14-R-78 - Contract Revenue Refunding Bond Resolution, SSLGCRESOLUTION 14 -R -78
APPROVING A BOND RESOLUTION PREVIOUSLY ADOPTED BY THE
BOARD OF DIRECTORS OF THE SCHERTZ /SEGUIN LOCAL
GOVERNMENT CORPORATION AUTHORIZING THE ISSUANCE OF
BONDS DESIGNATED AS "SCHERTZ /SEGUIN LOCAL GOVERNMENT
CORPORATION CONTRACT REVENUE REFUNDING BONDS, NEW
SERIES 2014 "; ACKNOWLEDGING THAT THESE OBLIGATIONS WILL
BE SOLD TO RAYMOND JAMES & ASSOCIATES, INC., AS THE
AUTHORIZED REPRESENTATIVE OF A GROUP OF UNDERWRITERS
PURSUANT TO THE PROVISIONS OF A PURCHASE CONTRACT;
RATIFYING, RECONFIRMING, AND READOPTING THE PROVISIONS
OF A REGIONAL WATER SUPPLY CONTRACT EXECUTED BETWEEN
THE CITY OF SCHERTZ, TEXAS, THE CITY OF SEGUIN, TEXAS, AND
THE SCHERTZ /SEGUIN LOCAL GOVERNMENT CORPORATION;
AUTHORIZING THE MAYOR, THE CITY MANAGER, AND THE CITY
SECRETARY OF THE CITY OF SCHERTZ, TEXAS TO EXECUTE ON
BEHALF OF THE CITY OF SCHERTZ, TEXAS ALL DOCUMENTS IN
CONNECTION WITH THIS TRANSACTION; AND OTHER MATTERS
IN CONNECTION THEREWITH
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS THAT:
Section 1. The City Council of the City of Schertz, Texas (the "City") has reviewed
and hereby approves (i) the Bond Resolution as to form and content, including the factual
findings contained therein and all documents referenced therein, adopted by the Board of
Directors of the Scheitz/Seguin Local Government Corporation (the "Corporation ") relating to the
issuance of obligations designated as "Schertz/Seguin Local Government Corporation Contract
Revenue Refunding Bonds, New Series 2014" (the "Bonds "), (ii) the Bonds that were sold to
Raymond James & Associates, Inc., as the authorized representative of a group of underwriters
(the "Underwriters "), (iii) the Regional Water Supply Contract, including the factual findings
contained therein, previously approved and executed among the City of Schertz, Texas, the City
of Seguin, Texas (collectively, the "Cities "), and the Schertz/Seguin Local Government
Corporation (the "Contract ") which provides certain security for the payment of these obligations,
(iv) the bond purchase contract (the "Purchase Contract ") authorizing the sale of the Bonds to the
Underwriters, (v) the Sale and Offering Documents (as defined in the Contract), including, but not
limited to, the City's annual continuing disclosure requirements in accordance with the Rule (as
defined in the Contract), (vi) the City's obligations under the Contract and acknowledges that the
payment of principal of and interest on such Bonds is payable, in whole or in part, from the
Annual Payments to be made by the Cities to the Corporation under and pursuant to the Contract,
and (vii) the refunding of the Refunded Obligations and acknowledges that this refunding will
provide present value savings to the Corporation. The Mayor, the City Manager, and the City
Secretary of the City of Schertz, Texas are hereby authorized to execute on behalf of the City, the
Purchase Contract, and any and all documents in connection with this transaction. This resolution
may be relied upon by the appropriate representatives of the parties to this transaction and the
Texas Attorney General in his review and approval of this transaction.
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Section 2. The City Council recognizes that Section 53 of the Bond Resolution
contains covenants of the City relating to the Bonds. Since certain financial information,
financial status, operating data, and annual audits of the City's utility system will be entirely
within the control and disposition of the City, and the Preliminary Official Statement and the
Final Official Statement prepared in connection with the issuance of the Bonds (together, the
"Official Statement "), describe a continuing disclosure undertaking agreement (the
"Undertaking ") of the City, the City Council specifically adopts the covenants hereinafter
described, which comprise the Undertaking, and shall comply therewith for so long as all or any
portion of the Annual Payments made by the City under the Contract act as security for or a
source of repayment of the Bonds.
A. Definitions.
As used in this Section, the following terms have the meanings ascribed to such terms
below:
EMMA means the MSRB's Electronic Municipal Market Access system, accessible by the
general public, without charge, on the internet through the uniform resource locator (URL)
hfp: / /www.emma.msrb.org.
MSRB means the Municipal Securities Rulemaking Board.
