1993 11 16 CC Minutes, SpecialMINUTES OF THE SPECIAL SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
November 16, 1993
The City Council of the City of Baytown, Texas, met in special session on
November 16, 1993, at 4:00 p.m. in the Don M. Hullum Conference Room of the
Baytown City Hall with the following in attendance:
Eva Benavides
David Byford
Manuel Escontrias
E. Frank Hinds, Jr.
Stephen DonCarlos
Rolland J. Pruett
Pete C. Alfaro
Bobby Rountree
Norman Dykes
Ignacio Ramirez
Eileen P. Hall
Council Member
Council Member
Council Member
Council Member
Council Member
Council Member
Mayor
City Manager
Asst. City Manager
City Attorney
City Clerk
The meeting was opened with a quorum present, after which Mayor Alfaro
recessed into executive session to discuss land acquisition.
When the open meeting reconvened, Mayor Alfaro announced that no action
was necessary as a result of the executive session.
Eileen P. Hall, City Clerk
W
MINUTES OF THE SPECIAL SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
November 16, 1993
The City Council of the City of Baytown, Texas, met in special session on
November 16, 1993, at 4:30 p.m. in the Don M. Hullum Conference Room of the
Baytown City Hall with the following in attendance:
Eva Benavides
David Byford
Manuel Escontrias
E. Frank Hinds, Jr.
Stephen DonCarlos
Rolland J. Pruett
Pete C. Alfaro
Bobby Rountree
Norman Dykes
Ignacio Ramirez
Eileen P. Hall
Council Member
Council Member
Council Member
Council Member
Council Member
Council Member
Mayor
City Manager
Asst. City Manager
City Attorney
City Clerk
The meeting was opened with a quorum present, and Council Member
Benavides offered the invocation, after which the following business was conducted.
Consider Proposed Ordinance, Authorizing Change Order to Contract with Miller
Brown for Engineering Services Associated with Wetland Mitigation for the Marina
Development
The City Manager stated that the staff is not ready on this item. For some time
the staff has been informing Council of the Corps of Engineers' Permit and the city's
mitigation plan. We have found that the Port of Houston is in the process of doing
some beneficial uses mitigation to prepare for their dredging. The staff has been
working through Bob Gillette, Port Commissioner, to set up a meeting with Port of
Houston Representatives. Mike Shields with Baytown Economic Development
Foundation met with the Port of Houston consulting firm today at 1:30 p.m. He
recommended postponing action on this item to allow time to work with the Port.
They have an interest in this project because of the work they plan, and they are
willing to share their expertise with Baytown. Our goal is to lessen the overall cost
of the project for Baytown. Now the groups are attempting to work out the specifics
of how the City of Baytown may be involved. One of the things the city is looking
at is reducing start up costs by using the same contractor. This will postpone our
bids on dredging. The staff plans to come back to Council on December 9, and within
a month of that be ready to advertise for bids. The changes in the permit require
931116 -2
Minutes of the Special Session - November 16, 1993
extra work to be done. The overall impact will be cheaper costs. There will be extra
engineering costs because of additional monitoring required to insure the Corps permit
is followed. This is a special project to the Corps because of its new concept of
beneficial use of dredge material. The engineering work is proceeding on the upland
areas and on the in- the -water work, which will be dredging, bulk heading, and
construction of the breakwater area. Those will be two separate contracts.
Consider Proposed Ordinance, Amending Chapter 15, Health and Sanitation to Require
Proper Disposal of Materials from Cleanup of Properties
Chapter 15, Health and Sanitation, gives the city authority to abate health
hazards and public nuisances, including illegal dumping of trash and rubbish. Since
the city is involved in requesting the removal of these nuisances, we should stay
involved to make sure of proper disposal. If not, much of this trash and rubbish is
illegally dumped in ditches and along roadways. The proposed amendment would
allow the city to require a receipt be provided to the Health Department of the City of
Baytown within a period of thirty days after cleanup showing proof of proper disposal.
The receipt would provide information such as the date, time, location, amount
disposed of, etc. A fine of up to $2,000 can be imposed for failure to comply. The
administration recommended approval of the ordinance.
Council Member Pruett moved for adoption of the ordinance. Council Member
DonCarlos seconded the motion. The vote follows:
Ayes: Council Members Benavides, Byford, Escontrias, Hinds,
DonCarlos and Pruett
Mayor Alfaro
Nays: None
ORDINANCE NO. 6861
AN ORDINANCE AMENDING CHAPTER 15, "HEALTH AND SANITATION," ARTICLE
I "IN GENERAL," SECTION 15 -1, "DEFINITIONS," BY ADDING SUBSECTION (d) AND
AMENDING ARTICLE IV "PUBLIC HEALTH NUISANCE,' SECTION 15 -22, "NOTICE TO
CLEAN UP PREMISES," OF THE CODE OF ORDINANCES OF THE CITY OF
BAYTOWN, TEXAS; PROVIDING A REPEALING CLAUSE; CONTAINING A SAVINGS
CLAUSE; AND PROVIDING FOR THE PUBLICATION AND EFFECTIVE DATE THEREOF.
Consider Proposed Ordinance, Authorizing Issuance of $5,480,000 City of Baytown,
Texas, Waterworks and Sewer System Revenue Bonds, Series 1993; Appropriating
$500,000 of the Proceeds of Sale Thereof for Waterworks System Improvements and
the $4,980,000 of the Proceeds of Sale Thereof for Sewer System Improvements;
and Containing Other Provisions Related Thereto
la
931116 -3
Minutes of the Special Session - November 16, 1993
and
Consider Proposed Ordinance, Authorizing Issuance of $3,500,000 City of Baytown,
Texas, General Obligation Bonds, Series 1993; Appropriating $900,000 of the
Proceeds of Sale Thereof for Public Buildings' Improvements and $2,600,000 of the
Proceeds of the Sale Thereof for Street Improvements; and Containing Other
Provisions Related thereto
Drew Masterson, fiscal agent, stated the city had received eighteen bids total
for the two bond issues as follows:
$5,480,000 Waterworks and Sewer System Revenue Bonds, Series 1993
Barre & Co., Inc.
5.1502%
Griffin, Kubik, Stephens &
5.0661%
Thompson, Inc.
Southwest Securities, Inc.
5.0244%
Prudential Securities, Inc.
4.9660%
Coastal Securities Ltd.
5.0502%
Smith Barney Shearson Inc.
4.9825%
First Southwest Company
5.1047%
The Principal /Eppler,
5.0481%
Guerin & Turner, Inc.
5.0366%
$3.500,00 General Obligation Bonds, Series 1993
Barre & Co., Inc.
5.1248%
Griffin, Kubik, Stephens &
4.9369%
Thompson, Inc.
Southwest Securities, Inc.
4.9880%
Masterson Moreland
4.9878%
Prudential Securities, Inc.
4.9720%
Coastal Securities Ltd.
5.0340%
Smith Barney Shearson Inc.
4.9379%
First Southwest Company
5.1045%
The Principal /Eppler,
5.0366%
Guerin & Turner, Inc.
Nationsbank of Texas
5.0158%
The apparent low bidders are Prudential Securities, Inc. on the Revenue Bonds
and Griffin, Kubik on the General Obligation Bonds. Mr. Masterson excused himself
to verify the bids. When he returned, he verified that Prudential Securities, Inc. and
Griffin, Kubik were the low bidders and recommended acceptance of those bids.
931116 -4
Minutes of the Special Session - November 16, 1993
Council Member Pruett moved for adoption of the ordinances. Council Member
Hinds seconded the motion.
The Water and Sewer Bonds are being sold with MBIA Bond Insurance and will,
therefore, be rated AAA, and the General Obligation Bonds are being sold without
insurance and will be rated on the city's credit at Al as -. The vote follows:
Ayes: Council Members Benavides, Byford, Escontrias, Hinds,
DonCarlos and Pruett
Mayor Alfaro
Nays: None
Ordinance Nos. 6862 and 6863, along with Certificate For Ordinance, see
Attachments "A" and "B" respectively.
City Manager's Report
Municipal Court Judge and Alternate Appointments - Council scheduled a work
session for December 9 to determine whether council will seek applicants for the
Municipal Court Judge and Alternate Judge positions. Also, council requested that
an item be placed on the agenda to seek applicants for both positions. The council
felt by having an item on the agenda, they would have the option to take action or
take no action.
Regular Council Meetings in November and December - Unless there is an
unexpected reason to hold another meeting, the November 23 meeting will not be
held, and December 9 is the only meeting scheduled in December.
Zoning Meetings - The staff is having difficulty scheduling the locations selected
by council for the zoning meetings. Those meetings are planned for December 6 and
December 7. Some of the rental costs are prohibitive; therefore, the City Manager
asked council to let him know if there were other preferred locations. If not, the staff
will try to select centrally located places that will fit within the budget. Council
Member Byford will check with Trinity Baptist Church on the December 7 date for a
time period between 4:00 p.m. and 8:00 p.m.
