16-B-24 - 2016 - General Obligation BondsFINAL
ORDINANCE NO. 16 -B -24
AN ORDINANCE AUTHORIZING THE ISSUANCE OF "CITY OF
SCHERTZ, TEXAS GENERAL OBLIGATION BONDS, SERIES 2016 ";
LEVYING A CONTINUING DIRECT ANNUAL AD VALOREM TAX,
WITHIN THE LIMITATIONS PRESCRIBED BY LAW, FOR THE
PAYMENT OF THE BONDS; PRESCRIBING THE FORM, TERMS,
CONDITIONS, AND RESOLVING OTHER MATTERS INCIDENT AND
RELATED TO THE ISSUANCE, SALE, AND DELIVERY OF THE
BONDS, INCLUDING THE APPROVAL AND DISTRIBUTION OF AN
OFFICIAL STATEMENT PERTAINING THERETO; AUTHORIZING
THE EXECUTION OF A PAYING AGENT /REGISTRAR AGREEMENT
AND AN OFFICIAL BID FORM; COMPLYING WITH THE
PROVISIONS OF THE DEPOSITORY TRUST COMPANY'S LETTER OF
REPRESENTATIONS; AUTHORIZING THE EXECUTION OF ANY
NECESSARY ENGAGEMENT AGREEMENTS WITH THE CITY'S
FINANCIAL ADVISORS AND/OR BOND COUNSEL; AND PROVIDING
FOR AN EFFECTIVE DATE
WHEREAS, the City Council (the Governing Body) of the City of Schertz, Texas (the
Issuer or the City) hereby finds and determines that general obligation bonds of the Issuer in the
total principal amount of $5,880,000, being the principal amount of $5,880,000 and a portion of
premium of $120,000 of the hereinafter defined voter authorization should be issued and sold at
this time, being the first installment of general obligation bonds approved and authorized to be
issued at an election held on November 3, 2015, the respective authorized purposes and amounts
authorized to be issued therefor, amounts previously issued, amounts being issued pursuant to
this ordinance, and amounts remaining to be issued from such voted authorizations subsequent to
the date hereof being as follows:
Date
Voted
Purpose
Amount
Authorized
Previously
Issued
Bonds
Bonds
Issued
Herein
Premium
Allocated
to Voted
Authority
Amount
Unissued
11/03/15
Designing, acquiring,
$7,000,000
$ -0-
$5,880,000
$120,000
$1,000,000
constructing, renovating,
improving, and equipping City
street (primarily FM 1103 and
FM 1518), curb, sidewalk, and
gutter improvements,
demolition, repair, and
rebuilding of new and existing
streets, completing necessary or
incidental utility relocation and
drainage in connection with the
foregoing and the purchase of
land, easements, rights -of -way,
36253591.5
Date
Voted
Purpose
Amount
Authorized
Previously
Issued
Bonds
Bonds
Issued
Herein
Premium
Allocated
to Voted
Authority
Amount
Unissued
and other real property interests
necessary therefor or incidental
thereto
11/03/15
Acquiring, constructing,
$8,000,000
-0-
-0-
-0-
$8,000,000
improving, renovating, and
equipping public safety
facilities (to include a new fire
station), acquiring lands and
rights -of -way necessary
thereto, and completing related
landscaping
WHEREAS, the Governing Body intends to issue an aggregate principal amount of
$5,880,000 in general obligation bonds the proceeds of which will be utilized for the purposes of
(i) making permanent public improvements and for public purposes as hereinafter described; and
(ii) payment of costs of issuance of the general improvement bonds; and
WHEREAS, the Governing Body hereby fords and determines that issuance of the
general obligation bonds is in the best interests of the residents of the City, now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
FF1 G 11�
SECTION 1: Authorization - Designation - Principal Amount - Purpose. General
obligation bonds of the Issuer shall be and are hereby authorized to be issued in the aggregate
principal amount of FIVE MILLION EIGHT HUNDRED EIGHTY THOUSAND AND NO/ 100
DOLLARS ($5,880,000) to be designated and bear the title "City of Schertz, Texas General
Obligation Bonds, Series 2016" (the Bonds), for the purpose of providing funds for: (i)
designing, acquiring, constructing, renovating, improving, and equipping City street (primarily
FM 1103 and FM 1518), curb, sidewalk, and gutter improvements, demolition, repair, and
rebuilding of new and existing streets, completing necessary or incidental utility relocation and
drainage in connection with the foregoing and the purchase of land, easements, rights -of -way,
and other real property interests necessary therefor or incidental thereto, and (ii) paying the costs
related to the issuance of the general obligation bonds, all in conformity with the laws of the
State of Texas, particularly Chapters 1251 and 1331, as amended, Texas Government Code, this
ordinance adopted by the Governing Body on August 2, 2016, and the election referenced in the
preamble to this Ordinance.
SECTION 2: Fullv Reizistered Bonds - Authorized Denominations - Stated
Maturities - Interest Rates — Dated Date. The Bonds are issuable in fully registered form only;
shall be dated August 1, 2016 (the Bond Date) and shall be issued in denominations of $5,000 or
any integral multiple thereof (within a Stated Maturity), shall be lettered "R" and numbered
consecutively from One (1) upward; and the Bonds shall become due and payable on February 1
36253591.5 -2-
in each of the years and in principal amounts (the Stated Maturities) and bear interest on the
unpaid principal amounts from the Bond Date, or from the most recent Interest Payment Date
(hereinafter defined) to which interest has been paid or duly provided for, to the earlier of
redemption or Stated Maturity, at the per annum rates, while Outstanding (hereinafter defined),
in accordance with the following schedule:
Years of
Principal
Interest
Stated Maturity
Amounts ($)
Rates
2017
405,000
2.000
2018
205,000
4.000
2019
215,000
4.000
2020
225,000
4.000
2021
235,000
4.000
2022
245,000
4.000
2023
255,000
4.000
2024
265,000
4.000
2025
275,000
4.000
2026
285,000
4.000
2027
295,000
2.000
2028
300,000
2.000
2029
305,000
2.125
2030
310,000
2.250
2031
320,000
2.375
2032
330,000
2.500
2033
335,000
3.000
2036
1,075,000
3.000
The Bonds shall bear interest on the unpaid principal amounts from the Bond Date, or
from the most recent Interest Payment Date (hereinafter defined) to which interest has been paid
or duly provided for to Stated Maturity or prior redemption, while Outstanding, at the rates per
annum shown in the above schedule (calculated on the basis of a 360 -day year of twelve 30 -day
months). Interest on the Bonds shall be payable on February 1 and August 1 in each year (each,
an Interest Payment Date), commencing February 1, 2017, while the Bonds are Outstanding.
SECTION 3: Payment of Bonds - Paying Agent/Registrar. The principal of, premium,
if any, and the interest on the Bonds, due and payable by reason of Stated Maturity, redemption,
or otherwise, shall be payable, without exchange or collection charges to the Holder (as
hereinafter defined), appearing on the registration and transfer books maintained by the Paying
Agent /Registrar (hereinafter defined), in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and private debts, and
such payment of principal of, premium, if any, and interest on the Bonds shall be without
exchange or collection charges to the Holder (as hereinafter defined) of the Bonds.
The selection and appointment of BOKF, NA, Austin, Texas, to serve as the initial
Paying Agent /Registrar (the Paying Agent /Registrar) for the Bonds is hereby approved and
confirmed, and the Issuer agrees and covenants to cause to be kept and maintained at the
36253591.5 -3-
corporate trust office of the Paying Agent /Registrar books and records (the Security Register) for
the registration, payment, and transfer of the Bonds, all as provided herein, in accordance with
the terms and provisions of a Paying Agent /Registrar Agreement, attached hereto in substantially
final form as Exhibit A, and such reasonable rules and regulations as the Paying Agent /Registrar
and the Issuer may prescribe. The Issuer covenants to maintain and provide a Paying
Agent /Registrar at all times while the Bonds are Outstanding, and any successor Paying
Agent /Registrar shall be (i) a national or state banking institution, or (ii) an association or a
corporation organized and doing business under the laws of the United States of America or of
any state, authorized under such laws to exercise trust powers. Such Paying Agent /Registrar
shall be subject to supervision or examination by federal or state authority and shall be
authorized by law to serve as a Paying Agent /Registrar.
The Issuer reserves the right to appoint a successor Paying Agent /Registrar upon
providing the previous Paying Agent /Registrar with a certified copy of a resolution or ordinance
terminating such agency. Additionally, the Issuer agrees to promptly cause a written notice of
this substitution to be sent to each Holder of the Bonds by United States mail, first -class postage
prepaid, which notice shall also give the address of the corporate office of the successor Paying
Agent /Registrar.
Principal of, premium, if any, and interest on the Bonds, due and payable by reason of
Stated Maturity, redemption, or otherwise, shall be payable only to the registered owner of the
Bonds (the Holder or Holders) appearing on the Security Register maintained on behalf of the
Issuer by the Paying Agent /Registrar as hereinafter provided (1) on the Record Date (hereinafter
defined) for purposes of paying interest thereon, (ii) on the date of surrender of the Bonds for
purposes of receiving payment of principal thereof upon redemption of the Bonds or at the
Bonds' Stated Maturity, and (iii) on any other date for any other purpose. The Issuer and the
Paying Agent /Registrar, and any agent of either, shall treat the Holder as the owner of a Bond for
purposes of receiving payment and all other purposes whatsoever, and neither the Issuer nor the
Paying Agent /Registrar, or any agent of either, shall be affected by notice to the contrary.
