Ordinance No. 10,261ORDINANCE NO. 10,261
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AUTHORIZING THE ISSUANCE OF $5,215,000 CITY OF BAYTOWN
TEXAS, GENERAL OBLIGATION BONDS, SERIES 2006; MAKING OTHER
PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE
DATE THEREOF.
THE STATE OF TEXAS §
COUNTIES OF HARRIS AND CHAMBERS §
CITY OF BAYTOWN §
WHEREAS, the bonds hereinafter authorized were duly and favorably voted at an election
held in the City of Baytown, Texas (the "City ") on the 5th day of May, 2001; and
WHEREAS, the City Council of the City does hereby determine that bonds should be issued
in the amount of $5,215,000 as a portion and the fifth installment of the $29,490,000 tax bonds voted
at the election mentioned above, said bonds having been authorized for the purposes and issued in
the amounts shown below:
NOW, THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN:
1. Definitions. Throughout this Ordinance the following terms and expressions as used
herein shall have the meanings set forth below:
"Act" means Chapter 1331, Texas Government Code, as amended.
"Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations
between the City, the Registrar and DTC.
"Bonds" means the $5,215,000 City of Baytown, Texas, General Obligation Bonds, Series
2006, authorized in this Ordinance, unless the context clearly indicates otherwise.
Amount
Prior
Purpose
Authorized
Issues
This Issue Unissued
Street Improvements
$20,375,000
$16,225,000
$ $
Drainage Improvements
3,250,000
2,850,000
$ $
Fire Fighting Facilities and
Equipment
2,175,000
1,435,000
$ $
Communications Equipment
2,090,000
2,090,000
0 0
Community Center
Improvements
1,250,000
1,250,000
0 0
Park Improvements
350,000
350,000
0 0
TOTAL
$29,490,000
$24,470,000
$ $
NOW, THEREFORE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN:
1. Definitions. Throughout this Ordinance the following terms and expressions as used
herein shall have the meanings set forth below:
"Act" means Chapter 1331, Texas Government Code, as amended.
"Blanket Issuer Letter of Representations" means the Blanket Issuer Letter of Representations
between the City, the Registrar and DTC.
"Bonds" means the $5,215,000 City of Baytown, Texas, General Obligation Bonds, Series
2006, authorized in this Ordinance, unless the context clearly indicates otherwise.
® "Business Day" means any day which is not a Saturday, Sunday, or a day on which the
Registrar is authorized by law or executive order to close.
"City" means the City of Baytown, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended.
"Comptroller" means the Comptroller of Public Accounts of the State of Texas.
"Debt Service Fund" means the debt service fund for payment of the Bonds established by the
City in Section 19 of this Ordinance.
"DTC" means The Depository Trust Company of New York, New York, or any successor
securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations on whose behalf DTC was created to hold securities to facilitate the
clearance and settlement of securities transactions among DTC Participants.
"Initial Bond" means the Initial Bond authorized by Section 5(d).
® "Interest Payment Date ", when used in connection with any Bond, means August 1, 2006, and
each August 1 and February 1 thereafter until maturity or earlier redemption.
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means 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.
"Ordinance" as used herein and in the Bonds means this ordinance authorizing the Bonds.
"Owner" means any person who shall be the registered owner of any outstanding Bond.
"Record Date" means, for any Interest Payment Date, the 15th day of the month next
preceding each Interest Payment Date.
"Register" means the books of registration kept by the Registrar, in which are maintained the
names and addresses of, and the principal amounts of the Bonds registered to, each Owner.
"Registrar" means JPMorgan Chase Bank, National Association, and its successors in that
capacity.
® "Rule" means SEC Rule 15c2 -12, as amended from time to time.
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® "SEC" means the United States Securities and Exchange Commission.
"SID" means the Municipal Advisory Council of Texas, which has been designated by the
State of Texas as, and determined by the SEC staff to be, a state information depository within the
meaning of the Rule.
2, Authorization. The matters and facts recited in the preamble to this Ordinance are
hereby found to be true and correct. The Bonds shall be issued, pursuant to the Act, in fully
registered form in the aggregate principal amount of Five Million One Hundred Twenty -Five
Thousand Dollars ($5,215,000) for the purposes listed below, with the amount for each purpose
being as described in the preamble to this Ordinance:
(i) street improvements;
(ii) drainage improvements; and
(iii) fire fighting facilities and equipment.
3. Designation, Date, and Interest Payment Dates. The Bonds shall be designated as
"CITY OF BAYTOWN, TEXAS, GENERAL OBLIGATION BONDS, SERIES 2005" and shall be
dated March 1, 2006. The Bonds shall bear interest at the rates set forth in Section 4 of this
Ordinance from the later of March 1, 2006, or the most recent Interest Payment Date to which such
interest has been paid or duly provided for, calculated on the basis of a 360 day year of twelve 30 day
months, interest payable on August 1, 2006, and semiannually thereafter on August 1 and February 1
® of each year until maturity or earlier redemption.
