HomeMy WebLinkAboutOrdinance - 2001-O0043 - Issuance Of Electric Light And Power System Revenue Bond Series - 06/14/2001J!'irst Reading
June 14,. 200 l
Item No. 21
ORDINANCE NO. 2001-00043
Second Reading
July 12, 2001
Item No. 12
AN ORDINANCE authorizing the issuance of "CITY OF LUBBOCK, TEXAS,
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BONDS, SERIES
2001";. prescribing the forms, terms, and provisions of said bonds;
pledging the net revenues of the City's Electric Light and Power System
to the payment of the principal of and interest on said bonds; enacting
provisions incident and related to the issuance, payment, security, sale
and delivery of said bonds, including the approval and distribution of an
Official Statement pertaining thereto and the approval and execution of a
Paying Agent/Registrar Agreement and a Purchase Contract; and
providing an effective date.
WHEREAS, in accordance with the provisions of V.T.C.A., Government Code, Chapter
1502, the City Council of the City of Lubbock, Texas (the "City") hereby finds and determines
that electric light and power system revenue bonds in the principal amount of $9,200,000 for the
purpose of providing money to construct, improve, renovate, enlarge or equip property,
buildings, structures, facilities or related infrastructure for the City's Electric Light and Power
System {the "System") should be issued and sold at this time; and,
WHEREAS, the City Council has further determined and hereby finds said bonds can
and should be issued on a parity with other outstanding revenue bonds of the City {hereinafter
called and defined as "Previously Issued Bonds") payable from and secured by a first lien on
and pledge of the net revenues of the System and that the terms and conditions for the
issuance of "additional bonds" on a parity with the Previously Issued Bonds can be met and
satisfied, to wit: {i) the Mayor and Director of Finance (who has assumed the duties of City
Treasurer) can certify that the City is not now in default as to any covenant, condition or
obligation prescribed by the ordinances authorizing the issuance of the outstanding Previously
Issued Bonds, including showings that all interest, sinking, and reserve funds have been fully
maintained in accordance with the provisions of said ordinances; {ii) applicable laws of the State
of Texas now in force permit and authorize the issuance of the bonds and the bonds herein
authorized will be in compliance with such applicable laws, (iii) the City can secure from an
independent Certified Public Accountant a written report demonstrating that the net revenues of
the System were, during the last completed fiscal year, equal to at least 1-1/2 times the average
annual principal and interest requirements of all the bonds which will be secured by a first lien
on and pledge of the net revenues of the System and which will be outstanding upon the
issuance of the bonds herein authorized; and further demonstrating that the net revenues of the
System during the last completed fiscal year were equal to at least 1-1/5 times the maximum
annual principal and interest requirements of all such bonds as will be outstanding upon the
issuance of the bonds herein authorized, {iv) the bonds herein authorized will mature on April 15
in each year, and {v) the "Reserve Portion" of the Bond Fund shall be accumulated and
supplemented as necessary to maintain therein a sum equal to at least the average annual
principal and interest requirements of all bonds secured by a first lien on and pledge of the net
revenues of the System which will be outstanding upon the issuance of the bonds herein
authorized; now, therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
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SECTION 1: Authorization -Designation -Principal Amount -Purpose. Revenue
bonds of the City shall be and are hereby authorized to be issued in the aggregate principal
amount of $9,200,000, to be designated and bear the title "City of Lubbock, Texas, Electric Light
and Power System Revenue Bonds, Series 2001" (the "Bonds"), for the purpose of providing
money to c;:onstruct, if]1prove, renovate, enlarge or equip property, buildings, structures, facilities
or related infrastructure for the City's Electric Light and Power System, in conformity with the
Constitution and laws of the State ·of Texas, including V.T.C.A., Government Code, Section
1502.051 ( c).
SECTION 2: Fully Registered Obligations -Authorized Denominations -Stated
Maturities -Date. The Bonds shall be issued as fully registered obligations, without coupons,
shall be dated July 1, 2001 (the "Bond Date") and, other than the single fully registered Initial
Bond referenced in Section 8 hereof, shall be in denominations of $5,000 or any integral
multiple thereof (within a Stated Maturity), shall be numbered consecutively from One (1)
upward and shall become due and payable on April 15 in each of the years and in principal
amounts (the "Stated Maturities") and bear interest at per annum rates in accordance with the
following schedule:
Year of Principal Interest
Stated Maturity Amount Rate(s)
2002 $460,000 4.000%
2003 460,000 4.000%
2004 460,000 4.000%
2005 460,000 4.000%
2006 460,000 4.250%
2007 460,000 4.250%
2008 460,000 4.250%
2009 460,000 4.350%
2010 460,000 4.400%
2011 460,000 4.500%
2012 460,000 4.625%
2013 460,000 4.750%
2014 460,000 4.900%
2015 460,000 5.000%
2016 460,000 5.000%
2017 460,000 5.150%
2018 460,000 5.150%
2019 460,000 5.200%
2021 920,000 5.250%
The Bonds shall bear interest on the unpaid principal amounts from the Bond Date at the
rate(s) per annum shown in the above schedule (calculated on the basis of a 360-day year of
twelve 30-day months). Interest on the Bonds shall be payable on April 15 and October 15 in
each year, commencing April 15, 2002.
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SECTION 3: Terms of Payment -Paying Agent/Registrar. The principal of, premium, if
any, and the interest on the Bonds, due and payable by reason of maturity, redemption or
otherwise, shall be payable only to the registered owners or holders of the Bonds (hereinafter
called the "Holders") appearing on the registration and transfer books maintained by the Paying
Agent/Registrar and tl:le payment thereof shall be in any coin or currency of the United States of
America, which at the time of payment is legal tender for the payment of public and private
debts, and shall be without exchange or collection charges to the Holders.
The selection and appointment of U. S. Trust Company of Texas, N.A., Dallas, Texas to
serve as Paying Agent/Registrar for the Bonds is hereby approved and confirmed. Books and
records relating to the registration, payment, transfer and exchange of the Bonds (the "Security
Register") shall at all times be kept and maintained on behalf of the City by the Paying
Agent/Registrar, as provided herein and in accordance with the terms and provisions of a
"Paying Agent/ Registrar Agreement", substantially in the form attached hereto as Exhibit A, and
such reasonable rules and regulations as the Paying Agent/Registrar and the City may
prescribe. The Mayor and City Secretary are authorized to execute and deliver such Agreement
in connection with the delivery of the Bonds. The City covenants to maintain and provide a
Paying Agent/Registrar at all times until the Bonds are paid and discharged, and any successor
Paying Agent/Registrar shall be a bank, trust company, financial institution or other entity
qualified and authorized to serve in such capacity and perform the duties and services of Paying
Agent/Registrar. Upon any change in the Paying Agent/Registrar for the Bonds, the City
agrees to promptly cause a written notice thereof to be sent to each Holder by United States
Mail, first class postage prepaid, which notice shall also give the address of the new Paying
Agent/Registrar.
Principal of and premium, if any, on the Bonds shall be payable at the Stated Maturities
or upon the earlier redemption thereof, only upon presentation and surrender of the Bonds to
the Paying Agent/Registrar at its designated offices in New York, New York (the "Designated
Payment/Transfer Office"). Interest on the Bonds shall be paid to the Holders whose names
appear in the Security Register at the close of business on the Record Date (the last business
day of the month next preceding each interest payment date) and shall be paid by the Paying
Agent/Registrar (i) by check sent United States Mail, first class postage prepaid, to the address
of the Holder recorded in the Security Register or (ii) by such other method, acceptable to the
Paying Agent/Registrar, requested by, and at the risk and expense of, the Holder. If the date for
the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal
holiday, or a day when banking institutions in the City where the Designated Payment/Transfer
Office of the Paying Agent/ Registrar is located are authorized by law or executive order to
close, then the date for such payment shall be the next succeeding day which is not such a
Saturday, Sunday, legal holiday, or ~ay when banking institutions are authorized to close; and
payment on such date shall have the same force and effect as if made on the original date
payment was due.
In the event of a non-payment of interest on one or more maturities on a scheduled
payment date, and for thirty (30) days thereafter, a new record date for such interest payment
for such maturity or maturities (a "Special Record Date") will be established by the Paying
Agent/Registrar, if and when funds for the payment of such interest have been received from
the City. Notice of the Special Record Date and of the scheduled payment date of the past due
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interest (which shall be 15 days after the Special Record Date) shall be sent at least five (5)
business days prior to the Special Record Date by United States Mail, first class postage
prepaid, to the address of each Holder of such maturity or maturities appearing on the Security
Register at the close of business on the last business day next preceding the date of mailing of
such notice.
SECTION 4: Redemption. (a) Optional Redemption. The Bonds having Stated
Maturities on and after April 15, 2013, shall be subject to redemption prior to maturity, at the
option of the City, in whole or in part in principal amounts of $5,000 or any integral multiple
thereof (and if within a Stated Maturity by lot by the Paying Agent/ Registrar). on April 15, 2012
or on any date thereafter at the redemption price of par plus accrued interest to the date of
redemption.
At least forty-five (45) days prior to a redemption date for the Bonds (unless a shorter
notification period shall be satisfactory to the Paying Agent/Registrar), the City shall notify the
Paying Agent/Registrar of the decision to redeem Bonds, the principal amount of each Stated
Maturity to be redeemed, and the date of redemption therefor. The decision of the City to
exercise the right to redeem Bonds shall be entered in the minutes of the governing body of the
City.
(b) Mandatory Redemption. The Bonds having Stated Maturities of April 15, 2021
("Term Bonds") shall be subject to mandatory redemption in part prior to maturity at the
redemption price of par and accrued interest to the date of redemption on April 15, 2020 in the
principal amount of $460,000.
Approximately forty-five (45) days prior to the mandatory redemption date specified
above that the Term Bonds are to be mandatorily redeemed, the Paying Agent/Registrar shall
select by lot the numbers of the Term Bonds to be redeemed on such mandatory redemption
date from moneys set aside for that purpose in the Bond Fund (as hereinafter defined). Any
Term Bonds not selected for prior redemption shall be paid on the date of their Stated Maturity.
The principal amount of the Term Bonds required to be redeemed pursuant to the
operation of such mandatory redemption provisions may be reduced, at the option of the City,
by the principal amount of Term Bonds which, at least 50 days prior to the mandatory
redemption date, (1) shall have been acquired by the City at a price not exceeding the principal
amount of such Term Bonds plus accrued interest to the date of purchase thereof, and delivered
to the Paying Agent/Registrar for cancellation or (2) shall have been redeemed pursuant to the
optional redemption provisions set forth in paragraph(a) of this Section and not theretofore
credited against a mandatory redemption requirement.
(c) Selection of Bonds for Redemption. If less than all Outstanding Bonds of the same
Stated Maturity are to be redeemed on a redemption date, the Paying Agent/ Registrar shall
treat such Bonds as representing the number of Bonds Outstanding which is obtained by
dividing the principal amount of such Bonds by $5,000 and shall select· the Bonds to be
redeemed within such Stated Maturity by lot.
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{d) Notice of Redemption. Not less than thirty (30) days prior to a redemption date
for the Bonds, a notice of redemption shall be sent by United States Mail, first class postage
prepaid, in the name of the City and at the City's expense, to each Holder of a Bond to be
redeemed in whole or in part at the address of the Holder appearing on the Security Register at
the close of business.on the business day next preceding the date of mailing such notice, and
any notice of redemption so mailed shall be conclusively presumed to have been duly given
irrespective of whether received by the Holder.
All notices of redemption shall (i) specify the date of redemption for the Bonds, (ii)
identify the Bonds to be redeemed and, in the case of a portion of the principal amount to be
redeemed, the principal amount thereof to be redeemed, (iii) state the redemption price,
(iv) state that the Bonds, or the portion of the principal amount thereof to be redeemed, shall
become due and payable on the redemption date specified, and the interest thereon, or on the
portion of the principal amount thereof to be redeemed, shall cease to accrue from and after the
redemption date, and (v) specify that payment of the redemption price for the Bonds, or the
principal amount thereof to be redeemed, shall be made at the Designated Payment/Transfer
Office of the Paying Agent/ Registrar only upon presentation and surrender thereof by the
Holder. If a Bond is subject by its terms to prior redemption and has been called for redemption
and notice of redemption thereof has been duly given or waived as herein provided, such Bond
(or the principal amount thereof to be redeemed} shall become due and payable, and interest
thereon shall cease to accrue from and after the redemption date therefor, provided moneys
sufficient for the payment of such Bonds {or of the principal amount thereof to be redeemed) at
the then applicable redemption price are held for the purpose of such payment by the Paying
Agent/Registrar.
SECTION 5: Registration -Transfer -Exchange of Bonds -Predecessor Bonds. The
Paying Agent/Registrar shall obtain, record, and maintain in the Security Register the name and
address of each registered owner of the Bonds issued under and pursuant to the provisions of
this Ordinance. Any Bond may, in accordance with its terms and the terms hereof, be
transferred or exchanged for Bonds of other authorized denominations upon the Security
Register by the Holder, in person or by his duly authorized agent, upon surrender of such Bond
to the Paying Agent/Registrar for cancellation, accompanied by a written instrument of transfer
or request for exchange duly executed by the Holder or by his duly authorized agent, in form
satisfactory to the Paying Agent/ Registrar.
Upon surrender for transfer of any Bond (other than the Initial Bonds authorized in
Section 8 hereof) at the Designated Payment/Transfer Office of the Paying Agent/Registrar, the
Paying Agent/Registrar shall register and deliver, in the name of the designated transferee or
transferees, one or more new Bonds, executed on behalf of, and furnished by, the City of
authorized denominations and having the same Stated Maturity and of a like aggregate principal
amount as the Bond or Bonds surrendered for transfer.
At the option of the Holder, Bonds {other than the Initial Bonds authorized in Section 8
hereof) may be exchanged for other Bonds of authorized denominations and having the same
Stated Maturity, bearing the same rate of interest and of like aggregate principal amount as the
Bonds surrendered for exchange, upon surrender of the Bonds to be exchanged at the
Designated Payment/Transfer Office of the Paying Agent/ Registrar. Whenever any Bonds are
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surrendered for exchange, the Paying Agent/Registrar shall register and deliver new Bonds,
executed on behalf of, and furnished by, the City, to the Holder requesting the exchange.
All Bonds issued upon any transfer or exchange of Bonds shall be delivered at the
Designated Payment/Transfer Office of the Paying Agent/Registrar, or sent by United States
Mail, first class postage prepaid, to the Holder and, upon the delivery thereof, the same shall be
valid obligations of the City, evidencing the same obligation to pay, and entitled to the same
benefits under this Ordinance, as the Bonds surrendered in such transfer or exchange.
All transfers or exchanges of Bonds pursuant to this. Section shall be made without
expense or service charge to the Holder, except as otherwise herein provided, and except that
the Paying Agent/Registrar shall require payment by the Holder requesting such transfer or
exchange of any tax or other governmental charges required to be paid with respect to such
transfer or exchange.
Bonds cancelled by reason of an exchange or-transfer pursuant to the provisions hereof
are hereby defined to be "Predecessor Bonds," evidencing all or a portion, as the case may be,
of the same obligation to pay evidenced by the Bond or Bonds registered and delivered in the
exchange or transfer therefor. Additionally, the term "Predecessor Bonds" shall include any
mutilated, lost, destroyed, or stolen Bond for which a replacement Bond has been issued,
registered and delivered in lieu thereof pursuant to Section 31 hereof and such new
replacement Bond shall be deemed to evidence the same obligation as the mutilated, lost,
destroyed, or stolen Bond.
Neither the City nor the Paying Agent/Registrar shall be required to transfer or exchange
any Bond called for redemption, in whole or in part, within 45 days of the date fixed for
redemption of such Bond; provided, however, such limitation of transfer shall not be applicable
to an exchange by the Holder of the unredeemed balance of a Bond called for redemption in
part.
SECTION 6: Book-Entry Only Transfers and Transactions. Notwithstanding the
provisions contained in Sections 3, 4 and 5 hereof relating to the payment, and
transfer/exchange of the Bonds, the City hereby approves and authorizes the use of
"Book-Entry Only" securities clearance, settlement and transfer system provided by The
Depository Trust Company (DTC), a limited purpose trust company organized under the laws of
the State of New York, in accordance with the operational arrangements referenced in the
Blanket Issuer Letter Representation, by and between the City and DTC (the "Depository
Agreement") relating to the Bonds.
Pursuant to the Depository Agreement and the rules of DTC, the Bonds shall be
deposited with DTC who shall hold said Bonds for its participants (the "DTC Participants").
While the Bonds are held by DTC under the Depository Agreement, the Holder of the Bonds on
the Security Register for all purposes, including payment and notices, shall be Cede & Co., as
nominee of DTC, notwithstanding the ownership of each actual purchaser or owner of each
Bond (the "Beneficial Owners") being recorded in the records of OTC and OTC Participants.
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In the event OTC determines to discontinue serving as securities depository for the
Bonds or otherwise ceases to provide book-entry clearance and settlement of securities
transactions in general or the City determines that OTC is incapable of properly discharging its
duties as securities depository for the Bonds, the City covenants and agrees with the Holders of
the Bonds .to cause B9nds to be printed in definitive form and provide for the Bond certificates to
be issued and delivered t.o OTC Participants and Beneficial Owners, as the case may be.
Thereafter, the Bonds in definitive form shall be assigned, transferred and exchanged on the
Security Register maintained by the Paying Agent/Registrar and payment of such Bonds shall
be made in accordance with the provisions of Sections 3, 4 and 5 hereof.
SECTION 7: Execution -Registration. The Bonds shall be executed on behalf of the
City by the Mayor under its seal reproduced or impressed thereon and countersigned by the
City Secretary. The signature of said officers on the Bonds may be manual or facsimile. Bonds
bearing the manual or facsimile signatures of individuals who are or were the proper officers of
the City on the Bond Date shall be deemed to be duly executed on behalf of the City,
notwithstanding that such individuals or either of them shall cease to hold such offices at the
time of delivery of the Bonds to the initial purchaser(s) and with respect to Bonds delivered in
subsequent exchanges and transfers, all as authorized and provided in the V.T.C.A.,
Government Code, Chapter 1201.