Principal of and premium, if any, on the Bonds, shall be payable only upon presentation
and surrender of the Bonds to the Paying Agent /Registrar at its corporate trust office. Interest on
the Bonds shall be paid to the Holder whose name appears in the Security Register at the close of
business on the fifteenth day of the month next preceding an Interest Payment Date for the Bonds
(the Record Date) and shall be paid (i) by check sent on or prior to the appropriate date of
payment by United States mail, first -class postage prepaid, by the Paying Agent /Registrar, to the
address of the Holder appearing in the Security Register or (ii) by such other method, acceptable
to the Paying Agent /Registrar, requested in writing by the Holder at the Holder's risk and
expense.
If the date for the payment of the principal of, premium, if any, or interest on the Bonds
shall be a Saturday, a Sunday, a legal holiday, or a day on which banking institutions in the
Issuer where the corporate trust office of the Paying Agent /Registrar is located are authorized by
law or executive order to close, then the date for such payment shall be the next succeeding day
which is not such a day. The payment on such date shall have the same force and effect as if
made on the original date any such payment on the Bonds was due.
36253591.5 -4-
In the event of a non - payment of interest on a scheduled payment date, and for thirty (30)
days thereafter, a new record date for such interest payment (a Special Record Date) will be
established by the Paying Agent /Registrar, if and when funds for the payment of such interest
have been received from the Issuer. Notice of the Special Record Date and of the scheduled
payment date of the past due interest (the Special Payment Date - -which shall be fifteen (15) days
after the Special Record Date) shall be sent at least five (5) business days prior to the Special
Record Date by United States mail, first -class postage prepaid, to the address of each Holder
appearing on the Security Register at the close of business on the last business day next
preceding the date of mailing of such notice.
SECTION 4: Redemption.
A. Mandatory Redemption. The Bonds stated to mature on February 1, 2036, are
referred to herein as the "Term Bonds ". The Term Bonds are subject to mandatory sinking fund
redemption prior to their stated maturities from money required to be deposited in the Bond Fund
for such purpose and shall be redeemed in part, by lot or other customary method, at the
principal amount thereof plus accrued interest to the date of redemption in the following
principal amounts on February 1 in each of the years as set forth below:
Term Bonds
Stated to Mature
on February 1, 2036,
Principal
Year Amount ($)
2034 345,000
2035 360,000
2036 370,000*
*Payable at Stated Maturity
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the Issuer, by the
principal amount of any Term Bonds of such Stated Maturity which, at least fifty (50) days prior
to the mandatory redemption date (1) shall have been defeased or acquired by the Issuer and
delivered to the Paying Agent /Registrar for cancellation, (2) shall have been purchased and
canceled by the Paying Agent /Registrar at the request of the Issuer with money in the Bond
Fund, or (3) shall have been redeemed pursuant to the optional redemption provisions set forth
below and not theretofore credited against a mandatory redemption requirement.
36253591.5 -5-
B. Optional Redemption of Bonds. The Bonds having Stated Maturities on and after
February 1, 2027 shall be subject to redemption prior to Stated Maturity, at the option of the
Issuer, on February 1, 2026, or on any date thereafter, in whole or in part, in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity selected at random and
by lot by the Paying Agent /Registrar), at the redemption price of par plus accrued interest to the
date of redemption.
C. Exercise of Redemption Option. At least forty -five (45) days prior to a date set
for the redemption of Bonds (unless a shorter notification period shall be satisfactory to the
Paying Agent /Registrar), the Issuer shall notify the Paying Agent /Registrar of its decision to
exercise the right to redeem the Bonds, the principal amount of each Stated Maturity to be
redeemed, and the date set for the redemption thereof. The decision of the Issuer to exercise the
right to redeem the Bonds shall be entered in the minutes of the governing body of the Issuer.
D. Selection of Bonds for Redem tp ion. If less than all Outstanding Bonds of the
same Stated Maturity are to be redeemed on a redemption date, the Paying Agent /Registrar shall
select at random and by lot the Bonds to be redeemed, provided that if less than the entire
principal amount of a Bond is to be redeemed, the Paying Agent /Registrar shall treat such Bond
then subject to redemption as representing the number of Bonds Outstanding which is obtained
by dividing the principal amount of such Bond by $5,000.
E. Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, the Paying Agent /Registrar shall cause a notice of redemption to be sent by
United States mail, first -class postage prepaid, in the name of the Issuer and at the Issuer's
expense, by the Paying Agent /Registrar to each Holder of a Bond to be redeemed, in whole or in
part, at the address of the Holder appearing on the Security Register at the close of business on
the business day next preceding the date of mailing such notice, and any notice of redemption so
mailed shall be conclusively presumed to have been duly given irrespective of whether received
by the Holder. This notice may also be published once in a financial publication, journal, or
reporter of general circulation among securities dealers in the City of New York, New York
(including, but not limited to, The Bond Buyer and The Wall Street Journal), or in the State of
Texas (including, but not limited to, The Texas Bond Reporter).
All notices of redemption shall (i) specify the date of redemption for the Bonds,
(ii) identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price, (iv) state
that the Bonds, or the portion of the principal amount thereof to be redeemed, shall become due
and payable on the redemption date specified, and the interest thereon, or on the portion of the
principal amount thereof to be redeemed, shall cease to accrue from and after the redemption
date, and (v) specify that payment of the redemption price for the Bonds, or the principal amount
thereof to be redeemed, shall be made at the corporate trust office of the Paying Agent /Registrar
only upon presentation and surrender thereof by the Holder.
If a Bond is subject by its terms to redemption and has been called for redemption and
notice of redemption thereof has been duly given or waived as herein provided, such Bond (or
the principal amount thereof to be redeemed) so called for redemption shall become due and
payable, and if money sufficient for the payment of such Bonds (or of the principal amount
36253591.5 -6-
thereof to be redeemed) at the then applicable redemption price is held for the purpose of such
payment by the Paying Agent /Registrar, then on the redemption date designated in such notice,
interest on the Bonds (or the principal amount thereof to be redeemed) called for redemption
shall cease to accrue and such Bonds shall not be deemed to be Outstanding in accordance with
the provisions of this Ordinance.
F. Transfer /Exchange of Bonds. Neither the Issuer nor the Paying Agent /Registrar
shall be required (1) to transfer or exchange any Bond during a period beginning forty -five (45)
days prior to the date fixed for redemption of the Bonds or (2) to transfer or exchange any Bond
selected for redemption, provided, however, such limitation of transfer shall not be applicable to
an exchange by the Holder of the unredeemed balance of a Bond which is subject to redemption
in part.
SECTION 5: Execution - Registration. The Bonds shall be executed on behalf of the
Issuer by its Mayor or Mayor Pro Tem under the seal of the Issuer reproduced or impressed
thereon and attested by its City Secretary. The signature of any of said officers on the Bonds
may be manual or facsimile. Bonds bearing the manual or facsimile signatures of individuals
who were, at the time of the Bond Date, the proper officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or either of them shall cease to hold such offices prior to
the delivery of the Bonds to the Purchasers (hereinafter defined), all as authorized and provided
in Chapter 1201, as amended, Texas Government Code.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 8C, executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent by manual signature, or a certificate
of registration substantially in the form provided in Section 8D, executed by the Paying
Agent /Registrar by manual signature, and either such certificate upon any Bond shall be
conclusive evidence, and the only evidence, that such Bond has been duly certified or registered
and delivered.
SECTION 6: Registration - Transfer - Exchange of Bonds - Predecessor Bonds. A
Security Register relating to the registration, payment, transfer, or exchange of the Bonds shall at
all times be kept and maintained by the Issuer at the corporate trust office of the Paying
Agent /Registrar, and the Paying Agent /Registrar shall obtain, record, and maintain in the
Security Register the name and address of each Holder of the Bonds issued under and pursuant to
the provisions of this Ordinance. Any Bond may, in accordance with its terms and the terms
hereof, be transferred or exchanged for Bonds of other authorized denominations upon the
Security Register by the Holder, in person or by his duly authorized agent, upon surrender of
such Bond to the Paying Agent /Registrar for cancellation, accompanied by a written instrument
of transfer or request for exchange duly executed by the Holder or by his duly authorized agent,
in form satisfactory to the Paying Agent /Registrar.
Upon surrender for transfer of any Bond at the corporate trust office of the Paying
Agent /Registrar, the Paying Agent /Registrar shall register and deliver, in the name of the
designated transferee or transferees, one or more new Bonds executed on behalf of, and
36253591.5 -7-
furnished by, the Issuer of authorized denominations and having the same Stated Maturity and of
a like interest rate and aggregate principal amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds may be exchanged for other Bonds of authorized
denominations and having the same Stated Maturity, bearing the same rate of interest, and of like
aggregate principal amount as the Bonds surrendered for exchange, upon surrender of the Bonds
to be exchanged at the corporate trust office of the Paying Agent/ Registrar. Whenever any
Bonds are so surrendered for exchange, the Issuer shall execute and the Paying Agent /Registrar
shall register and deliver new Bonds executed on behalf of, and furnished by, the Issuer to the
Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
corporate trust office of the Paying Agent /Registrar, or be sent by United States registered mail
to the Holder at his request, risk, and expense, and upon the delivery thereof, the same shall be
the valid and binding obligations of the Issuer, evidencing the same obligation to pay, and
entitled to the same benefits under this Ordinance, as the Bonds surrendered upon such transfer
or exchange.
All transfers or exchanges of Bonds pursuant to this Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that the
Paying Agent /Registrar shall require payment by the Holder requesting such transfer or exchange
of any tax or other governmental charges required to be paid with respect to such transfer or
exchange.
Bonds canceled by reason of an exchange or transfer pursuant to the provisions hereof are
hereby defined to be "Predecessor Bonds ", evidencing all or a portion, as the case may be, of the
same debt evidenced by the new Bond or Bonds registered and delivered in the exchange or
transfer therefor. Additionally, the term Predecessor Bonds shall include any Bond registered
and delivered pursuant to Section 16 in lieu of a mutilated, lost, destroyed, or stolen Bond which
shall be deemed to evidence the same obligation as the mutilated, lost, destroyed, or stolen Bond.
