18-B-36 - Issuance of City of Schertz Texas General Obigtion Refunding Bonds Series 201813 NMI iI
113 'A 0 0MOI 014 A ►LIM UM MrIt
WHEREAS, the City Council (the City Council) of the City of Schertz, Texas (the City)
hereby finds and determines that general obligation and refunding bonds of the City in the total
principal amount of $8,570,000 (the Bonds) should be issued and sold at this time, the proceeds of
which will be utilized to provide funds for (i) constructing street, bridge, and sidewalk
improvements, all as approved at an election held on November 3, 2015, (ii) refunding a portion
of the City's currently outstanding obligations as identified in Schedule I attached hereto for debt
service savings, and (iii) paying the costs of issuing the Bonds; and
WHEREAS, the City Council hereby finds and determines that general obligation bonds
of the City representing an allocation against the hereinafter described voted authorization in the
total principal amount of $605,000 (being the principal amount of $580,000.00 and a portion of
the premium of $25,000), should be issued and sold at this time, being the third 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:
82600885.7
Date
Amount
Previously
Bonds
Premium
Amount
Voted
Purpose
Authorized
Issued Bonds
Issued
Herein
allocated
to Voted
Unissued
Authority
11/03/15
Designing, acquiring,
$7,000,000
$2,000,000
580,000
25,000
4,395,000
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, and other real
property interests necessary
therefor or incidental thereto
WHEREAS, the City has heretofore issued, sold, and delivered, and there are currently
outstanding obligations in the aggregate original principal amount of $8,270,000, being the
obligations set forth on Schedule I hereto which is incorporated by reference for all purposes to
this ordinance (the Refunded Obligations); and
WHEREAS, a portion of the proceeds of the Bonds in the principal amount of $7,990,000
will be utilized to provide for the (i) refunding of the Refunded Obligations and (ii) payment of
the costs of issuance of the general obligation refunding bonds; and
WHEREAS, pursuant to the provisions of Chapter 1207, as amended, Texas Government
Code (the Act), the City Council is authorized to issue refunding bonds and deposit the proceeds
of sale under an escrow agreement to provide for the payment of the Refunded Obligations, and
such deposit, when made in accordance with the Act, shall constitute the making of firm banking
and financial arrangements for the discharge and final payment of the Refunded Obligations; and
WHEREAS, the Act permits that the deposit of the proceeds from the sale of the refunding
bonds be deposited directly with any designated escrow agent which is not the depository bank of
the City; and
WHEREAS, when firm banking arrangements have been made for the payment of principal
of and interest to the stated maturity or redemption dates of the Refunded Obligations, then the
Refunded Obligations shall no longer be regarded as outstanding except for the purpose of
receiving payment from the funds provided for such purpose and may not be included in or
considered to be an indebtedness of the City for the purpose of a limitation on outstanding
indebtedness or taxation or for any other purpose; and
WHEREAS, JPMorgan Chase currently serves as the paying agent for the Series 2007
Refunded Obligations and Wells Fargo Bank National Association Minneapolis, Minnesota, (as
82600885.7 -2-
successor in interest to Wells Fargo Bank National Association, Austin, Texas) currently serves as
paying agent for the Series 2009 Refunded Obligations and the Series 2010 Refunded Obligations.
WHEREAS, UMB Bank, N.A., Austin, Texas (which is not the depository bank of the
City) is hereby appointed as the Paying Agent /Registrar (hereinafter defined) and Escrow Agent
(hereinafter defined) for the Bonds; and
WHEREAS, the City Council also hereby finds and determines that the Refunded
Obligations are scheduled to mature or are subject to being redeemed, not more than twenty (20)
years from the date of the refunding bonds herein authorized and being issued to realize debt
service savings, and such refunding will result in a net present value benefit of $758,899.23 and a
gross savings of $976,001.96, including the City's cash contribution of $44,530.27; and
WHEREAS, the City Council hereby finds and determines that the issuance of the general
obligation and refunding bonds herein described 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
THAT:
SECTION 1: Authorization - Designation - Principal Amount - PuKpose. General
obligation and refunding bonds of the City shall be and are hereby authorized to be issued in the
aggregate principal amount of EIGHT MILLION FIVE HUNDRED SEVENTY THOUSAND
AND NO /100 DOLLARS ($8,570,000), to be designated and bear the title of "CITY OF
SCHERTZ, TEXAS GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 2018"
(the Bonds), for the purpose of providing funds for (i) constructing street, bridge, and sidewalk
improvements, (ii) refunding a portion of the City's currently outstanding obligations as identified
in Schedule I attached hereto (and as described herein as the Refunded Obligations) for debt service
savings, and (iii) paying the costs of issuing the Bonds, all in conformity with the laws of the State
of Texas, particularly Chapters 1207, 1251, and 1331, Texas Government Code, Chapter 331, as
amended, Texas Local Government Code, an election held in the City on November 3, 2015, this
ordinance adopted by the City Council on October 23, 2018 (the Ordinance), and the City's Home
Rule Charter.