4. Principal Amounts and Interest Rates; N_ umbers and Denominations. The Bonds shall
be issued in the principal amounts and bearing interest at the rates set forth in the following schedule,
and may be transferred and exchanged as set out in this Ordinance. The Bonds shall mature on
February 1 in each of the years and in the amounts set out in such schedule. The Initial Bond shall be
numbered 1 -1 and all other Bonds shall be numbered in sequence beginning with R -1. Bonds
delivered on transfer of or in exchange for other Bonds shall be numbered in order of their
authentication by the Registrar, shall be in the denomination of $5,000 or integral multiples thereof,
and shall mature on the same date and bear interest at the same rate as the Bond or Bonds in lieu of
which they are delivered.
Principal
Interest
Year
Amount
Rate
2007
$160,000
_%
2008
170,000
_%
2009
175,000
_%
2010
185,000
_%
2011
195,000
_%
2012
205,000
_%
2013
210,000
_%
2014
220,000
%
2015
230,000
_%
2016
245,000
%
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2017
255,000
® 2018
265,000
_%
_%
2019
275,000
%
2020
290,000
%
2021
305,000
%
2022
320,000
_%
2023
330,000
_%
2024
345,000
_%
2025
365,000
%
2026
380,000
%
5. Execution of Bonds; Seal. (a) The Bonds shall be signed by the Mayor and
countersigned by the City Clerk, by their manual, lithographed, or facsimile signatures, and the
official seal of the City shall be impressed or placed in facsimile thereon. Such facsimile signatures
on the Bonds shall have the same effect as if each of the Bonds had been signed manually and in
person by each of said officers, and such facsimile seal on the Bonds shall have the same effect as if
the official seat of the City had been manually impressed upon each of the Bonds.
(b) If any officer of the City whose manual or facsimile signature shall appear on the
Bonds shall cease to be such officer before the authentication of such Bonds or before the delivery of
such Bonds, such manual or facsimile signature shall nevertheless be valid and sufficient for all
purposes as if such officer had remained in such office.
• (c) Except as provided below, no Bond shall be valid or obligatory for any purpose or be
entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Registrar's Authentication Certificate substantially in the form provided herein, duly authenticated by
manual execution by an officer or duly authorized signatory of the Registrar. In lieu of the executed
Registrar's Authentication Certificate described above, the Initial Bond delivered at the Closing Date
shall have attached hereto the Comptroller's Registration Certificate substantially in the form
provided herein, manually executed by the Comptroller, or by his duly authorized agent, which
certificate shall be evidence that the Initial Bond has been duly approved by the Attorney General
and that it is a valid and binding obligation of the City, and has been registered by the Comptroller.
(d) On the Closing Date, the Initial Bond, being a single bond representing the entire
principal amount of the Bonds, payable in stated installments to the Underwriter or its designee,
executed by manual or facsimile signature of the Mayor and City Clerk of the City, approved by the
Attorney General, and registered and manually signed by the Comptroller, shall be delivered to the
Underwriter or its designee. Upon payment for the Initial Bond, the Registrar shall cancel the Initial
Bond and deliver definitive bonds to DTC.
6. Payment of Principal and Interest. The Registrar is hereby appointed as the paying
agent and registrar for the Bonds. The principal of the Bonds shall be payable, without exchange or
collection charges, in any coin or currency of the United States of America which on the date of
payment is legal tender for the payment of debts due the United States of America, upon their
presentation and surrender as they respectively become due and payable, whether at maturity or
earlier redemption, at the principal payment office of the Registrar. The interest on each Bond shall
be payable on each Interest Payment Date, by check mailed by the Registrar on or before the Interest
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Payment Date to the Owner of record as of the Record Date, to the address of such Owner as shown
on the Register.
If the date for payment of the principal of or interest on any Bond is not a Business Day, then
the date for such payment shall be the next succeeding Business Day with the same force and effect
as if made on the date payment was originally due.
7. Successor Reilistrars. The City covenants that at all times while any Bonds are
outstanding it will provide a commercial bank or trust company, organized under the laws of the
United States or any state, authorized under such laws to exercise trust powers, and subject to
supervision or examination by federal or state authority, to serve as and perform the duties and
services of Registrar for the Bonds. The City reserves the right to change the Registrar on not less
than 60 days written notice to the Registrar, so long as any such notice is effective not less than 60
days prior to the next succeeding principal or interest payment date on the Bonds. Promptly upon the
appointment of any successor Registrar, the previous Registrar shall deliver the Register or copies
thereof to the new Registrar, and the new Registrar shall notify each Owner, by United States mail,
first class postage prepaid, of such change and of the address of the new Registrar. Each Registrar
hereunder, by acting in that capacity, shall be deemed to have agreed to the provisions of this
Section.