Rainfall - Between 7:00 a.m. and 3:00 p.m. today, the rainfall at the following
locations registered:
1.8 inches
Central District
1.0 inch
East District
1.2 inches
West District
1.4 inches
Pinehurst
931116 -5
Minutes of the Special Session - November 16, 1993
Golf Course - Council Member Pruett announced that he, Council Members
Hinds and Escontrias have been working diligently toward the realization of a golf
course for Baytown. He reported that negotiations have been finalized with the
exception of executing the documents. The Ashbel Smith Land Company is controlled
by the Welsh Foundation. That group has approved the proposal of Gene Hazelwood
for a twenty -seven hole golf course. Mayor Alfaro acknowledged the Committee for
a job well done. The City Manager reminded council that this was one of the items
eliminated from the Bond Program. Later the Bond Committee came to council asking
that a golf course for Baytown be pursued. This is not an easy task when there is no
money; therefore, he too commended the committee.
Central Wastewater Treatment Plant Diversion Project Committee - Mayor Alfaro
appointed Council Members Pruett, Byford and Escontrias, the three members who
served on the committee to select architects for the Public Works Facility, to serve as
the committee to select an engineering firm for the Central Wastewater Treatment
Plant Diversion Project. The City Manager asked the Committee to get together with
he, Kent Laza and Herb Thomas in order that Mr. Thomas and Mr. Laza can begin to
develop criteria on which to seek proposals.
The Mayor recessed to allow time for Mr. Masterson to return with his
recommendation, and the group met.
Comments From Council
Mayor Alfaro reported that he did not attend the HGAC Meeting today because
of the inclement weather.
Council Member Byford commended Monte Mercer and his staff on preparation
of an excellent budget document.
Adjourn
There being no further business to be transacted, the meeting was adjourned.
Eileen P. Hall, City Clerk
• • ftouq
THE STATE OF TEXAS §
COUNTIES OF HARRIS §
AND CHAMBERS §
We, the undersigned officers 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 special meeting on the 16th day of November, 1993, 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 and the City Clerk, to wit:
Pete C. Alfaro
Stephen H. DonCarlos
Eva Benavides
Rolland J. Pruett
Manuel Escontrias
E. Frank Hinds, Jr.
David Byford
Eileen P. Hall
Mayor
Mayor Pro Tem and Council Member
(District 6)
Council Member (District 1)
Council Member (District 2)
Council Member (District 3)
Council Member (District 4)
Council Member (District 5)
City Clerk
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: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF $5,480,000 CITY OF
BAYTOWN, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
BONDS, SERIES 1993; APPROPRIATING $500,000 OF THE
PROCEEDS OF SALE THEREOF FOR WATERWORKS SYSTEM
IMPROVEMENTS AND $4,980,000 OF THE PROCEEDS OF SALE
THEREOF FOR SEWER SYSTEM IMPROVEMENTS; AND CONTAINING
OTHER PROVISIONS 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 adopted; and, after due discussion, said motion,
carrying with it the adoption of said ordinance, prevailed and
carried by the following vote:
AYES: All members of the City Council shown present
above voted "Aye ".
NOES: None.
2. That 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;
ATTACHMENT "A"
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
the Texas Open Meetings Act.
SIGNED AND SEALED this 16th day of November, 1993.
City Clerk
( SEAL)
,�U e
Mayor
(MIN
ORDINANCE NO. 6862
ORDINANCE AUTHORIZING THE ISSUANCE OF $5,480,000 CITY OF
BAYTOWN, TEXAS, WATERWORKS AND SEWER SYSTEM REVENUE
BONDS, SERIES 1993; APPROPRIATING $500,000 OF THE
PROCEEDS OF SALE THEREOF FOR WATERWORKS SYSTEM
IMPROVEMENTS AND $4,980,000 OF THE PROCEEDS OF SALE
THEREOF FOR SEWER SYSTEM IMPROVEMENTS; AND CONTAINING
OTHER PROVISIONS RELATED THERETO
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN:
ARTICLE I
FINDINGS AND DETERMINATIONS
Section 1: Findings and Determinations. It is hereby
officially found and determined that the City held an election on
May 4, 1991, at which the duly qualified voters of the City
authorized the issuance of $6,450,000 waterworks system revenue
bonds for the purpose of improving and extending the City's
waterworks system and $19,150,000 sanitary sewer system revenue
bonds for the purpose of improving and extending the City's
sanitary sewer system.
ARTICLE II
DEFINITIONS AND INTERPRETATIONS
Section 2.1: Definitions. In this Ordinance, the following
terms shall have the following meanings, unless the context clearly
indicates otherwise:
The term "Act" shall mean Articles 1111 through 1118, Vernon's
Texas Civil Statutes, as amended.
The term "Additional Parity Bonds" shall mean the additional
parity revenue bonds permitted to be issued by the City pursuant
to Section 6.1 of this Ordinance.
The term "Bonds" shall mean the City of Baytown, Texas,
Waterworks and Sewer System Revenue Bonds, Series 1993, authorized
by this Ordinance.
The term "Business Day" shall mean any day which is not a
Saturday, Sunday, a day on which banking institutions in the city
where the principal corporate trust office of the Registrar is
located are authorized by law or executive order to close, or a
legal holiday.
The term "City" shall mean the City of Baytown, Texas, and
where appropriate, the City Council thereof and any successor to
the City as owner of the System.
The term "Code" shall mean the Internal Revenue Code of 1986,
as amended.
The term "Comptroller" shall mean the Comptroller of Public
Accounts of the State of Texas.
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 and the interest income from
the investment or deposit of money in the Revenue Fund, the
Interest and Sinking Fund, and the Reserve Fund.
The term "Interest Payment Date ", when used in connection with
any Bond, shall mean February 1, 1994, and each August 1 and
February 1 thereafter until maturity or earlier redemption.
The term "Maintenance and Operation Expenses" shall mean the
reasonable and necessary expenses of operation and maintenance of
the System, including all salaries, labor, materials, repairs and
extensions necessary to render efficient service (but only such
repairs and extensions as, in the judgment of the governing body
of the City, are necessary to keep the System in operation and
render adequate service to the City and the inhabitants thereof,
or such as might be necessary to meet some physical accident or
condition which would otherwise impair the Parity Bonds), and all
payments under contracts now or hereafter defined as operating
expenses by the Legislature of Texas. Depreciation shall never be
considered as a Maintenance and Operation Expense.
The term "Net Revenues" shall mean all Gross Revenues
remaining after deducting the Maintenance and Operation Expenses.
The term "Ordinance" shall mean this bond ordinance and all
amendments hereof and supplements hereto.
The term "Outstanding Bonds" shall mean the Series 1991 Bonds
and the Series 1992 Bonds.
The term "Owner" or "Registered Owner ", when used with respect
to any Bond shall mean the person or entity in whose name such Bond
is registered in the Register. Any reference to a particular
percentage or proportion of the Owners shall mean the Owners at a
particular time of the specified percentage or proportion in
aggregate principal amount of all Bonds then outstanding under this
Ordinance, exclusive of Bonds held by the City.
-2-
The term "Parity Bonds" shall mean the Bonds, the Outstanding
Bonds, and each series of Additional Parity Bonds from time to time
hereafter issued, but only to the extent such Parity Bonds remain
outstanding.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date" shall mean, for any Interest Payment
Date, the fifteenth (15th) calendar day of the month next preceding
each Interest Payment Date.
The term "Register" shall mean 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.
The term "Registrar" shall mean First Interstate Bank of
Texas, N.A., Houston, Texas, and its successors in that capacity.
The term "Series 1991 Bonds" shall mean the City of Baytown,
Texas, Waterworks and Sewer System Revenue Bonds, Series 1991.
The term "Series 1992 Bonds" shall mean the City of Baytown,
Texas, Waterworks and Sewer System Revenue Bonds, Series 1992.
The term "Special Project" shall mean, to the extent permitted
by law, any waterworks or sanitary sewer system property,
improvement or facility declared by the City not to be part of the
System and substantially all of the costs of acquisition,
construction, and installation of which is paid from proceeds of
a financing transaction other than the issuance of bonds payable
from ad valorem taxes or Net Revenues of the System, and for which
all maintenance and operation expenses are payable from sources
other than revenues of the System, but only to the extent that and
for so long as all or any part of the revenues or proceeds of which
are or will be pledged to secure the payment or repayment of such
costs of acquisition, construction and installation under such
financing transaction.
The term "System" shall mean all properties, facilities,
improvements, equipment, interests, and rights constituting the
waterworks and sanitary sewer system of the City, including all
future extensions, replacements, betterments, additions, and
improvements to the System. The System shall not include any
Special Project.
Section 2.2: Interpretations. All terms defined herein and
all pronouns used in this ordinance shall be deemed to apply
equally to singular and plural and to all genders. The titles and
headings of the articles and sections of this Ordinance have been
-3-
inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or
restrict any of the terms or provisions hereof. This Ordinance and
all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein and to sustain the
validity of the Parity Bonds and the validity of the lien on and
pledge of the Net Revenues to secure the payment of the Parity
Bonds.
ARTICLE III
TERMS OF THE BONDS
Section 3.1: Authorization and Authorized Amount. The Bonds
shall be issued pursuant to the Act in fully registered form,
without coupons, in the amount of $5,480,000. The estimated
maximum amount, the amount appropriated, and the purposes for which
the Bonds are issued are $500,000 for improving and extending the
City's waterworks system and $4,980,000 for improving and extending
the City's sanitary sewer system.
Section 3.2: Designation. Date, and Interest Payment Dates.
