Ord 1337 06/08/2021 Revenue Bond or Ci
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ORDINANCE NO. /33-7
ORDINANCE AUTHORIZING THE ISSUANCE OF CITY .OF:CIBOLO,
TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS,SERIES 2021;
PRESCRIBING THE TERMS AND PROVISIONS THEREOF;
PRESCRIBING THE FORM, TERMS, CONDITIONS, AND RESOLVING
OTHER MATTERS INCIDENT AND RELATED TO THE 7 ISSUANCE,
SALE,AND DELIVERY OF THE BONDS,INCLUDING THE APPROVAL
AND DISTRIBUTION OF AN OFFICIAL STATEMENT.PERTAINING
THERETO; AUTHORIZING THE EXECUTION OF '.A. PAYING
AGENT/REGISTRAR AGREEMENT, AN ESCROW DEPOSIT-LETTER,
AND A PURCHASE CONTRACT; COMPLYING WITH THE LETTER OF
REPRESENTATIONS ON FILE WITH THE DEPOSITORY TRUST
COMPANY; DELEGATING THE AUTHORITY TO CERTAIN CITY
STAFF TO EXECUTE CERTAIN DOCUMENTS RELATING TO THE
SALE OF THE BONDS; AND PROVIDING AN EFFECTIVE DATE
DATE OF APPROVAL:JUNE 8;2021
WHEREAS, the CITY OF CIBOLO,TEXAS (the "City") in Guadalupe County, Texas, is a
political subdivision of the State of Texas operating as a home-rule city pursuant to the Texas
Local Government Code and its City Charter which was approved by the qualified voters of the.
City on May 8, 2004; and
WHEREAS, the City currently has outstanding two series of revenue bonds which are
equally and ratably secured by a first lien on and pledge of the"Net Revenues" (as described and
defined in Section 6 hereof)of the City combined waterworks and sewer system(as described and
defined in Section 6 hereof as the "System"),which bonds are described as follows:
City of Cibolo, Texas Utility System Revenue Bonds, Series 2006, dated February
1, 2006, maturing on February 1 in the years 2013 through 2026 in the aggregate
principal amount of$2,325,000;
City of Cibolo, Texas Utility System Revenue Bonds, Series 2012, dated December
1, 2012, maturing on February 1 in the years 2013 through 2032 in the aggregate .
principal amount of S7,640,000 (together defined in Section 6 hereof as the
"Previously Issued Prior Lien Obligations"); and ,
WHEREAS, the City Council of the City hereby finds and declares a public purpose and
deems it advisable and in the best interests of the City to issue a series of refunding bonds on a
parity with the Previously Issued Prior Lien Obligations (defined,in Sections 2 and 6 hereof as the
"Bonds") for the purpose of refunding currently outstanding obligations of the City's waterworks
and sewer systems for debt service savings (the "Refunded Obligations") and to.pay the costs of
issuance relating to the Bonds; and
WHEREAS, pursuant to the provisions of Chapter 1207, as amended, Texas Government
Code(the"Act's,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, BOKF, NA, Dallas, Texas, currently serves as the paying agent for the
Refunded Obligations; and
HIREREAS, , is hereby appointed
as the Paying Agent and the Escrow Agent(hereinafter defined)for the Bonds (hereafter defined);
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 utility system refunding bonds herein authorized and being issued to
restructure the City's debt service and associated tax rates in the coming years, and such refunding
will result in a net present value savings of $ (or %), and a gross
savings of$ ; and
WHEREAS, the Bonds shall be issued as "Additional Prior Lien Obligations" (as
described and defined in Section 6 hereof) and shall be equally and ratably secured by a lien on
and pledge of the Net Revenues on a parity with the lien on and pledge of the Net Revenues which
secures the outstanding Previously Issued Prior Lien Obligations; and
WHEREAS, it is hereby officially found and determined that the meeting at which this
Ordinance was adopted was open to the public and public notice of the time, place,:and purpose
of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended;
THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
CIBOLO, TEXAS, TIIAT,
SECTION 1. AMOUNT AND PURPOSE OF THE BONDS; DELEGATION
Obligations of the City are hereby authorized to be issued and delivered in the aggregate principal
amount of $ FOR THE PURPOSE OF REFUNDING CERTAIN CURRENTLY
OUTSTANDING OBLIGATIONS OF THE CITY'S WATERWORKS AND SEWER
SYSTEMS FOR DEBT SERVICE SAVINGS AND TO PAY COSTS OF ISSUANCE
As authorized by the Act, as amended, Texas Government Code, the Mayor, the Mayor
Pro Tem, the City Manager, the Director of Finance, and/or the City Secretary (each of the
foregoing, individually, an "Authorized Official") are each hereby authorized, appointed, and
designated as the officer of the City authorized to act on behalf of the City in selling and delivering
the Bonds authorized herein and carrying out the procedures specified in this Ordinance, including
approval of the aggregate principal amount of each maturity of the Bonds, the redemption
provisions therefor, the method of sale, the designation of the Bonds as taxable or-tax-exempt
obligations, the designation or deem designation of the Bonds as "qualified tax exempt
obligations"as necessary or appropriate,and the rate of interest to be borne on the principal amount,
of each series. Each Authorized Official, acting for and on behalf of the City, is authorized to
execute the Approval Certificate attached as Schedule II hereto. The Bonds shall be issued in the
principal amount not to exceed $5,000,000, the latest permitted maturity of the Bonds will be
August 1, 2034, the refunding will result in a net present value savings of at least 4.00%, and the
net effective per annum interest rate shall not exceed a rate greater than 6.00% per annum
calculated in a manner consistent with the provisions of Chapter 1204, as amended, Texas
Government Code. Each Authorized Official may select and effectuate the provision of a bond
insurance policy related to the Bonds, as necessary or desired. The execution of the Approval
Certificate shall evidence the sale date of the Bonds by the City to the Purchasers (hereinafter
defined) in accordance with the provisions of the Act.Upon execution of the Approval Certificate,
Bond Counsel is authorized to complete this Ordinance to reflect such finalterms.
SECTION 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS AND
MATURITIES OF BONDS. Each revenue bond issued pursuant to this Ordinance shall be
designated: "CITY OF CIBOLO, TEXAS UTILITY SYSTEM REVENUE REFUNDING
BONDS, SERIES 2021" ( the "Bonds") and initially there shall be issued, sold and delivered
hereunder one fully registered bond,without interest coupons,dated as of ,2021,with
Bonds issued in replacement thereof being in the denomination of$5,000 or any integral multiple
thereof, and with Bonds issued and delivered.in substitution for the Initial Bond being numbered
consecutively from R-1 upward, all payable to the initial registered owner thereof(with the Initial
Bond being payable to the initial purchaser designated in Section 28 hereof), or to the registered
assignee or assignees of said bond or any portion or portions thereof(in each case,the"Registered
Owner"). The Bonds shall mature on August 1 in each of the years and in the respective principal
amounts as set forth below:
YEAR OF PRINCIPAI,
MATURITY AMOUNT($)
2022
2023
2024
2025
2026
2026
2028
2029
2030
2031
2032
SECTION 3. INTEREST. (a) The Bonds shall bear interest calculated on the basis of a
360-day year composed of twelve 30-day months from the dates specified in the FORM OF
BONDS set forth in this Ordinance to their respective dates of maturity at the rates per annum as
set forth below:
YEAR OF INTEREST
MATURITY RATE(%)
2022
2023
2024
3
2025
2026
2027
2028
2029
2030
2031
2032
Said interest shall be payable in the manner provided and on the dates stated in the FORM OF
BONDS set forth in this Ordinance.
SECTION 4. CHARACTERISTICS OF THE BONDS. (a) Registration,Transfer,sand
Exchange; Authentication. The City shall keep or cause to be kept at the designated corporate
trust or commercial banking office (currently located in Austin, Texas) of
_ (the "Paying Agent/Registrar") books or records for the registration of the transfer.-and
exchange of the Bonds (the "Registration Books"), the City hereby appoints the Paying .
Agent/Registrar as its registrar and transfer agent to keep such books or records and make such
registrations of transfers and exchanges under such reasonable regulations as the City and Paying
Agent/Registrar may prescribe, and the Paying Agent/Registrar shall make such registrations,
transfers and exchanges as herein provided. Attached hereto as Exhibit A is a copy of the Paying
Agent/Registrar Agreement between the City and the Paying Agent/Registrar which is hereby
approved in substantially final form, and the Mayor and City Secretary of the City are hereby
authorized to execute the Paying Agent/Registrar Agreement and approve any changes in the.final
form thereof.
The Paying Agent/Registrar shall obtain and record in the Registration Books the address
of the Registered Owner of each Bond to which payments with respect to the Bonds shall be
mailed, as herein provided; but it shall be the duty of each Registered Owner to notify the Paying
Agent/Registrar in writing of the address to which payments shall be mailed, and such interest
payments shall not be mailed unless such notice has been given. To the extent possible and under
reasonable circumstances, all transfers of Bonds shall be made within three business days after.
request and presentation thereof. The City shall have the right to inspect the Registration Books
during regular business hours 'of the Paying Agent/Registrar, but otherwise the Paying
Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by
law, shall not permit their inspection by any other entity. The Paying Agent/Registrar's standard
or customary fees and charges for making such registration, transfer, exchange and delivery of a
substitute Bond or Bonds shall be paid as provided in the FORM OF BOND set forth in this
Ordinance. Registration of assignments, transfers and exchanges of Bonds shall be made in the
manner provided and with the effect stated in the FORM OF BOND set forth in this Ordinance.
Each substitute Bond shall bear a letter and/or number to distinguish it from each other Bond.
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Except as provided in(c)below,an authorized representative of the Paying Agent/Registrar
shall, before the delivery of any such Bond, date and facsimile, electronically, or manually sign
the Paying Agent/Registrar's Authentication Certificate, and no such Bond shall be deemed to be
issued or outstanding unless such Certificate is so executed. The Paying Agent/Registrar
promptly shall cancel all paid Bonds and Bonds surrendered for transfer and exchange. No
additional ordinances, orders, or resolutions need be passed or adopted by the governing body of
the City or any other body or person so as to accomplish the foregoing transfer and exchange of
any Bond or portion thereof, and the Paying Agent/Registrar shall provide for the printing,
execution, and delivery of the substitute Bonds in the manner prescribed herein, and said Bonds
shall be of type composition printed on paper with lithographed or steel engraved borders of
customary weight and strength. Pursuant to Chapter 1201,Texas Government Code,as amended,
and particularly Subchapter D and Section 1201.067 thereof,the duty of transfer and exchange of
the Bonds as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the,.
execution of said Certificate,the transferred and exchanged Bond shall be valid, incontestable,and
enforceable in the same manner and with the same effect as the Bonds which initially were issued
and delivered pursuant to this Ordinance, approved by the Attorney General, and registered by the
Comptroller of Public Accounts.
(b) Payment of Bonds and Interest. The City hereby further appoints the Paying
Agent/Registrar to act as the paying agent for paying the principal-of and interest on the Bonds,
all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all
payments.made by the City and the Paying Agent/Registrar with respect to the Bonds.
(c) In General. The Bonds (i) shall be issued in fully registered form, without interest
coupons, with the principal of and interest on such Bonds to be.payable.only to the Registered .
Owners thereof, (ii)may be redeemed prior to their scheduled maturities (notice of which shall be
given to the Paying Agent/Registrar by the City at least 50 days prior to any such redemption date), ;
(iii) may be transferred and assigned, (iv) may be exchanged for other Bonds, (v) shall have the.
characteristics, (vi) shall be signed, sealed, executed and authenticated, (vii) the principal of and
interest on the Bonds shall be payable, and (viii) shall be administered and the Paying.
Agent/Registrar and the City shall have certain duties and responsibilities with respect to the
Bonds, all as provided, and in the manner and to the effect as required or indicated, in,the FORM
OF BOND set forth in this Ordinance. The Initial Bond is not required to be, and shall not be,
authenticated by the Paying Agent/Registrar, but on each substitute Bond issued in exchange for
the Initial Bond issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING
AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the
FORM,OF BOND. In lieu of the executed Paying Agent/Registrar's Authentication Certificate
described above, the Initial Bond delivered on the closing date (as. further described in
subparagraph (i) below) shall have attached thereto the Comptroller's Registration Certificate
substantially in the form set forth in the FORM OF BOND below,manually,facsimile,or manually
executed by the Comptroller of Public Accounts of the State of Texas or by-his duly authorized
agent, which Certificate shall be evidence that the Initial Bond has been duly approved by the
Attorney General of the State of Texas and that it is a valid and binding obligation of the City, and
has been registered by the Comptroller.
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(d) Substitute Pang Agent/Registrar._ The City covenants with the Registered Owners
of the Bonds that at all times while the Bonds are outstanding the City will provide a competent
and legally qualified bank, trust company, financial institution, or other agency with trust powers
to act as and perform the services of Paying Agent/Registrar for the Bonds under this Ordinance,
and that the Paying Agent/Registrar will be one entity and shall be an entity registered with the
Securities and Exchange Commission. The City reserves the right to, and may, at its option,
change the Paying Agent/Registrar upon not less than 120 days written notice to the Paying
Agent/Registrar,to be effective not later than 60 days prior to the next principal or interest payment
date after such notice. In the event that the entity at any time acting as Paying Agent/Registrar
(or its successor by merger, acquisition, or other method) should resign or otherwise cease to act
as such, the City covenants that promptly it will appoint a competent and legally qualified bank,
trust company, financial institution, or other agency to act as Paying Agent/Registrar under this
Ordinance. Upon any change in the Paying Agent/Registrar,the previous Paying Agent/Registrar
promptly shall transfer.and deliver the Registration Books (or a copy thereof), along with all other
pertinent books and records relating to the Bonds, to the new Paying Agent/Registrar designated
and appointed by the City. Upon any change in the Paying Agent/Registrar, the City promptly
will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each Registered
Owner of the Bonds, by United States mail, first-class postage prepaid, which notice also shall
give the address of the new Paying Agent/Registrar. By accepting the position and performing as
such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this
Ordinance, and a certified copy of this Ordinance shall be delivered to each Paying
Agent/Registrar.