SECTION 7: Initial Bond. The Bonds herein authorized shall be issued initially either
(i) as a fully registered Bond in the total principal amount of $5,880,000 with principal
installments to become due and payable as provided in Section 2 and numbered T -1, or (ii) as
one (1) fully registered Bond for each year of Stated Maturity in the applicable principal amount,
interest rate, and denomination and to be numbered consecutively from T -1 and upward (the
Initial Bond) and, in either case, the Initial Bond shall be registered in the name of the Purchasers
or the designee thereof. The Initial Bond shall be the Bonds submitted to the Office of the
Attorney General of the State of Texas for approval and certified and registered by the Office of
the Comptroller of Public Accounts of the State of Texas and delivered to the Purchasers. Any
time after the delivery of the Initial Bond to the Purchasers, the Paying Agent /Registrar, upon
written instructions from the Purchasers, or the designee thereof, shall cancel the Initial Bond
delivered hereunder and exchange therefor definitive Bonds of like kind and of authorized
denominations, Stated Maturities, principal amounts bearing applicable interest rates and shall be
lettered "R" and numbered consecutively from one (1) upward for transfer and delivery to the
Holders named and at the addresses identified therefor; all pursuant to and in accordance with
36253591.5 -8-
and pursuant to such written instructions from the Purchasers, or the designee thereof, and such
other information and documentation as the Paying Agent /Registrar may reasonably require.
SECTION 8: Forms.
A. Forms Generally. The Bonds, the Registration Certificate of the Comptroller of
Public Accounts of the State of Texas, the Registration Certificate of Paying Agent /Registrar,
and the form of Assignment to be printed on each of the Bonds shall be substantially in the forms
set forth in this Section with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers, or
other marks of identification (including insurance legends in the event the Bonds, or any Stated
Maturities thereof, are insured and any reproduction of an opinion of Bond Counsel (hereinafter
referenced)) and identifying numbers and letters of the Committee on Uniform Securities
Identification Procedures of the American Bankers Association) and such legends and
endorsements (including insurance legends and any reproduction of an opinion of Bond Counsel)
thereon as may, consistent herewith, be established by the Issuer or determined by the officers
executing the Bonds as evidenced by their execution thereof. Any portion of the text of any
Bond may be set forth on the reverse thereof, with an appropriate reference thereto on the face of
the Bond.
The definitive Bonds shall be printed, lithographed, or engraved, produced by any
combination of these methods, or produced in any other similar manner, all as determined by the
officers executing the Bonds as evidenced by their execution thereof, but the Initial Bond
submitted to the Attorney General of the State of Texas may be typewritten or photocopied or
otherwise reproduced.
[The remainder of this page intentionally left blank.]
36253591.5 -9-
B. Form of Definitive Bond.
REGISTERED
NO.
United States of America
State of Texas
REGISTERED
PRINCIPAL AMOUNT
Counties of Bexar, Comal, and Guadalupe
CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION BONDS, SERIES 2016
Dated Date:
August 1, 2016
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Interest Rate: Stated Maturity: CUSIP No.:
DOLLARS
The City of Schertz, Texas (the Issuer), a body corporate and a municipal corporation
located in the Counties of Bexar, Comal, and Guadalupe, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner
named above (the Holder), or the registered assigns thereof, on the Stated Maturity date specified
above, the Principal Amount specified above (or so much thereof as shall not have been paid
upon prior redemption) and to pay interest on the unpaid Principal Amount hereof (computed on
the basis of a 360 -day year of twelve 30 -day months) from the Bond Date or from the most
recent Interest Payment Date (hereinafter defined) to which interest has been paid or duly
provided for until such Principal Amount has become due and payment thereof has been made or
duly provided for, to the earlier of redemption or Stated Maturity, at the per annum rate of
interest specified above; such interest being payable on February 1 and August 1 of each year
(each, an Interest Payment Date), commencing February 1, 2017.
Principal and premium, if any, of this Bond shall be payable to the Registered Owner
hereof (the Holder), upon presentation and surrender, at the corporate trust office of the Paying
Agent /Registrar executing the registration certificate appearing hereon, or its successor. Interest
shall be payable to the Holder of this Bond (or one or more Predecessor Bonds, as defined in the
Ordinance hereinafter referenced) whose name appears on the Security Register maintained by
the Paying Agent /Registrar at the close of business on the Record Date, which is the fifteenth
day of the month next preceding the Interest Payment Date. All payments of principal of,
premium, if any, and interest on this Bond shall be in any coin or currency of the United States
of America which at the time of payment is legal tender for the payment of public and private
debts. Interest shall be paid by the Paying Agent /Registrar by check sent on or prior to the
appropriate date of payment by United States mail, first -class postage prepaid, to the Holder
hereof at the address appearing in the Security Register or by such other method, acceptable to
the Paying Agent /Registrar, requested by the Holder hereof at the Holder's risk and expense.
36253591.5
This Bond is one of the series specified in its title issued in the aggregate principal
amount of $5,880,000 (the Bonds) pursuant to an ordinance adopted by the Governing Body of
the Issuer (the Ordinance), for the purpose of (i) designing, acquiring, constructing, renovating,
improving, and equipping City street (primarily FM 1103 and FM 1518), curb, sidewalk, and
gutter improvements, demolition, repair, and rebuilding of new and existing streets, completing
necessary or incidental utility relocation and drainage in connection with the foregoing and the
purchase of land, easements, rights -of -way, and other real property interests necessary therefor
or incidental thereto, and (ii) paying the costs related to the issuance of the general obligation
bonds, all in conformity with the laws of the State of Texas, particularly Chapters 1251 and 1331
as amended, Texas Government Code, an election held in the Issuer on November 3, 2015, and
the Ordinance.
As specified in the Ordinance, the Bonds stated to mature on February 1, 2036, are
referred to herein as the "Term Bonds ". The Term Bonds are subject to mandatory sinking fund
redemption prior to their stated maturities from money required to be deposited in the Bond Fund
for such purpose and shall be redeemed in part, by lot or other customary method, at the
principal amount thereof plus accrued interest to the date of redemption in the following
principal amounts on February 1 in each of the years as set forth below:
Term Bonds
Stated to Mature
on February 1, 2036,
Principal
Year Amount N
2034 345,000
2035 360,000
2036 370,000*
*Payable at Stated Maturity
The principal amount of a Term Bond required to be redeemed pursuant to the operation
of such mandatory redemption provisions shall be reduced, at the option of the Issuer, by the
principal amount of any Term Bonds of such Stated Maturity which, at least fifty (50) days prior
to the mandatory redemption date (1) shall have been defeased or acquired by the Issuer and
delivered to the Paying Agent /Registrar for cancellation, (2) shall have been purchased and
canceled by the Paying Agent /Registrar at the request of the Issuer with money in the Bond
Fund, or (3) shall have been redeemed pursuant to the optional redemption provisions set forth
below and not theretofore credited against a mandatory redemption requirement.
As specified in the Ordinance, the Bonds having Stated Maturities on and after
February 1, 2027 shall be subject to redemption prior to Stated Maturity, at the option of the
Issuer, on February 1, 2026, or on any date thereafter, in whole or in part, in principal amounts of
$5,000 or any integral multiple thereof (and if within a Stated Maturity selected at random and
by lot by the Paying Agent /Registrar), at the redemption price of par plus accrued interest to the
date of redemption and upon thirty (30) days prior written notice being given by United States
mail, first -class postage prepaid, to Holders of the Bonds to be redeemed, and subject to the
36253591.5 -11-
terms and provisions relating thereto contained in the Ordinance. If this Bond is subject to
redemption prior to Stated Maturity and is in a denomination in excess of $5,000, portions of the
principal sum hereof in installments of $5,000 or any integral multiple thereof may be redeemed,
and, if less than all of the principal sum hereof is to be redeemed, there shall be issued, without
charge therefor, to the Holder hereof, upon the surrender of this Bond to the Paying
Agent /Registrar at its corporate trust office, a new Bond or Bonds of like Stated Maturity and
interest rate in any authorized denominations provided in the Ordinance for the then unredeemed
balance of the principal sum hereof.
If this Bond (or any portion of the principal sum hereof) shall have been duly called for
redemption and notice of such redemption has been duly given, then upon such redemption date
this Bond (or the portion of the principal sum hereof to be redeemed) shall become due and
payable, and, if the money for the payment of the redemption price and the interest accrued on
the principal amount to be redeemed to the date of redemption is held for the purpose of such
payment by the Paying Agent /Registrar, interest shall cease to accrue and be payable hereon
from and after the redemption date on the principal amount hereof to be redeemed. If this Bond
is called for redemption, in whole or in part, the Issuer or the Paying Agent /Registrar shall not be
required to issue, transfer, or exchange this Bond within forty -five (45) days of the date fixed for
redemption; provided, however, such limitation of transfer shall not be applicable to an exchange
by the Holder of the unredeemed balance hereof in the event of its redemption in part.
The Bonds of this series are payable from the proceeds of an annual ad valorem tax
levied within the limitations prescribed by law, upon all taxable property within the Issuer.
Reference is hereby made to the Ordinance, a copy of which is on file in the corporate
trust office of the Paying Agent /Registrar, and to all of the provisions of which the Holder by his
acceptance hereof hereby assents, for definitions of terms; the description of and the nature and
extent of the tax levied for the payment of the Bonds; the terms and conditions relating to the
transfer or exchange of this Bond; the conditions upon which the Ordinance may be amended or
supplemented with or without the consent of the Holders; the rights, duties, and obligations of
the Issuer and the Paying Agent /Registrar; the terms and provisions upon which this Bond may
be redeemed or discharged at or prior to its Stated Maturity and deemed to be no longer
Outstanding thereunder; and for the other terms and provisions thereof. Capitalized terms used
herein have the same meanings assigned in the Ordinance.