The Bonds shall be designated as "City of Baytown, Texas,
Waterworks and Sewer System Revenue Bonds, Series 1993," and shall
be dated November 1, 1993. The Bonds shall bear interest at the
rates set out in Section 3.3 of this Ordinance from the later of
November 1, 1993, or the most recent Interest Payment Date to which
interest has been paid or duly provided for, calculated on the
basis of a 360 day year of twelve 30 day months, payable on
February 1, 1994, and semiannually thereafter on August 1 and
February 1 of each year until maturity or earlier redemption.
Section 3.3: Initial Bonds: Numbers and Denomination. The
Bonds shall be initially issued bearing the numbers, 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, subject to
prior redemption in accordance with this Ordinance, on February 1
in each of the years and in the amounts set out in such schedule.
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.
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Bond
Principal
Year of
Interest
Number
Amount
Maturity
Rate
R- 1
$215,000
1995
$
R- 2
220,000
1996
$
R- 3
230,000
1997
$
R- 4
235,000
1998
$
R- 5
245,000
1999
$
R- 6
255,000
2000
$
R- 7
265,000
2001
$
R- 8
275,000
2002
$
R- 9
285,000
2003
$
R -10
300,000
2004
$
R -11
310,000
2005
$
R -12
325,000
2006
$
R -13
340,000
2007
$
R -14
360,000
2008
$
R -15
375,000
2009
$
R -16
395,000
2010
$
R -17
415,000
2011
$
R -18
435,000
2012
$
Section 3.4: Execution of Bonds; Seal. The Bonds shall be
signed on behalf of the City 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
seal of the City had been manually impressed upon each of the
Bonds. 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.
Section 3.5.: Approval By Attorney General; Registration by
Comptroller. The Bonds to be initially issued shall be delivered
to the Attorney General of Texas for examination and approval and
shall be registered by the Comptroller. The manually executed
registration certificate of the Comptroller substantially in the
form provided in Article IV of this Ordinance shall be affixed or
attached to the Bonds to be initially issued.
Section 3.6: Authentication. Except for the Bonds to be
initially issued, which need not be authenticated, only such Bonds
as shall bear thereon a certificate of authentication substantially
in the form provided in Article IV of this Ordinance, manually
-5-
executed by an authorized representative of the Registrar, shall
be entitled to the benefits of this Ordinance or shall be valid or
obligatory for any purpose. Such duly executed certificate of
authentication shall be conclusive evidence that the Bond so
authenticated was delivered by the Registrar hereunder.
Section 3.' 7. Payment of Principal and Interest. The
Registrar is herby appointed as the registrar and paying agent for
the Bonds. The principal of the Bonds shall be payable, without
exchange or collection changes, 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 at the principal corporate trust office of the
Registrar. The interest on each Bond shall be payable by check
payable on the Interest Payment Date, mailed by the Registrar on
or before each Interest Payment Date to the Owner of record as of
the Record Date, to the address of such Owner as shown on the
Register, or by such other method, acceptable to the Registrar,
requested by and at the risk and expense of the Owner.
If the date for the payment of principal or interest on any
Bond is not a Business Day, then the date for such payment shall
be the next succeeding Business Day, and payment on such date shall
have the same force and effect as if made on the original date such
payment was due.
Section 3.8. Successor Registrars. 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
State of Texas or other entity duly qualified and legally
authorized to act as Registrar for the Bonds. The City reserves
the right to change the Registrar for the Bonds 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 a copy 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.
Section 3.9. 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
-6-
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 Owner or record of an affected Bond as of the
close of business on the day prior to the mailing of such notice.
Section 3.10. Ownership: Unclaimed Principal and Interest.
Subject to the further provisions of this Section, 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 3.10 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.
Section 3.11. Registration, Transfer. and Exchange. So long
as any Bonds remain outstanding, the Registrar shall keep the
Register at its principal corporate trust office and, subject to
such 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 corporate trust office of
the Registrar, 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 in proper form for transfer, the Registrar
shall authenticate and deliver in exchange therefor, within three
(3) 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.
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All Bonds shall be exchangeable upon presentation and
surrender thereof at the principal corporate trust office of the
Registrar for a Bond or Bonds of the same 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 3.11. Each Bond delivered in accordance
with this Section 3.11 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.
Section 3.12. Cancellation of Bonds. All Bonds paid or
redeemed 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 or
redemption. The Registrar shall furnish the City with appropriate
certificates of destruction of such Bonds.
Section 3.13. 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. The
City or the Registrar may require the Owner of such 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.
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 execute and the
Registrar shall authenticate and deliver a replacement Bond of like
maturity, interest rate and principal amount, bearing a number not
contemporaneously outstanding, provided that the Owner thereof
shall have:
(1) furnished to the City and the Registrar satisfactory
evidence of the ownership of and the circumstances
of the loss, destruction or theft of such Bond;
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(2) furnished such security or indemnity as may be required
by the Registrar and the City to save them harmless;
(3) paid 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) met 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 3.13 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.
Section 3.14: Redemption. The City reserves the right, at
its option, to redeem Bonds, in whole or from time to time in part,
on February 1, 2003, or any date thereafter, at par plus accrued
interest on the amounts called for redemption to the date fixed for
redemption. If less than all of the Bonds are to be redeemed, the
City shall determine the particular Bonds or portions thereof to
be redeemed.
Principal amounts may be 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 3.11 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.
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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, postage prepaid, 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 3.14 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 the 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.
ARTICLE IV
FORM OF BONDS AND CERTIFICATES
Section 4.1: Forms. The form of the Bonds, including the
form of the Registrar's authentication certificate, the form of
assignment, and the form of the Comptroller's Registration
Certificate for the bonds to be initially issued, shall be
substantially as follows, with such additions, deletions and
variations, as may be necessary or desirable and not prohibited by
this Ordinance, including any legend regarding bond insurance if
such insurance is obtained by the purchaser:
NUMBER
R-
REGISTERED
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF HARRIS AND CHAMBERS
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AMOUNT
S
REGISTERED
CITY OF BAYTOWN, TEXAS
WATERWORKS AND SEWER SYSTEM REVENUE BOND
SERIES 1993
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:
November 1, 1993
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The City of Baytown, Texas, a municipal corporation duly
incorporated under the laws of the State of Texas (herein the
"City ") for value received, promises to pay, but solely from
certain Net Revenues as hereinafter provided, to the Registered
Owner identified above or registered assigns, on the Maturity Date
specified above, upon presentation and surrender of this Bond at
the principal corporate trust office of First Interstate Bank of
Texas, N.A., Houston, Texas (the "Registrar "), the principal amount
identified above, in any coin or currency of the United States of
America which on the date of payment of such principal is legal
tender for the payment of debts due the United States of America,
and to pay, solely from such Net Revenues, 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 November 1, 1993, 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
payable on February 1 and August 1, beginning on February 1, 1994,
mailed to the registered owner as shown on the books of
registration kept by the Registrar as of the fifteenth (15th)
calendar day of the month next preceding each interest payment
date, or by such other method, acceptable to the Registrar,
requested by and at the risk and expense of the registered owner.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
IN WITNESS WHEREOF, the City has caused its corporate seal to
be impressed, printed, or lithographed hereon and has caused this
Bond to be executed by the manual or facsimile signatures of the
Mayor and City Clerk.
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(AUTHENTICATION (SEAL) CITY OF BAYTOWN, TEXAS
CERTIFICATE)
xxxxxxxxx
Mayor
COUNTERSIGNED:
xxxxxxxxx
City Clerk
(Back Panel of Bond)
THIS BOND IS ONE OF A DULY AUTHORIZED SERIES OF BONDS
aggregating $5,480,000, issued for the purposes of improving and
extending the City's waterworks and sanitary sewer system, as
authorized at an election held in the City on May 4, 1991, and an
ordinance adopted by the City Council of the City on November 16,
1993 (the "Ordinance ").
THIS BOND AND THE SERIES OF WHICH IT IS A PART are special
obligations of the City that are payable, together with the City's
outstanding waterworks and sewer system revenue bonds, from and are
equally and ratably secured by a first lien on the revenues of the
City's waterworks and sewer system remaining after deduction of the
operation and maintenance expenses of that system (the "Net
Revenues "), as defined and provided in the Ordinance, which Net
Revenues are required to be set aside and pledged to the payment
of the Bonds and all additional bonds issued on a parity therewith,
in the Interest and Sinking Fund and the Reserve Fund maintained
for the payment of all such Bonds, all as more fully described and
provided for in the Ordinance. This Bond and the series of which
it is a part, together with the interest thereon, are payable
solely from such Net Revenues and do not constitute an indebtedness
or general obligation of the City. The owner hereof shall never
have the right to demand payment of this obligation out of any
funds raised or to be raised by taxation.
THE CITY RESERVES THE RIGHT to redeem Bonds, in whole or from
time to time in part, in integral multiples of $5,000, on
February 11 2003, 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
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the same, the principal amounts so redeemed shall be payable solely
from the funds provided for redemption, and interest which would
otherwise accrue on the amounts called for redemption shall
terminate on the date fixed for redemption.
THIS BOND IS TRANSFERABLE only upon presentation and surrender
at the principal corporate trust office of the Registrar, 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 corporate trust
office of the Registrar for bonds in the principal amount of $5,000
or any integral multiple thereof, subject to the terms and
conditions of the Ordinance.