No Bond shall be entitled to any right or benefit under this Ordinance, or be valid or
obligatory for any purpose, unless there appears on such Bond either a certificate of registration
substantially in the form provided in Section 9C, manually executed by the Comptroller of Public
Accounts of the State of Texas or his duly authorized agent, or a certificate of registration
substantially in the form provided in Section 90, manually executed by an authorized officer,
employee or representative of the Paying Agent/ Registrar, and either such certificate upon any
Bond duly signed shall be conclusive evidence, and the only evidence, that such Bond has been
duly certified, registered and delivered.
SECTION 8: Initial Bond(s). The Bonds herein authorized shall be initially issued
either (i) as a single fully registered bond in the total principal amount of $9,200,000 with
principal installments to become due and payable as provided in Section 2 hereof and
numbered T-1, or (ii) as multiple fully registered bonds, being one bond for each year of maturity
in the applicable principal amount and denomination 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 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 initial purchaser(s). Any time after the delivery of the Initial
Bond(s), the Paying Agent/Registrar, pursuant to written instructions from the initial
purchaser(s), or the designee thereof, shall cancel the Initial Bond(s) delivered hereunder and
exchange therefor definitive Bonds of authorized denominations, Stated Maturities, principal
amounts and bearing applicable interest rates for transfer and delivery to the Holders named at
the addresses identified therefor; all pursuant to and in accordance with such written
instructions from the initial purchaser(s), or the designee thereof, and such other information
and documentation as the Paying Agent/Registrar may reasonably require.
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SECTION 9: Forms. A. Forms Generally. The Bonds, the Registration Certificate of
the Comptroller of Public Accounts of the State of Texas, the Certificate of Registration, and the
form of Assignment to be printed on each of the Bonds, shall be substantially in the forms set
forth in this Section with such appropriate insertions, omissions, substitutions, and other
variations as are permitted or required by this Ordinance and may have such letters, numbers,
or other marks of identification (including identifying numbers and letters of the Committee on
Uniform Securities Identification Procedures of the American Bankers Association) and such
legends and endorsements (including insurance legends in the event the Bonds, or any
maturities thereof, are purchased with insurance and any reproduction of an opinion of counsel)
thereon as may, consistently herewith, be established by the City or determined by the officers
executing such Bonds as evidenced. by their execution thereof. Any portion of the text of any
Bonds may be set forth on the reverse thereof. with an appropriate reference thereto on the face
of the Bond.
The definitive Bonds and the Initial Bond(s) shall be printed, lithographed, or engraved,
typewritten, photocopied or otherwise reproduced in any other similar manner, all as determined
by the officers executing such Bonds as evidenced by their execution.
B. Form of Definitive Bond.
REGISTERED NO. ___ _
Bond Date:
July 1, 2001
Registered Owner:
Principal Amount:
United States of America
State of Texas
City of Lubbock, Texas
Electric Light and Power System
Revenue Bond, Series 2001
Interest Rate:
%
Stated Maturity:
--
REGISTERED $ _____ _
CUSIPNO.
DOLLARS
The City of Lubbock (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the County of Lubbock, State of Texas, for value received, hereby
promises to pay to the Registered Owner named above, or the registered assigns thereof, solely
from the revenues hereinafter defined, on the Stated Maturity date specified above, the Principal
Amount stated above (or so much thereof as shall not have been paid upon prior redemption)
and to pay interest on the unpaid Principal Amount hereof from the Bond Date at the per annum
rate of interest specified above computed on the basis of a 360-day year of twelve 30-day
months; such interest being payable on April 15 and October 15 of each year, commencing
April 15, 2002. Principal of this Bond shall be payable to the registered owner hereof, upon
presentation and surrender, at the Designated Payment/Transfer Office of the Paying
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Agent/Registrar executing the registration certificate appearing hereon, or its successor;
provided, however, while this Bond is registered to Cede & Co., the payment of principal upon a
partial redemption of the principal amount hereof may be accomplished without presentation
and surrender of this Bond. Interest is payable to the registered owner of this Bond (or one or
more Predecessor Bonds, as defined in the Ordinance hereinafter referenced) whose name
appears on the "Security Register" maintained by the Paying Agent/ Registrar at the close of
business on the "Record Date", which is the last business day of the month next preceding each
interest payment date and interest shall be paid by the Paying Agent/ Registrar by check sent
United States Mail, first class postage prepaid, to the address of the registered owner recorded
in the Security Register or by such other method, acceptable to the Paying Agent/Registrar,
requested by, and at the risk and expense of, the registered owner. All payments of principal of,
premium, if any, and interest on this Bond shall be without exchange or collection charges to the
owner hereof and in any coin or currency of the United States of America which at the time of
payment is legal tender for the payment of public and private debts.
This Bond is .one of the series specified in its title issued in the aggregate principal
amount of $9,200,000 (herein referred to as the "Bonds") for the purpose of providing money to
construct, improve, renovate, enlarge or equip property, buildings, structures, facilities or related
infrastructure for the City's Electric Light and Power System, under and in strict conformity with
the Constitution and laws of the State of Texas, including V.T.C.A., Government Code, Section
1502.051(c), and pursuant to an Ordinance adopted by the City Council of the City (herein
referred to as the "Ordinance").
The Bonds maturing on April 15, 2021 (the "Term Bonds") are subject to mandatory
redemption prior to maturity with funds on deposit in the Bond Fund established and maintained
for the payment thereof in the Ordinance, and shall be redeemed in part prior to maturity at the
price of par and accrued interest thereon to the date of redemption, and without premium, on
April 15, 2020 and in the principal amount of $460,000.
The particular Term Bonds to be redeemed on such redemption date shall be chosen by
lot by the Paying Agent/Registrar; provided, however, that the principal amount of Term Bonds
required to be redeemed pursuant to the operation of such mandatory redemption provisions
may be reduced, at the option of the City, by the principal amount of Term Bonds of which, at
least 50 days prior to a mandatory redemption date, (1) shall have been acquired by the City at
a price not exceeding the principal amount of such Term Bonds plus accrued interest to the date
of purchase thereof, and delivered to the Paying Agent/Registrar for cancellation or (2) shall
have been redeemed pursuant to the optional redemption provisions appearing below and not
theretofore credited against a mandatory redemption requirement.
The Bonds maturing on and after April 15, 2013, may be redeemed prior to their Stated
Maturities, at the option of the City, in whole or in part in principal amounts of $5,000 or any
integral multiple thereof (and if within a Stated Maturity by lot by the Paying Agent/Registrar), on
April 15, 2012, or on any date thereafter, at the redemption price of par, together with accrued
interest to the date of redemption. .
At least thirty days prior to the date fixed for any redemption of Bonds, the City shall
cause a written notice of such redemption to be sent by United States Mail, first class postage
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prepaid, to the registered owners of each Bond to be redeemed at the address shown on the
Security Register and subject to the terms and provisions relating thereto contained in the
Ordinance. If a Bond (or any portion of its principal sum) shall have been duly called for
redemption and notice of such redemption duly given, then upon such redemption date such
Bond (or the portion of its principal sum to be redeemed) shall become due and payable, and
interest thereon shall cease to accrue from and after the redemption date therefor, provided
moneys for the payment of the redemption price and the interest on the principal amount to be
redeemed to the date of redemption are held for the purpose of such payment by the Paying
Agent/Registrar.
In the event a portion of the principal amount of a Bond is to be redeemed and the
registered owner is someone other than Cede & Co., payment of the redemption price of such
principal amount shall be made to the registered owner only upon presentation and surrender of
such Bond to the Designated Payment/Transfer Office of the Paying Agent/Registrar, and a new
Bond or Bonds of like maturity and interest rate in any authorized denominations provided by
the Ordinance for the then unredeemed balance of the principal sum thereof will be issued to
the registered owner, without charge. If a Bond is selected for redemption, in whole or in part,
the City and the Paying Agent/Registrar shall not be required to transfer such Bond to an
assignee of the registered owner within 45 days of the redemption date therefor; provided,
however, such limitation on transferability shall not be applicable to an exchange by the
registered owner of the unredeemed balance of a Bond redeemed in part.
The Bonds are special obligations of the City and, together with the outstanding and
unpaid Previously Issued Bonds (as defined in the Ordinance), are payable solely from and
secured by a first lien on and pledge of the Net Revenues (as defined in the Ordinance) of the
City's Electric Light and Power System (the "System"). The Bonds do not constitute a legal or
equitable pledge, charge, lien or encumbrance upon any property of the City or the System,
except with respect to the Net Revenues. The holder hereof shall never have the right to
demand payment of this obligation out of any funds raised or to be raised by taxation.
Subject to satisfying the terms and conditions prescribed therefor, the City has reserved
the right to issue additional revenue obligations payable from and equally and ratably secured
by a parity lien on and pledge of the Net Revenues of the System, in the same manner and to
the same extent as the Bonds.
Reference is hereby made to the Ordinance, a copy of which is on file in the Designated
Payment/Transfer Office the Paying Agent/Registrar, and to all of the provisions of which the
Holder by his acceptance hereof hereby assents, for definitions of terms; the description of and
the nature and extent of the security for the Bonds; the properties constituting the System; the
Net Revenues pledged to the payment of the principal of and interest on the Bonds; the nature
and extent and manner of enforcement of the lien and pledge securing the payment of the
Bonds; the terms and conditions for the issuance of additional revenue obligations; the terms
and conditions relating to the transfer or exchange of this Bond; the conditions upon which the
Ordinance may be amended or supplemented with or without the consent of the Holders; the
rights, duties, and obligations of the City and the Paying Agent/ Registrar; the terms and
provisions upon which the liens, pledges, charges and covenants made therein may be
discharged at or prior to the maturity or redemption of this Bond, and this Bond deemed to be no
45043591.1
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longer Outstanding thereunder; and for the other terms and provisions thereof. Capitalized
terms used herein have the same meanings assigned in the Ordinance.
This Bond, subject to certain limitations contained in the Ordinance, may be transferred
on the Security Register only upon its presentation and surrender at the Designated
Payment/Transfer Office of the Paying Agent/Registrar, with the Assignment hereon duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the
Paying Agent/Registrar duly executed by, the registered owner hereof, or his duly authorized
agent. When a transfer on the Security Register occurs, one or more new fully registered
Bonds of the same Stated Maturity, of authorized denominations, bearing the same rate of
interest, and of the same aggregate principal amount will be issued by the Paying
Agent/Registrar to the designated transferee or transferees.
The City and the Paying Agent/Registrar, and any agent of either, may treat the
registered owner hereof whose name appears on the Security Register (i) on the Record Date
as the owner entitled to payment of interest hereon, (ii) on the date of surrender of this Bond as
the owner entitled to payment of principal hereof at its Stated Maturity or its redemption, in
whole or in part, and (iii) on any other date as the owner for all other purposes, and neither the
City nor the Paying Agent/ Registrar, or any agent of either, shall be affected by notice to the
contrary. In the event of non-payment of interest on a scheduled payment date and for thirty
(30) days thereafter, a new record date for such interest payment (a "Special Record Date") will
be established by the Paying Agent/Registrar, if and when funds for the payment of such
interest have been received from the City. Notice of the Special Record Date and of the
scheduled payment date of the past due interest (which shall be 15 days after the Special
Record Date) shall be sent at least five (5) business days prior to the Special Record Date by
United States Mail, first class postage prepaid, to the address of each Holder appearing on the
Security Register at the close of business on the last business day next preceding the date of
mailing of such notice.
It is hereby certified, recited and represented and covenanted that the City is a duly
organized and legally existing municipal corporation under and by virtue of the Constitution and
laws of the State of Texas; that the issuance of the Bonds is duly authorized by law; that all
acts, conditions and things required to exist and be done precedent to and in the issuance of the
Bonds to render the same lawful and valid obligations of the City have been properly done, have
happened and have been performed in regular and due time, form and manner as required by
the Constitution and laws of the State of Texas, and the Ordinance; that the Bonds do not
exceed any constitutional or statutory limitation; and that due provision has been made for the
payment of the principal of and interest on the Bonds by a pledge of the Net Revenues of the
System as aforestated. In case any provision in this Bond or any application thereof shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions and applications shall not in any way be affected or impaired thereby. The terms and
provisions of this Bond and the Ordinance shall be construed in accordance with and shall be
governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, the City Council of the City has caused this Bond to be duly
executed under the official seal of the City as of the Bond Date.
COUNTERSIGNED:
City Secretary
(City Seal)
CITY OF LUBBOCK, TEXAS
Mayor
C. *Form of Registration Certificate of Comptroller
of Public Accounts to Appear on Initial Bonds only.
REGISTRATION CERTIFICATE OF
COMPTROLLER OF PUBLIC ACCOUNTS
OFFICE OF THE COMPTROLLER
OF PUBLIC ACCOUNTS
THE STATE OF TEXAS
§
§
§
§
REGISTER NO. ------
I HEREBY CERTIFY that this Bond has been examined, certified as to validity and
approved by the Attorney General of the State of Texas, and duly registered by the Comptroller
of Public Accounts of the State of Texas.
WITNESS my signature and seal of office this ________ _
(SEAL)
Comptroller of Public Accounts
of the State of Texas
* NOTE TO PRINTER: Do not print on Definitive Bonds.
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D. Form of Certificate of Paying Agent/Registrar to Appear on definitive Bonds only.
This Bond has been duly issued and registered in the name of the Registered Owner
shown above under the provisions of the within-mentioned Ordinance; the bond or bonds of the
above entitled and de_signated series originally delivered having been approved by the Attorney
General of the State of Texas and registered by the Comptroller of Public Accounts, as shown
by the records of the Paying Agent/Registrar.
The designated offices of the Paying Agent/Registrar in New York, New York, is the
"Designated Payment/Transfer Office" for this Bond.
Registration date:
E. Form of Assignment.
U. S. TRUST COMPANY OF TEXAS, N.A.
Dallas, Texas,
as Paying Agent/Registrar
By ____________ _
Authorized Officer
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells; assigns, and transfers unto
{Print or typewrite name, address, and zip code of transferee:), _________ _
(Social Security or other identifying number_~~--~--~-----the within
Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept for registration thereof, with full power of
substitution in the premises.
DATED:
Signature guaranteed:
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NOTICE: The signature on this
assignment must correspond with the
name of the registered owner as it
appears on the face of the within Bond in
every particular.
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F. The Initial Bond(s) shall be in the form set forth in paragraph B of this Section,
except that the form of a single fully registered Initial Bond shall be modified as follows:
(i) immediately under the name of the bond the headings "Interest Rate n
and "Stated Maturity " shall both be omitted;
(ii) Paragraph one shall read as follows:
The City of Lubbock (hereinafter referred to as the "City"), a body corporate and
municipal corporation in the County of Lubbock, State of Texas, for value received, hereby
promises to pay to the Registered Owner named above, or the registered assigns thereof, solely
from the revenues hereinafter identified, on April 15 in each of the years and in principal
amounts and bearing interest at per annum rates in accordance with the following schedule:
YEAR
PRINCIPAL
INSTALLMENTS
INTEREST
RATE
(Information to be inserted from schedule in Section 2 hereof).
(or so much thereof as shall not have been prepaid prior to maturity) and to pay interest on the
unpaid principal amounts hereof from the Bond Date at the per annum rates of interest specified
above computed on the basis of a 360-day year of twelve 30-day months; such interest being
payable on April 15 and October 15 of each year, commencing April 15, 2002. Principal of this
Bond shall be payable to the registered owner hereof by U. S. Trust Company of Texas, N.A.
(the "Paying Agent/Registrar"), upon presentation and surrender, at its designated office in New
York, New York (the "Designated Payment/ Transfer Office"). Interest is payable to the
registered owner of this Bond whose name appears on the "Security Register'' maintained by
the Paying Agent/Registrar at the close of business on the "Record Date", which is the last
business day of the month next preceding each interest payment date and interest shall be paid
by the Paying Agent/Registrar by check sent United States Mail, first class postage prepaid, to
the address of the registered owner recorded in the Security Register or by such other method,
acceptable to the Paying Agent/Registrar, requested by, and at the risk and expense of, the
registered owner. All payments of principal of, premium, if any, and interest on this Bond shall
be without exchange or collection charges to the owner hereof and in any coin or currency of
the United States of America which at the time of payment is legal tender for the payment of
public and private debts.
SECTION 10: Definitions. For all purposes of this Ordinance and in particular for clarity
with respect to the issuance of the Bonds herein authorized and the pledge and appropriation of
revenues therefor, the following definitions are provided:
(a) The term "Additional Bonds" shall mean the additional parity
obligations the City reserves the right to issue in accordance with the terms and
conditions prescribed in Section 21 hereof.
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(b) The term "Bonds" shall mean the $9,200,000 "City of Lubbock,
Texas, Electric Light and Power System Revenue Bonds, Series 2001," dated
July 1, 2001, authorized by this Ordinance.
(c) _The term "Bonds Similarly Secured" means the Previously Issued
Bonds, the Bonds and Additional Bonds.
(d) The term "Fiscal Year'' shall mean the twelve 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.
( e) The term "Government Obligations" shall mean (i) direct
noncallable obligations of the United States of America, including obligations the
principal of and interest on which are unconditionally guaranteed by the United
States of America, (ii) noncallable obligations of an agency or instrumentality of
the United States, including obligations unconditionally guaranteed or insured by
the agency or instrumentality and on the date of their acquisition or purchase by
the City are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent and (iii) noncallable obligations of a
state or an agency or a county, municipality, or other political subdivision of a
state that have been refunded and on the date of their acquisition or purchase by
the City, are rated as to investment quality by a nationally recognized investment
rating firm not less than AAA or its equivalent.
(f) The term "Net Revenues" shall mean the gross revenues of the
System less expenses of operation and maintenance. Such expenses of
operation and maintenance shall not include depreciation charges or funds
pledged for the Bonds Similarly Secured, but shall include all salaries, labor,
materials, repairs, and extensions necessary to render services; provided,
however, that in determining "Net Revenues", only such repairs and extensions
as in the judgment of the City Council, reasonably and fairly exercised, are
necessary to keep the System in operation and render adequate service to the
City and inhabitants thereof, or such as might be necessary to meet some
physical accident or condition which otherwise would impair the security of the
Bonds Similarly Secured, shall be deducted.