(e) Book-Entry Only System for Bonds. The Bonds issued in exchange for the Initial
Bond initially issued to the purchaser specified in Section 28 herein shall'be initially issued in the
form of a separate single fully registered Bond for each of the maturities thereof. Upon initial
issuance, the ownership of each such Bond shall be registered in the name of Cede & Co., as
nominee of The Depository Trust Company of New York ("DTC"), and except as provided in
subsection (i) hereof, all of the outstanding Bonds shall be registered in the name of Cede & Co.,
as nominee of DTC.
With respect to 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 securities brokers
and dealers, banks, trust companies, clearing corporations and certain other organizations .on
whose behalf DTC was created ("DTC Participant") to hold securities to facilitate the clearance
and settlement of securities transaction among DTC Participants or to any person on behalf of
whom such a DTC Participant holds an interest in the Bonds. 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 DTC
Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any DTC
Participant or any other person, other than a Registered Owner of the Bonds, as shown on the
Registration Books,' of any notice with respect to the Bonds, or (iii) the payment to any DTC
Participant or any other person, other than a Registered Owner of Bonds, as shown in the
Registration Books of any amount with respect to principal of or interest on the Bonds.
Notwithstanding any other provision of this Ordinance to the contrary, the City and the Paying
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Agent/Registrar shall be entitled to treat and consider the person in whose name each Bond is
registered in the Registration Books as the absolute owner of such Bond for the purpose of payment
of principal and interest with respect to such Bond, for the purpose of registering transfers with
respect to such Bond, and for all other purposes whatsoever. The Paying Agent/Registrar shall
pay all principal of and interest on the Bonds only to or upon the order of the Registered Owners,
as shown in the Registration Books as provided in this Ordinance, or their respective attorneys
duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and
discharge the City's obligations with respect to payment of principal of and interest on the Bonds
to the extent of the sum or sums so paid. No person other than a Registered Owner, as shown in
the Registration Books, shall receive a Bond certificate evidencing the obligation of the City to
make payments of principal 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 being mailed to the Registered Owner at the close of business on the Record
Date,the words ".Cede & Co." in this Ordinance shall refer to such new nominee of DTC.
(f) Successor Securities Depository; Transfers Outside Book-Enja OnlySstems.. In
the event that the City determines that DTC is incapable of discharging its responsibilities
described herein and in the representation,letter of the City to DTC or 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 .
(i) appoint a successor securities depository,,qualified to act as such under Section 17(a) of the
Securities and Exchange Act of 1934, as amended, notify DTC and DTC Participants of the
appointment of such successor securities depository and transfer one or more separate Bonds to
such successor securities depository or (ii) notify DTC and DTC Participants of the availability
through DTC of Bonds and transfer one or more separate Bonds to DTC Participants having Bonds
credited to their DTC accounts. In such event, the Bonds shall no longer be restricted to being
registered in the Registration Books in the name of Cede & Co., as nominee of DTC, but may be
registered in the name of the successor securities depository, or its nominee, or in whatever name
or names Registered Owners transferring or exchanging Bonds shall designate, in accordance with
the provisions of this Ordinance.
(g) Payments to Cede & Co. 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 for DTC,.
all payments with respect to principal of 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 of the City to DTC.
(h) DTC Letter of Representation. The officers of the City are herein authorized for and
on behalf of the City and as officers of the City to enter into one or more Letters of Representation
with DTC establishing the book-entry only system with respect to the Bonds.
(i) Delivery of Initial Bond. On the closing date, one Initial Bond representing the entire
principal amount of the Bonds, payable in stated installments to the initial Registered Owner
named in Section 28 hereof, executed by manual or facsimile signature of the Mayor and City
Secretary of the City, approved by the Attorney General of Texas, and registered and manually or
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electronically signed by the Comptroller of Public Accounts of the State of Texas,will be delivered
to the initial purchaser or its designee. Upon payment for the Initial Bond, the Paying
Agent/Registrar shall cancel the Initial Bond and deliver to the initial Registered Owner or its
designee one registered definitive Bond for each year of maturity of the Bonds, in the aggregate
principal amount of all of the Bonds for such maturity.
SECTION 5. FORM OF BOND. The form of the Bonds, including the form of Paying
Agent/Registrar's Authentication Certificate,the form of Assignment,and the form of Registration
Certificate of the Comptroller of Public Accounts of the State of Texas (to be attached only to the
Initial Bond initially issued and delivered pursuant to this Ordinance to the initial purchaser named
in Section 28 hereof), shall be,respectively, substantially as follows,with such appropriate varia-
tions, omissions, insertions, or completions as are permitted or required by this Ordinance.
FORM OF BOND
REGISTERED REGISTERED PRINCIPAL
NO.R- AMOUNT
UNITED STATES OF AMERICA
STATE OF TEXAS
CITY OF CIBOLO, TEXAS
UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES 2021
Interest Rate: Maturi , Date: Date of Series: CUSIP No.:
REGISTERED OWNER:
PRINCIPAL AMOUNT
ON THE MATURITY DATE SPECIFIED ABOVE, the CITY OF CIBOLO,TEXAS (the
"City"), in Guadalupe County, Texas, being a political subdivision of the State of Texas, hereby
promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called
the "Registered Owner").the principal amount set forth above, and to pay interest thereon from
2021, until the earlier of the Maturity Date specified above or the date of redemption
prior to maturity, at the Interest Rate per annum specified above, with interest being payable on
February 1, 2022, and on each August 1 and February 1 thereafter; except that if this Bond is
required to be authenticated and the date of its authentication is later than the first Record Date
(hereinafter defined), such principal amount shall bear interest from the interest payment date next
preceding the date of authentication, unless such date of authentication is after any Record Date
but on or before the next following interest payment date, in which case such principal amount
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shall bear interest from such next following interest payment date; provided, however, that if on
the date of authentication hereof the interest on the Bond or Bonds, if any, for which this Bond is
being exchanged is due but has not been paid, then this Bond shall bear interest from the date to
which such interest has been paid in full.
THE PRINCIPAL OF AND INTEREST ON THIS BOND are payable in lawful money
of the United States of America, without exchange or collection charges. The principal of this
Bond shall be paid to the Registered Owner hereof upon presentation and surrender of this Bond
at maturity,or upon the date fixed for its redemption prior to maturity, at the designated corporate
trust or commercial banking office, currently located in ,Texas,of ,which
is the "Paying Agent/Registrar" for this Bond. The payment of interest on this Bond shall be
made by the Paying Agent/Registrar to the Registered Owner hereof on each interest payment date
by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on,
and payable solely from, funds of the City required by the ordinance authorizing the issuance of
the Bonds (the "Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose
as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by
United States mail, first-class postage prepaid, on each such interest payment date, to the
Registered Owner hereof, at its address as it appeared on the fifteenth day of the month next
preceding such date (the "Record Date") on the Registration Books kept by the. Paying
Agent/Registrar, as as hereinafter described. In the event of a non-payment of interest on a
scheduled payment date, and for 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 15 days after the Special Record Date) shall be sent at least five business days prior
to the Special Record Date by United States mail, first class,postage prepaid, to the address of the
Registered Owner of this Bond appearing on the books of the Paying Agent/Registrar at the close
of business on the last business day next preceding the date of mailing of such notice. Any
accrued interest due upon the redemption of this Bond prior to maturity as provided herein shall
be paid to the Registered Owner at the principal corporate trust office of the Paying
Agent/Registrar upon presentation and surrender of this Bond for redemption and payment at the .
principal corporate trust office of the Paying Agent/Registrar (unless the redemption date is a
regular semi-annual interest payment date in which case interest shall be paid in the normal
course). The City covenants with the Registered Owner of this Bond that on or before each .
principal payment date and interest payment date for this Bond it will make available to the Paying
Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts
required to provide for the payment, in immediately available funds, of all principal of and interest
on the Bonds, when due.
IF THE DATE FOR THE PAYMENT of the principal of or interest on this Bond shall be
a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the city where 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 Saturday, Sunday, legal
holiday, or day on which banking institutions are authorized to close; and payment on such date
shall have the same force and effect as if made on the original date payment was due.
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THIS BOND IS ONE OF A SERIES OF BONDS dated as of , 2021,
authorized in accordance with the Constitution and laws of the State of Texas in the principal
amount of $ FOR THE PURPOSE OF PROVIDING FUNDS TO REFUND
CERTAIN CURRENTLY OUTSTANDING OBLIGATIONS OF THE CITY'S
WATERWORKS AND SEWER SYSTEMS FOR DEBT SERVICE SAVINGS AND TO PAY
COSTS OF ISSUANCE
ON AUGUST 1, 20 , OR ON ANY DATE THEREAFTER, the Bonds of this Series
maturing on and after August 1,20_, may be redeemed prior to their scheduled maturities, at the
option of the City, with funds derived from any available and lawful source, as a whole, or in part
(provided that a portion of a Bond may be redeemed only in an integral multiple of$5,000), at the
redemption price of the principal amount of Bonds called for redemption, plus accrued interest
thereon to the date fixed for redemption. The City shall determine the maturity or maturities, and
the principal amount of Bonds within each maturity, to be redeemed. If less than all Bonds of a
maturity are to be redeemed, the particular Bonds to be redeemed shall be selected by the Paying
Agent/Registrar at random and by lot; provided,that during any period in which ownership of the
Bonds is determined only by a book entry at a securities depository for the Bonds, if fewer than
all of the Bond of the same maturity and bearing the same interest rate are to be redeemed, the
particular Bonds shall be selected in accordance with the arrangements between the City and the
securities depository. -
AT LEAST 30 DAYS PRIOR to the date fixed for redemption of Bonds prior to maturity
a written notice of such redemption shall be sent by the Paying Agent/Registrar by United States
mail,first-class postage prepaid,to the registered owner of each Bond to be redeemed at its,address
as it appeared on the 45th day prior to such redemption date. The notice with respect to an
optional redemption of Bonds may state (1) that it is conditioned upon the deposit of moneys, in
an amount equal to the amount necessary to effect the redemption,with the Paying Agent/Registrar
no later than the redemption date, or(2)that the City retains the right to rescind such notice at any
time prior to the scheduled redemption date if the City delivers a certificate of an authorized
representative to the Paying Agent/Registrar instructing the Paying Agent/Registrar to rescind the
redemption notice, and such notice and optional redemption shall be of no effect if such moneys
are not so deposited or if such notice is so rescinded. By the date fixed for any such,redemption
due provision shall be made with the Paying Agent/Registrar for the payment of the required
redemption price for the Bonds which are to be so redeemed, plus accrued interest thereon to the
date fixed for redemption. If such written notice of redemption is mailed and if due provision for
such payment is made, all as provided above, the Bonds which are to be so redeemed thereby
automatically shall be treated as redeemed prior to their scheduled maturities, and they shall not
bear interest after the date fixed for redemption,and they shall not be regarded as being outstanding
except for the right of the registered owners to receive the redemption price plus accrued interest
from the Paying Agent/Registrar out of the funds provided for such payment.
THISBOND MAYBEASSIGNED and shall be transferred only in the Registration Books
of the City kept by the Paying Agent/Registrar acting in the capacity of registrar for the Bonds,
upon the terms and conditions set forth in the Ordinance. Among other requirements for such
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assignment and transfer, this Bond must be presented and surrendered to the Paying
Agent/Registrar, together with proper instruments of assignment, in form and with guarantee of
signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Bond to the
assignee in whose name this Bond is to be transferred and registered. The form of Assignment
printed on this Bond shall be executed by the Registered Owner, or its duly authorized attorney or
representative, to evidence the assignment hereof. The City shall pay the Paying
Agent/Registrar's standard or customary fees and charges for making such transfer, but the one
requesting such transfer shall pay any taxes or other governmental charges required to be paid with
respect thereto. The Paying Agent/Registrar shall not be required to make transfers of registration
of this Bond (i) during the period commencing with the close of business on any Record Date and
ending with the opening of business on the next following principal or interest payment date, or
(ii) with respect to any Bond called for redemption prior to maturity, within 45 days prior to its
redemption date. The Registered Owner of this Bond shall be deemed and treated by the City and
the Paying Agent/Registrar as the absolute owner hereof for all purposes, including payment and
discharge of liability upon this Bond to the extent of such payment, and the City and the Paying
Agent/Registrar shall not be affected by any notice to the contrary.
WHENEVER THE BENEFICL4L OWNERSHIP of this Bond is determined by a book .
entry at a securities depository for the Bonds,the foregoing requirements of holding, delivering or
transferring this Bond shall be modified to require the appropriate person or entity to meet the
requirements of the securities depository as to registering or transferring the book entry to produce
the same effect.
IN THE EVENT ANY PAYING AGENTIREGISTRAR for the Bonds is changed by the
City, resigns, or otherwise ceases to act as such, the City has covenanted in the Ordinance that it
promptly will appoint a competent and legally qualified substitute therefor, and .promptly will
cause written notice thereof to be mailed to the registered owners of the Bonds.