8. Special Record Date. If interest on any Bond is not paid on any interest Payment Date
and continues unpaid for thirty (30) days thereafter, the Registrar shall establish a new record date
® for the payment of such interest, to be known as a Special Record Date. The Registrar shall establish
a Special Record Date when funds to make such interest payment are received from or on behalf of
the City. Such Special Record Date shall be fifteen (15) days prior to the date fixed for payment of
such past due interest, and notice of the date of payment and the Special Record Date shall be sent by
United States mail, first class, postage prepaid, not later than five (5) days prior to the Special Record
Date, to each affected Owner of record as of the close of business on the day prior to the mailing of
such notice.
9. Ownershi • Unclaimed Principal and Interest. The City, the Registrar and any other
person may treat the person in whose name any Bond is registered as the absolute owner of such
Bond for the purpose of making and receiving payment of the principal of or interest on such Bond,
and for all other purposes, whether or not such Bond is overdue, and neither the City nor the
Registrar shall be bound by any notice or knowledge to the contrary. All payments made to the
person deemed to be the Owner of any Bond in accordance with this Section shall be valid and
effectual and shall discharge the liability of the City and the Registrar upon such Bond to the extent
of the sums paid.
Amounts held by the Registrar which represent principal of and interest on the Bonds
remaining unclaimed by the Owner after the expiration of three years from the date such amounts
have become due and payable shall be reported and disposed of by the Registrar in accordance with
the applicable provisions of Texas law including, to the extent applicable, Title 6 of the Texas
Property Code, as amended.
10. Registration, Transfer, and Exchange. So long as any Bonds remain outstanding, the
Registrar shall keep the Register at its principal payment office in Dallas, Texas. Subject to such
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• reasonable regulations as it may prescribe, the Registrar shall provide for the registration and transfer
of Bonds in accordance with the terms of this Ordinance.
Each Bond shall be transferable only upon the presentation and surrender thereof at the
principal payment office of the Registrar in Dallas, Texas, duly endorsed for transfer, or
accompanied by an assignment duly executed by the registered Owner or his authorized
representative in form satisfactory to the Registrar. Upon due presentation of any Bond for transfer,
the Registrar shall authenticate and deliver in exchange therefor, within three Business Days after
such presentation, a new Bond or Bonds registered in the name of the transferee or transferees, in
authorized denominations and of the same maturity and aggregate principal amount and bearing
interest at the same rate as the Bond or Bonds so presented.
All Bonds shall be exchangeable upon presentation and surrender thereof at the principal
payment office in Dallas, Texas, of the Registrar, for a Bond or Bonds of like maturity and interest
rate and in any authorized denomination, in an aggregate amount equal to the unpaid principal
amount of the Bond or Bonds presented for exchange. The Registrar shall be and is hereby
authorized to authenticate and deliver exchange Bonds in accordance with the provisions of this
Section. Each Bond delivered in accordance with this Section shall be entitled to the benefits and
security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such Bond is
delivered.
The City or the Registrar may require the Owner of any Bond to pay a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the transfer or
exchange of such Bond. Any fee or charge of the Registrar for such transfer or exchange shall be
paid by the City.
11. Mutilated, Lost, or Stolen Bonds. Upon the presentation and surrender to the
Registrar of a mutilated Bond, the Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of like maturity, interest rate, and principal amount, bearing a number not
contemporaneously outstanding. If any Bond is lost, apparently destroyed, or wrongfully taken, the
City, pursuant to the applicable laws of the State of Texas and in the absence of notice or knowledge
that such Bond has been acquired by a bona fide purchaser, shall authorize and the Registrar shall
authenticate and deliver a replacement Bond of like maturity, interest rate and principal amount,
bearing a number not contemporaneously outstanding.
The City or the Registrar may require the Owner of a mutilated Bond to pay a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection therewith and any
other expenses connected therewith, including the fees and expenses of the Registrar. The City or
the Registrar may require the Owner of a lost, apparently destroyed or wrongfully taken Bond, before
any replacement Bond is issued, to:
(1) furnish to the City and the Registrar satisfactory evidence of the ownership of
and the circumstances of the loss, destruction or theft of such Bond;
(2) furnish such security or indemnity as may be required by the Registrar and
the City to save them harmless;
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® (3) pay all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Registrar and any tax or other
governmental charge that may be imposed; and
(4) meet any other reasonable requirements of the City and the Registrar.
If, after the delivery of such replacement Bond, a bona fide purchaser of the original Bond in lieu of
which such replacement Bond was issued presents for payment such original Bond, the City and the
Registrar shall be entitled to recover such replacement Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Registrar in connection therewith.
If any such mutilated, lost, apparently destroyed or wrongfully taken Bond has become or is
about to become due and payable, the City in its discretion may, instead of issuing a replacement
Bond, authorize the Registrar to pay such Bond.
Each replacement Bond delivered in accordance with this Section shall be entitled to the
benefits and security of this Ordinance to the same extent as the Bond or Bonds in lieu of which such
replacement Bond is delivered.