As provided in the Ordinance and subject to certain limitations contained therein, this
Bond is transferable on the Security Register of the Issuer, upon presentation and surrender of
this Bond for transfer at the corporate trust office of the Paying Agent /Registrar, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to the Paying
Agent /Registrar duly executed by the Holder hereof, or his duly authorized agent, and thereupon
one or more new fully registered Bonds of the same Stated Maturity, of authorized
denominations, bearing the same rate of interest, and of the same aggregate principal amount will
be issued to the designated transferee or transferees.
The Issuer and the Paying Agent /Registrar, and any agent of either, shall treat the Holder
hereof whose name appears on the Security Register (i) on the Record Date as the owner hereof
for purposes of receiving payment of interest hereon, (ii) on the date of surrender of this Bond as
36253591.5 -12-
the owner hereof for purposes of receiving payment of principal hereof at its Stated Maturity or
its redemption, in whole or in part, and (iii) on any other date as the owner hereof for all other
purposes, and neither the Issuer nor the Paying Agent /Registrar, or any such agent of either, shall
be affected by notice to the contrary. In the event of a non - payment of interest on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment (a
Special Record Date) will be established by the Paying Agent /Registrar, if and when funds for
the payment of such interest have been received from the Issuer. Notice of the Special Record
Date and of the scheduled payment date of the past due interest (the Special Payment Date -
which shall be fifteen (15) days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States mail, first -class postage prepaid,
to the address of each Holder appearing on the Security Register at the close of business on the
last business day next preceding the date of mailing of such notice.
It is hereby certified, covenanted, and represented that all acts, conditions, and things
required to be performed, exist, and be done precedent to or in the issuance of this Bond in order
to render the same a legal, valid, and binding obligation of the Issuer have been performed, exist,
and have been done, in regular and due time, form, and manner, as required by the laws of the
State of Texas and the Ordinance, and that the issuance of the Bonds does not exceed any
constitutional or statutory limitation; and that due provision has been made for the payment of
the principal of, premium if any, and interest on the Bonds by the levy of a tax as aforestated. In
case any provision in this Bond or any application thereof shall be deemed invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions and
applications shall not in any way be affected or impaired thereby. The terms and provisions of
this Bond and the Ordinance shall be construed in accordance with and shall be governed by the
laws of the State of Texas.
36253591.5 -13-
IN WITNESS WHEREOF, the Issuer has caused this Bond to be duly executed under its
official seal.
CITY OF SCHERTZ, TEXAS
Mayor
ATTEST:
[The remainder of this page intentionally left blank.]
36253591.5 -14-
C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bond only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER OF §
PUBLIC ACCOUNTS §
§ REGISTER NO.
THE STATE OF TEXAS §
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 duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this
(SEAL)
*NOTE TO PRINTER: Do Not Print on Definitive Bonds.
Only.
Comptroller of Public Accounts
of the State of Texas
D. *Form of Certificate of Paving Agent/Registrar to Appear on Definitive Bonds
REGISTRATION CERTIFICATE OF PAYING AGENT /REGISTRAR
This Bond has been duly issued under the provisions of the within - mentioned Ordinance;
the Bond or Bonds of the above - entitled and designated series originally delivered having been
approved by the Attorney General of the State of Texas and registered by the Comptroller of
Public Accounts, as shown by the records of the Paying Agent /Registrar.
Registered this date:
BOKF, NA, Austin, Texas, as Paying
Agent /Registrar
L'In
Authorized Signature
*NOTE TO PRINTER: Print on Definitive Bonds.
36253591.5 -15-
E. Form of Assignment.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns, and transfers unto
(Print or typewrite name, address, and zip code of transferee):
(Social Security or other identifying number):
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration
thereof, with full power of substitution in the premises.
DATED:
NOTICE: The signature on this assignment must
correspond with the name of the registered owner as it
appears on the face of the within Bond in every particular.
Signature guaranteed:
F. Initial Bond. The Initial Bond shall be in the form set forth in paragraph B of this
Section, except that the form of the single fully registered Initial Bond shall be modified as
follows:
(1) immediately under the name of the bond the headings "Interest Rate " and
"Stated Maturity " shall both be completed "as shown below ";
(2) the first two paragraphs shall read as follows:
Registered Owner:
Principal Amount:
The City of Schertz, Texas (the Issuer), a body corporate and municipal corporation
located in the Counties of Bexar, Comal, and Guadalupe, State of Texas, for value received,
acknowledges itself indebted to and hereby promises to pay to the order of the Registered Owner
named above (the Holder), or the registered assigns thereof, the Principal Amount specified
above stated to mature on the first day of February in each of the years and in principal amounts
and bearing interest at per annum rates in accordance with the following schedule:
Years of Stated Maturity Principal Amounts M Interest Rates M
(Information to be inserted from schedule in Section 2 hereof).
36253591.5 -16-
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the
unpaid Principal Amounts hereof from the Bond Date specified above or from the most recent
Interest Payment Date (hereinafter defined) to which interest has been paid or duly provided for
until the Principal Amount has become due and payment thereof has been made or duly provided
for, to the earlier of redemption or Stated Maturity, at the per annum rates of interest specified
above computed on the basis of a 360 -day year of twelve 30 -day months; such interest being
payable on February 1 and August 1 of each year (each, an Interest Payment Date) commencing
February 1, 2017.
Principal of this Bond shall be payable to the Holder, upon presentation and surrender to
Stated Maturity or prior redemption, while Outstanding, at the corporate trust office of BOKF,
NA, Austin, Texas (the Paying Agent /Registrar). Interest shall be payable to the Holder of this
Bond whose name appears on the Security Register maintained by the Paying Agent /Registrar at
the close of business on the Record Date, which is the fifteenth day of the month next preceding
the Interest Payment Date. All payments of principal of, premium, if any, and interest on this
Bond shall be in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts. Interest shall be paid by the
Paying Agent /Registrar by check sent on or prior to the appropriate date of payment by United
States mail, first -class postage prepaid, to the Holder hereof at the address appearing in the
Security Register or by such other method, acceptable to the Paying Agent /Registrar, requested
by the Holder hereof at the Holder's risk and expense.
G. Insurance Legend. If bond insurance is obtained by the Issuer or the Purchasers
(hereinafter defined), the Definitive Bonds and the Initial Bond shall bear an appropriate legend
as provided by the insurer.
SECTION 9: Definitions. For all purposes of this Ordinance (as defined below), except
as otherwise expressly provided or unless the context otherwise requires: (i) the terms defined in
this Section have the meanings assigned to them in this Section, certain terms used in
Sections 18 and 36 of this Ordinance have the meanings assigned to them in such Sections, and
all such terms, include the plural as well as the singular; (ii) all references in this Ordinance to
designated "Sections" and other subdivisions are to the designated Sections and other
subdivisions of this Ordinance as originally adopted; and (iii) the words "herein ", "hereof', and
"hereunder" and other words of similar import refer to this Ordinance as a whole and not to any
particular Section or other subdivision.
A. The term Authorized Officials shall mean the Mayor, Mayor Pro Tem, City
Manager, Director of Finance, and /or the City Secretary.
B. The term Bond Fund shall mean the special fund created and established by the
provisions of Section 10 of this Ordinance.
C. The term Bonds shall mean the $5,880,000 "CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION BONDS, SERIES 2016" authorized by this Ordinance.
36253591.5 -17
D. The term Certificates shall mean the $2,375,000 "CITY OF SCHERTZ, TEXAS
COMBINATION TAX AND LIMITED PLEDGE REVENUE CERTIFICATES OF
OBLIGATION, SERIES 2016A ".
E. The term Closing Date shall mean the date of physical delivery of the Initial Bond
in exchange for the payment in full by the Purchasers.
F. The term Debt Service Requirements shall mean, as of any particular date of
computation, with respect to any obligations and with respect to any period, the aggregate of the
amounts to be paid or set aside by the Issuer as of such date or in such period for the payment of
the principal of, premium, if any, and interest (to the extent not capitalized) on such obligations;
assuming, in the case of obligations without a fixed numerical rate, that such obligations bear
interest at the maximum rate permitted by the terms thereof and further assuming in the case of
obligations required to be redeemed or prepaid as to principal prior to Stated Maturity, the
principal amounts thereof will be redeemed prior to Stated Maturity in accordance with the
mandatory redemption provisions applicable thereto.
G. The term Depository shall mean an official depository bank of the Issuer.
H. The term Government Securities, as used herein, shall mean: (i) direct noncallable
obligations of the United States, including obligations that are unconditionally guaranteed by, the
United States of America; (ii) noncallable obligations of an agency or instrumentality of the
United States, including obligations that are unconditionally guaranteed or insured by the agency
or instrumentality and that, on the date the governing body of the issuer adopts or approves the
proceedings authorizing the issuance of refunding bonds, are rated as to investment quality by a
nationally recognized investment rating firm not less than "AAA" or its equivalent;
(iii) noncallable obligations of a state or an agency or a county, municipality, or other political
subdivision of a state that have been refunded and that, on the date the governing body of the
issuer adopts or approves the proceedings authorizing the issuance of refunding bonds, are rated
as to investment quality by a nationally recognized investment rating firm not less than "AAA"
or its equivalent, or (iv) any additional securities and obligations hereafter authorized by the laws
of the State of Texas as eligible for use to accomplish the discharge of obligations such as the
Bonds.