ITIS HEREBY CERTIFIED,RECITED,AND COVENANTED that this Bond has been
duly and validly authorized, issued, and delivered;that all acts, conditions, and things required or
proper to be performed, exist, and be done precedent to or in the authorization, issuance, and
delivery of this Bond have been performed, existed, and been done in accordance with law; and.
that this Bond is a special obligation of the City secured by and payable from,together with other
currently outstanding Prior Lien Obligations(as defined in the Ordinance),an irrevocable first lien
on and pledge of"Net Revenues"(as defined in the Ordinance)of the City's Utility System(which
consists of the City's combined waterworks and sewer systems).
THE REGISTERED OWNER HEREOF shall never have the right to demand payment
of this Bond out of any funds raised or to be raised by taxation
THE CITY HAS RESERVED THE RIGHT, subject to the restrictions stated in the
Ordinance,to issue"Additional Prior Lien Obligations"which also may be secured by and payable
from an irrevocable first lien on and pledge of the aforesaid Net Revenues on a parity and of equal
dignity in all respects with this Bond.
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THE CITY ALSO HAS RESERVED THE RIGHT to amend the Ordinance with the
approval of the registered owners of at least a majority in principal amount of all outstanding"Prior
Lien Obligations"(which term is defined in the Ordinance and includes the outstanding Previously
Issued Prior Lien Obligations, the Bonds and all Additional Prior Lien Obligations issued on a
parity therewith), subject to the restrictions stated in the Ordinance, or without the consent of the
registered owners of the Prior Lien Obligations for the purpose of curing any ambiguity,
inconsistency,or formal defect or omission therein, or in connection with any other change if each
rating agency then maintaining a rating on the Prior Lien Obligations at the request of the City
confirms in writing that such amendment would not cause such rating agency to withdraw or
reduce its then current rating on the Prior Lien Obligations.
BYBECOMING THE REGISTERED OWNER OF THIS BOND,the Registered Owner
thereby acknowledges all of the terms and provisions of the Ordinance,agrees to be bound by such
terms and provisions, acknowledges that the Ordinance is duly recorded and available for
inspection in the official minutes and records of the governing body of the City, and agrees that
the terms.and provisions of this Bond and the Ordinance constitute a contract between the
Registered Owner hereof and the City.
IN WITNESS WHEREOF,the City has caused this Bond to be signed with the manual or
facsimile signature of the Mayor of the City and countersigned with the manual or facsimile
signature of the City Secretary of the City, and has caused the official seal of the City to be duly
impressed, or placed in facsimile, on this Bond.
(signature) (signature)
City Secretary Mayor
City of.Cibolo, Texas City of Cibolo,Texas
(CITY'S SEAL)
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*FORM OF REGISTRATION CERTIFICATE OF
THE COMPTROLLER OF PUBLIC ACCOUNTS:
COMPTROLLER'S REGISTRATION CERTIFICATE: REGISTER NO.
I hereby certify that this Bond has been examined, certified as to validity,and approved by
the Attorney General of the State of Texas, and that this Bond has been registered by the
Comptroller of Public Accounts of the State of Texas.
Witness my signature and seal this
xxxxxxxx
(COMPTROLLER'S SEAL) Comptroller of'Public Accounts
of the State of Texas
*NOTE: The Comptroller's Registration shall appear only on, or be attached
only to, the Bonds originally issued under this Ordinance.
FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE
(To be executed if this Bond is not accompanied by an executed Registration Certificate of the
Comptroller of Public Accounts of the State of Texas)
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described in the text of this Bond;and that this Bond has been issued in exchange for a Bond which
originally was approved by the Attorney General of the State of Texas and registered by the
Comptroller of Public Accounts of the State of Texas.
Dated
Texas
Paying Agent/Registrar
By
Authorized Representative
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FORM OF ASSIGNMENT
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
Please insert Social Security or Taxpayer (Please print or typewrite name and address,
Identification Number of Transferee including zip code of Transferee)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
, attorney to
register the transfer of the within Bond on the books kept for registration thereof, with full power
of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed NOTICE: The signature above must
by a member firm of the New York Stock correspond with the name of the Registered
Exchange or a commercial bank or trust Owner as it appears upon the front of this
company. Bond-in every particular, without alteration
or enlargement or any change whatsoever.
INITIAL BOND INSERTIONS
The Initial Bond shall be in the form set forth above except that:.,
(A) Immediately under the name of the Bond, the headings "INTEREST RATE" and
"MATURITY DATE" shall be completed with the words "As shown below" and
"CUSIP NO. "shall be deleted.
(B) The first paragraph shall be deleted and the following shall be inserted:
"ON THE RESPECTIVE MATURITY DATES specified below, the CITY OF CIBOLO,
TEXAS (the "City"), in Guadalupe County_, Texas, being a political,subdivision of the State of
Texas, hereby promises to pay to the Registered Owner specified above, or registered assigns
(hereinafter called the"Registered Owner"),the respective Principal Installments specified below,
and to pay interest thereon (calculated on the basis of a 360-day year composed of twelve 30-day
months) from , 2021, at the respective Interest Rates per annum specified below,
payable on February 1, 2022, and on each August 1 and February 1 thereafter to the respective
Maturity Dates specified below, or the date of redemption prior to maturity. The respective
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Maturity Dates,Principal Installments and Interest Rates for this Bond are set forth in the following
schedule:
Maturity Date Principal Interest
(August 1) Installment($) Rate (%)
[Insert information from Sections 2 and 3 above]
(C) The Initial Bond shall be numbered"T-1."
SECTION 6. DEFINITIONS. In addition to the capitalized terms which are defined in
the recitals or in Section 1 through Section 4 of this Ordinance, the following words and terms
used in this Ordinance shall have the following meanings unless the context or use indicates
another meaning or intent.
"Additional Limited Pledge Obligations" means bonds, notes, warrants, certificates of
obligation, or-other evidences of indebtedness hereafter issued by the City payable wholly or in
part from a pledge of and lien on Net Revenues of the System which pledge of revenues is limited
pursuant to Section 1502.052, as amended, Texas Government Code, all:as further provided in
Section 18 of this Ordinance.
"Additional Prior Lien Obligations" means any bonds, notes, warrants, certificates .of
obligation, or other evidences of indebtedness which the City reserves the right to issueor enter
into, as the case may be, in the future under the terms and conditions provided in Section 16 of this
Ordinance and which are equally and ratably secured by a prior and first lien,on and pledge of the
Net Revenues of the System.
"Average Annual Debt Service Requirements" means that average amount which, at the
time of computation, will be required to pay the Debt Service Requirements on all Outstanding
Prior Lien Obligations when due(either at Stated Maturity or mandatory redemption) and derived
by dividing the total of such Debt Service Requirements by the number.of Fiscal Years then
remaining before the final Stated Maturity of such Prior Lien Obligations. For purposes of this
definition,a fractional period of a Fiscal Year shall be treated as an entire Fiscal Year. Capitalized
interest payments provided from bond proceeds shall be excluded in making the aforementioned
computation.
"Bond Fund" means the special Fund previously created and established by the.City and
further described in Section 10 of this Ordinance.
"Bonds" means the CITY OF CIBOLO, TEXAS UTILITY SYSTEM REVENUE REFUNDING
BONDS,SERIES 2021 authorized by this Ordinance.
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"City" means the CITY OF CIBOLO, 'TEXAS, located in Guadalupe County, Texas, and,
where appropriate,the City Council of the City.
"Credit Facility" means (i) a policy of insurance or a surety bond, issued by an issuer of
policies of insurance insuring the timely payment of debt service on governmental obligations,
provided that a national rating agency having an outstanding rating on any Prior Lien Obligation
would rate such Prior Lien Obligation fully insured by a standard policy issued by the insurer in
its highest generic rating category for such obligations, or (ii) a letter or line of credit issued by
any financial institution, provided that a national rating agency having an outstanding rating on
any Prior Lien Obligations would rate such Prior Lien Obligations in one of its two highest generic
rating categories for such obligations if the letter or line of credit proposed to be issued by such
financial institution secured the timely payment of the entire principal amount of such Prior Lien
Obligations and the interest thereon; provided, however, when all Prior Lien Obligations issued
and delivered prior to December 1,2012 are no longer outstanding,the rating category requirement
in clause (i) above shall be reduced from the "highest generic rating category" and the phrase "in
its highest generic rating category" contained in clause (i) above shall thereafter read "in not less.
than its second highest generic rating category(including any modifier within such second highest
generic rating category)".
"Credit Provider" means any bank, financial institution, insurance company, surety bond
provider,or other institution which provides, executes,issues,or otherwise is a party to or provider
of a Credit Facility.
"Debt Service Requirements"means 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 calculated by
assuming (i) that the interest rate for every 12-month period on such bonds is equal to the rate of
interest reported in the most recently published edition of The Bond Buyer(or its successor)at the
time of calculation as the "Revenue Bond Index" or, if such Revenue Bond Index is no longer
being maintained by The Bond Buyer(or its successor)at the time of calculation,,such interest rate
shall be assumed to,be 80% of the rate of interest then being paid on United States Treasury
obligations of like maturity and (ii) that the principal of such bonds is amortized such that annual
debt service is substantially level over the remaining stated life of such bonds,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.
"Depository"means an official depository bank of the City.
"Fiscal Year" means the twelve-month accounting period used by the City in connection
with the operation of the System, currently ending on September 30th of each year, which may be
any twelve consecutive month period established by the City, but in no event may the Fiscal Year
be changed more than one time in any three calendar year period.
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"Gross Revenues" means all income, receipts, and revenues of every nature derived or
received from the operation and ownership (excluding refundable meter deposits, restricted gifts, _
and grants in aid of construction) of the System.
"Holder" or "Holders" means the registered owner whose name appears in the Security,
Register for any Prior Lien Obligation.
"Inferior Lien Obligations" means the currently outstanding Limited Pledge Obligations
and.any Junior Lien Obligations, Subordinate Lien Obligations, or Additional Limited Pledge
Obligations hereafter issued by the City.
"Junior Lien Obligations"means any bonds, notes, warrants, certificates of obligation or.
any similar obligations issued by the City that are payable wholly or in part from and equally and
ratably secured by a lien on and pledge of the Net Revenues of the System, such pledge being
junior and inferior to the lien on and pledge of the Net Revenues of the System that are or will be
pledged to the payment of the Prior Lien Obligations, but prior and superior tothe lien on and
pledge of the Net Revenues of the System that are or will be pledged to the payment of the currently
outstanding Limited Pledge Obligations and any Additional Limited Pledge Obligations or
Subordinate Lien Obligations issued by the City, all as further provided in Section 18 of this
Ordinance.
"Limited Pledge Obligations" means the currently outstanding obligations designated as
follows:
City of Cibolo, Texas Combination Tax and Limited Pledge Revenue Certificates
of Obligations, .Taxable Series 2017, dated February 1, 2017, issued in the original.
principal amount of$2,000,000;
Cityof Cibolo, Texas Combination Tax and Limited Pledge Revenue Certificates
of Obligations, Series 2019, dated September 1, 2019, issued in the original
principal amount of$5,860,000; and
City of Cibolo, Texas Combination Tax and Limited Pledge Revenue Certificates
of Obligations, Series 2019, dated September 15, 2020, issued in the original
principal amount of$6,950,000.
"Maintenance and Operating Expenses" means all current expenses of operating and
maintaining the System as authorized by the provisions of Chapter 1502, as amended, Texas
Government Code, including, but not limited to, all salaries, labor, materials, repairs and
extensions necessary to render efficient service; provided, however, that only such repairs and
extensions, as in the judgment of the City Council, reasonably and fairly exercised, are necessary
to maintain the operations and render adequate service to the City and the inhabitants thereof, or
such as might be necessary to meet some physical accident or condition which would otherwise
impair obligations payable from Net Revenues shall be deducted in determining Net Revenues.
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Depreciation, amortization, or other expenditures which, under standard accounting practice,
should be charged to capital expenditures shall not constitute or be regarded as Maintenance and
Operating Expenses of the System. Payments required to be made by the City for water supply
or water facilities, sewer services or sewer facilities, or fuel supply which payments under law
constitute operation and maintenance expenses of any part of the System, shall constitute and be
regarded as Maintenance and Operating Expenses of the System under this Ordinance.
"Net Revenues" means Gross Revenues of the System, with respect to any period, after
deducting the System's Maintenance and Operating Expenses during such period.
"Ordinance"means this ordinance adopted by the City Council on June 8,2021.
"Outstanding" means when used in this Ordinance with respect to Prior Lien Obligations
means, as of the date of determination, all Prior Lien Obligations theretofore issued and delivered
by the City except:
(a) those Prior Lien Obligations cancelled by the respective paying
agent/registrar or delivered to the respective paying agent/registrar for cancellation;
(b) those Prior Lien Obligations for which payment has been duly provided by
the City in accordance with the provisions of the applicable ordinance pursuant to which
such Prior Lien Obligations were issued(i.e.,with respect to the Bonds, Section 24.of this
Ordinance) by the irrevocable deposit with the respective paying agent/registrar, or an
authorized escrow agent, of money or authorized securities, or both, in the amount
necessary to fully pay the principal of,premium, if any, and interest thereon to maturity or
redemption, as the case may be, provided that, if such Prior Lien Obligations are to be
redeemed; notice of redemption thereof shall have been duly given pursuant to the
respective ordinance pursuant to which such Prior Lien Obligations were issued or
irrevocably provided to be given to the satisfaction of the respective paying agent/registrar,
or waived; and
(c) those Prior Lien Obligations that have been mutilated, destroyed; lost, or
stolen and replacement Prior Lien Obligations have been registered and delivered in lieu
thereof as provided in the applicable ordinance.