THE CITY HAS RESERVED THE RIGHT to issue additional parity
revenue bonds, subject to the restrictions contained in the
Ordinance, which may be equally and ratably payable from, and
secured by a first lien on and pledge of, the Net Revenues in the
same manner and to the same extent as this Bond and the series of
which it is a part.
IT IS HEREBY DECLARED AND REPRESENTED that this Bond has been
duly and validly issued and delivered; that all acts, conditions,
and things required or proper to be performed, exist, and be done
precedent to or in the issuance and delivery of this Bond have been
performed, existed, and been done in accordance with law; that the
Bonds do not exceed any statutory limitation; and that provision
has been made for the payment of the principal of and interest on
this Bond and all of the Bonds by the creation of the aforesaid
lien on and pledge of the Net Revenues.
FORM OF REGISTRATION CERTIFICATE
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)
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xxxxxxxxxx
Comptroller of Public Accounts
of the State of Texas
FORM OF AUTHENTICATION CERTIFICATE
AUTHENTICATION CERTIFICATE
It is hereby certified that this Bond
has been delivered pursuant to the Bond
Ordinance described in the text of this
Bond.
First Interstate Bank of Texas, N.A.
By
Authorized Signature
Date of Authentication
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.
Section 4.2: Legal Opinion: Cusip Numbers; Bond Insurance.
The approving opinion of Vinson & Elkins L.L.P., Houston, Texas,
and CUSIP Numbers may be printed on the Bonds, but errors or
omissions in the printing of such opinion or such numbers shall
have no effect on the validity of the Bonds. If bond insurance
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is obtained by the purchaser, the Bonds may bear an appropriate
legend as provided by the insurer.
ARTICLE V
SECURITY AND SOURCE OF
PAYMENT FOR ALL PARITY BONDS
Section 5.1: Pledge and Source of Payment. The City hereby
covenants and agrees that all Gross Revenues of the System shall
be deposited and paid into the special funds heretofore
established, and shall be applied in the manner set out herein,
to provide for the payment of all Maintenance and Operation
Expenses and to provide for the payment of principal, interest
and any redemption premium of the Parity Bonds and all expenses
of paying same. The Parity Bonds shall constitute special
obligations of the City that shall be payable solely from, and
shall be equally and ratably secured by a first lien on, the Net
Revenues, as collected and received by the City, from the
operation and ownership of the System, which Net Revenues shall,
in the manner herein provided, be set aside for and pledged to
the payment of the Parity Bonds in the Interest and Sinking Fund
and Reserve Fund as hereinafter provided, and the Parity Bonds
shall be in all respects on a parity with and of equal dignity
with one another. The owners of the Parity Bonds shall never
have the right to demand payment out of any funds raised or to be
raised by taxation.
Section 5.2: Rates and Charges. So long as any Parity
Bonds remain outstanding, the City shall fix, charge and collect
rates and charges for the use and services of the System which
are calculated to be fully sufficient to produce Net Earnings of
the System (as herein defined) in each fiscal year at least equal
to 125% of the principal and interest requirements scheduled to
occur in such fiscal year on all Parity Bonds then outstanding;
but in no event shall Net Revenues ever be less than the amount
required to maintain the Interest and Sinking Fund and the
Reserve Fund as hereinafter provided, and, to the extent that
funds for such purpose are not otherwise available, to pay all
other outstanding obligations payable from the Net Revenues of
the System as and when the same become due.
For purposes of this Section, the term "Net Earnings" shall
mean all Net Revenues of the System, except that in calculating
Net Earnings there shall not be deducted as Maintenance and
Operation Expenses any charge, disbursement or expenditure for
extensions, repairs or otherwise which, under standard accounting
practice, constitutes a capital expenditure.
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The City will not grant or permit any free service from the
System except for public buildings and institutions operated by
the City.
Section 5.3: Special Funds. The creation of the following
special Funds in the ordinance authorizing the issuance of the
Outstanding Bonds is hereby confirmed, and such Funds shall be
maintained and accounted for as hereinafter provided, so long as
any Parity Bonds remain outstanding:
(a) Waterworks and Sewer System Revenue Fund (the
"Revenue Fund ");
(b) Waterworks and Sewer System Revenue Bonds Interest
and Sinking Fund (the "Interest and Sinking
Fund"); and
(c) Waterworks and Sewer System Revenue Bonds Reserve
Fund (the "Reserve Fund ").
The Revenue Fund shall be maintained as a separate account on the
books of the City. The Interest and Sinking Fund and the Reserve
Fund shall be maintained at an official depository bank of the
City separate and apart from all other funds and accounts of the
City and shall constitute trust funds which shall be held in
trust for the benefit of the Owners of the Parity Bonds and the
proceeds of which (except for interest income, which shall be
transferred to the Revenue Fund) shall be and are hereby pledged
to the payment of the Parity Bonds. All of the Funds named above
shall be used solely as provided herein so long as any Parity
Bonds remain outstanding.
Section 5.4: Flow of Funds. All Gross Revenues of the
System shall be deposited as collected into the Revenue Fund.
Money from time to time on deposit to the credit of the Revenue
Fund shall be applied as follows in the following order of
priority:
(a) First, to pay Maintenance and Operation Expenses.
(b) Second, to make all deposits into the Interest and
Sinking Fund required by this Ordinance, the
ordinances authorizing the issuance of the
Outstanding Bonds, and any ordinance authorizing
the issuance of Additional Parity Bonds.
(c) Third, to make all deposits into the Reserve Fund
required by this Ordinance, the ordinance
authorizing the issuance of the Outstanding Bonds,
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and any ordinance authorizing the issuance of
Additional Parity Bonds.
(d) Fourth, for any lawful purpose.
Whenever the total amounts on deposit to the credit of the
Interest and Sinking Fund and the Reserve Fund shall be
equivalent to the sum of the aggregate principal amount of all
outstanding Parity Bonds plus the aggregate amount of all
interest accrued and to accrue thereon, no further payments need
be made into the Interest and Sinking Fund or the Reserve Fund.
Section 5.5: Interest and Sinking Fund. On or before the
last Business Day of each month so long as any Parity Bonds
remain outstanding, after making all required payments and
provision for payment of Maintenance and Operation Expenses,
there shall be transferred into the Interest and Sinking Fund
from the Revenue Fund
(i) such amounts, in approximately equal monthly
installments, as will be sufficient to
accumulate the amount required to pay the
interest scheduled to become due on the
Parity Bonds on the next interest payment
date; and
(ii) such amounts, in approximately equal monthly
installments, as will be sufficient to
accumulate the amount required to pay the
next maturing principal of the Parity Bonds,
including the principal amounts of, and any
redemption premium on, any Parity Bonds
payable as a result of the exercise or
operation of any optional or mandatory
redemption provision contained in any
ordinance authorizing the issuance of Parity
Bonds.
Money deposited to the credit of the Interest and Sinking Fund
shall be used solely for the purpose of paying principal (at
maturity or prior redemption or to purchase Parity Bonds issued
as term bonds in the open market to be credited against mandatory
redemption requirements), interest and any redemption premium on
the Parity Bonds, plus all bank charges and other costs and
expenses relating to such payment. On or before each principal
and /or interest payment date on the Parity Bonds, the City shall
transfer from the Interest and Sinking Fund to the paying agents
an amount equal to the principal, interest and any redemption
premium payable on the Parity Bonds on such date, together with
an amount equal to all bank charges and other costs and expenses
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relating to such payment. The paying agents shall totally
destroy all paid Parity Bonds and shall provide the City with an
appropriate certificate of destruction.
Section 5.6: Reserve Fund. Unless the Reserve Fund is
fully funded, on or before the last Business Day of each month so
long as any Parity Bonds remain outstanding, after making all
required payments and provision for payment of Maintenance and
Operation Expenses, and after making the transfers into the
Interest and Sinking Fund required in the preceding Section,
there shall be transferred into the Reserve Fund from the Revenue
Fund an amount at least equal to one - sixteeth (1 /60th) of the
average annual principal and interest requirements on the Parity
Bonds, so that the Reserve Fund shall contain, in no more than 60
months after the issuance of each such issue of Parity Bonds,
money and investments in an aggregate amount at least equal to
the average annual principal and interest requirements on all
Parity Bonds then outstanding. After such amount has accumulated
in the Reserve Fund and so long thereafter as such Fund contains
such amount, no further deposits shall be required to be made
into the Reserve Fund, and any excess amounts may be transferred
to the Revenue Fund. But if and whenever the balance in the
Reserve Fund is reduced below such amount, monthly deposits into
such Fund shall be resumed and continued in amounts at least
equal to one - sixtieth (1 /60th) of the average annual principal
and interest requirements on the Parity Bonds until the Reserve
Fund has been restored to such amount. The Reserve Fund shall be
used to pay the principal of and interest on the Parity Bonds at
any time when there is not sufficient money available in the
Interest and Sinking Fund for such purpose and it may be used
finally to pay and retire the last Parity Bonds to mature or be
redeemed.
