HomeMy WebLinkAboutOrdinance - 2019-O0034 - Bond - Water And Wastewater System Revenue Bonds, Series 2019 - 02/25/2019Ordinance No. 2019 - 00034
ORDINANCE
relating to
CITY OF LUBBOCK, TEXAS
WATER AND WASTEWATER SYSTEM REVENUE BONDS,
SERIES 2019
Adopted: February 25, 2019
4130-0359-34917
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section1.01
Definitions................................................................................................................1
Section1.02
Findings....................................................................................................................7
Mandatory Redemption. The Series 2019 Bonds shall not be subject to
Section 1.03
Table of Contents, Titles and Headings...................................................................7
mandatory redemption prior to their scheduled maturity......................................16
Section 1.04
Interpretation............................................................................................................8
Optional Redemption.............................................................................................16
ARTICLE II
Partial Redemption.................................................................................................16
SECURITY FOR THE BONDS
Notice of Redemption to Owners..........................................................................17
Section2.01
Pledge of Security....................................................................................................8
Section 2.02
Limited Obligations.................................................................................................8
Section2.03
Security Interest.......................................................................................................8
ARTICLE III
Lapse of Payment...................................................................................................18
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section3.01
Authorization...........................................................................................................9
Section 3.02
Date, Denomination, Maturities and Interest...........................................................9
Section 3.03
Medium, Method and Place of Payment................................................................10
Section 3.04
Execution and Registration of Bonds....................................................................11
Section3.05
Ownership..............................................................................................................12
Section 3.06
Registration, Transfer and Exchange.....................................................................12
Section3.07
Cancellation...........................................................................................................13
Section 3.08
Temporary Bonds...................................................................................................13
Section 3.09
Replacement Bonds...............................................................................................13
Section 3.10
Book -Entry Only System.......................................................................................14
Section 3.11
Successor Securities Depository; Transfer Outside Book -Entry Only
System....................................................................................................................15
Section 3.12
Payments to Cede & Co.........................................................................................16
ARTICLE IV
REDEMPTION OF SERIES 2019 BONDS BEFORE MATURITY
Section 4.01
Limitation on Redemption.....................................................................................16
Section 4.02
Mandatory Redemption. The Series 2019 Bonds shall not be subject to
mandatory redemption prior to their scheduled maturity......................................16
Section 4.03
Optional Redemption.............................................................................................16
Section 4.04
Partial Redemption.................................................................................................16
Section 4.05
Notice of Redemption to Owners..........................................................................17
Section 4.06
Payment Upon Redemption...................................................................................17
Section 4.07
Effect of Redemption.............................................................................................18
Section 4.08
Lapse of Payment...................................................................................................18
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Section 7.01 Segregation of Revenues/Fund Designations........................................................20
Section7.02 System Fund...........................................................................................................21
Section7.03 Bond Fund..............................................................................................................21
Section 7.04 General Reserve Fund............................................................................................22
Section 7.05 TWDB Reserve Fund.............................................................................................24
Section 7.06 Construction Fund..................................................................................................25
Section7.07 Payment of Bonds..................................................................................................26
Section 7.08 Deficiencies in Funds.............................................................................................26
Section 7.09 Security and Investment of Funds..........................................................................26
Section 7.10 Excess Revenues....................................................................................................27
ARTICLE VIII
SALE AND DELIVERY OF SERIES 2019 BONDS; DEPOSIT OF PROCEEDS
Section 8.01 Sale of the Series 2019 Bonds...............................................................................27
Section 8.02 Control and Delivery of Bonds..............................................................................27
Section 8.03 Deposit of Proceeds...............................................................................................28
ARTICLE IX
ADDITIONAL BONDS
Section 9.01 Issuance of Additional Bonds................................................................................28
Section9.02 Credit Facilities......................................................................................................29
Section 9.03 Separately Financed Projects.................................................................................30
ARTICLE X
PARTICULAR REPRESENTATIONS AND COVENANTS
Section10.01 Rates and Charges..................................................................................................30
Section 10.02 Maintenance and Operation; Insurance.................................................................30
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ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01
Appointment of Paying Agent/Registrar...............................................................18
Section 5.02
Qualifications.........................................................................................................18
Section 5.03
Maintaining Paying Agent/Registrar.....................................................................19
Section 5.04
Termination............................................................................................................19
Section 5.05
Notice of Change to Owners..................................................................................19
Section 5.06
Agreement to Perform Duties and Functions.........................................................19
Section 5.07
Delivery of Records to Successor..........................................................................19
ARTICLE VI
FORM OF THE SERIES 2019 BONDS
Section6.01
Form Generally......................................................................................................19
Section 6.02
CUSIP Registration................................................................................................20
Section6.03
Legal Opinion........................................................................................................20
Section 6.04
Statement of Insurance...........................................................................................20
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7.01 Segregation of Revenues/Fund Designations........................................................20
Section7.02 System Fund...........................................................................................................21
Section7.03 Bond Fund..............................................................................................................21
Section 7.04 General Reserve Fund............................................................................................22
Section 7.05 TWDB Reserve Fund.............................................................................................24
Section 7.06 Construction Fund..................................................................................................25
Section7.07 Payment of Bonds..................................................................................................26
Section 7.08 Deficiencies in Funds.............................................................................................26
Section 7.09 Security and Investment of Funds..........................................................................26
Section 7.10 Excess Revenues....................................................................................................27
ARTICLE VIII
SALE AND DELIVERY OF SERIES 2019 BONDS; DEPOSIT OF PROCEEDS
Section 8.01 Sale of the Series 2019 Bonds...............................................................................27
Section 8.02 Control and Delivery of Bonds..............................................................................27
Section 8.03 Deposit of Proceeds...............................................................................................28
ARTICLE IX
ADDITIONAL BONDS
Section 9.01 Issuance of Additional Bonds................................................................................28
Section9.02 Credit Facilities......................................................................................................29
Section 9.03 Separately Financed Projects.................................................................................30
ARTICLE X
PARTICULAR REPRESENTATIONS AND COVENANTS
Section10.01 Rates and Charges..................................................................................................30
Section 10.02 Maintenance and Operation; Insurance.................................................................30
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Section 10.03 Records, Accounts, Accounting Reports...............................................................31
Section 10.04 Further Covenants..................................................................................................31
Section 10.05 Federal Income Tax Exclusion..............................................................................32
ARTICLE XI
DEFAULT AND REMEDIES
Section 11.01 Events of Default...................................................................................................36
Section 11.02 Remedies for Default.............................................................................................36
Section 11.03 Remedies Not Exclusive........................................................................................36
ARTICLE XII
DISCHARGE
Section12.01 Discharge...............................................................................................................37
ARTICLE XIII
CONTINUING DISCLOSURE UNDERTAKING
Section 13.01 Annual Reports......................................................................................................37
Section 13.02 Event Notices.........................................................................................................38
Section 13.03 Identifying Information..........................................................................................39
Section 13.04 Limitations, Disclaimers and Amendments...........................................................39
ARTICLE XIV
AMENDMENT OF ORDINANCE
Section 14.01 Amendment of Ordinance......................................................................................40
ARTICLE XV
MISCELLANEOUS
Section 15.01 Compliance with the Texas Water Development Board's Rules and
Regulations............................................................................................................42
Section15.02 Severability............................................................................................................44
Section 15.03 Effective Immediately............................................................................................44
Exhibit A - Description of Annual Disclosure of Financial Information .................................. A-1
Exhibit B Form of the Series 2019 Bonds................................................................................B-1
Exhibit C - Special Escrow Deposit Agreement.........................................................................0-1
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AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, WATER AND WASTEWATER
SYSTEM REVENUE BONDS, SERIES 2019; AND ENACTING
OTHER PROVISIONS RELATING THERETO
WHEREAS, in accordance with the Constitution and laws of the State of Texas,
specifically Chapter 1502, Texas Government Code, as amended ("Chapter 1502"), the City
Council (the "City Council") of the City of Lubbock, Texas (the "City") has determined that it is
in the best interest of the City to create and maintain a combined water and wastewater system (the
"Water and Wastewater System" or the "System");
WHEREAS, the City Council hereby finds and determines that bonds secured by a first
lien on and pledge of the Net Revenues of the Water and Wastewater System should be issued for
the purposes hereinafter provided;
WHEREAS, the revenue bonds hereinafter authorized are to be issued and delivered
pursuant to Chapter 1502 and in accordance with the general laws of the State of Texas;
WHEREAS, the meeting at which this Ordinance is considered is open to the public as
required by law, and the public notice of the time, place and purpose of said meeting was given as
required by Chapter 551, Texas Government Code, as amended; therefore,
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
LUBBOCK, TEXAS, THAT:
ARTICLE I
DEFINITIONS AND OTHER PRELIMINARY MATTERS
Section 1.01 Definitions.
Unless otherwise expressly provided or unless the context clearly requires otherwise in this
Ordinance, the following terms shall have the meanings specified below:
"Account" means any account created within a Fund established pursuant to the terms of
this Ordinance or an ordinance authorizing the issuance of Parity Obligations.
"Additional Bonds" means the additional parity obligations the City reserves the right to
issue in accordance with the terms and conditions prescribed in Section 9.01 hereof.
"Authorized Officer" means each of the Mayor, the City Manager and the Chief Financial
Officer, acting individually.
"Bond Date" means March 19, 2019.
"Business Day" means any day other than a Saturday, Sunday or legal holiday or other day
on which banking institutions in the city where the Designated Payment/Transfer Office of the
Paying Agent/Registrar is located are required or authorized by law or executive order to close.
4130-0359-3491.7
"Chapter 1208" means Chapter 1208, Texas Government Code, as amended.
"Chapter 1502" means Chapter 1502, Texas Government Code, as amended.
"Chief Financial Officer" means the Chief Financial Officer of the City or such other City
official or officer who has assumed the duties of the Chief Financial Officer.
"City" means the City of Lubbock, Texas.
"Closing Date" means the date of the initial delivery of and payment for the Series 2019
Bonds.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
enacted on or before the Issue Date.
"Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Concurrent Ordinance" means the ordinance, approved by City Council
contemporaneously with this Ordinance, authorizing the issuance of Covered Parity Bonds
designated as the City of Lubbock, Texas Water and Wastewater System Revenue Bonds, Series
2019A.
"Covered Parity Bonds" means Parity Bonds (other than TWDB Bonds) designated as
Covered Parity Bonds.
"Credit Facility" means an agreement (including a loan agreement, revolving credit
agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement,
insurance contract, commitment to purchase Parity Bonds, purchase or sale agreements, or
commitments or other contracts or agreements) that is (a) authorized, recognized and approved by
the City as a Credit Facility in connection with the authorization, issuance, security, or payment
of Parity Bonds or (b) entered into with a financial institution for the purpose of (i) enhancing or
supporting the creditworthiness of (A) a series or installment of Parity Bonds or (B) all of the
Parity Bonds, (ii) providing a surety policy or other similar instrument in order to fund all or a
portion of a Reserve Fund Requirement for one or more series of Parity Bonds, or (iii) providing
liquidity with respect to a series or installment of Parity Bonds which by their terms are subject to
tender for purchase, and which, by its terms, creates a liability on the part of the City on a parity
with the Parity Bonds; provided that, on the date any such credit facility is issued, any rating
agency having an outstanding rating on the Parity Bonds would not lower the rating on the Parity
Bonds as confirmed in writing by such rating agency. A determination by the City contained in
the ordinance authorizing the issuance of Parity Bonds and/or authorizing the execution and
delivery of a Credit Facility that such agreement constitutes a Credit Facility under this definition
shall be conclusive as against all Owners.
"Debt Service" means, as of any particular date of computation, with respect to any series
or installment of 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 required to be redeemed or prepaid as to principal prior to maturity, the
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4130-0359-3491.7
principal amounts thereof will be redeemed or paid prior to maturity in accordance with the
mandatory redemption or prepayment provisions applicable thereto.
"Designated Payment/Transfer Office" means the Designated Payment/Transfer Office, as
designated in the Paying Agent/Registrar Agreement, or such other location designated by the
Paying Agent/Registrar.
"DTC" means The Depository Trust Company of New York, New York, or any successor
securities depository.
"DTC Participant" means brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations on whose behalf DTC was created to hold securities
to facilitate the clearance and settlement of securities transactions among DTC Participants.
"EMMA" means the Electronic Municipal Market Access System.
"Event of Default" means any event of default as defined in Section 10.01 of this
Ordinance.
"Financial Obligation" means a (a) debt obligation; (b) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that
"financial obligation" shall not include municipal securities (as defined in the Securities Exchange
Act of 1934, as amended) as to which a final official statement (as defined in the Rule) has been
provided to the MSRB consistent with the Rule,
"Fiscal Year" means the twelve (12) month accounting period used by the City in
connection with the operations of the System which may be any twelve (12) consecutive month
period established by the City.
"Fund" means any of the funds, accounts or a portion of a fund or account, confirmed
and/or established pursuant to Article VII hereof.
"General Reserve Fund Requirement" means an amount equal to the lesser of (i) the
maximum annual debt service (calculated on a Fiscal Year basis) for all Outstanding Covered
Parity Bonds, as determined on the date of issuance of each series or installment of Additional
Bonds issued as Covered Parity Bonds, and annually following each principal payment date or
redemption date for the Covered Parity Bonds, as the case may be, or (ii) the maximum amount in
a reasonably required reserve fund that can be invested without restriction as to yield pursuant to
Subsection (d) of section 148 of the Code and regulations promulgated thereunder.
"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Initial Bond" means the initial bond or bonds authorized by Section 8.01 of this
Ordinance.
4134-0359-3491.7
"Interest Payment Date" means the date or dates on which interest on the Series 2019
Bonds is scheduled to be paid until their respective dates of maturity or prior redemption, such
dates being February 15 and August 15, commencing February 15, 2020.
"Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Issue Date" for the Series 2019 Bonds is the date on which the Series 2019 Bonds are
delivered against payment therefor.
"MSRB" means the Municipal Securities Rulemaking Board.
"Net Revenues" means all income, revenues and receipts of every nature derived from and
received by virtue of the operation of the System including interest income and earnings received
from the investment of moneys in the special Funds created by this Ordinance or ordinances
authorizing Parity Obligations, after deducting and paying, and making provisions for the payment
of, current expenses of maintenance and operation thereof, including all salaries, materials, repairs
and extensions necessary to render efficient service; provided, however, only such expenses for
repairs and extensions as in the judgment of the City Council reasonably and fairly exercised, are
necessary to keep the System in operation and to 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 any obligations payable from Net Revenues of the System, shall be
deducted in determining "Net Revenues". Contractual payments for the purchase of water or the
treatment of sewage shall be a maintenance and operating expense of the System to the extent
provided in the contract incurred therefor and as may be authorized by law. Depreciation shall
never be considered as an expense of operation and maintenance.
"Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Non -Recourse Debt" means any debt secured by a lien (other than a lien on Net
Revenues), liability for which is effectively limited to the property subject to such lien with no
recourse, directly or indirectly, to any other property of the City attributable to the Water and
Wastewater System; provided, however, that such debt is being incurred in connection with the
acquisition of property only, which property is not, at the time of such occurrence, owned by the
City and being used in the operations of the City.
"Outstanding" when used in this Ordinance with respect to Parity Bonds, means, as of the
date of determination, all Parity Bonds theretofore sold, issued and delivered by the City, except:
(1) those Parity Bonds cancelled or delivered to the transfer agent or registrar
for cancellation in connection with the exchange or transfer of such obligations;
(2) those Parity Bonds paid or deemed to be paid in accordance with the
provisions of Section 12.01 of this Ordinance; and
(3) those Parity Bonds that have been mutilated, destroyed, lost, or stolen and
replacement bonds have been registered and delivered in lieu thereof.
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4130-0359-3491.7
"Owner" means the person who is the registered owner of a Series 2019 Bond or Series
2019 Bonds, as shown in the Register.
"Parity Bonds" means any Previously Issued Bonds, the Series 2019 Bonds and Additional
Bonds, if any.
"Parity Obligations" means all Parity Bonds, as well as any other obligations issued or
incurred by the City that are determined and declared by the City Council of the City to be on a
parity with the Parity Bonds, including obligations of the City issued or incurred under the terms
of a Credit Facility.
"Paying Agent/Registrar" means the bank or trust company identified in Section 5.01 of
this Ordinance, or any successor thereto as provided in this Ordinance.
"Previously Issued Bonds" means Outstanding and unpaid revenue bonds payable from
and secured by a first lien on and pledge of the Net Revenues of the System. As of the date of this
Ordinance, there are no Previously Issued Bonds.
"Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Rebate Amount" has the meaning stated in Section 1.148-3 of the Regulations.
"Record Date" means the last Business Day of the month next preceding an Interest
Payment Date
"Register" means the register specified in Section 3.06(a) of this Ordinance.
"Regulations" means the final or temporary Income Tax Regulations applicable to
obligations issued pursuant to Sections 141 through 150 of the Code. Any reference to a section
of the Regulations shall also refer to any successor provision to such section hereafter promulgated
by the Internal Revenue Service pursuant to Sections 141 through 150 of the Code and applicable
to the Series 2019 Bonds.
"Representation Letter" means the Blanket Letter of Representations between the City and
DTC.
"Reserve Fund Obligations" means cash or investment securities of any of the type or types
permitted under Section 7.04 of this Ordinance.
"Rule" means SEC Rule 15c2-12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"Series 2019 Bonds" means the City's bonds authorized to be issued by Section 3.01 of
this Ordinance.
"Series 2019A Bonds" means the City of Lubbock, Texas Water and Wastewater System
Revenue Bonds, Series 2019A, authorized to be issued pursuant to the Concurrent Ordinance.
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"Special Payment Date" means the special payment date prescribed by Section 3.03(b).
"Special Record Date" means the special record date prescribed by Section 3.03(b).
"Subordinate Obligations" means any debt secured by or payable in whole or in part from
revenues of the System or any portion thereof which expressly provides that all payments thereon
shall be subordinated to the timely payment of all Parity Obligations then outstanding or
subsequently issued.
"System" or "Water and Wastewater System" means the City's combined water and
wastewater system, including all properties and interests in properties (real, personal or mixed and
tangible or intangible, including contract rights, water rights and permits) owned, operated,
maintained, and vested in, the City for the supply, storage, treatment and distribution of treated
water for municipal, domestic, commercial, industrial and other uses and the collection and
treatment of watered wastes, together with all future additions, extensions, replacements and
improvements thereto; provided that, notwithstanding the foregoing, and to the extent now or
hereafter authorized or permitted by law, the term Water and Wastewater System shall not include
any water or wastewater facilities that are declared not to be a part of the Water and Wastewater
System and are acquired or constructed by 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 secured by or payable from the Net Revenues as defined herein, but which are secured by
and payable solely from special contract revenues or payments received from any other legal entity
in connection with such facilities, and thus constitute Non -Recourse Debt; and such revenues or
payments shall not be considered as or constitute gross revenues of the Water and Wastewater
System, unless and to the extent otherwise provided in the ordinance or ordinances authorizing the
issuance of such "Special Facilities Bonds."
"TWDB" means Texas Water Development Board.
"TWDB Bonds" means Parity Bonds owned by the Texas Water Development Board and
designated as TWDB Bonds.
"TWDB Reserve Fund Requirement" means an amount equal to the lesser of (i) the average
annual debt service (calculated on a Fiscal Year basis) for all Outstanding TWDB Bonds, as
determined on the date of issuance of each series or installment of Additional Bonds issued as
TWDB Bonds, and annually following each principal payment date or redemption date for TWDB
Bonds, as the case may be, or (ii) the maximum amount in a reasonably required reserve fund that
can be invested without restriction as to yield pursuant to Subsection (d) of section 148 of the Code
and regulations promulgated thereunder.
"Unclaimed Payments" mean money deposited with the Paying Agent/Registrar for the
payment of principal of, premium, if any, or interest on the Series 2019 Bonds as the same come
due and payable and remaining unclaimed by the Owners of such Bonds after the applicable
payment or redemption date.
4130-0359-3491.7
"Yield of '
(i) any Investment shall be computed in accordance with Section 1.148-5 of the
Regulations, and
(ii) the Series 2019 Bonds shall be computed in accordance with Section 1.148-4
of the Regulations.
Section 1.02 Findings.
(a) The declarations, determinations and findings declared, made and found in the
preamble to this Ordinance are hereby adopted, restated and made a part of the operative provisions
hereof.
(b) The Water and Wastewater System is hereby created and shall be maintained in
accordance with this Ordinance as long as the Series 2019 Bonds remain Outstanding.
(c) The Series 2019 Bonds are payable from and secured by a first lien on and pledge
of the Net Revenues of the Water and Wastewater System.
(d) All conditions precedent to the issuance of the Series 2019 Bonds have been or will
be satisfied prior to delivery of the Series 2019 Bonds to the TWDB.
(e) Each of the Series 2019 Bonds shall be deemed and construed to be a "Security",
and as such a negotiable instrument, within the meaning of Article 8 of the Texas Uniform
Commercial Code.
(f) The provisions of this Ordinance shall constitute a contract between the City and
the holder or holders from time to time of the Series 2019 Bonds and no change, variation or
alteration of any kind of the provisions of this Ordinance may be made, unless as herein otherwise
provided, until all of the Series 2019 Bonds shall have been paid as to both principal and interest.
(g) To the extent that the Series 2019 Bonds are delivered before the delivery of the
Series 2019A Bonds, the City intends to issue the Series 2019A Bonds as Additional Bonds in
accordance with this Ordinance. In the event that the Series 2019A Bonds are delivered before
the delivery of the Series 2019 Bonds, the Series 2019A Bonds shall constitute Previously Issued
Bonds for purposes of this Ordinance.
Section 1.03 Table of Contents, Titles and Heading -S.
The table of contents, titles and headings of the Articles and Sections of this Ordinance
have been inserted for convenience of reference only and are not to be considered a part hereof
and shall not in any way modify or restrict any of the terms or provisions hereof and shall never
be considered or given any effect in construing this Ordinance or any provision hereof or in
ascertaining intent, if any question of intent should arise.
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Section 1.04 Interpretation.
(a) Unless the context requires otherwise, words of the masculine gender shall be
construed to include correlative words of the feminine and neuter genders and vice versa, and
words of the singular number shall be construed to include correlative words of the plural number
and vice versa.
(b) Any action required to be taken on a date which is not a Business Day shall be done
on the next succeeding Business Day and have the same effect as if done on the date so required.
(c) Any duty, responsibility, privilege, power or authority conferred by this Ordinance
upon an officer shall extend to an individual who occupies such office in an interim, acting or
provisional capacity.
(d) This Ordinance and all the terms and provisions hereof shall be liberally construed
to effectuate the purposes set forth herein.
ARTICLE II
SECURITY FOR THE BONDS
Section 2.01 Pledge of Securitx.
The Series 2019 Bonds are and shall be equally and ratably secured by and payable from a
first lien on and pledge of the Net Revenues.
The City hereby covenants and agrees that all of the Net Revenues derived from the
operation of the System, with the exception of Net Revenues in excess of the amounts required to
establish and maintain the special Funds created for the payment and security of the Parity
Obligations, are hereby irrevocably pledged for the payment of the Parity Obligations (including
the Series 2019 Bonds) and the interest thereon, and it is hereby ordained that the Parity
Obligations (including the Series 2019 Bonds) and the interest thereon, shall constitute a first lien
on the Net Revenues of the System and be valid and binding without any physical delivery thereof
or further act by the City as provided in Chapter 1208, Texas Government Code, as amended.
Section 2.02 Limited Obligations.
(a) The Series 2019 Bonds are special obligations of the City, payable solely from the
pledged Net Revenues, and do not constitute a prohibited indebtedness of the City, and the Series
2019 Bonds shall never be payable out of funds raised or to be raised by taxation.
(b) The Net Revenues shall not in any manner be pledged to the payment of any debt
or obligation of the City or the System, other than Parity Obligations, except on a subordinate lien
basis.
Section 2.03 Security Interest.
Chapter 1208 applies to the issuance of the Series 2019 Bonds and the pledge of the Net
Revenues granted by the City under Section 2.01 hereof, and such pledge is therefore valid,
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4130-0359-3491.7
effective, and perfected. If Texas law is amended at any time while the Series 2019 Bonds 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 registered owners of the Series 2019 Bonds the perfection of the security interest
in said pledge, the City agrees to take such measures as it determines are reasonable and necessary
under Texas law to comply with the applicable provisions of Chapter 9, Texas Business &
Commerce Code, and enable a filing to perfect the security interest in said pledge to occur.
ARTICLE III
AUTHORIZATION; GENERAL TERMS AND PROVISIONS
REGARDING THE BONDS
Section 3.01 Authorization.
The City's bonds, to be designated "City of Lubbock, Texas, Water and Wastewater
System Revenue Bonds, Series 2019," are hereby authorized to be issued and delivered in
accordance with the Constitution and laws of the State of Texas, including specifically Chapter
1502 and Article VIII of the Charter of the City. The Series 2019 Bonds shall be issued as TWDB
Bonds in the aggregate principal amount of $19,635,000, for the purposes of (i) paying the costs
of acquiring, purchasing, constructing, improving, renovating, enlarging and equipping property,
buildings, structures, facilities and related infrastructure for the System, (ii) funding capitalized
interest on the Series 2019 Bonds, (iii) funding the reserve fund requirement for the Series 2019
Bonds, and (iv) paying the costs of issuing the Series 2019 Bonds.
Section 3.02 Date, Denomination, Maturities and Interest.
(a) The Series 2019 Bonds shall be dated the Bond Date. The Series 2019 Bonds shall
be in fully -registered form, without coupons, in the denomination of $5,000 or any integral
multiple thereof, and shall be numbered separately from one upward or such other designation
acceptable to the City and the Paying Agent/Registrar, except the Initial Bond, which shall be
numbered T-1.
(b) The Series 2019 Bonds shall mature on February 15, in the years and in the principal
amounts and shall bear interest at the rates set forth below:
Year
Principal Amount
Interest Rate
2020
$985,000
0.00%
2021
985,000
0.00%
2022
985,000
0.00%
2023
985,000
0.05%
2024
985,000
0.10%
2025
985,000
0.18%
2026
985,000
0.27%
2027
980,000
0.39%
2028
980,000
0.50%
2029
980,000
0.62%
2030
980,000
0.76%
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4130-0359-3491 7
Year
_Principal Amount
Interest Rate
2031
980,000
0.87%
2032
980,000
0.96%
2033
980,000
1.03%
2034
980,000
1.08%
2035
980,000
1.14%
2036
980,000
1.20%
2037
980,000
1.27%
2038
980,000
1.33%
2039
980,000
1.38%
(c) Interest shall accrue and be paid on each Series 2019 Bond respectively until its
maturity or prior redemption, from the later of the Bond Date or the most recent Interest Payment
Date to which interest has been paid or provided for at the rates per annum for each respective
maturity set forth above. Such interest shall be payable on each Interest Payment Date until
maturity or prior redemption. Interest on the Series 2019 Bonds shall be calculated on the basis
of a three hundred sixty (3 60) day year composed of twelve (12) months of thirty (3 0) days each.
Section 3.03 Medium, Method and Place of Payment.
(a) The principal of, premium, if any, and interest on the Series 2019 Bonds shall be
paid in lawful money of the United States of America.
(b) Interest on the Series 2019 Bonds shall be payable to each Owner as shown in the
Register at the close of business on the Record Date; provided, however, in the event of
nonpayment of interest on a scheduled Interest Payment Date and for 30 days thereafter, a new
record date for such interest payment (a "Special Record Date") shall 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 first-class United States mail,
postage prepaid, to the address of each Owner of a Series 2019 Bond appearing on the Register at
the close of business on the last Business Day next preceding the date of mailing of such notice.
(c) Interest shall be paid by check, dated as of the Interest Payment Date, and sent by
the Paying Agent/Registrar to each Owner by United States mail, first class postage prepaid, to the
address of each Owner as it appears in the Register, or by such other customary banking
arrangement acceptable to the Paying Agent/Registrar and the Owner; provided, however, the
Owner shall bear all risk and expense of such other banking arrangement. At the option of an
Owner of at least $1,000,000 principal amount of the Series 2019 Bonds, interest may be paid by
wire transfer to the bank account of such Owner on file with the Paying Agent/Registrar.
(d) The principal of each Bond shall be paid to the Owner thereof on the due date
(whether at the maturity date or the date of prior redemption thereof) upon presentation and
surrender of such Bond at the Designated Payment/Transfer Office.