"Previously Issued Prior Lien Obligations" means the currently outstanding and unpaid
obligations of the City that are payable from and equally and ratably secured by a prior and first
lien on and pledge of the Net Revenues of the System and designated as follows:
City of Cibolo; Texas Utility System Revenue Bonds, Series 2006, dated
February 1, 2006, issued in the original principal amount of$3,000,000; and
City of Cibolo, Texas Utility System`Revenue Bonds, Series 2012, dated December
1, 2012, maturing on February 1 in the years 2013 through 2032 in the aggregate
principal amount of$7,640,000.
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"Prior Lieu Obligations" means the Previously Issued Prior Lien Obligations currently
Outstanding,the Bonds, and any Additional Prior Lien Obligations hereafter issued by the City.
"Required Reserve Amount" means the amount required to be deposited and maintained
in the Reserve Fund under the provisions of Section 11 of this Ordinance, which amount is equal
to the Average Annual Debt Service Requirements (calculated on a Fiscal Year basis and
determined as of the date of issuance of the Bonds or the most recently issued series of Additional
Prior Lien Obligations then Outstanding).
"Stated Maturity" means the annual principal payments of the Prior Lien Obligations
payable onthe dates set forth in Section 2 of this Ordinance(with respect to the Bonds)and Section
2 of the ordinance which authorized the issuance of the Previously Issued Prior Lien Obligations.
"Subordinate Lien Obligations" means (i) any bonds, notes, warrants, certificates of
obligation or any similar obligations hereafter issued by the City that are payable wholly or in part
from and equally and ratably secured by a subordinate and inferior lien on and pledge of the Net
Revenues of the System, such pledge being subordinate and inferior to the lien on and pledge of
the Net Revenues of the System that are or will be pledged to the payment of the Prior Lien
Obligations or Junior Lien Obligations issued by the City, but prior and superior to the lien on and
pledge of the Net Revenues of the System that are or will be pledged to the payment of the currently
outstanding Limited Pledge Obligations and any Additional Limited Pledge Obligations hereafter
issued by the City, all as further provided in Section 18 of this Ordinance.
"System" means all properties, facilities and plants currently owned, operated, and
maintained by the City for the supply,treatment, and transmission of treated potable water,for the
collection and treatment of wastewater, together will all future extensions, improvements,
replacements and additions thereto, whether situated within or without the limits of the City,.and
the City expressly reserves the right at its sole discretion to include additional utility,
telecommunications, technology, or similar enterprise services as components of,the System;
provided, however, that notwithstanding the foregoing, and to the extent now or hereafter
authorized or permitted by law, the term System shall not mean to include facilities of any kind
which are declared.not to be a part of the System and which are acquired or constructed by or on
behalf of the City with the proceeds from the issuance of Special Facilities Bonds, which are
hereby defined as being special revenue obligations of the City which are not payable from Net
Revenues but which are payable from and equally and ratably secured by other liens on and pledges
of any revenues, sources or payments, not pledged to the payment of the Prior Lien Obligations
including, but not limited to, special contract revenues or payments received from any other legal
entity in connection with such facilities.
SECTION 7. CUMULATIVE EFFECT OF ORDINANCE; PLEDGE OF NET
REVENUES; SECURITY INTEREST.
(a) Cumulative Effect of Ordinance. The Bonds are Additional Prior Lien Obligations
issued pursuant to applicable sections of the ordinance authorizing the issuance of the Outstanding .
Previously Issued Prior Lien Obligations and are in all respects on a parity with the Outstanding
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Previously Issued Prior Lien Obligations. Sections 6 through 21 of this Ordinance substantially
restate, and are supplemental to and cumulative of, Sections 9 through 25 of the ordinance
authorizing the issuance of the most recently issued series of Previously Issued Prior Lien
Obligations, so that Sections 6 through 21 of this Ordinance are applicable to all Prior Lien
Obligations and any future Additional Prior Lien Obligations and state all requirements with
respect thereto.
(b)Pledge of Net Revenues. The City hereby covenants and agrees that the Net Revenues
of the System, with the exception of those in excess of the amounts required to establish and
maintain the Funds as hereinafter provided, are hereby irrevocably pledged to the payment and
security of the Prior Lien Obligations including the establishment and maintenance of the special
funds or accounts created and established for the payment and security thereof, all as hereinafter
provided; and it is hereby ordained that the Prior Lien Obligations, and the interest thereon, shall
constitute a first and prior lien on and pledge of the Net Revenues of the System and be valid and
binding without any physical delivery thereof or further act by the City.
(c) Security Interest. Chapter 1208,as amended,Texas Government Code,applies to the
issuance of the Prior Lien Obligations and the pledge of Net Revenues granted by the City under
subsection (b) of this Section, and such pledge is therefore valid, effective, and perfected. .If
Texas law is amended at anytime while the Prior Lien Obligations are outstanding and unpaid such
that the pledge of the Net Revenues granted by the City is to be subject to the filing requirements
of Chapter 9, Texas Business & Commerce Code, then in order to preserve to the Holders of the
Prior Lien Obligations the perfection of the security interest in this pledge,the City Council agrees
to take such measures as it determines are reasonable and necessary under Texas law to comply
with the applicable provisions of Chapter 9, as amended, Texas Business &.Commerce Code and.
enable a filing to perfect the security interest in this pledge to occur.
(d) Limited Obligations of the City. The Prior Lien Obligations are limited, special
obligations of the City payable from and equally and ratably secured by a first lien on and pledge ,
of the Net Revenues of the System, and the Holders thereof shall never have the right to demand
payment of the principal or interest on the Prior Lien Obligations from any funds raised or to be
raised through taxation by the City.
SECTION 8. RATES AND CHARGES. For the benefit of the Holders of the Prior Lien
Obligations and in addition to all provisions and covenants in the laws of the State of Texas and
in this Ordinance, the City hereby expressly stipulates and'agrees, while any of the Prior Lien
Obligations are Outstanding,to establish and maintain rates and charges for facilities and services
afforded by the System that are reasonably expected, on the basis of available information and
experience and with due allowance for contingencies, to produce Gross Revenues in each Fiscal
Year sufficient:
A. To pay all Maintenance and Operating Expenses, or any expenses required by
statute to be a first claim on and charge against the Gross Revenues of the System;
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B. To produce Net Revenues, together with any other lawfully available funds,
sufficient to pay the principal and interest on the Prior Lien Obligations and amounts
required to be deposited in any reserve or contingency fund or account created for the
payment and security of the Prior Lien Obligations,and any other obligations or evidences
of indebtedness issued or incurred that are payable from and secured by a prior and first
lien on and pledge of the Net Revenues of the System;
C. To produce Net Revenues, together with any other lawfully available funds,
sufficient to pay the principal of and interest on any Junior Lien Obligations issued by the
City as the same become due and payable and to deposit the amounts required to be
deposited in any special fund or account created and established for the payment and.
security of any Junior Lien Obligations issued by the City, and any other obligations or
evidences of indebtedness issued or incurred that are payable from and secured by a junior
lien on and pledge of the Net Revenues of the System;
D. To produce Net Revenues, together with any other lawfully available funds,
sufficient to pay the principal of and interest on any Subordinate Lien Obligations issued
by the City as the same become due and payable and to deposit the amounts required to be..
deposited in any special fund or account created and established for the payment and
security of any Subordinate Lien Obligations issued by the City, and any other obligations
or evidences of indebtedness issued or incurred that are payable from and secured by a
subordinate lien on and pledge of the Net Revenues of the System;
E. To produce Net Revenues, together with any other lawfully available funds;.
sufficient to pay the principal of and interest on the Limited Pledge Obligations and any
Additional Limited Pledge Obligations issued by the City as the same become due and
payable and to deposit the amounts required to be deposited in any special fund or account ,
created and established for the payment and security of the Limited Pledge Obligations and
any Additional Limited Pledge Obligations issued by the City, and any other obligations.
or evidences of indebtedness issued or incurred that are payable from equally and ratably
secured in part, by a lien on and pledge of a limited amount of the Net Revenues of the
System;
F. To pay, together with any other lawfully available funds, any other legally
incurred indebtedness payable from the Net Revenues of the System and/or secured by a
lien on the System.
SECTION 9. SYSTEM FUND. The City hereby covenants, agrees, and reaffirms that
the Gross Revenues of the System shall be deposited, as collected and received, into a separate
Fund or account previously created and established and hereby maintained with the Depository
known as the CITY OF CIBOLO,TEXAS UTILITY SYSTEM FUND (the"System Fund") and that the
Gross Revenues of the System shall be kept separate and apart from all other funds of the City.
All Gross Revenues deposited into the System Fund shall be pledged and appropriated to the extent
required for the following uses and in the order of priority shown:
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FIRST: to the payment of all necessary and reasonable Maintenance and Operating
Expenses as defined herein or required by statute, including, but not limited
to,Chapter 1502, as amended,Texas Government Code,to be a first charge
on and claim against the Gross Revenues of the System;
SECOND: to the payment of the amounts required to be deposited into the Bond Fund
created and established for the payment of the Prior Lien Obligations as the
same become due and payable;
THIRD: to the payment of the amounts required to be deposited into the Reserve
Fund (hereinafter defined) created and established to maintain the amounts
required to be deposited in accordance with the provisions of this
Ordinance;
FOURTH: - to the payment of the amounts required to be deposited into the funds
created and established for the payment,security, and benefit of the Inferior
Lien Obligations as the same become due and payable
Any Net Revenues remaining in the System Fund after satisfying the foregoing payments, or
making adequate and sufficient provision for the payment thereof, may be appropriated and used
for any other City purpose now or hereafter permitted by law.
SECTION 10. BOND FUND; EXCESS BOND 'PROCEEDS. For purposes of
providing funds to pay the principal of and interest on the Prior Lien Obligations as the same
become due and payable, the City agrees to maintain, at the Depository, a separate and special
Fund or account to be created and known as the CITY OF CIBOLO, TEXAS UTILITY SYSTEM
REVENUE REFUNDING BONDS INTEREST AND SINKING FUND (the "Bond Fund"). The City
covenants that there shall be deposited into the Bond Fund prior to each principal and interest
payment date from the available Net Revenues an amount equal to one hundred per cent (100%)
of the amount required to fully pay the interest on and the principal of the Prior Lien Obligations
then falling due and payable, such deposits to pay maturing principal and accrued interest on the
Prior Lien Obligations to be made in substantially equal monthly installments on or before the
tenth (10th) day of each month, commencing with the month immediately following the issuance
of any series of Prior Lien Obligations. If the Net Revenues in any month are insufficient to make
the required payments into the Bond Fund, then the amount of any deficiency in such payment
shall be added to the amount otherwise required to be paid into the Bond Fund in the next month.
The required monthly deposits to the Bond Fund for the payment of principal of and interest
on the Prior Lien Obligations shall continue to be made as hereinabove provided until such time
as (i) the total amount on deposit in the Bond Fund and Reserve Fund is equal to the amount
required to fully pay and discharge all outstanding Prior Lien Obligations (principal and interest)
or, (ii)the Prior Lien Obligations are no longer Outstanding.
Accrued interest and premium, if any, generated by the sale of a series of Prior Lien
Obligations to pay capitalized interest shall be deposited into the Bond Fund upon the delivery of
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such series of Prior Lien Obligations and shall be taken into consideration and reduce the amount
of the monthly deposits hereinabove required to be deposited into the Bond Fund from-the Net
Revenues of the System. Additionally, any proceeds of the Prior Lien Obligations, and
investment income thereon,not expended for authorized purposes shall be deposited into the Bond
Fund and shall be taken into consideration and reduce the amount of monthly deposits required to
be deposited into the Bond Fund from the Net Revenues of the System.
SECTION 11. RESERVE FUND.
1
(a) Creation and Purpose. In connection with the issuance of the outstanding Prior
Lien Obligations, the City created, established and maintained, and hereby confirms that it shall
continue to maintain (except as permitted in subsection (g)below), a separate and special fund or
account known as the CITY OF CIDOLO, TEXAS UTILITY SYSTEM REVENUE BOND RESERVE
FUND(the"Reserve Fund"),which fund or account is required to be maintained at the Depository.
All funds deposited into the Reserve Fund (excluding earnings and income derived or received
from deposits or investments which will be transferred to the System Fund described in Section 9
of this Ordinance during such period as there is on deposit in the Reserve Fund the Required
Reserve Amount) shall be used solely for the payment of the principal of and interest on the Prior
Lien Obligations, when and to the extent other funds available for such purposes are insufficient,
and, in addition, may be used to retire the last stated maturity or interest on the Prior Lien
Obligations.
(b) Funding the Required Reserve Amount. The Required Reserve Amount in
connection with the Outstanding Previously Issued Prior Lien Obligations (i.e., prior to the
issuance of the Bonds) is equal to $ , which amount has been fully satisfied by the City
having made monthly deposits of cash from available Net Revenues of the System. Upon the
issuance of the Bonds, and until the issuance of any Additional Prior Lien Obligations, the
Required Reserve Amount shall be $ which amount is equal to the Average Annual
Debt Service Requirements immediately following the issuance of the Bonds. The City hereby
covenants to fund the difference between the amount currently on deposit in the Reserve Fund
(i.e., $ and the new Required Reserve Amount following the issuance of the Bonds by
making substantially equal monthly deposits into the Reserve Fund of$ (which amount is
equal to 1/60th of such difference) on or before the tenth (10th) day of each month following the
month of delivery of the Bonds.
(c) Funding the Required Reserve Amount Upon Issuance of Additional Prior Lien
Obligations. Subject to the provisions of subsection(g)below,as and when Additional Prior Lien
Obligations are delivered or incurred,the Required Reserve Amount shall be increased,if required,
to an amount calculated in the manner provided in the definition of Required Reserve Amount.