SECTION 2: Fully Registered Obligations - Authorized Denominations - Stated
Maturities - Interest Rates — Dated Date. The Bonds shall be issued as fully registered obligations,
without coupons, shall be dated October 15, 2018 (the Dated Date), shall be issued in
denominations of $5,000 or any integral multiple thereof (within a Stated Maturity), and the Bonds
shall be lettered "R" and numbered consecutively from One (1) upward and principal shall become
due and payable on February 1 in each of the years and in principal amounts (the Stated Maturities)
and bear interest on the unpaid principal amounts from the Dated Date (hereinafter defined), or
from the most recent Interest Payment Date (hereinafter defined) to which interest has been paid
or duly provided for, to the earlier of redemption or Stated Maturity, while Outstanding
(hereinafter defined), at the per annum rates in accordance with the following schedule:
82600885.7 -3-
Years of
Principal
Interest
Stated Maturity
Amounts ($)
Rates
2019
95,000
5.000
2020
915,000
5.000
2021
880,000
5.000
2022
555,000
5.000
2023
595,000
5.000
2024
660,000
5.000
2025
670,000
5.000
2026
700,000
5.000
2027
260,000
5.000
2028
570,000
4.000
2029
495,000
4.000
2030
515,000
4.000
2031
535,000
3.125
2032
555,000
3.250
2033
570,000
3.375
The Bonds shall bear interest on the unpaid principal amounts from the Dated 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, 2019 while the Bonds are Outstanding.
SECTION 3: Payment of Bonds - Paving A eg nt /Re ig strar. The principal of, premium, if
any, and the interest on the Bonds, due and 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) by reason of Stated Maturity, redemption, or
otherwise, shall be payable 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 UMB Bank, N.A., Austin, Texas, to serve as the initial
Paying Agent /Registrar (the Paying Agent /Registrar) for the Bonds is hereby approved and
confirmed, and the City agrees and covenants to cause to be kept and maintained at the 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 City may prescribe. The City covenants to maintain and provide a Paying Agent /Registrar at
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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 authorized by law to serve as a Paying
Agent /Registrar.
The City 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 City 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 appearing on the Security Register (the Holder or Holders) maintained on behalf of the City
by the Paying Agent /Registrar as hereinafter provided (1) on the Record Date (hereinafter defined)
for purposes of payment of interest on the Bonds, (ii) on the date of surrender of the Bonds for
purposes of receiving payment of principal thereof at the Bonds' Stated Maturity or upon
redemption of the Bonds, and (iii) on any other date for any other purpose. The City 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 City 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 city
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.
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 City. 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 of a Bond
82600885.7 -5-
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. Optional Redemption of Bonds. The Bonds having Stated Maturities on and after
February 1, 2029 shall be subject to redemption prior to Stated Maturity at the option of the City,
on February 1, 2028, or on any date thereafter, as a 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.
B. Exercise of Redem tip on Option. At least forty -five (45) days prior to a date set for
the redemption of the Bonds (unless a shorter notification period shall be satisfactory to the Paying
Agent /Registrar), the City 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 City to exercise the right to redeem the
Bonds shall be entered in the minutes of the governing body of the City.
C. 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.
D. 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 City and at the City'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 (1) 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.
82600885.7 -6-
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 hereinabove 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 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.
E. Transfer /Exchange of Bonds. Neither the City nor the Paying Agent /Registrar shall
be required (i) 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 (ii) 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 City
by its Mayor or Mayor Pro Tern under the seal of the City 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 Dated Date, the proper officers of the City shall bind the City, 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 City 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 every owner of the Bonds, or, if appropriate, the nominee thereof.
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.
82600885.7 -7-
Upon surrender for transfer of any Bond at the corporate trust office of the Paying
Agent /Registrar, the City shall execute and 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 furnished by, the City 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 City shall execute, and the Paying Agent /Registrar shall
register and deliver new Bonds executed on behalf of, and furnished by, the City 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 City, 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
fee, 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 17 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 Bonds. The Bonds herein authorized shall be initially issued as a
single fully registered Bond in the aggregate principal amount of $8,570,000 with principal
installments to become due and payable as provided in Section 2 hereof and numbered T -1 (the
Initial Bonds), and the Initial Bonds shall be registered in the name of the Purchasers or the
designee thereof. The Initial Bonds shall be the Bonds submitted to the Office of the Attorney
General of the State of Texas for approval, 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 Bonds, the Paying Agent /Registrar, pursuant to written instructions from the
Purchasers, or the designee thereof, shall cancel the Initial Bonds 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 at the
addresses identified therefor; all pursuant to and in accordance with and pursuant to such written
82600885.7 -8-
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 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 (hereinafter referenced)) thereon as may, consistent
herewith, be established by the City 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(s)
submitted to the Attorney General of the State of Texas may be typewritten or photocopied or
otherwise reproduced.
B. Form of Definitive Bond.
REGISTERED
NO.
REGISTERED
PRINCIPAL AMOUNT
United States of America
State of Texas
Counties of Bexar, Comal and Guadalupe
CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION AND REFUNDING BONDS,
SERIES 2018
Dated Date: Interest Rate: Stated Maturity: CUSIP NO:
October 15, 2018
REGISTERED OWNER:
PRINCIPAL AMOUNT:
The City of Schertz, Texas (the City), 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 specified above
82600885.7 -9-
(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 from the Dated 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, while Outstanding, at
the per annum rate 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 in each year (each,
an Interest Payment Date), commencing February 1, 2019
Principal and premium, if any, on 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 a successor thereof.
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 each 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.