I. The term Holder or Holders shall mean the registered owner, whose name
appears in the Security Register, for any Bond.
J. The term Interest Payment Date shall mean the date interest is payable on the
Bonds, being February I and August I of each year, commencing February 1, 2017, while any of
the Bonds remain Outstanding.
K. The term Issuer shall mean the City of Schertz, Texas, located in the Counties of
Bexar, Comal, and Guadalupe, Texas and, where appropriate, the Governing Body of the Issuer.
L. The term Ordinance shall mean this ordinance adopted by the Governing Body of
the Issuer on August 2, 2016.
36253591.5 -18-
M. The term Outstanding when used in this Ordinance with respect to Bonds shall
mean, as of the date of determination, all Bonds issued and delivered under this Ordinance,
except:
(1) those Bonds canceled by the Paying Agent /Registrar or delivered to the
Paying Agent /Registrar for cancellation;
(2) those Bonds for which payment has been duly provided by the Issuer in
accordance with the provisions of Section 19 of this Ordinance; and
(3) those Bonds that have been mutilated, destroyed, lost, or stolen and
replacement Bonds have been registered and delivered in lieu thereof as provided in
Section 16 of this Ordinance.
N. The term Purchasers shall mean the initial purchaser or purchasers of the Bonds
named in Section 17 of this Ordinance.
O. The term Stated Maturity shall mean the annual principal payments of the Bonds
payable on February 1 of each year the Bonds are Outstanding, as set forth in Section 2 of this
Ordinance.
SECTION 10: Bond Fund; Investments. For the purpose of paying the interest on and to
provide a sinking fund for the payment, redemption, and retirement of the Bonds, there shall be
and is hereby created a special fund to be designated "GENERAL OBLIGATION BONDS,
SERIES 2016, INTEREST AND SINKING FUND" (the Bond Fund), which fund shall be kept
and maintained at the Depository, and money deposited in such fund shall be used for no other
purpose and shall be maintained as provided in Section 18. Authorized Officials of the Issuer are
hereby authorized and directed to make withdrawals from the Bond Fund sufficient to pay the
purchase price or the amount of principal of, premium, if any, and interest on the Bonds as the
same become due and payable and shall cause to be transferred to the Paying Agent/Registrar
from money on deposit in the Bond Fund an amount sufficient to pay the amount of principal
and /or interest stated to mature on the Bonds, such transfer of funds to the Paying
Agent /Registrar to be made in such manner as will cause immediately available funds to be
deposited with the Paying Agent /Registrar on or before the business day next preceding each
interest and principal payment date for the Bonds.
Pending the transfer of funds to the Paying Agent /Registrar, money deposited in any fund
created and established pursuant to the provisions of this Ordinance may, at the option of the
Issuer, be placed in time deposits, certificates of deposit, guaranteed investment contracts, or
similar contractual agreements as permitted by the provisions of the Public Funds Investment
Act, as amended, Chapter 2256, Texas Government Code, secured (to the extent not insured by
the Federal Deposit Insurance Corporation) by obligations of the type hereinafter described, or
be invested, as authorized by any law, including investments held in book -entry form, in
securities including, but not limited to, direct obligations of the United States of America,
obligations guaranteed or insured by the United States of America, which, in the opinion of the
Attorney General of the United States, are backed by its full faith and credit or represent its
general obligations, or invested in indirect obligations of the United States of America,
36253591.5 -19-
including, but not limited to, evidences of indebtedness issued, insured or guaranteed by such
governmental agencies as the Federal Land Banks, Federal Intermediate Credit Banks, Banks for
Cooperatives, Federal Home Loan Banks, Government National Mortgage Association, Farmers
Home Administration, Federal Home Loan Mortgage Association, Small Business
Administration, or Federal Housing Association; provided that all such deposits and investments
shall be made in such a manner that the money required to be expended from any fund will be
available at the proper time or times. All interest and income derived from deposits and
investments in any fund established pursuant to the provisions of this Ordinance shall be credited
to, and any losses debited to, such fund. All such investments shall be sold promptly when
necessary to prevent any default in connection with the Bonds.
SECTION 11: Levy of Taxes; Surplus Bond Proceeds. To provide for the payment of the
Debt Service Requirements on the Bonds being (i) the interest on the Bonds, and (ii) sinking
fund for their redemption at Stated Maturity or a sinking fund of 2% (whichever amount shall be
the greater), there shall be and there is hereby levied for the current fiscal year and each
succeeding year thereafter while the Bonds or any interest thereon shall remain Outstanding, a
sufficient tax, within the limitations prescribed by law, on each one hundred dollars' valuation of
taxable property in the Issuer, adequate to pay such Debt Service Requirements, full allowance
being made for delinquencies and costs of collection; said tax shall be assessed and collected
each year and applied to the payment of the Debt Service Requirements, and the same shall not
be diverted to any other purpose. The taxes so levied and collected shall be paid into the Bond
Fund and are thereafter pledged to the payment of the Bonds. The Governing Body hereby
declares its purpose and intent to provide and levy a tax legally and fully sufficient to pay such
Debt Service Requirements, it having been determined that the existing and available taxing
authority of the Issuer for such purpose is adequate to permit a legally sufficient tax in
consideration of all other outstanding indebtedness and other obligations of the Issuer.
Accrued interest received from the Purchasers of the Bonds shall be deposited to the
Bond Fund and ad valorem taxes levied and collected for the benefit of the Bonds shall be
deposited to the Bond Fund. In addition, any surplus proceeds from the sale of the Bonds,
including investment income thereon, not expended for authorized purposes shall be deposited in
the Bond Fund, and such amounts so deposited shall reduce the sum otherwise required to be
deposited in the Bond Fund from ad valorem taxes.
SECTION 12: Security for Funds. All money on deposit in the funds for which this
Ordinance makes provision (except any portion thereof as may be at any time properly invested
as provided herein) shall be secured in the manner and to the fullest extent required by the laws
of the State of Texas for the security of public funds, and money on deposit in such funds shall
be used only for the purposes permitted by this Ordinance.
SECTION 13: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the Issuer covenants and agrees particularly that in
the event the Issuer: (a) defaults in the payments to be made to the Bond Fund; or (b) defaults in
the observance or performance of any other of the covenants, conditions, or obligations set forth
in this Ordinance, the Holders of any of the Bonds shall be entitled to seek a writ of mandamus
issued by a court of proper jurisdiction compelling and requiring the Governing Body of the
36253591.5 -20-
Issuer and other officers of the Issuer to observe and perform any covenant, condition, or
obligation prescribed in this Ordinance.
No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver of any such default or
acquiescence therein, and every such right and power may be exercised from time to time and as
often as may be deemed expedient. The specific remedies herein provided shall be cumulative of
all other existing remedies and the specification of such remedies shall not be deemed to be
exclusive.
SECTION 14: Notices to Holders - Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and sent by United States mail, first -class postage prepaid, to
the address of each Holder appearing in the Security Register at the close of business on the
business day next preceding the mailing of such notice.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Holders. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent /Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 15: Cancellation. All Bonds surrendered for payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying Agent /Registrar, shall be promptly
canceled by it and, if surrendered to the Issuer, shall be delivered to the Paying Agent /Registrar
and, if not already canceled, shall be promptly canceled by the Paying Agent /Registrar. The
Issuer may at any time deliver to the Paying Agent /Registrar for cancellation any Bonds
previously certified or registered and delivered which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent /Registrar. All canceled Bonds held by the Paying Agent /Registrar shall be destroyed as
directed by the Issuer.
SECTION 16: Mutilated - Destroyed - Lost and Stolen Bonds. I£ (i) any mutilated Bond
is surrendered to the Paying Agent /Registrar, or the Issuer and the Paying Agent /Registrar
receive evidence to their satisfaction of the destruction, loss, or theft of any Bond; and (ii) there
is delivered to the Issuer and the Paying Agent/Registrar such security or indemnity as may be
required to save each of them harmless, then, in the absence of notice to the Issuer or the Paying
Agent /Registrar that such Bond has been acquired by a bona fide purchaser, the Issuer shall
execute and, upon the Issuer's request, the Paying Agent /Registrar shall register and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost, or stolen Bond, a new Bond of the
same Stated Maturity and interest rate and of like tenor and principal amount, bearing a number
not contemporaneously Outstanding.
36253591.5 -21-
In case any such mutilated, destroyed, lost, or stolen Bond has become or is about to
become due and payable, the Issuer in its discretion may, instead of issuing a new Bond, pay
such Bond. Upon the issuance of any new Bond, or payment in lieu thereof, under this Section,
the Issuer may require payment by the Holder of a sum sufficient to cover any tax or other
governmental charge imposed in relation thereto and any other expenses and charges (including
attorney's fees and the fees and expenses of the Paying Agent /Registrar) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost, or
stolen Bond shall constitute a replacement of the prior obligation of the Issuer, whether or not the
mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Ordinance equally and ratably with all other Outstanding
Bonds. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 17: Sale of Bonds at Competitive Sale; Official Statement; Proceeds of Sale.
The Bonds authorized by this Ordinance are hereby sold by the Issuer to Fidelity Capital
Markets, Inc., Boston, Massachusetts, at a competitive sale (the Purchasers, having all of the
rights, duties, and obligations of a Holder), in accordance with the provisions of an Official Bid
Form (the "Official Bid Form "), dated August 2, 2016, attached hereto as Exhibit B and
incorporated herein by reference as a part of this Ordinance for all purposes, at the price of par,
plus a premium of $288,682.00, less underwriting discount of $54,886.13, plus accrued interest
to the date of initial delivery of the Bonds to the Purchasers, and is hereby approved and
confirmed. The Initial Bond shall be registered in the name of Fidelity Capital Markets, Inc. It
is hereby officially found, determined, and declared that the Purchasers are the highest bidder for
the Bonds whose bid, received as a result of invitations for competitive bids in compliance with
applicable law, produced the lowest true interest cost to the Issuer. The pricing and terms of the
sale of the Bonds are hereby found and determined to be the most advantageous reasonably
obtainable by the Issuer.