12. Cancellation of Bonds. All Bonds paid in accordance with this Ordinance, and all
Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and delivered in
accordance herewith, shall be cancelled and destroyed upon the making of proper records regarding
such payment. The Registrar shall furnish the City with appropriate certificates of destruction of
such Bonds.
13. Book -Entry Only System. (a) The Initial Bond shall be registered in the name of
Except as provided in Section 14 hereof, all other Bonds shall be
registered in the name of Cede & Co., as nominee of DTC.
(b) With respect to Bonds registered in the name of Cede & Co., as nominee of DTC, the
City and the Registrar shall have no responsibility or obligation to any DTC Participant or to any
person on behalf of whom such DTC Participant holds an interest in the Bonds, except as provided in
this Ordinance. Without limiting the immediately preceding sentence, the City and the Registrar
shall have no responsibility or obligation with respect to (1) 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 an Owner, as shown on the Register, 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 an Owner, as shown on the Register, 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 Registrar shall be entitled to treat and
consider the person in whose name each Bond is registered in the Register as the absolute Owner of
such Bond for the purpose of payment of principal of and interest on the Bonds, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for the purpose of
registering transfer with respect to such Bond, and for all other purposes whatsoever. The Registrar
shall pay all principal of, premium, if any, and interest on the Bonds only to or upon the order of the
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® respective Owners, as shown in the Register as provided in this Ordinance, or their respective
attorneys duly authorized in writing, and all such payments shall be valid and effective to fully
satisfy and discharge the City's obligations with respect to payments of principal, premium, if any,
and interest on the Bonds to the extent of the sum or sums so paid. No person other than an Owner,
as shown in the Register, shall receive a Bond certificate evidencing the obligation of the City to
make payments of amounts due pursuant to this Ordinance. Upon delivery by DTC to the Registrar
of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede
& Co., and subject to the provisions of this Ordinance with respect to interest checks being mailed to
the Owner of record as of the Record Date, the phrase "Cede & Co." in this Ordinance shall refer to
such new nominee of DTC.
14. Successor Securities Depository; Transfer Outside Book -Entry Only System. In the
event that the City, in its sole discretion, determines that the beneficial owners of the Bonds should
be able to obtain certificated Bonds, or in the event DTC discontinues the services described herein,
the City shall (1) appoint a successor securities depository, qualified to act as such under Section
17(a) of the Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants, as
identified by DTC, of the appointment of such successor securities depository and transfer one or
more separate Bonds to such successor securities depository or (ii) notify DTC and DTC
Participants, as identified by DTC, of the availability through DTC of Bonds and transfer one or
more separate Bonds to DTC Participants having Bonds credited to their DTC accounts, as identified
by DTC. In such event, the Bonds shall not longer be restricted to being registered in the Register in
the name of Cede & Co., as nominee of DTC, but may be registered in the name of the successor
securities depository, or its nominee, or in whatever name or names Owners transferring or
exchanging Bonds shall designate, in accordance with the provisions of this Ordinance.
15. Payments to Cede & Co. Notwithstanding any other provision of this Ordinance to
the contrary, so long as any Bonds are registered in the name of Cede & Co., as nominee of DTC, all
payments with respect to principal of, premium, if any, and interest on such Bonds, and all notices
with respect to such Bonds, shall be made and given, respectively, in the manner provided in the
Blanket Letter of Representations.
16. Optional Redemption. The Bonds are subject to optional redemption as set forth in
the Norm of Bonds in this Ordinance.
Principal amounts maybe redeemed only in integral multiples of $5,000. If a Bond subject to
redemption is in a denomination larger than $5,000, a portion of such Bond may be redeemed, but
only in integral multiples of $5,000. Upon surrender of any Bond for redemption in part, the
Registrar, in accordance with Section 10 hereof, shall authenticate and deliver in exchange therefor a
Bond or Bonds of like maturity and interest rate in an aggregate principal amount equal to the
unredeemed portion of the Bond so surrendered.
Notice of any redemption identifying the Bonds to be redeemed in whole or in part shall be
given by the Registrar at least thirty days prior to the date fixed for redemption by sending written
notice by first class mail to the Owner of each Bond to be redeemed in whole or in part at the address
® shown on the Register. Such notices shall state the redemption date, the redemption price, the place
at which Bonds are to be surrendered for payment and, if less than all Bonds outstanding of a
particular maturity are to be redeemed, the numbers of the Bonds or portions thereof of such maturity
• to be redeemed. Any notice given as provided in this Section shall be conclusively presumed to have
been duly given, whether or not the Owner receives such notice. By the date fixed for redemption,
due provision shall be made with the Registrar for payment of the redemption price of the Bonds or
portions thereof to be redeemed, plus accrued interest to the date fixed for redemption. When Bonds
have been called for redemption in whole or in part and due provision has been made to redeem same
as herein provided, the Bonds or portions thereof so redeemed shall no longer be regarded as
outstanding except for the purpose of receiving payment solely from the funds so provided for
redemption, and the rights of the Owners to collect interest which would otherwise accrue after the
redemption date on any Bond or portion thereof called for redemption shall terminate on the date
fixed for redemption.