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4130-0359-3491 7
(e) If the date for the payment of the principal of, premium, if any, or interest on the
Series 2019 Bonds is not a Business Day, then the date for such payment shall be the next
succeeding day that is a Business Day, and payment on such date shall have the same force and
effect as if made on the original date payment was due and no additional interest shall be due by
reason of nonpayment on the date on which such payment is otherwise stated to be due and
payable.
(f) Unclaimed Payments shall be segregated in a special escrow account and held in
trust, uninvested by the Paying Agent/Registrar, for the accounts of the Owners of the Series 2019
Bonds to which the Unclaimed Payments pertain. Subject to Title 6 of the Texas Property Code,
Unclaimed Payments remaining unclaimed by the Owners entitled thereto for three years after the
applicable payment or redemption date shall be applied to the next payment or payments on the
Series 2019 Bonds thereafter coming due and, to the extent any such money remains three (3)
years after the retirement of all outstanding Bonds, shall be paid to the City to be used for any
lawful purpose. Thereafter, neither the City, the Paying Agent/Registrar nor any other person shall
be liable or responsible to any owners of such Bonds for any further payment of such unclaimed
monies or on account of any such Bonds, subject to Title 6 of the Texas Property Code.
Section 3.04 Execution and Re istration of Bonds.
(a) The Series 2019 Bonds shall be executed on behalf of the City by the Mayor and
the City Secretary, by their manual or facsimile signatures, and the official seal of the City shall
be impressed or placed in facsimile thereon. Such facsimile signatures on the Series 2019 Bonds
shall have the same effect as if each of the Series 2019 Bonds had been signed manually and in
person by each of said officers, and such facsimile seal on the Series 2019 Bonds shall have the
same effect as if the official seal of the City had been manually impressed upon each of the Series
2019 Bonds.
(b) In the event that any officer of the City whose manual or facsimile signature appears
on the Series 2019 Bonds ceases to be such officer before the authentication of such Bonds or
before the delivery thereof, such manual or facsimile signature nevertheless shall be valid and
sufficient for all purposes as if such officer had remained in such office.
(c) Except as provided below, no Bond shall be valid or obligatory for any purpose or
be entitled to any security or benefit of this Ordinance unless and until there appears thereon the
Certificate of Paying Agent/Registrar substantially in the form provided in the form of bond
attached hereto as Exhibit B, duly authenticated by manual execution by an officer or duly
authorized signatory of the Paying Agent/Registrar. It shall not be required that the same officer
or authorized signatory of the Paying Agent/Registrar sign the Certificate of Paying
Agent/Registrar on all of the Series 2019 Bonds. In lieu of the executed Certificate of Paying
Agent/Registrar described above, the Initial Bond delivered at the Closing Date shall have attached
thereto the Comptroller's Registration Certificate substantially in the form provided in the form of
bond attached hereto as Exhibit B, 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
Series 2019 Bond has been duly approved by the Attorney General of the State of Texas, that it is
a valid and binding obligation of the City and that it has been registered by the Comptroller of
Public Accounts of the State of Texas.
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4130-0359.3491.7
Section 3.05 Ownership.
(a) The City, the Paying Agent/Registrar and any other person may treat the person in
whose name any Bond is registered as the absolute owner of such Bond for the purpose of making
and receiving payment as provided herein (except interest shall be paid to the person in whose
name such Bond is registered on the Record Date or Special Record Date, as applicable), and for
all other purposes, whether or not such Bond is overdue, and neither the City nor the Paying
Agent/Registrar shall be bound by any notice or knowledge to the contrary.
(b) All payments made to the Owner of a Series 2019 Bond shall be valid and effectual
and shall discharge the liability of the City and the Paying Agent/Registrar upon such Bond to the
extent of the sums paid.
Section 3.06 Registration, Transfer and Exchange.
(a) So long as any Series 2019 Bond remains outstanding, the City shall cause the
Paying Agent/Registrar to keep at the Designated Payment/Transfer Office a register (the
"Register") in which, subject to such reasonable regulations as it may prescribe, the Paying
Agent/Registrar shall provide for the registration and transfer of Series 2019 Bonds in accordance
with this Ordinance.
(b) The ownership of a Series 2019 Bond may be transferred only upon the presentation
and surrender of the Series 2019 Bond at the Designated Payment/Transfer Office of the Paying
Agent/Registrar with such endorsement or other evidence of transfer as is acceptable to the Paying
Agent/Registrar. No transfer of any Bond shall be effective until entered in the Register.
(c) The Series 2019 Bonds shall be exchangeable upon the presentation and surrender
thereof at the Designated Payment/Transfer Office of the Paying Agent/Registrar for a Series 2019
Bond or Bonds of the same series, maturity and interest rate and in any denomination or
denominations of any integral multiple of $5,000 and in an aggregate principal amount equal to
the unpaid principal amount of the Series 2019 Bonds presented for exchange. The Paying
Agent/Registrar is hereby authorized to authenticate and deliver Bonds exchanged for other Bonds
in accordance with this Section.
(d) Each exchange Bond delivered by the Paying Agent/ Registrar in accordance with
this Section shall constitute an original contractual obligation of the City and shall be entitled to
the benefits and security of this Ordinance to the same extent as the Series 2019 Bond or Series
2019 Bonds in lieu of which such exchange Series 2019 Bond is delivered.
(e) No service charge shall be made to the Owner for the initial registration, subsequent
transfer, or exchange for any different denomination of any of the Series 2019 Bonds. The Paying
Agent/Registrar, however, may require the Owner to pay a sum sufficient to cover any tax or other
governmental charge that is authorized to be imposed in connection with the registration, transfer
or exchange of a Series 2019 Bond.
(f) Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer,
or exchange any Bond called for redemption, in whole or in part, where such redemption is
scheduled to occur within forty-five (45) calendar days after the transfer or exchange date;
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4130-0359-3491.7
provided, however, such limitation shall not be applicable to an exchange by the Owner of the
uncalled principal balance of a Series 2019 Bond.
Section 3.07 Cancellation.
All Bonds paid or redeemed before scheduled maturity in accordance with this Ordinance,
and all Bonds in lieu of which exchange Bonds or replacement Bonds are authenticated and
delivered in accordance with this Ordinance, shall be cancelled and proper records shall be made
regarding such payment, redemption, exchange or replacement. The Paying Agent/Registrar shall
then return such cancelled Bonds to the City or may in accordance with law destroy such cancelled
Bonds and periodically furnish the City with certificates of destruction of such Bonds.
Section 3.08 Temporary Bonds.
(a) Following the delivery and registration of the Initial Bond and pending the
preparation of definitive Bonds, the proper officers of the City may execute and, upon the City's
request, the Paying Agent/Registrar shall authenticate and deliver, one or more temporary Bonds
that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Bonds in lieu of which they are delivered,
without coupons, and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the City executing such temporary Bonds may determine, as evidenced
by their signing of such temporary Bonds.
(b) Until exchanged for Bonds in definitive form, such Bonds in temporary form shall
be entitled to the benefit and security of this Ordinance.
(c) The City, without unreasonable delay, shall prepare, execute and deliver to the
Paying Agent/Registrar the Series 2019 Bonds in definitive form; thereupon, upon the presentation
and surrender of the Series 2019 Bonds in temporary form to the Paying Agent/Registrar, the
Paying Agent/Registrar shall cancel the Series 2019 Bonds in temporary form and shall
authenticate and deliver in exchange therefor Bonds of the same maturity and series, in definitive
form, in the authorized denomination, and in the same aggregate principal amount, as the Series
2019 Bonds in temporary form surrendered. Such exchange shall be made without the making of
any charge therefor to any Owner.
Section 3.09 Replacement Bonds.
(a) Upon the presentation and surrender to the Paying Agent/Registrar of a mutilated
Bond, the Paying Agent/Registrar shall authenticate and deliver in exchange therefor a
replacement Bond of the same series and of like tenor and principal amount, bearing a number not
contemporaneously outstanding. The City or the Paying Agent/Registrar may require the Owner
of such Bond to pay a sum sufficient to cover any tax or other governmental charge that is
authorized to be imposed in connection therewith and any other expenses connected therewith.
(b) In the event that any Bond is lost, apparently destroyed or wrongfully taken, the
Paying Agent/Registrar, pursuant to the applicable laws of the State of Texas and in the absence
of notice or knowledge that such Bond has been acquired by a bona fide purchaser, shall
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4130-0359-3491.7
authenticate and deliver a replacement Bond of the same series and of like tenor and principal
amount, bearing a number not contemporaneously outstanding, provided that the Owner first:
(i) furnishes to the Paying Agent/Registrar satisfactory evidence of his or her
ownership of and the circumstances of the loss, destruction or theft of such Bond;
(ii) furnishes such security or indemnity as may be required by the Paying
Agent/Registrar to save it and the City harmless;
(iii) pays all expenses and charges in connection therewith, including, but not
limited to, printing costs, legal fees, fees of the Paying Agent/Registrar and any tax or other
governmental charge that is authorized to be imposed; and
(iv) satisfies any other reasonable requirements imposed by the City and the
Paying Agent/Registrar.
(c) If, after the delivery of such replacement Series 2019 Bond, a bona fide purchaser
of the original Series 2019 Bond in lieu of which such replacement Series 2019 Bond was issued
presents for payment such original Series 2019 Bond, the City and the Paying Agent/Registrar
shall be entitled to recover such replacement Series 2019 Bond from the person to whom it was
delivered or any person taking therefrom, except a bona fide purchaser, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the City or the Paying Agent/Registrar in connection therewith.
(d) In the event that any such mutilated, lost, apparently destroyed or wrongfully taken
Bond has become or is about to become due and payable, the Paying Agent/Registrar, in its
discretion, instead of issuing a replacement Series 2019 Bond, may pay such Series 2019 Bond if
it has become due and payable or may pay such Series 2019 Bond when it becomes due and
payable.
(e) Each replacement Series 2019 Bond delivered in accordance with this Section shall
constitute an original additional contractual obligation of the City and shall be entitled to the
benefits and security of this Ordinance to the same extent as the Series 2019 Bond or Series 2019
Bonds in lieu of which such replacement Series 2019 Bond is delivered.
Section 3.10 Book -Entry Only System.
(a) Notwithstanding any other provision hereof, upon initial issuance of the Series
2019 Bonds, the ownership of the Series 2019 Bonds shall be registered in the name of Cede &
Co., as nominee of DTC. The definitive Bonds shall be initially issued in the form of a single
separate fully registered certificate for each of the maturities thereof.
(b) With respect to Series 2019 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 DTC Participant or to any person on behalf of whom such a DTC Participant
holds an interest in the Series 2019 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
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4130-0359-3491.7
ownership interest in the Series 2019 Bonds, (ii) the delivery to any DTC Participant or any other
person, other than an Owner, as shown on the Register, of any notice with respect to the Series
2019 Bonds, including any notice of redemption, or (iii) the payment to any DTC Participant or
any other person, other than a Bondholder, as shown in the Register of any amount with respect to
principal of, premium, if any, or interest on the Series 2019 Bonds. Notwithstanding any other
provision of this Ordinance to the contrary, the City and the Paying Agent/Registrar shall be
entitled to treat and consider the person in whose name each Bond is registered in the Register as
the absolute owner of such Bond for the purpose of payment of principal of, premium, if any, and
interest on such Bonds, for the purpose of giving notices of redemption and other matters with
respect to such Bond, for the purpose of registering transfer with respect to such Bond, and for all
other purposes whatsoever. The Paying Agent/Registrar shall pay all principal of, premium, if
any, and interest on the Series 2019 Bonds only to or upon the order of the respective owners, as
shown in the Register 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, premium, if any, and interest on the
Series 2019 Bonds to the extent of the sum or sums so paid. No person other than an Owner, as
shown in the Register, shall receive a certificate evidencing the obligation of the City to make
payments of amounts due 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., the word "Cede & Co." in this Ordinance shall refer to such new
nominee of DTC.
(c) An Authorized Officer is authorized and directed to execute and deliver any
agreements, certificates, letters and other instruments (including but not limited to a representation
letter) in such form as such official shall approve and deem appropriate to evidence the City's
obligations to DTC as securities depository in connection with the delivery of the Series 2019
Bonds and the City's other public securities in book -entry only form.
Section 3.11 Successor Securities Depository; Transfer Outside Book -Entry Onl
System.
In the event that the City or the Paying Agent/Registrar determines that DTC is incapable
of discharging its responsibilities described herein and in the Representation Letter of the City to
DTC, or in the event DTC discontinues the services described herein, the City or the Paying
Agent/Registrar 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 Series 2019 Bonds
shall no longer be restricted to being registered in the Register 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 Owners transferring or exchanging Bonds shall designate,
in accordance with the provisions of this Ordinance.
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4130-0359-3491 7
Section 3.12 Payments to Cede & Co.
Notwithstanding any other provision of this Ordinance to the contrary, so long as any Series
2019 Bonds are registered in the name of Cede & Co., as nominee of DTC, all payments with
respect to principal of, premium, if any, and interest on such Series 2019 Bonds, and all notices
with respect to such Series 2019 Bonds, shall be made and given, respectively, in the manner
provided in the Representation Letter.
ARTICLE IV
REDEMPTION OF SERIES 2019 BONDS BEFORE MATURITY
Section 4.01 Limitation on Redemption.
The Series 2019 Bonds shall be subject to redemption before scheduled maturity only as
provided in this Article IV.
Section 4.02 Mandatory Redemption. The Series 2019 Bonds shall not be subject to
mandatory redemption prior to their scheduled maturity.
Section 4.03 Optional Redemption.
(a) The City reserves the right, at its option, to redeem prior to maturity Series 2019
Bonds maturing on or after February 15, 2030, in inverse order of maturity, in whole or in part, in
principal installments of $5,000 or any integral multiple thereof, on August 15, 2029, or any date
thereafter, at a price equal to the principal amount of the Series 2019 Bonds or portions thereof
called for redemption plus accrued interest to the date of redemption.
(b) If less than all of the Series 2019 Bonds are to be redeemed pursuant to an optional
redemption, the City shall determine the maturity or maturities and the amounts thereof to be
redeemed and shall direct the Paying Agent/Registrar to call by lot, or by any other customary
method that results in a random selection, the Series 2019 Bonds, or portions thereof, within such
maturity or maturities and in such principal amounts for redemption.
(c) The City, at least forty-five (45) days before the redemption date, unless a shorter
period shall be satisfactory to the Paying Agent/Registrar, shall notify the Paying Agent/Registrar
of such redemption date and of the principal amount of Bonds to be redeemed.
Section 4.04 Partial Redemption.
(a) A portion of a single Bond of a denomination greater than $5,000 may be redeemed,
but only in a principal amount equal to $5,000 or any integral multiple thereof. If such a Series
2019 Bond is to be partially redeemed, the Paying Agent/Registrar shall treat each $5,000 portion
of the Series 2019 Bond as though it were a single Series 2019 Bond for purposes of selection for
redemption.
(b) Upon surrender of any Series 2019 Bond for redemption in part, the Paying
Agent/Registrar, in accordance with Section 3.06 of this Ordinance, shall authenticate and deliver
and exchange Series 2019 Bond or Series 2019 Bonds in an aggregate principal amount equal to
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4130-0359-3491.7
the unredeemed portion of the Series 2019 Bond so surrendered, such exchange being without
charge.
(c) The Paying Agent/Registrar shall promptly notify the City in writing of the
principal amount to be redeemed of any Bond as to which only a portion thereof is to be redeemed.
Section 4.05 Notice of Redemption to Owners.
(a) The Paying Agent/Registrar shall give notice of any redemption of Bonds by
sending notice by United States mail, first class postage prepaid, not less than thirty (30) days
before the date fixed for redemption, to the Owner of each Bond (or part thereof) to be redeemed,
at the address shown on the Register at the close of business on the Business Day next preceding
the date of mailing such notice.
(b) The notice shall state the redemption date, the redemption price, the place at which
the Series 2019 Bonds are to be surrendered for payment, and, if less than all the Series 2019
Bonds outstanding are to be redeemed, an identification of the Series 2019 Bonds or portions
thereof to be redeemed.
(c) The City reserves the right to give notice of its election or direction to redeem
Bonds under Section 4.03 conditioned upon the occurrence of subsequent events. Such notice may
state (i) that the redemption is conditioned upon the deposit of moneys and/or authorized securities,
in an amount equal to the amount necessary to effect the redemption, with the Paying
Agent/Registrar, or such other entity as may be authorized by law, no later than the redemption
date or (ii) 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 the City to the Paying Agent/Registrar
instructing the Paying Agent/Registrar to rescind the redemption notice, and such notice and
redemption shall be of no effect if such moneys and/or authorized securities are not so deposited
or if the notice is rescinded. The Paying Agent/Registrar shall give prompt notice of any such
rescission of a conditional notice of redemption to the affected Owners. Any Bonds subject to
conditional redemption where redemption has been rescinded shall remain Outstanding, and the
rescission shall not constitute an event of default. Further, in the case of a conditional redemption,
the failure of the City to make moneys and/or authorized securities available in part or in whole
on or before the redemption date shall not constitute an event of default.
(d) Any notice given as provided in this Section shall be conclusively presumed to have
been duly given, whether or not the Owner receives such notice.
Section 4.06 Payment Upon Redemption.
(a) Before or on each redemption date, the City shall deposit with the Paying
Agent/Registrar money sufficient to pay all amounts due on the redemption date and the Paying
Agent/Registrar shall make provision for the payment of the Series 2019 Bonds to be redeemed
on such date by setting aside and holding in trust such amounts as are received by the Paying
Agent/Registrar from the City and shall use such funds solely for the purpose of paying the
principal of and accrued interest on the Series 2019 Bonds being redeemed.
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4130-0359-3491 7
(b) Upon presentation and surrender of any Bond called for redemption at the
Designated Payment/Transfer Office on or after the date fixed for redemption, the Paying
Agent/Registrar shall pay the principal of and accrued interest on such Bond to the date of
redemption from the money set aside for such purpose.
Section 4.07 Effect of Redemption.
(a) Notice of redemption having been given as provided in Section 4.05 of this
Ordinance and subject to any conditions or rights reserved by the City under Section 4.05(c), the
Series 2019 Bonds or portions thereof called for redemption shall become due and payable on the
date fixed for redemption and, unless the City defaults in its obligation to make provision for the
payment of the principal thereof, or accrued interest thereon, such Bonds or portions thereof shall
cease to bear interest from and after the date fixed for redemption, whether or not such Bonds are
presented and surrendered for payment on such date.
(b) If the City shall fail to make provision for payment of all sums due on a redemption
date, then any Series 2019 Bond or portion thereof called for redemption shall remain Outstanding
and continue to bear interest at the rate stated on the Series 2019 Bond until due provision is made
for the payment of same by the City.
Section 4.08 Lapse of Pant.
Money set aside for the redemption of Series 2019 Bonds and remaining unclaimed by the
Owners of such Series 2019 Bonds shall be subject to the provisions of Section 3.03(f) hereof.
ARTICLE V
PAYING AGENT/REGISTRAR
Section 5.01 Appointment of Paying Agent/Registrar.
The form of Paying Agent/Registrar Agreement presented at the meeting at which this
Ordinance was approved and the appointment of The Bank of New York Mellon Trust Company,
N.A., Dallas, Texas as the Paying Agent/Registrar are hereby approved.
The Mayor is hereby authorized and directed to execute the Paying Agent/Registrar
Agreement with the Paying Agent/Registrar, specifying the duties and responsibilities of the City
and the Paying Agent/Registrar, in substantially the form presented at the meeting at which this
Ordinance was approved with such changes as may be approved by the Mayor. The signature of
the Mayor shall be attested by the City Secretary.
Section 5.02 Qualifications.
The Paying Agent/Registrar shall be a commercial bank, a trust company organized under
the laws of the State of Texas, or any other entity duly qualified and legally authorized to serve as
and perform the duties and services of paying agent and registrar for the Series 2019 Bonds.
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4130-0359-3491.7
Section 5.03 Maintaining Paying Agent/Registrar.
(a) At all times while any Bonds are Outstanding, the City will maintain a Paying
Agent/Registrar that is qualified under Section 5.02 of this Ordinance.
(b) If the Paying Agent/Registrar resigns or otherwise ceases to serve as such, the City
will promptly appoint a replacement.
Section 5.04 Termination.
The City, upon not less than sixty (60) days' notice, reserves the right to terminate the
appointment of any Paying Agent/Registrar by delivering to the entity whose appointment is to be
terminated written notice of such termination.
Section 5.05 Notice of Change to Owners.
Promptly upon each change in the entity serving as Paying Agent/Registrar, the City will
cause notice of the change to be sent to each Owner by United States mail, first class postage
prepaid, at the address in the Register thereof, stating the effective date of the change and the name
and mailing address of the replacement Paying Agent/Registrar.
Section 5.06 Agreement to Perform Duties and Functions.
By accepting the appointment as Paying Agent/Registrar and executing the Paying
Agent/Registrar Agreement, the Paying Agent/Registrar is deemed to have agreed to the provisions
of this Ordinance and that it will perform the duties and functions of Paying Agent/Registrar
prescribed thereby.
Section 5.07 Delivery of Records to Successor.
If a Paying Agent/Registrar is replaced, such Paying Agent/Registrar, promptly upon the
appointment of the successor, will deliver the Register (or a copy thereof) and all other pertinent
books and records relating to the Series 2019 Bonds to the successor Paying Agent/Registrar.
ARTICLE VI
FORM OF THE SERIES 2019 BONDS
Section 6.01 Form Generally.
(a) The Series 2019 Bonds, including the Registration Certificate of the Comptroller
of Public Accounts of the State of Texas, the Certificate of the Paying Agent/Registrar, and the
Assignment form to appear on each of the Series 2019 Bonds, (i) shall be generally in the form set
forth in Exhibit B hereto, with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance, and (ii) may have such letters, numbers,
or other marks of identification (including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American Bankers Association, referred to
herein as "CUSIP numbers") and such legends and endorsements (including any reproduction of
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4130-0359-3491.7
an opinion of counsel) thereon as, consistently herewith, may be determined by the City or by the
officers executing such Bonds, as evidenced by their execution thereof.
(b) Any portion of the text of any Bonds may be set forth on the reverse side thereof,
with an appropriate reference thereto on the face of the Series 2019 Bonds.
(c) The definitive Series 2019 Bonds shall be typewritten, photocopied, printed,
lithographed, or engraved, and may be produced by any combination of these methods or produced
in any other similar manner, all as determined by the officers executing such Bonds, as evidenced
by their execution thereof.
(d) The Initial Series 2019 Bond submitted to the Attorney General of the State of
Texas may be typewritten and photocopied or otherwise reproduced.
Section 6.02 CUSIP Registration.
The City or TWDB may secure CUSIP numbers and may authorize the printing of such
numbers on the face of the Series 2019 Bonds. It is expressly provided, however, that the presence
or absence of CUSIP numbers on the Series 2019 Bonds shall be of no significance or effect
regarding the legality thereof, and neither the City nor the attorneys approving said Bonds as to
legality are to be held responsible for CUSIP numbers incorrectly printed on the Series 2019
Bonds.
Section 6.03 Legal Oninion.
The approving legal opinion of Orrick, Herrington & Sutcliffe LLP, Austin, Texas, Bond
Counsel to the City ("Bond Counsel"), may be attached to or printed on the reverse side of each
Series 2019 Bond over the certification of the City Secretary of the City, which may be executed
in facsimile.
Section 6.04 Statement of Insurance.
A statement relating to a municipal bond insurance policy, if any, issued for any Series
2019 Bond or Series 2019 Bonds may be printed on or attached to each such Series 2019 Bond.
ARTICLE VII
FUNDS AND ACCOUNTS
Section 7.01 Segregation of Revenues/Fund Designations.
All receipts, revenues and income derived from the operation and ownership of the System
shall be kept separate from other funds of the City and deposited within twenty-four (24) hours
after collection into the "Water and Wastewater System Fund" (hereinafter referred to as the
"System Fund") which is hereby created and established in connection with the issuance of the
Series 2019 Bonds. The System Fund shall continue to be kept and maintained at an official
depository bank of the City while the Parity Obligations (including the Series 2019 Bonds) remain
Outstanding. Furthermore, the following special funds are hereby created and established in
connection with the issuance of the Series 2019 Bonds and such funds shall continue to be
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maintained by the City while any Parity Obligations (including the Series 2019 Bonds) remain
Outstanding: the "Special Water and Wastewater System Revenue Bond Fund" (hereinafter
referred to as the "Bond Fund"), the "Special Water and Wastewater System Revenue Bond
General Reserve Fund" (hereinafter referred to as the "General Reserve Fund") and the "Special
Water and Wastewater System Revenue Bond TWDB Reserve Fund" (herein after referred to as
the "TWDB Reserve Fund" and, together with the General Reserve Fund, the "Reserve Funds").
The Bond Fund, the General Reserve Fund and the TWDB Reserve Fund shall continue to be kept
and maintained at the City's official depository bank, and moneys deposited therein shall be used
for no purpose other than for the payment, redemption and retirement of Parity Obligations, as
herein provided. The City may provide for the creation of any special Accounts deemed necessary
or appropriate for the efficient administration of the System and payment of Parity Obligations.
Section 7.02 System Fund.
The City hereby covenants and agrees with the owners of the Series 2019 Bonds that the
moneys deposited in the System Fund shall be used first for the payment of the reasonable and
proper expenses of operating and maintaining the System. All moneys deposited in the System
Fund in excess of the amounts required to pay operating and maintenance expenses of the System
shall be applied and appropriated, to the extent required and in the order of priority prescribed, as
follows:
First: To the payment of the amounts required to be deposited in the Bond Fund for the
payment of Parity Obligations, including the principal of and interest on the Parity Bonds
as the same become due and payable;
Second: To the payment, equally and ratably, of the amounts required to be deposited in
the Reserve Funds to accumulate, restore and maintain the amounts required to be
deposited therein; and
Third: To the payment of Subordinate Obligations, including the payment of amounts
required to maintain any special funds created to secure payment of Subordinate
Obligations; and
Fourth: For any other purpose of the City now or hereafter permitted by law.
Section 7.03 Bond Fund.
The City hereby agrees and covenants to deposit to the Bond Fund an amount equal to one
hundred percent (100%) of the amount required to fully pay all Parity Obligations as such
payments mature and become due, including the amount required to pay the principal of and
interest on the Series 2019 Bonds on or before each maturity date and Interest Payment Date
therefor, such payments to be made in substantially equal monthly installments on or before the
first day of each month beginning on or before the first day of the month next following the month
the Series 2019 Bonds are delivered to TWDB. The required monthly deposits to the Bond Fund
for the payment of principal of and interest on the Series 2019 Bonds shall continue to be made as
hereinabove provided until such time as (i) the total amount on deposit in the Bond Fund, together
with the amount deposited in the Reserve Funds, is equal to the amount required to fully pay and
discharge all Outstanding Parity Obligations, including Parity Bonds (principal and interest), or
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(ii) the Series 2019 Bonds are no longer Outstanding. Accrued interest, if any, received from the
purchasers of the Series 2019 Bonds shall be deposited in the Bond Fund, and shall be taken into
consideration and reduce the amount of the monthly deposits hereinabove required which would
otherwise be required to be deposited in the Bond Fund from the Net Revenues of the System.
Section 7.04 General Reserve Fund.
(a) The City covenants and agrees to accumulate and maintain Reserve Fund
Obligations in the General Reserve Fund equal to not less than the General Reserve Fund
Requirement which shall be calculated and predetermined at the time of issuance of each series or
installment of Covered Parity Bonds. Upon issuance of Additional Bonds designated as Covered
Parity Bonds, the General Reserve Fund Requirement shall be increased, if required, to an amount
equal to the General Reserve Fund Requirement after taking into account such Additional Bonds.
The General Reserve Fund shall be made available for and reasonably employed to pay principal
of and interest on Covered Parity Bonds in the event that amounts in the Bond Fund are insufficient
for such purpose. If any amount of the General Reserve Fund is employed to pay principal of or
interest on Covered Parity Bonds and, after disbursement of such amounts for such purpose, the
amount on deposit in the General Reserve Fund is less than the General Reserve Fund
Requirement, or if an event of default under any Credit Facility held in the General Reserve Fund
has occurred and is continuing, the General Reserve Fund Requirement shall be restored from Net
Revenues in twenty-four (24) approximately equal monthly payments from the first available Net
Revenues in the System Fund, subject only to (and in accordance with) the priority of payments
hereinabove prescribed in Section 7.02.
(b) The City may, at its option, withdraw all surplus on deposit in the General Reserve
Fund over the General Reserve Fund Requirement and deposit the same in the System Fund;
provided, however, that to the extent such surplus monies constitute bond proceeds, including
interest and income derived therefrom, such amounts shall not be deposited to the System Fund
and shall only be used for the purposes for which bond proceeds may be used.