This Bond is one of the series specified in its title issued in the aggregate principal amount
of $8,570,000 (the Bonds) pursuant to an ordinance adopted by the governing body of the City (the
Ordinance), for the purpose of providing funds for (1) financing street, bridge, and sidewalk
improvements, (ii) refunding a portion of the City's currently outstanding obligations as identified
in Schedule I attached hereto (and as described herein as the Refunded Obligations) for debt service
savings, and (iii) paying the costs of issuing the Bonds, all in conformity with the laws of the State
of Texas, particularly Chapters 1207, 1251, and 1331, Texas Government Code, Chapter 331, as
amended, Texas Local Government Code, an election held in the City on November 3, 2015, an
ordinance adopted by the City Council on October 23, 2018 (the Ordinance), and the City's Home
Rule Charter.
As specified in the Ordinance, the Bonds stated to mature on and after February 1, 2029
may be redeemed prior to their Stated Maturities at the option of the City, on February 1, 2028, 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;
provided, however, that at least and upon thirty (30) days prior written notice shall be sent to the
Holder of the Bonds to be redeemed by United States mail, first -class postage prepaid, and subject
to the 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
82600885.7 -10-
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 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 City 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 Bonds; 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
City and the Paying Agent /Registrar; the terms and provisions upon which this Bond may be
redeemed or discharged at or prior to the Stated Maturity thereof, and deemed to be no longer
Outstanding thereunder; and for the other terms and provisions specified in the Ordinance.
Capitalized terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred on
the Security Register 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 City and the Paying Agent /Registrar, and any agent of either, shall treat the Holder
hereof whose name appears on the Security Register (1) 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
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 City 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
82600885.7 - I I -
payment of such interest have been received from the City. 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 City 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.
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82600885.7 -12-
IN WITNESS WHEREOF, the City has caused this Bond to be duly executed under its official
seal.
CITY OF SCHERTZ, TEXAS
ayor
ATTEST:
(;ityv Secretary
(CITY SEAL)
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82600885.7 -13-
C. *Form of Registration Certificate of Comptroller of Public Accounts to Appear on
Initial Bonds 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
Comptroller of Public Accounts
of the State of Texas
(SEAL)
* Note to Printer: Not to appear on printed Bonds
D. Form of Certificate of Paying Agent /Registrar to Appear on Definitive Bonds Only.
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: UMB Bank N.A., Austin, Texas as Paying
Agent /Registrar
C
82600885.7 -14-
Authorized Signature
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:
Signature guaranteed:
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.
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82600885.7 -15-
F. The Initial Bonds shall be in the respective forms set forth in paragraph B of this
Section, except that the form of a single fully registered Initial Bond shall be modified as follows:
(i) immediately under the name of the Bond(s) the headings "Interest Rate"
and "Stated Maturity" shall both be completed "as shown below ";
(ii) the first two paragraphs shall read as follows:
Registered Owner:
Principal Amount:
The City of Schertz, Texas (the City), 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 Principal Interest
Stated Maturity Amounts M Rates
(Information to be inserted from
schedule in Section 2 hereof).
(or so much thereof as shall not have been paid upon prior redemption) and to pay interest on the
unpaid Principal Amount hereof from the Dated Date, 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, while Outstanding, 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, 2019.
Principal of this Bond shall be payable to the Registered Owner hereof, upon its
presentation and surrender to Stated Maturity or prior redemption, while Outstanding, at the
corporate trust office of UMB Bank N.A., (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 each 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, and at the risk and expense of, the Holder hereof.
82600885.7 -16-
G. Insurance Legend. If bond insurance is obtained by the City or the Purchasers for
the Bonds, the Definitive Bonds and the Initial Bonds shall bear an appropriate legend as provided
by the bond insurer to appear under the following header:
[BOND INSURANCE]
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, and certain terms used in
Sections 21 and 39 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, the City
Manager, the 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 $8,570,000 "CITY OF SCHERTZ, TEXAS
GENERAL OBLIGATION AND REFUNDING BONDS, SERIES 2018" authorized by this
Ordinance.
D. The term City shall mean City of Schertz, located in the Counties of Bexar, Comal,
and Guadalupe, Texas and, where appropriate, the City Council of the City.
E. The term Closing Date shall mean the date of physical delivery of the Initial Bonds
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 City 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 City.
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
82600885.7 -17-
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 1 and August 1 of each year, commencing February 1, 2019, while any of
the Bonds remain Outstanding.
K. The term Ordinance shall mean this ordinance adopted by the City Council of the
City on October 23, 2018.
L. 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 City in
accordance with the provisions of Section 23 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 17 of this Ordinance.
M. The term Purchasers shall mean the initial purchasers of the Bonds named in
Section 18 of this Ordinance.
N. 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 "CITY OF SCHERTZ, TEXAS GENERAL
OBLIGATION AND REFUNDING BONDS, SERIES 2018 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 21.
Authorized Officials of the City are hereby authorized and directed to make withdrawals from the
Bond Fund sufficient to pay the principal of, premium, if any, and interest on the Bonds as the
82600885.7 -18-
same become due and payable, or the purchase price thereof, 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, at the option of the City, may
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, 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 such 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: Tax Levy. To provide for the payment of the Debt Service Requirements
on the Bonds being (i) the interest on the Bonds and (ii) a 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 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 City, 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 City Council 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 City for such purpose is adequate to permit a
legally sufficient tax in consideration of all other outstanding indebtedness and other obligations
of the City.