17. Forms. The form of the Bonds, including the form of the Registrar's Authentication
Certificate, the form of Assignment, and the form of Registration Certificate of the Comptroller,
which shall be attached or affixed to the Bonds initially issued, shall be, respectively, substantially as
follows, with such additions, deletions and variations as may be necessary or desirable and not
prohibited by this Ordinance, including any legend regarding bond insurance if such insurance is
obtained by the Underwriter:
(a) Form of Bonds.
REGISTERED
NUMBER
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF HARRIS AND CHAMBERS
CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION BOND
SERIES 2006
INTEREST RATE: MATURITY DATE: ISSUE DATE:
February 1, 20� March 1, 2006
REGISTERED OWNER:
PRINCIPAL AMOUNT:
REGISTERED
DENOMINATION
CUSIP:
DOLLARS
The City of Baytown, Texas (the "City ") promises to pay to the registered owner identified
above, or registered assigns, on the maturity date specified above, upon presentation and surrender of
this Bond to JPMorgan Chase Bank, National Association (the "Registrar "), at its principal payment
office in Dallas, Texas, the principal amount identified above, payable in any coin or currency of the
United States of America which on the date of payment of such principal is legal tender for the
In
• payment of debts due the United States of America, and to pay interest thereon at the rate shown
above, calculated on the basis of a 360 day year of twelve 30 day months, from the later of March 1,
2006, or the most recent interest payment date to which interest has been paid or duly provided for.
Interest on this Bond is payable by check on August 1, 2006, and semiannually thereafter on each
August 1 and February 1, mailed to the registered owner as shown on the books of registration kept
by the Registrar as of the 15th day of the month next preceding such interest payment date.
THIS BOND is one of a duly authorized issue of Bonds, aggregating $5,215,000 (the
"Bonds "), issued for the purposes of acquiring and constructing street improvements, drainage
improvements, and fire fighting facilities and equipment, under and in strict conformity with the
Constitution and laws of the State of Texas and by authority of an election held within the City on
May 5, 2001 and pursuant to an ordinance adopted by the City Council (the "Ordinance "), which
Ordinance is of record in the official minutes of the City Council.
THE CITY RESERVES THE RIGHT to redeem Bond's maturing on and after February 1,
2016, prior to their scheduled maturities, in whole or from time to time in part, in integral multiples
of $5,000, on February 1, 2015, or any date thereafter at par plus accrued interest on the principal
amounts called for redemption to the date fixed for redemption. Reference is made to the Ordinance
for complete details concerning the manner of redeeming the Bonds.
NOTICE OF ANY REDEMPTION shall be given at least thirty (30) days prior to the date
fixed for redemption by first class mail, addressed to the registered owners of each Bond to be
redeemed in whole or in part at the address shown on the books of registration kept by the Registrar.
When Bonds or portions thereof have been called for redemption, and due provision has been made
to redeem the same, the amounts so redeemed shall be payable solely from the funds provided for
redemption, and interest which would otherwise accrue on the amounts called for redemption shall
terminate on the date fixed for redemption.
THIS BOND is transferable only upon presentation and surrender at the principal payment
office of the Registrar in Dallas, Texas, duly endorsed for transfer or accompanied by an assignment
duly executed by the registered owner or his authorized representative, subject to the terms and
conditions of the Ordinance.
THE BONDS are exchangeable at the principal payment office of the Registrar in Dallas,
Texas, for Bonds in the principal amount of $5,000 or any integral multiple thereof, subject to the
terms and conditions of the Ordinance.
THIS BOND shall not be valid or obligatory for any purpose or be entitled to any benefit
under the Ordinance unless this Bond is either (1) registered by the Comptroller of Public Accounts
of the State of Texas by registration certificate attached or affixed hereto or (ii) authenticated by the
Registrar by due execution of the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof, acknowledges and agrees
to be bound by all the terms and conditions of the Ordinance.
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® THE CITY has covenanted in the Ordinance that it will at all times provide a legally qualified
registrar for the Bonds and will cause notice of any change of registrar to be mailed to each
registered owner.
IT IS HEREBY certified, recited and covenanted that this Bond has been duly and validly
issued and delivered; that all acts, conditions and things required or proper to be performed, to exist
and to be done precedent to or in the issuance and delivery of this Bond have been performed, exist
and have been done in accordance with law; and that annual ad valorem taxes, within the limits
prescribed by law, sufficient to provide for the payment of the interest on and principal of this Bond,
as such interest comes due and such principal matures, have been levied and ordered to be levied
against all taxable property in the City, and have been pledged irrevocably for such payment.
IN WITNESS WHEREOF, this Bond has been signed with the manual or facsimile signature
of the Mayor of the City and countersigned with the manual or facsimile signature of the City Clerk
of the City, and the official seal of the City has been duly impressed, or placed in facsimile, on this
Bond.