(c) For the purpose of determining compliance with the requirements of subsections
(a) and (b) of this Section 7.04, Reserve Fund Obligations shall be valued each year as of the last
day of the Fiscal Year at their market value, except that any direct obligations of the United States
(State and Local Government Series) held for the benefit of the Reserve Fund in book -entry form
shall be continuously valued at their par value or face principal amount.
(d) To the extent permitted by and in accordance with applicable law, the City may
replace or substitute a Credit Facility for cash or investment securities on deposit in the General
Reserve Fund or in substitution or replacement of any existing Credit Facility. Upon such
replacement or substitution, cash or investment securities of any of the types permitted by Section
7.09 hereof on deposit in the General Reserve Fund, which (taken together with the face amount
of any existing Credit Facilities) are in excess of the General Reserve Fund Requirement may be
withdrawn by the City, at its option, and transferred to the System Fund; provided that the face
amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer.
However, to the extent such surplus monies constitute bond proceeds, including interest and
income derived therefrom, such amounts shall not be deposited to the System Fund and shall only
be used for the purposes for which bond proceeds may be used.
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(e) If the City is required to make a withdrawal from the General Reserve Fund, the
City shall promptly notify the issuer of any Credit Facility of the necessity for a withdrawal from
the General Reserve Fund, and shall make such withdrawal first from available moneys or
investment securities then on deposit in the General Reserve Fund, and next from a drawing under
any Credit Facility to the extent of such deficiency.
(f) In the event of a deficiency in the General Reserve Fund (including a deficiency
resulting in whole or in part from termination or expiration of a Credit Facility or an event of
default under a Credit Facility), the City shall restore such deficiency from the first available Net
Revenues of the System in the System Fund, subject only to (and in accordance with) the priority
of payments hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal
monthly payments.
(g) In the event of the redemption or defeasance of any of the Outstanding Covered
Parity Bonds, any Reserve Fund Obligations on deposit in the General Reserve Fund in excess of
the General Reserve Fund Requirement may be withdrawn and transferred, at the option of the
City and subject to the last sentence of this subparagraph (g), to the System Fund, as a result of (i)
the redemption of the Outstanding Covered Parity Bonds, or (ii) funds for the payment of the
Outstanding Covered Parity Bonds having been deposited irrevocably with the paying agent or
place of payment therefor in the manner described in this Ordinance, the result of such deposit
being that such Covered Parity Bonds no longer are deemed to be Outstanding under the terms of
this Ordinance. However, to the extent such surplus monies constitute bond proceeds, including
interest and income derived therefrom, such amounts shall not be deposited to the System Fund
and shall only be used for the purposes for which bond proceeds may be used.
(h) In the event there is a draw upon a Credit Facility, the City shall reimburse the
issuer of such Credit Facility for such draw in accordance with the terms of any agreement pursuant
to which the Credit Facility is issued from Net Revenues; however, such reimbursement from Net
Revenues shall be (i) subject to the provisions of subparagraph (f) hereof, and (ii) subordinate and
junior in right of payment to the payment of principal of and premium, if any, and interest on the
Parity Bonds. Any interest due on any reimbursement obligation under the Credit Facility shall
not exceed the highest lawful rate of interest which may be paid by the City.
(i) Notwithstanding anything to the contrary contained in this Ordinance, the
requirement set forth above in this Section 7.04 to maintain the General Reserve Fund shall be
suspended for such time as the Net Revenues for each Fiscal Year are equal to at least 1.25 times
the maximum annual debt service requirements of all Outstanding Parity Bonds. In the event that
the Net Revenues for any Fiscal Year are less than 1.25 times the maximum annual debt service
requirements of all Outstanding Parity Bonds, the City will be required to commence making
deposits to the General Reserve Fund, as provided in subsection (f) above, and to continue such
deposits until the earlier of (i) such time as the General Reserve Fund contains the General Reserve
Fund Requirement or (ii) the end of any period of two consecutive Fiscal Years during which Net
Revenues were equal to not less than 1.25 times the maximum annual debt service requirements
of all Outstanding Parity Bonds.
During such time as the obligation to maintain the General Reserve Fund Requirement in
the General Reserve Fund has been suspended pursuant to this subsection (i), the City may, at its
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option, withdraw all monies from the General Reserve Fund and deposit such surplus in the System
Fund; provided, however, to the extent such monies constitute bond proceeds, including interest
and income derived therefrom, such amounts shall not be deposited to the System Fund and shall
only be used for the purposes for which bond proceeds may be used.
Section 7.05 TWDB Reserve Fund.
(a) The City covenants and agrees to accumulate and maintain Reserve Fund
Obligations in the TWDB Reserve Fund equal to not less than the TWDB Reserve Fund
Requirement which shall be calculated and predetermined at the time of issuance of each series or
installment of TWDB Bonds. The City covenants and agrees that the TWDB Reserve Fund
Requirement in connection with the issuance of each series of TWDB Bonds shall be accumulated
in equal monthly installments over the initial sixty (60) months following the initial delivery of
such series of TWDB Bonds. Upon issuance of Additional Bonds designated as TWDB Bonds,
the TWDB Reserve Fund Requirement shall be increased, if required, to an amount equal to the
TWDB Reserve Fund Requirement after taking into account such Additional Bonds. The TWDB
Reserve Fund shall be made available for and reasonably employed to pay principal of and interest
on TWDB Bonds in the event that amounts in the Bond Fund are insufficient for such purpose. if
any amount of the TWDB Reserve Fund is employed to pay principal of or interest on TWDB
Bonds and, after disbursement of such amounts for such purpose, the amount on deposit in the
TWDB Reserve Fund is less than the TWDB Reserve Fund Requirement, or if an event of default
under any Credit Facility held in the TWDB Reserve Fund has occurred and is continuing, the
TWDB Reserve Fund Requirement shall be restored from Net Revenues in twenty-four (24)
approximately equal monthly payments from the first available Net Revenues in the System Fund,
subject only to (and in accordance with) the priority of payments hereinabove prescribed in Section
7.02.
(b) The City may, at its option, withdraw all surplus on deposit in the TWDB Reserve
Fund over the TWDB Reserve Fund Requirement and deposit the same in the System Fund;
provided, however, that to the extent such surplus monies constitute bond proceeds, including
interest and income derived therefrom, such amounts shall not be deposited to the System Fund
and shall only be used for the purposes for which bond proceeds may be used.
(c) For the purpose of determining compliance with the requirements of subsections
(a) and (b) of this Section 7.05, Reserve Fund Obligations shall be valued each year as of the last
day of the Fiscal Year at their market value, except that any direct obligations of the United States
(State and Local Government Series) held for the benefit of the Reserve Fund in book -entry form
shall be continuously valued at their par value or face principal amount.
(d) To the extent permitted by and in accordance with applicable law, the City may
replace or substitute a Credit Facility for cash or investment securities on deposit in the TWDB
Reserve Fund or in substitution or replacement of any existing Credit Facility. Upon such
replacement or substitution, cash or investment securities of any of the types permitted by Section
7.04 hereof on deposit in the TWDB Reserve Fund, which (taken together with the face amount
of any existing Credit Facilities) are in excess of the TWDB Reserve Fund Requirement may be
withdrawn by the City, at its option, and transferred to the System Fund; provided that the face
amount of any Credit Facility may be reduced at the option of the City in lieu of such transfer.
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However, to the extent such surplus monies constitute bond proceeds, including interest and
income derived therefrom, such amounts shall not be deposited to the System Fund and shall only
be used for the purposes for which bond proceeds may be used.
(e) If the City is required to make a withdrawal from the TWDB Reserve Fund, the
City shall promptly notify the issuer of any Credit Facility of the necessity for a withdrawal from
the TWDB Reserve Fund, and shall make such withdrawal first from available moneys or
investment securities then on deposit in the TWDB Reserve Fund, and next from a drawing under
any Credit Facility to the extent of such deficiency.
(f) In the event of a deficiency in the TWDB Reserve Fund (including a deficiency
resulting in whole or in part from termination or expiration of a Credit Facility or an event of
default under a Credit Facility), the City shall restore such deficiency from the first available Net
Revenues of the System in the System Fund, subject only to (and in accordance with) the priority
of payments hereinabove prescribed in Section 7.02, in twenty-four (24) approximately equal
monthly payments.
(g) In the event of the redemption or defeasance of any of the Outstanding TWDB
Bonds, any Reserve Fund Obligations on deposit in the TWDB Reserve Fund in excess of the
TWDB Reserve Fund Requirement may be withdrawn and transferred, at the option of the City
and subject to the last sentence of this subparagraph (g), to the System Fund, as a result of (i) the
redemption of the Outstanding TWDB Bonds, or (ii) funds for the payment of the Outstanding
TWDB Bonds having been deposited irrevocably with the paying agent or place of payment
therefor in the manner described in this Ordinance, the result of such deposit being that such
TWDB Bonds no longer are deemed to be Outstanding under the terms of this Ordinance.
However, to the extent such surplus monies constitute bond proceeds, including interest and
income derived therefrom, such amounts shall not be deposited to the System Fund and shall only
be used for the purposes for which bond proceeds may be used.
(h) In the event there is a draw upon a Credit Facility, the City shall reimburse the
issuer of such Credit Facility for such draw in accordance with the terms of any agreement pursuant
to which the Credit Facility is issued from Net Revenues; however, such reimbursement from Net
Revenues shall be (i) subject to the provisions of subparagraph (f) hereof, and (ii) subordinate and
junior in right of payment to the payment of principal of and premium, if any, and interest on the
Parity Bonds. Any interest due on any reimbursement obligation under the Credit Facility shall
not exceed the highest lawful rate of interest which may be paid by the City.
Section 7.06 Construction Fund.
There is hereby created and there shall be established and maintained on the books of the
City, and accounted for separate and apart from all other funds of the City, a separate fund
designated as the "City of Lubbock, Texas, Water and Wastewater System Revenue Bonds Series
2019 Construction Fund" (hereinafter called the "Construction Fund"). A portion of the proceeds
from the sale of the Series 2019 Bonds shall be deposited to the credit of the Construction Fund
for use by the City for payment of all lawful costs associated with acquiring, purchasing,
constructing, improving, renovating, enlarging and equipping property, buildings, structures,
facilities and related infrastructure for the System, as provided herein.
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Section 7.07 Payment of Bonds.
While any of the Series 2019 Bonds are Outstanding, the proper officers of the City are
hereby authorized to transfer or cause to be transferred to the Paying Agent/Registrar, from funds
on deposit in the Bond Fund and, if necessary, the Reserve Fund amounts sufficient to fully pay
and discharge promptly each installment of interest and principal on the Series 2019 Bonds as such
installments mature and come due; such transfer of funds to be made in such manner as will cause
immediately available funds to be deposited with the Paying Agent/Registrar for the Series 2019
Bonds at the close of the Business Day next preceding the date of payment for the Series 2019
Bonds.
Section 7.08 Deficiencies in Funds.
If in any month the City shall, for any reason, fail to pay into any Fund the full amounts
above stipulated, amounts equivalent to such deficiencies shall be set apart and paid into such Fund
from the first available and unallocated Net Revenues of the System, subject to the priority of
payments prescribed in Section 7.02, in the following month or months and such payments shall
be in addition to the amounts hereinabove provided to be otherwise paid into such Fund during
such month or months.
Section 7.09 Security and Investment of Funds.
(a) All Funds and Accounts shall be secured in the manner and to the fullest extent
required by law for the security of public funds, including Chapter 2257, Texas Government Code,
as amended, and the funds created by the Ordinance shall be used only for the purposes therein
specified.
(b) Money in any Fund or Account established or affirmed pursuant to this Ordinance
or any ordinance authorizing the issuance of Parity Obligations, may, at the option of the City, be
invested in time deposits or certificates of deposit secured in the manner required by law for public
funds, or be invested in direct obligations of, including obligations the principal and interest on
which are unconditionally guaranteed by, the United States of America, in obligations of any
agencies or instrumentalities thereof, or in such other investments as are permitted under the Public
Funds Investment Act, Chapter 2256, Texas Government Code, as amended, or any successor law,
as in effect from time to time, consistent with the City's investment policy; provided that all such
deposits and investments shall be made in such manner (which may include repurchase agreements
for such investment with any primary dealer of such agreements) that the money required to be
expended from any such Fund will be available at the proper time or times. Such investments shall
be valued each year in terms of current market value as of the last day of the Fiscal Year. For
purposes of maximizing investment returns, to the extent permitted by law, money in such Funds
may be invested in common investments of the kind described above, or in a common pool of such
investment which shall be kept and held at an official depository bank, which shall not be deemed
to be or constitute a commingling of such money or funds provided that safekeeping receipts or
certificates of participation clearly evidencing the investment or investment pool in which such
money is invested and the share thereof purchased with such money or owned by such fund are
held by or on behalf of each such Fund. If necessary, such investments shall be promptly sold to
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prevent any default. Any investment made with money deposited to the credit of the Reserve Fund
shall not have a maturity in excess of five (5) years.
Section 7.10 Excess Revenues.
All revenues of the System in excess of those required to establish and maintain the Bond
Fund and the Reserve Funds as required herein may be used for any proper City purpose now or
hereafter permitted by law including, without limitation, pledging any excess revenues in support
of Subordinate Obligations.
ARTICLE VIII
SALE AND DELIVERY OF SERIES 2019 BONDS; DEPOSIT OF PROCEEDS
Section 8.01 Sale of the Series 2019 Bonds.
The sale of the Series 2019 Bonds to TWDB at a price of the par value thereof, is hereby
approved. It is hereby officially found, determined and declared that the above price and terms of
sale of the Series 2019 Bonds are the most advantageous reasonable obtainable by the City.
The Series 2019 Bonds herein authorized shall be initially issued (i) as a single fully
registered bond in the total principal amount of this series with principal installments to become
due and payable as provided in Section 3.02 hereof and numbered T-1, or (ii) as one bond for each
year of maturity in the applicable principal amount and denomination as referenced in Section 3.02
hereof and to be numbered consecutively from T-1 and upward (hereinafter called the "Initial
Bond(s)") and, in either case, the Initial Bond(s) shall be registered in the name of the initial
purchaser(s) or the designee thereof. The Initial Bond(s) shall be the Series 2019 Bonds submitted
to the Office of the Attorney General of the State of Texas for approval, certified and registered
by the Office of the Comptroller of Public Accounts of the State of Texas and delivered to the
TWDB. At the delivery of the Series 2019 Bonds, the TWDB shall have the right to exchange such
Series 2019 Bonds as provided in Section 3.06 hereof without cost.
Section 8.02 Control and Delivery of Bonds.
(a) An Authorized Officer is hereby authorized to have control of the Initial Bond and
all necessary records and proceedings pertaining thereto pending investigation, examination, and
approval of the Attorney General of the State of Texas, registration by the Comptroller of Public
Accounts of the State of Texas and registration with, and initial exchange or transfer by, the Paying
Agent/Registrar.
(b) After registration by the Comptroller of Public Accounts, delivery of the Series
2019 Bonds shall be made to the TWDB under and subject to the general supervision and direction
of the Mayor, against receipt by the City of all amounts due to the City under the terms of sale.
(c) In the event the Mayor or City Secretary is absent or otherwise unable to execute
any document or take any action authorized herein, the Mayor Pro Tem and the Assistant City
Secretary, respectively, shall be authorized to execute such documents and take such actions, and
the performance of such duties by the Mayor Pro Tem and the Assistant City Secretary shall for
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the purposes of this Ordinance have the same force and effect as if such duties were performed by
the Mayor and City Secretary, respectively.
Section 8.03 Deposit of Proceeds.
The proceeds from the sale of the Series 2019 Bonds shall be used for the purposes set
forth in this Ordinance at the direction of the Mayor, City Manager, Chief Financial Officer or
other authorized City official. Any proceeds of the Series 2019 Bonds, together with earnings
from the investment thereof, remaining after making all such deposits and payments shall be
deposited into the Bond Fund and, to the extent applicable, applied to pay or redeem Bonds as
provided in Section 15.01(b) of this Ordinance.
Notwithstanding the above and foregoing, immediately following the delivery of the Series
2019 Bonds and prior to the deposit of the proceeds from the sale of such Bonds into the
Construction Fund established at an official depository of the City pursuant to Section 7.05 hereof,
such proceeds shall be held in trust and in escrow pursuant to the written escrow agreement
described below pending written authorization to release said proceeds.
A "Special Escrow Deposit Agreement" by and between the City and The Bank of New
York Mellon Trust Company, N.A., attached hereto as Exhibit C and incorporated herein by
reference as a part of this Ordinance for all purposes, is hereby approved as to form and content,
and the Mayor and the City Secretary of the City are hereby authorized and directed to execute
such Special Escrow Deposit Agreement in substantially the same form and content herein
approved.
ARTICLE IX
ADDITIONAL BONDS
Section 9.01 Issuance of Additional Bonds.
(a) In addition to the right to issue obligations of inferior lien as authorized by the laws
of the State of Texas, the City hereby reserves the right to issue Additional Bonds which, when
duly authorized and issued in compliance with the terms and conditions hereinafter appearing,
shall be on a parity with the Parity Obligations (including the Series 2019 Bonds herein
authorized), payable from and equally and ratably secured by a first lien on and pledge of the Net
Revenues of the System. The Additional Bonds may be issued in one or more series or
installments, provided, however, that none shall be issued unless and until the following conditions
have been met:
(i) The City is not then in default as to any covenant, condition or obligation
prescribed by any ordinance authorizing the issuance of Parity Obligations then
Outstanding;
(ii) Each of the special Funds created for the payment and security of the Parity
Obligations contains the amount of money and investments then required to be on deposit
therein;
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(iii) With respect to Covered Parity Bonds, the General Reserve Fund
Requirement shall be accumulated and supplemented as necessary to maintain therein the
General Reserve Fund Requirement (unless the obligation to maintain the General Reserve
Fund Requirement is suspended pursuant to subsection 7.04(i)) and, with respect to TWDB
Bonds, the TWDB Reserve Fund Requirement shall be accumulated and supplemented as
necessary to maintain therein the TWDB Reserve Fund Requirement; the ordinance
authorizing the issuance of the Additional Bonds shall provide for any required increase in
the General Reserve Fund or the TWDB Reserve Fund, as applicable, and (if
supplementation is necessary to meet all conditions of said Reserve Funds) said ordinance
shall make provision that same be supplemented by the required amounts in equal monthly
installments from the date of delivery of such Additional Bonds, as provided by this
Ordinance;
(iv) The Chief Financial Officer shall provide a certificate to the effect that,
according to the books and records of the City, during the last completed Fiscal Year, or
during any consecutive twelve (12) month period of the last fifteen (15) months next
preceding the date of delivery of the Additional Bonds, the Net Revenues of the System
were equal to at least 1.25 times the maximum annual debt service requirements of the
Parity Bonds which will be outstanding upon the issuance of the Additional Bonds. In
making a determination of the Net Revenues, the Chief Financial Officer may take into
consideration a change in the charges for services afforded by the System that became
effective at least 60 days prior to the last day of the period for which Revenues are
determined and, for purposes of satisfying the above Net Revenues test, make a pro -forma
determination of the Net Revenues of the System for the period of time covered by the
certificate based on such change in charges being in effect for the entire period covered by
the certificate of the Chief Financial Officer.
When thus issued, such Additional Bonds may be secured by a pledge of the Net Revenues
of the System on a parity in all things with the pledge securing the Parity Bonds.
(b) Wherever, in this Ordinance, the City reserves the right to issue Additional Bonds,
such term shall also include, mean and refer to any other forms or types of obligations which may
be made lawfully payable from and secured by the same source of revenues of the City.
(c) If Additional Bonds are being issued for the purpose of refunding less than all
outstanding Parity Bonds, the certification described in subsection (a)(iv) of this Section is not
required so long as the aggregate debt service requirements of such refunding Parity Bonds (or
Parity Obligations) will not exceed the aggregate debt service requirements of the Parity Bonds
being refunded.
Section 9.02 Credit Facilities.
Payments to be made under a Credit Facilities may be treated as Parity Obligations if the
governing body of the City makes a finding in the ordinance authorizing the execution and delivery
of such Credit Facility that the obligations of the City incurred under a Credit Facility shall be
treated as a Parity Obligation that, based upon the findings contained in a certificate executed and
delivered by the Chief Financial Officer, the City will have sufficient funds to meet the financial
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obligations of the System, including sufficient Net Revenues to satisfy the annual debt service
requirements of the System and the financial obligations of the City relating to the System after
giving effect to the treatment of the Credit Facility as a Parity Obligation.
Section 9.03 Separately Financed Projects.
The City expressly retains the right to issue or incur bonds, notes, or other obligations or
evidences of indebtedness, other than Parity Obligations, for any project or purpose for goods or
services other than the supply, storage, treatment and distribution of treated water for municipal,
domestic, commercial, industrial and other uses and the collection and treatment of watered
wastes, which presently are or hereafter may be authorized or permitted to be provided or
maintained by water and wastewater systems generally or the City specifically under the laws of
the State of Texas, federal law or the City's home rule charter; provided, that the bonds, notes or
other obligations issued or incurred for any such separately financed project are payable from and
secured by other available funds derived from the ownership or operation thereof or excess Net
Revenues remaining after satisfying, or making provision for the satisfaction of, the priority of
claims identified on such Net Revenues in Section 7.02 hereof and separate books and records for
such separately financed project or activity are maintained by the City.
ARTICLE X
PARTICULAR REPRESENTATIONS AND COVENANTS
Section 10.01 Rates and Ch r es.
The City shall, at all times while any of the Parity Obligations (including the Series 2019
Bonds) are outstanding and unpaid, maintain rates and collect charges for the facilities and services
afforded by the Water and Wastewater System, as required by Section 1502.057, Texas
Government Code, which will provide revenues sufficient at all times to:
(a) pay all maintenance, operation, debt service, depreciation, replacement and
betterment charges of the Water and Wastewater System;
(b) pay the amounts required to be deposited to the Bond Fund to pay the principal of
and interest on the Parity Bonds as the same becomes due and payable, to accumulate and maintain
the reserve amount, if any, required to be deposited in the Reserve Fund, and to pay any other costs
of Parity Obligations as the same becomes due and payable;
(c) produce Net Revenues each year in an amount reasonably estimated to be not less
than 1.25 times the maximum annual debt service requirements of the Parity Bonds from time to
time outstanding; and
(d) pay any other legally incurred indebtedness payable from the revenues of the
System and/or secured by a lien on the System or the revenues thereof.
Section 10.02 Maintenance_ and Operation; Insurance.
The City shall maintain the Water and Wastewater System in good condition and operate
the same in an efficient manner and at reasonable cost. So long as any Parity Bonds are
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outstanding, the City agrees to carry and maintain liability and property damage insurance of the
kind and in the amounts customarily carried by municipal corporations in Texas on such kind of
properties; provided, however, the City, in lieu of and/or in combination with carrying such
insurance, may self -insure against all perils and risks by establishing self-insurance reserves.
Section 10.03 Records Accounts Accounting Rel2orts.
The City hereby covenants and agrees while any of the Series 2019 Bonds or any interest
thereon remain Outstanding and unpaid, it will keep and maintain a proper and complete system
of records and accounts pertaining to the operation of the System separate and apart from all other
records and accounts of the City in accordance with generally accepted accounting principles
prescribed for municipal corporations, and complete and correct entries shall be made of all
transactions relating to said System, as provided by applicable law. The Owner of any Bonds, or
any duly authorized agent or agents of such Owner, shall have the right at all reasonable times to
inspect all such records, accounts and data relating thereto and to inspect the System and all
properties comprising the same. The City further agrees that as soon as possible following 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. Each such audit, in addition to whatever other
matters may be thought proper by the certified public accountant, shall particularly include the
following:
Year;
(a) A detailed statement of the income and expenditures of the System for such Fiscal
(b) A balance sheet as of the end of such Fiscal Year;
(c) The comments of such accountant regarding the manner in which the City has
complied with the covenants and requirements of this Ordinance and his recommendations for any
changes or improvements in the operation, records and accounts of the System;
(d) A list of the insurance policies in force at the end of the Fiscal Year on the System
properties, setting out as to each policy the amount thereof, the risk covered, the name of the
insurer, and the policy's expiration date.
Expenses incurred in making the audits above referred to are to be regarded as maintenance
and operating expenses of the System and paid as such. Copies of the aforesaid annual audit shall
be furnished upon written request to the original purchasers and any subsequent Owners of the
Series 2019 Bonds.
Section 10.04 Further Covenants.
The City hereby further covenants and agrees as follows:
(a) That it has the lawful power to pledge the Net Revenues to the payment of the Series
2019 Bonds and has lawfully exercised said power under the Constitution and laws of the State of
Texas; that the Series 2019 Bonds, when issued, shall be equally and ratably secured by a first lien
on and pledge of the Net Revenues pari passu with the lien securing payment of all other Parity
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Obligations in such manner that no Parity Obligation shall have preference or priority over the
Series 2019 Bonds.
(b) That, other than for the payment of Parity Obligations, the Net Revenues are (and
shall) not in any manner be pledged to the payment of any debt or obligation of the City or of the
System on a parity with the Series 2019 Bonds.
(c) So far as it legally may, the City covenants and agrees, for the protection and
security of the Parity Bonds and the holders thereof from time to time, that it will not grant a
franchise for the operation of any competing system in the City until all Parity Bonds shall have
been retired.
(d) That, for so long as any of the Series 2019 Bonds or any interest thereon remain
Outstanding, the City will not sell, lease or encumber the System or any substantial part thereof;
provided, however, 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 when other property of equal value has been substituted therefor, and,
also, with the exception of the Additional Bonds expressly permitted by this Ordinance to be
issued, it will not encumber the Net Revenues unless such encumbrance is made junior and
subordinate to all of the provisions of this Ordinance. In the event the City sells the System, the
City will use proceeds of such sale to provide for final payment of the Parity Obligations (including
the Series 2019 Bonds and any Additional Bonds).
(e) That, it will cause to be rendered monthly to each customer receiving water and
wastewater services a statement therefor and will not accept payment of less than all of any
statement so rendered, using its power under existing ordinances and under all such ordinances to
become effective in the future to enforce payment, to withhold service from such delinquent
customers and to enforce and authorize reconnection charges.
(f) That it will faithfully and punctually perform all duties with respect to the System
required by the Constitution and laws of the State of Texas, including the making and collecting
of reasonable and sufficient rates for services supplied by the System, and the segregation and
application of the revenues of the System as required by the provisions of this Ordinance.
(g) That no free service shall be provided by the System and to the extent the City or
its departments or agencies utilize the services provided by the System, payment shall be made
therefor at rates charged to others for similar service.
(h) That it will faithfully perform at all times any and all covenants, undertakings,
stipulations, and provisions contained in this Ordinance; the City will promptly pay or cause to be
paid the principal of, premium, if any, and interest on each Bond on the dates and at the places and
manner prescribed in such Bond; and the City will, at the times and in the manner prescribed by
this Ordinance, deposit or cause to be deposited the amounts of money specified by this Ordinance.
Section 10.05 Federal Income Tax Exclusion.
(a) Definitions. When used in this Section, the following terms have the following
meanings:
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"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
enacted on or before the Issue Date.
"Computation Date" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Gross Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Issue Date" for each series or sub -series of the Series 2019 Bonds or other obligations of
the City is the respective date on which such series or sub -series of the Series 2019 Bonds or other
obligations of the City is delivered against payment therefor.
"Net Sale Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Nonpurpose Investment" has the meaning stated in Section 1.148-1(b) of the Regulations.
"Proceeds" has the meaning stated in Section 1.148-1(b) of the Regulations. "Rebate
Amount" has the meaning stated in Section 1.148-3 of the Regulations.
"Regulations" means the temporary or final Income Tax Regulations applicable to
obligations issued pursuant to Sections 141 through 150 of the Code. Any reference to a section
of the Regulations shall also refer to any successor provision to such section hereafter promulgated
by the Internal Revenue Service pursuant to Sections 141 through 150 of the Code and applicable
to the Series 2019 Bonds.
"TWDB Source Series Bonds" means the TWDB Bonds that are issued to provide
financing for the Series 2019 Bonds.
"Yield of
any Investment shall be computed in accordance with Section 1.148-5 of the
Regulations, and
the Series 2019 Bonds shall be computed in accordance in accordance with Section
1.148-4 of the Regulations.