SECTION 12: Deposits to Bond Fund — Surplus Bond Proceeds. The City hereby
covenants and agrees to cause to be deposited in the Bond Fund prior to a principal and interest
payment date for the Bonds, from the annual levy of an ad valorem tax or from other lawfully
82600885.7 -19-
available funds, amounts sufficient to fully pay and discharge promptly each installment of interest
and principal of the Bonds as the same accrues or matures or comes due by reason of Stated
Maturity.
Accrued interest received from the Purchasers of the Bonds, along with any taxes collected
pertaining to the Refunded Obligations, after the Closing Date, 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 sums otherwise required to be deposited in said fund from
ad valorem taxes.
SECTION 13: Security of 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 14: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (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 City Council of the City and other
officers of the City 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 15: 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.
82600885.7 -20-
SECTION 16: Cancellation. All Bonds surrendered for payment, transfer, redemption,
exchange, or replacement, if surrendered to the Paying Agent /Registrar, shall be promptly canceled
by it and, if surrendered to the City, shall be delivered to the Paying Agent /Registrar and, if not
already canceled, shall be promptly canceled by the Paying Agent /Registrar. The City may at any
time deliver to the Paying Agent /Registrar for cancellation any Bonds previously certified or
registered and delivered which the City 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 City.
SECTION 17: Mutilated, Destroyed, Lost, and Stolen Bonds. If (1) any mutilated Bond is
surrendered to the Paying Agent /Registrar, or the City and the Paying Agent /Registrar receive
evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (2) there is delivered
to the City 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 City or the Paying Agent/Registrar that
such Bond has been acquired by a bona fide purchaser, the City shall execute and, upon the City'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.
In case any such mutilated, destroyed, lost, or stolen Bond has become or is about to
become due and payable, the City 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 City
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 City, 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 18: Sale of the Bonds at Competitive Sale — Approval of the Official Statement;
Proceeds of Sale. The Bonds authorized by this Ordinance are hereby sold by the City to Citigroup
Global Markets Inc., Dallas, Texas, as the authorized representative of a group of purchasers at a
competitive sale (the Purchasers, having all the rights, benefits, and obligations of a Holder), in
accordance with the provisions of an Official Bid Form (the Official Bid Form), dated October 23,
2018, 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 net reoffering premium of $573,687.85 (including the
Purchasers' compensation of $35,097.75), 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
82600885.7 -21-
registered in the name of Citigroup Global 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 City. The pricing and terms of the sale of the Bonds are hereby found and
determined to be the most advantageous reasonably obtainable by the City. Any Authorized
Official is hereby authorized and directed to execute the Official Bid Form for and on behalf of
the City and as the act and deed of this City Council, and in regard to the approval and execution
of the Official Bid Form, the City Council hereby finds, determines and declares that the
representations, warranties, and agreements of the City contained in the Official Bid Form are true
and correct in all material respects and shall be honored and performed by the City. Delivery of
the Bonds to the Purchasers shall occur as soon as practicable after the adoption of this Ordinance,
upon payment therefor in accordance with the terms of the Official Bid Form.
Proceeds from the sale of the Bonds shall be applied as follows:
(1) Accrued interest in the amount of $44,764.27 shall be deposited into the
Bond Fund.
(2) The City received a net reoffering premium from the sale of the Bonds of
$573,687.85 of which $538,249.75 is attributable to the refunding portion of the Bonds
(the Refunding Premium) and $35,438.10 is attributable to the new money portion of the
Bonds (the New Money Premium). The Refunding Premium is hereby allocated by the
City in the following manner: (1) $32,722.41, to pay the Purchasers' compensation,
(2) $107,192.22 to pay certain costs of issuance, and (3) $398,335.12 shall be deposited
into the Escrow Fund pursuant to the Agreement to provide for the refunding of the
Refunded Obligations. The New Money Premium is hereby allocated by the City in the
following manner: (1) $2,375.34 to pay the Purchasers' compensation, (2) $8,062.76 to
pay certain costs of issuance, and (3) $25,000.00 shall be counted against the City's voted
authorization and deposited into the construction fund as described in paragraph 3 below.
(3) $605,000.00 (representing $580,000.00 of principal and $25,000.00 of
remaining net reoffering premium allocated against the applicable voted authorization as
specified in the table included in the preamble of this Ordinance and as described) shall be
deposited into the special construction account or accounts created for the projects to be
constructed with the Bond proceeds. 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 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 12.
Furthermore, the City hereby ratifies, confirms, and approves in all respects (i) the City'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 Official
Notice of Sale, Official Bid Form, and Preliminary Official Statement by the Purchasers in
connection with the public offering and sale of the Bonds. The final Official Statement, being a
82600885.7 -22-
modification and amendment of the Preliminary Official Statement to reflect the terms of sale
referenced in the Official Bid Form (together with such changes approved by any Authorized
Official, any one or more of said officials), shall be and is hereby in all respects approved and the
Purchasers are hereby authorized to use and distribute the final Official Statement, dated October
23, 2018 in the reoffering, sale and delivery of the Bonds to the public. The Mayor, Mayor Pro
Tem, and /or City Secretary are further authorized and directed to manually execute and deliver for
and on behalf of the City 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 City Council and constitute the Official Statement
authorized for distribution and use by the Purchasers. The proper officials of the City are hereby
authorized to execute and deliver a certificate pertaining to such Official Statement as prescribed
therein, dated as of the date of payment for and delivery of the Bonds.