Section 5.7: Deficiencies in Funds. If in any month there
shall not be deposited into any Fund maintained pursuant to this
Article the full amounts required herein, amounts equivalent to
such deficiency shall be set apart and paid into such Fund or
Funds from the first available and unallocated money in the
Revenue Fund, and such payment shall be in addition to the
amounts otherwise required to be paid into such Funds during the
succeeding month or months. To the extent necessary, the rates
and charges for the System shall be increased to make up for any
such deficiencies.
Section 5.8: Investment of Funds: Transfer of Investment
Income. (a) Money in the Revenue Fund, the Interest and Sinking
Fund and the Reserve Fund may, at the option of the City, be
invested in time deposits or certificates of deposit of
commercial banks secured in the manner required by law for public
funds and insured by the Federal Deposit Insurance Corporation to
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the maximum extent permitted by law, or be invested in direct
obligations of, or obligations fully guaranteed by, the United
States of America; provided that all such deposits and
investments shall be made in such manner that the money required
to be expended from any Fund will be available at the proper time
or times, and provided further that in no event shall such
deposits or investments of money in the Reserve Fund mature later
than the final maturity date of the Parity Bonds. Any obligation
in which money is so invested shall be kept and held in the
official depository bank of the City at which the Fund is
maintained from which the investment was made. All such
investments shall be promptly sold when necessary to prevent any
default in connection with the Parity Bonds.
(b) All interest and income derived from such deposits and
investments shall be transferred or credited as received to the
Revenue Fund, and shall constitute Gross Revenues of the System.
Section 5.9: Security for Uninvested Funds. So long as any
Parity Bonds remain outstanding, all uninvested money on deposit
in, or credited to, the Revenue Fund, the Interest and Sinking
Fund and the Reserve Fund shall be secured by the pledge of
security, as provided by Texas law.
ARTICLE VI
ADDITIONAL BONDS
Section 6.1: Additional Parity Bonds. The City reserves
the right to issue, for any lawful purpose (including the
refunding of any previously issued Parity Bonds or any other
bonds or obligations of the City issued in connection with or
payable from the revenues of the System), one or more series of
Additional Parity Bonds payable from and secured by a first lien
on the Net Revenues of the System, on a parity with the Bonds,
the Outstanding Bonds, and any previously issued Additional
Parity Bonds; provided, however, that no Additional Parity Bonds
may be issued unless:
(a) The Additional Parity Bonds mature on, and
interest is payable on, the same days of the year
as the Bonds;
(b) The Interest and Sinking Fund and the Reserve Fund
each contains the amount of money then required to
be on deposit therein;
(c) For either the preceding fiscal year or any
consecutive 12 -month period out of the !8 month
period immediately preceding the month in which
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the ordinance authorizing such Additional Parity
Bonds is adopted (the "Base Period "), either:
(1) Net Earnings of the System (as hereinbelow
defined) were equal to at least 125% of the
average annual principal and interest
requirements on all Parity Bonds that will be
outstanding after the issuance of the series
of Additional Parity Bonds then proposed to
be issued, as certified by the City's
Director of Finance or by an independent
certified public accountant or firm of
independent certified public accountants; or
(2) Net Earnings of the System, as adjusted to
give effect to any rate increase for the
System that -has been in effect for at least
60 days prior to the adoption of the
ordinance authorizing the issuance of the
series of Additional Parity Bonds then
proposed to be issued, to the same extent as
if such rate increase had been in effect for
the entire Base Period, would have been at
least equal to the amount required in
paragraph (1) above, as certified by an
independent consulting engineer or
independent firm of consulting engineers;
provided, however, that this requirement shall not
apply to the issuance of any series of Additional
Parity Bonds for refunding purposes that will have
the result of reducing the average annual
principal and interest requirements on Parity
Bonds; and
(d) Provision is made in the ordinance authorizing the
Additional Parity Bonds then proposed to be issued
for (1) additional payments into the Interest and
Sinking Fund sufficient to provide for any
increased principal and interest requirements on
the Parity Bonds resulting from the issuance of
the Additional Parity Bonds and (2) payments into
the Reserve Fund so that such Fund will, in not
later than 60 months from the date of issuance of
such Additional Parity Bonds, contain a balance
not less than the average annual principal and
interest requirements on all Parity Bonds that
will be outstanding after the issuance of such
series of Additional Parity Bonds.
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For purposes of Section 6.1(c), the term "Net Earnings of
the System" shall mean all of the Net Revenues of the System,
-cept that in calculating Net Earnings there shall not be
,-aducted as Maintenance and Operation Expenses any charge,
disbursement or expenditure for extensions, repairs or otherwise
which, under standard accounting practice, constitutes a capital
expenditure.
Section 6.2: Subordinate Lien Bonds. The City reserves the
right to issue, for any lawful purpose, bonds, notes or other
obligations secured in whole or in part by liens on the Net
Revenues that are junior and subordinate to the lien on Net
Revenues securing payment of the Parity Bonds. Such subordinate
lien obligations may be further secured by any other source of
payment lawfully available for such purposes.
Section 6.3: Special Proiect Bonds. The City reserves the
right to issue revenue bonds secured by liens on and pledges of
revenues and proceeds derived from Special Projects.
ARTICLE VII
COVENANTS AND PROVISIONS
RELATING TO ALL PARITY BONDS
Section 7.1: Punctual Payment of Parity Bonds. The City
will punctually pay or cause to be paid the interest on and
principal of all Parity Bonds according to the terms thereof and
will faithfully do and perform, and at all times fully observe,
any and all covenants, undertakings, stipulations and provisions
contained in this ordinance and in any ordinance authorizing the
issuance of Additional Parity Bonds.
Section 7.2: Maintenance of System. So long as any Parity
Bonds remain outstanding, the City covenants that it will at all
times maintain the System, or within the limits of its authority
cause the same to be maintained, in good condition and working
order and will operate the same, or cause the same to be
operated, in an efficient and economical manner at a reasonable
cost and in accordance with sound business principles. In
operating and maintaining the System, the City will comply with
all contractual provisions and agreements entered into by it and
with all valid rules, regulations, directions or orders of any
governmental, administrative, or judicial body promulgating same,
noncompliance with which would materially and adversely affect
the operation of the System.
Section 7.3: Sale or Encumbrance of System. So long as any
Parity Bonds remain outstanding, the City will not sell, dispose
of or, except as permitted in Article VI, further encumber the
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System; provided, however, that this provision shall not prevent
the City from disposing of any portion of the System which is
being replaced or is deemed by the City to be obsolete, worn out,
surplus or no longer needed for the proper operation of the
System. Any agreement pursuant to which the City contracts with
a person, corporation, municipal corporation or political
subdivision to operate the System or to lease and /or operate all
or part of the System shall not be considered as an encumbrance
of the System.
Section 7.4: Insurance. The City further covenants and
agrees that it will keep the System insured with insurers of good
standing against risks, accidents or casualties against which and
to the extent customarily insured against by political
subdivisions of the State of Texas operating similar properties,
to the extent that such insurance is available. The cost of all
such insurance together with any additional insurance, shall be a
part of the Maintenance and Operation Expenses. All net proceeds
of such insurance shall be applied to repair or replace the
insured property that is damaged or destroyed, or to make other
capital improvements to the System, or to redeem Parity Bonds.
Section 7.5: Accounts Records. and Audits. So long as any
Parity Bonds remain outstanding, the City covenants and agrees
that it will maintain a proper and complete system of records and
accounts pertaining to the operation of the System in which full,
true and proper entries will be made of all dealings,
transactions, business and affairs which in any way affect or
pertain to the System or the Gross Revenues or the Net Revenues
thereof. The City shall after the close of each of its fiscal
years cause an audit report of such records and accounts to be
prepared by an independent certified public accountant or
independent firm of certified public accountants. Each year
promptly after such audit report is prepared, the City shall
furnish a copy thereof without cost to the Municipal Advisory
Council of Texas, the major municipal rating agencies and any
owners of Parity Bonds who shall request same. All expenses
incurred in preparing such audits shall be Maintenance and
operation Expenses.
Section 7.6: Competition. To the extent it legally may,
the City 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 and
will prohibit the operation of any such competing facilities.
Section 7.7: Pledge and Encumbrance of Net Revenues. The
City covenants and represents that it has the lawful power to
create a lien on and to pledge the Net Revenues to secure the
payment of the Parity Bonds and has lawfully exercised such power
-22-
-
under the Constitution and laws of the State of Texas. The City
further covenants and represents that, other than to the payment
of the Parity Bonds, the Net Revenues are not and will not be
made subject to any other lien, pledge or encumbrance to secure
the payment of any debt or obligation of the City, unless such
lien, pledge or encumbrance is junior and subordinate to the lien
and pledge securing payment of the Parity Bonds.
Section 7.8: Bondowners' Remedies. This ordinance shall
constitute a contract between the City and the Owners of the
Parity Bonds from time to time outstanding and this Ordinance
shall be and remain irrepealable until the Parity Bonds and the
interest thereon shall be fully paid or discharged or provision
therefor shall have been made as provided herein. In the event
of a default in the payment of the principal of or interest an
any of the Parity Bonds or a default in the performance of any
duty or covenant provided by law or in this Ordinance, the Owner
or Owners of any of the Parity Bonds may pursue all legal
remedies afforded by the Constitution and laws of the State of
Texas to compel the City to remedy such default and to prevent
further default or defaults. Without in any way limiting the
generality of the foregoing, it is expressly provided that any
Owner of any of the Parity Bonds may at law or in equity, by
suit, action, mandamus, or other proceedings, enforce and compel
performance of all duties required to be performed by the City
under this Ordinance, including the making and collection of
reasonable and sufficient rates and charges for the use and
services of the System, the deposit of the Gross Revenues into
the special funds herein provided, and the application of such
Gross Revenues and Net Revenues in the manner required in this
ordinance.