Any additional amount required to be maintained in the Reserve Fund shall be so accumulated by
the deposit of the necessary amount of the proceeds of the issue or other lawfully available funds
in the Reserve Fund immediately after the delivery of the then proposed Additional Prior Lien
Obligations,or,at the option of the City,by the deposit of monthly installments,made on or before
the tenth day of each month following the month of delivery of the then proposed Additional Prior
Lien Obligations, of not less than 1/60th of the additional amount to be maintained in the Reserve
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Fund by reason of the issuance of the Additional Prior Lien Obligations then being issued (or
1/60th of the balance of the additional amount not deposited immediately in cash), thereby
ensuring the accumulation of the appropriate Required Reserve Amount.
(d) Other Deposits into the Reserve Fund. When and so long as the cash and
investments in the Reserve Fund equal the Required Reserve Amount, no deposits need be made
to the credit of the Reserve Fund; but, if and when the Reserve Fund at any time contains less than
the Required Reserve Amount (other than as the result of the issuance of Additional Prior Lien
Obligations as provided in the preceding paragraph), the City covenants and agrees to cure the
deficiency in the Required Reserve Amount by resuming the monthly deposits to the Reserve Fund
from the Net Revenues of the System,or any other lawfully available funds,such monthly deposits
to be in amounts equal to not less than 1/60th of the Required Reserve Amount covenanted by the
City.to be maintained in the Reserve Fund, with any such deficiency payments being made on or
before the tenth (10th) day of each month until the Required Reserve Amount has been fully
restored. The City further covenants and agrees that the Net Revenues shall be applied and
appropriated and used to establish and maintain the Required Reserve Amount and to cure any
deficiency in such amounts as required by the terms of this Ordinance and any other ordinance
pertaining to the issuance of any Additional Prior Lien Obligations.
(e) Use of Credit Facilities. The City expressly reserves the right at any time to fund
the Reserve Fund at the Required Reserve Amount by purchasing a Credit Facility. that will
unconditionally obligate the insurance company or other entity to pay all, or any part thereof, of
the Required Reserve Amount in the event funds on deposit in the Bond Fund are not sufficient to
pay the debt service requirements on the Bonds. All ordinances adopted after the date hereof
authorizing the issuance of Additional Prior Lien Obligations shall contain a provision to this
effect.
(f) Withdrawal of Surplus Funds. During such time as the Reserve Fund contains the
Required Reserve Amount, the City may, at its option, withdraw all surplus funds in the Reserve
Fund in excess of the Required Reserve Amount and deposit such surplus in the System Fund.
Similarly; in the event the City is not required to maintain any funds in the Reserve Fund as
permitted under Section 11(g) hereof, the City may withdraw all or any portion of the funds on
deposit in the Reserve Fund and deposit such fund's in the System Fund. Additionally,in the event
a Credit Facility issued to satisfy all or part of the City's obligation with respect to the Reserve
Fund causes the amount then on deposit in the Reserve Fund to exceed the Required Reserve
Amount, the City may transfer such excess amount (held in the form of cash or investments) to
any fund or account established for the payment of or security for the Prior Lien Obligations
(including any escrow established for the final payment of any such obligations .pursuant to
Chapter 1207, as amended,Texas Government Code) or use such excess amount(held in the form
of cash or investments) for any lawful purpose now or hereafter provided by law; provided,
however, to the extent that such excess amount represents bond proceeds, then such amount must
be transferred to the Bond Fund.
(g) Suspension of Reserve Fund Requirement Under Certain Circumstances.
Notwithstanding anything to the contrary contained herein,when all Prior Lien Obligations issued
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and delivered prior to December 1, 2012 are no longer Outstanding, the requirement set forth in
this Section to maintain the Required Reserve Amount in the Reserve Fund shall be suspended for
such time as the Net Revenues are equal to at least 1.35 times the Average Annual Debt Service
Requirements for the most recently completed Fiscal Year. In the event that the Net Revenues
for any Fiscal Year are less than 1.35 times the Average Annual Debt Service Requirements, the
City shall commence making monthly deposits into the Reserve Fund, such monthly deposits to
be in amounts equal to not less than 1/60th of the Required Reserve Amount covenanted by the
City to be maintained in the Reserve Fund, with such payments being made on or before the tenth
(10th)day of each month until the earlier of(i)such time as the Reserve Fund contains the Required
Reserve Amount, or(ii)the Net Revenues in each of the two most recent consecutive Fiscal Years
have been equal to not less than 1.35 times the Average Annual Debt Service Requirements.
SECTION 12. DEFICIENCIES; EXCESS NET REVENUES.
(a)If on any occasion there shall not be sufficient Net Revenues of the System to make the
required deposits into the Bond Fund and the Reserve Fund, then such deficiency shall be cured
as soon as possible from the next available unallocated Net Revenues of the System, or from any
other sources available for such purpose, and such payments shall be in addition to the amounts
required to be paid into these Funds or accounts during such month or months.
(b) Subject to making the required deposits to the Bond Fund and the Reserve Fund when
and as required by this Ordinance, or any ordinance authorizing the issuance of any Additional
Prior Lien Obligations, or the payments required by the provisions of the ordinances authorizing
the issuance of the currently outstanding Inferior Lien Obligations,the excess Net Revenues of the
System may be used by the City for any lawful purpose.
SECTION 13. PAYMENT OF PRIOR LIEN OBLIGATIONS. While any of the Prior
Lien Obligations are outstanding, the City Manager or the Director of Finance shall cause to be
transferred to the respective paying agent/registrar therefor, from funds on deposit in the Bond
Fund, and, if necessary, in the Reserve Fund, amounts sufficient to fully pay and discharge
promptly each installment of interest on and principal of the Prior Lien Obligations as such
installment accrues or matures; such transfer of funds must be made in such manner as will cause
immediately available funds to be deposited with the respective paying agent/registrar for the Prior
Lien Obligations at the close of the business day next preceding the date a debt service payment is
due on the Prior Lien Obligations.
SECTION 14. INVESTMENTS. Pending the transfer of funds to each paying
agent/registrar for the Prior Lien Obligations, money in any Fund established by this Ordinance,
at the option of the City, may be placed in time deposits or certificates of deposit as permitted by
the provisions of the Public Funds Investment Act,as amended, Chapter 2256,Texas Government
Code, or any other law, and 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
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I
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,or Federal Housing Association;provided that all such deposits and investments shall
be made in such a manner that the money required to be expended from any Fund or account will
be available at the proper time or times. Such investments (except State and Local Government
Series investments held in book entry form, which shall at all times be valued at cost) shall be
valued in terms of current market value within 45 days of the close of each Fiscal Year and, with
respect to investments held for the account of the Reserve Fund, within 30 days of the date of
passage of each ordinance authorizing the issuance of any Additional Prior Lien Obligations. All
interest and income derived from deposits and investments in the Bond Fund immediately shall be
credited to, and any losses debited to, the Bond Fund. All interest income derived from deposits
in and investments of the Reserve Fund shall, subject to the limitations provided in Section 11(a),
be credit to and deposited in the System Fund. All such investments shall be sold promptly when
necessary to prevent any default in connection with the Prior Lien Obligations.
SECTION 15. SECURITY OF FUNDS. All money on deposit in the Funds or accounts
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 Texas for the security of public funds, and money on deposit,in such Funds
or accounts shall be used only for the purposes permitted by this Ordinance.
SECTION 16. ISSUANCE OF ADDITIONAL PRIOR LIEN OBLIGATIONS. In
addition'to the right to issue Junior Lien Obligations, Subordinate Lien Obligations, and/or
Additional Limited Pledge Obligations as authorized by Section 18 hereof and any laws of.the
State of Texas, the City reserves the right hereafter to issue Additional Prior Lien Obligations to
fund repairs, expansions and improvements to the System, refund any Outstanding Prior Lien
Obligations or any other lawful obligations of the City, or for any other purpose permitted by
applicable law. The Additional Prior Lien Obligations,when issued in compliance with the terms
an&conditions hereinafter prescribed, shall be payable from and equally and ratably secured by a
first and prior lien on and pledge of the Net Revenues of the System in the same manner and to the
same extent as all Prior Lien Obligations then Outstanding. The Additional Prior Lien
Obligations may be issued in one or more installments, provided, however, that none shall be
issued unless and until the following conditions have been met:
A. Except for a refunding to cure a default, or the deposit of a portion of the proceeds of
any Additional Prior Lien Obligations to satisfy the City's obligations under this Ordinance, the
City is not then in default as to any covenant, condition, or obligation prescribed in this Ordinance
or in the ordinances authorizing the issuance of the then Outstanding Prior Lien Obligations.
B. The laws of the State of Texas in force at such time provide for the issuance of the
Additional Prior Lien Obligations.
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C. The City has secured from its chief financial officer or City Manager a certificate or
opinion to the effect that, the Net Revenues of the System, for the preceding Fiscal Year or for
any 12 consecutive calendar month period out of the 18 months immediately preceding the month
the ordinance authorizing the Additional Prior Lien Obligations is adopted, are at least equal to
1.25 times the Average Annual Debt Service Requirements for the payment of principal of and
interest on all Prior Lien Obligations after giving effect to the issuance of the Additional Prior Lien
Obligations then proposed. In making a determination of the Net Revenues, the chief financial
officer or City Manager may take into consideration a change in the rates and charges for services
and facilities afforded by the System that became effective not more than ninety(90) days prior to
adoption of the ordinance authorizing the issuance of the Additional Prior Lien Obligations and,
for purposes of satisfying the Net Revenues test, make a pro forma determination of the Net
Revenues for the period of time covered by his certification or opinion based on such change in
rates and charges being in effect for.the entire period covered by the chief financial officer's or
City Manager's certificate or opinion.
D. The ordinance authorizing the issuance of the Additional Prior Lien Obligations
provides for deposits to be made to the Bond Fund in amounts sufficient to pay the principal of
and interest on such Additional Prior Lien Obligations as the same mature.
E. The ordinance authorizing the issuance of the Additional Prior Lien Obligations
provides that the amount to be accumulated and maintained in the Reserve Fund shall be in an
amount equal to not less than the Required Reserve Amount after giving effect to the issuance of
the proposed Additional Prior Lien Obligations, and provides that any additional amount to be
maintained in the Reserve Fund shall be accumulated within sixty (60) months from the date the
Additional Prior Lien Obligations are delivered.
All such Additional Prior Lien Obligations provided for in this Section, when.issued in
accordance with the above, shall be payable from and equally and ratably secured by a first lien
on and pledge of the Net Revenues, and the provisions of this Ordinance relating to the use of Net
Revenues shall be applicable to such Additional Prior Lien Obligations as though the same were a .
part of such original authorization.
The right to issue such other and further Additional Prior Lien Obligations shall exist as
often as the need therefor shall arise and so long as such Additional Prior Lien_Obligations are
issued in compliance with law and the terms and conditions contained in this Ordinance.
SECTION 17. REFUNDING BONDS. The City reserves the right to issue refunding
bonds to refund all or any part of the Prior Lien Obligations then Outstanding, pursuant to any law
then available, upon such terms and conditions as the City Council of the City may deem to be in
the best interest of the City and its inhabitants, and if less than all such Outstanding Prior Lien
Obligations are refunded, the conditions precedent prescribed for the issuance of Additional Prior
Lien Obligations set forth in Section 16 of this Ordinance shall be satisfied and the certificate
required in subparagraph C shall give effect to the Debt Service Requirements of the proposed
refunding bonds (but shall not give effect to the Debt Service Requirements of the Prior Lien
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Obligations being refunded following their cancellation or provision being made for their
payment).
SECTION 18. OBLIGATIONS OF INFERIOR LIEN AND PLEDGE. The City
hereby reserves the right to issue,at any time,obligations including,but not limited to,Junior Lien
Obligations, Subordinate Lien Obligations and/or Additional Limited Pledge Obligations payable
from and equally and ratably secured, in whole or in part, by a lien on and pledge of the Net
Revenues of the System, subordinate and inferior in rank and dignity to the lien on and pledge of
such Net Revenues securing the payment of the Prior Lien Obligations, as may be authorized by
the laws of the State of Texas upon satisfying any conditions precedent contained in the ordinances
authorizing the issuance of the currently outstanding Limited Pledge Obligations.
SECTION 19. MAINTENANCE OF SYSTEM-INSURANCE. The City covenants,
agrees, and affirms its covenants,that while the Prior Lien Obligations remain outstanding it will
maintain and operate the System with all possible efficiency and maintain casualty and other
insurance on the properties of the System and its operations of a kind and in such amounts
customarily carried by.municipal corporations in the State of Texas engaged in a similar type of
business (which may include an adequate program of self insurance);and that it will faithfully and
punctually perform all duties with reference to the System required by the laws of the State of
Texas. All money received from losses under such insurance policies, other than public liability
policies, shall be retained for the benefit of the holders of the Prior Lien Obligations until and
unless the proceeds are paid out in making good the loss or damage in respect of which such
proceeds are received, either by replacing the property destroyed or repairing the property
damaged, and adequate provision for making good such loss or damage must be made within
ninety (90) days after the date of loss. The payment of premiums for all insurance policies
required under the provisions hereof shall be considered Maintenance and Operating Expenses.
Nothing in this Ordinance shall be construed as requiring the City to expend any funds which are
derived from sources other than the operation of the System but nothing herein shall be construed
as preventing the-City from doing so.