Rule means SEC Rule 15c2 -12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
B. Annual Reports.
The City shall file annually with the MSRB, (1) within six months after the end of each
fiscal year of the City ending in or after 2014, financial information and operating data with
respect to the City of the general type included in the final Official Statement authorized by
Section 35 of the Bond Resolution, being the information described in Exhibit C thereto, and
(2) if not provided as part of such financial information and operating data, audited financial
statements of the City, when and if available. Any financial statements so to be provided shall be
(i) prepared in accordance with the accounting principles described in Exhibit C thereto, or such
other accounting principles as the City may be required to employ from time to time pursuant to
state law or regulation, and (ii) audited, if the City commissions an audit of such financial
statements and the audit is completed within the period during which they must be provided. If
the audit of such financial statements is not complete within such period, then the City shall file
unaudited financial statements within such period and audited financial statements for the
applicable fiscal year to the MSRB, when and if the audit report on such financial statements
becomes available. Under current Texas law, including, but not limited to, Chapter 103, as
amended, Texas Local Government Code, the City must have its records and accounts audited
annually and shall have an annual financial statement prepared based on the audit. The annual
financial statement, including the auditor's opinion on the statement, shall be filed in the office of
the City Secretary within 180 days after the last day of the City's fiscal year. Additionally, upon
the filing of this financial statement and the annual audit, these documents are subject to the
Texas Open Records Act, as amended, Texas Government Code, Chapter 552.
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If the City changes its fiscal year, it will file notice of such change (and of the date of the
new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
C. Notice of Certain Events.
The City shall file notice of any of the following events with respect to the Bonds to the
MSRB in a timely manner and not more than 10 business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non - payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB), or other
material notices or determinations with respect to the tax status of the Bonds, or other material
events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds, if
material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which shall
occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the City or
the sale of all or substantially all of its assets, other than in the ordinary course of business, the
entry into of a definitive agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if material; and
(14) Appointment of a successor or additional paying agent/registrar or the change of
name of a paying agent/registrar, if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has
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assumed jurisdiction over substantially all of the assets or business of the City, or if such
jurisdiction has been assumed by leaving the existing governing body and officials or officers in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets. or
business of the City.
The City shall file notice with the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with this Section by the time
required by this Section.
D. Limitations, Disclaimers, and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the City remains an "obligated person" with respect to the
Bonds within the meaning of the Rule, except that the City in any event will give notice of any
deposit that causes the Bonds to be no longer Outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide
only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the City's
financial results, condition, or prospects or hereby undertake to update any information provided
in accordance with this Section or otherwise, except as expressly provided herein. The City does
not make any representation or warranty concerning such information or its usefulness to a
decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under the Bond Resolution for purposes of any other provision of
the Bond Resolution.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
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sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a) the holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of the Bond Resolution that authorizes
such an amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. The City may also repeal or amend the provisions of this Section if the SEC amends or
repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, and the City also may amend the provisions of this
Section in its discretion in any other manner or circumstance, but in either case only if and to the
extent that the provisions of this sentence would not have prevented an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (a) such
provisions as so amended and (b) any amendments or interpretations of the Rule. If the City so
amends the provisions of this Section, the City shall include with any amended financial
information or operating data next provided in accordance with this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
E. Information Format — Incorporation by Reference.
The City information required under this Section shall be filed with the MSRB through
EMMA in such format and accompanied by such identifying information as may be specified
from time to time thereby. Under the current rules of the MSRB, continuing disclosure
documents submitted to EMMA must be in word- searchable portable document format (PDF)
files that permit the document to be saved, viewed, printed, and retransmitted by electronic means
and the series of obligations to which such continuing disclosure documents relate must be
identified by CUSIP number or numbers.
Financial information and operating data to be provided pursuant to this Section may be
set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document) available to the public
through EMMA or filed with the SEC.
Section 3. Authorized Officials of the City will review and approve the Official
Statement. Information appearing in the Official Statement concerning the City (including,
particularly, the description of the Undertaking and Appendices C and E thereto), as of its date,
were and are true and correct in all material respects. Insofar as the City and its affairs, including
its financial affairs, are concerned, such Official Statement did not and does not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading. Insofar as the descriptions and statements, including financial data, of or
pertaining to entities, other than the City, and their activities contained in such Official Statement
are concerned, such statements and data have been obtained from sources which the City believes
to be reliable, and the City has no reason to believe that they are untrue in any material respect.
Section 4. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
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Section 5. All ordinances and resolutions, or parts thereof, which are in conflict or
inconsistent with any provision of this Resolution are hereby repealed to the extent of such
conflict, and the provisions of this Resolution shall be and remain controlling as to the matters
resolved herein.
Section 6. This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
Section 7. If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application of
such provision to other persons and circumstances shall nevertheless be valid, and the City
Council hereby declares that this Resolution would have been enacted without such invalid
provision.
Section 8. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, as amended, Texas Government Code.
Section 9. This Resolution shall be in force and effect from and after the date of its
adoption, and it is so resolved.
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APPROVED THIS THE 16' DAY OF SEPTEMBER, 2014.
ATTEST:
I�
4 e.,
Brenda Dennis, City Secretary
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Michael R. Carpenter, Mayor