Section 7.9: Discharge by Deposit. The City may discharge
its obligation to the Owners of any or all of the Parity Bonds to
pay principal, interest and redemption premium (if any) thereon
in any manner then permitted by law, including by depositing with
any paying agent for such Parity Bonds or with the State
Treasurer of the State of Texas either: (i) cash in an amount
equal to the principal amount and redemption premium, if any, of
such Parity Bonds plus interest thereon to the date of maturity
or redemption, or (ii) pursuant to an escrow or trust agreement,
cash and /or direct obligations of the United States of America,
in principal amounts and maturities and bearing interest at rates
sufficient to provide for the timely payment of the principal
amount and redemption premium, if any, of such Parity Bonds plus
interest thereon to the date of maturity or redemption; provided,
however, that if any of such Parity Bonds are to be redeemed
prior to their respective dates of maturity, provision shall have
been made for giving notice of redemption as provided in the
ordinance authorizing such Parity Bonds. Upon such deposit, such
-23-
Parity Bonds shall no longer be regarded to be outstanding or
unpaid.
Section 7.10: Paying Agents May Own Parity Bonds. The
paying agents for the Parity Bonds, in their individual or any
other capacity, may become holders or pledges of the Parity Bonds
with the same rights they would have if they were not paying
agents.
Section 7.11: No Recourse Against City Officials. No
recourse shall be had for the payment of principal of or interest
on any Parity Bonds or for any claim based thereon or on this
Ordinance against any official of the City or any person
executing any Parity Bonds.
ARTICLE VIII
PROVISIONS CONCERNING SALE AND
APPLICATION OF PROCEEDS OF BONDS
Section 8.1: Sale. The Bonds are hereby sold and shall be
delivered to at a price of
par plus accrued interest to the date of delivery, plus a cash
premium of $ , subject to the approval of the Attorney
General of Texas and Vinson & Elkins L.L.P., bond counsel, and
such price is hereby found and determined to be the most
advantageous reasonably obtainable by the City pursuant to public
competitive bids. The Mayor and other appropriate officers,
agents and representatives of the City are hereby authorized to
do any and all things necessary or desirable to provide for the
issuance and delivery of the Bonds.
Section 8.2: Tax Exemption. (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
Code, and applicable 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, of the owners thereof for
purposes of federal income taxation. In particular, the City
covenants and agrees to comply with each requirement of this
Section 8.2; provided, however, that the City shall not be
required to comply with any particular requirement of this
Section 8.2 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
-24-
that compliance with some other requirement set forth in this
Section 8.2 will satisfy the applicable requirements of the Code,
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 8.2.
(b) Use of Proceeds. The City covenants and agrees that
its use of the Net Proceeds of the Bonds will at all times
satisfy the following requirements:
The City will limit the amount of original or
investment proceeds of the Bonds to be used (other than
use as a member of the general public) in the trade or
business of any person other than a governmental unit
to an amount aggregating no more than ten percent of
the Net Proceeds of the Bonds ( "private -use proceeds ").
For purposes of this Section, the term "person"
includes any individual, corporation, partnership,
unincorporated association, or any other entity capable
of carrying on a trade or business; and the term "trade
or business" means, with respect to any natural person,
any activity regularly carried on for profit and, with
respect to persons other than natural persons, any
activity other than an activity carried on by a
governmental unit. Any use of proceeds of the Bonds in
any manner contrary to the guidelines set forth in
Revenue Procedure 93 -19, including any revisions or
amendments thereto, shall constitute the use of such
proceeds in the trade or business of one who is not a
governmental unit;
(ii) The City will not permit more than five
percent of the Net Proceeds of the Bonds and to be used
in the trade or business of any person other than a
governmental unit if such use is unrelated to the
governmental purpose of the Bonds. Further, the amount
of private -use proceeds of the Bonds in excess of five
percent of the Net Proceeds of the Bonds ( "excess
private -use proceeds ") did not and will not exceed the
proceeds of the Bonds expended for the governmental
purpose of the Bonds to which such excess private -use
proceeds relate;
(iii) The City will not permit an amount of proceeds
of the Bonds exceeding the lesser of (a) $5,000,000 or
(b) five percent of the Net Proceeds of the Bonds to be
used, directly or indirectly, to finance loans to
persons other than governmental units.
-25-
When used in this Section 8.2, the term Net Proceeds of the Bonds
shall mean the proceeds from the sale of the Bonds, including
investment earnings on such proceeds, less accrued interest.
(c) No Federal Guaranty. 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 Bonds to be "federally guaranteed" within the meaning of
section 149(b) of the Code and applicable regulations thereunder,
except as permitted by section 149(b)(3) of the Code and such
regulations.
(d) Bonds Are Not Hedge Bonds. The City covenants and
agrees that not more than 50 percent of the proceeds of the Bonds
will be invested in nonpurpose investments (as defined in section
148(f)(6)(A) of the Code) having a substantially guaranteed yield
for four years or more within the meaning of section
149(g)(3)(A)(ii) of the Code, and the City reasonably expects
that at least 85 percent of the spendable proceeds of the Bonds
will be used to carry out the governmental purposes of the Bonds
within the three -year period beginning on the date the Bonds are
issued.
(e) No- Arbitrage Covenant. 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 applicable
regulations 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 applicable regulations thereunder.
(f) Arbitrage Rebate. 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(f)(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
-26-
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 by 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 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 of 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 applicable
regulations thereunder.
Section 8.3. Qualified Tax - Exempt Obligations. The City
hereby designates the Bonds as "qualified tax - exempt obligations"
for purposes of section 265(b) of the Code. In connection
therewith, the City represents (a) that the aggregate amount of
tax - exempt obligations issued by the City during calendar year
1993, including the Bonds, which have been designated as
"qualified tax - exempt obligations" under section 265(b)(3) of the
Code does not exceed $10,000,000, and (b) that the reasonably
anticipated amount of tax - exempt obligations which will be issued
by the City during calendar year 1993, including the Bonds, will
not exceed $10,000,000. For purposes of this Section, the term
"tax- exempt obligation" does not include "private activity bonds"
within the meaning of section 141 of the Code, other than
"qualified 501(c)(3) bonds" within the meaning of section 145 of
the Code. In addition, for purposes of this Section, the City
includes all governmental units which are aggregated with the
City under the Code.
Section 8.4: 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 shall be deposited
into the Interest and Sinking Fund.
-27-
(b) The remaining proceeds from the sale of the Bonds shall
be used for the purposes set out in Section 3.1 and to pay
costs of issuance, with any remainder being transferred to
the Interest and Sinking Fund.
Section 8.5: 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 Purchaser's
bid and other relevant information. The use of such Official
Statement in the reoffering of the Bonds by the Purchaser 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.
ARTICLE IX
MISCELLANEOUS
Section 9.1: Further Proceedings. The Mayor, the City
Manager, the 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 of this
Ordinance.
Section 9.2: 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 9.3: Open Meeting. It is hereby officially found
and determined that the meeting at which this Ordinance was
adopted was open to the public, and that public notice of the
time, place and purpose of said meeting was given, all as
required by the Texas Open Meetings Act.
Section 9.4: Paying Agent /Registrar Agreement. The form of
agreement setting forth the duties of the Registrar is hereby
approved, and an appropriate official of the City is hereby
authorized to execute such agreement for and on behalf of the
City.
Section 9.5: 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
-28-
official or employee of the City or any person executing any
Bonds.
Section 9.6: Parties Interested. Nothing in this Ordinance
expressed or implied is intended or shall be construed to confer
upon, or to give to, any person or entity, other than the City,
the Registrar, and the Owners of the Bonds, any right, remedy or
claim under or by reason of this Ordinance or any covenant,
condition or stipulation hereof, and all covenants, stipulations,
promises and agreements in this Ordinance shall be for the sole
and exclusive benefit of the City, the Registrar, and the Owners
of the Bonds.
Section 9.7: Repealer. All orders, resolutions and
ordinances, or parts thereof, inconsistent herewith are hereby
repealed to the extent of such inconsistency.
Section 9.8: Effective Date. This Ordinance shall become
effective immediately upon passage by this City Council and
signature of the Mayor.
PASSED AND APPROVED this 16th day of November, 1993.
