acting officers and members of said City Council as indicated therein; that each of the officers and members of said City Council was duly and sufficiently notified officially and personally, in advance, of the date, hour, place and purpose of the aforesaid meeting, and that said ordinance would be introduced and considered for adoption at said meeting, and each of said officers and members consented, in advance, to the holding of said meeting for such purpose; that said meeting was open to the public as required by law; and that public notice of the date, hour, place and subject of said meeting was given as required by Chapter 551,Texas Government Code, as amended. SIGNED AND SEALED this 9th day of May, 2024. City Clerk City of Baytown, Texas [SEAL]