SECTION 19: Escrow Agreement Approval and Execution; Proceeds of Sale;
Contribution by City. The Escrow Deposit Letter dated as of October 23, 2018 to be effective
upon the initial delivery of the Bonds to the Purchasers (the Agreement) between the City and
UMB Bank, N.A., Austin, Texas (the Escrow Agent), attached hereto as Exhibit C and
incorporated herein by reference as a part of this Ordinance for all purposes, is hereby approved
as to form and content, and such Agreement in substantially the form and substance attached
hereto, together with such changes or revisions as may be necessary to accomplish the refunding
or benefit the City, is hereby authorized to be executed by the Mayor, Mayor Pro Tem, and City
Secretary and on behalf of the City and as the act and deed of this City Council; and such
Agreement as executed by said officials shall be deemed approved by the City Council and
constitute the Agreement herein approved.
Furthermore, any Authorized Official, or any one or more of said officials, and Bond
Counsel in cooperation with the Escrow Agent are hereby authorized and directed to make the
necessary arrangements for the purchase of the Federal Securities referenced in the Agreement and
the initial delivery thereof to the Escrow Agent on the day of delivery of the Bonds to the
Purchasers for deposit to the credit of the "CITY OF SCHERTZ, TEXAS GENERAL
OBLIGATION AND REFUNDING BONDS SERIES 2018 ESCROW FUND" (the Escrow
Fund, including the execution of the subscription forms for the purchase and issuance of the
"United States Treasury Securities - State and Local Government Series ", if any, for deposit to the
Escrow Fund; all as contemplated and provided by the provisions of the Act, this Ordinance, and
the Agreement.
Immediately following the delivery of the Bonds, the proceeds of sale along with a cash
contribution, if any, from the City (less certain costs of issuance, New Money Bond proceeds and
accrued interest received from the Purchasers of the Bonds) shall be deposited with the Escrow
Agent for application and disbursement in accordance with the provisions of the Agreement. The
proceeds of sale of the Bonds not so deposited with the Escrow Agent for the refunding of the
Refunded Obligations shall be disbursed for payment of costs of issuance and deposited with the
place of payment (of the Refunded Obligations) in an account in the name of the City and applied
for the purposes of providing for the payment of the costs and expenses incurred in connection
therewith or deposited in the Bond Fund for the Bonds, all in accordance with written instructions
from the Mayor or City Manager.
82600885.7 -23-
SECTION 20: Redemption of Refunded Obligations. The Refunded Obligations
referenced in the preamble hereof become subject to redemption prior to their stated maturities at
the price of par, premium, if any, and accrued interest to the dates of redemption. The Mayor shall
give written notice to the paying agent /registrar for the Refunded Obligations and the Escrow
Agent that all of the Refunded Obligations have been called for redemption, and the City Council
order that such obligations are called for redemption on the dates set forth on Schedule I attached
to this Ordinance, and such order to redeem the Refunded Obligations on such dates shall be
irrevocable upon the delivery of the Bonds. Copies of the notices of redemption pertaining to the
Refunded Obligations are attached to this Ordinance as Exhibit D and are incorporated herein by
reference for all purposes. The paying agent for the Refunded Obligations is authorized and
instructed to provide a notice of these redemptions to the holders of the Refunded Obligations in
the form and manner described in the ordinances authorizing the issuance of the Refunded
Obligations.
SECTION 21: 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 of physical delivery of the Initial Bonds in exchange
for the payment in full by the Purchasers.
"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.
"New Money Bonds " means that portion of the Bonds other than the Refunding
Bonds.
"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.
"Refunding Bonds " means that portion of the Bonds allocated in accordance with
the Regulations to refund the Refunded Obligations.
82600885.7 -24-
"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) the Bonds means the combined yield on the New Money Bonds and the
Refunding Bonds, treating them as a single issuance and as calculated pursuant to
Section 1.148 of the Regulations.
B. Not to Cause Interest to Become Taxable. The City 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 City 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 City 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 not cause the
Bonds to become "private activity bonds" within the meaning of section 141 of the Code and the
Regulations and rulings thereunder, the City 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 (including property financed with Gross Proceeds of the
Refunded Obligations), 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 (including
property financed with Gross Proceeds of the Refunded Obligations) or any property the
acquisition, construction or improvement of which is to be financed or refinanced directly
or indirectly with such Gross Proceeds (including property financed with Gross Proceeds
of the Refunded Obligations), other than taxes of general application within the City or
82600885.7 -25-
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
rulings thereunder, the City 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 not cause the Bonds
to become "arbitrage bonds" within the meaning of section 148 of the Code and the Regulations
and rulings thereunder, the City 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 City 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 City 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 City 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 City may commingle Gross
Proceeds of the Bonds with other money of the City, provided that the City separately
accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired
therewith.