ATTEST:
/s/ Eileen P. Hall
City Clerk
CITY OF BAYTOWN, TEXAS
( SEAL)
-29-
/s/ Pete C. Alfaro
Mayor
CITY OF BAYTOWN, TEXAS
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CERTIFICATE FOR ORDINANCE
THE STATE OF TEXAS
COUNTIES OF HARRIS
AND CHAMBERS
We, the undersigned officers 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 special meeting on the 16th day of November, 1993, 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 and the City Clerk, to wit:
Pete C. Alfaro
Stephen H. DonCarlos
Eva Benavides
Rolland J. Pruett
Manuel Escontrias
E. Frank Hinds, Jr.
David Byford
Eileen P. Hall
Mayor
Mayor Pro Tem and Council Member
(District 6)
Council Member (District 1)
Council Member (District 2)
Council Member (District 3)
Council Member (District 4)
Council Member (District 5)
City Clerk
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: a written
ORDINANCE AUTHORIZING THE ISSUANCE OF $3,500,000 CITY OF
BAYTOWN, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1993;
APPROPRIATING $900,000 OF THE PROCEEDS OF SALE THEREOF
FOR PUBLIC BUILDINGS IMPROVEMENTS AND $2,600,000 OF THE
PROCEEDS OF SALE THEREOF FOR STREET IMPROVEMENTS; AND
CONTAINING OTHER PROVISIONS 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 adopted; and, after due discussion, said motion,
carrying with it the adoption of said ordinance, prevailed and
carried by the following vote:
AYES: All members of the City Council shown present
above voted "Aye ".
NOES: None.
2. That 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
ATTACHMENT "B"
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
the Texas Open Meetings Act.
SIGNED AND SEALED this 16th day of November, 1993.
City Clerk
( SEAL)
Mayor
ORDINANCE NO. 6863
ORDINANCE AUTHORIZING THE ISSUANCE OF $3,500,000 CITY OF
BAYTOWN, TEXAS, GENERAL OBLIGATION BONDS, SERIES 1993;
APPROPRIATING $900,000 OF THE PROCEEDS OF SALE THEREOF
FOR PUBLIC BUILDINGS IMPROVEMENTS AND $2,600,000 OF THE
PROCEEDS OF SALE THEREOF FOR STREET IMPROVEMENTS; AND
CONTAINING OTHER PROVISIONS RELATED THERETO
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 on the 4th day of
May, 1991; and
WHEREAS, the City Council of the City does hereby determine
that bonds in the amount- of $3,500,000 should be issued as a
portion and the third installment of the $27,400,000 bonds voted
at the election mentioned above, $17,155,000 bonds having been
heretofore issued, sold and delivered, leaving the remaining
$6,745,000 bonds to be issued, sold and delivered at a later date;
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:
The term "Act" shall mean Article 823, Vernon's Texas Civil
Statutes, as amended.
The term "Bond" or "Bonds" shall mean any bond or all bonds,
as the case may be, of the Series 1993 Bonds authorized in this
Ordinance, unless the context clearly indicates otherwise.
The term "Business Day" shall mean any day which is not a
Saturday, Sunday, a day on which banking institutions in the city
where the principal corporate trust office of the Registrar is
located are authorized by law or executive order to close, or a
legal holiday.
The term "City" shall mean the City of Baytown, Texas.
The term "Code" shall mean the Internal Revenue Code of 1986,
as amended.
The term "Comptroller" shall mean the Comptroller of Public
Accounts of the State of Texas.
The term "Interest and Sinking Fund" shall mean the interest
and sinking fund established by the City pursuant to Section 18 of
this Ordinance.
The term "Interest Payment Date", when used in connection with
any Bond, shall mean February 1, 1994, and each August 1 and
February 1 thereafter until maturity or earlier redemption.
The term "Ordinance" as used herein and in the Bonds shall
mean this ordinance authorizing the Bonds.
The term "Owner" shall mean any person who shall be the
registered owner of any outstanding Bond.
The term "Paying Agent" shall mean the Registrar.
The term "Record Date!' shall mean, for any Interest Payment
Date, the fifteenth (15th) day of the month next preceding each
Interest Payment Date.
The term "Register" shall mean 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.
The term "Registrar" shall mean First Interstate Bank of
Texas, N.A., Houston, Texas, and its successors in that capacity.
2. Authorization. The Bonds shall be issued pursuant to the
Act in fully registered form, without coupons, in the total amount
of Three Million Five Hundred Thousand Dollars ($3,500,000). The
estimated maximum costs, the amount appropriated, and the purposes
for which the Bonds are issued are:
$900,000 for constructing, improving, and permanently
equipping public buildings; and
$2,600,000 for the construction and improvement of City
streets.
3. Designation. Date. and Interest Payment Dates. The Bonds
shall be designated as the "CITY OF BAYTOWN, TEXAS, GENERAL
OBLIGATION BONDS, SERIES 199310, and shall be dated November 1,
1993. The Bonds shall bear interest at the rates set forth below
from the later of November 1, 1993, or the most recent Interest
Payment Date to which 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 February 1, 1994, and semiannually thereafter
on August 1 and February 1 of each year until maturity or earlier
redemption.
-2-
4. Initial Bonds; Numbers and Denominations. The Bonds
shall be issued bearing the numbers, 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. 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.
Bond Principal
Number Year Amount
Interest
Rate
R- 1
1995
$135,000 $
R- 2
1996
140,000 $
R- 3
1997
145,000 $
R- 4
1998
150,000 $
R- 5
1999
155,000 $
R- 6
2000
160,000 $
R- 7
2001
170,000 $
R- 8
2002
175,000 $
R- 9
2003
180,000 $
R -10
2004
190,000 $
R -11
2005
200,000 $
R -12
2006
210,000 $
R -13
2007
220,000 $
R -14
2008
230,000 %
R -15
2009
240,000 %
R -16
2010
255,000 %
R -17
2011
265,000 %
R -18
2012
280,000 %
5. Execution of Bonds; Seal. The Bonds shall be signed by
the Mayor of the City and countersigned by the City Clerk of the
City, 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
seal of the City had been manually impressed upon each of the
Bonds. 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.
-3-
6. gRproval by Attorney General: Registration by
Comptroller. The Bonds to be initially issued shall be delivered
to the Attorney General of Texas for approval and shall be
registered by the Comptroller. The manually executed registration
certificate of the Comptroller substantially in the form provided
in Section 16 of this Ordinance shall be attached or affixed to the
Bonds to be initially issued.
7. Authentication. Except for the Bonds to be initially
issued, which need not be authenticated by the Registrar, only such
Bonds which bear thereon a certificate of authentication,
substantially in the form provided in Section 16 of this Ordinance,
manually executed by an authorized representative of the Registrar,
shall be entitled to the benefits of this ordinance or shall be
valid or obligatory for any purpose. Such duly executed
certificate of authentication shall be conclusive evidence that the
Bonds so authenticated were delivered by the Registrar hereunder.
a. Payment of Principal and Interest. The Registrar is
hereby appointed as the paying agent 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 by prior redemption, at the principal corporate trust
office of the Registrar. The interest on each Bond shall be
payable by check payable on the Interest Payment Date, mailed by
the Registrar on or before each Interest Payment Date to the Owner
of record as of the Record Date, to the address of such Owner as
shown on the Register, or by such other method, acceptable to the
Registrar, requested by and at the risk and expense of the Owner.
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 such payment was originally due.
9. Successor Registrars. 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 State of
Texas or other entity duly qualified and legally authorized to
serve as and perform the duties and services of the Paying
Agent /Registrar for the Bonds. The City reserves the right to
change the Registrar for the Bonds 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
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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.
10. 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.
11. Ownership: 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 principal 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 11 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.
12. Recristration. Transfer. and Exchange. So long as any
Bonds remain outstanding, the Registrar shall keep the Register at
its principal corporate trust office and, subject to such
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 corporate trust office of the
Registrar, duly endorsed for transfer, or accompanied by an
assignment duly executed by the registered Owner or his authorized
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representative in form satisfactory to the Registrar. Upon due
presentation of any Bond in proper form for transfer, the Registrar
shall authenticate and deliver in exchange therefor, within three
(3) 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 corporate trust office 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•.12. Each Bond delivered in accordance
with this Section 12 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.
13. 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
Q�
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;
(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 13 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.
14. 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.
15. Optional Redemption. The City reserves the right, at its
option, to redeem Bonds, in whole or from time to time in part, on
February 1, 2003, or any date thereafter, at par plus accrued
interest on the amounts called for redemption to the date fixed for
redemption. If less than all of the Bonds are to be redeemed, the
City shall determine the Bonds or portions thereof to be redeemed.
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Principal amounts may be 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 12 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, postage prepaid, 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 are to be
redeemed, the numbers of the Bonds or portions thereof to be
redeemed. Any notice given as provided in this Section 15 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 the 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.
16. 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 of Public
Accounts of the State of Texas 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 purchaser:
ig
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(Face of Bond)
UNITED STATES OF AMERICA
STATE OF TEXAS
COUNTIES OF HARRIS AND CHAMBERS
NUMBER DENOMINATION
R- $
REGISTERED REGISTERED
CITY OF BAYTOWN, TEXAS
GENERAL OBLIGATION BOND
SERIES 1993
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP
November 1, 1993
REGISTERED OWNER:
PRINCIPAL AMOUNT: DOLES
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 at the principal corporate trust office of First
Interstate Bank of Texas, N.A., Houston, Texas (the "Registrar "),
the principal amount identified above, payable in any coin or
currency of the United States of America which on the date of
payment of such principal is legal tender for the payment of debts
due the United States of America, and, to pay interest thereon at
the rate shown above, calculated on the basis of a 360 day year of
twelve 30 day months, from the later of November 1, 1993, 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 February 1 and August 1, beginning on February 1, 1994, mailed
to the registered owner as shown on the books of registration kept
by the Registrar as of the fifteenth (15th) day of the month next
preceding each interest payment date, or by such other method,
acceptable to the Registrar, requested by and at the risk and
expense of the Owner.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
BOND SET FORTH ON THE REVERSE HEREOF, WHICH PROVISIONS SHALL HAVE
THE SAME FORCE AND EFFECT AS IF SET FORTH AT THIS PLACE.
