Ordinance No. 11,883ORDINANCE NO. 11,883
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 AND
REFUNDING BONDS, SERIES 2012 (CITY OF BAYTOWN PROJECT);
ACCEPTING THE TERMS AND CONDITIONS OF SUCH RESOLUTION;
PROVIDING FOR CONTINUING DISCLOSURE WITH RESPECT TO SUCH
BONDS; AND PROVIDING FOR AN EFFECTIVE DATE THEREOF.
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
on October 26, 2004 (the "Contract "), with the Baytown Area Water Authority (the
"Authority "); and
WHEREAS, in order to clarify provisions of the Contract relating to the term of the
Contract, the City Council desires to amend the Contract in the form attached hereto as Exhibit A
(the "Contract Amendment "); and
WHEREAS, pursuant to Chapter 1207, Texas Government Code and Chapter 8104,
Texas Special District Local Laws Code (the "Acts "), and the Contract, the Authority now
proposes to issue its bonds styled `Baytown Area Water Authority Water Supply Contract
Revenue and Refunding Bonds, Series 2012 (City of Baytown Project) (the "Bonds "); and
WHEREAS, the Council is required 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: The Council hereby approves the Contract Amendment in substantially the
form attached hereto as Exhibit "A." The Mayor and the City Clerk are hereby authorized to
execute, attest and deliver the Contract Amendment on behalf of the City.
Section 3: A copy of the Bond Resolution has been submitted to the Council. The
Bond Resolution, including all of the terms and conditions thereof, is hereby approved, and the
Bonds are hereby approved and authorized to be issued pursuant to the Bond Resolution.
Section 4: 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.
(i) The City will provide certain updated financial information and operating
data to the Municipal Securities Rulemaking Board ( "MSRB ") annually in an electronic
format as prescribed by the MSRB. The information to be updated by the City includes
certain updated financial and operating data with respect to the City of the general type
included in the final official statement under Tables 3 through 6 and in Appendix B. The
Authority and the City will update and provide this information within six (6) months of
the end of its Fiscal Years (as defined herein) ending in or after 2012. 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 commission 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 notice that audited financial statements are not available and 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.
(ii) 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 4(a).
(iii) The financial information and operating data to be provided pursuant to
this Section 4(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.
(iv) The term "Fiscal Year" shall mean the fiscal year of the City as set from
time to time by the Council.
(b) Material Events 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;
(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
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to undertake such an action or the termination of a definitive agreement relating to
any such actions, other than pursuant to its terms, if material; and
(14) Appointment of successor or additional trustee or the change of
name of a trustee, if material.
(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 and notices of material events in accordance with Section
4(a) and Section 4(b)(i) 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 4 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 4 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 4 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 4 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 WITHOUT
FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION 4,
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 4 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 4 is intended or shall act to disclaim, waive, or
otherwise limit the duties of the City under federal and state securities laws.
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(v) The provisions of (his Section 4 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 4, as so amended, would have permitted all
underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance
with the Rtfle, taking into account any amendments or interpretations of tile Rule to tile
date of such amendment, as well as such changed circumstances, and (2) either (i) 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 tile
Bonds then outstanding under the Bond Resolution consent to Such amendment or (ii) 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
tile Owners and beneficial owners of the Bonds. 'File provisions of this Section 4 may
also be amended from time to time or repealed by the City if the SEC amends or repeals
the applicable provisions of the RUIC Or a court of final jurisdiction determines that such
provisions are invalid, but only it' and to tile extent that reservation of tile 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 4, it shall include with any amended financial infonnation or
operating data next provided in accordance with Section 4(a) all 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 5: This Ordinance shall become efTective immediately from and after its
passage by the Council of the City of Baytown.
IN-rRODUCED, DEAD and PASSED by the affirmative vot r ifthe City Council of the
City of Baytown this the 3 rd day of February, 2012.
APPROVED ASTO FORM:
DONCARLOS, Mayor
A4NACIO RAMIREZ SR., City
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EXHIBIT A
CONTRACT AMENDMENT
STATE OF TEXAS §
COUNTIES OF HARRIS AND CHAMBERS §
This Contract Amendment (the "Amendment ") is made and entered into by and between
the Baytown Area Water Authority, a governmental entity and body politic and corporate, which
is situated and has its principal in the City of Baytown, Texas, Harris County ( "BAWA ") and the
City of Baytown, Texas, a municipal corporation home -rule city, which is principally situated
and has its City Hall in Harris County, Texas (the "City ").
WITNESSETH:
WHEREAS, the City and BAWA entered into a Water Supply Contract — Treated Water,
dated January 31, 1977, which was amended and restated on November 6, 1997 and further
amended by action dated October 26, 2004 (the "2004 Amendment," and collectively the
"Contract "); and
WHEREAS, the City and BAWA wish to clarify the provision of the 2004 Amendment
that extended the termination date of the Contract by correcting the Article of the Contract
referenced in the 2004 Amendment;
NOW, THEREFORE, for and in consideration of the premises and mutual covenants and
agreements herein contained, the parties hereby agree as follows:
I.
Article X of the Contract shall be amended and restated as set forth below:
ARTICLE X
TERM
This Contract as amended and restated shall remain in force and
effect until December 31, 2040; provided that this Contract shall
continue in effect until all of the Bonds are paid.
II.
The amendment to Article VIII of the Contract set forth in the 2004 Amendment is
hereby repealed.
III.
This Amendment is effective as of February 23, 2012.
113974279.4 A- I
IV.
The Contract between the parties hereto and this Amendment are the entire agreement of
the parties. In the event of any conflict between a provision of the Contract and this
Amendment, the provision of this Amendment shall control.
BAYTOWN AREA WATER AUTHORITY CITY OF BAYTOWN, TEXAS
BRENDA BRADLEY SMITH, President
ATTEST:
LETICIA BRYSCH, Assistant Secretary
APPROVED AS TO FORM:
STEPHEN H. DONCARLOS, Mayor
ATTEST:
LETICIA BRYSCH, City Clerk
APPROVED AS TO FORM:
IGNACIO RAMIREZ, SR., General Counsel IGNACIO RAMIREZ, SR., City Attorney
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