(AUTHENTICATION (SEAL) CITY OF BAYTOWN, TEXAS
CERTIFICATE)
Mayor
City Clerk
(b) Form of Registration Certificate of Comptroller.
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity, and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS MY SIGNATURE AND SEAL this
(SEAL)
Comptroller of Public Accounts
of the State of Texas
(c) Form of Registrar's Authentication Certificate.
• AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond has been delivered pursuant to the
Ordinance described in the text of this Bond.
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JPMorgan Chase Bank, National Association
As Paying Agent/Registrar
Authorized Signature
Date of Authentication
(d) Form of Assignment.
ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers unto
(Please print or type name, address, and zip code of Transferee)
(Please insert Social Security or Taxpayer Identification Number of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer said Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature Guaranteed:
NOTICE: Signature must be guaranteed
by a member firm of the New York Stock
Exchange or a commercial bank or trust
company.
Registered Owner
NOTICE: The signature above must
correspond to the name of the registered
owner as shown on the face of this Bond in
every particular, without any alteration,
enlargement or change whatsoever.
(e) The Initial Bond shall be in the form set forth in paragraphs (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Bond, the headings
"INTEREST RATE" and "MATURITY DATE" shall both be
completed with the words "As Shown Below" and the word "CUSIP"
deleted;
(ii) in the first paragraph of the Bond, the words "on the maturity
date specified above" and "at the rate shown above" shall be deleted
and the following shall be inserted at the end of the first sentence "...,
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® with such principal to be paid in installments on February 1 in each of
the years and in the principal amounts identified in the following
schedule and with such installments bearing interest at the per annum
rates set forth in the following schedule:
[Information to be inserted from schedule in Section 4]
(iii) the Initial Bond shall be numbered I -1.
18. CUSIP Numbers; Bond Insurance. CUSIP Numbers may be printed on the Bonds, but
errors or omissions in the printing of such numbers shall have no effect on the validity of the Bonds.
If bond insurance is obtained by the Underwriter, the Bonds may bear an appropriate legend as
provided by the insurer.
19. Debt Service Fund, Tax Levy. There is hereby established a separate fund of the City
to be known as the City of Baytown, Texas, General Obligation Bonds, Series 2006 Debt Service
Fund (the "Debt Service Fund "), which shall be kept separate and apart from all other funds of the
City. The proceeds from all taxes levied, assessed and collected for and on account of the Bonds
authorized by this Ordinance shall be deposited, as collected, in the Debt Service Fund. While the
Bonds or any part of the principal thereof or interest thereon remain outstanding and unpaid, there is
hereby levied and there shall be annually assessed and collected in due time, form and manner, and at
the same time as other City taxes are assessed, levied and collected, in each year, a continuing direct
annual ad valorem tax, within the limits prescribed by law, upon all taxable property in the City,
sufficient to pay the current interest on the Bonds as the same becomes due and to provide and
maintain a sinking fund of not less than two percent of the principal amount of the Bonds or the
amount required to pay each installment of principal of the Bonds as the same matures, whichever is
greater, full allowance being made for delinquencies and costs of collection, and said taxes are
hereby irrevocably pledged to the payment of the interest on and principal of the Bonds and to no
other purpose.
To pay the debt service coming due on the Bonds prior to receipt of the taxes levied to pay
such debt service, there is hereby appropriated from current funds on hand, which are hereby
certified to be on hand and available for such purpose, an amount sufficient to pay such debt service
and such amount shall be used for no other purpose.
20. Application of Chapter 1208, Government Code. Chapter 1208, Government Code,
applies to the issuance of the Bonds and the pledge of the taxes granted by the City under Section 19
of this Ordinance, and such pledge is therefore valid, effective and perfected. If Texas law is
amended at any time while the Bonds are outstanding and unpaid such that the pledge of the taxes
granted by the City under Section 19 of this Ordinance is to be subject to the filing requirements of
Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the
Bonds the perfection of the security interest in said pledge, the City agrees to take such measures as
it determines are reasonable and necessary under Texas law to comply with the applicable provisions
of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said
• pledge to occur.
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21. Further Proceedings. After the Bonds to be initially issued have been executed, it
shall be the duty of the Mayor or Mayor Pro Tern and other appropriate officials and agents of the
City to deliver the Bonds to be initially issued and all pertinent records and proceedings to the
Attorney General, for examination and approval. After the Bonds to be initially issued have been
approved by the Attorney General, they shall be delivered to the Comptroller for registration. Upon
registration of the Bonds to be initially issued, the Comptroller (or the Comptroller's bond clerk or an
assistant bond clerk lawfully designated in writing to act for the Comptroller) shall manually sign the
Comptroller's Registration Certificate prescribed herein and the seal of said Comptroller shall be
impressed, or placed in facsimile, thereon.