Furthermore, the Issuer hereby ratifies, confirms, and approves in all respects (i) the
Issuer's prior determination that the Preliminary Official Statement was, as of its date, "deemed
final" in accordance with the Rule (hereinafter defined) and (ii) the use and distribution of the
Preliminary Official Statement by the Purchasers in connection with the public offering and sale
of the Bonds. The final Official Statement, being a modification and amendment of the
Preliminary Official Statement to reflect the terms of sale (together with such changes approved
by any Authorized Official), shall be and is hereby in all respects approved and the Purchasers
are hereby authorized to use and distribute the final Official Statement, dated August 2, 2016, in
the reoffering, sale and delivery of the Bonds to the public. The Mayor and City Secretary are
further authorized and directed to manually execute and deliver for and on behalf of the Issuer
copies of the Official Statement in final form as may be required by the Purchasers, and such
final Official Statement in the form and content manually executed by said officials shall be
deemed to be approved by the Governing Body and constitute the Official Statement authorized
for distribution and use by the Purchasers. The proper officials of the Issuer 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.
Proceeds from the sale of the Bonds shall be applied as follows:
36253591.5 -22-
(1) Accrued interest on the Bonds (in the amount of $14,983.85), received from the
Purchasers, shall be deposited into the Bond Fund.
(2) The Issuer received a net original issue reoffering premium from the sale of the
Bonds of $288,682.00 which is hereby allocated by the Issuer in the following manner:
(A) $54,886.13 to pay the Purchasers' compensation, (B) $113,795.87 to pay the costs of
issuance, and (C) the remaining $120,000.00 is allocated toward the Issuer's voted authority
and deposited as described in Paragraph (3) below.
(3) The balance of the proceeds (including a portion of the premium in the amount
of $120,000.00 as described above and principal in the amount of $5,880,000.00, totaling
$6,000,000.00) derived from the sale of the Bonds (after paying costs of issuance) shall be
deposited into the special construction account or accounts created for the projects to be
constructed with the proceeds of the Bonds. This special construction account shall be
established and maintained at the Depository and shall be invested in accordance with the
provisions of Section 10 of this Ordinance. Interest earned on the proceeds of the Bonds
pending completion of construction of the projects financed with such proceeds shall be
accounted for, maintained, deposited, and expended as permitted by the provisions of Chapter
1201, as amended, Texas Government Code, or as required by any other applicable law.
Thereafter, such amounts shall be expended in accordance with Section 11 of this Ordinance.
SECTION 18: Covenants to Maintain Tax - Exempt Status.
A. Definitions. When used in this Section, the following terms have the following
meanings:
Closing Date means the date on which the Bonds are first authenticated and
delivered to the initial purchasers against payment therefor.
Code means the Internal Revenue Code of 1986, as amended by all legislation, if
any, effective on or before the Closing Date.
Computation Date has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
Gross Proceeds means any proceeds as defined in Section 1.148 -1(b) of the
Regulations, and any replacement proceeds as defined in Section 1.148 -1(c) of the
Regulations, of the Bonds.
Investment has the meaning set forth in Section 1.148 -1(b) of the Regulations.
Nonpurpose Investment means any investment property, as defined in section
148(b) of the Code, in which Gross Proceeds of the Bonds are invested and which is not
acquired to carry out the governmental purposes of the Bonds.
Rebate Amount has the meaning set forth in Section 1.148 -1(b) of the
Regulations.
36253591.5 -23-
Regulations means any proposed, temporary, or final Income Tax Regulations
issued pursuant to sections 103 and 141 through 150 of the Code, and 103 of the Internal
Revenue Code of 1954, which are applicable to the Bonds. Any reference to any specific
Regulation shall also mean, as appropriate, any proposed, temporary or final Income Tax
Regulation designed to supplement, amend or replace the specific Regulation referenced.
Yield of
(1) any Investment has the meaning set forth in Section 1.148 -5 of the
Regulations; and
(2) means the combined yield of the Certificates and the Bonds within
the meaning set forth in Section 1.148 -4 of the Regulations.
B. Not to Cause Interest to Become Taxable. The Issuer shall not use, permit the use
of, or omit to use Gross Proceeds or any other amounts (or any property the acquisition,
construction or improvement of which is to be financed or refinanced directly or indirectly with
Gross Proceeds) in a manner which if made or omitted, respectively, would cause the interest on
any Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the Issuer receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the Issuer shall comply
with each of the specific covenants in this Section.
C. No Private Use or Private Payments. Except to the extent that it will cause the
Bonds to become "private activity bonds" within the meaning of section 141 of the Code and the
Regulations and rulings thereunder, the Issuer shall at all times prior to the last Stated Maturity
of Bonds:
(1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross
Proceeds (including all contractual arrangements with terms different than those
applicable to the general public) or any property acquired, constructed or improved with
such Gross Proceeds in any activity carried on by any person or entity (including the
United States or any agency, department and instrumentality thereof) other than a state or
local government, unless such use is solely as a member of the general public; and
(2) not directly or indirectly impose or accept any charge or other payment by
any person or entity who is treated as using Gross Proceeds of the Bonds or any property
the acquisition, construction or improvement of which is to be financed or refinanced
directly or indirectly with such Gross Proceeds, other than taxes of general application
within the Issuer or interest earned on investments acquired with such Gross Proceeds
pending application for their intended purposes.
D. No Private Loan. Except to the extent that it will not cause the Bonds to become
"private activity bonds" within the meaning of section 141 of the Code and the Regulations and
36253591.5 -24-
rulings thereunder, the Issuer shall not use Gross Proceeds of the Bonds to make or finance loans
to any person or entity other than a state or local government. For purposes of the foregoing
covenant, such Gross Proceeds are considered to be "loaned" to a person or entity if. (1) property
acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or
entity in a transaction which creates a debt for federal income tax purposes; (2) capacity in or
service from such property is committed to such person or entity under a take -or -pay, output or
similar contract or arrangement; or (3) indirect benefits, or burdens and benefits of ownership, of
such Gross Proceeds or any property acquired, constructed or improved with such Gross
Proceeds are otherwise transferred in a transaction which is the economic equivalent of a loan.
E. Not to Invest at Higher Yield. Except to the extent that it will cause the Bonds to
become "arbitrage bonds" within the meaning of section 148 of the Code and the Regulations
and rulings thereunder, the Issuer shall not at any time prior to the final Stated Maturity of the
Bonds directly or indirectly invest Gross Proceeds in any Investment, if as a result of such
investment the Yield on any Investments acquired with Gross Proceeds (or with money replaced
thereby), whether then held or previously disposed of, materially exceeds the Yield of the Bonds.
F. Not Federally Guaranteed. Except to the extent permitted by section 149(b) of the
Code and the Regulations and rulings thereunder, the Issuer shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
G. Information Report. The Issuer shall timely file the information required by
section 149(e) of the Code with the Secretary of the Treasury on Form 8038 -G or such other
form and in such place as the Secretary may prescribe.
H. Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The Issuer shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and apart from
all other funds (and receipts, expenditures and investments thereof) and shall retain all
records of accounting for at least six years after the day on which the last Outstanding
Bond is discharged. However, to the extent permitted by law, the Issuer may commingle
Gross Proceeds of the Bonds with other money of the Issuer, provided that the Issuer
separately accounts for each receipt and expenditure of Gross Proceeds and the
obligations acquired therewith.
(2) Not less frequently than each Computation Date, the Issuer shall calculate
the Rebate Amount in accordance with rules set forth in section 148(f) of the Code and
the Regulations and rulings thereunder. The Issuer shall maintain such calculations with
its official transcript of proceedings relating to the issuance of the Bonds until six years
after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to induce such
purchase by measures designed to insure the excludability of the interest thereon from the
36253591.5 -25-
gross income of the owners thereof for federal income tax purposes, the Issuer shall pay
to the United States out of the Bond Fund or its general fund, as permitted by applicable
Texas statute, regulation or opinion of the Attorney General of the State of Texas, the
amount that when added to the future value of previous rebate payments made for the
Bonds equals (i) in the case of a Final Computation Date as defined in Section 1.148 -
3(e)(2) of the Regulations, one hundred percent (100 %) of the Rebate Amount on such
date; and (ii) in the case of any other Computation Date, ninety percent (90 %) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made at the
times, in the installments, to the place and in the manner as is or may be required by
section 148(f) of the Code and the Regulations and rulings thereunder, and shall be
accompanied by Form 8038 -T or such other forms and information as is or may be
required by section 148(f) of the Code and the Regulations and rulings thereunder.
(4) The Issuer shall exercise reasonable diligence to assure that no errors are
made in the calculations and payments required by paragraphs (2) and (3), and if an error
is made, to discover and promptly correct such error within a reasonable amount of time
thereafter (and in all events within one hundred eighty (180) days after discovery of the
error), including payment to the United States of any additional Rebate Amount owed to
it, interest thereon, and any penalty imposed under Section 1.148 -3(h) of the Regulations.
I. Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the Issuer shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection H of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
Bonds Not Hedge Bonds.
(1) The Issuer reasonably expects to spend at least 85% of the spendable
proceeds of the Bonds within three years after such Bonds are issued.
(2) Not more than 50% of the proceeds of the Bonds will be invested in
Nonpurpose Investments having a substantially guaranteed Yield for a period of four
years or more.