(2) Not less frequently than each Computation Date, the City 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 City shall maintain such calculations with its
82600885.7 -26-
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 gross income
of the owners thereof for federal income tax purposes, the City 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 City 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 City 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) At the time the original bonds refunded by the Bonds were issued, the City
reasonably expected to spend at least eighty -five percent (85 %) of the spendable proceeds
of such bonds within three years after such bonds were issued.
(2) Not more than fifty percent (50 %) of the proceeds of the original bonds
refunded by the Refunding Bonds were, and proceeds of the New Money Bonds are
expected to be, invested in Nonpurpose Investments having a substantially guaranteed
Yield for a period of 4 years or more.
82600885.7 -27-
(3) The City reasonably expects to spend eighty -five percent (85 %) of the
spendable proceeds of the New Money Bonds within three years after the date of issuance
thereof.
(4) Current Refunding of the Refunded Obligations. The Bonds are being
issued, in part, to refund the Refunded Obligations, and the Bonds will be issued, and
certain proceeds thereof used, within 90 days after the Closing Date for the redemption of
the Refunded Obligations. In the issuance of the Bonds, the City has employed no "device"
to obtain a material financial advantage (based on arbitrage), within the meaning of section
149(d)(4) of the Code, apart from savings attributable to lower interest rates. The City has
complied with the covenants, representations, and warranties contained in the documents
executed in connection with the issuance of the Refunded Obligations. Accordingly, the
City expects to invest the Bond proceeds to be used to refund the Refunded Obligations
without regard to Yield restrictions.
K. Elections. The City hereby directs and authorizes each Authorized Official, 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 22: Satisfaction of Obligation of City. If the City 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 of taxes
levied under this Ordinance and all covenants, agreements, and other obligations of the City 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 (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof on or prior to Stated Maturity, 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 will 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, at the Stated Maturity thereof In the event of a defeasance of
the Bonds, the City shall deliver a certificate from its financial advisor, an independent accounting
firm, 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. As and to the extent applicable, if at all, the City
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 21 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,
82600885.7 -28-
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 City or deposited as directed by the City. 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 City be remitted to the City 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 City 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 (1) 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.
SECTION 23: Ordinance a Contract — Amendments - Outstanding Bonds. The City
acknowledges that the covenants and obligations of the City 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, shall be binding on the City and its successors and assigns, and shall
not be amended or repealed by the City so long as any Bond remains Outstanding except as
permitted in this Section. The City 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 City 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 (1) extend the
time or times of payment of the principal of, premium, if any, and interest on the Bonds, reduce
the principal amount thereof, or the rate of interest thereon, or in any other way modify the terms
of payment of the principal of, premium, if any, the redemption price therefor, or interest on the
Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce the aggregate
principal amount of Bonds required for consent to any such amendment, addition, or rescission.
SECTION 24: Control and Custody of Bonds. The Mayor 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 and shall take and have charge and control of the Bonds
pending their 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 of the Bonds to the
Purchasers.
82600885.7 -29-
Furthermore, any Authorized Official, either individually or any combination of them, are
hereby authorized and directed to furnish and execute such documents relating to the City and its
financial affairs as may be necessary for the issuance of the Bonds, the approval of the Attorney
General and their registration by the Comptroller of Public Accounts and, together with the City's
financial advisors, Bond Counsel, and the Paying Agent /Registrar, make the necessary
arrangements for the delivery of the Initial Bonds to the Purchasers and the initial exchange thereof
for definitive Bonds.
SECTION 25: 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 certain legal matters as to the Bonds, said opinion
to be dated and delivered as of the date of initial delivery and payment for such Bonds. Printing
of a true and correct copy of said opinion on the reverse side of each of the Bonds, with appropriate
certificate pertaining thereto executed by facsimile signature of the City Secretary of the City is
hereby approved and authorized.
SECTION 26: CUSIP Numbers. CUSIP numbers may be printed or typed on the definitive
Bonds. It is expressly provided, however, that the presence or absence of CUSIP numbers on the
definitive Bonds shall be of no significance or effect as regards the legality thereof, and neither
the City nor attorneys approving said Bonds as to legality are to be held responsible for CUSIP
numbers incorrectly printed or typed on the definitive Bonds.
SECTION 27: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied, is
intended or shall be construed to confer upon any person other than the City, Bond Counsel, Paying
Agent /Registrar, 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 City, Bond Counsel, the Paying
Agent /Registrar, and the Holders.
SECTION 28: Inconsistent Provisions. All ordinances and 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 ordained herein.
SECTION 29: 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 30: Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
SECTION 31: 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 City Council hereby declares that this Ordinance would have been enacted without such invalid
provision.
SECTION 32: 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,
82600885.7 -30-
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 33: Authorization of Paying Agent/Registrar Agreement. The City Council of
the City hereby finds and determines that it is in the best interest of the City to authorize the
execution of a Paying Agent /Registrar Agreement concerning the payment, exchange, registration,
and transferability of the Bonds. A copy of the Paying Agent /Registrar Agreement is attached
hereto, in substantially final form, as Exhibit A and is incorporated by reference to the provisions
of this Ordinance.
SECTION 34: Incorporation of Preamble Recitals. The recitals contained in the preamble
hereof 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 City Council.
SECTION 35: Book -Entry Only System.
The Bonds initially shall 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 (DTC), as set forth herein. Each Stated Maturity of the Bonds shall be issued
(following cancellation of the Initial Bonds 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 & Co., as the nominee of DTC. The City and the Paying Agent /Registrar 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 F (the Representation Letter).