SECTION 20. RECORDS AND ACCOUNTS — ANNUAL AUDIT. The City
covenants, agrees, and affirms its covenants that so long as any of the Prior Lien Obligations
remain outstanding, it will keep and maintain separate and complete records and accounts
pertaining to the operations of the System in which complete and correct entries shall be made of
all transactions relating thereto, as provided by Chapter 1502, as amended, Texas Government
Code, or other applicable law. The Holders of the Prior Lien Obligations or any duly authorized
agent or agents of such Holders shall have the right to inspect the System and all properties
comprising the same. The City further agrees that following(and in no event later than 180 days)
the close of each Fiscal Year, it will cause an audit of such books and accounts to be made by an
independent firm of Certified Public Accountants. Copies of each annual audit shall be furnished,
without charge, and upon written request, to any Holder thereof and shall be filed with the
Municipal Securities Rulemaking Board through its Electronic Municipal Markets Access
("EMMA")system. Expenses incurred in making the annual audit of the operations of the System
are to be regarded as Maintenance and Operating Expenses.
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SECTION 21. SPECIAL COVENANTS. The City further covenants and agrees by and
through this Ordinance as follows:
A. It has the lawful power to pledge the Net Revenues supporting the Prior Lien
Obligations and has lawfully exercised this power under the laws of the State of Texas,
including the power existing under Chapter 1502, as amended, Texas Government Code,
and the City's Home Rule Charter.
B. The Prior Lien Obligations shall be equally and ratably secured by a first and
prior lien on and pledge of the Net Revenues of the System in a manner that one bond shall
have no preference over any other bond.
C. Other than for the payment of the currently outstanding Previously Issued Prior
Lien Obligations, the Bonds and the Limited Pledge Obligations, the Net Revenues of the
System have not in any manner been pledged to the payment of any debt or obligation of
the City or of the System.
D. As long as any Prior Lien Obligations, or any interest thereon, remain
Outstanding, the City will not sell, lease, or encumber the System or any substantial part
thereof(except as provided in Sections 16, 17 or 18 of this Ordinance); provided that this .
covenant shall not be construed to prohibit the sale of such machinery, or other properties
or equipment, which has become obsolete or otherwise unsuited to,the efficient operation
of the System; and
E. No free service of the System(except water provided to the City for municipal
fire-fighting purposes) shall be allowed, and, should the City.or any of its agents or
instrumentalities make use of the services and facilities of the.System, payment of the
reasonable value thereof shall be made by the City out of funds from.sources other than the
revenues and income of the System.
SECTION 22. REMEDIES IN THE EVENT OF DEFAULT. In addition to all of the
rights and remedies provided by the laws of the State of Texas,'it is,specifically covenanted and
agreed particularly that in the event the City (i) defaults in the payments to be made to the Bond
Fund or the Reserve Fund as required by this Ordinance or (ii) defaults in the observance or
performance of any other of the covenants, conditions, or obligations set forth in this Ordinance,
the following remedies shall be available,the holder or holders of any Prior Lien Obligations shall
be entitled to seek a writ of mandamus issued by a court of proper jurisdiction, compelling and
requiring the City and its officers to observe and perform any covenants,conditions,or obligations .
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 specifications of such remedies shall not be deemed to be exclusive.
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SECTION 23. ORDINANCE A CONTRACT; AMENDMENTS. (a) Ordinance a
Contract. This Ordinance shall constitute a contract with the Registered Owners of the Bonds,
binding on the City and its successors and assigns, and shall not be amended or repealed by the
City as long as any Bonds remains Outstanding except as permitted in this Section.
(b) Amendments Without Notice to or Consent of Registered Owners. The City may,
with notice to the Credit Provider of any Credit Facility issued in connection with the Bonds, if
any, but without the consent of or notice to any Registered Owners of the Bonds, amend, change,
or modify this Ordinance (i) as may be required by the provisions hereof, (ii) as may be required
for the purpose of curing any ambiguity, inconsistency,or formal defect or omission herein,or(iii)
in connection with any other change (other than any change described in clauses (i) through (iv)
of the-first sentence in subsection (c) below) with respect to which the City receives the prior
written consent of each such Credit Provider and the written confirmation from each rating agency
then maintaining a rating on the Bonds at the request of the City that such amendment would not
cause such rating agency to withdraw or reduce its then current rating on any the Prior Lien
Obligations.
(c) Amendments With Notice to and Consent of Registered Owners. In addition to the
amendments authorized by subsection (b) above, the City may, with the written consent of the
Credit Provider of each Credit Facility issued in connection with the Bonds, if any, and the
Registered Owners of at least a majority in aggregate principal amount of the Bonds then
outstanding and affected thereby, amend, change, modify, or rescind any other provision of this
Ordinance; provided that without the consent of all of the Registered Owners affected, no such
amendment, change, modification, or rescission shall (i) extend the time or times of payment of
the principal of and interest on the Bonds,reduce the principal amount thereof or the rate of interest
thereof, (ii) give any preference to any Bonds over any other Bonds, (iii) extend any waiver of
default to subsequent defaults,or(iv)reduce the aggregate principal amount of Bonds required for
consent to any such amendment, change, modification, or rescission.
(d) Notice of Amendment. Whenever the City shall desire to make any amendment or
addition to'or rescission of this Ordinance requiring consent of the Credit Provider of each Credit
Facility issued in connection with the Bonds, if any, and the Registered Owners of the Bonds,the
City shall cause notice of the amendment, addition, or rescission to be sent by first class mail,
postage.prepaid, to (i) the Credit Provider of each such Credit Facility, if any, and (ii) the
Registered Owners (if all or at least a majority in aggregate principal.amount of the Bonds are
required to consent) at the respective addresses shown on the Registration Books. Whenever at
any time within one year after the date of the giving of such notice, the City shall receive an
instrument or instruments in writing executed by the Credit Provider of each such Credit Facility,
if any, and the Registered Owners of all or a;majority (as the case may be) in aggregate principal
amount of the Bonds then Outstanding affected by any such amendment, addition, or rescission
requiring the consent of the Registered Owners,which instrument or instruments shall refer to the
proposed amendment, addition, or rescission described in such notice and shall specifically
consent to and approve the adoption thereof in substantially the form of the copy thereof referred
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to in such notice, thereupon, but not otherwise, the City may adopt such amendment, addition, or
rescission in substantially such form, except as herein provided.
(e) Effect of Amendment on Registered Owners. No Registered Owner may thereafter
object to the adoption of any amendment, addition, or rescission which is accomplished pursuant
to and in accordance with the provisions of this Section, or to any of the provisions thereof, and
such amendment, addition, or rescission shall be fully effective for all purposes.
SECTION 24. DEFEASANCE OF BONDS. (a) Defeased Bonds. Any Bond and the
interest thereon shall be deemed to be paid,retired and no longer Outstanding(a"Defeased Bond")
within the meaning of this Ordinance, except to the extent provided in subsection (d) of this
Section,when payment of the principal of such Bond,plus interest thereon to the due date(whether
such due date be by reason of maturity or otherwise) either (i) shall have been made or caused to
be made in accordance with the terms thereof, or (ii) shall have been provided for on or before
such due date by irrevocably depositing with or making available to the escrow agent authorized
by applicable law and named in the proceedings authorizing the defeasance of the Defeased Bonds
(the "Escrow Agent") in accordance with an escrow agreement or other instrument (the "Future
Escrow Agreement") for such payment (1) lawful money of the United States of_America
sufficient to make such payment and/or (2) Defeasance Securities that mature as to principal and
interest in such amounts and at such times as will insure the availability, without reinvestment, of
sufficient money to provide for such payment, and when proper arrangements have been made by
the City with the Paying Agent/Registrar for the payment of its services until all Defeased Bonds
shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased.
Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by,
payable from, or entitled to the benefits of, the revenues herein levied and pledged as provided in
this Ordinance, and such principal and interest shall be payable solely from such money or
Defeasance Securities.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 (a)(i) or (ii) of this Section shall not be
irrevocable, provided that: (1) in the proceedings providing for such payment arrangements, 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 making
of the payment arrangements; and (3) directs that notice of the reservation be included in any
redemption notices that it authorizes.
(b) Investment in Defeasance Securities. Any moneys so deposited with the Escrow
Agent may at the written direction of the City be invested in Defeasance Securities, maturing in
the amounts and times as hereinbefore set forth, and all income from such Defeasance Securities
received by the Escrow Agent that is not required for the payment of the Bonds and interest
thereon,with respect to which such money has been so deposited, shall be turned over to the City,
or deposited as directed in writing by the City. Any Future Escrow Agreement pursuant to which
the money and/or Defeasance Securities are held for the payment of Defeased Bonds may contain
provisions permitting the investment or reinvestment of such moneys in Defeasance Securities or
the substitution of other Defeasance Securities upon the satisfaction of the requirements specified
in subsection (a)(i) or (ii) of this Section. All income from such Defeasance Securities received
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by the Escrow Agent which is not required for the payment of the Defeased Bonds, with respect
to which such money has been so deposited, shall be remitted to the City or deposited as directed
in writing by the City.
(c) Definition of Defeasance Securities. The term "Defeasance Securities" means (i)
direct, noncallable obligations of the United States of America, including obligations that are
unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an
agency or instrumentality of the United States of America, including obligations that are
unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the
governing body of the City adopts or approves the proceedings authorizing the financial
arrangements, 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 City adopts or approves the proceedings authorizing the financial
arrangements, are rated as to investment quality by a nationally recognized investment rating firm
not less than AAA or its equivalent, and (iv) any other then authorized securities or obligations
under applicable state law that may be used to defease obligations such as the Bonds.
(d) Paying Agent/Registrar Services. Until all Defeased Bonds shall have become due
and payable,the Paying Agent/Registrar shall perform the services of Paying Agent/Registrar for
such Defeased Bonds the same as if they had not been defeased, and the City shall make,proper
arrangements to provide and pay for such services as required by this Ordinance.
(e) Selection'of Bonds for Defeasance. In the event that the City elects to defease less
than all of the principal amount of Bonds of a maturity,the.Paying Agent/Registrar shall select, or
cause to be selected, such amount of Bonds by such random method as it deems fair and
appropriate.
SECTION 25. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED
BONDS. (a) Replacement Bonds. In the event any Outstanding Bond is damaged, mutilated,
lost, stolen,or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and,de-
livered, 'a new bond of the same principal amount, maturity, and interest rate, as the damaged,
mutilated, lost, stolen; or destroyed Bond, in replacement for such Bond in the manner hereinafter
provided.
(b) Application for Replacement Bonds. Application for replacement of damaged,
mutilated, lost, stolen, or destroyed Bonds shall be made by the Registered Owner thereof to the
Paying Agent/Registrar. In every case of loss, theft, or destruction of a Bond, the Registered
Owner applying for a replacement bond shall furnish to the City and to the Paying Agent/Registrar
such security or indemnity as may be required by them to save each of them harmless from any
loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Bond,
the Registered Owner shall furnish to the City and to the Paying Agent/Registrar evidence to their
satisfaction of the loss, theft, or destruction of such Bond, as the case may be. In every case of
damage or mutilation of a Bond, the Registered Owner shall surrender to the Paying
Agent/Registrar for cancellation the Bond so damaged or mutilated.
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(c) No Default Occurred. Notwithstanding the foregoing provisions of this Section, in
the event any such Bond shall have matured, and no default has occurred which is then continuing
in the payment of the principal of, redemption premium, if any, or interest on the Bond, the City
may authorize the payment of the same.(without surrender thereof except in the case of a damaged
or mutilated Bond) instead of issuing a replacement Bond, provided security or indemnity is
furnished as above provided in this Section.
(d) Charge for Issuing Replacement Bonds. Prior to the issuance of any replacement
bond, the Paying Agent/Registrar shall charge the Registered Owner of such Bond with all legal,
printing, and other expenses in connection therewith. Every replacement bond issued pursuant to
the provisions of this Section by virtue of the fact that any Bond is lost, stolen, or destroyed shall
constitute a contractual obligation of the City whether or not the lost, stolen, or destroyed Bond
shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of
this Ordinance equally and proportionately with any and all other Bonds duly issued under this
Ordinance.
(e) Authority for Issuing Replacement Bonds. This Section of this Ordinanceshall
constitute authority for the issuance of any such replacement bond without necessity of further
action by the governing body of the City or any other body or person, and the duty of the
replacement of such bonds is hereby authorized and imposed upon the Paying Agent/Registrar,
and the Paying Agent/Registrar shall authenticate and deliver such Bonds in the form and manner
and with the effect, as provided in this Ordinance for Bonds issued in conversion and exchange
for other Bonds.
SECTION 26. CUSTODY,APPROVAL,AND REGISTRATION OF BONDS;BOND
COUNSEL'S OPINION; CUSIP NUMBERS. The Mayor of the City is hereby authorized to
have control of the Bonds issued hereunder and all necessary records and proceedings pertaining
to the Bonds pending their delivery and their investigation, examination, and approval by the
Attorney General of the State of Texas, and their registration by the Comptroller of Public . .
Accounts of the State of Texas: Upon registration of the Bonds said Comptroller.of Public
Accounts (or a deputy designated in writing to act for said Comptroller) shall facsimile,
electronically, or manually sign the Comptroller's Registration Certificate on the Bonds, and the
seal of said Comptroller shall be impressed, or placed in facsimile, on the Bonds. The approving
legal opinion of the City's Bond Counsel, and the assigned CUSIP numbers may, at the option of
the City,be printed on the Bonds issued and delivered under this Ordinance,but neither shall have
any legal effect, and shall be solely for the convenience and information of the Registered Owners.
of the Bonds.