(g) The term "Outstanding" when used in this Ordinance with respect
to Bonds or Bonds Similarly Secured, as the case may be, shall mean, as of the
date of determination, all Bonds and Bonds Similarly Secured theretofore sold,
issued and delivered by the City, except:
45043591.1
(1) those Bonds or Bonds Similarly Secured cancelled
or delivered to the transfer agent or registrar for cancellation in
connection with the exchange or transfer of such obligations;
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(2) those Bonds or Bonds Similarly Secured paid or
deemed to be paid in accordance with the provisions of Section 29
hereof; and
(3) those Bonds or Bonds Similarly Secured that have
been mutilated, destroyed, lost, or stolen and replacement bonds
have been registered and delivered in lieu thereof.
(h) The term "Previously Issued Bonds" shall mean the outstanding
and unpaid revenue bonds payable from and secured by a first lien on and
pledge of the Net Revenues of the System, further identified as follows:
(1) City of Lubbock, Texas, Electric Light and Power
System Revenue Refunding Bonds, Series 1991A, dated July 15,
1991, in the original principal amount of $4,424,976;
(2) City of Lubbock, Texas, Electric Light and Power
System Refunding Revenue Bonds, Series 1995, dated June 15,
1995, in the original principal amount of $13,560,000.
(3) City of Lubbock, Texas, Electric light and Power
System Revenue Bonds, Series 1998, dated January 1, 1998, in
the original principal amount of $9,170,000.
(4) City of Lubbock, Texas, Electric light and Power
System Revenue Refunding and Improvement Bonds, Series
1999, dated January 15, 1999, in the original principal amount of
$14,975,000.
(i) The term "System" shall mean all properties, real, personal, mixed
or otherwise, now owned or hereafter acquired by the City of Lubbock through
purchase, construction or otherwise, and used in connection with the City's
Electric light and Power System and in anywise pertaining thereto, whether
situated within or without the Jimits of the City.
SECTION 11: Pledge. The City hereby covenants and agrees that all of the Net
Revenues derived from the operation of the System, with the exception of those in excess of the
amounts required to establish and maintain the special Funds created for the payment and
security of the Bonds Similarly Secured, are hereby irrevocably pledged for the payment of the
Previously Issued Bonds, the Bonds and Additional Bonds, if issued, and the interest thereon,
and it is hereby ordained that the Previously Issued Bonds, the Bonds and Additional Bonds, if
issued, 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._
SECTION 12: Rates and Charges. The City hereby covenants and agrees with the
owners of the Bonds that rates and charges for electric power and energy afforded by the
System will be established and maintained to provide revenues sufficient at all times to pay:
45043591.1
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(a) all necessary and reasonable expenses of operating and
maintaining the System as set forth in the definition "Net Revenues" and to
recover depreciation;
(b) .the amounts required to be deposited to the Bond Fund to pay the
principal of and interest on the Bonds Similarly Secured as the same becomes
due and payable and to accumulate and maintain the reserve amount required to
be deposited therein; and
(c) 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 13: 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 in the
"Electric Light and Power System Fund" (created and established in connection with the
issuance of the Previously Issued Bonds), which Fund (hereinafter referred to as the "System
Fund") is hereby reaffirmed and shall continue to be kept and maintained at an official
depository bank of the City while the Bonds remain Outstanding. Furthermore, the "Special
Electric Light and Power System Revenue Bond Retirement and Reserve Fund" (hereinafter
referred to as the "Bond Fund"), created and established in connection with the issuance of the
Previously Issued Bonds, is hereby reaffirmed and shall continue to be maintained by the City
while the Bonds remain Outstanding. The Bond Fund is and shall continue to be kept and
maintained at the City's official depository bank, and moneys deposited in the Bond Fund shall
be used for no purpose other than for the payment, redemption and retirement of Bonds
Similarly Secured.
SECTION 14: System Fund .. The City hereby reaffirms its covenant to the holders of the
Previously Issued Bonds and agrees with the owners of the 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, as identified in Section 1 O(f) hereof. 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:
(a) To· the payment of the amounts required to be deposited in the
Bond Fund for the payment of principal of and interest on the Bonds Similarly
Secured as the same become due and payable; and
(b) To the payment of the amounts, if any. required to be deposited in
the Bond Fund to accumulate and maintain the reserve amount as security for
the payment of the principal of and interest on the Bonds Similarly Secured.
SECTION 15: Bond Fund. (a) In addition to the required monthly deposits to the Bond
Fund for the payment of principal of and interest on the Previously Issued Bonds, the City
hereby agrees and covenants to deposit to the Bond Fund an amount equal to one hundred
45043591.1
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percentum (100%) of the amount required to fully pay the interest on and principal of the Bonds
falling due on or before each maturity and interest payment date, such payments to be made in
substantially equal monthly installments on or before the 1st day of each month beginning on or
before the 1st day of the month next following the month the Bonds are delivered to the initial
purchaser.
The required monthly deposits to the Bond Fund for the payment of principal of and
interest on the Bonds shall continue to be made as hereinabove provided until such time as (i)
the total amount on deposit in the Bond Fund, including the "Reserve Portion" deposited therein,
is equal to the amount required to fully pay and discharge all outstanding Bonds Similarly
Secured (principal and interest) or (ii) the Bonds are no longer outstanding, i.e., the Bonds have
been fully paid as to principal and interest or all the Bonds have been refunded.
Accrued interest and premium, if any, received from the purchasers of the 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.
(b) In addition to the amounts to be deposited in the Bond Fund to pay current
principal and interest for the Bonds Similarly Secured, the City reaffirms its covenant to the
holders of the Previously Issued Bonds and agrees to accumulate and maintain in said Fund a
reserve amount (the "Reserve Portion"} equal to not less than the average annual principal and
interest requirements of all outstanding Bonds Similarly Secured (calculated and redetermined
at the time of issuance of each series of Bonds Similarly Secured).
In accordance with the ordinances authorizing the issuance of the Previously Issued
Bonds, there is currently on deposit to the credit of the Reserve Portion of the Bond Fund the
sum of $2,457,807 (the "Current Reserve"). By virtue of the issuance of the Bonds, the amount
required to be on deposit in the Reserve Portion of the Bond Fund is determined to be
$2,610, 189 (the "Required Reserve .. ), which amount equals not less than the average annual
principal and interest requirements of the outstanding Bonds Similarly Secured after giving
effect to the issuance of the Bonds. Simultaneously with the delivery of the Bonds, the City
shall cause to be deposited to the credit of the Reserve Portion of the Bond Fund an amount
sufficient to fully fund the Required Reserve from available Net Revenues of the System.
The Reserve Portion of the Bond Fund shall be made available for and reasonably
employed in meeting the requirements of the Bond Fund if need be, and if any amount thereof is
so employed, the Reserve Portion in the Bond Fund shall be fully restored to the Required
Reserve as rapidly as possible from the first available Net Revenues of the System in the
System Fund subject only to the priority of payments hereinabove prescribed in Section 14.
Any amounts on deposit in the Reserve Portion of the Bond Fund which is in excess of the
Required Reserve shall be transferred to the System Fund.
SECTION 16: Payment of Bonds. While any of the 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, including the Reserve Portion, if
necessary, amounts sufficient to fully pay and discharge promptly as each installment of interest
45043591.1
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and principal of the Bonds accrues or matures or comes due by reason of redemption prior to
maturity; 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 Bonds at the close of the business
day next preceding the date of payment for the Bonds.
SECTION 17: Deficiencies in Funds. If in any month the City shall, for any reason, fail
to pay into the Bond Fund the full amounts above stipulated, amounts equivalent to such
deficiencies shall be set apart and paid into said Fund from the first available and unallocated
Net Revenues of the System in the following month or months and such payments shall be in
addition to the amounts hereinabove provided to be otherwise paid into said Fund during such
month or months.
SECTION 18: Excess Revenues. Any surplus Net Revenues of the System remaining
after all payments have been made into the Bond Fund and after all deficiencies in making
deposits to said Fund have been remedied, may be used for any other City purposes now or
hereafter permitted by law, including the use thereof for the retirement in advance of maturity of
the Bonds Similarly Secured by the purchase of any of such Bonds Similarly Secured on the
open market at not exceeding the market value thereof. Nothing herein, however, shall be
construed as impairing the right of the City to pay, in accordance with the provisions thereof,
any junior lien bonds legally issued and payable out of the Net Revenues of the System.
SECTION 19: Security of Funds. Moneys on deposit in the System Fund (except any
amounts as may be properly invested) shall be secured in the manner and to the fullest extent
required by the laws of the State of Texas for the security of public funds. Moneys on deposit in
the Bond Fund shall be continuously secured by a valid pledge of direct obligations of, or
obligations unconditionally guaranteed by the United States of America, having a par value, or
market value, exclusive of accrued interest, at all times at least equal to the amount of money to
be deposited in said Fund. All sums deposited in said Bond Fund shall be held as a trust fund
for the benefit of the Holders of the Bonds Similarly Secured, while the beneficial interest therein
deemed to be vested in such Holders. To the extent money in the Reserve Portion of the Bond
Fund is invested under the provisions of Section 20 hereof, securing such money as provided
otherwise in this section, is not required.
SECTION 20: Investment of Reserve Portion of Bond Fund. Money deposited to the
credit of the Reserve Portion of the Bond Fund may, at the option of the City, be invested in
obligations identified in, and in accordance with the provisions of the "Public Funds Investment
Act" (V.T.C.A., Government Code, Chapter 2256} relating to the investment of "bond proceeds";
provided that all such investments shall be made in such a manner that the money required to
be expended from said Funds will be available at the proper time or times. Such investments
(except State and Local Government Series investments held in book entry form, which shall at
all times be valued at cost} shall be valued in.terms of current market value within 45 days of the
close of each Fiscal Year and, with respect to investments held for the account of the Reserve
Fund, within 30 days of the date of passage of each ordinance authorizing the issuance of
Additional Bonds. All moneys resulting from maturity of principal and interest of the securities
shall be reinvested or accumulated in the Reserve Portion of the Bond Fund and considered a
part thereof and used for and only for the purposes hereinabove provided with respect to said
Reserve Portion, provided that when the full amount required to be accumulated in the Reserve
45043591.1
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Portion of the Bond Fund (being the amounts required to be accumulated by the ordinances
authorizing the Bonds Similarly Secured) is accumulated, any interest increment may be used in
the Bond Fund to reduce the payments that would otherwise be required to pay the current debt
service requirements on Bonds Similarly Secured.
SECTION 21: Issuance of Additional Parity Bonds. In addition to the right to issue
bonds 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 Previously Issued
Bonds and the 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 installments, provided, however, that none shall be issued unless and until the
following conditions have been met: .
(a) The Mayor and Director of Finance (who has assumed the duties
of City Treasurer) have certified that the City is not then in default as to any
covenant, condition or obligation prescribed by any ordinance authorizing the
issuance of Bonds Similarly Secured then outstanding, including showings that
all interest, sinking and reserve funds then provided for have been fully
maintained in accordance with the provisions of said ordinances;
(b) The applicable laws of the State of Texas in force at the time
provide permission and authority for the issuance of such bonds and have been
fully complied with;
(c) The City has secured from an independent Certified Public
Accountant a written report demonstrating the Net Revenues of the System were,
during the last completed Fiscal Year, or during any consecutive twelve (12)
months period of the last fifteen (15) consecutive months prior to the month of
adoption of the ordinance authorizing the Additiopal Bonds, equal to at least one
and one-half (1-1/2) times the average annual principal and interest requirements
of all the bonds which will be secured by a first lien on and pledge of the Net
Revenues of the System and which will be outstanding upon the issuance of the
Additional Bonds; and further demonstrating that for the same period as is
employed in arriving at the aforementioned test said Net Revenues were equal to
at least one and one-fifth (1-1/5) times the maximum annual principal and interest
requirements of all such bonds as will be outstanding upon the issuance of the
Additional Bonds;
(d) The Additional Bonds are made to mature on April 15 or October
15, or both, in each of the years in which they are provided to mature;
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(e) The Reserve Portion of the Bond Fund shall be accumulated and
supplemented as necessary to maintain a sum which shall be not less than the
average annual principal and interest requirements of all bonds secured by a first
lien on and pledge of the Net Revenues of the System which will be outstanding
upon the issuance of any series of Additional Bonds. Accordingly, each
ordinance authorizing the issuance of any series of Additional Bonds shall
provide for any required increase in the Reserve Portion, and if supplementation
is necessary to meet all conditions of said Reserve Portion, said ordinances shall
make provision that same be supplemented by the required amounts in equal
monthly installments over a period of not to exceed sixty (60) calendar months
from the dating of such Additional Bonds.
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 issuance of the
Bonds and the Previously Issued Bonds.
SECTION 22: Maintenance and Operation -Insurance. The City hereby covenants and
agrees to maintain the System in good condition and operate the same in an efficient manner
and at reasonable cost. The City further agrees to maintain insurance for the benefit of the
owners of the Bonds of the kinds and in the amounts which are usually carried by private
companies operating similar properties, and that during such time all policies of insurance shall
be maintained in force and kept current as to premium payments. All moneys received from
losses under such insurance policies other than public liability policies are hereby pledged as
security for the Bonds Similarly Secured until and unless the proceeds thereof are paid out in
making good the loss or damage in respect of which such proceeds are received, either by
replacing the property destroyed or repairing the property damaged, and adequate provisions
are made within ninety (90) days after the date of the loss for making good such loss or
damage. The premiums for all insurance policies required under the provisions of this Section
shall be considered as maintenance and operation expenses of the System.
SECTION 23: Records -Accounts -Accounting Reports. The City hereby covenants
and agrees while any of the 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 Holder of any Bonds, or any duly authorized agent or agents of
such Holder, 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 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 Accountant, shall particularly include the following:
(a) A detailed statement of the income and expenditures of the
System for such Fiscal Year;
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{b) A balance sheet as of the end of such Fiscal Year;
(c) The Accountant's comments 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;
(e) A list of the securities which have been on deposit as security for
the money in the Bond Fund throughout the Fiscal Year and a list of the
securities, if any, in which the Reserve Portion of the Bond Fund has been
invested.
(f) The total number of metered and unmetered customers, if any,
connected with the System at the end of the Fiscal Year.
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 immediately furnished to the Executive Director of the Municipal Advisory
Council of Texas at his office in Austin, Texas, and, upon written request, to the original
purchasers and any subsequent Holders of the Bonds.
SECTION 24: Remedies in Event of Default. In addition to all the rights and remedies
provided by the laws of the State of Texas, the City covenants and agrees particularly that in the
event the City (a) defaults in payments to be made to the Bond Fund as required by this
Ordinance or (b) defaults in the observance or performance of any other of the covenants,
conditions or obligations set forth in this Ordinance, with the consent of the Holders of any of the
Bonds 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.
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. The specific remedies herein provided shall be cumulative
of all other existing remedies and the specifications of such remedies shall not be deemed to be
exclusive.
SECTION 25: Special Covenants. The City hereby further covenants as follows:
(a) It has the lawful power to pledge the revenues supporting this
issue of Bonds and has lawfully exercised said power under the Constitution and
laws of the State of Texas, including V.T.C.A., Government Code, Chapter 1502.;
that the Previously Issued Bonds, the Bonds and the Additional Bonds, when
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issued, shall be ratably secured under said pledge of income in such manner that
one bond shall have no preference over any other bond of said issues.
(b) Other than for the payment of the Previously Issued Bonds and
the Bonds, th~ Net Revenues of the System have not been pledged to the
payment of any debt or obligation of the City or of the System.
(c) While any of the 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 of the System
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 Bonds, the Previously
Issued Bonds, and any Additional Bonds.
(d) The City will cause to be rendered monthly to each customer
receiving electric 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.
(e) The City 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.
(f) 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.
SECTION 26: Special Obligations. The Bonds are special obligations of the City
payable from the pledged Net Revenues of the System and the Holders shall never have the
right to demand payment thereof out of funds raised or to be raised by taxation. ·
SECTION 27: Ordinance to Constitute Contract. The provisions of the Ordinance shall
constitute a contract between the City and the Holder or Holders from time to time of the Bonds
and no change, variation or alteration of any kind of the provisions of the Ordinance may be
made, except as permitted in this Section. The City may, without the consent of or notice to any
Holder or Holders, from time to time and at any time, amend this Ordinance in any manner not
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detrimental to the interests of the Holders and, with the consent of Holder or Holders holding a
majority in aggregate principal amount of the Bonds then Outstanding affected thereby, the City
may amend, add to, or rescind any of the provisions of this Ordinance; provided that, without the
consent of all Holders of Outstanding Bonds, no such amendment, addition or rescission shall
(1) extend the time or times of payment of the principal of, premium, if any, and interest on the
Bonds, reduce the principal amount thereof, the redemption price therefor, or the rate of interest
thereon, or in any other way modify the terms of payment of the principal of, premium, if any, or
interest on the Bonds, (2) give any preference to any Bond over any other Bond, or (3) reduce
the aggregate principal amount of Bonds required for consent to any such amendment, addition
or rescission.
SECTION 28: Covenants to Maintain Tax-Exempt Status.
(a) Definitions. When used in this Section, the following terms shall have the
following meanings:
"Closing Date" means the date on which the Bonds are first authenticated and delivered
to the initial purchasers against payment therefor.
"Code" means the Internal Revenue Code of 1986, as amended by all legislation, if any,
effective on or before the Closing Date.
"Computation Date" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Gross Proceeds" means any proceeds as defined in Section 1.148-1 (b) of the
Regulations, and any replacement proceeds as defined in Section 1.148-1 (c) of the
Regulations, of the Bonds.
"Investment" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Nonpurpose Investment" means any investment property, as defined in section 148(b)
of the Code, in which Gross Proceeds of the Bonds are invested and which is not acquired to
carry out the governmental purposes of the Bonds.
"Rebate Amount" has the meaning set forth in Section 1.148-1 (b) of the Regulations.
"Regulations" means any proposed, temporary, or final Income Tax Regulations issued
pursuant to Sections 103 and 141 through 150 of the Code, and 103 of the Internal Revenue
Code of 1954, which are applicable to the Bonds. Any reference to any specific Regulation
shall also mean, as appropriate, any proposed, temporary or final Income Tax Regulation
designed to supplement, amend or replace the specific Regulation referenced.
"Yield" of ( 1) any Investment has the meaning set forth in Section 1.148-5 of the
Regulations; and (2) the Bonds has the meaning set forth in Section 1.148-4 of the
Regulations.