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City 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 City 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 City 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.
82600885.7 -31-
In the event that (a) the City 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 City determines that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall
notify the Paying Agent /Registrar, DTC, and the Depository 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
City 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 City, or
such depository's agent or designee, and if the City 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 36: 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 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 37: 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 City 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 38: No Recourse Against City 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 City or any person executing any Bond.
SECTION 39: 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.
82600985.7 -32-
MSRB means the Municipal Securities Rulemaking Board.
Rule means SEC Rule 15c2 -12, as amended from time to time.
SEC means the United States Securities and Exchange Commission.
B. Annual Reports.
The City shall file annually with the MSRB, (1) within six months after the end of each
fiscal year of the City ending in or after 2018, financial information and operating data with respect
to the City of the general type included in the final Official Statement authorized by Section 18 of
this Ordinance, being the information described in Exhibit E hereto, and (2) if not provided as part
of such financial information and operating data, audited financial statements of the City, when
and if available. Any financial statements so to be provided shall be (i) prepared in accordance
with the accounting principles described in Exhibit E hereto, or such other accounting principles
as the City may be required to employ from time to time pursuant to state law or regulation, and
(ii) audited, if the City commissions an audit of such financial statements and the audit is
completed within the period during which they must be provided. If the audit of such financial
statements is not complete within such period, then the City shall file unaudited financial
statements within such period and audited financial statements for the applicable fiscal year to the
MSRB, when and if the audit report on such financial statements becomes available. Under current
Texas law, including, but not limited to, Chapter 103, as amended, Texas Local Government Code,
the City must have its records and accounts audited annually and shall have an annual financial
statement prepared based on the audit. The annual financial statement, including the auditor's
opinion on the statement, shall be filed in the office of the City Secretary within 180 days after the
last day of the City's fiscal year. Additionally, upon the filing of this financial statement and the
annual audit, these documents are subject to the Texas Open Records Act, as amended, Texas
Government Code, Chapter 552.
If the City changes its fiscal year, it will file notice of such change (and of the date of the
new fiscal year end) with the MSRB prior to the next date by which the City otherwise would be
required to provide financial information and operating data pursuant to this Section.
C. Notice of Certain Events.
The City shall file notice of any of the following events with respect to the Bonds to the
MSRB in a timely manner and not more than 10 business days after occurrence of the event:
(1) Principal and interest payment delinquencies;
(2) Non - payment related defaults, if material;
(3) Unscheduled draws on debt service reserves reflecting financial difficulties;
(4) Unscheduled draws on credit enhancements reflecting financial difficulties;
(5) Substitution of credit or liquidity providers, or their failure to perform;
82600885.7 -33-
(6) Adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -
TEB), or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds;
(7) Modifications to rights of holders of the Bonds, if material;
(8) Bond calls, if material, and tender offers;
(9) Defeasances;
(10) Release, substitution, or sale of property securing repayment of the Bonds,
if material;
(11) Rating changes;
(12) Bankruptcy, insolvency, receivership, or similar event of the City, which
shall occur as described below;
(13) The consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of its assets, other than in the ordinary course of
business, the entry into of a definitive agreement to undertake such an action or the
termination of a definitive agreement relating to any such actions, other than pursuant to
its terms, if material; and
(14) Appointment of a successor or additional paying agent /registrar or the
change of name of a paying agent /registrar, if material.
For these purposes, any event described in the immediately preceding paragraph (12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement, or liquidation by a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the
City.
The City shall file notice with the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with this Section by the time
required by this Section.
D. Limitations, Disclaimers, and Amendments.
The City shall be obligated to observe and perform the covenants specified in this Section
for so long as, but only for so long as, the City remains an "obligated person" with respect to the
82600885.7 -34-
Bonds within the meaning of the Rule, except that the City in any event will give notice of any
deposit that causes the Bonds to be no longer Outstanding.
The provisions of this Section are for the sole benefit of the holders and beneficial owners
of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or
equitable right, remedy, or claim hereunder to any other person. The City undertakes to provide
only the financial information, operating data, financial statements, and notices which it has
expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any
other information that may be relevant or material to a complete presentation of the City's financial
results, condition, or prospects or hereby undertake to update any information provided in
accordance with this Section or otherwise, except as expressly provided herein. The City does not
make any representation or warranty concerning such information or its usefulness to a decision
to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY
THE CITY, WHETHER NEGLIGENT OR WITH OR WITHOUT FAULT ON ITS PART, OF
ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF
ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH
BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC
PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances that arise from a change in legal requirements, a change in law, or a change
in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this
Section, as so amended, would have permitted an underwriter to purchase or 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 City (such as nationally recognized bond counsel) determines that such
amendment will not materially impair the interests of the holders and beneficial owners of the
Bonds. The City may also repeal or amend the provisions of this Section if the SEC amends or
repeals the applicable provisions of the Rule or any court of final jurisdiction enters judgment that
such provisions of the Rule are invalid, and the City also may amend the provisions of this Section
in its discretion in any other manner or circumstance, but in either case only if and to the extent
that the provisions of this sentence would not have prevented an underwriter from lawfully
purchasing or selling Bonds in the primary offering of the Bonds, giving effect to (a) such
82600885.7 -35-
provisions as so amended and (b) any amendments or interpretations of the Rule. If the City so
amends the provisions of this Section, the City shall include with any amended financial
information or operating data next provided in accordance with this Section an explanation, in
narrative form, of the reasons for the amendment and of the impact of any change in the type of
financial information or operating data so provided.