22. Sale. The sale and delivery of the Bonds to (the
"Underwriter ") at a price of par, plus a cash premium of S , plus accrued interest
thereon to date of delivery, is hereby authorized, approved, ratified and confirmed, subject to the
approving opinion as to the legality of the Bonds of the Attorney General of the State of Texas, and
of Vinson & Elkins L.L.P., Houston, Texas, bond counsel. It is hereby found and declared that the
Bonds were sold at public sale and that the bid of the Underwriter was the best bid received by the
City.
23. Federal Income Tax Inclusion.
(a) General Tax Covenant. The City intends that the interest on the Bonds shall be
excludable from gross income for purposes of federal income taxation pursuant to sections 103 and
141 through 150 of the Internal Revenue Code of 1986, as amended (the "Code), and applicable
Income Tax Regulations (the "Regulations "). The City covenants and agrees not to take any action,
or knowingly omit to take any action within its control that, if taken or omitted, respectively, would
cause the interest on the Bonds to be includable in gross income, as defined in section 61 of the
Code, for federal income tax purposes. In particular, the City covenants and agrees to comply with
each requirement of this Section; provided, however, that the City shall not be required to comply
with any particular requirement of this Section if the City has received an opinion of nationally
recognized bond counsel ( "Counsel's Opinion ") that such noncompliance will not adversely affect
the exclusion from gross income for federal income tax purposes of interest on the Bonds or if the
City has received a Counsel's Opinion to the effect that compliance with some other requirement set
forth in this Section will satisfy the applicable requirements of the Code and Regulations, in which
case compliance with such other requirement specified in such Counsel's Opinion shall constitute
compliance with the corresponding requirement specified in this Section.
(b) No Private Use or Payment and No Private Loan Financing. The City shall certify,
through an authorized officer, employee or agent that based upon all facts and estimates known or
reasonably expected to be in existence on the date the Bonds are delivered, that the proceeds of the
Bonds will not be used in a manner that would cause the Bonds to be "private activitybonds" within
the meaning of section 141 of the Code and the Regulations promulgated thereunder. Moreover, the
City covenants and agrees that it will make such use of the proceeds of the Bonds including interest
or other investment income derived from Bond proceeds, regulate the use of property financed,
directly or indirectly, with such proceeds, and take such other and further action as may be required
• so that the Bonds will not be "private activity bonds" within the meaning of section 141 of the Code
and the Regulations promulgated thereunder.
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® (c) No Federal Guarantee, The City covenants and agrees not take any action, or
knowingly omit to take any action within its control, that, if taken or omitted, respectively, would
cause the Bonds to be "federally guaranteed" within the meaning of section 149(6) of the Code and
the applicable Regulations thereunder, except as permitted by section 149(b)(3) of the Code and such
Regulations.
(d) No Hedge Bonds. The City covenants and agrees that it has not and will not take any
action, and has not knowingly omitted and will not knowingly omit to take any action, within its
control, that, if taken or omitted, respectively, would cause the Bonds to be "hedge bonds" within the
meaning of section 149(8) of the Code and the applicable Regulations thereunder.
(e) No Arbitrage. The City shall certify, through an authorized officer, employee or agent
that based upon all facts and estimates known or reasonably expected to be in existence on the date
the Bonds are delivered, the City will reasonably expect that the proceeds of the Bonds will not be
used in a manner that would cause the Bonds to be "arbitrage bonds" within the meaning of section
148(a) of the Code and the applicable Regulations promulgated thereunder. Moreover, the City
covenants and agrees that it will make such use of the proceeds of the Bonds including interest or
other investment income derived from Bond proceeds, regulate investments of proceeds of the
Bonds, and take such other and further action as may be required so that the Bonds will not be
"arbitrage bonds" within the meaning of section 148(a) of the Code and the applicable Regulations
promulgated thereunder.
(f) Arbitrage Rebate. If the City does not qualify for an exception to the requirements of
section 148(f) of the Code relating to the required rebate to the United States, the City will take all
necessary steps to comply with the requirement that certain amounts earned by the City on the
investment of the "gross proceeds" of the Bonds (within the meaning of section 148(0(6)(B) of the
Code), be rebated to the federal government. Specifically, the City will (i) maintain records
regarding the investment of the gross proceeds of the Bonds as may be required to calculate the
amount earned on the investment of the gross proceeds of the Bonds separately from records of
amounts on deposit in the funds and accounts of the City allocable to other bond issues of the City or
moneys which do not represent gross proceeds of any bonds of the City, (ii) calculate at such times
as are required by applicable Regulations, the amount earned from the investment of the gross
proceeds of the Bonds which is required to be rebated to the federal government, and (iii) pay, not
less often than every fifth anniversary date of the delivery of the Bonds or on such other dates as may
be permitted under applicable Regulations, all amounts required to be rebated to the federal
government. Further, the City will not indirectly pay any amount otherwise payable to the federal
government pursuant to the foregoing requirements to any person other than the federal government
by entering into any investment arrangement with respect to the gross proceeds of the Bonds that
might result in a reduction in the amount required to be paid to the federal government because such
arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement
had been at arm's length and had the yield on the issue not been relevant to either party.