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(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 any
Bond to become includable in the gross income, as defined in section 61 of the Code, of the
owner thereof for federal income tax purposes. Without limiting the generality of the foregoing,
unless and until the City receives a written opinion of counsel nationally recognized in the field
of municipal bond law to the effect that failure to comply with such covenant will not adversely
affect the exemption from federal income tax of the interest on any Bond, the City shall comply
with each of the specific covenants in this Section.
{c) No Private Use or Private Payments. Except as permitted by section 141 of the
Code and the Regulations and rulings thereunder, the City shall at all times prior to the last
Stated Maturity of Bonds:
{1) exclusively own, operate and possess all property the acquisition,
construction or improvement of which is to be financed or refinanced directly or
indirectly with Gross Proceeds of the Bonds, and not use or permit the use of
such Gross Proceeds (including all contractual arrangements with terms different
than those applicable to the general public} or any property acquired, constructed
or improved with such Gross Proceeds in any activity carried on by any person or
entity (including the United States or any agency, department and instrumentality
thereof) other than a state or local government. unless such use is solely as a
member of the general public; and
(2) not directly or indirectly impose or accept any charge or other
payment by any person or entity who is treated as using Gross Proceeds of the
Bonds or any property the acquisition, construction or improvement of which is
to be financed or refinanced directly or indirectly with such Gross Proceeds, other
than taxes of general application within the City or interest earned on
investments acquired with such Gross Proceeds pending application for their
intended purposes.
{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 the Bonds to
make or finance loans to any person or entity other than a state or local government. For
purposes of the foregoing covenant, such Gross Proceeds are considered to be "loaned" to a
person or entity if: (1) property acquired, constructed or improved with such Gross Proceeds is
sold or leased to such person or entity in a transaction which creates a debt for federal income
tax purposes; (2) capacity in or service from such property is committed to such person or entity
under a take-or-pay, output or similar contract or arrangement; or (3) indirect benefits, or
burdens and benefits of ownership, of such Gross Proceeds or any property acquired,
constructed or improved with such Gross Proceeds are otherwise transferred in a transaction
which is the economic equivalent of~ loan.
(e) Not to Invest at Higher Yield. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not at any time prior to the
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final Stated Maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment
( or use Gross Proceeds to replace money so invested), if as a result of such investment the
Yield from the Closing Date of all Investments acquired with Gross Proceeds (or with money
replaced thereby), whether then held or previously disposed of, exceeds the Yield of the Bonds.
(f) Not Federally Guaranteed. Except to the extent permitted by section 149(b) of
the Code and the Regulations and rulings thereunder, the City shall not take or omit to take any
action which would cause the Bonds to be federally guaranteed within the meaning of section
149(b) of the Code and the Regulations and rulings thereunder.
(g) Information Report The City shall timely file the information required by section
149(e) of the Code with the Secretary of the Treasury on Form 8038-G or such other form and
in such place as the Secretary may prescribe.
(h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section
148(f) of the Code and the Regulations and rulings thereunder:
(1) The City shall account for all Gross Proceeds (including all receipts,
expenditures and investments thereof) on its books of account separately and
apart from all other funds (and receipts, expenditures and investments thereof)
and shall retain all records of accounting for at least six years after the day on
which the last Outstanding Bond is discharged. However, to the extent permitted
by law, the City may commingle Gross Proceeds of the Bonds with other money
of the City, provided that the City separately accounts for each receipt and
expenditure of Gross Proceeds and the obligations acquired therewith.
(2) Not less frequently than each Computation Date, the City shall
calculate the Rebate Amount in accordance with rules set forth in section 148(f)
of the Code and the Regulations and rulings thereunder. The City shall maintain
such calculations with its official transcript of proceedings relating to the issuance
of the Bonds until six years after the final Computation Date.
(3) As additional consideration for the purchase of the Bonds by the
Purchasers and the loan of the money represented thereby and in order to
induce such purchase by measures designed to insure the excludability of the
interest thereon from the gross income of the owners thereof for federal income
tax purposes, the City shall pay to the United States out of the Bond Fund or its
general fund, as permitted by applicable Texas statute, regulation or opinion of
the Attorney General of the State of Texas, the amount that when added to the
future value of previous rebate payments made for the Bonds equals (i) in the
case of a Final Computation Date as defined in Section 1.148-3(e)(2) of the
Regulations, one hundred percent (100%) of the Rebate Amount on such date;
and (ii) in the case of any other Computation Date, ninety percent (90%) of the
Rebate Amount on such date. In all cases, the rebate payments shall be made
at the times, in the installments, to the place and in the manner as is or may be
required by section 148(f) of the Code and the Regulations and rulings
thereunder, and shall be accompanied by Form 8038-T or such other forms and
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information as is or may be required by Section 148(f) of the Code and the
Regulations and rulings thereunder.
{4) The City shall exercise reasonable diligence to assure that no errors
are. made in the calculations and payments required by paragraphs (2) and (3),
and if an error is made, to discover and promptly correct such error within a
reasonable amount of time thereafter (and in all events within one hundred eighty
(180) days after discovery of the error), including payment to the United States of
any additional Rebate Amount owed to it, interest thereon, and any penalty
imposed under Section 1.148-3(h) of the Regulations.
(i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of
the Code and the Regulations and rulings thereunder, the City shall not, at any time prior to the
earlier of the Stated Maturity or final payment of the Bonds, enter into any transaction that
reduces the amount required to be paid to the United States pursuant to Subsection H of this
Section because such transaction results in a smaller profit or a larger loss than would have
resulted if the transaction had been at arm's length and had the Yield of the Bonds not been
relevant to either party.
U) Elections. The City hereby directs and authorizes the Mayor, City Manager, City
Secretary, and Director of Finance, either or any combination of them, to make elections
permitted or required pursuant to the provisions of the Code or the Regulations, as they deem
necessary or appropriate in connection with the Bonds, in the Certificate as to Tax Exemption or
similar or other appropriate certificate, form or document.
SECTION 29: Satisfaction of Obligation of City. If the City shall pay or cause to be paid,
or there shall otherwise be paid to the Holders, the principal of, premium, if any, and interest on
the Bonds, at the times and in the manner stipulated in this Ordinance, then the pledge of the
Net Revenues of the System under this Ordinance and all other obligations of the City to the
Holders shall thereupon cease, terminate, and become void and be discharged and satisfied.
Bonds or any principal amount(s) thereof shall be deemed to have been paid within the
meaning and with the effect expressed above in this Section when (i) money sufficient to pay in
full such Bonds or the principal amount(s) thereof at maturity or to the redemption date therefor,
together with all interest due thereon, shall have been irrevocably deposited with and held in
trust by the Paying Agent/Registrar, or an authorized escrow agent, or (ii) Government
Obligations shall have been irrevocably deposited in trust with the Paying Agent/ Registrar, or
an authorized escrow agent, which Government Obligations have been certified by an
independent accounting firm to mature as to principal and interest in such amounts and at such
times as will insure the availability, without reinvestment, of sufficient money, together with any
moneys deposited therewith, if any, to pay when due the principal of and interest on ·such
Bonds, or the principal amount(s) thereof, on and prior to the Stated Maturity thereof or (if notice
of redemption has been duly given or waived or if irrevocable arrangements therefor acceptable
to the Paying Agent/Registrar have been made) the redemption date thereof. The City
covenants that no deposit of moneys or Government Obligations will be made under this
Section and no use made of any such deposit which would cause the Bonds to be treated as
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"arbitrage bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as
amended, or regulations adopted pursuant thereto.
Any moneys so deposited with the Paying Agent/ Registrar, or an authorized escrow
agent, and all income. from Government Obligations held in trust by the Paying Agent/Registrar
or an authorized escrow agent, pursuant to this Section which is not required for the payment of
the Bonds, or any principal amount(s) thereof, or interest thereon with respect to which such
moneys have been so deposited shall be remitted to the City or deposited as directed by the
City. Furthermore, any money held by the Paying Agent/Registrar for the payment of the
principal of and interest on the Bonds and remaining unclaimed for a period of three (3) years
after the Stated Maturity, or applicable redemption date, of the Bonds such moneys were
deposited and are held in trust to pay shall, upon the request of the City, be remitted to the City
against a written receipt therefor. Notwithstanding the above and foregoing, any remittance of
funds from the Paying Agent/Registrar to the City shall be subject to any applicable unclaimed
property laws of the State of Texas.
SECTION 30: Notices to Holders-Waiver. Wherever this Ordinance provides for notice
to Holders of any event, such notice shall be sufficiently given {unless otherwise herein
expressly provided) if in writing and sent by United States Mail, first class postage prepaid, to
the address of each Holder as it appears in the Security Register.
In any case where notice to Holders is given by mail, neither the failure to mail such
notice to any particular Holders, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice with respect to all other Bonds. Where this Ordinance provides for
notice in any manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event with respect to which such notice is given, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Paying Agent/Registrar, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 31: Mutilated -Destroyed -Lost and Stolen Bonds. In case any Bond shall
be mutilated, or destroyed, lost or stolen, the Paying Agent/Registrar may execute and deliver a
replacement Bond of like form and tenor, and in the same denomination and bearing a number
not contemporaneously outstanding, in exchange and substitution for such mutilated Bond, or in
lieu of and in substitution for such destroyed, lost or stolen Bond, only upon the approval of the
City and after (i) the filing by the Holder thereof with the Paying Agent/ Registrar of evidence
satisfactory to the Paying Agent/ Registrar of the destruction, loss or theft of such Bond, and of
the authenticity of the ownership thereof and (ii) the furnishing to the Paying Agent/Registrar of
indemnification in an amount satisfactory to hold the City and the Paying Agent/Registrar
harmless. All expenses and charges associated with such indemnity and with the preparation,
execution and delivery of a replacement Bond shall be borne by the Holder of the Bond
mutilated, or destroyed, lost or stolen.
Every new Bond issued pursuant to this Section in lieu of any mutilated, destroyed, lost,
or stolen Bond shall constitute a replacement of the prior obligation of the City, whether or not
the mutilated, destroyed, lost, or stolen Bond shall be at any time enforceable by anyone, and
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shall be entitled to all the benefits of this Ordinance equally and ratably with all other
Outstanding Bonds.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all
other rights and remedies with respect to the replacement and payment of mutilated, destroyed,
lost, or stolen Bonds.
SECTION 32: Cancellation. All Bonds surrendered for payment, redemption, transfer,
exchange, or replacement, if surrendered to the Paying Agent/Registrar, shall be promptly
canceled by it and, if surrendered to the City, shall be delivered to the Paying Agent/Registrar
and, if not already canceled, shall be promptly canceled by the Paying Agent/Registrar. The
City may at any time deliver to the Paying Agent/Registrar for cancellation any Bonds previously
certified or registered and delivered which the City may have acquired in any manner
whatsoever, and all Bonds so delivered shall be promptly canceled by the Paying
Agent/Registrar. All canceled Bonds held by the Paying Agent/Registrar shall be disposed of as
directed by the City.
SECTION 33: Sale of Bonds -Official Statement Approval. The Bonds authorized by
this Ordinance are hereby sold by the City to U. S. Bancorp Piper Jaffray Inc. and Prudential
Securities Incorporated (herein referred to as the "Purchasers") in accordance with the
Purchase Contract, dated July 12, 2001, attached hereto as Exhibit B and incorporated herein
by reference as a part of this Ordinance for all purposes. The Mayor is hereby authorized and
directed to execute said Purchase Contract for and on behalf of the City and as the act and
deed of this Council, and in regard to the approval and execution of the Purchase Contract, the
Council hereby finds, determines and declares that the representations, warranties and
agreements of the City contained in the Purchase Contract are true and correct in all material
respects and shall be honored and performed by the City.
Furthermore, the use of the Official Statement by the Purchasers in connection with the
public offering and sale of the Bonds is hereby ratified, confirmed and approved in all respects.
The final Official Statement, which reflects the terms of sale, attached as Exhibit A to the
Purchase Contract (together with such changes approved by the Mayor, Mayor Pro Tern, City
Secretary, City Manager, Deputy City Manager, or Director of Finance, one or more of said
officials), shall be and is hereby in all respects approved and the Purchasers are hereby
authorized to use and distribute said final Official Statement, dated July 12, 2001, in the
reoffering, sale and delivery of the. Bonds to the public. The Mayor and City Secretary are
further authorized and directed to manually execute and deliver for and on behalf of the City
copies of said Official Statement in final form as may be required by the Purchasers, and such
final Official Statement in the form and content manually executed by said officials shall be
deemed to be approved by the City Council and constitute the Official Statement authorized for
distribution and use by the Purchasers.
SECTION 34: Approval and Registration of Bonds. The Mayor of said City is hereby
authorized to have control of the Bonds, including the Initial Bonds, and all necessary records
and proceedings pertaining to said Bonds pending . their delivery and their investigation,
examination and approval by the Attorney General of the State of Texas. Upon registration of
the Initial Bonds, said Comptroller of Public Accounts (or a deputy designated in writing to act
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for said Comptroller) shall manually sign the Comptroller's Registration Certificate prescribed
herein to be printed and endorsed on the Initial Bonds, and the seal of said Comptroller shall be
impressed, or printed, or lithographed on said Initial Bonds.
In addition, the Mayor, Mayor Pro Tern, City Secretary, City Manager, Deputy City
Manager, or Director of Finance, any one or more of said officials, are hereby authorized and
directed to furnish and execute such documents and certifications relating to the City and the
issuance of the Bonds, including a certification as to facts, estimates, circumstances and
reasonable expectations pertaining to the use and expenditure and investment of the proceeds
of the Bonds as may be necessary for the approval of the Attorney General, registration by the
Comptroller of Public Accounts and delivery of the Bonds to the purchasers thereof and,
together with the City's financial advisor, bond counsel and the Paying Agent/ Registrar, make
the necessary arrangements for the delivery of the Initial Bonds to the purchasers.
SECTION 35: Proceeds of Sale. The proceeds of sale of the Bonds, excluding the
accrued interest received from the purchasers and proceeds disbursed for the payment of costs
of issuance and municipal bond insurance premium, shall be deposited in a construction fund
maintained at the City's depository bank. Pending expenditure for authorized projects and
purposes, such proceeds of sale may be invested in authorized investments in accordance with
the provisions of V.T.C.A., Government Code, Chapter 2256, including guaranteed investment
contracts permitted by V.T.C.A., Section 2256.015 et seq., and the City's investment policies
and guidelines, and any investment earnings realized shall be expended for such authorized
projects and purposes or deposited in the Bond Fund as shall be determined by the City
Council. Accrued interest and premium, if any, received from the sale of the Bonds and any
excess bond proceeds, including investment earnings, remaining after completion of all
authorized projects or purposes shall be deposited to the credit of the Bond Fund.
SECTION 36: Legal Opinion. The obligation of the Purchasers to accept delivery of the
Bonds is subject to being furnished a final opinion of Fulbright & Jaworski L.L.P., Attorneys,
Dallas, Texas, approving such Bonds as to their validity, said opinion to be dated and delivered
as of the date of delivery and payment for such Bonds. A true and correct reproduction of said
opinion is hereby authorized to be printed on the definitive Bonds or an executed counterpart
thereof shall accompany the global Bonds deposited with the Depository Trust Company.
SECTION 37: CUSIP Numbers. CUSIP numbers may be printed on the Bonds. It is
expressly provided, however, that the presence or absence of CUSIP numbers on the Bonds
shall be of no significance or effect as regards the legality thereof and neither the City nor the
attorneys approving said Bonds as to legality are to be held responsible for CUSIP numbers
incorrectly printed on the Bonds.
SECTION 38: Benefits of Ordinance. Nothing in this Ordinance, expressed or implied,
is intended or shall be construed to confer upon any person other than the City, the Paying
Agent/Registrar, and the Holders, any right, remedy, or claim, legal or equitable, under or by
reason of this Ordinance or any provision hereof, this Ordinance and all its provisions being
intended to be and being for the sole and exclusive benefit of the City, the Paying
Agent/Registrar, and the Holders.
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SECTION 39: Inconsistent Provisions. All ordinances, orders or resolutions, or parts
thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby
repealed to the extent of such conflict and the provisions of this Ordinance shall be and remain
controlling as to the matters contained herein.
SECTION 40: Governing Law. This Ordinance shall be construed and enforced in
accordance with the laws of the State of Texas and the United States of America.
SECTION 41: Severability. If any provision of this Ordinance or the application thereof
to any circumstance shall be held to be invalid, the remainder of this Ordinance and the
application thereof to other circumstances shall nevertheless be valid, and this governing body
hereby declares that this Ordinance would have been enacted without such invalid provision.
SECTION 42: Continuing Disclosure Undertaking. (a) Definitions. As used in this
Section, the following terms have the meanings ascribed to such terms below:
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means each person whom the SEC or its staff has determined to be a
nationally recognized municipal securities information repository within the meaning of the Rule
from time to time.
"Rule" means SEC Rule 15c2•12, as amended from time to time.
"SEC" means the United States Securities and Exchange Commission.
"SID" means any person designated by the State of Texas or an authorized department,
officer, or agency thereof as, and determined by the SEC or its staff to be, a state information
depository within the meaning of the Rule from time to time.
(b) Annual Reports. The City shall provide annually to each NRMSIR and any SID,
within six months after the end of each fiscal year (beginning with the fiscal year ending
September 30, 2001) financial information and operating data with respect to the City of the
general type included in the final Official Statement approved by Section 33 of this Ordinance,
being the information described in Exhibit C hereto. Financial statements to be provided shall
be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and
(2) audited, if the City commissions an audit of such statements and the audit is completed
within the period during which they must be provided. If audited financial statements are not
available at the time the financial information and operating data must be provided, then the City
shall provide unaudited financial statements for the applicable fiscal year to each NRMSIR and
any SID with the financial information and operating data and will file the annual audit report
when and if the same becomes available.
If the City changes its fiscal year, it will notify each NRMSIR and any SID 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.
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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 reference to any
document (including an official statement or other offering document, if it is available from the
MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC.
(c) Material Event Notices. The City shall notify any SID and either each NRMSIR or
the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such
event is material within the meaning of the federal securities laws:
1. Principal and interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on debt service reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements reflecting financial difficulties;
5. Substitution of credit or liquidity providers, or their failure to perform;
6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds;
7. Modifications to rights of holders of the Bonds;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds; and
11. Rating changes.
The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner,
of any failure by the City to provide financial information or operating data in accordance with
subsection (b) of this Section by the time required by such Section.