(b) Not to Cause Interest to Become Taxable. The City shall not use, permit the use of
or omit to use Gross Proceeds or any other amounts (or any property the acquisition, construction
or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner
which, if made or omitted, respectively, would cause the interest on such Series 2019 Bond to
become includable in the gross income, as defined in Section 61 of the Code, of the owner thereof
for federal income tax purposes. Without limiting the generality of the foregoing, unless and until
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the City shall have received a written opinion of counsel nationally recognized in the field of
municipal bond law to the effect that failure to comply with such covenant will not adversely affect
the exemption from federal income tax of the interest on any Series 2019 Bond, the City shall
comply with each of the specific covenants in this Section.
(c) No Private Use or Private Payments. Except as permitted by Section 141 of the
Code and the regulations and rulings thereunder, the City shall, at all times after the Issue Date of
any Series 2019 Bond and prior to the last stated maturity of the Series 2019 Bonds
(i) exclusively own, operate, and possess all property the acquisition,
construction, or improvement of which is to be financed directly or indirectly with Gross
Proceeds of such Series 2019 Bond and not use or permit the use of such Gross Proceeds
or any property acquired, constructed, or improved with such Gross Proceeds in any
activity carried on by any person or entity other than a state or local government,
(ii) not directly or indirectly impose or accept any charge or other payment for
use of Gross Proceeds of such Series 2019 Bond or any property the acquisition,
construction or improvement of which is to be financed directly or indirectly with such
Gross Proceeds other than taxes of general application and interest earned on investments
acquired with such Gross Proceeds pending application for their intended purposes, and
(iii) not use the proceeds of the Series 2019 Bonds in a manner that would cause
the Series 2019 Bonds to become "private activity bonds" within the meaning of Section
141 of the Code.
(d) No Private Loan. Except to the extent permitted by Section 141 of the Code and the
regulations and rulings thereunder, the City shall not use Gross Proceeds of such Series 2019 Bond
to make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, Gross Proceeds are considered to be "loaned" to a person or
entity if (1) property acquired, constructed or improved with Gross Proceeds is sold or leased to
such person or entity in a transaction which creates a debt for federal income tax purposes, (2)
capacity in or service from such property is committed to such person or entity under a take -or -
pay, output, or similar contract or arrangement, or (3) indirect benefits, or burdens and benefits of
ownership, of such Gross Proceeds or such property are otherwise transferred in a transaction
which is the economic equivalent of a loan.
(e) No Arbitrage Bonds. The City shall not, at any time prior to the earlier of the final
stated maturity or final payment of such Series 2019 Bond, directly or indirectly use the proceeds
of the Series 2019 Bonds in a manner that would cause the Series 2019 Bonds to be "arbitrage
bonds" within the meaning of Section 148(a) of the Code and Regulations, including to acquire or
to replace funds which were used, directly or indirectly, to acquire Nonpurpose Investments which
produce a yield materially higher than the yield on the TWDB Source Series Bonds, other than
Nonpurpose Investments acquired with:
(i) proceeds of the TWDB's Source Series Bonds invested for a reasonable
temporary period of up to three (3) years after the issue date of the Source Series Bonds
until such proceeds are needed for the facilities to be financed;
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4130-0339-3491.7
(ii) amounts invested in a bona fide debt service fund, within the meaning of
Section 1.148-1(b) of the Regulations; and
(iii) amounts deposited in any reasonably required reserve or replacement fund
to the extent such amounts do not exceed the least of maximum annual debt service on the
Obligations, 125% of average annual debt service on the Obligations, or 10 percent of the
stated principal amount (or, in the case of a discount, the issue price) of the Obligations;
(f) Not Federally Guaranteed. Except to the extent permitted by Section 149(b) of the
Code and the regulations and rulings thereunder, the City shall not take or omit to take any action
which would cause the Series 2019 Bonds to be federally guaranteed within the meaning of Section
149(b) of the Code and the regulations and rulings thereunder.
(g) Information Report. The City shall timely file with the Secretary of the Treasury
the information required by Section 149(e) of the Code with respect to the Series 2019 Bonds on
such forms and in such place as such Secretary may prescribe.
(h) Payment of Rebate Amount. Except to the extent otherwise provided in Section
148(f) of the Code and the regulations and rulings thereunder, the City shall:
(i) account for all Gross Proceeds (including all receipts, expenditures and
investments thereof) on its books of account separately and apart from all other funds (and
receipts, expenditures and investments thereof) and shall retain all records of such
accounting for at least six years after the final Computation Date. The City may, however,
to the extent permitted by law, commingle Gross Proceeds of the Series 2019 Bonds with
other money of the City, provided that the City separately accounts for each receipt and
expenditure of such Gross Proceeds and the obligations acquired therewith,
(ii) calculate the Rebate Amount with respect to such Series 2019 Bond not less
frequently than each Computation Date, in accordance with rules set forth in Section 148(f)
of the Code, Section 1.148-3 of the Regulations, and the rulings thereunder. The City shall
maintain a copy of such calculations for at least six years after the final Computation Date,
(iii) as additional consideration for the purchase of the Series 2019 Bonds by the
initial purchasers thereof and the loan of the money represented thereby, and in order to
induce such purchase by measures designed to ensure the excludability of the interest
thereon from the gross income of the owners thereof for federal income tax purposes, pay
to the United States the amount described in paragraph (2) above at the times, in the
installments, to the place, in the manner and accompanied by such forms or other
information as is or may be required by Section 148(f) of the Code and the regulations and
rulings thereunder, and
(iv) exercise reasonable diligence to assure that no errors are made in the
calculations required by paragraph (2) and, if such error is made, to discover and promptly
to correct such error within a reasonable amount of time thereafter, including payment to
the United States of any interest and any penalty required by the Regulations.
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(i) Not to Divert_ Arbitrage_ Profits. Except to the extent permitted by Section 148 of
the Code and the regulations and rulings thereunder, the City shall not, at any time after the Issue
Date of the Series 2019 Bonds and prior to the earlier of the final stated maturity or final payment
of the Series 2019 Bonds, enter into any transaction that reduces the amount required to be paid to
the United States pursuant to Subsection (h) of this Section because such transaction results in a
smaller profit or a larger loss than would have resulted if the transaction had been at arm's length
and had the Yield of the Series 2019 Bonds, not been relevant to either party.
0) No Acquisition of the TWDB Source Series Bonds. Neither the City nor a related
party thereto will acquire any of the TWDB's Source Series Bonds in an amount related to the
amount of the Series 2019 Bonds.
ARTICLE XI
DEFAULT AND REMEDIES
Section 11.01 Events of Default.
Each of the following occurrences or events for the purpose of this Ordinance is hereby
declared to be an Event of Default:
(a) defaults in payments to be made to the Bond Fund as required by this Ordinance;
(b) defaults in the observance or performance of any other of the covenants, conditions
or obligations set forth in this Ordinance.
Section 11.02 Remedies for Default.
(a) Upon the happening of any Event of Default, then any Owner or an authorized
representative thereof, including but not limited to, a trustee or trustees therefor, may proceed
against the City for the purpose of protecting and enforcing the rights of the Owners under this
Ordinance and shall be entitled to a writ of mandamus issued by a court of proper jurisdiction
compelling and requiring the City Council and other officers of the City to observe and perform
any covenant, condition or obligation prescribed in this Ordinance.
(b) It is provided that all such proceedings shall be instituted and maintained for the
equal benefit of all Owners of Bonds then Outstanding.
Section 11.03 Remedies Not Exclusive.
(a) No remedy herein conferred or reserved is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or under the Series 2019 Bonds or now or hereafter
existing at law or in equity; provided, however, that notwithstanding any other provision of this
Ordinance, the right to accelerate the debt evidenced by the Series 2019 Bonds shall not be
available as a remedy under this Ordinance.
(b) The exercise of any remedy herein conferred or reserved shall not be deemed a
waiver of any other available remedy.
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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 or power may be exercised from time to time and as often as may be
deemed expedient.
ARTICLE XII
DISCHARGE
Section 12.01 Discharge.
The Series 2019 Bonds may be defeased, discharged or refunded in any manner permitted
by applicable law.
ARTICLE XIII
CONTINUING DISCLOSURE UNDERTAKING
Section 13.01 Annual Reports.
(a) The City shall provide annually to the MSRB, (1) within six (6) months after the
end of each fiscal year of the City, financial information and operating data with respect to the
City of the general type described in Exhibit A hereto, including financial statements of the City
if audited financial statements of the City are then available, and (2) if not provided as part such
financial information and operating data, audited financial statements of the City, when and if
available. Any financial statements to be provided shall be (i) prepared in accordance with the
accounting principles described in Exhibit A, or such other accounting principles as the City may
be required to employ from time to time pursuant to state law or regulation, and (ii) audited, if the
City commissions an audit of such financial statements and the audit is completed within the period
during which they must be provided. If the audit of such financial statements is not complete
within twelve (12) months after any such fiscal year end, then the City shall file unaudited financial
statements within such 12 -month period and audited financial statements for the applicable fiscal
year, when and if the audit report on such statements becomes available.
(b) If the City changes its fiscal year, it will notify the MSRB of the change (and 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 Section.
(c) The financial information and operating data to be provided pursuant to this Section
may be set forth in full in one or more documents or may be included by specific referenced 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 of filed with the SEC.
(d) An Authorized Officer is authorized to establish and implement written procedures
to ensure compliance with the reporting requirements imposed by this Section. Such procedures
may be modified and amended by the Authorized Officer from time to time to the extent the
modification or amendment of such procedures are deemed necessary, useful or appropriate.
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Section 13.02 Event Notices.
(a) The City shall notify the MSRB, in a timely manner (not in excess of ten (10)
Business Days after the occurrence of an event), of any of the following events with respect to the
Series 2019 Bonds:
(i) principal and interest payment delinquencies;
(ii) nonpayment related defaults, if material;
(iii) unscheduled draws on debt service reserves reflecting financial difficulties;
(iv) unscheduled draws on credit enhancements reflecting financial difficulties;
(v) substitution of credit or liquidity providers, or their failure to perform;
(vi) adverse tax opinions, the issuance by the Internal Revenue Service of
proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-
TEB) or other material notices or determinations with respect to the tax status of the Series
2019 Bonds, or other material events affecting the tax status of the Series 2019 Bonds;
(vii) modifications to rights of Owners, if material;
(viii) redemption calls, if material, and tender offers;
(ix) defeasances;
(x) release, substitution, or sale of property securing repayment of the Series
2019 Bonds, if material;
(xi) rating changes;
(xii) bankruptcy, insolvency, receivership or similar event of the City;
(xiii) the consummation of a merger, consolidation, or acquisition involving the
City or the sale of all or substantially all of the assets of the City, 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, if material;
(xiv) appointment of a successor trustee or change in the name of the trustee, if
material;
(xv) incurrence of a Financial Obligation of the City, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar terms of a
Financial Obligation of the City, any of which affect security holders, if material; and
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4130-0359-34917
(xvi) default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a Financial Obligation of the City, any of which
reflect financial difficulties.
For these purposes, (a) any event described in the immediately preceding paragraph (xii)
is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent,
or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any
other proceeding under state or federal law in which a court or governmental authority has assumed
jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has
been assumed by leaving the existing governing body and officials or officers of the City in
possession but subject to the supervision and orders of a court or governmental authority, or the
entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or
governmental authority having supervision or jurisdiction over substantially all of the assets or
business of the City, and (b) the City intends the words used in the immediately preceding
paragraphs (xv) and (xvi) and the definition of Financial Obligation in this Ordinance to have the
same meanings as when they are used in the Rule, as evidenced by SEC Release No. 34-83885,
dated August 20, 2018.
(b) The City shall notify the MSRB, in a timely manner, of any failure by the City to
provide financial information or operating data in accordance with Section 13.01 of this Ordinance
by the time required by such Section.
Section 13.03 ying Information.
All documents provided to the MSRB pursuant to this Article shall be provided in an
electronic format and be accompanied by identifying information as prescribed by the MSRB.
Section 13.04 Limitations, Disclaimers and Amendments.
(a) The City shall be obligated to observe and perform the covenants specified in this
Article for so long as, but only for so long as, the City remains an "obligated person" with respect
to the Series 2019 Bonds within the meaning of the Rule, except that the City in any event will
give notice of any Bond calls and any defeasances that cause the City to be no longer an "obligated
person."
(b) The provisions of this Article are for the sole benefit of the Owners and beneficial
owners of the Series 2019 Bonds, and nothing in this Article, 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 Article 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 Article or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date.
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE OWNER
OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR
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4130-0359-3491.7
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 ARTICLE, 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.
(c) No default by the City in observing or performing its obligations under this Article
shall constitute a breach of or default under the Ordinance for purposes of any other provisions of
this Ordinance.
(d) Nothing in this Article is intended or shall act to disclaim, waive, or otherwise limit
the duties of the City under federal and state securities laws.
(e) The provisions of this Article 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 (i) the provisions
of this Article, as so amended, would have permitted an underwriter to purchase or sell Bonds in
the primary offering of the Series 2019 Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (ii) either (A) the Owners of a majority in aggregate principal amount
(or any greater amount required by any other provisions of this Ordinance that authorizes such an
amendment) of the Outstanding Bonds consent to such amendment or (B) an entity or individual
person that is unaffiliated with the City (such as nationally recognized bond counsel) determines
that such amendment will not materially impair the interests of the Owners and beneficial owners
of the Series 2019 Bonds. If the City so amends the provisions of this Article, it shall include with
any amended financial information or operating data next provided in accordance with Section
12.01 an explanation, in narrative form, of the reasons for the amendment and of the impact of any
change in type of financial information or operating data so provided.
ARTICLE XIV
AMENDMENT OF ORDINANCE
Section 14.01 Amendment of Ordinance.
(a) That the holders of the Parity Bonds aggregating a majority in principal amount of
then outstanding Parity Bonds shall have the right from time to time to approve any amendment
to this Ordinance which may be deemed necessary or desirable by the City; provided, however,
that without the consent of the holders of all of the Parity Bonds at the time outstanding, nothing
herein contained shall permit or be construed to permit the amendment of the terms and conditions
in this Ordinance or in the Series 2019 Bonds so as to: (i) make any change in the maturity of
the outstanding Bonds; (ii) reduce the rate of interest borne by any of the outstanding Bonds; (iii)
reduce the amount of the principal payable on the outstanding Bonds; (iv) modify the terms of
payment of principal of or interest on the outstanding Bonds or impose any conditions with respect
to such payment; (v) affect the rights of the holders of less than all of the Series 2019 Bonds then
outstanding; or (vi) change the minimum percentage of the principal amount of Bonds necessary
for consent to such amendment.
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4130-0359-3491.7
(b) That if at any time the City shall desire to amend the Ordinance under this Section,
the City shall cause notice of the proposed amendment to be (i) posted on the MSRB's EMMA
system or (ii) published in a financial newspaper or journal published in The City of New York,
New York, once during each calendar week for at least two (2) successive calendar weeks;
provided, however, that the publication of such notice shall not constitute a condition precedent to
the adoption of such amendatory ordinance and the failure to post or publish such notice shall not
adversely affect the implementation of such amendment as adopted pursuant to such amendatory
ordinance. Such notice shall briefly set forth the nature of the proposed amendment and shall state
that a copy thereof is on file at the principal office of the Paying Agent/Registrar for inspection by
all holders of Bonds, Such publication is not required, however, if notice in writing is given to
each holder of Bonds.
(c) That whenever at any time not less than thirty (30) days, and within one year, from
the date of the first posting or publication of said notice or other service of written notice the City
shall receive an instrument or instruments executed by the holders of at least a majority in
aggregate principal amount of all Bonds then outstanding, which instrument or instruments shall
refer to the proposed amendment described in said notice and which specifically consent to and
approve such amendment in substantially the form of the copy thereof on file with the Paying
Agent/Registrar, the City Council may pass the amendatory ordinance in substantially the same
form.
(d) That upon the passage of any amendatory ordinance pursuant to the provisions of
this Section, this Ordinance shall be deemed to be amended in accordance with such amendatory
ordinance, and the respective rights, duties and obligations under this Ordinance of the City and
all the holders of then outstanding Bonds shall thereafter be determined, exercised and enforced
hereunder, subject in all respects to such amendments.
(e) That any consent given by the holder of a Series 2019 Bond pursuant to the
provisions of this Section shall be irrevocable for a period of six (6) months from the date of the
first publication of the notice provided for in this Section, and shall be conclusive and binding
upon all future holders of the same Bond during such period. Such consent may be revoked at any
time after six (6) months from the date of the first publication of such notice by the holder who
gave such consent, or by a successor in title, by filing notice thereof with the Paying
Agent/Registrar therefor and the City, but such revocation shall not be effective if the holders of a
majority in aggregate principal amount of the then outstanding Bonds as in this Section defined
have, prior to the attempted revocation, consented to and approve the amendment.
(f) For the purposes of this Section, the ownership and other matters relating to all
Bonds registered as to ownership shall be determined from the registration books kept by the
registrar therefor. The Paying Agent/Registrar may conclusively assume that such ownership
continues until written notice to the contrary is served upon the Paying Agent/Registrar.
(g) The foregoing provisions of this Section notwithstanding, the City by action of the
City Council may amend this Ordinance for any one or more of the following purposes:
(i) To add to the covenants and agreements of the City in this Ordinance
contained, other covenants and agreements thereafter to be observed, grant additional rights
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4130-0359-3491.7
or remedies to bondholders or to surrender, restrict or limit any right or power herein
reserved to or conferred upon the City;
(ii) To make such provisions for the purpose of clarifying matters or questions
arising under this Ordinance, as are required by the Attorney General of Texas to obtain
the Attorney General's approval of the issuance of the Series 2019 Bonds or required by
TWDB before their issuance or for the purpose of curing any ambiguity, or curing,
correcting or supplementing any defective provision contained in this Ordinance, or at any
time before or after issuance, including, without limitation, those matters described in
Section 13.04 hereof, as are necessary or desirable and not contrary to or inconsistent with
this Ordinance, and in all events which shall not adversely affect the interests of the owners
of the Series 2019 Bonds;
(iii) To modify any of the provisions of this Ordinance in any other respect
whatever, provided that such modification shall be, and be expressed to be, effective only
after all previously issued Parity Bonds outstanding at the date of the adoption of such
modification shall cease to be outstanding;
(iv) To make such amendments to this Ordinance as may be required, in the
opinion of Bond Counsel, to ensure compliance with sections 103 and 141 through 150 of
the Code and the regulations promulgated thereunder and applicable thereto.
Notice of any such amendment may be posted or published by the City in the manner
described in clause (b) of this Section; provided, however, that the publication of such notice shall
not constitute a condition precedent to the adoption of such amendatory ordinance and the failure
to post or publish such notice shall not adversely affect the implementation of such amendment as
adopted pursuant to such amendatory ordinance.
ARTICLE XV
MISCELLANEOUS
Section 15.01 Compliance with the Texas Water Development Board's Rules and
ReRe uulations.
The City will comply with all of the requirements contained in the resolution or resolutions
adopted by the TWDB with respect to the issuance of the Series 2019 Bonds. In addition, in
compliance with the TWDB's Clean Water State Revolving Fund Loan Program Rules, the City
agrees and covenants:
(a) Unused Funds. Any unused funds (those funds unspent after the original approved
project is completed) shall be used for enhancements to the original project that are explicitly
approved by the Executive Administrator, or if no enhancements are authorized by the Executive
Administrator, the City shall submit a final accounting and disposition of any unused funds.
(b) Surplus Proceeds. Any proceeds of the Series 2019 Bonds determined to be surplus
funds remaining after completion of one or more of the purposes described in Section 3.01 hereof
shall be used for the following purposes as approved by the Executive Administrator of the TWDB:
(1) to redeem, in inverse annual order, the Series 2019 Bonds owned by the TWDB, (2) deposit
42
4130-0359-3491,7
into the Bond Fund for the payment of interest or principal on the Series 2019 Bonds owned by
the TWDB, or (3) deposit into the Reserve Fund.
(c) TWDB Remedies. The TWDB may exercise all remedies available to it in law or
equity, and any provision of the Series 2019 Bonds that restricts or limits the TWDB's full exercise
of these remedies shall be of no force and effect.
(d) Investment of Proceeds. Proceeds from the sale of the Series 2019 Bonds shall be
held at a designated state depository institution or other properly chartered and authorized
institution in accordance with the Public Funds Investment Act, Government Code, Chapter 2256,
and the Public Funds Collateral Act, Government Code, Chapter 2257.
(e) Environmental Indemnification. The City shall indemnify, hold harmless and
protect the TWDB from any and all claims, causes of action or damages to the person or property
of third parties arising from the sampling, analysis, transport, storage, treatment and disposition of
any contaminated sewage sludge, contaminated sediments and/or contaminated media that may be
generated by the City, its contractors, consultants, agents, officials and employees as a result of
activities relating to the project, to the extent permitted by law.
(0 Compliance with Davis -Bacon. All laborers and mechanics employed by
contractors and subcontractors for projects be paid wages at rates not less than those prevailing on
projects of a similar character in the City in accordance with the Davis -Bacon Act, and the U.S.
Department of Labor's implementing regulations and all project contracts shall mandate
compliance with the Davis -Bacon Act. All contracts and subcontracts for the construction of the
project carried out in whole or in part with proceeds of the Series 2019 Bonds shall insert in full
in any contract in excess of $2,000 the contracts clauses as provided by the TWDB.
(g) Federal Funding Accountability and Transparency Act. The City shall provide the
TWDB with all information required to be reported in accordance with the Federal Funding
Accountability and Transparency Act of 2006, Pub. L. 109-282. The City shall obtain a Data
Universal Numbering System Number (DUNS) and shall register with the System for Award
Management (SAM), and maintain such registration while the Series 2019 Bonds are outstanding.
(h) Timely Use of Proceeds. All funds deposited to the credit of the Construction Fund
will be used in a timely and expeditious manner, as required by federal statute and Environmental
Protection Agency regulations, and the City will adhere to the project schedule approved by the
Executive Administrator.
(i) American Iron and Steel Requirement. The City will abide by all applicable
construction contract requirements related to the use of iron and steel products produced in the
United States, as required by the 2014 Federal Appropriations Act and related State Revolving
Fund Policy Guidelines.
0) Additional Covenants Related to Tax -Exempt Status.
(i) The City will not use any portion of the proceeds of the Series 2019 Bonds
in a manner that would cause the Series 2019 Bonds to become "private activity bonds"
within the meaning of Section 141 of the Code, and the Regulations.
43
4130-0359-3491.7
(ii) No portion of the proceeds of the Series 2019 Bonds will be used, directly
or indirectly, in a manner that would cause the Series 2019 Bonds to be "arbitrage bonds"
within the meaning of Section 148(a) of the Code and Regulations, including to acquire or
to replace funds which were used, directly or indirectly to acquire Nonpurpose Investments
(as defined in the Code and Regulations) which produce a yield materially higher than the
yield on the TWDB's bonds that are issued to provide financing for the Series 2019 Bonds
(the "Source Series Bonds"), other than Nonpurpose Investments acquired with:
(A) proceeds of the TWDB's Source Series Bonds invested for a
reasonable temporary period of up to three (3) years after the issue date of the
Source Series Bonds until such proceeds are needed for the facilities to be financed;
(B) amounts invested in a bona fide debt service fund, within the
meaning of Section 1.148-1(b) of the Regulations; and
(C) amounts deposited in any reasonably required reserve or
replacement fund to the extent such amounts do not exceed the least of the
maximum annual debt service on the Series 2019 Bonds, 125% of the average
annual debt service on the Series 2019 Bonds, or 10% of the stated principal amount
(or, in the case of a discount, the issue price) of the Series 2019 Bonds.
(iii) Neither the City nor a related party thereto will acquire any of the TWDB's
Source Series Bonds in an amount related to the amount of the Series 2019 Bonds.
(iv) The City will refrain from using the proceeds of the Series 2019 Bonds to
pay debt service on another issue of obligations of the City in contravention of section
149(d) of the Code (related to "advance refundings").
(k) Payment of Principal and Interest. Notwithstanding Section 3.03 hereof, payments
of principal and interest on the Series 2019 Bonds will be made to the TWDB via wire transfer at
no cost to the TWDB.
Section 15.02 Severability.
(a) If any Section, paragraph, clause or provision of this Ordinance shall for any reason
be held to be invalid, null, void, of no force and effect, then such provisions shall be construed as
severable from the reminder of this Ordinance and shall not affect the validity of all other provision
of this Ordinance which shall remain in full force and effect.
Section 15.03 Effective Immediately.
Notwithstanding the provisions of the City Charter, this Ordinance shall become effective
immediately upon its adoption at this meeting pursuant to Section 1201.028, Texas Government
Code.
[Signature Page Follows. ]
44
4130-0359-3491.7
PRESENTED, FINALLY PASSED AND APPROVED, AND EFFECTIVE on the 25th
day of February, 2019, at a regular meeting of the City Council of the City of Lubbock, Texas.
L'jv-
DANIEL M. POPE, Mayor
ATTEST:
RE EC .A GARZA, City tc tary
[SEAL]
APPROVED AS TO CONTENT:
By: fDL_
D. BLU KOST13LICH, Chief Financial Officer
APPROVED AS TO FORM:
By: _ �-
JERRY v
KYLE, JR., Bond Counsel
Signature Page for Ordinance
4130-0359-3491 7
EXHIBIT A
DESCRIPTION OF ANNUAL DISCLOSURE OF FINANCIAL INFORMATION
The following information is referred to in Article XII 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 below:
1. The financial statements of the City for the most recently concluded fiscal year.
Accounting Principles
The accounting principles referred to in such Article XII are the accounting principles
described in the notes to the financial statements.
Exhibit A-1
4130-0359-3491 7
EXHIBIT B
FORM OF THE BONDS
The form of the Series 2019 Bonds shall be generally in the form set forth below, including
the form of the Registration Certificate of the Comptroller of Public Accounts of the State of Texas
to accompany the initially delivered Bonds, the form of Certificate of the Paying Agent/Registrar
and the form of Assignment appearing on the Series 2019 Bonds shall be substantially as follows:
(a) Form of Bond.
REGISTERED
No.
United States of America
REGISTERED
State of Texas
County of Lubbock
CITY OF LUBBOCK, TEXAS
WATER AND WASTEWATER SYSTEM REVENUE BOND
SERIES 2019
INTEREST RATE: MATURITY DATE: BOND DATE: CUSIP NUMBER:
% February 15, 20_ March 19, 2019
The City of Lubbock (the "City"), in the County of Lubbock, State of Texas, for value
received, hereby promises to pay to
or registered assigns, but solely from the sources and in the manner hereinafter provided, on the
Maturity Date specified above, the sum of
DOLLARS
unless this Bond shall have been sooner called for redemption and the payment of the principal
hereof shall have been paid or provided for, and to pay interest on such principal amount from the
later of the Bond Date specified above or the most recent interest payment date to which interest
has been paid or provided for until payment of such principal amount has been paid or provided
for, at the per annum rate of interest specified above, computed on the basis of a 360 -day year of
twelve 30 -day months, such interest to be paid semiannually on February 15 and August 15 of
each year, commencing February 15, 2020. All capitalized terms used herein but not defined shall
have the meaning assigned to them in the Ordinance (defined below).
The principal of this Bond shall be payable without exchange or collection charges in
lawful money of the United States of America upon presentation and surrender of this Bond at the
Exhibit B-1
4130-0359-3491.7
corporate office in Dallas, Texas (the "Designated Payment/Transfer Office"), of The Bank of
New York Mellon Trust Company, N.A., the initial Paying Agent/Registrar, or, with respect to a
successor Paying Agent/Registrar, at the Designated Payment/Transfer Office of such successor.
Interest on this Bond is payable by check dated as of the interest payment date, and mailed by the
Paying Agent/Registrar to the registered owner at the address shown on the Register kept by the
Paying Agent/Registrar, or by such other customary banking arrangements acceptable to the
Paying Agent/Registrar and the registered owner; provided, however, such registered owner shall
bear all risk and expense of such other banking arrangement. For the purpose of the payment of
interest on this Bond, the registered owner shall be the person in whose name this Bond is
registered at the close of business on the "Record Date," which shall be the [last/fifteenth] Business
Day of the month next preceding an Interest Payment Date.
If the date for the payment of the principal of or interest on this Bond shall be a Saturday,
Sunday, legal holiday or day on which banking institutions in the city where the Paying
Agent/Registrar is located are required or authorized by law or executive order to close, the date
for such payment shall be the next succeeding day that is not a Saturday, Sunday, legal holiday or
day on which banking institutions are required or authorized to close and payment on such date
shall for all purposes be deemed to have been made on the original date payment was due.