SECTION 27. COVENANTS REGARDING TAX-EXEMPTION OF INTEREST ON
THE BONDS. (a) Covenants. The City covenants to take any action necessary to assure, or
refrain from any action which would adversely affect, the treatment of the Bonds as obligations
described in section 103 of the Internal Revenue Code of 1986, as amended (the "Code"), the
interest on which is not includable in the "gross income" of the holder for purposes of-federal
income taxation. In furtherance thereof, the City covenants as follows:
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(1) to take any action to assure that no more than 10 percent of the proceeds of the
Bonds or the projects financed or refinanced therewith(less amounts deposited to a reserve
fund, if any) are used for any"private business use," as defined in section 141(b)(6) of the
Code or, if more than 10 percent of the proceeds of the Bonds or the projects financed or
refinanced therewith are so used, such amounts,whether or not received by the City, with
respect to such private business use, do not, under the terms of this Ordinance or any
underlying arrangement, directly or indirectly, secure or provide for the payment of more
than 10 percent of the debt service on the Bonds, in contravention of section 141(b)(2) of
the Code;
(2) to take any action to assure that in the event that the "private business use"
described in subsection (1) hereof exceeds 5 percent of the proceeds of the Bonds or the
projects financed or refinanced therewith (less amounts deposited into a reserve fund, if
any) then the amount in excess of 5 percent is used-for a "private business use" which is
"related" and not"disproportionate,"within the meaning of section 141(b)(3).of the Code,
to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of
$5,000,000,or 5 percent of the proceeds of the Bonds(less amounts deposited into a reserve
fund, if any is directly or indirectly used to finance loans to persons, other than state or
local governmental units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Bonds
being treated as"private activity bonds"within the meaning of section 141(b)of the Code;
(5) to refrain from taking any action that would result in the Bonds being
"federally guaranteed"within the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of.the Bonds, directly or
indirectly,to acquire or to replace funds which were used, directly or indirectly,to acquire
investment property (as defined in section 148(b)(2) of the Code) which.produces a
materially higher yield over the term of the Bonds,other than investment property acquired
with--
(A) -proceeds of the Bonds invested for a reasonable temporary period of
three years or less until such proceeds are needed for the purpose for which the
Bonds are issued,
(B) amounts invested in a bona fide debt service fund,within the meaning
of section 1.148-1(b) of the Treasury Regulations, and
(C) amounts deposited in any reasonably required reserve or replacement
fund to the extent such amounts do not exceed 10 percent of the proceeds of the
Bonds;
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(7) to otherwise restrict the use of the proceeds of the Bonds or amounts treated
as proceeds of the Bonds, as may be necessary, so that the Bonds do not otherwise
contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the
extent applicable, section 149(d) of the Code(relating to advance refundings); and
(8) to pay to the United States of America at least once during each five-year
period (beginning on the date of delivery of the Bonds) an amount that is at least equal to
90 percent of the"Excess Earnings,"within the meaning of section 148(f)of the Code and
to pay to the United States of America, not later than 60 days after the Bonds have been
paid in full, 100 percent of the amount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code.
(b) Rebate Fund. In order to facilitate compliance with the above covenant (8), a
"Debate Fund" is hereby established by the City for the sole benefit of the United States of
America, and such fund shall not be subject to the claim of any other person, including without
limitation the bondholders. The Rebate Fund is established for the additional purpose .of ,
compliance with section 148 of the Code.
(c) Proceeds. The City understands that the-_term "proceeds" includes "disposition
proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred
proceeds(if any)and proceeds of the refunded bonds expended prior to the date of issuance of the .
Bonds. It is the understanding of the City that the covenants contained herein are intended to
assure compliance with the Code and any regulations or rulings promulgated by the U.S.
Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter
promulgated which modify or expand provisions of the Code, as applicable to the Bonds,the City
will not be required to comply.with any covenant contained herein to the extent that such failure
to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of interest on the Bonds under section 103 of the.Code.
In the event that regulations or rulings are hereafter promulgated which impose additional
requirements which are applicable to the Bonds, the City agrees to comply with the additional
requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to
preserve the exemption from federal income taxation of interest on the Bonds under section 103
of the Code. In furtherance of such intention, the City hereby authorizes and directs the Mayor,
the City Manager or the Director of Finance of the City to execute any documents, certificates or.
reports required by the Code and to make such elections, on behalf of the City, which may be
permitted by the Code as are consistent with the purpose for the issuance of the Bonds.
(d) Allocation of and Limitation on,Expenditures for the Project. The City covenants to
account for the expenditure of sale proceeds and investment earnings to be used for the purposes
described in Section 1 of this Ordinance (collectively referred to herein as the "Project") on its
books and records in accordance with the requirements of the Code. The City recognizes that in
order for the proceeds to be considered used for the reimbursement of costs, the proceeds must be
allocated to expenditures within 18 months of the later of the date that(1)the expenditure is made,
or (2) the Project is completed; but in no event later than three years after the date on which the
35
original expenditure is paid. The foregoing notwithstanding,the City recognizes that in order for
proceeds to be expended under the Code, the sale proceeds or investment earnings must be
expended no more than 60 days after the earlier of(1) the fifth anniversary of the delivery of the
Bonds, or (2) the date the Bonds are retired. The City agrees to obtain the advice of
nationally-recognized bond counsel if such expenditure fails to comply with the foregoing to
assure that such expenditure will not adversely affect the tax-exempt status of the Bonds. For
purposes hereof,the City shall not be obligated to comply with this covenant if it obtains an opinion
that such failure to comply will not adversely affect the excludability for federal income tax
purposes from gross income of the interest.
(e) Disposition of Project. The City covenants that the property constituting the projects
financed or refinanced with the proceeds of the Bonds will not be sold or otherwise disposed in a
transaction resulting in the receipt by the City of cash or other compensation, unless the City
obtains an opinion of nationally-recognized bond counsel that such sale or other disposition will
not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing,the portion
of the property comprising personal property and disposed in the ordinary course shall not be
treated as a transaction.resulting in the receipt of cash or other compensation. For purposes
hereof, the City shall not be obligated to comply with this covenant-if it obtains an opinion.that
such failure to comply will not adversely affect the excludability for federal income tax purposes.
from gross income of the interest.
(f) Designation as Qualified Tax-Exempt Obligations. The City hereby designates, or
deem designates,the Bonds as"qualified tax-exempt bonds"as defined in section 265(b)(3)of the
Code. In furtherance -of such designation, the City represents, covenants and warrants _the
following: (i)that during the calendar year in which the Bonds are issued,the City (including any
subordinate entities)has not designated nor will designate bonds,which when aggregated with the
Bonds,will result in more than$10,000,000 of"qualified tax-exempt bonds"being issued;(ii)that
the City reasonably anticipates that the amount of tax-exempt obligations issued, during the
calendar'year in which the Bonds are issued, by the City (or any-subordinate entities) will not.
exceed $10,000,000; and (iii) that the City will take such action or refrain from such action as
necessary, and as more particularly set forth in this Section, in order that the Bonds will not be
considered"private activity bonds"within the meaning of section 141 of the Code.
(g)• Written Procedures. Unless superseded by another action of the Issuer, to ensure
compliance with the covenants contained herein regarding private business use, remedial actions,
arbitrage and rebate, the City Council hereby adopts and establishes the instructions attached
hereto as Exhibit B as the Issuer's written procedures.
SECTION 28. SALE AND DELIVERY OF BONDS; DISPOSITION OF
PROCEEDS; ESCROW FUND.
(a) Sale and Delivery of Bonds. The Bonds are hereby initially sold and shall be delivered
to , as the representative of the initial purchasers of the Bonds (the "Underwriters"),
at a price of $ .(which amount is equal to par, plus an original issue premium of
$ , less underwriters' discount on the Bonds of$ ), plus accrued interest on the
36
Bonds from , 2021, all pursuant to the terms and provisions of a Purchase Contract
in substantially the form attached hereto as Exhibit C which the Mayor or Mayor-Pro Tem is hereby
authorized and directed to execute and deliver. In satisfaction of Section 1201.022(a)(3), Texas
Government Code, and upon consultation with the City's Financial Advisor, the City Council
hereby determines that the final terms of the Bonds as set forth in this Ordinance are in the City's
best interests. The City will deliver to the Underwriters an Initial Bond in the aggregate principal
amount of$ payable in principal installments on the dates and in the principal amounts
shown in Section 2 hereof, and bearing interest at the rates for each respective maturity as shown
in Section 3 hereof. The Bonds shall initially be registered in the name of
(b) Escrow Deposit Letter,Approval and Execution,Proceeds of Sale, Contribution by the
C� The Escrow Deposit Letter dated as of June 8,2021 to be effective upon the initial delivery
of the Bonds to the Purchasers (the "Escrow Agreement") between the City and
(the"Escrow Agent"), attached hereto
as Exhibit D and incorporated herein by reference as a part of this Ordinance for all purposes, is
hereby approved as to form and content, and such Escrow 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 an Authorized
Official on behalf of the City and as the act and deed of this City Council; and such Escrow
Agreement as executed by said officials shall be deemed approved by the City Council and
constitute the Escrow Agreement herein approved.
Furthermore, any Authorized Official and Bond Counsel in cooperation with the Escrow
Agent are hereby authorized and directed to make the necessary arrangements for the purchase of
the Escrowed Securities referenced in the Escrow 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 CIBOLO, TEXAS UTILITY SYSTEM REVENUE REFUNDING BONDS, SERIES
2021 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 Escrow Agreement.
Immediately following the delivery of the Bonds, the proceeds of sale thereof, along with
a cash contribution, if any, from the City (less certain costs of issuance 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 Escrow 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 any Authorized Official.
SECTION 29. AUTHORITY FOR OFFICERS TO EXECUTE DOCUMENTS. The
Mayor,Mayor Pro-Tem, City Secretary, City Manager and Director of Finance of the City, and all
37
other officers, employees, and agents of the City, and each of them, shall be and they are hereby
expressly 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
Bonds,the sale of the Bonds, the Official Statement, and the Paying Agent/Registrar Agreement.
In addition,prior to the initial delivery of the Bonds,the Mayor, Mayor Pro-Tem, City Secretary,
City Manager, Director of Finance, City Attorney and Bond Counsel are hereby authorized and
directed to approve any technical changes or correction 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 satisfy any requirements of the provider of a municipal
bond insurance policy, if any, or (iii) obtain the approval of the Bonds by the Attorney General's
office. In case any officer whose signature shall appear on any Bond shall cease to be such officer
before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all
purposes the same as if such officer had remained in office until such delivery. The Director of
Finance of the City is further authorized to pay to the Attorney General of Texas prior to the
delivery of the Bonds, for the Attorney General's review of the transcript of proceedings related
to the Bonds, the amount required pursuant to Section 1202.004, Texas Government Code, as
amended.
SECTION 30. APPROVAL OF OFFICIAL STATEMENT. The City hereby approves
the form and content of the Official Statement relating to the Bonds and any addenda,supplement,
or.amendment thereto, and approves the distribution of the Official Statement in the'reoffering of
the Bonds by the initial purchaser in final form, with such changes therein or additions thereto as
the officer executing the same may deem advisable, such determination to be conclusively
evidenced by his or her execution thereof. The distribution and use of the Preliminary Official
Statement for the Bonds, dated , 2021, prior to the date hereof is hereby ratified and
confirmed. The City Council finds and determines that the Preliminary Official Statement and
the Official.Statement were and are "deemedfinal" (as that term is defined in 17 C.F.R. Section
240.15c-12) as of each of their respective dates.
SECTION 31. CONTINUING DISCLOSURE OF INFORMATION.
(a) Definition . As used in this Section, the following terms have the meanings ascribed
to such terms below:
"EMMA"means the Electronic Municipal Market Access system being established by the
MSRB.
"MSRB" means the Municipal Securities Rulemaking Board.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
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"SEC'means the United States Securities and Exchange Commission.
(b) Annual Reports. The City shall provide annually to the MSRB through EMMA
within six months after the end of each fiscal year ending in or after 2021, financial information
and operating data with respect to the City of the general type included in the final Official
Statement authorized by.this Ordinance being the information described in Exhibit G hereto. Any
financial statements so to be provided shall be (1) prepared in accordance with the accounting
principles described in Exhibit G 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. (2) audited, if the
City commissions an audit of such statements and the audit is completed within the period during
which they must be provided. If the audit of such financial statements is not complete within such
period, then the City shall provide (1) unaudited financial statements for such fiscal year within
such six month period, and (2) audited financial statements for the applicable fiscal year to the
MSRB through EMMA when and if the audit report on such statements become available.
If the City changes its fiscal year, it will notify the MSRB through EMMA of the date of
the new fiscal year end prior to the next date by which the City otherwise would be required to
provide financial information and operating data pursuant to this paragraph (b).
The financial information and operating data to be provided pursuant to this paragraph(b)
may be set forth in full in one or more documents or may be included by specific reference to any
document (including an official statement or other offering document, if it is available from the
MSRB)that theretofore has been provided to the MSRB through EMMA or filed with the SEC.
(c) Event Notices.
(i) The City shall notify the MSRB through EMMA in an electronic format as.
prescribed by the MSRB, in a timely manner (but not in excess of ten business days after
,the occurrence of the event) of any of the following events with respect to the Bonds, if
such event is material within the meaning of the federal securities laws:
1. Non-payment related defaults;
2. Modifications to rights of holders;
3. Redemption calls;
4. Release, substitution, or sale of property securing repayment of the Bonds;
5. The consummation of a merger, consolidation, or acquisition involving an
obligated person or the sale of all or substantially all of the assets of the
obligated person, other than in the ordinary course of business, the entry
into 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; and
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6. Appointment of a successor or additional paying agent/registrar or the
change of name of a paying agent/registrar.
(ii) The City shall notify the MSRB through EMMA in an electronic format as
prescribed by the MSRB, in a timely manner (but not in excess of ten business days after
the occurrence of the event) of any of the following events with respect to the Bonds,
without regard to whether such event is considered material within the meaning of the
federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults, if material;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or 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 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 payment 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;
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14. Appointment of a successor or additional paying agent/registrar or the
change of name of a paying agent/registrar, if material;
15. Incurrence of a Financial Obligation of the Issuer, if material, or agreement
to covenants, events of default, remedies,priority rights, or other similar terms of a
Financial Obligation of the Issuer, any of which affect security holders, if material;
and
16. Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the Issuer, any of
which reflect financial difficulties.