(d) Limitations, Disclaimers, and Amendments. The City shall be obligated to
observe and perform the covenants specified in this Section while, but only while, the City
remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except
that the City in any event will give the notice required by subsection (c) hereof of any Bond calls
and defeasance that cause the City to be no longer such an "obligated person."
The provisions of this Section are for the sole benefit of the Holders and beneficial
owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or
any legal or equitable right, remedy, or claim hereunder to any other person. The City
undertakes to provide only the financial information, operating data, financial statements, and
notices which it has expressly agreed to provide pursuant to this Section and does not hereby
undertake to provide any other information that may be relevant or material to a complete
presentation of the City's financial results, condition, or prospects or hereby undertake to update
any information provided in accordance with this Section or otherwise, except as expressly
provided herein. The City does not make any representation or warranty concerning such
information or its usefulness to a decision to invest in or sell Bonds at any future date. ·
UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR
BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT,
FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY,
WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT
SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON,
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IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE
LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE.
No default by the City in observing or performing its obligations under this Section shall
constitute a breach of_ or default under this Ordinance for purposes of any other provision of this
Ordinance.
Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the
duties of the City under federal and state securities laws.
The provisions of this Section may be amended by the City from time to time to adapt to
changed circumstances resulting from a change in legal requirements, a change in law, or a
change in the identity, nature, status, or type of operations of the City, but only if (1) the
provisions of this Section, as so amended, would have permitted an underwriter to purchase or
sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account
any amendments or interpretations of the Rule to the date of such amendment, as well as such
changed circumstances, and (2) either (a} the Holders of a majority in aggregate principal
amount (or any greater amount required by any other provision of this Ordinance that authorizes
such an amendment} of the Outstanding Bonds consent to such amendment or (b) a Person
that is unaffiliated with the City (such as nationally recognized bond counsel) determines that
such amendment will not materially impair the interests of the Holders and beneficial owners of
the Bonds. The provisions of this Section may also be amended from time to time or repealed
by the City if the SEC amends or repeals the applicable provisions of the Rule or a court of final
jurisdiction determines that such provisions are invalid, but only if and to the extent that
reservation of the City's right to do so would not prevent underwriters of the initial public offering
of the Bonds from lawfully purchasing or selling Bonds in such offering. If the City so amends
the provisions of this Section, it shall include with any amended financial information or
operating data filed with each NRMSIR and SID pursuant to subsection (b) of this Section an
explanation, in narrative form, of the reasons for the amendment and of the impact of any
change in the type of financial information or operating data so provided.
SECTION 43: Insurance. The Bonds have been sold with the principal of and interest
thereon being insured by Ambac Assurance Corporation (hereinafter called "Ambac") pursuant
to a Municipal Bond Insurance Policy. In accordance with the terms and conditions applicable
to insurance provided by Ambac, the City covenants and agrees that, in the event the principal
and interest due on the Bonds shall be paid by Ambac pursuant to the policy referred to this
Section, the assignment and pledge of all funds and all covenants, agreements and other
obligations of the City to the Holders shall continue to exist and Ambac shall be subrogated to
the rights of such Holders; and furthermore, the City covenants and agrees that:
(a) Consent of Ambac where Holder Consent Required. Ambac
shall be deemed to be the holder of the Bonds insured by Ambac at all times for
the purpose of the execution and delivery of any amendment, change or
modification of this Ordinance or the initiation by Holders of any action to be
taken under this Ordinance at the Hotder's request, which under this Ordinance
(or under such underlying documents requires the written approval or consent of
45043591.1
-33-
or can be initiated by the Holders of a majority (50% percent) in aggregate
principal amount of the Bonds at the time Outstanding.
(b} Defeasance. In the event that the principal and redemption price,
if applicable, and interest due on tne Bonds shall be paid by Ambac pursuant to
the policy referred to in this Section, all covenants, agreements and other
obligations of the City to the Holders shall continue to exist and Ambac shall be
subrogated to the rights of such Holders.
{c} Notices to be Given to Ambac. While the Municipal Bond
Guaranty Insurance Policy is .in effect, the City shall furnish to Ambac:
(1) as soon as practicable after the filing thereof, a copy of any financial
statement of the City and a copy of any audit and annual report of the City;
(2) a copy of any notice to be given to the registered owners of the
Bonds, including, without limitation, notice of any redemption or defeasance of
Bonds, and any certificate rendered pursuant to this Ordinance relating to the
security for the Bonds; and
(3) such additional information as it may reasonably request.
The City will permit Ambac to discuss the affairs, finances and accounts
of the City, or any information Ambac may reasonably request regarding the
security for the Bonds with appropriate officers of the City. The City will permit
Ambac to have access to and make copies of all books and records relating to
the Bonds at any reasonable time.
( d) Consent of Ambac. Any provision of this Ordinance expressly
recognizing or granting rights in or to Ambac may not be amended in any manner
which affects the rights of Ambac hereunder without the prior written consent of
Ambac. Furthermore, anything in this Ordinance to the contrary notwithstanding,
upon the occurrence and continuance of an event of default, Ambac shall be
entitled to control and direct the enforcement of all rights and remedies granted
to the Holders of the Bonds for the benefit of such Holders.
(e) Concerning the Bond Insurance Policy. As long as insurance for
the . Bonds shall be in full force and effect, the City agrees to comply with the
following provisions:
(1} if five {5} days prior to an interest payment date for the Bonds the City
determines that there will be insufficient funds in the Bond Fund to pay the
principal of or interest on the Bonds on such interest payment date, the City shall
so notify Ambac. Such notice shall specify the amount of the anticipated
deficiency, the Bonds to which such deficiency is applicable and whether such
Bonds will be deficient as to principal or interest, or both.
45043591.1
-34-
{2) the City shall, after giving notice to Ambac as provided in (1) above,
make available to Ambac and the United States Trust Company of New York, as
insurance trustee for Ambac, the registration books of the City maintained by the
Paying Agent/Registrar, and all records relating to the funds and accounts
maintained under this Ordinance.
(3) the City shall cause the Paying Agent/Registrar to provide Ambac and
the United States Trust Company of New York with a list of registered owners of
Bonds entitled to receive principal or interest payments from Ambac under the
terms of the Municipal Bond Insurance Policy, and shall cause the Paying
Agent/Registrar to make arrangements with United States Trust Company of
New York (i} to mail checks or drafts to the registered owners of Bonds entitled to
receive full or partial interest payments from Ambac, and {ii) to pay principal upon
Bonds surrendered to United States Trust Company of New York by the
registered owners of Bonds entitled to receive full or partial principal payments
from Ambac.
{4) the City shall cause the Paying Agent/Registrar to notify, at the time it
provides notice to Ambac pursuant to (1) above, the registered owners of Bonds
entitled to receive the payment of principal or interest thereon from Ambac (i) as
to the fact of such entitlement, (ii} that Ambac will remit to them all or a part of the
interest payments next coming due, (iii) that should they be entitled to receive full
payment of principal from Ambac they must tender their Bonds (along with a form
of transfer of title thereto) for payment to United States Trust Company of New
York, as insurance trustee for Ambac, and not the Paying Agent/ Registrar, and
(iv) that should they be entitled to receive partial payment of principal from
Ambac they must tender their Bonds for payment thereon first to the Paying
Agent/Registrar, who shall note on such Bonds the portion of the principal paid
by the Paying Agent/Registrar, and then, along with a form of transfer of title
thereto, to Ambac, which will then pay the unpaid portion of principal.
(5) Ambac shall, to the extent it makes a payment of principal of or
interest on Bonds, become subrogated to the rights of the recipients of such
payments in accordance with the terms of the Municipal Bond Insurance Policy,
and to evidence such subrogation (i) in the case of subrogation as to claims for
past due interest, the City shall cause the Paying Agent/Registrar to note
Ambac's rights as subrogee on the registration books of the City maintained by
the Paying Agent/Registrar upon receipt from Ambac of proof of the payment of
interest thereon to the registered owners of the Bonds, and (ii) in the case of
subrogation as to claims for past due principal, the City shall cause the Paying
Agent/Registrar to note Ambac's rights as subrogee on the registration books of
the City maintained by the Paying Agent/ Registrar upon surrender of the Bonds
by the registered owners thereof together with proof of the payment of principal
thereof.
SECTION 44: Public Meeting. It is officially found, determined, and declared that the
meeting at which this Ordinance is adopted was open to the public and public notice of the time,
45043591.1
~35-
place, and subject matter of the public business· to be considered at such meeting, including this
Ordinance, was given, all as required by V.T.C.A., Government Code, Chapter 551, as
amended.
SECTION 45: Effective Date. This ordinance shall take effect and be in force
immediately from and after its passage on second and final reading and IT IS SO ORDAINED.
PASSED AND APPROVED ON FIRST READING the 14th day of June, 2001.
PASSED AND APPROVED ON SECOND AND FINAL READING, this the 12th day of
July, 2001.
CITY OF LUBBOCK, TEXAS
ATTEST:
~• g ,u.1 "' ~ Cty Secretary
(City Sea!)
APPROVED AS TO FORM:
(l; L £l!,,~u•
City Attorney
45043591.1
-36-
Ordinance No. 2001-00043
PAYING AGENT/REGISTRAR AGREEMENT
THIS AGREEMENT entered into as of July 12, 2001 (this "Agreement"), by and between
the City of Lubbock, _Texas (the "Issuer"), and U. S. Trust Company of Texas, N.A., Dallas,
Texas, a banking associati9n duly organized and existing under the laws of the United States of
America, or its successor or assigns (the "Bank").
RECITALS
WHEREAS, the Issuer has duly authorized and provided for the issuance of its "City of
Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2001" (the
"Securities") in the aggregate principal amount of $9,200,000, which Securities are scheduled to
be delivered to the initial purchasers on or about August 16, 2001; and
WHEREAS, the Issuer has selected and the Bank has agreed to serve as Paying
Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest
on said Securities and with respect to the registration, transfer and exchange thereof by the
registered owners; and
WHEREAS, the Bank represents it has full power and authority to perform and serve as
Paying Agent/Registrar for the Securities;
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE ONE
APPOINTMENT OF BANK AS
PAYING AGENT AND REGISTRAR
Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying
Agent with respect to the Securities, and, as Paying Agent for the Securities, the Bank shall be
responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the
Securities as the same become due and payable to the registered owners thereof; all in
accordance with this Agreement and the "Bond Resolution" (hereinafter defined). The Issuer
hereby appoints the Bank as Registrar with respect to the Securities and, as Registrar for the
Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records
as to the ownership of said Securities and with respect to the transfer and exchange thereof as
provided herein and in the "Bond Resolution." ·
The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and
Registrar for the Securities.
Section 1.02. Compensation. 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
Annex A attached hereto.
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 with any
45043744.1 1
of the provIsIons hereof (including the reasonable compensation and the expenses and
disbursements of its agents and counsel).
ARTICLE "DNO
DEFINITIONS
Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
"Acceleration Date" on any Security means the date on and after which the
principal or any or all installments of interest, or both, are due and payable on any
Security which has become accelerated pursuant to the terms of the Security.
"Bank Office" means the principal office of the Bank as indicated in Section 3.01
hereof. The Bank will notify the Issuer in writing of any change in location of the Bank
Office.
"Bond Resolution" means the resolution, order, or ordinance of the governing
body of the Issuer pursuant to which the Securities are issued, certified by the Secretary
or any other officer of the Issuer and delivered to the Bank.
"Fiscal Year'' means the fiscal year of the Issuer, ending September 30th.
"Holder" and "Security Holder'' each means the Person in whose name a Security
is registered in the Security Register.
"Issuer Request" and "Issuer Order" means a written request or order signed in
the name of the Issuer by the Mayor, City Manager, Director of Finance, Assistant
City Manager or City Secretary, any one or more of said officials, and delivered to the
Bank.
"Legal Holiday" means a day on which the Bank is required or authorized to be
closed.
"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.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same obligation as that evidenced by such
particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed,
or stolen Security for which a replacement Security has been registered and delivered in
lieu thereof pursuant to Section 4.06 hereof and the Resolution).
"Redemption Date" when used with respect to any Security to be redeemed
means the date fixed for such redemption pursuant to .the terms of the Bond Resolution.
"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,
45043744.1 -2-
EXHIB\T At
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.
"Security Register'' means a register maintained by the Bank on behalf of the
Issuer providing for the registration and transfers of Securities.
"Stated Maturity" means the date specified in the Bond Resolution the principal of
a Security is scheduled to be due and payable.
Section 2.02. Other Definitions. The terms "Bank," "Issuer," and "Securities {Security)"
have the meanings assigned to them in the recital paragraphs of this Agreement.
The term "Paying Agent/Registrar'' refers to the Bank in the performance of the duties
and functions of this Agreement.
ARTICLE THREE
PAYING AGENT
Section 3.01. Duties of Paying Agent As Paying Agent, the Bank shall, provided
adequate collected funds have been provided to it for such purpose by or on behalf of the
Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity,
Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the
Bank at the following offices:
By Hand:
U. S. Trust Company of Texas, N.A.
30 Broad Street
B-Level
New York, New York 10006-1906
By Mail:
U. S. Trust Company of Texas, N.A.
P. 0. Box84
Bowling Green Station
New York, New York 1027 4-0084
As Paying Agent, the Bank shall, provided adequate collected funds have been provided
to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on
each Security when due, by computing the amount of interest to be paid each Holder and
making payment thereof to the Holders of the Securities { or their Predecessor Securities) on the
Record Date. All payments of prihcipal and/or interest on the Securities to the registered
owners shall be accomplished { 1 ) by the issuance of checks, payable to the registered owners,
drawn on the fiduciary account provided in Section 5.05 hereof, sent by United States mail, first
class, postage prepaid, to the address appearing on the Security Register or (2) by such other
method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and
expense.
Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal
of and interest on the Securities at the dates specified in the Bond Resolution.
45043744.1 -3-
EAHIBIT A j
ARTICLE FOUR
REGISTRAR
Section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep
and maintain for and on behalf of the Issuer at the Bank Office books and records (herein
sometimes referred to as the "Security Register") for recording the names and addresses of the
Holders of the Securities, the transfer, exchange and replacement of the Securities and the
payment of the principal of and interest on the Securities to the Holders and containing such
other information as may be reasonably required by the Issuer and subject to such reasonable
regulations as the Issuer and Bank may prescribe. All transfers, exchanges and replacement of
Securities shall be noted in the Security Register. The Bank represents and warrants its office
in Dallas, Texas will at all times have immediate access to the Security Register by electronic or
other means and will be capable at all times of producing a hard copy of the Security Register at
its Dallas office for use by the Issuer.
Every Security 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
by an officer of a federal or state bank or a member of the National Association of Securities
Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly
authorized in writing.
The Bank may request any supporting documentation it feels necessary to effect a
re-registration, transfer or exchange of the Securities.
To the extent possible and under reasonable circumstances, the Bank agrees that, in
relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof
will be completed and new Securities delivered to the Holder or the assignee of the Holder in
not more than three (3) business days after the receipt of the Securities to be cancelled in an
exchange or transfer and the written instrument of transfer or request for exchange duly
executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the
Paying Agent/Registrar.
Section 4.02. Certificates. The Issuer shall provide an adequate inventory of printed
Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of
printed Securities will be kept in safekeeping pending their use and reasonable care will be
exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less
than the care maintained by the Bank for debt securities of other governments or corporations
for which it serves as registrar, or that is maintained for its own securities.
Section 4.03. Form of Security Register. The Bank, as Registrar, will maintain the
Security Register relating to the registration, payment, transfer and exchange of the Securities
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 Security Register in any form other than those
which the Bank has currently available and currently utilizes at the time.
The Security 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 Security Holders. The Bank will provide the Issuer at any time
requested by the Issuer, upon payment of the required fee, a copy of the information contained
in the Security Register. The Issuer may also inspect the information contained in the Security
45043744.1 -4-
EXHIBIT A 1
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.
The Bank will not release or disclose the contents of the Security 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 court order or as otherwise required by law. Upon receipt of a court order and
prior to the release or disclosure of the contents of the Security Register, the Bank will notify the
Issuer so that the Issuer may contest the court order or such release or disclosure of the
contents of the Security Register.
Section 4.05. Retum of Cancelled Certificates. The Bank will, at such reasonable
intervals as it determines, surrender to the Issuer, Securities in lieu of which or in exchange for
which other Securities have been issued, or which have been paid.
Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby
instructs the Bank, subject to the provisions of Section 31 of the Bond Resolution, to deliver and
issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as
long as the same does not result in an overissuance.
In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank may
execute and deliver a replacement Security of like form and tenor, and in the same
denomination and bearing a number not contemporaneously outstanding, in exchange and
substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or
stolen Security, only upon the approval of the Issuer and after (i) the filing by the Holder thereof
with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such
Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of
indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All
expenses and charges associated with such indemnity and with the preparation, execution and
delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or
destroyed, lost or stolen.
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 Securities
it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of
any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu
of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06.
ARTICLE FIVE
THE BANK
Section 5.01. Duties of Bank The Bank undertakes to perform the duties set forth
herein and agrees to use reasonable care in the performance thereof.
Section 5.02. Reliance on Documents, Etc. (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.
45043744.1 -5-
tXH\B\T l\ A.
{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 resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, 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
Securities, but is protected in acting upon receipt of Securities containing an endorsement or
instruction of transfer or power of transfer which appears on its face to be signed by the Holder
or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts
or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, note, security, or other paper or document supplied by
Issuer.
{e) 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.
{f) 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. The recitals contained herein with respect to the Issuer
and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no
responsibility for their correctness.
The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security,
or any other Person for any amount due on any Security from its own funds.
Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity,
may become the owner or pledgee of Securities 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. Moneys Held by Bank -Fiduciary Account/Collateralization. A fiduciary
account shall at all times be kept and maintained by the Bank for the receipt, safekeeping and
disbursement of moneys received from the Issuer hereunder for the payment of the Securities,
and money deposited to the credit of such account until paid to the Holders of the Securities
shall be continuously collateralized by securities or obligations which qualify and are eligible
under both the laws of the State of Texas and the laws of the United States of America to
secure and be pledged as collateral for fiduciary accounts to the extent such money is not
insured by the Federal Deposit Insurance Corporation. Payments made from such fiduciary
account shall be made by check drawn on such fiduciary account unless the owner of such
Securities shall, at its own expense and risk, request such other medium of payment.
The Bank shall be under no liability for interest on any money received by it hereunder.