This Bond is one of a series of fully -registered bonds specified in the title hereof issued in
the aggregate principal amount of $19,635,000 (herein referred to as the "Bonds"), issued pursuant
to the authority provided by Chapters 1502, Texas Government Code, as amended, and a certain
ordinance of the City (the "Ordinance"), for the purposes of (i) acquiring, purchasing, constructing,
improving, enlarging, enlarging, equipping, operating, and maintaining any property, buildings,
structures, activities, services, operations or other facilities, and!or related infrastructure for the
City's Water and Wastewater System, (ii) funding capitalized interest on the Bonds, (iii) funding
the reserve fund requirement for the Bonds, and (iv) paying the costs of issuing the Bonds.
The Bonds are secured by and payable solely from a first lien on and pledge of the Net
Revenues of the System, as provided or incorporated by reference in the Ordinance. The Bonds
constitute special obligations of the City payable solely from the sources and in the manner set
forth herein and in the Ordinance and not from any other revenues, funds or assets of the City.
The City has reserved the right, subject to the restrictions stated or incorporated by
reference in the Ordinance, to issue additional parity revenue bonds that may be secured in the
same manner and on a parity with the Bonds.
The City reserves the right, at its option, to redeem prior to maturity Bonds maturing on or
after February 15, 2030, in inverse order of maturity, in whole or in part, in principal installments
of $5,000 or any integral multiple thereof, on August 15, 2029, or any date thereafter, at a price
equal to the principal amount of the Bonds or portions thereof called for redemption plus accrued
interest to the date of redemption. If less than all of the Bonds are to be redeemed, the City shall
determine the maturity or maturities and the amounts thereof to be redeemed and shall direct the
Paying Agent/Registrar to call by lot the Bonds, or portion thereof, within such maturity and in
such principal amounts, for redemption.
Exhibit B-2
4130-0359-3491 7
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than 30 days before the date fixed for redemption, to the registered owner of each
of the Bonds to be redeemed in whole or in part. Subject to the right of the City to give a
conditional notice of redemption with respect to an optional redemption, as described below, notice
having been so given, the Bonds or portions thereof designated for redemption shall become due
and payable on the redemption date specified in such notice; from and after such date,
notwithstanding that any of the Bonds or portions thereof so called for redemption shall not have
been surrendered for payment, interest on such Bonds or portions thereof shall cease to accrue.
Notice of such redemption or redemptions shall be given by first class mail, postage
prepaid, not less than thirty (30) days before the date fixed for redemption, to the registered owner
of each of the Bonds to be redeemed in whole or in part. In the Ordinance, the City reserves the
right in the case of an optional redemption to give notice of its election or direction to redeem
Bonds conditioned upon the occurrence of subsequent events. Such notice may state (i) that the
redemption is conditioned upon the deposit of moneys and/or authorized securities, in an amount
equal to the amount necessary to effect the redemption, with the Paying Agent/Registrar, or such
other entity as may be authorized by law, no later than the redemption date or (ii) 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 the City to the Paying Agent/Registrar instructing the Paying
Agent/Registrar to rescind the redemption notice, and such notice and redemption shall be of no
effect if such moneys and/or authorized securities are not so deposited or if the notice is rescinded.
The Paying Agent/Registrar shall give prompt notice of any such rescission of a conditional notice
of redemption to the affected owners. Any Bonds subject to conditional redemption where
redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute an
event of default. Further, in the case of a conditional redemption, the failure of the City to make
moneys and/or authorized securities available in part or in whole on or before the redemption date
shall not constitute an event of default.
As provided in the Ordinance and subject to certain limitations therein set forth, this Bond
is transferable upon surrender of this Bond for transfer at the Designated Payment/Transfer Office
of the Paying Agent/Registrar with such endorsement or other evidence of transfer as is acceptable
to the Paying Agent/Registrar; thereupon, one or more new fully registered Bonds of the same
stated maturity, of authorized denominations, bearing the same rate of interest, and for the same
aggregate principal amount will be issued to the designated transferee or transferees.
Neither the City nor the Paying Agent/Registrar shall be required to issue, transfer or
exchange any Bond called for redemption where such redemption is scheduled to occur within 45
calendar days of the transfer or exchange date; provided, however, such limitation shall not be
applicable to an exchange by the registered owner of the uncalled principal balance of a Bond.
The City, the Paying Agent/Registrar, and any other person may treat the person in whose
name this Bond is registered as the owner hereof for the purpose of receiving payment as herein
provided (except interest shall be paid to the person in whose name this Bond is registered on the
Record Date) and for all other purposes, whether or not this Bond be overdue, and neither the City
nor the Paying Agent/Registrar, nor any such agent shall be affected by notice to the contrary.
Exhibit B-3
4134-0359-3491 7
IT IS HEREBY CERTIFIED AND RECITED that this Bond has been duly and validly
issued and delivered; that all acts, conditions, and things required or proper to be performed, exist,
and be done precedent to or in the issuance and delivery of this Bond have been performed, existed,
and been done in accordance with law; that the Bonds do not exceed any constitutional or statutory
limitation; and that provision has been made for the payment of the principal of and interest on the
Bonds by irrevocably pledging the net revenues of the System, as hereinabove recited.
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.
IN WITNESS WHEREOF, the City has caused this Bond to be executed in its name by the
manual or facsimile signature of the Mayor of the City and countersigned by the manual or
facsimile signature of the City Secretary, and the official seal of the City has been duly impressed
or placed in facsimile on this Bond.
Mayor, City of Lubbock, Texas
City Secretary, City of Lubbock, Texas
[SEAL]
(b) Form of Comptroller's Registration Certificate.
The following Comptroller's Registration Certificate may be deleted from the definitive
Bonds if such Certificate on the initial Bond is fully executed.
OFFICE OF THE COMPTROLLER §
OF PUBLIC ACCOUNTS § REGISTER NO.
OF THE STATE OF TEXAS 6
I hereby certify that there is on file and of record in my office a certificate of the Attorney
General of the State of Texas to the effect that this Bond has been examined by him as required by
law, that he finds that it has been issued in conformity with the Constitution and laws of the State
of Texas, and that it is a valid and binding special obligation of the City of Lubbock, Texas, payable
Exhibit B-4
4130-0359-34917
from the revenues pledged to its payment by and in the ordinance authorizing same and that said
bond has this day been registered by me.
Witness my hand and seal of office at Austin, Texas,
Comptroller of Public Accounts
of the State of Texas
[SEAL]
(c) Form of Certificate of Pang A en�gistrar.
The following Certificate of Paying Agent/Registrar may be deleted from the Initial Bond
if the Comptroller's Registration Certificate appears thereon.
CERTIFICATE OF PAYING AGENT/REGISTRAR
It is hereby certified that this Bond has been issued under the provisions of the Ordinance
described on this Bond; and that this Bond has been issued in conversion of and exchange for or
replacement of a bond, bonds, or portion of a bond or bonds of an issue which was originally
approved by the Attorney General of the State of Texas and registered by the Comptroller of Public
Accounts of the State of Texas as shown in the records kept by the undersigned.
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Paying Agent/Registrar
By:
Dated: Authorized Representative
Exhibit B-5
4130-0359-3491.7
(d) Form of Assignment.
F.W143Nuri:0111
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers unto (print
or typewrite name, address and Zip Code of transferee):
(Social Security or other identifying number: ) the within Bond and all rights
hereunder and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration hereof, with full power of
substitution in the premises.
Dated:
Signature Guaranteed By:
Authorized Signatory
NOTICE: The signature on this Assignment
must correspond with the name of the
registered owner as it appears on the face of
the within Bond in every particular and must
be guaranteed in a manner acceptable to the
Paying Agent/Registrar.
(e) The Initial Bond shall be in the form set forth in subsections (a), (b) and (d) of this
Section, except for the following alterations:
(i) immediately under the name of the Bond, the headings "INTEREST
RATE" and "MATURITY DATE" shall be completed with the words "As shown below";
(ii) in the first paragraph of the Bond, the words "on the Maturity Date specified
above" shall be deleted and the following will be inserted: "on February 15 in each of the
years, in the principal installments and bearing interest at the per annum rates in accordance
with the following schedule:
Year Principal Installment Interest Rate
(Information to be inserted from Section 3.42 of the Ordinance)
(iii) the Initial Bond shall be numbered T-1.
Exhibit B-6
4130-0359-3491 7
EXHIBIT C
SPECIAL ESCROW DEPOSIT AGREEMENT
Exhibit C-1
4130-0359-3491.7
MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF AN ORDINANCE
STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
On the 25th day of February, 2019, the City Council of the City of Lubbock, Texas,
convened in a regular meeting at the regular meeting place thereof, the meeting being open to the
public and notice of said meeting, giving the date, place and subject thereof, having been posted
as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the
duly constituted officers and members of the City Council, which officers and members are as
follows:
Daniel M. Pope, Mayor Juan A. Chadis )
Jeff Griffith, Mayor Pro Tem Shelia Patterson Harris ) Members of
Latrelle Joy ) the Council
Steve Massengale )
Randy Christian )
and all of said persons were present, except Shelia Patterson Harris , thus constituting a quorum.
Whereupon, among other business, a written Ordinance bearing the following caption was
introduced:
AN ORDINANCE PROVIDING FOR THE ISSUANCE OF CITY
OF LUBBOCK, TEXAS, WATER AND WASTEWATER
SYSTEM REVENUE BONDS, SERIES 2019; AND ENACTING
OTHER PROVISIONS RELATING THERETO
The Ordinance, a full, true and correct copy of which is attached hereto, was read and
reviewed by the City Council. Thereupon, it was duly moved and seconded that the Ordinance be
passed and adopted.
The Presiding Officer put the motion to a vote of the members of the City Council, and the
Ordinance was passed and adopted by the following vote:
AYES: _,6_ NOES: S ABSTENTIONS: 0
4159-6822-4794.1
MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly
reflect the duly constituted officers and members of the City Council of said City, and the attached
and following copy of said Ordinance is hereby certified to be a true and correct copy of an official
copy thereof on file among the official records of the City, all on this the 25th day of February,
2019.
City Sretary
City o kubbock, Texas
[SEAL]
4159-66224794.1
PAYING AGENTiREGISTRAR AGREEMENT
between
CITY OF LUBBOCK, TEXAS
and
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
Pertaining to
City of Lubbock, Texas
Water and Wastewater System Revenue Bonds
Series 2019
Dated as of February 25, 2019
4127-6728-1433 1
TABLE OF CONTENTS
Page
ARTICLE I APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR .................1
Section1.01. Appointment . ..................................................................................................... I
Section 1.02. Compensation....................................................................................................1
ARTICLE II DEFINITIONS...........................................................................................................2
Section2.01. Definitions..........................................................................................................2
ARTICLE III PAYING AGENT.....................................................................................................3
Section 3.01. Duties of Paying Agent......................................................................................3
Section3.02. Payment Dates...................................................................................................4
Section 3.03. Merger, Conversion, Consolidation, or Succession...........................................4
ARTICLE IV REGISTRAR............................................................................................................4
Section 4.01.
Transfer and Exchange......................................................................................4
Section4.02.
The Bonds..........................................................................................................4
Section 4.03.
Form of Register................................................................................................5
Section4.04.
List of Owners....................................................................................................5
Section 4.05.
Cancellation of Bonds........................................................................................5
Section 4.06.
Mutilated, Destroyed, Lost, or Stolen Bonds.....................................................5
Section 4.07.
Transaction Information to Issuer......................................................................6
ARTICLEV THE BANK................................................................................................................6
Section 5.01.
Duties of Bank...................................................................................................6
Section 5.02.
Reliance on Documents, Etc..............................................................................6
Section 5.03.
Recitals of Issuer................................................................................................7
Section5.04.
May Hold Bonds................................................................................................8
Section 5.05.
Money Held by Bank.........................................................................................8
Section 5.06.
Indemnification..................................................................................................8
Section5.07.
Interpleader........................................................................................................8
ARTICLE VI MISCELLANEOUS PROVISIONS........................................................................9
Section6.01.
Amendment........................................................................................................9
Section6.02.
Assignment........................................................................................................9
Section6.03.
Notices...............................................................................................................9
Section 6.04.
Effect of Headings.............................................................................................9
Section 6.05.
Successors and Assigns......................................................................................9
Section6.06.
Separability............................................................................. ...........
Section 6.07.
Benefits of Agreement.....................................................................................10
Section 6.08.
Entire Agreement.............................................................................................10
Section 6.09.
Counterparts.....................................................................................................10
Section6.10.
Termination......................................................................................................10
Section 6.11.
Governing Law................................................................................................10
4127-6728-1433.1
PAYING AGENT/REGISTRAR AGREEMENT
THIS PAYING AGENT/REGISTRAR AGREEMENT (the "Agreement"), dated as of
February 25, 2019, is by and between CITY OF LUBBOCK, TEXAS (the "Issuer"), and THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (the "Bank"), a national banking
association.
WHEREAS, the Issuer has duly authorized and provided for the issuance of its Water and
Wastewater System Revenue Bonds, Series 2019 (the "Bonds"), dated March 19, 2019, to be
issued as registered securities without coupons; and
WHEREAS, all things necessary to make the Bonds the valid obligations of the Issuer, in
accordance with their terms, will be taken upon the issuance and delivery thereof, and
WHEREAS, the Issuer is desirous that the Bank act as the Paying Agent of the Issuer in
paying the principal, redemption premium, if any, and interest on the Bonds, in accordance with
the terms thereof, and that the Bank act as Registrar for the Bonds; and
WHEREAS, the Issuer has duly authorized the execution and delivery of this Agreement,
and all things necessary to make this Agreement the valid agreement of the Issuer, in accordance
with its terms, have been done;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I
APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR
Section 1.01. Appointment.
(a) The Issuer hereby appoints the Bank to act as Paying Agent with respect to the
Bonds in paying to the Owners of the Bonds the principal, redemption premium, if any, and interest
on all or any of the Bonds.
(b) The Issuer hereby appoints the Bank as Registrar with respect to the Bonds.
(c) The Bank hereby accepts its appointment, and agrees to act as, the Paying Agent
and Registrar.
Section 1.02. Compensation.
(a) As compensation for the Bank's services as Paying Agent/Registrar, the Issuer
hereby agrees to pay the Bank the fees and amounts set forth in Exhibit A attached hereto for the
first year of this Agreement, or such part thereof as this Agreement shall be in effect.
(b) In addition, the Issuer agrees to reimburse the Bank upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Bank in accordance
4127-6728-1433 1
with any of the provisions hereof, including the reasonable compensation and the expenses and
disbursements of its agents and counsel.
ARTICLE II
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires, the following terms have the following
meanings when used in this Agreement:
"Bank" means The Bank of New York Mellon Trust Company, N.A.
"Bank Office" means the Bank's office in Dallas, Texas. The Bank will notify the Issuer
in writing of any change in location of the Bank Office.
"Bond" or "Bonds" means, collectively, any or all of the Issuer's Water and Wastewater
System Revenue Bonds, Series 2019, dated March 19, 2019.
"Bond Ordinance" means the ordinance of the City Council of the Issuer authorizing the
issuance and delivery of the Bonds.
"Business Day" means any day which is not a Saturday, Sunday or legal holiday or day on
which banking institutions in New York, New York are required or authorized by law or executive
order to close.
"Financial Advisor" means RBC Capital Markets, LLC.
"Fiscal Year" means the 12 -month period ending September 30th of each year.
"Issuer" means the City of Lubbock, Texas.
"Issuer Request" and "Issuer Order" means a written request or order signed in the name
of the Issuer by the Mayor of the Issuer, or any other authorized representative of the Issuer and
delivered to the Bank.
"Legal Holiday" means a day on which the Bank is required or authorized by applicable
law to be closed.
"Owner" means the Person in whose name a Bond is registered in the Register.
"Paying Agent" means the Bank when it is performing the functions associated with the
terms in this Agreement.
"Person" means any individual, corporation, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any agency or political
subdivision of a government.
-2-
4127-6728-1433.1
"Predecessor Bonds" of any particular Bond means every previous Bond evidencing all or
a portion of the same obligation as that evidenced by such particular Bond (and, for the purposes
of this definition, any Bond registered and delivered under Section 4.06 in lieu of a mutilated, lost,
destroyed or stolen Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed or stolen Bond).
"Record Date" means the last Business Day of the month next preceding an interest
payment date established by the Bond Ordinance.
"Register" means a register in which the Issuer shall provide for the registration and
transfer of Bonds.
"Responsible Officer" when used with respect to the Bank means the Chairman or Vice
Chairman of the Board of Directors, the Chairman or Vice Chairman of the Executive Committee
of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or
Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar
to those performed by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Stated Maturity" means the date or dates specified in the Bond Ordinance as the fixed
date on which the principal of the Bonds is due and payable or the date fixed in accordance with
the terms of the Bond Ordinance for redemption of the Bonds, or any portion thereof, prior to the
fixed maturity date.
ARTICLE III
PAYING AGENT
Section 3.01. Duties of Paving Agent.
(a) The Bank, as Paying Agent and on behalf of the Issuer, shall pay to the Owner, at
the Stated Maturity and upon the surrender of the Bond or Bonds so maturing at the Bank Office,
the principal amount of the Bond or Bonds then maturing, and redemption premium, if any,
provided that the Bank shall have been provided by or on behalf of the Issuer adequate funds to
make such payment.
(b) The Bank, as Paying Agent and on behalf of the Issuer, shall pay interest when due
on the Bonds to each Owner of the Bonds (or their Predecessor Bonds) as shown in the Register
at the close of business on the Record Date, provided that the Bank shall have been provided by
or on behalf of the Issuer adequate funds to make such payments; such payments shall be made by
computing the amount of interest to be paid each Owner, preparing the checks, and mailing the
checks on each interest payment date addressed to each Owner's address as it appears in the
Register on the Record Date.
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4127-6728-1433.1
Section 3.02. Payment Dates, The Issuer hereby instructs the Bank to pay the principal
of, redemption premium, if any, and interest on the Bonds at the dates specified in the Bond
Ordinance,
Section 3.03. Merger, Conversion Consolidation or Succession. Any corporation into
which the Paying Agent may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion, or consolidation to which the Paying Agent
shall be a party, or any corporation succeeding to all or substantially all of the corporate trust
business of the Paying Agent shall be the successor of the Paying Agent hereunder without the
execution or filing of any paper or any further act on the part of either of the parties hereto.
ARTICLE IV
1;11:14"Mis = 7
Section 4.01. Transfer and Exchange.
(a) The Issuer shall keep the Register at the Bank Office, and subject to such reasonable
written regulations as the Issuer may prescribe, which regulations shall be furnished to the Bank
herewith or subsequent hereto by Issuer Order, the Issuer shall provide for the registration and
transfer of the Bonds. The Bank is hereby appointed "Registrar" for the purpose of registering and
transferring the Bonds as herein provided. The Bank agrees to maintain the Register while it is
Registrar. The Bank agrees to at all times maintain a copy of the Register at its office located in
the State of Texas.
(b) The Bank as Registrar hereby agrees that at any time while any Bond is outstanding,
the Owner may deliver such Bond to the Registrar for transfer or exchange, accompanied by
instructions from the Owner, or the duly authorized designee of the Owner, designating the
persons, the maturities, and the principal amounts to and in which such Bond is to be transferred
and the addresses of such persons; the Registrar shall thereupon, within not more than three (3)
business days, register and deliver such Bond or Bonds as provided in such instructions. The
provisions of the Bond Ordinance shall control the procedures for transfer or exchange set forth
herein to the extent such procedures are in conflict with the provisions of the Bond Ordinance.
(c) Every Bond surrendered for transfer or exchange shall be duly endorsed or be
accompanied by a written instrument of transfer, the signature on which has been guaranteed in a
manner satisfactory to the Bank, duly executed by the Owner thereof or his attorney duly
authorized in writing.
(d) The Bank may request any supporting documentation it feels necessary to effect a
re -registration.
Section 4.02. The Bonds. The Issuer shall provide an adequate inventory of
unregistered Bonds to facilitate transfers. The Bank covenants that it will maintain the unregistered
Bonds in safekeeping and will use reasonable care in maintaining such unregistered Bonds in
safekeeping, which shall be not less than the care it maintains for debt securities of other
governments or corporations for which it serves as registrar, or which it maintains for its own
securities.
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4127-6728-1433 1
Section 4.03. Form of Register.
(a) The Bank as Registrar will maintain the records of the Register in accordance with
the Bank's general practices and procedures in effect from time to time. The Bank shall not be
obligated to maintain such Register in any form other than a form which the Bank has currently
available and currently utilizes at the time.
(b) The Register may be maintained in written form or in any other form capable of
being converted into written form within a reasonable time.
Section 4.04. List of Owners.
(a) The Bank will provide the Issuer at any time requested by the Issuer, upon payment
of the cost, if any, of reproduction, a copy of the information contained in the Register. The Issuer
may also inspect the information in the Register at any time the Bank is customarily open for
business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to
convert the information into written form.
(b) The Bank will not release or disclose the content of the Register to any person other
than to, or at the written request of, an authorized officer or employee of the Issuer, except upon
receipt of a subpoena or court order or as otherwise required by law. Upon receipt of a subpoena
or court order the Bank will notify the Issuer so that the Issuer may contest the subpoena or court
order.
Section 4.05. Cancellation of Bonds. All Bonds surrendered for payment, redemption,
transfer, exchange, or replacement, if surrendered to the Bank, shall be promptly cancelled by it
and, if surrendered to the Issuer, shall be delivered to the Bank and, if not already cancelled, shall
be promptly cancelled by the Bank. The Issuer may at any time deliver to the Bank for cancellation
any Bonds previously certified or registered and delivered which the Issuer may have acquired in
any manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the Bank. All
cancelled Bonds held by the Bank shall be disposed of pursuant to the Securities Exchange Act of
1934, as amended.
Section 4.06. Mutilated, Destroyed, Lost, or Stolen Bonds.
(a) Subject to the provisions of this Section 4.06, the Issuer hereby instructs the Bank
to deliver fully registered Bonds in exchange for or in lieu of mutilated, destroyed, lost, or stolen
Bonds as long as the same does not result in an over -issuance.
(b) If (i) any mutilated Bond is surrendered to the Bank, or the Issuer and the Bank
receives evidence to their satisfaction of the destruction, loss, or theft of any Bond, and (ii) there
is delivered to the Issuer and the Bank such security or indemnity as may be required by the Bank
to save and hold each of them harmless, then in the absence of notice to the Issuer or the Bank that
such Bond has been acquired by a bona fide purchaser, the Issuer shall execute, and upon its
request the Bank shall register and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost, or stolen Bond, a new Bond of the same stated maturity and of like tenor and
principal amount bearing a number not contemporaneously outstanding.
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4127-6728-1433.1
(c) Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed,
lost, or stolen Bond shall constitute a replacement of the prior obligation of the Issuer, whether or
not the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of the Bond Ordinance equally and ratably with all other
outstanding Bonds.
(d) Upon the satisfaction of the Bank and the Issuer that a Bond has been mutilated,
destroyed, lost, or stolen, and upon receipt by the Bank and the Issuer of such indemnity or security
as they may require, the Bank shall cancel the Bond number on the Bond registered with a notation
in the Register that said Bond has been mutilated, destroyed, lost, or stolen; and a new Bond shall
be issued of the same series and of like tenor and principal amount bearing a number, according
to the Register, not contemporaneously outstanding.
(e) The Bank may charge the Owner the Bank's fees and expenses in connection with
issuing a new Bond in lieu of or exchange for a mutilated, destroyed, lost, or stolen Bond.
(f) The Issuer hereby accepts the Bank's current blanket bond for lost, stolen, or
destroyed Bonds and any future substitute blanket bond for lost, stolen, or destroyed Bonds that
the Bank may arrange, and agrees that the coverage under any such blanket bond is acceptable to
it and meets the Issuer's requirements as to security or indemnity. The Bank need not notify the
Issuer of any changes in the security or other company giving such bond or the terms of any such
bond, provided that the amount of such bond is not reduced below the amount of the bond on the
date of execution of this Agreement. The blanket bond then utilized by the Bank for lost, stolen,
or destroyed Bonds by the Bank is available for inspection by the Issuer on request.
Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable
time after receipt of written request from the Issuer, furnish the Issuer information as to the Bonds
it has paid pursuant to Section 3.01; Bonds it has delivered upon the transfer or exchange of any
Bonds pursuant to Section 4.01; and Bonds it has delivered in exchange for or in lieu of mutilated,
destroyed, lost, or stolen Bonds pursuant to Section 4.06 of this Agreement.
ARTICLE V
THE BANK
Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein
and in accordance with the Bond Ordinance and agrees to use reasonable care in the performance
thereof. The Bank hereby agrees to use the funds deposited with it for payment of the principal of,
redemption premium, if any, and interest on the Bonds to pay the Bonds as the same shall become
due and further agrees to establish and maintain all accounts and funds as may be required for the
Bank to function as Paying Agent.
Section 5.02. Reliance on Documents, Etc.
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4127-6728-1433.1
(a) The Bank may conclusively rely, as to the truth of the statements and correctness
of the opinions expressed therein, on certificates or opinions furnished to the Bank.
(b) The Bank shall not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the
pertinent facts.
(c) No provisions of this Agreement shall require the Bank to expend or risk its own
funds or otherwise incur any financial liability for performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is
not assured to it.
(d) The Bank may rely and shall be protected in acting or refraining from acting upon
any ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, certificate, note, security, or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties. Without limiting the
generality of the foregoing statement, the Bank need not examine the ownership of any Bonds, but
is protected in acting upon receipt of Bonds containing an endorsement or instruction of transfer
or power of transfer which appears on its face to be signed by the Owner or an attorney-in-fact of
the Owner. The Bank shall not be bound to make any investigation into the facts or matters stated
in an ordinance, resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, certificate, note, security, or other paper or document supplied by Issuer.
(e) The Bank is also authorized to transfer funds relating to the closing and initial
delivery of the Bonds in the manner disclosed in the closing memorandum as prepared by the
Issuer's Financial Advisor or other agent. The Bank may act on a facsimile or e-mail transmission
of the closing memorandum acknowledged by the Financial Advisor or the Issuer as the final
closing memorandum. The Bank shall not be liable for any losses, costs or expenses arising directly
or indirectly from the Bank's reliance upon and compliance with such instructions.
(f) The Bank may consult with counsel, and the written advice of such counsel or any
opinion of counsel shall be full and complete authorization and protection with respect to any
action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon.
(g) The Bank may exercise any of the powers hereunder and perform any duties
hereunder either directly or by or through agents or attorneys of the Bank.
Section 5.03. Recitals of Issuer.
(a) The recitals contained herein and in the Bonds shall be taken as the statements of
the Issuer, and the Bank assumes no responsibility for their correctness.
(b) The Bank shall in no event be liable to the Issuer, any Owner or Owners, or any
other Person for any amount due on any Bond except as otherwise expressly provided herein with
respect to the liability of the Bank for its duties under this Agreement.
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4127-6728-1433 1
Section 5.04. May Hold Bonds. The Bank, in its individual or any other capacity, may
become the Owner or pledgee of Bonds and may otherwise deal with the Issuer with the same
rights it would have if it were not the Paying Agent/Registrar, or any other agent.
Section 5.05. Money Held by Bank.
(a) Money held by the Bank hereunder need not be segregated from any other funds
provided appropriate accounts are maintained.
(b) The Bank shall be under no liability for interest on any money received by it
hereunder.
(c) Subject to the provisions of Title 6, Texas Property Code, as amended, any money
deposited with the Bank for the payment of the principal, redemption premium, if any, or interest
on any Bond and remaining unclaimed for three years after final maturity of the Bond has become
due and payable will be paid by the Bank to the Issuer, and the Owner of such Bond shall thereafter
look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies
shall thereupon cease.
(d) The Bank will comply with the reporting requirements of Chapter 74 of the Texas
Property Code, as amended.
(e) The Bank shall deposit any moneys received from the Issuer into a trust account to
be held in a paying agent capacity for the payment of the Bonds, with such moneys in the account
that exceed the deposit insurance, available to the Issuer, provided by the Federal Deposit
Insurance Corporation to be fully collateralized with securities or obligations that are eligible under
the laws of the State of Texas and to the extent practicable under the laws of the United States of
America to secure and be pledged as collateral for trust accounts until the principal and intO-rest on
the Bonds have been presented for payment and paid to the owner thereof. Payments made from
such trust account shall be made by check drawn on such trust account unless the owner of such
Bonds shall, at its own expense and risk, request such other medium of payment.
Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank, its officers, directors, employees, and agents for, and hold them harmless
against, any loss, liability, or expense incurred without negligence or bad faith on their part arising
out of or in connection with its acceptance or administration of the Bank's duties hereunder, and
under Article V of the Bond Ordinance, including the cost and expense (including its counsel fees)
of defending itself against any claim or liability in connection with the exercise or performance of
any of its powers or duties under this Agreement.
Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demands or controversy over its persons as well as funds on
deposit in a court of competent jurisdiction within the State of Texas; waive personal service of
any process; and agree that service of process by certified or registered mail, return receipt
requested, to the address set forth in this Agreement shall constitute adequate service. The Issuer
and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of
competent jurisdiction within the State of Texas to determine the rights of any person claiming
any interest herein.
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4127-6728-1433.1
Section 5.08. Legislative Contracting Requirements.
(a) In accordance with Section 2270.002, Texas Government Code, the Bank
hereby verifies that the Bank: (i) does not Boycott Israel (as such term is defined in Section
2270.001, Texas Government Code) and (ii) subject to or as otherwise required by applicable
Federal law, including, without limitation, 50 U.S.C. Section 4607, will not Boycott Israel during
the term of the Agreement; and
(b) Pursuant to Section 2252.152, Texas Government Code, neither the Bank
nor any wholly owned subsidiary, majority-owned subsidiary, parent company or affiliate of the
Bank is a company currently listed by the Texas Comptroller of Public Accounts under Sections
806.051, 807.051, or 2252.153 of the Texas Government Code.
ARTICLE V1
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment. This Agreement may be amended only by an agreement in
writing signed by both of the parties hereof.
Section 6.02. Assignment._ This Agreement may not be assigned by either party without
the prior written consent of the other.
Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent,
waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown
below:
(a) if to the Issuer: City of Lubbock, Texas
1625 13th Street
Lubbock, Texas 79457
Attention: Chief Financial Officer
if to the Bank: The Bank of New York Mellon Trust Company, N.A.
2001 Bryan Street, 11th Floor
Dallas, Texas 75201
Section 6.04. Effect of Headings. The Article and Section headings herein are for
convenience only and shall not affect the construction hereof.
Section 6.05. Successors and Assigns. All covenants and agreements herein by the
Issuer shall bind its successors and assigns, whether so expressed or not.
Section 6.06. Separabilitx. If any provision herein shall be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
4127-672$-1433 1
Section 6.07. Benefits of Agreement. Nothing herein, express or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, any benefit or any legal
or equitable right, remedy, or claim hereunder.
Section 6.08. Entire Agreement. This Agreement and the Bond Ordinance constitute the
entire agreement between the parties hereto relative to the Bank acting as Paying Agent/Registrar,
and if any conflict exists between this Agreement and the Bond Ordinance, the Bond Ordinance
shall govern.
Section 6.09. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall constitute one and
the same Agreement.
Section 6.10. Termination.
(a) This Agreement will terminate on the date of final payment by the Bank issuing its
checks for the final payment of principal, redemption premium, if any, and interest of the Bonds.
(b) This Agreement may be earlier terminated upon sixty (60) days written notice by
either party; provided, that, no termination shall be effective until a successor has been appointed
by the Issuer and has accepted the duties imposed by this Agreement. A resigning Paying
Agent/Registrar may petition any court of competent jurisdiction for the appointment of a
successor Paying Agent/Registrar if an instrument of acceptance by a successor Paying
Agent/Registrar has not been delivered to the resigning Paying Agent/Registrar within sixty (60)
days after the giving of notice of resignation.
(c) The provisions of Section 1.02 and of Article Five shall survive and remain in full
force and effect following the termination of this Agreement.
Section 6.11. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of Texas.
[Signature Page to Follow]
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4127-6728-1433.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first written above.
CITY OF LUBBOCK, TEXAS
Mayor
ATTEST:
.1 )X
City tecretary
[Signature page for paying Agent:'Registrar Agreement for Water and Wastewater System Revenue Bonds, Series 20191
4127-6728-1433 1
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
By:
Title:
(Signature page for Paying Agent/Registrar Agreement for Water and Wastewater System Revenue Bonds, Series 10191
4127-6728-1433.1
EXHIBIT "A"
SCHEDULE OF FEES FOR SERVICE AS PAYING AGENTIREGISTRAR
4127-6728-1433 1
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (Agreement), dated as of February 25, 2019, made by and
between City of Lubbock, Texas, a political subdivision of the State of Texas in Lubbock County,
Texas, (City), acting by and through the City Council of the City, and The Bank of New York
Mellon Trust Company, N.A., as Escrow Agent together with any successor in such capacity;
WITNESSETH:
WHEREAS, pursuant to an ordinance finally adopted on February 25, 2019 (Ordinance), the City
of Lubbock, Texas authorized the issuance of $19,635,000 City of Lubbock, Texas Water and
Wastewater System Revenue Bonds, Series 2019, dated March 19, 2019 (Obligations) to obtain
financial assistance from the Texas Water Development Board (TWDB) for the purpose of funding
water or wastewater system improvements (Project); and
WHEREAS, the Escrow Agent is a state or national bank designated by the Texas Comptroller as a
state depository institution in accordance with Texas Government Code, Chapter 404, Subchapter
C, or is a designated custodian of collateral in accordance with Texas Government Code, Chapter
404, Subchapter D and is otherwise qualified and empowered to enter into this Agreement, and
hereby acknowledges its acceptance of the terms and provisions hereof; and
WHEREAS, a condition of the Obligations is the deposit of the proceeds of the Obligations
(Proceeds) in escrow subject to being withdrawn only with the approval of the Executive
Administrator or another designated representative; provided, however, the Proceeds can be
transferred to different investments so long as all parties hereto consent to such transfer;
NOW, THEREFORE, in consideration of the mutual agreements herein contained and in
consideration of the amount of fees to be paid by the City to the Escrow Agent, as set forth on
EXHIBIT A, the receipt of which is hereby acknowledged, and in order to secure the delivery of
the Obligations, the parties hereto mutually undertake, promise and agree for themselves, their
respective representatives and successors, as follows:
SECTION 1: ESCROW ACCOUNT(S). Upon the delivery of the Obligations described above,
the Proceeds identified under TWDB Commitment Numbers LFI000939 and LFI000940 shall be
deposited to the credit of a special escrow account(s) or escrow subaccount(s) (Escrow Account(s))
maintained at the Escrow Agent on behalf of the City and the TWDB and shall not be commingled
with any other accounts or with any other proceeds or funds. The Proceeds received by the Escrow
Agent under this Agreement shall not be considered as a banking deposit by the City, and the
Escrow Agent shall have no right to title with respect thereto except as Escrow Agent under the
terms of this Agreement.
The Escrow Account(s) shall be entitled "City of Lubbock, Texas, Water and Wastewater System
Revenue Bonds, Series 2019, Texas Water Development Board Numbers LF1000939 and
LGL -006 10/01 13
4149-0932-5593 1
LF1000940 Escrow Account" and shall not be subject to warrants, drafts or checks drawn by the
City but shall be disbursed or withdrawn to pay the costs of the Project for which the Obligations
were issued or other purposes in accordance with the Ordinance and solely upon written
authorization from the Executive Administrator or his/her designated representative. The Escrow
Agent shall provide to the City and to the TWDB the Escrow Account(s) bank statements upon
request.
SECTION 2: COLLATERAL. All cash deposited to the credit of such Escrow Account(s) and
any accrued interest in excess of the amounts insured by the FDIC and remaining uninvested under
the terms of this Agreement shall be continuously secured by a valid pledge of direct obligations of
the United States of America or other collateral meeting the requirements of the Public Funds
Collateral Act, Texas Government Code, Chapter 2257,
SECTION 3: INVESTMENTS. While the Proceeds are held in escrow, the Escrow Agent shall
only invest escrowed Proceeds in investments that are authorized by the Public Funds Investment
Act, Texas Government Code, Chapter 2256 (PFIA). It is the City's responsibility to direct the
Escrow Agent to invest all public funds in a manner that is consistent not only with the PFIA but
also with its own written investment policy.
SECTION 4: DISBURSEMENTS. The Escrow Agent shall not honor any disbursement from the
Escrow Account(s), or any portion thereof, unless and until it has been supplied with written
approval and consent by the Executive Administrator or his/her designated representative.
However, no written approval and consent by the Executive Administrator shall be required if the
disbursement involves transferring Proceeds from one investment to another within the Escrow
Account(s) provided that all such investments are consistent with the PFIA requirements.
SECTION 5: UNEXPENDED FUNDS, Any Proceeds remaining unexpended in the Escrow
Account(s) after completion of the Project and after the final accounting has been submitted to and
approved by the TWDB shall be disposed of pursuant to the provisions of the Ordinance. The City
shall deliver a copy of such TWDB approval of the final accounting to the Escrow Agent together
with instructions concerning the disbursement of unexpended Proceeds hereunder. The Escrow
Agent shall have no obligation to ensure that such unexpended Proceeds are used as required by the
provisions of the Ordinance, that being the sole obligation of the City.
SECTION 6: CERTIFICATIONS. The Escrow Agent shall be authorized to accept and rely
upon the certifications and documents furnished to the Escrow Agent by the City and shall not be
liable for the payment of any funds made in reliance in good faith upon such certifications or other
documents or approvals, as herein recited.
SECTION 7: LIABILITY OF ESCROW AGENT. To the extent permitted by law, the Escrow
Agent shall not be liable for any act done or step taken or omitted by it or any mistake of fact or
law, except for its negligence or default or failure in the performance of any obligation imposed
upon it hereunder. The Escrow Agent shall not be responsible in any manner for any proceedings
in connection with the Obligations or any recitation contained in the Obligations.
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4149-0932-5593 1
LG L-006 10101? l 3
SECTION 8: RECORDS. The Escrow Agent will keep complete and correct books of record
and account relating to the receipts, disbursements, allocations and application of the money
deposited to the Escrow Account, and investments of the Escrow Account and all proceeds thereof.
The records shall be available for inspection and copying at reasonable hours and under reasonable
conditions by the City and the TWDB.
SECTION 9: MERGERICONSOLIDATION. In the event that the Escrow Agent merges or
consolidates with another bank or sells or transfers substantially all of its assets or corporate trust
business, then the successor bank shall be the successor Escrow Agent without the necessity of
further action as long as the successor bank is a state or national bank designated by the Texas
Comptroller as a state depository institution in accordance with Texas Government Code, Chapter
404, Subchapter C, or is a designated custodian of collateral in accordance with Texas Government
Code Chapter 404, Subchapter D. The Escrow Agent must provide the TWDB with written
notification within 30 days of acceptance of the merger, consolidation, or transfer. If the merger,
consolidation or other transfer has occurred between state banks, the newly -created entity shall
forward the certificate of merger or exchange issued by the Texas Department of Banking as well
as the statement filed with the pertinent chartering authority, if applicable, to the TWDB within five
business days following such merger, consolidation or exchange.
SECTION 10: AMENDMENTS. This Agreement may be amended from time to time as
necessary with the written consent of the City and the TWDB, but no such amendments shall
increase the liabilities or responsibilities or diminish the rights of the Escrow Agent without its
consent.
SECTION 11: TERMINATION. In the event that this Agreement is terminated by either the
City or by the Escrow Agent, the Escrow Agent must report said termination in writing to the
TWDB within five business days of such termination. The City is responsible for ensuring that the
following criteria are satisfied in selecting the successor escrow agent and notifying the TWDB of
the change in escrow agents: (a) the successor escrow agent must be an FDIC -insured state or
national bank designated by the Texas Comptroller as a state depository; (b) the successor escrow
agent must be retained prior to or at the time of the termination; (c) an escrow agreement must be
executed by and between the City and the successor escrow agent and must contain the same or
substantially similar terms and conditions as are present in this Agreement; and (d) the City must
forward a copy of the executed escrow agreement with the successor escrow agent within five
business days of said termination. No funds shall be released by the TWDB until it has received,
reviewed and approved the escrow agreement with the successor escrow agent. If the City has not
appointed a successor escrow agent within thirty (30) days of the notice of termination, the Escrow
Agent may petition any court of competent jurisdiction in Texas for the appointment of a successor
escrow agent or for other appropriate relief, and any such resulting appointment shall be binding
upon the City. Whether appointed by the City or a court, the successor escrow agent and escrow
agreement must be approved by the TWDB for the appointment to be effective. The Escrow Agent
is responsible for performance under this Agreement until a successor has been approved by the
TWDB and has signed an acceptable escrow agreement.
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4149-0932-5593 1
LGL -006 1010L -A 3
SECTION 12: EXPIRATION. This Agreement shall expire upon final transfer of the funds in the
Escrow Account(s) to the City.
SECTION 13: POINT OF CONTACT. The points of contact for the Escrow Agent and the
TWDB are as follows:
Corporate Trust Department Executive Administrator
The Bank of New York Mellon Trust Company, N.A. Texas Water Development Board
2001 Bryan Street, I ph Floor 1700 North Congress Avenue
Dallas, Texas 75201 Austin, Texas 78701
SECTION 14: CHOICE OF LAW. This Agreement shall be governed exclusively by the
applicable laws of the State of Texas. Venue for disputes shall be in the District Court of Travis
County, Texas.
SECTION 15: ASSIGNABILITY. This Agreement shall not be assignable by the parties hereto,
in whole or in part, and any attempted assignment shall be void and of no force and effect.
SECTION 16: ENTIRE AGREEMENT. This Agreement evidences the entire Escrow
Agreement between the Escrow Agent and the City and supersedes any other agreements, whether
oral or written, between the parties regarding the Proceeds or the Escrow Account(s). No
modification or amendment of this Agreement shall be valid unless the same is in writing and is
signed by the City and consented to by the Escrow Agent and the TWDB.
SECTION 17: VALIDITY OF PROVISIONS. If any term, covenant, condition or provision of
this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
SECTION 18: COMPENSATION FOR ESCROW SERVICES. The Escrow Agent shall be
entitled to compensation for its services as stated in Exhibit A, which compensation shall be paid
by the City but may not be paid directly from the Escrow Account(s).
SECTION 19: FAX/E-MAIL. The Escrow Agent shall have the right to accept and act upon
instructions, including funds transfer instructions ("Instructions") given by any officer named on
Exhibit B hereto (each, an "Authorized Officers") and delivered using Electronic Means, as defined
herein. The City shall provide to the Escrow Agent an incumbency certificate listing substitute or
additional Authorized Officers who are authorized to provide such Instructions and containing
specimen signatures of such Authorized Officers whenever a person is to be added or deleted from
the listing. "Electronic Means" shall mean the following communications methods: Society for
Worldwide Interbank Financial Telecommunication (or "S.W.I.F.T."), email, facsimile
transmission, secure electronic transmission containing applicable authorization codes, passwords
4
4149-0932-5593.1
LGL -006 10!01-13
and/or authentication keys issued by the Escrow Agent, or another method or system specified by
the Escrow Agent as available for use in connection with its services hereunder.
If the City elects to give the Escrow Agent Instructions using Electronic Means and the
Escrow Agent in its discretion elects to act upon such Instructions, the Escrow Agent's
understanding of such Instructions shall be deemed controlling. The City understands and agrees
that the Escrow Agent cannot determine the identity of the actual sender of such Instructions and
that the Escrow Agent shall conclusively presume that directions that purport to have been sent by
an Authorized Officer listed on the incumbency certificate provided to the Escrow Agent have been
sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized
Officers transmit such Instructions to the Escrow Agent and that the City and all Authorized
Officers are solely responsible to safeguard the use and confidentiality of applicable user and
authorization codes, passwords and/or authentication keys upon receipt by the City. The Escrow
Agent shall not be liable for any losses, costs or expenses arising directly or indirectly from the
Escrow Agent's reliance, in good faith, upon and compliance with such Instructions
notwithstanding such directions conflict or are inconsistent with a subsequent written instruction,
provided however, the Escrow Agent will endeavor to comply with such subsequent written
instruction once received. The City agrees, to the extent permitted by law,: (i) to assume all risks
arising out of the use of Electronic Means to submit Instructions to the Escrow Agent, including
without limitation the risk of the Escrow Agent acting on unauthorized Instructions, and the risk of
interception and misuse by third parties; (ii) that it is fully informed of the protections and risks
associated with the various methods of transmitting Instructions to the Escrow Agent and that there
may be more secure methods of transmitting Instructions than the method(s) selected by the City;
(iii) that the security procedures (if any) to be followed in connection with its transmission of
Instructions provide to it a commercially reasonable degree of protection in light of its particular
needs and circumstances; and (iv) to notify the Escrow Agent immediately upon learning of any
compromise or unauthorized use of the security procedures.
SECTION 20: ANTI -BOYCOTT VERIFICATION. The Escrow Agent represents that, to the
extent this Agreement constitutes a contract for goods or services within the meaning of Section
2270.002 of the Texas Government Code, as amended, solely for purposes of compliance with
Chapter 2270 of the Texas Government Code, and subject to applicable Federal law, neither the
Escrow Agent nor any wholly owned subsidiary, majority-owned subsidiary, parent company or
affiliate of the Escrow Agent (i) boycotts Israel or (ii) will boycott Israel through the term of this
Agreement. The terms "boycotts Israel" and "boycott Israel" as used in this paragraph have the
meanings assigned to the term "boycott Israel" in Section 808.001 of the Texas Government Code,
as amended.
SECTION 21: IRAN, SUDAN AND FOREIGN TERRORIST ORGANIZATIONS. The
Escrow Agent represents that, to the extent this Agreement constitutes a governmental contract
within the meaning of Section 2252.151 of the Texas Government Code, as amended, solely for
purposes of compliance with Chapter 2252 of the Texas Government Code, and except to the extent
otherwise required by applicable federal law, neither the Escrow Agent nor any wholly owned
F1
4149-0932-5593 1
LGL -006 10/01.13
subsidiary, majority-owned subsidiary, parent company or affiliate of the Escrow Agent (i) engages
in business with Iran, Sudan, or any foreign terrorist organization as described in Chapters 806 or
807 of the Texas Government Code, or Subchapter F of Chapter 2252 of the Texas Government
Code, or (ii) is a company listed by the Texas Comptroller of Public Accounts under Sections
806.051, 807.051, or 2252.153 of the Texas Government Code. The term "foreign terrorist
organization" in this paragraph has the meaning assigned to such term in Section 2252.151 of the
Texas Government Code.
LGL -006 10%01:13
4149-0932-5593.1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective upon
signature of both parties.
CITY OF LUBBOCK, TEXAS
��V
By: ---
Mayor
Address: 1625 131" Street
Lubbock, Texas 79457
(Seal)
7
4149-0932-5593.1
LGL -006 10/01!13
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
as Escrow Agent
By: _
Title:
Address: 2001 Bryan Street, l 1 th Floor
Dallas, Texas 75201
(Bank Seal)
LG L-006 1010113
4149-0932-5593 1
EXHIBIT A
Fee Schedule
4149-0932-5593 1
LGL -006 10101;13
EXHIBIT B
Authorized Officers
Name Signature Office
D. Blu Kostelich Chief Financial Officer
W. Jarrett Atkinson City Manager
t0
4149-0932-5593.1
LGL -006 10/01;13
GENERAL CERTIFICATE
We, the undersigned, Mayor, City Manager and City Secretary, respectively, of the City of
Lubbock, Texas, do hereby certify the following information:
1. This certificate relates to the City of Lubbock, Texas, Water and Wastewater
System Revenue Bonds, Series 2019 (the "Bonds"), dated March 19, 2019. Capitalized terms used
herein and not otherwise defined shall have the meaning assigned thereto in the ordinance (the
"Ordinance") of the City Council authorizing the issuance of the Bonds.
2. The City of Lubbock, Texas, is a duly incorporated Home Rule City with a
population greater than 50,000, and is operating and existing under the Constitution and laws of
the State of Texas and the duly adopted Home Rule Charter of the City. The Home Rule Charter
was last amended at an election held in the City on November 2, 2004.
3. The following are duly qualified and acting, elected or appointed officials of the
City of Lubbock, Texas:
Daniel M. Pope, Mayor
Jeff Griffith, Mayor Pro Tem
W. Jarrett Atkinson, City Manager
D. Blu Kostelich, Chief Financial Officer
Rebecca Garza, City Secretary
Juan A. Chadis
Shelia Patterson Harris
Latrelle Joy
Steve Massengale
Randy Christian
} Members of
the Council
4. Save and except for the pledge of the income and revenues of the City's combined
Water and Wastewater System (the "System") to the payment of the principal of and interest to
become due with respect to the obligations listed in Exhibit A, the income and revenues of said
System have not been pledged or hypothecated in any other manner or for any other purpose; and
the above obligations evidence the only liens, encumbrances or indebtedness of said System or
against the income and revenues of such System.
5. Attached hereto as Exhibit B is a schedule of the gross receipts, operating expenses
and net revenues of the System for each of the fiscal years 20_ through 20_.
6. The current monthly rates and charges for water and sewer services provided by the
System are as shown on the attached Exhibit C.
7. A debt service requirement schedule for the City's outstanding indebtedness
payable from a lien on and pledge of revenues of the System, as well as the proposed Bonds, is
attached hereto as Exhibit D and made a part of this certificate for all purposes.
8. The City is not now in default as to any covenant, condition or obligation in
connection with Parity Bonds, as defined in the Ordinance, and the ordinances authorizing the
4138-2329-7050.1
Parity Bondst; and each of the funds and accounts created for the payment and security of the
Parity Bonds contain the amounts now required to be on deposit therein.
9. For the Fiscal Year next preceding the date of the Bonds, the Net Revenues of the
System are equal to at least 1.25 times the maximum Annual Debt Service Requirements
(calculated on a Fiscal Year basis) of all outstanding Parity Obligations which will be outstanding
after the issuance of the Bonds, as shown in Exhibit E.
10. Except for city buildings and institutions operated by the City, no free services of
the System shall be allowed, and rates charged for services furnished by the System shall be equal
and uniform as required by law.
11. With respect to the contracts executed in connection with the authorization and
issuance of the Bonds, all disclosure filings and acknowledgements required by Section 2252.908,
Texas Government Code, and the rules of the Texas Ethics Commission related to said provision,
have been made.
[The remainder of this page is intentionally left blank.]
No Parity Bonds are currently outstanding.
4138-2129-7050.1
Cp
EXECUTED AND DELIVERED this
MANUAL SIGNATURE
STATE OF TEXAS §
COUNTY OF LUBBOCK §
OFFICIAL TITLE
Mayor, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared Daniel M. Pope,
Mayor, of the City of Lubbock, Texas, known to me to be such person who signed the above and
foregoing certificate in my presence and acknowledged to me that such person executed the above
and foregoing certificate for the purposes therein stated. A
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
V P. JENNIFER SOW DER CLEMENTS
Noixy Public, State of Texas
Notary IDI 12497088.3
[SEAL] My Commission Expkes08.28.2020
4138-2329-7050 1
Notary Public,
for the State of Texas
Signature Page for General Certificate
EXECUTED AND DELIVERED this
MANUAL SIGNATURE OFFICIAL TITLE
STATE OF TEXAS
COUNTY OF LUBBOCK
City Manager, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared W. Jarrett Atkinson,
City Manager, of the City of Lubbock, Texas, known to me to be such person who signed the
above and foregoing certificate in my presence and acknowledged to me that such person executed
the above and foregoing certificate for the purposes therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS �+
P JENNIFER SOWDER CLEMENTS
Notary Pubk�, State of Texas
Notary ID# 1249Tii68-3
My Commissxm Expires 06.28.2820
[SEAL]
4138-2324-7050 1
— Notary Public,
n and for the State of Texas
Signature Page for General Certificate
EXECUTED AND DELIVERED this
MANUAL SIGNATURE
STATE OF TEXAS
0FFIC L TITLE
A--� City Secretary, City of Lubbock, Texas
Before me, the undersigned authority, on this day personally appeared Rebecca Garza, City
Secretary, of the City of Lubbock, Texas, known to me to be such person who signed the above
and foregoing certificate in my presence and acknowledged to me that such person executed the
above and foregoing certificate for the purposes therein stated. A
GIVEN UNDER MY HAND AND SEAL OF OFFICE THIS
" Notary Public,
In and for the State of Texas
LedJENNIFER SOWDER CLEMENTSNaiary Punic, Sf210 of TWS[SEAL]Notary IN 12497068.3
My CommissW Expires 06-28.2020
Signature Page for General Certificate
4138-2329-7050A
EXHIBIT A
WATERWORKS AND SEWER SYSTEM OBLIGATIONS
Bonds payable from a first lien on and pledge of the Net Revenues of the System:
a. ; and
b. the Bonds.
, Obligations payable from a limited pledge of the Net Revenues of the System:
a.
-1
4138-2329-7050.1
EXHIBIT B
GROSS RECEIPTS, OPERATING EXPENSES AND NET REVENUES
OF THE WATERWORKS AND SEWER SYSTEM
Fiscal Year
Ending 9130
2011
2012
2013
2014
2015
Gross
Receipts
13-1
4138-2329-7050.1
Operating
Expenses
Net Revenues
EXHIBIT C
WATER AND SEWER RATES
C -f
4138-2329-7050 1
EXHIBIT D
DEBT SERVICE REQUIREMENTS
D-1
4138-2329-7050.1
EXHIBIT E
E-1
4138-2324-7050.1
SIGNATURE IDENTIFICATION AND NO -LITIGATION CERTIFICATE
STATE OF TEXAS §
COUNTY OF LUBBOCK §
CITY OF LUBBOCK §
WE, the undersigned, officials of the City of Lubbock, Texas (the "City"), do hereby certify
with respect to the "CITY OF LUBBOCK, TEXAS, WATER AND WASTEWATER SYSTEM
REVENUE BONDS, SERIES 2019," dated March 19, 2019 (the "Bond Date"), in the aggregate
principal amount of $19,635,000 (the `Bonds") as follows:
I. The Bonds have been duly and officially executed by the undersigned with their
manual or facsimile signature in the same manner appearing hereon, and the undersigned
hereby adopt and ratify their respective signatures in the manner appearing on each of the
Bonds whether in manual or facsimile form, as the case may be, as their true, genuine and
official signatures.
2. On the Bond Date and on the date hereof, we were and are the duly qualified and
acting officials of the City indicated below.
3. We have caused the official seal of the City to be impressed, imprinted or
lithographed on the Bonds; and said seal on the Bonds has been duly adopted as, and is
hereby declared to be, the official seal of the City.
4. No litigation of any nature is now pending before any federal or state court, or
administrative body, or to our knowledge threatened, seeking to restrain or enjoin the
issuance or delivery of the Bonds or questioning the issuance or sale of the Bonds, the
authority or action of the governing body of the City relating to the issuance or sale of the
Bonds, the collection of the revenues of the City's combined Water and Wastewater
System (the "System"), or the imposition of rates and charges with respect to the System,
pledged to pay the principal of and interest on the Bonds or that otherwise would have a
material adverse effect on the financial affairs of the City or the System to pay the Bonds;
and that neither the corporate existence or boundaries of the City nor the right to hold office
of any member of the governing body of the City or any other elected or appointed official
of the City is being contested or otherwise questioned.
5. No authority or proceeding for the issuance, sale or delivery of the Bonds, passed
and adopted by the governing body of the City, has been amended, repealed, revoked,
rescinded or otherwise modified since the date of passage thereof, and all such proceedings
and authority relating to the issuance and sale of the Bonds remain in full force and effect
as of the date of this certificate.
6. The information and data contained in the General Certificate dated February 25,
2019, remain true and correct as of this date.
4139-67704345.
The City hereby authorizes the Office of the Attorney General to date this certificate the
date of delivery of its approving opinion, and the City agrees to notify the Office of the Attorney
General of any changes with respect to this certificate or any Bond documents to which it is a party
that are made between the date of such opinion and the date of closing.
[Execution Page Follows]
4134-67704345.1
T4.0f
DELIVERED this
SIGNATURE OFFICIAL TITLE
Mayor, City of Lubbock, Texas
•G City Secretary, City of Lubbock, Texas
THE STATE OF TEXAS
COUNTY OF BRAZOS LUBBOCK
Before me, on this day personally appeared the foregoing individuals, known to me to be
the persons whose names were subscribed in my presence to the foregoing instrument.
4 GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the e day of
1 2019.