E. Information Format — Incorporation by Reference.
The City information required under this Section shall be filed with the MSRB through
EMMA in such format and accompanied by such identifying information as may be specified from
time to time thereby. Under the current rules of the MSRB, continuing disclosure documents
submitted to EMMA must be in word - searchable portable document format (PDF) files that permit
the document to be saved, viewed, printed, and retransmitted by electronic means and the series of
obligations to which such continuing disclosure documents relate must be identified by CUSIP
number or numbers.
Financial information and operating data to be provided pursuant to this Section may be
set forth in full in one or more documents or may be included by specific reference to any document
(including an official statement or other offering document) available to the public through EMMA
or filed with the SEC.
SECTION 40: Book -Entry Only System.
The Bonds initially shall 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 (DTC), as set forth herein. Each Stated Maturity of the Bonds shall be issued
(following cancellation of the Initial Bonds 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 & Co., as the nominee of DTC. The City and the Paying Agent /Registrar 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 F (the Representation Letter).
With respect to the Bonds registered in the name of Cede & Co., as nominee of DTC, the
City 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 City 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
82600885.7 -36-
any successor thereto, as nominee for DTC, shall receive a bond certificate evidencing the
obligation of the City 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 City 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 City determines that it is in the best interest
of the beneficial owners of the Bonds that they be able to obtain certificated Bonds, the City shall
notify the Paying Agent /Registrar, DTC, and the Depository 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
City 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 City, or
such depository's agent or designee, and if the City 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 41: Further Procedures. The officers and employees of the City 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 City 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 Paying Agent /Registrar Agreement, the Official Bid Form, the
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 necessary in order to (i) correct any ambiguity or mistake or properly or more
completely document the transactions contemplated and approved by this Ordinance and as
described in the Official Statement, (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 City 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 42: Contracts with Financial Advisor and /or Bond Counsel. The City Council
authorizes the Mayor, City Manager and /or the Director of Finance, 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 City (the Financial Advisor). The City understands
82600885.7 -37-
that under applicable federal securities laws and regulations that the City must have a contractual
arrangement with its Financial Advisor relating to the sale, issuance, and delivery of the
Certificates. In addition, the City Council also authorizes the Mayor, City Manager, or the Director
of Finance, 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 City.
SECTION 43: City's Consent to Provide Information and Documentation to the Texas
MAC. The Municipal Advisory Council of Texas (the Texas AMC), 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 City hereby consents to and authorizes any Authorized
Official, Bond Counsel to the City, and /or Financial Advisor to the City 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 44: 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.
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82600885.7 -38-
ILM-Tv on 101110 r
Schedule I ............................. Table of Refunded Obligations
Exhibit A ............................... Paying Agent /Registrar Agreement
Exhibit B ............................... Official Bid Form
Exhibit C ............................... Escrow and Deposit Letter
Exhibit D ............................... Notices of Redemption
Exhibit E ............................... Description of Annual Financial Information
Exhibit F ............................... DTC Letter of Representations
82600885.7 Index - I
Schedule I
'• �=- �
City of Schertz, Texas Combination Tax and Limited Pledge Revenue Certificates
of Obligation, Series 2007, dated January 1, 2007, in the original principal amount
of $9,915,000 stated to mature on August 1 in each of the years 2020 through 2026
in the aggregate principal amount of $2,935,000, to be redeemed on November 14,
2018 (the Series 2007 Refunded Obligations).
City of Schertz, Texas General Obligation and Refunding Bonds, Series 2009,
dated July 1, 2009, in the original principal amount of $9,500,000 stated to mature
on February 1 in each of the years 2020, 2022, 2024, 2028, and 2033 in the
aggregate principal amount of $4,705,000, to be redeemed on February 1, 2019 (the
Series 2009 Refunded Obligations).
City of Schertz, Texas General Obligation Refunding Bonds, Series 2010, dated
October 1, 2010, in the original principal amount of $2,865,000 stated to mature on
February 1 in each of the years 2020 and 2021 in the aggregate principal amount of
$630,000, to be redeemed on November 14, 2018 (the Series 2010 Refunded
Obligations).
82600885.7 Schedule 1 -1
r0►.14as" H�
Paying Agent/Registrar Agreement
See Tab No. _
82600885.7 A -1
I
See Tab No.
82600885.7 B -1
[W14
Escrow and Deposit Letter
See Tab No.
82600885.7 C -1
See Tab No.
82600885.7 D -1
Description of Annual Financial Information
The following information is referred to in Section 38 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.
2. The financial information and operating data in the Official Statement under Table
1 of the Official Statement and Tables 1 through 13 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.
82600885.7 E -1
10.14 ON I 1 1,11 a]
MEM
See Tab No.
82600885.7 F-I
PASSED, APPROVED AND ADOPTED on the 23`d day of October, 2018.
CITY OF SCHERTZ, TEXAS
ay r
ATTEST:
1„ I
City Secretary
(CITY SEAL)
82600885.7 S -1