Subject to the applicable unclaimed property laws of the State of Texas, any money
deposited with the Bank for the payment of the principal, premium {if any), or interest on any
45043744.1 -6-
Security and remaining unclaimed for three years after final maturity of the Security has become
due and payable will be paid by the Bank to the Issuer, and the Holder of such Security shall
thereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to
such moneys shall thereupon cease.
Section 5.06 .. Indemnification. To the extent permitted by law, the Issuer agrees to
indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred
without negligence or bad faith on its part, arising out of or in connection with its acceptance or
administration of its duties hereunder, including the cost and expense 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. lnterpleader. The Issuer and the Bank agree that the Bank may seek
adjudication of any adverse claim, demand, or controversy over its person as well as funds on
deposit, in either a Federal or State District Court located in the State and County where either
the Bank Office or the administrative offices of the Issuer is located, and agree that service of
process by certified or registered mail, return receipt requested, to the address referred to in
Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank
further agree that the Bank has the right to file a Bill of lnterpleader in any court of competent
jurisdiction to determine the rights of_ any Person claiming any interest herein.
Section 5.08. OT Services. It is hereby represented and warranted that, in the event the
Securities are otherwise qualified and accepted for "Depository Trust Company" services or
equivalent depository trust services by other organizations, the Bank has the capability and, to
the extent within its control, will comply with the "Operational Arrangements," which establishes
requirements for securities to be eligible for such type depository trust services, including, but
not limited to, requirements for the timeliness of payments and funds availability, transfer
turnaround time, and notification of redemptions and calls.
ARTICLE SIX
MISCELLANEOUS PROVISIONS
Section 6.01. Amendment This Agreement may be amended only by an agreement in
writing signed by both of the parties hereto.
Section 6.02. Assignment. (a) Except as noted in 6.02(b) below, this Agreement may
not be assigned by either party without the prior written consent of the other.
(b) Any corporation or association into which the Bank may be converted or merged,
or with which it may be consolidated, or to which it may sell, lease, or transfer its corporate trust
business and assets as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation, or transfer to which it is a party,
ipso facto, shall be and become successor trustee hereunder and vested with all of the title to
the funds deposited in trust with it for the payment of the Securities and all the trusts, powers,
rights, obligations, duties, remedies, discretions, immunities, privileges, and all other matters as
was its predecessor, without the execution or filing of any instruments or any further act, deed,
or conveyance on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
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
45043744.1 . -7 -
the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses
shown on page 9.
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. Severability. In case 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.
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 Resolution 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 Resolution, the
Bond Resolution 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. This Agreement will terminate (i) on the date of final
payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be
earlier terminated by either party upon sixty (60) days written notice; provided, however, an
early termination of this Agreement by either party shall not be effective until (a) a successor
Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and
(b) notice given to the Holders of _the Securities of the appointment of a successor Paying
Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an
early termination of this Agreement shall not occur at any time which would disrupt, delay or
otherwise adversely affect the payment of the Securities.
Upon an early termination of this Agreement, the Bank agrees to promptly transfer and
deliver the Security Register (or a copy thereof), together with other pertinent books and records
relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by
the Issuer.
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.
45043744.1 -8-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
[SEAL]
Attest:
Title:
(CITY SEAL)
Attest:
City Secretary
45043744.1
U.S. TRUST COMPANY OF TEXAS, N.A.
BY _____________ _
Title:
Address: 2001 Ross Ave., Suite 2700
Dallas, Texas 75201
CITY OF LUBBOCK, TEXAS
BY _____________ _
Mayor
Address: P. 0. Box 2000
Lubbock, Texas 79457
-9-
L:AHIBIT Ai
$9,200,000
CITY OF LUBBOC~ TEXAS
Electric Light and Power System Revenue Bonds,
Series 2001
PURCHASE CONTRACT
July 12, 2001
The Honorable Mayor and Members of the City Council
City of Lubbock
1625 13th St.
Lubbock, Texas79401
Dear Mayor and Members of the City Council:
Ordinance No. 2001-00043
U.S. Bancorp Piper Jaffray Inc. (the "Authorized Representative") and Prudential Securities
Incorporated (collectively, the "Underwriters"), offer to enter into this Purchase Contract with the
City of Lubbock, Texas (the "City"). This offer is made subject to the City's acceptance of this
Purchase Contract on or before 9:00 p.m. Central Time on July 12, 2001.
1. Purchase and Sale of the Certificates. Upon the terms and conditions and upon the
basis of the representations set forth herein, the Underwriters jointly and severally hereby agree to
purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters an
aggregate of $9,200,000 principal amount of City of Lubbock, Texas Electric Light and Power
System Revenue Bonds, Series 2001 (the "Bonds"). The Bonds shall have the maturities, interest
rates and be subject to redemption in accordance with the provisions of Exhibit A hereto and shall
be issued and secured under the provisions of the Ordinance (as defined below). The purchase price
for the Bonds shall be $9,165,166.96, representing the principal amount of the Bonds of
$9,200,000.00, less an Underwriters' discount on the Bonds of $71,781.97, less a net original issue
discount on the Bonds of $16,109.20, and plus accrued interest in the amount of$53,058.13.
U.S. Bancorp Piper Jaffray Inc. represents that it has been duly authorized to execute this
Purchase Contract and has been duly authorized to act hereunder as the Authorized Representative.
All actions that may be taken by the Underwriters may be taken by the Authorized Representative
alone.
2. Ordinance. The Bonds shall be as described in and shall be issued and secured under
the provisions of the Ordinance authorizing the issuance ~d sale of the Bonds adopted by the City
on July 12, 2001 (the "Ordinance"). The Bonds shall be secured and payable as provided in the
Ordinance.
3. Public Offering. It shall be a condition of the obligations of the City to sell and
deliver the Bonds to the Underwriters, and of the obligations of the Underwriters to purchase and
accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the
Ordinan~e shall be sold and delivered by the City and accepted and paid for by the Underwriters at
the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not
in excess of the initial public offering prices, as set forth in the Official Statement; provided however
· at least ten percent ( 10%) of the principal amount of the Bonds of each maturity shall be sold to the
"public" ( exclusive of dealers, brokers and investment bankers, etc.) at the initial offering price set
forth in the Official Statement
4. Security Deposit. Delivered to the City herewith is a corporate check of the Authorized
Representative payable to the order of the City in the amount of $92,000. The City agrees to hold
such check uncashed until the Closing to ensure the performance by the Underwriters of their
obligation to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with
the payment by the Underwriters of the purchase price of the Bonds, the City shall return such check
to the Authorized Representative as provided in Paragraphs 7 and 8 hereof. Should the City fail to
deliver the Bonds at the Closing, or should the City be unable to satisfy the conditions of the
obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth
in this Purchase Contract (unless waived by the Authorized Representative), or should such
obligations of the Underwriters be terminated for any reason permitted by this Purchase Contract,
such check shall immediately be returned to the Authorized Representative. In the event the
Underwriters fail (other than for a reason permitted hereunder) to purchase, accept delivery of and
pay for the Bonds at the Closing as herein provided, such check shall be retained by the City as and
for full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the
part of the Underwriters. The Authorized Representative hereby agrees not to stop or cause payment
on said check to be stopped unless the City has breached any of the terms of this Purchase Contract.
5. Official Statement. . The Official Statement, including the cover pages and
Appendices thereto, of the City, dated July 12, 2001, with respect to the Bonds, as further amended
only in the manner herein provided, is hereinafter called the "Official Statement." The City hereby
authorizes the Ordinance and the Official Statement and the information therein contained to be used
by the Underwriters in connection with the public offering and sale of the Bonds. The City confirms
its consent to the use by the Underwriters prior to the date hereof of the Preliminary Official
Statement, relative to the Bonds, dated June 21, 2001 (the "Preliminary Official Statement"), in
connection with the preliminary public offering and sale of the Bonds, and it is "deemed final" as of
its date, within the meaning, and for the purposes, of Rule 15c2-12 promulgated under authority
granted by the federal Securities and Exchange Act of 1934 (the "Rule"). The City agrees to
cooperate with the Underwriters to provide a supply of final Official Statements within seven business
days of the date hereof in sufficient quantities to comply with the Underwriters' obligations under the
Rule and the applicable rules of the Municipal Securities Rulemaking Board. The Underwriters will
use their best efforts to assist the City in the preparation of the final Official Statement in order to
ensure compliance with the aforementioned rules.
2
~\nlBIT B4
If at any time after the date of this Purchase Contract but before the first to occur of (i) the
date upon which the Underwriters notify the City that the period of the initial public offering of the
Bonds has expired or (ii) the date that is 90 days after the date hereof, any event shall occur that
might or would cause the Official Statement to contain any untrue statement of a material fact or to
omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, the City shall notify
the Authorized Representative, and if, in the opinion of the Authorized Representative, such event
requires the preparation and publication of a supplement or amendment to the Official Statement, the
City will at its expense supplement or amend the Official Statement in the form and in a manner
approved by the Authorized Representative and furnish to the Underwriters a reasonable number of
copies requested by the Authorized Representative in order to enable the Underwriters to comply
with the Rule.
To the best knowledge and belief of the City, the Official Statement contains information,
including financial information or operating data, as required by the Rule. The City has not failed to
comply with any undertaking specified in paragraph (b )( 5)(i) of the Rule within the last five years.
6. Representations, Warranties and Agreements of the City. On the date hereof, the
City represents, warrants and agrees as follows:
(a) The City is a home rule municipality and a political subdivision of the State of
Texas and a body politic and corporate, and has full legal right, power and authority to enter
into this Purchase Contract, to own and operate its Electric Light and Power System (the
"System''), to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to
the Underwriters as provided herein and to carry out and consummate all other transactions
contemplated by the Ordinance and this Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Ordinance, has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations contained in the
Bonds and this Purchase Contract and has duly authorized and approved the performance by
the City of its obligations contained in the Ordinance and in this Purchase Contract;
( c) The City is not in breach of or default under any applicable law or
administrative regulation of the State of Texas or the United States (including regulations of
its agencies) or any applicable judgment or decree or any loan agreement, note, order,
agreement or other instrument, except as may be disclosed in the Official Statement, to which
the City is a party or to the knowledge of the City it is otherwise subject, that would have a
material and adverse effect upon the business or financial condition of the City; and the
execution and delivery of this Purchase Contract by the City and the execution and delivery
of the Bonds and the adoption of the Ordinance by the City and compliance with the
provisions of each thereof will not violate or constitute a breach of or default under any
existing law, administrative regulation, judgment, decree or any agreement or other
instnnnent to which the City is a party or, to the knowledge of the City, is otherwise subject;
3
( d) All approvals, consents and orders of any governmental authority or agency
having jurisdiction of any matter that would constitute a condition precedent to the
performance by the City of its obligations to sell and deliver the Bonds hereunder will have
been obtained prior to the Closing;
( e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circurpstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and the Closing, the City will not,
without the prior written consent of the Underwriters, issue any additional bonds, notes or
other obligations for borrowed money payable in whole or in part from revenues of the
System, and the City will not incur any material liabilities, direct or contingent, nor will there
be any adverse change of a material nature in the financial position of the City, and, m
particular, with respect to the System;
(g) Except as described in the Official Statement, no litigation is pending or, to
the knowledge of the City, threatened in any court affecting the corporate existence of the
City, the title of its officers to their respective offices, or seeking to restrain or enjoin the
issuance or delivery of the Bonds, the collection or application of the revenues of the System
pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way
contesting or affecting the issuance, execution, delivery, payment, security or validity of the
Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance
or this Purchase Contract, or contesting the powers of the City and, in particular, the System,
or any authority for the Bonds, the Ordinance or this Purchase Contract or contesting in any
way the completeness, accuracy or fairness of the Preliminary Official Statement or the
Official Statement;
(h) The City will cooperate with the Underwriters in arranging for the qualification
of the Bonds for sale and the determination of their eligibility for investment under the laws
of such jurisdictions as the Authorized Representative designates, and will use its best efforts
to continue such qualifications in effect so long as required for distribution of the Bonds;
provided, however, that the City will not be required to execute a consent to service of
process or to qualify to do business in connection with any such qualification in any
jurisdiction;
(i) The descriptions of the Bonds and the Ordinance contained in the Official
Statement accurately summarize certain provisions of such instruments, and the Bonds, when
validly executed, authenticated and delivered in accordance with the Ordinance and sold to
the Underwriters as provided herein, will be validly issued and outstanding obligations of the
City entitled to the benefits of, and subject to the limitations contained in, the Ordinance;
4
EXHIBIT BA
(j) If prior to the Closing an event occurs affecting the City and, in particular, the
System, that is materially adverse for the purpose for which the Official Statement is to be
used and is not disclosed in the Official Statement, the City shall notify the Authorized
Representative, and if in the opinion of the City and the Authorized Representative such event
requires a supplement or amendment to the Official Statement, the City will supplement or
amend the Official Statement in a form and in a manner approved by the Authorized
Representative;
(k) The financial statements contained in the Official Statement present fairly the
financial position of the City and the System as of the date and for the period covered thereby
and are stated on a basis substantially consistent with that of the prior year's audited financial
statements;
( l) Any certificate signed by any official of the City and delivered to the
Underwriters shall be deemed a representation and warranty by the City to the Underwriters
as to the truth of the statements therein contained;
(m) The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not
be relied upon; and
(n) The City will not knowingly take or omit to take any action, which action or
omission will in any way cause the proceeds from the sale of the Bonds to be applied in a
manner other than as provided in the Ordinance or that would cause the interest of the Bonds
to be includable in gross income of the holders thereof for federal income tax purposes.
7. Closing. At 10:00 A.M., Central Time, on August 16, 2001 (the "Closing"), the City
will deliver the initial Bonds (as defined in the Ordinance) to the Underwriters and the City shall take
appropriate steps to provide The Depository Trust Company ("DTC11) with one definite securities
certificate for each year of maturity of the Bonds, and to provide the Underwriters with the other
documents hereinafter mentioned. On or prior to the date of Closing, the Underwriters shall make
arrangements with DTC for the Bonds to be immobilized and thereafter traded as book-entry only
· securities and on the date of Closing the Underwriters will accept such delivery and pay the purchase
price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds. Concurrently
with such payment by the Underwriters, the City shall return to the Authorized Representative the
check referred to in paragraph 4 hereof. Delivery and payment as aforesaid shall be made at the office
of the paying agent/registrar, as noted in the Official Statement, or such other place as shall have been
mutually agreed upon by the City and the Authorized Representative.
8. Conditions. The Underwriters have entered into this Purchase Contract in reliance
upon the representations and warranties of the City contained herein and to be contained in the
documents and instruments to be delivered at the Closing, and upon the performance by the City of
its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the
Underwriters' obligations under this Purchase Contract to purchase and pay for the Bonds shall be
5
subject to the performance by the City of its obligations to be performed hereunder and under such
documents and instruments at or prior to the Closing, and shall also be subject to the following
conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of
Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ordinance shall be in full force and effect,
and the Ordinance shall not have been amended, modified or supplemented and the Official
Statement shall not have been• amended, modified or supplemented, except as may have been
agreed to by the Authorized Representative; and (ii) the net proceeds of the sale of the Bonds
shall be deposited and applied as described in the Official Statement and in the Ordinance;
( c) At the time of the Closing, all official action of the City related to the
Ordinance shall be in full force and effect and shall not have been amended, modified or
supplemented;
( d) The City shall not have failed to pay principal or interest when due on any of
its outstanding obligations for borrowed money;
( e) At or prior to the Closing, the Underwriters shall have received each of the
following documents:
( 1) The Official Statement of the City executed on behalf of the City by
the Mayor and City Secretary;
(2) The Ordinance certified by the City Secretary under the seal of the City
as having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriters, the Ordinance shall
contain the agreement of the City, in form satisfactory to the Underwriters, that is
described mder the caption °Continuing Disclosure of Information" in the Preliminary
Official Statement;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski L.L.P.
("Bond Counsel'*) in substantially the form and substance of Appendix C to the
Official Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of
the Attorney General of Texas, approving the Bonds as required by law and the
registration certificate of the Comptroller of Public Accounts of the State of Texas;
( 5) The supplemental opinion or opinions, dated the date of Closing, of
Bond Counsel, addressed to the City and the Underwriters, which provides that the
6
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance
with the provisions of paragraph 8(f)(3) hereof, and opining to the effect that (a) the
Purchase Contract has been duly authorize~ executed and delivered by the City and
(assuming due authorization by the Underwriters) constitutes a binding and
enforceable agreement of the City in accordance with its terms; (b) in its capacity as
Bond Counsel, such firm has reviewed the information in the Official Statement under
the captions or subcaptions subcaptions "The Bonds" ( exclusive of the information
under the subcaptions "Book-Entry Only System" and "Holders' Remedies"),
"Selected Provisions of the Bond Ordinance,'' "Tax Matters," "Continuing Disclosure
of Information" (exclusive of the information under the subcaption "Compliance with
Prior Undertakings"), "Legal Opinions"( exclusive of the last two sentences of the first
paragraph thereof) and "Legal Investments and Eligibility to Secure Public Funds in
Texas" and such firm is of the opinion that such descriptions present a fair and
accurate summary of the provisions of the laws and instruments therein described an~
with respect to the Bonds, such information conforms to the Ordinance; and ( c) the
Bonds are exempt from registration pursuant to the Securities Act of 1933, as
amende~ and the Ordinance is exempt from qualification as an indenture pursuant to
the Trust Indenture Act of 1939, as amended;
(6) An opinion of McCall, Parkhurst & Horton L.L.P., Underwriters'
Counsel addressed to the Underwriters, and dated the date of Closing to the effect
that: (i) the Bonds are exempt securities within the meaning of Section 3(a)(2) of the
Securities Act of 1933, as amende~ and it is not necessary in connection with the sale
of the Bonds to the public to register the Bonds under the Securities Act of 1933, as
amended, or to qualify the Ordinance under the Trust Indenture Act of 1939, as
amended; and (ii) in their participation in the preparation of the Official Statement,
nothing has come to the attention of said firm that would lead them to believe that the
Official Statement ( excluding the financial and statistical data and forecasts included
therein, all as to which no view need be expressed) contains any untrue statement of
a material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the Mayor and City
Manager, of the City, to the effect that (i) the representations and warranties of the
City contained herein are true and correct in all material respects on and as of the date
of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the
Official Statement, no litigation is pending or, to the knowledge of such persons,
threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or
the levy, collection or application of the revenues of the System pledged or to be
pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in
any way contesting or affecting the validity of the Bonds, the Ordinance or this
Purchase Contract, or. contesting the powers of the City or the authorization of the
Bonds or the Ordinance, or contesting in any way the accuracy, completeness or
fairness of the Official Statement (but in lieu of or in conjunction with such certificate,
7
tXHIBIT ~ -~
the Underwriters may, in their sole discretion, accept certificates or opinions of the
City Attorney that, in the opinion thereof, the issues raised in any such pending or
threatened litigation are without substance or that the contentions of all plaintiffs
therein are without merit); (iii) to the best of their knowledge, no event affecting the
City has occurred since the date of the Official Statement that should be disclosed in
the Official Statement for the purpose for which it is to be used or that it is necessru:y
to disclose therein in order to make the statements and information therein not
misleading in any respect; and (iv) that there has not been any material and adverse
change in the affairs or financial condition of the City since September 30, 2000, the
latest date as to which audited financial information is available;
(8) An opinion of the City Attorney addressed to the Underwriters and
dated the date of Closmg substantially in the form and substance of Exhibit B hereto;
(9) A certificate, dated the date of the Closing, of an appropriate officer
of the City to the effect that, on the basis of the facts, estimates and circumstances in
effect on the date of delivery of the Bonds, it is not expected that the proceeds of the
Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds
within the meaning of Section 148 of the Internal Revenue Code of 1986, as
amended;
(10) Evidence of the rating on the Bonds, which shall be "Aaa" by Moody's
Investors Service, Inc. ("Moody1s"), "AAA" by Standard and Poor's Corporation, a
division of the McGraw-Hill Companies, Inc. ("S&P"), and "AAA" by Fitch, Inc.