(Notary
aotPAM P JENNIFER SOWDER CLEMENTS
Notary Public, State of Texas
Notary 1D# 12497068.3
My Commission Expires 08.28.2020
4139-67704345 1
NotArj Public, State of Texas
MINUTES AND CERTIFICATION PERTAINING TO
PASSAGE OF A RESOLUTION
STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
On the 25th day of February, 2019, the City Council of the City of Lubbock, Texas,
convened in a regular meeting at the regular meeting place thereof, the meeting being open to the
public and notice of said meeting, giving the date, place and subject thereof, having been posted
as prescribed by Chapter 551, Texas Government Code, as amended; and the roll was called of the
duly constituted officers and members of the City Council, which officers and members are as
follows:
Daniel M. Pope, Mayor Juan A, Chadis )
Jeff Griffith, Mayor Pro Tem Shelia Patterson Harris ) Members of
Latrelle Joy ) the Council
Steve Massengale )
Randy Christian )
Shcha Patterson
and all of said persons were present except _ Hates , thus constituting a quorum. Whereupon,
among other business, a written Resolution bearing the following caption was introduced:
A RESOLUTION APPROVING AND AUTHORIZING THE
EXECUTION OF A PRINCIPAL FORGIVENESS AGREEMENT
BETWEEN THE TEXAS WATER DEVELOPMENT BOARD
AND THE CITY OF LUBBOCK, TEXAS, AND AN ESCROW
AGREEMENT RELATING THERETO.
The Resolution, a full, true and correct copy of which is attached hereto, was read and
reviewed by the City Council. Thereupon, it was duly moved and seconded that the Resolution be
passed and adopted.
The Presiding Officer put the motion to a vote of the members of the City Council, and the
Resolution was passed and adopted by the following vote:
AYES: 6 NOES: 0 ABSTENTIONS: 0
4139-9766-1338.1
MINUTES APPROVED AND CERTIFIED TO BE TRUE AND CORRECT, and to correctly
reflect the duly constituted officers and members of the City Council of said City, and the attached
and following copy of said Resolution is hereby certified to be a true and correct copy of an official
copy thereof on file among the official records of the City, all on this the 25th day of February,
2019.
8i�tecretary
City of Lubbock, Texas
[SEAL]
4139-8766-1338.1
Principal Forgiveness Agreement
Clean Water State Revolving Fund
TEXAS WATER DEVELOPMENT BOARD
, Wo
CITY OF LUBBOCK
TWDB COMMITMENT NO. LF1000940
TWDB PROJECT NO. 73820 (IUP FISCAL YEAR 2019)
TWDB RESOLUTION NO. 19-009
CFDA No. 66.458
4164-3752-8090 1
CITY OF LUBBOCK
TWDB COMMITMENT NO. LF1000940
TWDB PROJECT NO. 73820
TWDB RESOLUTION NO. 19-009
PRINCIPAL FORGIVENESS AGREEMENT
TABLE OF CONTENTS
ARTICLEI. DEFINITIONS.......................................................................................................................................................1
ARTICLE II. AUTHORITY AND RECITALS.........................................................................................................................3
ARTICLEIII. LEGAL REQUIREMENTS................................................................................................................................ 4
ARTICLEIV. CONSTRUCTION................................................................................................................................................ 6
ARTICLE V. SPECIAL COVENANTS AND REPRESENTATIONS.................................................................................... 7
ARTICLE VI. NON-PERFORMANCE AND REMEDIES...................................................................................................... 8
ARTICLE VII. GENERAL TERMS AND CONDITIONS.....................................................................................................10
EXHIBIT
TWDBResolution No. 19-009................................................................................................................EXHIBIT A
Cityof Lubbock's Resolution..................................................................................................................EXHIBIT B
List of Federal Laws and Authorities (Cross-Cutters)........................................................................EXHIBIT C
Davis -Bacon Contract and Subcontract Provisions...........................................................................EXHIBIT D
ProjectSchedule......................................................................................................................................EXHIBIT E
ProjectBudget.........................................................................................................................................EXHIBIT F
EscrowAgreement.......................................................................................................................................EXHIBIT G
TWDB Commitment No. LF1000940
Page 2 of X
4164-3752-8090.1
THE STATE OF TEXAS § TWDB Commitment No. LP1000940
COUNTY OF TRAVIS §
PRINCIPAL FORGIVENESS AGREEMENT
BETWEEN THE
TEXAS WATER DEVELOPMENT BOARD
AND THE
CITY OF LUBBOCK
WHEREAS, the City of Lubbock (City) has filed an application with the Texas Water
Development Board (TWDB) for financial assistance in the amount of $20,635,000 from the
Clean Water State Revolving Fund (CWSRF) to finance wastewater system improvements for
the project identified as Project No. 73820; and
WHEREAS, on January 22, 2019, the TWDB determined that the City qualifies for
principal forgiveness because it meets Green Project requirements pursuant to 31 TAC §
375.18, as effective July 4, 2016, and the criteria set forth in the 2019 CWSRF Intended Use
Plan (IUP), and agreed, pursuant to the TWDB Resolution, to provide financial assistance in
the amount of $20,635,000 to the City and further agreed that $1,000,000 will be forgiven;
and
WHEREAS, the TWDB and the City are the Parties to this Agreement.
NOW, THEREFORE, the Parties mutually agree to adhere to the terms of this
Agreement and to administer the Principal Forgiveness Funds provided through this
Agreement in conformance with all applicable state and federal laws and regulations, the
TWDB. Resolution, and all terms and conditions set forth herein.
ARTICLE 1, DEFINITIONS
The following terms, as used in this Agreement, have the meanings assigned below:
Agreement means this Principal Forgiveness Agreement and the attached exhibits.
CFR means the Code of Federal Regulations.
Commitment means an offer by the TWDB to provide financial assistance to an Applicant as
evidenced by a TWDB resolution.
Construction Account means an account dedicated to the payment of Project costs, as defined
by 31 TAC § 375.1(16) and required by the TWDB Resolution.
CWSRF means the Clean Water State Revolving Fund, a program of financial assistance
administered by the TWDB for wastewater projects pursuant to the Federal Water Pollution
TWDB Commitment No. LF 1000940
Page I of 14
4164-3752-81011 1
Control Act, 33 U.S.C.A. §§ 1251 et seq.; applicable federal regulations; Texas Water Code,
Chapter 15, §§ 15.601- 15.618; and 31 TAC Chapter 375.
Eligible Expenses means the expenses allowed by TWDB program requirements and
authorized by the TWDB in the approved Project Budget.
EPA means the U.S. Environmental Protection Agency.
Escrow Account means an account established by the City that will be used to manage the
Principal Forgiveness Funds in accordance with an escrow agreement acceptable to the
Executive Administrator, which is attached hereto as EXHIBIT G, until such time as the
Executive Administrator authorizes the release of the Principal Forgiveness Funds to the
Construction Account.
Executive Administrator means the Executive Administrator of the TWDB or designated
representative.
Financial Assistance means funding made available to eligible Applicants, as authorized in
33 U.S.C. §1383(d), including principal forgiveness
Force Majeure means acts of god, strikes, lockouts, or other industrial disturbances, acts of
the public enemy, war, blockades, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, storms, floods, washouts, droughts, tornadoes, hurricanes, arrests and
restraints of government and people, explosions, breakage or damage to machinery,
pipelines or canals, and any other inabilities of either party, whether similar to those
enumerated or otherwise, and not within the control of the party claiming such inability,
which by the exercise of due diligence and care such party could not have avoided.
Green Project means a project or portion of a project that meets the EPA criteria for inclusion
in the Green Project Reserve, including green infrastructure, water or energy efficiency
improvements or other environmentally innovative activities.
Green Project Reserve means the equivalent amount of the EPA capitalization grant that is
reserved for projects that meet the EPA's criteria for green projects.
IUP means the Intended Use Plan, State Fiscal Year 2019, approved by the TWDB and the
EPA in which the Project was prioritized for funding.
Obligations means the $19,635,000 City of Lubbock, Texas Water and Wastewater System
Revenue Bonds, Proposed Series 2019, together with all authorizing documents, which
evidence the portion of the financial assistance that is not forgiven, identified as L1000939.
Outlay Report means the TWDB form regarding the total amount of costs incurred by the
City relating to the Project for the specified period.
Parties or Party means the TWDB and the City and their authorized successors and assignees.
TWDB Commitment No. LF 1000940
Page 2 of 14
4164-3752-8090.1
Principal Forgiveness Funds means the portion of the Financial Assistance that is forgiven,
identified as LF1000940, in an amount not to exceed $1,000,000.
Project means the project for which the TWDB is providing financial assistance under this
Agreement and as further described in the TWDB Resolution and identified as Project No.
73820.
State means the State of Texas.
TWDB Resolution means TWDB Resolution No. 19-009, dated January 22, 2019, approving
the application for financial assistance filed by the City and authorizing the execution of this
Agreement.
ARTICLE 11. AUTHORITY AND RECITALS
2.01. AUTHORITY. This Agreement is authorized and required by the Federal Water
Pollution Control Act, 33 U.S.C. §§ 1251 et seq., and is also governed by the terms of the IUP;
Texas Water Code, Chapter 6; Texas Water Code; Chapter 15, §§ 15.601 — 15.618; 31 TAC
Chapter 375; and the TWDB Resolution.
2.02. RECITALS. The Parties agree that the following representations are true and correct
and form the basis of this Agreement.
A. The TWDB may provide financial assistance in the form of additional subsidization,
such as principal forgiveness, for all or a portion of the Project costs in an amount
which the TWDB has determined to be eligible.
B. On January 22, 2019, the TWDB considered an Application filed by the City for
financial assistance from the CWSRF program. Based on the representations made by
the City in that Application, the TWDB adopted the TWDB Resolution in which the
TWDB:
1. determined that the City qualifies for principal forgiveness and is eligible for
financial assistance; and
2. made a commitment to provide financial assistance through the purchase of
bonds in an amount not to exceed $19,635,000 for the planning, acquisition,
design, and/or construction of the Project and to provide additional
subsidization in the form of principal forgiveness to the City in an amount not
to exceed $1,000,000 as Principal Forgiveness Funds without the expectation
of repayment.
C. The TWDB and the City enter this Agreement to memorialize and set forth the terms
and conditions for the Principal Forgiveness Funds in an amount not to exceed
$1,000,000. The Executive Administrator is authorized to execute this Agreement on
TWDB Commitment No. LFIC00940
Page 3 of 14
4164-3752-8090 1
behalf of the TWDB pursuant to the TWDB Resolution, which is attached to this
Agreement as EXHIBIT A. The City is authorized to execute this Agreement through
its authorized representative designated in a resolution duly adopted by the
governing body of the City, a copy of which is attached hereto as EXHIBIT B.
D. Nothing in this Agreement supersedes or affects any provisions of the Obligations
relating to the Financial Assistance amount not forgiven.
ARTICLE III. LEGAL REQUIREMENTS
3.01. APPLICABLE LAWS. In consideration of the performance of the mutual agreements
set forth in this Agreement, the City, by and through its designated and authorized
representatives, agrees to plan, design, and construct the Project in compliance with the
following:
A. the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et seq., and EPA regulations
at 40 CFR Part 35;
B. all federal laws and regulations identified on EXHIBIT C;
C. Texas Water Code, Chapter 15, §§ 15.601- 15.618; and
D. 31 TAC Chapter 375,
3.02. LABOR STATUTES AND REGULATIONS. The City agrees to comply with the
following statutes and regulations, and shall execute the certifications required by the TWDB
related to same. Further, the City shall ensure that each contract for work on the Project
shall also contain the following requirements.
A. Equal Employment Opp=unity. The City shall comply with Executive Order 11246
of September 24, 1965, entitled "Equal Employment Opportunity," as amended by
Executive Order 11375 of October 13, 1967, and U.S. Department of Labor regulations
at 41 CFR Chapter 60, relating to Office of Federal Contract Compliance, EEO. The City
shall include this provision in any contract or subcontract in excess of $10,000 as
required by 40 CFR § 31.36.
B. Day's. Act, Wage Rates. In accordance with the Federal Water Pollution Control
Act, 33 U.S.C. §§ 1251 et seq., and the applicable IUP and TWDB Guidance on Davis -
Bacon Wage Rate Requirements, the City, its contractors and its subcontractors, for
the Project that is funded in whole or in part with Principal Forgiveness Funds, shall
pay all laborers and mechanics at rates not less than those prevailing on similar
projects in the same locality, as determined by the U.S. Secretary of Labor's Wage and
Hour Division, in conformance with the Davis -Bacon Act, 40 U.S.C. §§ 3141- 3148, 29
CFR Part 5, relating to Labor Standards Provisions Applicable to Contracts Covering
Federally Financed and Assisted Construction, and 29 CFR Part 3, relating to
TWDB Commitment No. LF 1000940
Page 4 of 14
4164-3752-8090.1
Contractors and Subcontractors on Public Work Financed in Whole or in Part by
Loans or Grants from the United States. All contracts and subcontracts for the
construction of the Project carried out in whole or in part with assistance made
available as stated herein shall insert in full in any contract in excess of $2,000 the
contracts clauses as attached hereto as EXHIBIT D.
C. Contract Work Hours and Safety Standards Act. The City shall ensure that its
contractors and subcontractors comply with the Contract Work Hours and Safety
Standards Act, 40 U.S.C. §§ 3701- 3708 and 29 CFR Part 5.
3.03. NO LOBBYING. The City agrees to comply with 40 CFR Part 34, relating to New
Restrictions on Lobbying. The City understands and agrees that none of the Principal
Forgiveness Funds provided under this Agreement shall be expended to pay any person for
influencing or attempting to influence an officer or employee of any federal entity, or a
Member of Congress, with regard to the awarding of any federal contract, federal grant,
federal loan, or the extension, continuation, renewal, amendment or modification of any
federal contract, loan, or grant. The City shall require that all contracts in excess of $100,000
for work implementing the Project contain the following statement: IN ACCORDANCE WITH
THE BYRD ANTI -LOBBYING AMENDMENT, ANY RECIPIENT WHO MAKES A PROHIBITED
EXPENDITURE UNDER TITLE 40 CFR PART 34 OR FAILS TO FILE THE REQUIRED
CERTIFICATION OR LOBBYING FORMS SHALL BE SUBJECT TO A CIVIL PENALTY OF NOT
LESS THAN $10,000 AND NOT MORE THAN $100,000 FOR EACH SUCH EXPENDITURE.
3.04. IRQN AND STEEL. The City will abide by all applicable construction contract
requirements related to the use of iron and steel products produced in the United States as
required by the Federal Water Pollution Control Act, 33 U.S.C. § 1388, related EPA SRF Policy
Guidelines and the TWDB American Iron and Steel Guidance, unless the City has requested
and obtained a waiver from EPA pertaining to the Project. This section applies in a manner
consistent with United States obligations under international agreements. If the City is a
signatory to such an agreement, then the City is under the obligation to determine its
applicability and requirements and document the actions taken to comply for the TWDB.
3.05. PROCUREMENT,. The City shall comply with the following when procuring goods and
services for work on the Project according to the requirements in this section.
A. Debarred and Suspended Vendors. Prior to selecting any contractor, the City shall
ensure that the contractor is not listed on the federal Excluded Parties List System
and is not suspended or disbarred by either the State or the federal government. See
the following websites for lists of suspended and debarred federal and State
vendors: www.sam.gov and
www.wiadow.state.tx.us/procurementf,progf�ndor performance./debarred.
B. State Pr curem nt Requirements. All purchases for goods, services or commodities
made with funds provided under this Agreement shall comply with State and local
procurement and contracting laws.
TWDB Commitment No. LF 1000940
Page 5 of 14
4164-3752-8090.1
C. Disadvantaged BUsinessEnterprises. The City agrees to comply with 40 CFR Part 33,
relating to Participation by Disadvantaged Business Enterprises in United States
Environmental Protection Agency Programs.
D. Contracts for.A[chitectural or Engineering Professional Services. The City agrees to
comply with 33 U.S.C. § 1382(b)(14) (Section 602(b)(14) of the Federal Water
Pollution Control Act), relating to Capitalization Grant Agreements and 40 U.S.C. §§
1101 etseq., relating to the Selection of Architects and Engineers.
ARTICLE IV. CONSTRUCTION
4.01. PROJECT REWIREMENTS. The City shall comply with the following:
A. Plans and Specifications. The City shall construct the Project in accordance with the
plans and specifications as sealed by a State licensed engineer and as approved by the
Executive Administrator in compliance with 31 TAC §§ 375.81- 375.83.
B. Changes IQ Plansand Specifications. The City shall not make or implement any
changes to the scope of the Executive Administrator's approved Project or to the
specifications for the Project including, but not limited to, changes to the Green
Project Reserve portion of the Project without the written approval of the Executive
Administrator.
C. Project Schedule,. The City shall adhere to the TWDB approved Project schedule,
attached as EXHIBIT E, and shall timely and expeditiously use funds and complete
the Project. The City shall not exceed or revise the Project schedule except upon
written approval from the TWDB. The City shall not delay the Project completion date
except by Amendment to this Agreement.
D. PCoject Budget. The City shall be solely responsible for all costs that exceed the TWDB
approved Project budget, attached as EXHIBIT F. The City shall notify the Executive
Administrator immediately when it appears that the Project budget may not be
sufficient to complete the Project. The City shall not exceed the Project budget except
by Amendment to this Agreement.
E. Environmental Complijance. The City shall comply with all environmental conditions
and shall implement environmental mitigation measures as required through TWDB
environmental review under 31 TAC Chapter 375, Subchapter E.
4.02. PROGRESS REPORTS. The Executive Administrator may request reports on the
progress of the Project at any time. The reports shall contain information as directed by the
Executive Administrator and shall be submitted periodically as requested. The City shall
respond as requested and a failure to respond may result in withholding the release of funds
from the Escrow Account.
TWDB Commitment No. LF 1000940
Page 6 of 14
4164-3752-8090 1
ARTICLE V. SPECIAL COVENANTS AND REPRESENTATIONS
5.01. CONDITIONS PRINCIPAL FORGIVENESSS. No
Principal Forgiveness Funds shall be deposited into the Escrow Account or released until the
applicable requirements and conditions in the TWDB Resolution and 31 TAC § 375.93,
relating to Disbursement of Funds, are met. Construction funds shall not be released unless
the City has complied with 31 TAC Chapter 375, Subchapter E, relating to Environmental
Reviews and Determinations and 31 TAC §§ 375.81- 375.83, relating to Engineering Review
and Approval. If other conditions affect the release of funds, the Parties agree to negotiate in
good faith regarding any new or different terms or conditions that become applicable to the
release of Principal Forgiveness Funds.
5.02. DELIVERY OF PRINCIPAL FORGIVENESS FUNDS. The TWDB shall deposit the
Principal Forgiveness Funds in an approved Escrow Account to be released to the City's
Construction Account at the direction of the Executive Administrator.
A. Outlay rt and Invoices. The City shall submit the following documentation:
1. TWDB Outlay Report forms identifying:
a. the total amount of expenses incurred by the City for the period
covered by the Outlay Report; and
b. invoices, receipts or other documentation satisfactory in form and in
substance to the TWDB sufficient to establish the requested amount as
an eligible expense incurred by the City.
2. Outlay Report forms are due to TWDB quarterly during the planning,
acquisition and design phases and monthly during the construction phase of
the Project until the completion of the Project.
B. Release from E w Account. The Executive Administrator shall authorize the
release of Principal Forgiveness Funds from Escrow when Outlay Reports have been
approved by the TWDB.
5.03. N . The City must use Principal Forgiveness Funds for Eligible
Expenses. The City must return any Principal Forgiveness Funds that are used for expenses
that cannot be verified as eligible or that are ineligible. The amount of Principal Forgiveness
Funds used for any ineligible or unverified expenses shall be credited against verified
Eligible Expenses. If the total amount of Eligible Expenses is insufficient to fully offset the
amount of improperly expended Principal Forgiveness Funds, the City must use other funds
to fully repay the TWDB.
5.04. MAINTENANCE OF PROJECT ACCOUNTS The City must maintain all project accounts
containing funds disbursed for the planning, acquisition, design, or construction of a project,
TWDB Commitment No. LF 1000940
Page 7 of 14
4164-3752-8090.1
as applicable, in compliance with generally accepted accounting principles (GAAP), including
the reporting of underlying infrastructure assets.
5.05. FINAL ACCOUNTING. The City shall provide a final accounting of funds expended on
the Project pursuant to 31 TAC § 375.106 and return any remaining Principal Forgiveness
Funds in a manner determined by the Executive Administrator.
5.06. LEGAL STATUS. The City must notify the Executive Administrator prior to taking any
actions to alter its legal status in any manner, such as by conversion to a conservation and
reclamation district or a sale -transfer -merger with another retail public utility.
5.07. WATER CONSERVATION AND DROUGHT CONTINGENCY PLAN. If applicable, the
City shall adopt and implement a water conservation and drought contingency plan that
complies with Texas Water Code §§ 11.1271 and 11.1272 and 31 TAC §§ 363.15 and 375.43.
5.08. WATER AUDIT. If the City is a retail public utility as defined in Texas Water Code
§ 13.002 and the City provides potable water, then the City annually shall perform and file a
water audit computing the City's most recent annual system water loss with the TWDB. The
first water audit shall be submitted by May 1st following the passage of one year after the
effective date of this Agreement and then by May 1$1 every year thereafter during the term
of this Agreement. The City agrees to comply with 31 TAC § 358.6 relating to water audits.
5.09. REGISTRATION -REQUIREMENT. Pursuant to the Federal Funding Accountability
and Transparency Act of 2006, Pub. L. 109-282, as amended by Pub. L. 110-252, the City shall
obtain a Data Universal Numbering System (DUNS) Number and shall maintain registration
in the System for Award Management (SAM).
5.10. ANNUAL FINANCIAL AUDIT. During the Term of this Agreement, the City shall
submit an annual audit of the general purpose financial statements prepared in accordance
with Generally Accepted Accounting Principles (GAAP) by a certified public accountant or
licensed public accountant. Audits shall be submitted to the TWDB no later than 180 days
after the close of the City's fiscal year.
5.11. INVESTMENT AND COLLATERALIZATION OF PUBLIC FUNDS. Financial Assistance
funds are public funds and, as such, these funds shall be held at a designated state depository
institution or other properly chartered and authorized institution in accordance with the
Public Funds Investment Act, Government Code, Chapter 2256, and the Public Funds
Collateral Act, Government Code, Chapter 2257.
ARTICLE VI. NON-PERFORMANCE AND REMEDIES
A. Stop WQrk Order 0 . The Executive Administrator may issue a written SWO to
TWDB Commitment No. LF 1000940
Page 8 of ] 4
4164-3752-8ii9ii
the City at any time for failure to comply with any provision of this Agreement. The
SWO shall provide the City with notice of the facts supporting the determination to
issue the SWO. The SWO may require cessation of work immediately or at a definite
future date. The SWO shall provide the City with a specified time to cure.
B. City's Response. The City shall provide a written response to the SWO and shall
provide the Executive Administrator with a detailed plan to address and cure the
conditions causing the SWO. The City shall provide the response within five business
days from its receipt of the SWO.
C. Executive Administrator's Reply. The Executive Administrator may accept, reject or
amend the City's plan and shall provide notice of such action to the City within five
business days of receipt of the plan. The Executive Administrator may issue an
amended SWO that allows resumption of work contingent upon the City's execution
of the plan to cure. The Executive Administrator may modify the City's plan to cure
only in a manner consistent with the terms and conditions of this Agreement.
D. City's Option. The City shall notify the Executive Administrator within five business
days whether it accepts the amended plan. If the City does not accept the amended
plan, the Executive Administrator may terminate this Agreement. Upon successful
completion of the plan to cure the conditions causing the SWO, the City shall continue
work to complete all obligations under this Agreement.
6.02. TERMINATION. The TWDB may terminate this Agreement in writing at any time.
Upon receipt of a notice of termination, the City shall immediately discontinue all work in
connection with the performance of this Agreement and shall promptly cancel all existing
orders or other financial commitments chargeable to funding provided pursuant to this
Agreement, provided, however, that any costs for Eligible Expenses incurred prior to the
receipt of such written notice by the City shall be payable from the funding provided
pursuant to this Agreement.
Within thirty days of the notice of termination, the City shall submit a statement showing in
detail the work performed, all payments received by the City, and all payments made by or
due from the City to any contractor prior to the date of termination.
6.03. SURVIVAL OF TERMSCONDITIONS.
A. Termination or expiration of this Agreement for any reason shall not release either
Party from any liabilities or obligations set forth in this Agreement that:
1. the Parties have expressly agreed shall survive any such termination or
expiration, if any; or
2. by their nature, would be intended to be applicable following any such
termination or expiration.
TWDB Commitment No. LF 1000940
Page 9 of 14
4164-3752-8090 1
B. The Parties expressly agree that the following terms and conditions survive the
termination or expiration of this Agreement.
1. Article V, Sections 5.03, 5.04, 5.05, 5.07, 5.08, and 5.09.
2. Article VII, General Terms and Conditions.
6.04. REAL ESTATE. If the City purchases real estate for the Project with Principal
Forgiveness Funds and any of the real estate or portion of the real estate is not used for the
Project, the City shall repay to the TWDB the full amount of the Principal Forgiveness Funds
for purchase of the real estate that is not used for the Project. Such amount shall be due and
payable within 90 days after termination or expiration of this Agreement.
6.05. REMEDIES.
A. The City shall have all remedies available in law or equity.
B. The TWDB shall have all remedies available in law or equity, including remedies
available under Texas Water Code §§ 6.114 and 6.115.
ARTICLE V11. GENERAL TERMS AND CONDITIONS
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A. The City shall at all times keep insured with a responsible insurance company or
companies such portions of the Project as are customarily insured by political
subdivisions in the State that operate like properties in similar locations under
similar circumstances. The City shall insure against risks, accidents, casualties or loss
in an amount that is customarily carried by such municipalities and political
subdivisions and is at least sufficient to protect the TWDB's interest in the Project.
B. The City is solely responsible for liability resulting from acts or omissions of the City,
its employees, contractors, or agents. The City shall indemnify and hold the TWDB
and the State harmless to the extent that the City may do so in accordance with State
law.
C. Principal forgiveness proceeds shall not be used by the City when sampling, testing,
removing or disposing of contaminated soils and/or media at the project site. The
City agrees to indemnify, hold harmless and protect the TWDB from any and all
claims, causes of action or damages to the person or property of third parties arising
from the sampling, analysis, transport, storage, treatment and disposition of any
contaminated sewage sludge, contaminated sediments and/or contaminated media
that may be generated by the City, its contractors, consultants, agents, officials and
employees as a result of activities relating to the project to the extent permitted by
law.
TWDB Commitment No. LF 1000940
Page 10 of 14
4164-3752-8090.1
7.02. PERMITS. The City shall be responsible for timely filing applications for all licenses,
permits, registrations and other authorizations that the City has identified in the application
for financial assistance as required for the construction of the Project. The City shall submit
copies of all of these final licenses, permits, registrations and other authorizations issued by
local, state and federal agencies to the TWDB within thirty (30) days of receipt from the
issuing agency.
7.03. RECORDS. The City shall comply with all terms and conditions relating to records of
the Project as follows:
A. Duty to Maintain Records. The City shall maintain financial accounting records
relating to the Project in accordance with Generally Accepted Accounting Principles.
The City shall also require its contractors to maintain financial accounting records
consistent with Generally Accepted Accounting Principles and with State laws
applicable to government accounting. All accounting and other financial
documentation shall be accurate, current, and shall reflect recordation of the
transactions at or about the time the transactions occurred;
1. SingleA-usiitAct, 31 U.S.C. §§ 7S01- 7507. The City shall comply with the Single
Audit Act, and with Office of Management and Budget (OMB) Circular A-133
ensuring an audit is conducted in accordance with OMB Circulars.
2. Green Projects. If all or part of the Project is designated as a Green Project,
then the City shall maintain separate tracking of the expenses related to that
Project or portion of the Project that has been designated as an approved
Green Project.
B. puty to Retain Records. The City shall retain all financial records and supporting
documents and any other documents pertinent to the Project in accordance with the
requirements of 31 TAC § 37S.107, relating to Records Retention. The TWDB requires
the City to retain all records related to this Agreement for a period of three (3) years
after the Obligations are paid in full.
C. Public -Records. The City understands and agrees that all documents relating to this
Agreement are subject to the Public Information Act, Texas Government Code,
Chapter 552, and that such documents may not be withheld from public disclosure,
except in accordance with law and with the rulings of the Texas Attorney General.