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
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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
(Back Panel of Bond)
THIS BOND is one of a duly authorized issue of Bonds,
aggregating $3,500,000 (the "Bonds "), issued for the following
purposes:
constructing, improving, and permanently equipping public
buildings ($900,000); and
the construction and improvement of City streets
($2,600,000),
authorized at an election held in the City on May 4, 1991, and
pursuant to an ordinance adopted by the City on November 16, 1993
(the "Ordinance ").
THE CITY RESERVES THE RIGHT to redeem Bonds, in whole or from
time to time in part, in integral multiples of $5,000, on
February 1, 2003, 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 principal amounts so redeemed shall be payable solely
from the funds provided for redemption, and interest which would
otherwise accrue on the amounts called for redemption shall
terminate on the date fixed for redemption.
THIS BOND IS TRANSFERABLE only upon presentation and surrender
at the principal corporate trust office of the Registrar, duly
endorsed for transfer or accompanied by an assignment duly executed
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by the registered owner or his authorized representative, subject
to the terms and conditions of the Ordinance.
THIS BOND IS EXCHANGEABLE at the principal corporate trust
office of the Registrar 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 (i) registered by the Comptroller of Public Accounts of the
State of Texas by registration certificate attached or affixed
hereto or (ii) authenticated by the Registrar by due execution of
the authentication certificate endorsed hereon.
THE REGISTERED OWNER of this Bond, by acceptance hereof,
acknowledges and agrees to be bound by all the terms and conditions
of the Ordinance.
THE CITY has covenanted in the Ordinance that it will at all
times provide a legally qualified registrar for the 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.
Form of Registration Certificate
of Comptroller of Public Accounts
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.
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WITNESS MY SIGNATURE AND SEAL this .
xxxxxxxxxx
Comptroller of Public Accounts
(SEAL) of the State of Texas
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.
First Interstate Bank of Texas, N.A.
By
Authorized Signature
Date of Authentication _
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.
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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.
i
17. Legal Opinion: Cusi�p: Bond Insurance. The approving
opinion of Vinson & Elkins L.L.P., Houston, Texas, and CUSIP
Numbers may be printed on the Bonds, but errors or omissions in the
printing of such opinion or such numbers shall have no effect on
the validity of the Bonds. If bond insurance is obtained by the
purchaser, the Bonds may bear an appropriate legend as provided by
the insurer.
18. Interest and Sinking Fund: Tax Levy. 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 a special fund to be designated "City of Baytown,
Texas, General Obligation Bonds, Series 1993, Interest and Sinking
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 levied, assessed and collected
in due time, form and manner and at the same time other City taxes
are levied, assessed 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 said Bonds as the same becomes due, and to provide and
maintain a sinking fund sufficient to pay the principal of the
Bonds as such principal matures but never less than two percent
(2 %) of the original principal amount of the Bonds each year, full
allowance being made for delinquencies and costs of collection, and
said taxes when collected shall be applied 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.
19. Further Proceedings. After the Bonds to be initially
issued have been executed, it shall be the duty of the Mayor of the
City 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 of the State of Texas, 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.
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20. Sale. The sale and delivery of the Bonds to
(herein referred to as the
"Purchaser ") at par and accrued interest thereon to date of
delivery, plus a cash premium of $ , 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 such price is the
best obtainable by the City for the Bonds.
Accrued interest and any premium received from the Purchaser
shall be deposited into the Interest and Sinking Fund and invested
in direct obligations of the United States of America. The
remaining proceeds of sale of the Bonds, and any interest earnings
on investment of such proceeds shall be used for the purposes set
out in Section 2 of this Ordinance and to pay the costs of issuing
the Bonds; provided, however, that interest earnings may be
transferred to the Interest and Sinking Fund. Any money remaining
shall be deposited into the Interest and Sinking Fund.
21. Tax Exemption. (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 Code, and applicable
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, of the holders thereof for purposes of federal income
taxation. In particular, the City covenants and agrees to comply
with each requirement of this Section 21; provided, however, that
the City shall not be required to comply with any particular
requirement of this Section 21 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 21 will satisfy the applicable requirements of the Code,
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 21.
(b) USE OF PROCEEDS. The City covenants and agrees that its
use of the Net Proceeds of the Bonds will at all times satisfy the
following requirements:
(i) The City will limit the amount of original or
investment proceeds of the Bonds to be used (other than
use as a member of the general public) in the trade or
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business of any person other than a governmental unit to
an amount aggregating no more than ten percent of the Net
Proceeds of the Bonds ( "private -use proceeds "). For
purposes of this Section, the term "person" includes any
individual, corporation, partnership, unincorporated
association, or any other entity capable of carrying on
a trade or business; and the term "trade or business"
means, with respect to any natural person, any activity
regularly carried on for profit and, with respect to
persons other than natural persons, any activity other
than an activity carried on by a governmental unit. Any
use of proceeds of the Bonds in any manner contrary to
the guidelines set forth in Revenue Procedure 93 -19,
including any revisions or amendments thereto, shall
constitute the use of such proceeds in the trade or
business of one who is not a governmental unit;
(ii) The City will not permit more than five percent
of the Net Proceeds of the Bonds to be used in the trade
or business of any person other than a governmental unit
if such use is unrelated to the governmental purpose of
the Bonds. Further, the amount of private -use proceeds
of the Bonds in excess of five percent of the Net
Proceeds of the Bonds ( "excess private -use proceeds ")
will not exceed the proceeds of the Bonds expended for
the governmental purpose of the Bonds to which such
excess private -use proceeds relate;
(iii) The City will not permit an amount of proceeds
of the Bonds exceeding the lesser of (a) $5,000,000 or
(b) five percent of the Net Proceeds of the Bonds to be
used, directly or indirectly, to finance loans to persons
other than governmental units.
When used in this Section 21, the term Net Proceeds of the Bonds
shall mean the proceeds from the sale of the Bonds, including
investment earnings on such proceeds, less accrued interest.
(c) NO FEDERAL GUARANTY. 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
Bonds to be "federally guaranteed" within the meaning of section
149(b) of the Code and applicable regulations thereunder, except
as permitted by section 149(b) (3) of the Code and such regulations.
(d) BONDS ARE NOT HEDGE BONDS. The City covenants and agrees
that not more than 50 percent of the proceeds of the Bonds will be
invested in nonpurpose investments (as defined in section
148(f)(6)(A) of the Code) having a substantially guaranteed yield
for four years or more within the meaning of section
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149 (g) (3) (A) (ii) of the Code, and the City reasonably expects that
at least 85 percent of the spendable proceeds of the Bonds will be
used to carry out the governmental purposes of the Bonds within the
three -year period beginning on the date the Bonds are issued.
(e) NO- ARBITRAGE COVENANT. 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 applicable regulations
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 applicable regulations thereunder.
(f) ARBITRAGE REBATE. 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(f)(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 obligations of the City or moneys which do not represent
gross proceeds of any obligations 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 by
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 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
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close of 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 applicable
regulations thereunder.
22. Oualified Tax - Exempt Obligations. The City hereby
designates the Bonds as "qualified tax - exempt obligations" for
purposes of section 265(b) of the Code. In connection therewith,
the City represents (a) that the aggregate amount of tax - exempt
obligations issued by the City during calendar year 1993, including
the Bonds, which have been designated as "qualified tax - exempt
obligations" under section 265(b) (3) of the Code does not exceed
$10,000,000, and (b) that the reasonably anticipated amount of
tax - exempt obligations which will be issued by the City during
calendar year 1993, including the Bonds, will not exceed
$10,000,000. For purposes of this Section 22, the term "tax- exempt
obligation" does not include "private activity bonds" within the
meaning of section 141 of the Code, other than "qualified 501(c) (3)
bonds" within the meaning of section 145 of the Code. In addition,
for purposes of this Section 22, the City includes all governmental
units which are aggregated with the City under the Code.
23. official Statement. The City hereby 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 Purchaser's bid and
other relevant information. The use of such Official Statement in
the reoffering of the Bonds by the Purchaser is hereby approved and
authorized.
24. Related Matters. To satisfy in a timely manner all of
the City's obligations under this Ordinance, the Mayor and City
Clerk of the City and all other appropriate officers and agents 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.
25. 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.
26. 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.
27. Open Meeting. It is hereby officially found and
determined that the meeting at which this Ordinance was adopted was
-17-
open to the public, and that public notice of the time, place and
purpose of said meeting was given, all as required by the Texas
Open Meetings Act.
28. Effective Date. This Ordinance shall become effective
immediately upon passage by this City Council and signature of the
Mayor.
PASSED AND APPROVED this 16th day of November, 1993.
ATTEST:
/s/ Eileen P. Hall
City Clerk
CITY OF BAYTOWN, TEXAS
(SEAL)
/s/ Pete C. Alfaro
Mayor
CITY OF BAYTOWN, TEXAS
-18-
N
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