("Fitch"), shall be delivered in a form acceptable to the Underwriters;
( 11) A copy of the policy of municipal bond insurance issued by AMBAC,
Inc. with respect to the Bonds; and
(12) Such additional legal opllllons, certificates, instruments and other
documents as Bond Counsel or the Underwriters may reasonably request to evidence
the truth, accuracy and completeness, as of the date hereof and as of the date of
Closing, of the City's representations and warranties contained herein and of the
statements and information contained in the Official Statement and the due
performance and satisfaction by the City at or prior to the date of Closing of all
agreements then to be performed and all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above
or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof
if, but only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if
the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall
8
EXHIBIT B
be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall
terminate, the security deposit referred to m Paragraph 4 of this Purchase Contract shall be returned
to the Authorized Representative and neither the Underwriters nor the City shall be under further
obligation hereunder, except that the respective obligations of the City and the Underwriters set forth
in Paragraphs 10 and 12 hereof shall continue in full force and effect.
9. Termination. The Underwriters may terminate their obligation to purchase at any
time before the Closing if any of the following should occur:
(a) (i) Legislation shall have been enacted by the Congress of the United States,
or recommended to the Congress for passage by the President of the United States or
favorably reported for passage to either House of the Congress by any Committee of such
House; or (ii) a decision shall have been rendered by a court established under Article ill of
the Constitution of the United States or by the United States Tax Court; or (iii) an order,
ruling or regulation shall have been issued or proposed by or on behalf of the Treasury
Department of the United States or the Internal Revenue Service or any other agency of the
United States; or (iv) a release or official statement shall have been issued by the President
of the United States or by the Treasury Department of the United States or by the Internal
Revenue Service, the effect of which, in any such case described in clause (i), (ii), (iii), or (iv),
would be to impose, directly or indirectly, federal income taxation upon interest received on
obligations of the general character of the Bonds or upon income of the general character to
be derived by the City, other than any imposition of federal income taxes upon interest
received on obligations of tht: general character as the Bonds on the date hereof and other
than as disclosed in the Official Statement, in such a manner as in the judgment of the
Authorized Representative would materially impair the marketability or materially reduce the
market price of obligations of the general character of the Bonds.
(b) Any action shall have been taken by the Securities and Exchange Commission
or by a court that would require registration of any security under the Securities Act of 1933,
as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as
amended, in connection with the public offering of the Bonds, or any action shall have been
taken by any court or by any governmental authority suspending the use of the Preliminary
Official Statement or the Official Statement or any amendment or supplement thereto, or any
proceeding for that purpose shall have been initiated or threatened in any such court or by any
such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment
shall be proposed; or (ii) legislation shall be enacted; or (iii) a decision shall have been
rendered as to matters of Texas law; or (iv) any order, ruling or regulation shall have been
issued or proposed by or on behalf of the State of Texas by an official, agency or department
thereof, affecting the tax status of the City, its property or income, its bonds or other
obligations (including the Bonds) or the interest thereon, that in the judgment of the
Authorized Representative would materially affect the market price of the Bonds.
9
EXHIBIT B ~
( d) (i) A general suspension of trading in securities shall have occurred on the
New York Stock Exchange; or (ii) the United States shall have become engaged in hostilities
(including the escalation of any hostilities existing on the date hereof, whether foreseeable),
the effect of which, in either case described in clause (i) and (ii), that, in the judgment of the
Authorized Representative, would materially affect the market price of the Bonds.
(e) An event described in Paragraph 6(j) hereof occurs that, in the opinion of the
Authorized Representative, requires a supplement or amendment to the Official Statement
that is deemed by them, in their discretion, to adversely affect the market for the Bonds.
(f) A general banking moratorium shall have been declared by authorities of the
United States, the State of New York or the State of Texas.
(g) A lowering of the ratings of "Aaa,1' "AAA" and "AAA", initially assigned to
the Bonds by Moody's, S&P and Fitch, respectively, shall occur prior to the Closing.
10. Expenses. (a) The City shall pay all expenses incident to the issuance of the Bonds,
including but not limited to: (i) the cost of the preparation, printing and distribution of the Preliminary
Official Statement and the Official Statement; (ii) the cost of the preparation and printing of the
Bonds; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees and disbursements of the
City's accountants, advisors, and of any other experts or consultants retained by the City; (v) the fees
for the bond ratings and any travel or other expenses incurred incident thereto; and ( vi) the premium
for municipal bond insurance policy pertaining to the Bonds.
(b) The Underwriters shall pay (i) all advertising expenses in connection with the offering
of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents; and (iii)
the fee of McCall, Parkhurst & Horton L.L.P. for such firm's opinion required by Paragraph 8(e)(6)
hereof.
1 L Notices. Any notice or other communication to be given to the City under this
Purchase Contract may be given by delivering the same in writing at the address for the City set forth
above, and any notice or other communication to be given to the Underwriters under this Purchase
Contract may be given by delivering the same in writing to U.S. Bancorp Piper Jaffray Inc., 1100
Louisiana Street, Suite 3430, Houston,_Texas 77002, Attention: Dale Lehman.
12. Parties in Interest This Purchase Contract is made solely for the benefit of the City
and the Underwriters (including the successors or assigns of any Underwriter) and no other person
shall acquire or have any right under this contract. The City's representations, warranties and
agreements contained in this Purchase Contract that exist as of the Closing, and without regard to
any change in fact or circumstance occurring subsequent to the Closing, shall remain operative and
in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters,
and (ii) delivery of any payment for the Bonds hereunder; and the City's representations and
warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full force
and effect, regardless of any termination of this Purchase Contract.
10
EXHIBIT B I
13. Severability. If any provision of this Purchase Contract shall be held or deemed to
be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or unenforceable in any other case
or circumstances, or of rendering any other provision inoperative or unenforceable to any extent
whatever.
14. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
15. Execution in Counterparts. This Purchase Contract may be executed in any number
of counterparts, all of which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Purchase Contract by signing any such counterpart.
16. Section Headings. Section headings have been inserted in this Contract as a matter
of convenience of reference only, and it is agreed that such section headings are not a part of this
Contract and will not be used in the interpretation of any provisions of this Contract.
17. Status of the Underwriters. It is understood and agreed that for all purposes of this
Contract and the transactions contemplated hereby the Underwriters have, in their role as
underwriters, acted solely as independent contractors and have not acted as financial or investment
advisors, fiduciaries or agents to or for the City, whether directly or indirectly through any person.
The City recognizes that the Underwriters expect to profit from the acquisition and potential
distribution of the Bonds.
[Execution page follows.]
11
tXHIBIT 8
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
City of Lubbock, Texas Electric Light and Power System
Revenue Bonds, Series 2001
Maturity Principal Interest Rate Yield
{4/15) Amount {%} {%}
2002 $460,000 4.000 2.80
2003 460,000 4.000 3.25
2004 460,000 4.000 3.54
2005 460,000 4.000 3.73
2006 460,000 4.250 3.89
2007 460,000 4.250 4.08
2008 460,000 4.250 4.25
2009 460,000 4.350 4.37
2010 460,000 4.400 4.48
2011 460,000 4.500 4.58
2012 460,000 4.625 4.75
2013 460,000 4.750 4.86
2014 460,000 4.900 4.96
2015 460,000 5.000 5.06
2016 460,000 5.000 5.13
2017 460,000 5.150 5.19
2018 460,000 5.150 5.24
2019 460,000 5.200 5.28
2021 920,000 5.250 5.32
1he Bonds maturing on and after April 15, 2013 are subject to redemption prior to maturity at the
option of the City on April 15, 2012 .or any date thereafter at a price of par plus accrued interest to
the date of redemption. In addition, the Bonds maturing on April 15 in the year 2021 (the "Term
Bonds") are subject to mandatory redemption prior to maturity. The Term Bonds shall be redeemed
by the Paying Agent/Registrar in part prior to matmity for the principal amount thereof and accrued
interest to the date of redemption, and without premium, on the dates and in the principal amounts
as set forth in the following schedule:
(*) Final maturity.
Bonds Maturing 4/15/21
Redemption Date
4/15/20
4/15/21 *
A-1
Principal
Amount
$460,000
460,000
EXHIBIT B :t
EXHIBITB
OPINION OF THE CITY ATTORNEY
August 16, 2001
U.S. Bancorp Piper Jaffiay Inc.
Prudential Securities Incorporated
% U.S. Bancorp Piper Jaffray Inc.
1100 Louisiana Street
Suite 3430
Houston, Texas 77002
Ladies and Gentlemen:
I am the City Attorney for the City of Lubbock, Texas (the "City") at the time of the issuance
and sale of the "City of Lubbock, Texas Electric Light and Power System Revenue Bonds, Series
2001," in the aggregate principal amount of $9,200,000 (the "Bonds"), pursuant to the provisions of
an ordinance duly adopted by the City Council of the City on July 12, 2001 (the "Ordinance").
Capitalized terms not otherwise defined in this opinion have the meanings assigned in the Purchase
Contract.
In my capacity as City Attorney to the City, I have reviewed such agreements, documents,
certificates, opinions, letters, and other papers as I have deemed necessary or appropriate in rendering
the opinions set forth below.
In making my review, I have assumed the authenticity of all documents and agreements
submitted to me as originals conformity to the originals of all documents and agreements submitted
to me as certified or photostatic copies, the authenticity of the originals of such latter documents and
agreements, and the accuracy of the statement contained in such documents.
Based upon the foregoing, and subject to the qualifications and exceptions hereinafter set
forth, I am of the opinion that under the applicable laws of the United States of America and the State
of Texas in force and effect on the date hereof:
1. Based on reasonable inquiry made of the responsible City employees and public officials, the
City is not, to the best of my knowledge, in breach of or in default under any applicable law
or administrative regulation of the State of Texas or the United States, or any applicable
judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the City is party or is othenvise subject and, to the
best of my knowledge after due inquiry, no event has occurred and is continuing that, with
the passage of time or the giving of notice, or both, would constitute such a default by the
City under any of the foregoing; and the execution and delivery of the Purchase Contract and
the Bonds, and the adoption of the Ordinance and compliance with the provisions of each of
such agreements or instruments does not constitute a breach of or default under any
applicable law or administrative regulation of the State of Texas or the United States or any
applicable judgment or decree or, to the best of my knowledge, any trust agreement, loan
agreement, bond, note, resolution, ordinance, agreement or other instrument to which the
City is a party or is othenvise subject; and
B-1
EXHIBIT B ~
2. Except as disclosed in the Official Statement, no litigation is pending, or, to my knowledge,
threatened, in any court in any way (a) challenging the titles of the Mayor or any of the other
members of the City Council to their respective offices, (b) seeking to restrain or enjoin the
issuance or delivery of any of the Bonds, or the collection of taxes levied or to be levied to
pay the principal of and interest on the Bonds, (c) contesting or affecting the validity or
enforceability of the Bonds, the Ordinance or the Purchase Contract, ( d) contesting the
powers of the City or any authority for the issuance of the Bonds, or the adoption of the
Ordinance, or (e) that would have a material and adverse effect on the financial condition of
the City, including, particularly on the financial condition of the Electric Light and Power
System of the City.
This opinion is furnished solely for your benefit and may be relied upon only by the addresses
hereof or anyone to whom specific permission is given in writing by me.
Very truly yours,
B-2
Exhibit C
to
Ordinance
The following information is referred to in Section 42 of this Ordinance.
. .
Annual Financial S_tatements and Operating Data
Ordinance No. 2001-00043
The financial information and operating data with respect to the City to be provided
annually in accordance with such Section are as specified (and included in the Appendix or
under the headings of the Official Statement referred to) below:
1. The financial statements of the City appended to the Official Statement as
Appendix B, but for the most recently concluded fiscal year.
2. The information contained in Tables numbered 1 through 13 in the Official
Statement.
Accounting Principles
The accounting principles referred to in such Section are the generally accepted
accounting principles as applicable to governmental units as prescribed by The Government
Accounting Standards Board.
45043591.1
$9,200,000
CITY OF LUBBOCK, TEXAS
Electric Light and Power System Revenue Bonds,
Series 2001
PURCHASE CONTRACT
July 12, 2001
The Honorable Mayor and Members of the City Council
City of Lubbock
1625 13th St.
Lubbock, Texas79401
Dear Mayor and Members of the City Council:
Ordinance No. 2001-00043
U.S. Bancorp Piper Jaffray Inc. (the "Authorized Representativeu) and Prudential Securities
Incorporated (collectively, the "Undeiwriters"), offer to enter into this Purchase Contract with the
City of Lubbock, Texas (the "City"). This offer is made subject to the Cityts acceptance of this
Purchase Contract on or before 9:00 p.m. Central Time on July 12, 2001.
1. Purchase and Sale of the Certificates. Upon the tenns and conditions and upon the
basis of the representations set forth herein, the Underwriters jointly and severally hereby agree to
purchase from the City, and the City hereby agrees to sell and deliver to the Underwriters an
aggregate of $9,200,000 principal amount of City of Lubbock, Texas Electric Light and Power
System Revenue Bonds, Series 2001 (the f!Bonds"). The Bonds shall have the maturities, interest
rates and be subject to redemption in accordance with the provisions of Exhibit A hereto and shall
be issued and secured under the provisions of the Ordinance (as defined below). The purchase price
for the Bonds shall be $9,165,166.96, representing the principal amount of the Bonds of
$9,200,000.00, less an Underwriters' discount on the Bonds of $71,781.97, less a net original issue
discount on the Bonds of$16,109.20, and plus accrued interest in the amount of$53,058.13.
U.S. Bancorp Piper Jaffiay Inc. represents that it has been duly authorized to execute this
Purchase Contract and has been dulY. authorized to act hereunder as the Authorized Representative.
All actions that may be taken by the Undeiwriters may be taken by the Authorized Representative
alone.
2. Ordinance. 1be Bonds shall be as described in and shall be issued and secured under
the provisions of the Ordinance authorizing the issuance and sale of the Bonds adopted by the City
on July 12, 2001 (the "Ordinance"). The Bonds shall be secured and payable as provided in the
Ordinance.
3. Public Offering. It shall be a condition of the obligations of the City to sell and
deliver the Bonds to the Underwriters, and of the obligations of the Underwriters to purchase and
accept delivery of the Bonds, that the entire principal amount of the Bonds authorized by the
Ordinance shall be sold and delivered by the City and accepted and paid for by the Underwriters at
the Closing. The Underwriters agree to make a bona fide public offering of all of the Bonds, at not
in excess of the initial public offering prices, as set forth in the Official Statement; provided however
at least ten percent (10%) of the principal amount of the Bonds of each maturity shall be sold to the
"public" (exclusive of dealers, brokers and investment bankers, etc.) at the initial offering price set
forth in the Official Statement
4. Security Deposit. Delivered to the City herewith is a corporate check of the Authorized
Representative payable to the order of the City in the amount of $92,000. The City agrees to hold
such check uncashed until the Closing to ensure the performance by the Underwriters of their
obligation to purchase, accept delivery of and pay for the Bonds at the Closing. Concurrently with
the payment by the Underwriters of the purchase price of the Bonds, the City shall return such check
to the Authorized Representative as provided in Paragraphs 7 and 8 hereof. Should the City fail to
deliver the Bonds at the Closing, or should the City be unable to satisfy the conditions of the
obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds, as set forth
in this Purchase Contract (unless waived by the Authorized Representative), or should such
obligations of the Underwriters be terminated for any reason permitted by this Purchase Contract,
such check shall immediately be returned to the Authorized Representative. In the event the
Underwriters fail ( other than for a reason permitted hereunder) to purchase, accept delivery of and
pay for the Bonds at the Closing as herein provided, such check shall be retained by the City as and
for full liquidated damages for such failure of the Underwriters and for any defaults hereunder on the
part of the Underwriters. The Authorized Representative hereby agrees not to stop or cause payment
on said check to be stopped unless the City has breached any of the tenns of this Purchase Contract.
5. Official Statement. . The Official Statement, including the cover pages and
Appendices thereto, of the City, dated July 12, 2001, with respect to the Bonds, as further amended
only in the manner herein provided, is hereinafter called the "Official Statement." The City hereby
authorizes the Ordinance and the Official Statement and the information therein contained to be used
by the Underwriters in connection with the public offering and sale of the Bonds. The City confinns
its consent to the use by the Underwriters prior to the date hereof of the Preliminary Official
Statement, relative to the Bonds, dated June 21, 2001 (the "Preliminary Official Statement"), in
connection with the preliminary public offering and sale of the Bonds, and it is "deemed final" as of
its date, within the meaning, and for the purposes, of Rule 15c2-12 promulgated under authority
granted by the federal Securities and Exchange Act of 1934 (the "Rule*'). The City agrees to
cooperate with the Underwriters to provide a supply of final Official Statements within seven business
days of the date hereof in sufficient quantities to comply with the Underwriters' obligations under the
Rule and the applicable rules of the Municipal Securities Rulemaking Board. The Underwriters will
use their best efforts to assist the City in the preparation of the final Official Statement in order to
ensure compliance with the aforementioned rules.