The City is required to make any information created or exchanged pursuant to this
Agreement, and not otherwise excepted from disclosure under the Texas Public
Information Act, available in a format that is accessible by the public at no additional
charge. The City shall promptly respond to a request by the TWDB for copies of any
of the City's records related to this Agreement; and
D. Access to Records.
1. State Auditor. By executing this Agreement, the City accepts the authority of
TWDB Commitment No. LF 1000940
Page I 1 of 14
4164-3752-8090 1
the Texas State Auditor's Office to conduct audits and investigations in
connection with all Principal Forgiveness Funds received pursuant to this
Agreement. The City shall comply with directives from the Texas State Auditor
and shall cooperate in any such investigation or audit. The City agrees to
provide the Texas State Auditor with access to any information the Texas State
Auditor considers relevant to the investigation or audit. The City also agrees
to include a provision in any contract or subcontract related to this Agreement
that requires the contractor and the subcontractor to submit to audits and
investigations by the Texas State Auditor's Office in connection with all
Principal Forgiveness Funds received pursuant to the contract or subcontract.
2. TWDB. EPA. and Comptrollet„Qgneral of the United States. The City agrees that
the TWDB, the EPA, and the Comptroller General of the United States shall
have full access to any books, documents, papers, and records which are
related to the funds expended under this Agreement and that further these
federal entities may audit, examine, copy excerpts, and make transcriptions of
any such books, documents, papers, and records. The standards of
administration, property management, audit procedures, procurement and
financial management, and the records and facilities of the City and its
contractors are subject to audit and inspection by the TWDB and by the EPA
and by any other authorized state or federal entity. All books, documents,
papers, and records of the City related to this Agreement shall be made
available for audit, examination, excerption, and transcription by the staff of
the TWDB within a reasonable time after a request from the TWDB. The City
understands and agrees that the EPA's Regional Administrator may, after a
thirty day written notice, review any records the Regional Administrator
deems necessary to determine compliance with all requirements concerning
the Principal Forgiveness Funds provided under this Agreement.
7.04. UPDATING INFORMATION. The City shall provide the TWDB with updated
information, reports, statements and certifications as requested by the Executive
Administrator relating to the financial condition of the City or the Project and the use of
Principal Forgiveness Funds. The City shall promptly notify the TWDB of any material
change in the activities, prospects or conditions of the City relating to the Project, or its ability
to observe and perform its duties, covenants, obligations and agreements under this
Principal Forgiveness Agreement.
7.05. FORCE MAIEURE. Unless otherwise provided, neither the City nor the TWDB nor any
agency of the State shall be liable to the other for any delay in or failure of performance of a
requirement contained in this Agreement caused by Force Majeure. The existence of such
causes of delay or failure shall extend the period of performance until after the causes of
delay or failure have been removed provided the non-performing Party exercises all
reasonable due diligence to perform. Each Party must inform the other in writing with proof
of receipt within five (5) business days of the existence of such Force Majeure or otherwise
waive this right as a defense.
TWDB Commitment No. LF 1000940
Page ti 2 of 14
4164-3752-80901
7.06. NON -ASSIGNABILITY. The terms and conditions of the financial assistance provided
by this Agreement may not be assigned, transferred, or subcontracted in any manner without
the express written consent of the TWDB.
7.07. ENTIRE AGREEMENT AND AMEIyDMENT. This Agreement, which incorporates all
attached Exhibits, constitutes the entire agreement between the Parties. This Agreement
may be amended only in writing signed by the Parties. The changes allowed under Section
4.01 do not require an amendment to this Agreement unless a change to the Project Schedule,
EXHIBIT E or the Project Budget, EXHIBIT F, results in a different project completion date
or total budget amount.
7.08. NO WAIVER. The failure of any Party to insist upon the strict performance of any of
the terms, provisions, or conditions of this Agreement shall not be construed as a waiver or
relinquishment for the future of the strict performance of any such term, provision, or
condition or any other term, provision, or condition.
7.09. NO DEBT CREATED. Each Party agrees and understands that, by this Agreement, the
State, acting through the TWDB, is not lending its credit or in any manner creating a debt on
behalf of the State. To the extent that the City is not securing the Obligations with ad valorem
taxes, each Party agrees and understands that, pursuant to this Agreement, the City is not
lending its credit or in any other manner creating a debt on behalf of the City.
7.10. LAW AND VENUE. The validity, operation, and performance of this Agreement shall
be governed and controlled by the laws of the State of Texas and applicable federal
regulations, and the terms and conditions of this Agreement shall be construed and
interpreted in accordance with the laws of the State. The Parties understand and agree that
this Agreement is for the provision of financial assistance for the planning, design,
acquisition and construction of the Project and as such all or part of the performance of the
terms and obligations of the Agreement will be performed in Lubbock County, Texas.
Notwithstanding the location of the Project, the Parties understand and agree that any
proceeding brought for any breach of this Agreement involving the TWDB shall be in Travis
County, Texas. This section does not waive the sovereign immunity of the State or the TWDB.
7.11. NOTICES. All notices, notifications, or requests required or permitted by this
Agreement shall be in writing and shall be transmitted by personal delivery or transmitted
by United States certified mail, return receipt requested, postage prepaid, to the addresses
of the Parties shown below. Notice shall be effective when received by the Party to whom
notice is sent.
Texas Water Development Board
Attn: Executive Administrator
Physical Address:
1700 N. Congress Ave., 6th Floor
Austin, Texas 78701-1496
Mailing Address:
P.O. Box 13231
4164-3752-8090.1
City of Lubbock, Texas
Attn: Chief Financial Officer
1625 13th Street
Lubbock, Texas 79401
TWDB Commitment No. LF 1000940
Page 13 of 14
Austin, Texas 78711-3231
7.12. TERM. This Agreement is effective on the date signed by the Executive Administrator.
The Agreement shall expire upon the successful completion of the Project and Final
Accounting in accordance with Section 5.05 of this Agreement.
TEXAS WATER DEVELOPMENT BOARD
Jeff Walker
Executive Administrator
Date
4164-3752-8090 1
CITY OF LUBBOCK
Daniel M. Pope
Mayor
Date
TWDB Commitment No. LF1000940
Page 14 of 14
EXHIBIT A
TWDB Resolution No. 19-009
TWDB Commitment No. LF 1000940
Exhibit A, Page 1 of X
4164-3752-8090.1
TWDB Commitment No. LF'1000940
Exhibit A, Page 2 of X
4164-3752-8090 1
EXHIBIT B
City of Lubbock's Resolution
TWDB Commitment No. LF1000940
Exhibit B, Page I of X
4164-3752-9090.1
EXHIBIT C
List of Federal Laws and Authorities (Cross -Cutters)
The basic rules for complying with cross -cutting federal authorities are set -out in the CWSRF regulations at 40
C.F.R. § 35,3145 and in the DWSRF regulations at 40 C.F.R. § 35.3575. A list of and link to these authorities
is provided below and also available from the Environmental Protection Agency (EPA) at:
http://water.epa.gov/grants_funding/dwsrf/xcuts.cfm. A handbook on the applicability of the cross -cutting
federal authorities is available from EPA at
http://www.epa.gov/owm/cwfinance/cwsrf/enhance/DocFi les/Other%2ODocs/CrosscutterHandbook.pdf.
Environmental Authorities
• Archeological and Historic Preservation Act of 1974, Pub. L. 86-523, as amended
• Clean Air Act, Pub. L. 84-159, as amended
• Coastal Barrier Resources Act, Pub. L. 97-348
• Coastal Zone Management Act, Pub. L. 92-583, as amended
• Endangered Species Act, Pub. L. 93-205, as amended
• Environmental Justice, Executive Order 12898
• Floodplain Management, Executive Order 11988 as amended by Executive Order 12148
• Protection of Wetlands, Executive Order 11990
• Farmland Protection Policy Act, Pub. L. 97-98
• Fish and Wildlife Coordination Act, Pub. L. 85-624, as amended
• National Historic Preservation Act of 1966, PL 89-665, as amended
• Safe Drinking Water Act, Pub. L. 93-523, as amended
• Wild and Scenic Rivers Act, Pub. L. 90-542, as amended
Economic and Miscellaneous Authorities
• Demonstration Cities and Metropolitan Development Act of 1966, Pub. L. 89-754, as amended,
Executive Order 12372
• Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean Water
Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal Water
Pollution Control Act with Respect to Federal Contracts, Grants, or Loans
• Procurement Requirements for Architectural and Engineering Services under 40 U.S.C. § 1101 and
Section 602 of the Clean Water Act
• Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646, as amended
• Debarment and Suspension, Executive Order 12549
Social Policy Authorities
• Age Discrimination Act of 1975, Pub. L. 94-135
• Title VI of the Civil Rights Act of 1964, Pub. L. 88-352 (2)
• Section 13 of the Federal Water Pollution Control Act Amendments of 1972, Pub. L. 92-500 (the Clean
Water Act)
• Section 504 of the Rehabilitation Act of 1973, Pub. L. 93-112 (including Executive Orders 11914 and
11250)
• The Drug -Free Workplace Act of 1988, Pub. L. 100-690 (applies only to the capitalization grant
recipient)
• Equal Employment Opportunity, Executive Order 11246
• Women's and Minority Business Enterprise, Executive Orders 11625, 12138 and 12432
• Section 129 of the Small Business Administration Reauthorization and Amendment Act of 1988, Pub.
L. 100-590
• Anti -Lobbying Provisions (40 CFR Part 30) [applies only to capitalization grant recipients]
The Civil Rights Act and related anti -discrimination statutes apply to ail the operations of the SRF
program.
TWDB Commitment No. LF1000940
Exhibit C, Page I of t
4164-3752-8090.1
EXHIBIT D
Davis -Bacon Contract and Subcontract Provisions
(a) GENERAL CONTRACT AND SUBCONTRACT PROVISIONS.
The subrecipient(s) shall insert in full in any contract in excess of $2,000 which is entered into for the actual
construction, alteration and/or repair, including painting and decorating, of a public building or public work,
or building or work financed in whole or in part from Federal funds or in accordance with guarantees of a
Federal agency or financed from funds obtained by pledge of any contract of a Federal agency to make a loan,
grant or annual contribution (except where a different meaning is expressly indicated), and which is subject to
the labor standards provisions sof any of the acts listed in 29 CFR § 5.1 and the Water Resources Reform and
Development Act of 2014, the following clauses:
(1) Minimum Wages
(i) All laborers and mechanics employed or working upon the site of the work will be paid unconditionally and
not less often than once a week, and without subsequent deduction or rebate on any account (except such
payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act
(29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at
time of payment computed at rates not less than those contained in the wage determination of the Secretary of
Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may
be alleged to exist between the contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1(b)(2) of the
Davis -Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics,
subject to the provisions of paragraph (a)(1)(iv) of this section; also, regular contributions made or costs
incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs
which cover the particular weekly period, are deemed to be constructively made or incurred during such
weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the
wage determination for the classification of work actually performed, without regard to skill, except as
provided in 29 CFR § 5.5(a)(4). Laborers or mechanics performing work in more than one classification may
be compensated at the rate specified for each classification for the time actually worked therein: Provided, that
the employer's payroll records accurately set forth the time spent in each classification in which work is
performed. The wage determination (including any additional classification and wage rates conformed under
paragraph (a)(1)(ii) of this section) and the Davis -Bacon poster (WH -1321) shall be posted at all times by the
contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be
easily seen by the workers.
Subrecipients may obtain wage determinations from the U.S. Department of Labor's web site, www.dol.gov.
(ii)(A) The subrecipient(s), on behalf of EPA, shall require that any class of laborers or mechanics, including
helpers, which is not listed in the wage determination and which is to be employed under the contract shall be
classified in conformance with the wage determination. The State award official shall approve a request for an
additional classification and wage rate and fringe benefits therefore only when the following criteria have been
met:
(1) The work to be performed by the classification requested is not performed by a classification in the wage
determination; and
(2) The classification is utilized in the area by the construction industry; and
(3) The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage
rates contained in the wage determination.
TWDB Commitment No LF1000940
Exhibit D, Page 1 of 7
4164-3752-8090.1
(B) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their
representatives, and the subrecipient(s) agree on the classification and wage rate (including the amount
designated for fringe benefits where appropriate), documentation of the action taken and the request, including
the local wage determination shall be sent by the subrecipient (s) to the State award official. The State award
official will transmit the request, to the Administrator of the Wage and Hour Division, Employment Standards
Administration, U.S. Department of Labor, Washington, DC 20210 and to the EPA DB Regional Coordinator
concurrently. The Administrator, or an authorized representative, will approve, modify, or disapprove every
additional classification request within 30 days of receipt and so advise the State award official or will notify
the State award official within the 30 -day period that additional time is necessary.
(C) In the event the contractor, the laborers or mechanics to be employed in the classification or their
representatives, and the subrecipient(s) do not agree on the proposed classification and wage rate (including
the amount designated for fringe benefits, where appropriate), the award official shall refer the request and
the local wage determination, including the views of all interested parties and the recommendation of the State
award official, to the Administrator for determination. The request shall be sent to the EPA DB Regional
Coordinator concurrently. The Administrator, or an authorized representative, will issue a determination
within 30 days of receipt of the request and so advise the contracting officer or will notify the contracting officer
within the 30 -day period that additional time is necessary.
(D) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs
(a)(1)(ii)(B) or (C) of this section, shall be paid to all workers performing work in the classification under this
contract from the first day on which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes
a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in
the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the contractor may consider
as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing
bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the
written request of the contractor, that the applicable standards of the Davis -Bacon Act have been met. The
Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of
obligations under the plan or program.
(2) Withholding
The subrecipient(s), shall upon written request of the EPA Award Official or an authorized representative of
the Department of Labor, withhold or cause to be withheld from the contractor under this contract or any other
Federal contract with the same prime contractor, or any other federally -assisted contract subject to Davis -
Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued
payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices,
trainees, and helpers, employed by the contractor or any subcontractor the full amount of wages required by
the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper,
employed or working on the site of the work, all or part of the wages required by the contract, the (Agency)
may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary
to cause the suspension of any further payment, advance, or guarantee of funds until such violations have
ceased.
(3) Payrolls and basic records
(i) Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the
work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of
the work. Such records shall contain the name, address, and social security number of each such worker, his or
her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for
TWDB Commitment No. LF 1000940
Exhibit D, Page 2 of 7
4164-3752-8090.1
bona fide fringe benefits or cash equivalents thereof of the types described in section 1(b)(2)(B) of the Davis -
Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the
Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the
amount of any costs reasonably anticipated in providing benefits under a plan or program described in section
1(b)(2)(B) of the Davis -Bacon Act, the contractor shall maintain records which show that the commitment to
provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or
program has been communicated in writing to the laborers or mechanics affected, and records which show the
costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or
trainees under approved programs shall maintain written evidence of the registration of apprenticeship
programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios
and wage rates prescribed in the applicable programs.
(ii)(A) The contractor shall submit weekly, for each week in which any contract work is performed, a copy of
all payrolls to the subrecipient, that is, the entity that receives the sub -grant or loan from the State capitalization
grant recipient. Such documentation shall be available on request of the State recipient or EPA. As to each
payroll copy received, the subrecipient shall provide written confirmation in a form satisfactory to the State
indicating whether or not the project is in compliance with the requirements of 29 CFR 5.5(a)(1) based on the
most recent payroll copies for the specified week. The payrolls shall set out accurately and completely all of the
information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and
home addresses shall not be included on the weekly payrolls. Instead the payrolls shall only need to include an
individually identifying number for each employee (e.g., the last four digits of the employee's social security
number). The required weekly payroll information may be submitted in any form desired. Optional Form WH -
347 is available for this purpose from the Wage and Hour Division Web site at
http;j/www.dol.gov/whdlformslwh347instr.htm or its successor site. The prime contractor is responsible for
the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the
full social security number and current address of each covered worker, and shall provide them upon request
to the subrecipient(s) for transmission to the State or EPA if requested by EPA, the State, the contractor, or the
Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance
with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a
subcontractor to provide addresses and social security numbers to the prime contractor for its own records,
without weekly submission to the subrecipient(s).
(B) Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the contractor or
subcontractor or his or her agent who pays or supervises the payment of the persons employed under the
contract and shall certify the following:
(1) That the payroll for the payroll period contains the information required to be provided under § 5.5
(a)(3)(il) of Regulations, 29 CFR part 5, the appropriate information is being maintained under § 5.5 (a)(3)(i)
of Regulations, 29 CFR part 5, and that such information is correct and complete;
(2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract
during the payroll period has been paid the full weekly wages earned, without rebate, either directly or
indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other
than permissible deductions as set forth in Regulations, 29 CFR part 3;
(3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or
cash equivalents for the classification of work performed, as specified in the applicable wage determination
incorporated into the contract.
(C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form
WH -347 shall satisfy the requirement for submission of the "Statement of Compliance" required by paragraph
(a)(3)(R)(B) of this section.
(D) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or
criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code.
TWDB Commitment No. LF1000940
Exhibit D, Page 3 of 7
4164-3752-8090.1
(iii) The contractor or subcontractor shall make the records required under paragraph (a)(3)(i) of this section
available for inspection, copying, or transcription by authorized representatives of the State, EPA or the
Department of Labor, and shall permit such representatives to interview employees during working hours on
the job. If the contractor or subcontractor fails to submit the required records or to make them available, the
Federal agency or State may, after written notice to the contractor, sponsor, applicant, or owner, take such
action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds.
Furthermore, failure to submit the required records upon request or to make such records available may be
grounds for debarment action pursuant to 29 CFR 5.12.
(4) Apprentices and trainees
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they
performed when they are employed pursuant to and individually registered in a bona fide apprenticeship
program registered with the U.S. Department of Labor, Employment and Training Administration, Office of
Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by
the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice
in such an apprenticeship program, who is not individually registered in the program, but who has been
certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship
Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio
of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio
permitted to the contractor as to the entire work force under the registered program. Any worker listed on a
payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid
not less than the applicable wage rate on the wage determination for the classification of work actually
performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under
the registered program shall be paid not less than the applicable wage rate on the wage determination for the
work actually performed. Where a contractor is performing construction on a project in a locality other than
that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman's
hourly rate) specified in the contractor's or subcontractor's registered program shall be observed. Every
apprentice must be paid at not less than the rate specified in the registered program for the apprentice's level
of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage
determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the
apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be
paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the
Administrator determines that a different practice prevails for the applicable apprentice classification, fringes
shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training,
Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval
of an apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than the
applicable predetermined rate for the work performed until an acceptable program is approved.
(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the
predetermined rate for the work performed unless they are employed pursuant to and individually registered
in a program which has received prior approval, evidenced by formal certification by the U.S. Department of
Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not
be greater than permitted under the plan approved by the Employment and Training Administration. Every
trainee must be paid at not less than the rate specified in the approved program for the trainee's level of
progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage
determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program.
If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits
listed on the wage determination unless the Administrator of the Wage and Hour Division determines that
there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage
determination which provides for less than full fringe benefits for apprentices. Any employee listed on the
payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment
and Training Administration shall be paid not less than the applicable wage rate on the wage determination for
the classification of work actually performed. In addition, any trainee performing work on the job site in excess
TWDB Commitment No. LF 1000940
Exhibit D, Page 4 of 7
4164-3752-$090.1
of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the
wage determination for the work actually performed. In the event the Employment and Training
Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize
trainees at less than the applicable predetermined rate for the work performed until an acceptable program is
approved.
(iii) Equal employment opportunity. The utilization of apprentices, trainees and journeymen under this part
shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as
amended, and 29 CFR part 30.
(5) Compliance with Copeland Act requirements
The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in
this contract.
(6) Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses contained in 29 CFR 5.5(a)(1)
through (10) and such other clauses as the EPA determines may by appropriate, and also a clause requiring the
subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be
responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses
in 29 CFR S.S.
(7) Contract termination; debarment.
A breach of the contract clauses in 29 CER 5.5 may be grounds for termination of the contract, and for
debarment as a contractor and a subcontractor as provided in 29 CFR 5.12.
(8) Compliance with Davis -Bacon and Related Act requirements.
All rulings and interpretations of the Davis -Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are
herein incorporated by reference in this contract.
(9) Disputes concerning labor standards.
Disputes arising out of the labor standards provisions of this contract shall not be subject to the general
disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the
Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include
disputes between the contractor (or any of its subcontractors) and Subrecipient(s), State, EPA, the U.S.
Department of Labor, or the employees or their representatives.
(10) Certification of eligibility.
(i) By entering into this contract, the contractor certifies that neither it (nor he or she) nor any person or firm
who has an interest in the contractor's firm is a person or firm ineligible to be awarded Government contracts
by virtue of section 3(a) of the Davis -Bacon Actor 29 CFR 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government
contract by virtue of section 3(a) of the Davis -Bacon Act or 29 CFR 5.12(a)(1).
(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001.
b. CONTRACT PROVISIONS FOR CONTRACTS IN EXCESS OF $100,000
TWDB Commitment No. LF 1000940
Exhibit 17, Page 5 of 7
4164-3752-8090.1
Contract Work Hours and Safety Standards Act. The subrecipient shall insert the following clauses set forth in
paragraphs (a)(1), (2), (3), and (4) of this section in full in any contract in an amount in excess of $100,000 and
subject to the overtime provisions of the Contract Work Hours and Safety Standards Act. These clauses shall be
inserted in addition to the clauses required by Item 3, above or 29 CFR 4.6. As used in this paragraph, the terms
laborers and mechanics include watchmen and guards.
(1) Overtime requirements
No contractor or subcontractor contracting for any part of the contract work which may require or involve the
employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek
in which he or she is employed on such work to work in excess of forty hours in such workweek unless such
laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay
for all hours worked in excess of forty hours in such workweek.
(2) Violation; liability for unpaid wages; liquidated damages.
In the event of any violation of the clause set forth in paragraph (b)(1) of this section the contractor and any
subcontractor responsible therefore shall be liable for the unpaid wages. In addition, such contractor and
subcontractor shall be liable to the United States (in the case of work done under contract for the District of
Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages
shall be computed with respect to each individual laborer or mechanic, including watchmen and guards,
employed in violation of the clause set forth in paragraph (b)(1) of this section, in the sum of $10 for each
calendar day on which such individual was required or permitted to work in excess of the standard workweek
of forty hours without payment of the overtime wages required by the clause set forth in paragraph (b)(1) of
this section.
(3) Withholding for unpaid wages and liquidated damages
The subrecipient, upon written request of the EPA Award Official or an authorized representative of the
Department of Labor, shall withhold or cause to be withheld, from any moneys payable on account of work
performed by the contractor or subcontractor under any such contract or any other Federal contract with the
same prime contractor, or any other federally -assisted contract subject to the Contract Work Hours and Safety
Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary
to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as
provided in the clause set forth in paragraph (b)(2) of this section.
(4) Subcontracts
The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (b)(1)
through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower
tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier
subcontractor with the clauses set forth in paragraphs (b)(1) through (4) of this section.
(c) MAINTENANCE OF RECORDS
In addition to the clauses contained in Section (a), above, in any contract subject only to the Contract Work
Hours and Safety Standards Act and not to any of the other statutes cited in 29 CFR 5.1, the Subrecipient shall
insert a clause requiring that the contractor or subcontractor shall maintain payrolls and basic payroll records
during the course of the work and shall preserve them for a period of three years from the completion of the
contract for all laborers and mechanics, including guards and watchmen, working on the contract. Such records
shall contain the name and address of each such employee, social security number, correct classifications,
hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid.
Further, the Subrecipient shall insert in any such contract a clause providing that the records to be maintained
under this paragraph shall be made available by the contractor or subcontractor for inspection, copying, or
TWDB Commitment No. LF1000940
Exhibit D. Page 6 of 7
4164-3752-8090.1
transcription by authorized representatives of the (write the name of agency) and the Department of Labor,
and the contractor or subcontractor will permit such representatives to interview employees during working
hours on the job.
(d) COMPLIANCE VERIFICATION
(1) The subrecipient shall periodically interview a sufficient number of employees entitled to DB prevailing
wages (covered employees) to verify that contractors or subcontractors are paying the appropriate wage rates.
As provided in 29 CFR 5.6(a)(6), all interviews must be conducted in confidence. The subrecipient must use
Standard Form 1445 (SF 1445) or equivalent documentation to memorialize the interviews. Copies of the SF
1445 are available from EPA on request.
(2) The subrecipient shall establish and follow an interview schedule based on its assessment of the risks of
noncompliance with DB posed by contractors or subcontractors and the duration of the contract or
subcontract.' Subrecipients must conduct more frequent interviews if the initial interviews or other
information indicated that there is a risk that the contractor or subcontractor is not complying with DB.
Subrecipients shall immediately conduct interviews in response to an alleged violation of the prevailing wage
requirements. All interviews shall be conducted in confidence.
(3) The subrecipient shall periodically conduct spot checks of a representative sample of weekly payroll data
to verify that contractors or subcontractors are paying the appropriate wage rates. The subrecipient shall
establish and follow a spot check schedule based on its assessment of the risks of noncompliance with DB posed
by contractors or subcontractors and the duration of the contract or subcontract. At a minimum, if practicable,
the subrecipient should spot check payroll data within two weeks of each contractor or subcontractor's
submission of its initial payroll data and two weeks prior to the completion date the contract or subcontract.
Subrecipients must conduct more frequent spot checks if the initial spot check or other information indicates
that there is a risk that the contractor or subcontractor is not complying with DB. In addition, during the
examinations the subrecipient shall verify evidence of fringe benefit plans and payments thereunder by
contractors and subcontractors who claim credit for fringe benefit contributions.
(4) The subrecipient shall periodically review contractors and subcontractors use of apprentices and trainees
to verify registration and certification with respect to apprenticeship and training programs approved by either
the U.S Department of Labor or a state, as appropriate, and that contractors and subcontractors are not using
disproportionate numbers of, laborers, trainees and apprentices. These reviews shall be conducted in
accordance with the schedules for spot checks and interviews described in Item 5(b) and (c) above.
(5) Subrecipients must immediately report potential violations of the DB prevai:ing wage requirements to the
EPA Region 6 DB Coordinator, TWDB, and to the appropriate DOL Wage and Hour District Office listed at
http://www.dol.2ovlwhdlamerica2,htm.
' The provision that read "At a minimum, the subrecipient should conduct interviews with a representative group of
covered employees within two weeks of each contractor or subcontractor's submission of its initial weekly payroll
data and two weeks prior to the estimated completion date for the contract or subcontract" was issued a waiver in
EPA Class Deviation memo dated November 16, 2012.
TWDB Commitment No. LF 1000940
Exhibit D, Page 7 of 7
4164-3752-8090.1
EXHIBIT E
Project Schedule
TWDB Commitment No. LF 1000940
Exhibit E, Page I of X
4164-3752-8090.1
EXHIBIT F
Project Budget
TWDB Commitment No. LFI 000940
Exhibit F, Page I of l
4164-3752-$090.1
EXHIBIT G
Escrow Agreement
4164-3752-8090 1
February 25, 2019
The Attorney General of Texas
Public Finance Section
William P. Clements Building, 71h Floor
300 West 15th Street
Austin, Texas 78701
The Comptroller of Public Accounts
Public Finance Division
I 1 I East 17th Street
Austin, Texas 78701
Re: City of Lubbock, Texas — Water and Wastewater System Revenue Bonds, Series
2019 (the "Obligations")
Ladies and Gentlemen:
The captioned Obligations are being sent to the Office of the Attorney General, and it is
requested that such office examine and approve the Obligations in accordance with law. After
such approval, it is requested that the Attorney General deliver the Obligations to the Comptroller
of Public Accounts for registration.
Enclosed with the Obligations is a signed but undated copy of the SIGNATURE
IDENTIFICATION AND NO -LITIGATION CERTIFICATE (the "Certificate") relating to the
Obligations. The Attorney General is hereby authorized and directed to date the Certificate
concurrently with the date of approval of the Obligations. If any litigation or contest should
develop pertaining to the Obligations or any other matters covered by said Certificate, the
undersigned will notify the Attorney General thereof immediately by telephone. With this
assurance the Attorney General can rely on the absence of any such litigation or contest, and on
the veracity and currency of said Certificate, at the time the Attorney General approves the
Obligations unless the Attorney General is notified otherwise as aforesaid.
The Comptroller is hereby requested to register the Obligations as required by law and the
proceedings authorizing the Obligations. After such registration, the Comptroller is hereby
authorized and directed to deliver the Obligations, together with three copies of each of the
Attorney General's Approving Opinion and Comptroller's Certificate for the Obligations, to Jerry
V. Kyle, Jr., Orrick, Herrington & Sutcliffe LLP, 300 West 61h Street, Suite 1850, Austin, TX
78701.
CITY OF LUBBOCK, TEXAS
ayor
4148-1203-5610.1