(g) Information Reporting. The City covenants and agrees to file or cause to be filed with
the Secretary of the Treasury, not later than the 15th day of the second calendar month after the close
aof the calendar quarter in which the Bonds are issued, an information statement concerning the
Bonds, all under and in accordance with section 149(e) of the Code and the applicable Regulations
promulgated thereunder.
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® (h) Continuing Obligation. Notwithstanding any other provision of this Ordinance, the
City's obligations under the covenants and provisions of this Section shall survive the defeasance and
discharge of the Bonds.
24. Use of Proceeds. Proceeds from the sale of the Bonds shall, promptly upon receipt by
the City, be applied as follows:
(a) Accrued interest and any premium on the Bonds shall be deposited
into the Debt Service Fund.
(b) The remaining proceeds of the Bonds shall be used for the purposes
described in Section 2 of this Ordinance and for paying the costs of
issuance of the Bonds. After accomplishing the purposes described in
Section 2, any remaining bond proceeds, including earnings on
investment of such proceeds, shall be transferred to the Debt Service
Fund.
25. Official Statement. The City ratifies and confirms its prior approval of the form and
content of the Preliminary Official Statement prepared in the initial offering and sale of the Bonds
and hereby authorizes the preparation of a final Official Statement reflecting the terms of the
Underwriter's bid and other relevant information. The use of such Official Statement in the
reoffering of the Bonds by the Underwriter is hereby approved and authorized. The proper officials
of the City are hereby authorized to execute and deliver a certificate pertaining to such Official
Statement as prescribed therein, dated as of the date of payment for and delivery of the Bonds.
26. Continuing Disclosure Undertaking. (a) Annual Reports. The City shall provide
annually to each NRMSIR and the SID, within six months after the end of each fiscal year, financial
information and operating data with respect to the City of the general type included in the final
Official Statement authorized by Section 25 of this Ordinance under Tables numbered 1 through 7
and 9 through 18, and in Appendix B. The information to be provided will include audited financial
statements, if the City commissions an audit and it is completed by the required time. If audited
financial statements are not available by the required time, the City will provide unaudited financial
statements at the required time and audited financial statements when and if they become available.
Any financial statements so to be provided shall be prepared in accordance with the accounting
principles described in Appendix to the Official Statement, or such other accounting principles
as the City may be required to employ from time to time pursuant to State law or regulation.
If the City changes its fiscal year, it will notify each NRMSIR and the 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 financial information and operating data to be provided pursuant to this Section maybe
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 the SID or filed with the SEC.
(b) Material Event Notices. The City shall notify the SID and either each NRMSIR or the
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• 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;
1. Defeasances;
J. Release, substitution, or sale of property securing repayment of the
Bonds; and
K. Rating changes.
The City shall notify the 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 Section
26(a) of this Ordinance by the time required by such Section.
(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 Texas law that causes
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 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. '
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 SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
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® IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
comprise a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adopt to
changed circumstances that arise from a change in legal requirements, change in law, or change in
the identity, nature, status or type of operations of the City, but only if (1) the agreement, as
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 (2) either (a) the
holders of a majority in aggregate principal amount of the outstanding Bonds consent to such
amendment, or (b) a person unaffiliated with the City (such as nationally recognized bond counsel),
determines that the amendment will not materially impair the interests of the holders and beneficial
owners of the Bonds. The City may also amend or repeal the provisions of this continuing disclosure
agreement if the SEC amends or repeals the applicable provisions of the Rule or a court of final
jurisdiction enters judgment hat 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 form lawfully purchasing or
selling Bonds in the primary offering of the Bonds. If any such amendment is made, the City will
include in its next annual update an explanation in narrative form of the reasons for the change and
its impact on the type of operating data or financial information being provided.
27. Registrar. The form of agreement setting forth the duties of the Registrar is hereby
approved, and the appropriate officials of the City are hereby authorized to execute such agreement
for and on behalf of the City.
28. Further Proceedings. The Mayor, the Mayor Pro Tem, City Clerk and other
appropriate officials of the City are hereby authorized and directed to do any and all things necessary
and/or convenient to carry out the terms and purposes of this Ordinance.
29. Partial tnvalidity. 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.
30. Open Meeting. The meeting at which this Ordinance was adopted was open to the
public, and public notice of the time, place and purpose of said meeting, was given, all as required by
the Texas Open Meetings Act.
• 31. Effective Date. This Ordinance shall take effect immediately from and after its
passage by the City Council of the City of Baytown.
M
INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City
of Baytown, this 91h day of February, 2006.
A
K'5D''l City Clerk
APPROVED AS 'f0 FORM:
• R:Ueanene\My Documents \Council \05 -06 \February Ist \City of Baytown -Bond Ordinance (2006 GO) (3).DOC
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