K. Elections. The Issuer hereby directs and authorizes any Authorized Official,
either or any combination of the foregoing, to make such elections in the Certificate as to Tax
Exemption or similar or other appropriate certificate, form, or document permitted or required
pursuant to the provisions of the Code or the Regulations, as they deem necessary or appropriate
in connection with the Bonds. Such elections shall be deemed to be made on the Closing Date.
SECTION 19: Satisfaction of Obligation of the Issuer. If the Issuer shall pay or cause to
be paid, or there shall otherwise be paid to the Holders, the principal of, premium, if any, and
interest on the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge
36253591.5 -26-
of taxes levied under this Ordinance and all covenants, agreements, and other obligations of the
Issuer to the Holders shall thereupon cease, terminate, and be discharged and satisfied.
Bonds, or any principal amount(s) thereof, shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when: (1) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at Stated Maturity or to the redemption date
therefor, together with all interest due thereon, shall have been irrevocably deposited with and
held in trust by the Paying Agent /Registrar, or an authorized escrow agent; and /or (ii)
Government Securities shall have been irrevocably deposited in trust with the Paying
Agent /Registrar, or an authorized escrow agent, which Government Securities have, in the case
of a net defeasance, been certified by an independent accounting firm to mature as to principal
and interest in such amounts and at such times as will insure the availability, without
reinvestment, of sufficient money, together with any money deposited therewith, if any, to pay
when due the principal of and interest on such Bonds, or the principal amount(s) thereof, on and
prior to the Stated Maturity thereof (or if notice of redemption has been duly given or waived or
if irrevocable arrangements therefor acceptable to the Paying Agent /Registrar have been made)
the redemption date thereof for the Bonds. In the event of a gross defeasance of the Bonds, the
Issuer shall deliver a certificate from its financial advisor, the Paying Agent /Registrar, or another
qualified third party concerning the deposit of cash and /or Government Securities to pay, when
due, the principal of, redemption premium (if any), and interest due on any defeased Bonds. The
Issuer covenants that no deposit of money or Government Securities will be made under this
Section and no use made of any such deposit which would cause the Bonds to be treated as
arbitrage bonds within the meaning of section 148 of the Code (as defined in Section 18 hereof).
Any money so deposited with the Paying Agent /Registrar, and all income from
Government Securities held in trust by the Paying Agent /Registrar, or an authorized escrow
agent, pursuant to this Section which is not required for the payment of the Bonds, or any
principal amount(s) thereof, or interest thereon with respect to which such money has been so
deposited shall be remitted to the Issuer or deposited as directed by the Issuer. Furthermore, any
money held by the Paying Agent /Registrar for the payment of the principal of and interest on the
Bonds and remaining unclaimed for a period of three (3) years after the Stated Maturity, or
applicable redemption date of the Bonds, such money was deposited and is held in trust to pay
shall upon the request of the Issuer be remitted to the Issuer against a written receipt therefor,
subject to the unclaimed property laws of the State of Texas.
Notwithstanding any other provision of this Ordinance to the contrary, it is hereby
provided that any determination not to redeem defeased Bonds that is made in conjunction with
the payment arrangements specified in subsection (i) or (ii) above shall not be irrevocable,
provided that: (1) in the proceedings providing for such defeasance, the Issuer expressly
reserves the right to call the defeased Bonds for redemption; (2) gives notice of the reservation of
that right to the owners of the defeased Bonds immediately following the defeasance; (3) directs
that notice of the reservation be included in any redemption notices that it authorizes; and (4) at
the time of the redemption, satisfies the conditions of (i) or (ii) above with respect to such
defeased debt as though it was being defeased at the time of the exercise of the option to redeem
the defeased Bonds, after taking the redemption into account in determining the sufficiency of
the provisions made for the payment of the defeased Bonds.
36253591.5 -27-
SECTION 20: Ordinance a Contract - Amendments - Outstanding Bonds. The Issuer
acknowledges that the covenants and obligations of the Issuer herein contained are a material
inducement to the purchase of the Bonds. This Ordinance shall constitute a contract with the
Holders from time to time, be binding on the Issuer, and its successors and assigns, and it shall
not be amended or repealed by the Issuer so long as any Bond remains Outstanding except as
permitted in this Section. The Issuer may, without the consent of or notice to any Holders, from
time to time and at any time, amend this Ordinance in any manner not detrimental to the interests
of the Holders, including the curing of any ambiguity, inconsistency, or formal defect or
omission herein. In addition, the Issuer may, with the written consent of Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding affected thereby, amend,
add to, or rescind any of the provisions of this Ordinance; provided, however, that, without the
consent of all Holders of Outstanding Bonds, no such amendment, addition, or rescission shall:
(i) extend the time or times of payment of the principal of, premium, if any, and interest on the
Bonds, reduce the principal amount thereof, the redemption price thereof, or the rate of interest
thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or
interest on the Bonds; (ii) give any preference to any Bond over any other Bond; or (iii) reduce
the aggregate principal amount of Bonds required for consent to any such amendment, addition,
or rescission.
SECTION 21: Control and Custody of Bonds. The Mayor of the Issuer shall be and is
hereby authorized to take and have charge of all necessary orders and records pending
investigation by the Attorney General of the State of Texas including the printing and supply of
definitive Bonds and shall take and have charge and control of the Initial Bond pending its
approval by the Attorney General of the State of Texas, the registration thereof by the
Comptroller of Public Accounts of the State of Texas and the delivery thereof to the Purchasers.
Furthermore, each Authorized Official, any or all, are hereby authorized and directed to
furnish and execute such documents relating to the Issuer and its financial affairs as may be
necessary for the issuance of the Bonds, the approval of the Attorney General of the State of
Texas, and their registration by the Comptroller of Public Accounts of the State of Texas and,
together with the Issuer's Financial Advisors, Bond Counsel, and the Paying Agent /Registrar, to
make the necessary arrangements for the delivery of the Initial Bond to the Purchasers and the
initial exchange thereof for definitive Bonds.
SECTION 22: Printed Opinion. The Purchasers' obligation to accept delivery of the
Bonds is subject to its being furnished a final opinion of Norton Rose Fulbright US LLP, San
Antonio, Texas, as Bond Counsel, approving the Bonds as to their validity, said opinion to be
dated and delivered as of the date of initial delivery and payment for the Bonds. Printing of a
true and correct reproduction of said opinions on the reverse side of each of the Bonds is hereby
approved and authorized.
SECTION 23: CUSIP Numbers. CUSIP numbers may be printed or typed on the Bonds.
It is expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds
shall be of no significance or effect as regards the legality thereof, and neither the Issuer nor
attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers
incorrectly printed or typed on the Bonds.
36253591.5 -28-
SECTION 24: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the Issuer, the Paying
Agent /Registrar, Bond Counsel, the Purchasers, and the Holders any right, remedy, or claim,
legal or equitable, under or by reason of this Ordinance or any provision hereof, this Ordinance
and all its provisions being intended to be and being for the sole and exclusive benefit of the
Issuer, the Paying Agent /Registrar, Bond Counsel, the Purchasers, and the Holders.
SECTION 25: Inconsistent Provisions. All ordinances, orders, or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 26: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 27: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 28: Severability. If any provision of this Ordinance or the application thereof
to any person or circumstance shall be held to be invalid, the remainder of this Ordinance and the
application of such provision to other persons and circumstances shall nevertheless be valid, and
the Governing Body hereby declares that this Ordinance would have been enacted without such
invalid provision.
SECTION 29: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance 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
Ordinance, was given, all as required by Chapter 551, as amended, Texas Government Code.
SECTION 30: Authorization of Paving Agent/Registrar Agreement. The Governing
Body of the Issuer hereby finds and determines that it is in the best interest of the Issuer to
authorize the execution of a Paying Agent /Registrar Agreement pertaining to the registration,
transferability, and payment of the Bonds. A copy of the Paying Agent /Registrar Agreement is
attached hereto, in substantially final form, as Exhibit A and is incorporated herein by reference
as fully as if recopied in its entirety in this Ordinance.
SECTION 31: Incorporation of Preamble Recitals. The recitals contained in the
preamble to this Ordinance are hereby found to be true, and such recitals are hereby made a part
of this Ordinance for all purposes and are adopted as a part of the judgment and findings of the
Governing Body of the Issuer.
SECTION 32: Book -Entry -Only System. It is intended that the Bonds initially be
registered so as to participate in a securities depository system (the DTC System) with the
Depository Trust Company, New York, New York, or any successor entity thereto (the DTC), as
set forth herein. Each Stated Maturity of the Bonds shall be issued (following cancellation of the
Initial Bond described in Section 7) in the form of a separate single definitive Bond. Upon
issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as the
nominee of DTC, and all of the Outstanding Bonds shall be registered in the name of Cede &
36253591.5 -29-
Co., as the nominee of DTC. The Issuer and the Paying Agent /Register are authorized to
execute, deliver, and take the actions set forth in such letters to or agreements with DTC as shall
be necessary to effectuate the DTC System, including the Letter of Representations attached
hereto as Exhibit C (the Representation Letter).
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
Issuer and the Paying Agent /Registrar shall have no responsibility or obligation to any
broker - dealer, bank, or other financial institution for which DTC holds the Bonds from time to
time as securities depository (a Depository Participant) or to any person on behalf of whom such
a Depository Participant holds an interest in the Bonds (an Indirect Participant). Without
limiting the immediately preceding sentence, the Issuer and the Paying Agent /Registrar shall
have no responsibility or obligation with respect to: (i) the accuracy of the records of DTC, Cede
& Co., or any Depository Participant with respect to any ownership interest in the Bonds; (ii) the
delivery to any Depository Participant or any other person, other than a registered owner of the
Bonds, as shown on the Security Register, of any notice with respect to the Bonds, including any
notice of redemption; or (iii) the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Bond, of any amount with respect to
principal of, premium, if any, or interest on the Bonds. While in the DTC System, no person
other than Cede & Co., or any successor thereto, as nominee for DTC, shall receive a bond
certificate evidencing the obligation of the Issuer to make payments of principal, premium, if
any, and interest pursuant to this Ordinance. Upon delivery by DTC to the Paying
Agent /Registrar of written notice to the effect that DTC has determined to substitute a new
nominee in place of Cede & Co., and subject to the provisions in this Ordinance with respect to
interest checks or drafts being mailed to the Holder, the word "Cede & Co." in this Ordinance
shall refer to such new nominee of DTC.