For these purposes, (a) any event described in the immediately preceding paragraph(12) is
considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the Issuer in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers in possession but
subject to the supervision and orders of a court or governmental authority, or the entry of an order
confirming a plan of reorganization, arrangement, or liquidation by. a court or governmental
authority having supervision or jurisdiction over substantially all of the assets or business of the .
Issuer, and(b)the Issuer intends the words used in the immediately preceding paragraphs (15)and
(16) and the definition of Financial Obligation in this Section have the same meanings as when
they are used in the Rule, as evidenced by SEC Release No. 34-83885, dated August 20, 2018.
The City shall notify the MSRB through EMMA, in a timely manner, of any failure by the
City to provide financial information or operating data in accordance with subsection (b) of this .
Section by the time required by such subsection.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe
and perform the covenants specified in this Section for so long.as, but only for so long as,the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except
that the City in any event will give notice of any deposit made in accordance with Section 24 of
this Ordinance that causes Bonds no longer to be 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
41
J
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 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
comprise 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 since such offering 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) determined that such amendment will not materially impair
the interest of the holders and beneficial owners of the Bonds. The City may also amend or repeal
the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable
provision of the Rule or a.court of final jurisdiction enters judgment that such provisions of the
Rule are invalid,but only if and to the extent that the provisions of this sentence would not prevent
an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds.
If the City so amends the provisions of this Section, it shall include with any amended financial
information or operating data next provided in accordance with paragraph (b) of this Section an
explanation, in narrative form, of the reason for the amendment and of the impact of any change
in the type of financial information or operating data so provided.
SECTION 32. 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 Purchase
Contract, the Official Statement, and the Escrow Agreement. In addition, prior to the initial
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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, (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 33. CITY'S CONSENT TO PROVIDE INFORMATION AND
DOCUMENTATION TO THE TEXAS MAC. The Municipal Advisory Council of Texas (the
"Texas MAC'), a non-profit membership corporation organized exclusively for non-profit
purposes described in section 501(c)(6) of the Internal Revenue Code and which serves as a
comprehensive financial information repository regarding municipal debt issuers in Texas,
requires provision of written documentation regarding the issuance of municipal debt by the issuers
thereof. In support of the purpose of the Texas MAC and in compliance with applicable law,the
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 34. DELEGATION AUTHORIZATION PURSUANT TO HB 1295.
Though such parties may be identified, and the entry into a particular form of contract may be
authorized herein,pursuant to the Act, and any other applicable law,the City Council,pursuant to
the Act and other applicable law,hereby delegates to any Authorized Official that is not a member
of the City Council, the authority to independently select the counterparty to any paying
agent/registrar, rating agency, bond insurer, securities depository,.escrow agent, open market,
securities bidding agent, or any other contract that is determined by the foregoing, the City's
Financial Advisor, or the City's Bond Counsel to be necessary or incidental to the issuance of the
Bonds as long as each of such contracts has a value of less than the amount referenced in Section
2252.908 of the Texas Government Code (collectively, the "Ancillary Bond Contracts") and, as
necessary, to execute the Ancillary Bond Contracts on behalf and as the act and deed of the City.
The City Council has not participated in the selection of any of the business entities which are
counterparties to the Ancillary Bond Contracts.
SECTION 35. 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.
43
SECTION 36. INCORPORATION OF RECITALS. The City hereby finds that the
statements set forth in the recitals of this Ordinance are true and correct, and the City hereby
incorporates such recitals as a part of this Ordinance.
SECTION 37. EFFECTIVE DATE. Pursuant to Section 1201.028, Texas Government
Code,this Ordinance shall be effective immediately upon adoption,notwithstanding any provision
in the City Charter to the contrary.
[The remainder of this page intentionally left blank]
44
ADOPTED BY THE CITY COUNCIL OF THE CITY OF CIBOLO, TEXAS AT A
REGULAR MEETING HELD ON THE STHDA Y OF JUNE,2021.
CITY OF CIBOLO, TEXAS
St Boyl16yor
ATTEST:
Peggy Cimics, City Secretary
(Seal)
m
• '
• a
• C
P.iey..•Cp•e•,
ADOPTED BY THE CITY COUNCIL OF THE CITY OF CIBOLO, TEXAS AT A
REGULAR MEETING HELD ON THE STHDAY OFJUNE,2021
CITY OF.CIBOLO, TEXAS
Stosh Boyle,Mayor
ATTEST: .
Peggy Cimics, City Secretary
(Seal)
_ J
SCHEDULEI
Refunded Obligations
City of Cibolo,Texas Utility System Revenue Bonds, Series 2012,dated December
1, 2012, in the original principal .amount of$7,640;000 and stated to mature on
August 1 in the years 2022 through 2032, in the aggregate principal amount of
$4,630,000. These obligations have been called for redemption on September 2,
2021.
SCHEDULE II
Approval Certificate
See Tab No.
EXHIBIT A
Paying Agent/Registrar Agreement
See Tab No.
EXHIBIT B
WRITTEN PROCEDURES RELATING TO
CONTINUING COMPLIANCE WITH FEDERAL TAX COVENANTS
A. Arbitrase. With respect to the investment and expenditure of the proceeds of the
Bonds,the City's chief financial officer(the"Responsible Person"),which currently is the City's
Director of Finance, will:
(i) instruct the appropriate -person or persons that the construction, renovation or
acquisition of the facilities financed with the Bonds must proceed with due
-diligence and that binding contracts for the expenditure- of at least 5%of the
proceeds of the Bonds will be entered into within six (6) months of the date of
delivery of the Bonds (the "Issue Date");
(ii) monitor that at least 85% of the proceeds of the Bonds to be used for the
construction, renovation or acquisition of any facilities are expended within.three
(3)years of the Issue Date;
(iii) restrict the yield of the investments to the yield on the Bonds after three (3) years
of the Issue Date;
(iv) monitor all amounts deposited into a sinking fund or funds (e.g.,.the Bond Fund),
to assure that the maximum amount invested at a yield higher than the yield on the
Bonds does not exceed an amount equal to the debt serviceon the Bonds in the
succeeding 12 month period plus a carryover amount equal to one-twelfth of the
principal and interest payable on the Bonds for the immediately preceding
12-month period;
(v) ensure.that no more than 50% of the proceeds of the Bonds are invested in an
investment with a guaranteed yield for 4 years or more;
(vi) maintain any official action of the City(such as a reimbursement resolution) 'stating
its intent to reimburse with the proceeds of the Bonds any amount expended prior
to the Issue Date for the acquisition, renovation or construction of the facilities;
(vii) ensure that the applicable information return(e.g., IRS Form 8038-G, 8038-GC, or
any successor forms) is timely filed with the IRS; and
(viii) assure that, unless excepted from rebate and yield restriction under section 148(f)
of the Code, excess investment earnings are computed and paid to the U.S.
government at such time and in such manner as directed by the IRS (A) at least
every 5 years after the Issue Date and (B) within 30 days after the date the Bonds
are retired.
B. Private Business Use. With respect to the use of the,facilities financed or
refinanced with the proceeds of the Bonds the Responsible Person will:
(i) monitor the date on which the facilities are substantially complete and available to
be used for the purpose intended;
(ii) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of.the City or members of the general
public has any contractual right (such as a lease, purchase, management or other
service agreement)with respect to any portion of the facilities;
(iii) monitor whether,at any time the Bonds are outstanding, any person, other than-the
City, the employees of the City, the agents of the City or members of the general
public has a right to use the output of the facilities (e.g.,water, gas, electricity);
(iv) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the.agents of the City or members of the general .
public has a right to use the facilities to conduct or to direct the conduct of research;
'(v). determine whether, at anytime the Bonds are outstanding, any person, other than
the City,has a naming right for the facilities or any other contractual right-granting
an intangible benefit;
(vi) determine whether, at any time the Bonds are outstanding, the facilities are sold or.
otherwise disposed of; and
(vii) take such action as is necessary to remediate any failure to.maintain compliance
with the covenants contained in the Ordinance related to the public use of the
facilities.
C. Record Retention. The Responsible Person will maintain or cause to be
maintained all records relating to the investment and expenditure of the proceeds of the Bonds and
the use of the facilities financed or refinanced thereby for a period ending three (3) years after the
complete extinguishment of the Bonds. If any portion of the Bonds is refunded with the proceeds
of another series of tax-exempt obligations, such records shall be maintained until the three (3) .
years after the refunding obligations are completely extinguished. , Such records can be
maintained in paper or electronic format.
D. Responsible Person. The Responsible Person shall receive appropriate training .
regarding the City's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use of the
facilities financed or refinanced with the proceeds of the Bonds. The foregoing notwithstanding,
the Responsible Person is authorized and instructed to retain such experienced advisors and agents
as may be necessary to carry out the purposes of these instructions.
EXHIBIT C
FORINT OF PURCHASE CONTRACT
EXHIBIT D
Escrow Deposit Letter
See Tab No.
EXHIBIT E
Notice of Redemption
See Tab No.
EXHIBIT F
DTC Letter of Representations
See Tab No.
EXHIBIT G
DESCRIPTION OF ANNUAL FINANCIAL,INFORMATION
The following information is referred to in Section 31 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 annual audited financial statements of the City or the unaudited financial
statements of the City in the event audited financial statements are not completed within six months
after the end of any fiscal year.
2. All quantitative financial information and operating data with respect to the City of
the general type included in Table 1 of the Official Statement and Tables 1 through 6 in Appendix
B of the Official Statement.
Accounting Principles
The accounting principles referred to in such Section are the accounting principles
described in the notes to the financial statements referred to in paragraph 1 above.
EXHIBIT II
Written Procedures Relating to
Continuing Compliance with Federal Tax Covenants
A. Arbitraize. With respect to the investment and expenditure of the proceeds of the
Bonds,the City's Chief Financial Officer(the Responsible Person),which currently is the Director
of Finance, will:
(i) instruct the appropriate person or persons that the construction, renovation or
acquisition of the facilities must proceed with due diligence and that binding
contracts for the expenditure of at least 5% of the proceeds of the Bonds will be
entered into within six (6) months of the date of delivery of the Bonds (the Issue
Date);
(ii) monitor that at least 85% of the proceeds of the Bonds to be used for the
construction, renovation or acquisition of any facilities are expended within three
(3)years of the Issue Date;
(iii) restrict the yield of the investments to the yield on the Bonds after three (3) years
of the Issue Date;
(iv) monitor all amounts deposited into a sinking fund or funds (e.g., the Interest and
Sinking Fund),to assure that the maximum amount invested at a yield higher than
the yield on the Bonds does not exceed an amount equal to the debt service on the
Bonds in the succeeding 12 month period plus a carryover amount equal to one-
twelfth of the principal and interest payable on the Bonds for the immediately
preceding 12-month period;
(v) ensure that no more than 50% of the proceeds of the Bonds are invested in an
investment with a guaranteed yield for 4 years or more;
(vi) maintain any official action of the City(such as a reimbursement resolution)stating
its intent to reimburse with the proceeds of the Bonds any amount expended prior
to the Issue Date for the acquisition,renovation or construction of the facilities;
(vii) ensure that the applicable information return(e.g., IRS Form 8038-G, 8038-GC, or
any successor forms) is timely filed with the IRS; and
(viii) assure that, unless excepted from rebate and yield restriction under section 148(f)
of the Code, excess investment earnings are computed and paid to the U.S.
government at such time and in such manner as directed by the IRS (A) at least
every 5 years after the Issue Date and (B) within 30 days after the date the Bonds
are retired.
B: Private Business Use. With respect.to the use of the facilities financed or
refinanced with the proceeds of the Bonds the Responsible Person will:
(i) monitor the date on which the facilities are substantially complete and available to
be used for the purpose intended;
(ii) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has any contractual right (such as a lease, purchase, management or other
service agreement)with respect to any portion of the facilities;
(iii) monitor whether, at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has a right to use the output of the facilities (e.g., water, gas, electricity);
(iv) monitor whether; at any time the Bonds are outstanding, any person, other than the
City, the employees of the City, the agents of the City or members of the general
public has a right to use the facilities to conduct or to direct the conduct of research;
(v) determine whether, at any time the Bonds are outstanding, any person, other than
the City, has a naming right for the facilities or any other contractual right granting
an intangible benefit;
(vi) determine whether, at any time the Bonds are outstanding,the facilities are sold or
otherwise disposed of; and
(vii) take such action as is necessary to remediate any failure to maintain compliance
with the covenants contained in the Ordinance related to the public use of the
facilities.
C. Record Retention. The Responsible Person will maintain or cause to be
maintained all records relating to the investment and expenditure of the proceeds of the Bonds and
the use of the facilities financed or refinanced thereby for a period ending three (3)years after the
complete extinguishment of the Bonds. If any portion of the Bonds is refunded with the proceeds
of another series of tax-exempt obligations, such records shall be maintained until the three (3)
years after the refunding obligations are completely extinguished. Such records can be
maintained in paper or electronic format.
D. Responsible Person. The Responsible Person shall receive appropriate training
regarding the City's accounting system, contract intake system, facilities management and other
systems necessary to track the investment and expenditure of the proceeds and the use. of the
facilities financed or refinanced with the proceeds of the Bonds. The foregoing notwithstanding,
the Responsible Person is authorized and instructed to retain such experienced advisors and agents
as may be necessary to carry out the purposes of these instructions.