In the event that: (a) the Issuer determines that DTC is incapable of discharging its
responsibilities described herein and in the Representation Letter; (b) the Representation Letter
shall be terminated for any reason; or (c) DTC or the Issuer determines that it is in the best
interest of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the
Issuer shall notify the Paying Agent /Registrar, DTC, and DTC Participants of the availability
within a reasonable period of time through DTC of bond certificates, and the Bonds shall no
longer be restricted to being registered in the name of Cede & Co., as nominee of DTC. At that
time, the Issuer may determine that the Bonds shall be registered in the name of and deposited
with a successor depository operating a securities depository system, as may be acceptable to the
Issuer, or such depository's agent or designee, and if the Issuer and the Paying Agent /Registrar
do not select such alternate securities depository system then the Bonds may be registered in
whatever name or names the Holders of Bonds transferring or exchanging the Bonds shall
designate, in accordance with the provisions hereof.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any
Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of, premium, if any, and interest on such Bond and all notices with respect to such
Bond shall be made and given, respectively, in the manner provided in the Representation Letter.
SECTION 33: Construction of Terms. If appropriate in the context of this Ordinance,
words of the singular number shall be considered to include the plural, words of the plural
36253591.5 -30-
number shall be considered to include the singular, and words of the masculine, feminine or
neuter gender shall be considered to include the other genders.
SECTION 34: Unavailability of Authorized Publication. If, because of the temporary or
permanent suspension of any newspaper, journal, or other publication, or, for any reason,
publication of notice cannot be made meeting any requirements herein established, any notice
required to be published by the provisions of this Ordinance shall be given in such other manner
and at such time or times as in the judgment of the Issuer or of the Paying Agent /Registrar shall
most effectively approximate such required publication and the giving of such notice in such
manner shall for all purposes of this Ordinance be deemed to be in compliance with the
requirements for publication thereof.
SECTION 35: No Recourse Against Issuer Officials. No recourse shall be had for the
payment of principal of, premium, if any, or interest on any Bond or for any claim based thereon
or on this Ordinance against any official of the Issuer or any person executing any Bond.
SECTION 36: Continuing Disclosure Undertaking.
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)
http://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 Issuer shall file annually with the MSRB, (1) within six months after the end of each
fiscal year of the Issuer ending in or after 2016, financial information and operating data with
respect to the Issuer of the general type included in the final Official Statement authorized by
Section 17 of this Ordinance, being the information described in Exhibit D hereto, and (2) if not
provided as part of such financial information and operating data, audited financial statements of
the Issuer, when and if available. Any financial statements so to be provided shall be (i)
prepared in accordance with the accounting principles described in Exhibit D hereto, or such
other accounting principles as the Issuer may be required to employ from time to time pursuant
to state law or regulation, and (ii) audited, if the Issuer 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 Issuer 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
36253591.5 -31-
becomes available. Under current Texas law, including, but not limited to, Chapter 103, as
amended, Texas Local Government Code, the Issuer 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 Issuer'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.
If the Issuer 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 Issuer otherwise
would be required to provide financial information and operating data pursuant to this Section.
C. Notice of Certain Events.
The Issuer 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 Issuer, which
shall occur as described below;
36253591.5 -32-
(13) The consummation of a merger, consolidation, or acquisition involving the
Issuer 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 Issuer 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
assumed jurisdiction over substantially all of the assets or business of the Issuer, 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 Issuer.
The Issuer shall file notice with the MSRB, in a timely manner, of any failure by the
Issuer 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 Issuer shall be obligated to observe and perform the covenants specified in this
Section for so long as, but only for so long as, the Issuer remains an "obligated person" with
respect to the Bonds within the meaning of the Rule, except that the Issuer 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 Issuer
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 Issuer'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 Issuer 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 ISSUER 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 ISSUER, WHETHER NEGLIGENT OR WITH OR WITHOUT
36253591.5 -33-
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 Issuer in observing or performing its obligations under this Section
shall constitute a breach of or default under this Ordinance for purposes of any other provision of
this Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the Issuer under federal and state securities laws.
The provisions of this Section may be amended by the Issuer 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 Issuer, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a) the holders of a majority in aggregate principal amount
(or any greater amount required by any other provision of this Ordinance that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or (b) a person that is
unaffiliated with the Issuer (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 Issuer 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 Issuer 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
Issuer so amends the provisions of this Section, the Issuer 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 Issuer 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
36253591.5 -34-
document (including an official statement or other offering document) available to the public
through EMMA or filed with the SEC.
SECTION 37: Further Procedures. The officers and employees of the Issuer are hereby
authorized, empowered and directed from time to time and at any time to do and perform all such
acts and things and to execute, acknowledge and deliver in the name and under the corporate seal
and on behalf of the Issuer all such instruments, whether or not herein mentioned, as may be
necessary or desirable in order to carry out the terms and provisions of this Ordinance, the initial
sale and delivery of the Bonds, the Official Bid Form, the Paying Agent /Registrar Agreement,
and the Official Statement. In addition, prior to the initial delivery of the Bonds, any Authorized
Official and Bond Counsel are hereby authorized and directed to approve any technical changes
or corrections to this Ordinance or to any of the instruments authorized and approved by this
Ordinance and as described in the Official Statement necessary in order to: (i) correct any
ambiguity or mistake or properly or more completely document the transactions contemplated
and approved by this Ordinance; (ii) obtain a rating from any of the national bond rating
agencies; or (iii) obtain the approval of the Bonds by the Texas Attorney General's office. In
case any officer of the Issuer whose signature shall appear on any certificate shall cease to be
such officer before the delivery of such certificate, such signature shall nevertheless be valid and
sufficient for all purposes the same as if such officer had remained in office until such delivery.
SECTION 38: Contracts with Financial Advisor and /or Bond Counsel. The Governing
Body authorizes each Authorized Official, or their designees, to take all actions necessary to
execute any necessary financial advisory contracts with SAMCO Capital Markets, Inc., as the
financial advisor to the Issuer (the Financial Advisor). The Issuer understands that under
applicable federal securities laws and regulations that the Issuer must have a contractual
arrangement with its Financial Advisor relating to the sale, issuance, and delivery of the Bonds.
In addition, the Governing Body also authorizes each Authorized Official, or their designees, to
take all actions necessary to execute any necessary engagement agreement with Norton Rose
Fulbright US LLP, as the Bond Counsel to the Issuer.
SECTION 39: Issuer's Consent to Provide Information and Documentation to the Texas
MAC. The Municipal Advisory Council of Texas (the Texas MAC), a non - profit membership
corporation organized exclusively for non -profit purposes described in section 501(c)(6) of the
Internal Revenue Code and which serves as a comprehensive financial information repository
regarding municipal debt issuers in Texas, requires provision of written documentation regarding
the issuance of municipal debt by the issuers thereof. In support of the purpose of the Texas
MAC and in compliance with applicable law, the Issuer hereby consents to and authorizes any
Authorized Representative, Bond Counsel to the Issuer, and /or Financial Advisor to the Issuer to
provide to the Texas MAC information and documentation requested by the Texas MAC relating
to the Bonds; provided, however, that no such information and documentation shall be provided
prior to the Closing Date. This consent and authorization relates only to information and
documentation that is a part of the public record concerning the issuance of the Bonds.
SECTION 40: Effective Date. Pursuant to the provisions of Section 1201.028, as
amended, Texas Government Code, this Ordinance shall be effective immediately upon
adoption, notwithstanding any provision in the City's Home Rule Charter to the contrary
concerning a multiple reading requirement for the adoption of ordinances.
36253591.5 -35-
PASSED, APPROVED AND ADOPTED by the Governing Body of the City of Schertz,
Texas, this the 2nd day of August, 2016.
ATTEST:
City Secretary
(CITY SEAL)
CITY OF SCHERTZ, TEXAS
A M o
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36253591.5 S -1
INDEX TO SCHEDULES AND EXHIBITS
Exhibit A ............ ............................... .........................Paying Agent /Registrar Agreement
Exhibit B .............. ............................... .......................Official Bid Form
Exhibit C ........................................ ............................DTC Letter of Representations
Exhibit D ................. ............................... ....................Description of Annual Financial Information
36253591.5 Index- I
EXHIBIT A
Paying Agent /Registrar Agreement
See Tab No.
36253591.5 A -1
EXHIBIT B
Official Bid Form
See Tab No. _
36253591.5 B-1
EXHIBIT C
DTC Letter of Representations
See Tab No.
36253591.5 C -1
EXHIBIT D
Description of Annual Financial Information
The following information is referred to in Section 36 of this Ordinance.
Annual Financial Statements and Operating Data
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
(1) The City's audited financial statements for the most recently concluded fiscal year
or to the extent these audited financial statements are not available, the portions of the unaudited
financial statements of the City attached to the Official Statement as Appendix D, but for the
most recently concluded fiscal year.
The information in the Official Statement under Table 1 of the Official Statement and
Tables 1 through 10 of Appendix A, to the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are generally accepted accounting
principles for governmental units as prescribed by the Government Accounting Standards Board
from time to time.
36253591.5 D -1