2
If at any time after the date of this Purchase Contract but before the first to occur of (i) the
date upon which the UndeIWriters notify the City that the period of the initial public offering of the
Bonds has expired or (ii) the date that is 90 days after the date hereof, any event shall occur that
might or would cause the Official Statement to contain any untrue statement of a material fact or to
omit to state a material fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, the City shall notify
the Authorized Representative, and if, in the opinion of the Authorized Representative, such event
requires the preparation and publication of a supplement or amendment to the Official Statement, the
City will at its expense supplement or amend the Official Statement in the form and in a manner
approved by the Authorized Representative and furnish to the UndeIWriters a reasonable number of
copies requested by the Authorized Representative in order to enable the UndeIWriters to comply
with the Rule.
To the best knowledge and belief of the City, the Official Statement contains information,
including financial information or operating data, as required by the Rule. The City has not failed to
comply with any undertaking specified in paragraph (b )(5Xi) of the Rule within the last five years.
6. Representations, Warranties and Agreements of the City. On the date hereof, the
City represents, warrants and agrees as follows:
(a) The City is a home rule municipality and a political subdivision of the State of
Texas and a body politic and cmporate, and has full legal right, power and authority to enter
into this Purchase Contract, to own and operate its Electric Light and Power System (the
''System'1, to adopt the Ordinance, to sell the Bonds, and to issue and deliver the Bonds to
the Underwriters as provided herein and to carry out and consummate all other transactions
contemplated by the Ordinance and this Purchase Contract;
(b) By official action of the City prior to or concurrently with the acceptance
hereof, the City has duly adopted the Ordinance, has duly authorized and approved the
execution and delivery of, and the performance by the City of the obligations contained in the
Bonds and this Purchase Contract and has duly authorized and approved the performance by
the City of its obligations contained in the Ordinance and in this Purchase Contract;
( c) The City is not in breach of or default under any applicable law or
administrative regulation of the State of Texas or the United States (including regulations of
its agencies) or any applicable judgment or decree or any loan agreement, note, order,
agreement or other instrument., except as may be disclosed in the Official Statement, to which
the. City is a party or to the knowledge of the City it is otherwise subject, that would have a
material and adverse effect upon the business or financial condition of the City; and the
execution and delivery of this Purchase Contract by the City and the execution and delivery
of the Bonds and the adoption· of the Ordinance by the City and compliance with the
provisions of each thereof will not violate or constitute a breach of or default under any
existing law, administrative regulation, judgment, decree or any agreement or other
instrument to which the City is a party or, to the knowledge of the City, is otherwise subject;
3
( d) All approvals, consents and orders of any governmental authority or agency
having jurisdiction of any matter that would constitute a condition precedent to the
performance by the City of its obligations to sell and deliver the Bonds hereunder will have
been obtained prior to the Closing;
( e) At the time of the City's acceptance hereof and at the time of the Closing, the
Official Statement does not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circurpstances under which they were made, not misleading;
(f) Between the date of this Purchase Contract and the Closing, the City will not,
without the prior written consent of the Underwriters, issue any additional bonds, notes or
. other obligations for borrowed money payable in whole or in part from revenues of the
System, and the City will not incur any material liabilities, direct or contingent, nor will there
be any adverse change of a material nature in the financial position of the City, and, in
particular, with respect to the System;
(g) Except as described in the Official Statement, no litigation is pending or, to
the knowledge of the City, threatened in any court affecting the corporate existence of the
City, the title of its officers to their respective offices, or seeking to restrain or enjoin the
issuance or delivery of the Bonds, the collection or application of the revenues of the System
pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way
contesting or affecting the issuance, execution, delivery, payment, security or validity of the
Bonds, or in any way contesting or affecting the validity or enforceability of the Ordinance
or this Purchase Contract, or contesting the powers of the City and, in particular, the System,
or any authority for the Bonds, the Ordinance or this Purchase Contract or contesting in any
way the completeness, accuracy or fairness of the Preliminary Official Statement or the
Official Statement;
(h) The City will cooperate with the Underwriters in arranging for the qualification
of the Bonds for sale and the determination of their eligibility for investment under the laws
of such jurisdictions as the Authorized Representative designates, and will use its best efforts
to continue such qualifications in effect so long as required for distribution of the Bonds;
provided, however, that the City will not be required to execute a consent to service of
process or to qualify to do business in connection with any such qualification in any
jurisdiction;
(i) The descriptions of the Bonds and the Ordinance contained in the Official
Statement accurately summarize certain provisions of such instruments, and the Bonds, when
validly executed, authenticated and delivered in accordance with the Ordinance and sold to
the Underwriters as provided herein, will be validly issued and outstanding obligations of the
City entitled to the benefits of, and subject to the limitations contained in, the Ordinance;
4
G) If prior to the Closing an event occurs affecting the City and, in particular, the
System, that is materially adverse for the purpose for which the Official Statement is to be
used and is not disclosed in the Official Statement, the City shall notify the Authorized
Representative, and if in the opinion of the City and the Authorized Representative such event
requires a supplement or amendment to the Official Statement, the City will supplement or
amend the. Official Statement in a form and in a manner approved by the Authorized
Representative;
(k) The financial statements contained in the Official Statement present fairly the
financial position of the City and the System as of the date and for the period covered thereby
and are stated on a basis substantially consistent with that of the prior year's audited financial
statements;
([) Any certificate signed by any official of the City and delivered to the
Underwriters shall be deemed a representation and warranty by the City to the Underwriters
as to the truth of the statements therein contained;
(m) The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not
be relied upon; and
(n) 'The City will not knowingly take or omit to take any action, which action or
omission will in any way cause the proceeds from the sale of the Bonds to be applied in a
manner other than as provided in the Ordinance or that would cause the interest of the Bonds
to be includable in gross income of the holders thereof for federal income tax purposes.
7. Closing. At 10:00 AM., Central Time, on August 16, 2001 (the "Closing11), the City
will deliver the initial Bonds ( as defined in the Ordinance) to the Underwriters and the City shall take
appropriate steps to provide The Depository Trust Company ("DTC') with one definite securities
certificate for each year of maturity of the Bonds, and to provide the Underwriters with the other
documents hereinafter mentioned On or prior to the date of Closing, the Underwriters shall make
arrangements with DTC for the Bonds to be immobilized and thereafter traded as book-entry only
securities and on the date of Closing the Underwriters will accept such delivery and pay the purchase
price of the Bonds as set forth in Paragraph 1 hereof in immediately available funds. Concurrently
with such payment by the Underwriters, the City shall return to the Authorized Representative the
check referred to in paragraph 4 hereof Delivery and payment as aforesaid shall be made at the office
of the paying agent'registrar, as noted in the Official Statement, or such other place as shall have been
mutually agreed upon by the City and the Authorized Representative.
8. Conditions. The Underwriters have entered into this Purchase Contract in reliance
upon the representations and warranties of the City contained herein and to be contained in the
documents and instruments to be delivered at the Closing, ~d upon the performance by the City of
its obligations hereunder, both as of the date hereof and as of the date of Closing. Accordingly, the
Underwriters' obligations under this Purchase Contract to purchase and pay for the Bonds shall be
s
subject to the performance by the City of its obligations to be performed hereunder and under such
documents and instruments at or prior to the Closing, and shall also be subject to the following
conditions:
(a) The representations and warranties of the City contained herein shall be true,
complete and correct in all material respects on the date hereof and on and as of the date of
Closing, as if made on the date of Closing;
(b) At the time of the Closing, (i) the Ord.µlance shall be in full force and effect,
and the Ordinance shall not have been amended, modified or supplemented and the Official
Statement shall not have been-amended, modified or supplemented, except as may have been
agreed to by the Authorized Representative; and (ii) the net proceeds of the sale of the Bonds
shall be deposited and applied as described in the Official Statement and in the Ordinance;
( c) At the time of the Closing, all official action of the City related to the
Ordinance shall be in full force and effect and shall not have been amended, modified or
supplemented;
( d) The City shall not have failed to pay principal or interest when due on any of
its outstanding obligations for borrowed money;
( e) At or prior to the Closing, the Underwriters shall have received each of the
following documents:
( l) The Official Statement of the City executed on behalf of the City by
the Mayor and City Secretary;
(2) The Ordinance certified by the City Secretary under the seal of the City
as having been duly adopted by the City and as being in effect, with such changes or
amendments as may have been agreed to by the Underwriters, the Ordinance shall
contain the agreement of the City, in form satisfactory to the Underwriters, that is
described under the caption "Continuing Disclosure of Infonnation11 in the Preliminaty
Official Statement;
(3) The opinion, dated the date of Closing, of Fulbright & Jaworski L.L.P.
("Bond Counsel") in substantially the form and substance of Appendix C to the
Official Statement;
(4) An opinion or certificate, dated on or prior to the date of Closing, of
the Attorney General of Texas, approving the Bonds as required by law and the
registration certificate of the Comptroller of Public Accounts of the State of Texas;
(5) The supplemental opinion or opinions, dated the date of Closing, of
Bond Counsel, addressed to the City and the Underwriters, which provides that the
6
Underwriters may rely upon the opinion of Bond Counsel delivered in accordance
with the provisions of paragraph 8(f)(3) hereof, and opining to the effect that (a) the
Purchase Contract has been duly authorized, executed and delivered by the City and
( assuming due authorization by the Underwriters) constitutes a binding and
enforceable agreement of the City in accordance with its terms; (b) in its capacity as
Bond Counsel, such firm has reviewed the information in the Official Statement under
the captions or subcaptions subcaptions "The Bonds" (exclusive of the information
under the subcaptions "Book-Entry Only System" and "Holders' Remedies"),
"Selected Provisions of the Bond Ordinance,11 "Tax Matters," "Continuing Disclosure
of Information" ( exclusive of the information under the subcaption "Compliance with
Prior Undertakings"), "Legal Opinions"(exclusive of the last two sentences of the first
paragraph thereof) and "Legal Investments and Eligibility to Secure Public Funds in
Texas" and such firm is of the opinion that such descriptions present a fair and
accurate summary of the provisions of the laws and instruments therein described and,
with respect to the Bonds, such information conforms to the Ordinance; and ( c) the
Bonds are exempt from registration pursuant to the Securities Act of 1933, as
amended, and the Ordinance is exempt from qualification as an indenture pursuant to
the Trust Indenture Act of 1939, as amended;
(6) An opinion of McCall, Parkhurst & Horton L.L.P., Underwriters'
Counsel addressed to the Underwriters, and dated the date of Closing to the effect
that: (i) the Bonds are exempt securities within the meaning of Section 3(aX2) of the
Securities Act of 1933, as amended, and it is not necessary in connection with the sale
of the Bonds to the public to register the Bonds under the Securities Act of 1933, as
amended, or to qualify the Ordinance under the Trust Indenture Act of 1939, as
amended; and (ii) in their participation in the preparation of the Official Statement,
nothing has come to the attention of said firm that would lead them to believe that the
Official Statement ( excluding the financial and statistical data and forecasts included
therein, all as to which no view need be expressed) contains any untrue statement of
a material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading;
(7) A certificate, dated the date of Closing, signed by the Mayor and City
Manager of the City, to the effect that (i) the representations and warranties of the
City contained herein are true and correct in all material respects on and as of the date
of Closing as if made on the date of Closing; (ii) except to the extent disclosed in the
Official Statement, no litigation is pending or, to the knowledge of such persons,
threatened in any court to restrain or enjoin the issuance or delivery of the Bonds, or
the levy, collection or application of the revenues of the System pledged or to be
pledged to pay the principal of and interest on the Bonds, or the pledge thereof, or in
any way contesting or affecting the validity of the Bonds, the Ordinance or this
Purchase Contract, or. contesting the powers of the City or the authorization of the
Bonds or the Ordinance, or contesting in any way the accuracy, completeness or
fairness of the Official Statement (but in lieu of or in conjunction with such certificate,
7
the Underwriters may, in their sole discretion, accept certificates or opinions of the
City Attorney that, in the opinion thereof, the issues raised in any such pending or
threatened litigation are without substance or that the contentions of all plaintiffs
therein are without merit); (iii) to the best of their knowledge, no event affecting the
City has occurred since the date of the Official Statement that should be disclosed in
the Official Statement for the purpose for which it is to be used or that it is necessary
to disclose therein in order to make the statements and information therein not
misleading in any respect; and (iv) that there has not been any material and adverse
change in the affairs or financial condition of the City since September 30, 2000, the
latest date as to which audited financial infonnation is available;
(8) An opinion of the City Attorney addressed to the Underwriters and
dated the date of Closmg substantially in the fonn and substance of Exhibit B hereto;
(9) A certificate, dated the date of the Closing, of an appropriate officer
of the City to the effect that, on the basis of the facts, estimates and circumstances in
effect on the date of delivery of the Bonds, it is not expected that the proceeds of the
Bonds will be used in a manner that would cause the Bonds to be arbitrage bonds
within the meaning of Section 148 of the Internal Revenue Code of 1986, as
amended;
(10) Evidence of the rating on the Bonds, which shall be "Aaa" by Moody's
Investors Service, Inc. ("Moody's"), "AAA" by Standard and Poor's Corporation, a
division of the McGraw•Hill Companies, Inc. ("S&P"), and "AAA" by Fitch, Inc.
("Fitch"), shall be delivered in a fonn acceptable to the Underwriters;
( 11) A copy of the policy of municipal bond insurance issued by AMBAC,
Inc. with respect to the Bonds; and
(12) Such additional legal opllllons, certificates, instruments and other
documents as Bond Counsel or the Underwriters may reasonably request to evidence
the truth, accuracy and completeness, as of the date hereof and as of the date of
Closing, of the City's representations and warranties contained herein and of the
statements and information contained in the Official Statement and the due
perfonnance and satisfaction by the City at or prior to the date of Closing of all
agreements then to be perfonned and all conditions then to be satisfied by the City.
All of the opinions, letters, certificates, instruments and other documents mentioned above
or elsewhere in this Purchase Contract shall be deemed to be in compliance with the provisions hereof
if, but only if, they are satisfactory to the Underwriters.
If the City shall be unable to satisfy the conditions to the obligations of the Underwriters to
purchase, to accept delivery of and to pay for the Bonds as set forth in this Purchase Contract, or if
the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall
8
be terminated for any reason pennitted by this Purchase Contract, this Purchase Contract shall
tenninate, the security deposit referred to in Paragraph 4 of this Purchase Contract shall be returned
to the Authorized Representative and neither the Underwriters nor the City shall be under further
obligation hereunder, except that the respective obligations of the City and the Underwriters set forth
in Paragraphs 10 and 12 hereof shall continue in full force and effect.
9. Termination. The Underwriters may tenninate their obligation to purchase at any
time before the Closing if any of the following should occur:
(a) (i) Legislation shall have been enacted by the Congress of the United States,
or recommended to the Congress for passage by the President of the United States or
favorably reported for passage to either House of the Congress by any Committee of such
House; or (ii) a decision shall have been rendered by a court established under Article ill of
the Constitution of the United States or by the United States Tax Court; or (iii) an order,
ruling or regulation shall have been issued or proposed by or on behalf of the Treasury
Department of the United States or the Internal Revenue Service or any other agency of the
United States; or (iv) a release or official statement shall have been issued by the President
of the United States or by the Treasury Department of the United States or by the Internal
Revenue Service, the effect of which, in any such case descnbed in clause (i), (ii), (iii), or (iv),
would be to impose, directly or indirectly, federal income taxation upon interest received on
obligations of the general character of the Bonds or upon income of the general character to
be derived by the City, other than any imposition of federal income taxes upon interest
received on obligations of the general character as the Bonds on the date hereof and other
than as disclosed in the Official Statement, in such a manner as in the judgment of the
Authorized Representative would materially impair the marketability or materially reduce the
market price of obligations of the general character of the Bonds.
(b) Any action shall have been taken by the Securities and Exchange Commission
or by a court that would require registration of any security under the Securities Act of 1933,
as amended, or qualification of any indenture under the Trust Indenture Act of 1939, as
amended, in connection with the public offering of the Bonds, or any action shall have been
taken by any court or by any governmental authority suspending the use of the Preliminary
Official Statement or the Official Statement or any amendment or supplement thereto, or any
proceeding for that pwpose shall have been initiated or threatened in any such court or by any
such authority.
(c) (i) The Constitution of the State of Texas shall be amended or an amendment
shall be proposed; or (ii) legislation shall be enacted; or (iii) a decision shall have been
rendered as to matters of Texas law; or (iv) any order, ruling or regulation shall have been
issued or proposed by or on behalf of the State of Texas by an official, agency or department
thereof, affecting the tax status of the City, its property or income, its bonds or other
obligations (including the Bonds) or the interest thereon, that in the judgment of the
Authorized Representative would materially affect the market price of the Bonds.
9
( d) (i) A general suspension of trading in secmities shall have occurred on the
New York Stock Exchange; or (ii) the United States shall have become engaged in hostilities
(including the escalation of any hostilities existing on the date hereof, whether foreseeable),
the effect of which, in either case described in clause (i) and (ii), that, in the judgment of the
Authorized Representative, would materially affect the market price of the Bonds.
( e) An event described in Paragraph 6G) hereof occurs that, in the opinion of the
Authorized Representative, requires a supplement or amendment to the Official Statement
that is deemed by them, in their discretion, to adversely affect the market for the Bonds.
(f) A general banking moratorium shall have been declared by authorities of the
United States, the State of New York or the State of Texas.
(g) A lowering of the ratings of "Aaa," "AAA" and "AAA", initially assigned to
the Bonds by Moody's, S&P and Fitch, respectively, shall occur prior to the Closing.
10. Expenses. (a) The City shall pay all expenses incident to the issuance of the Bonds,
including but not limited to: (i) the cost of the preparation, printing and distribution of the Preliminary
Official Statement and the Official Statement; (ii) the cost of the preparation and printing of the
Bonds; (iii) the fees and expenses of Bond Counsel to the City; (iv) the fees and disbursements of the
City's accountants, advisors, and of any other experts or consultants retained by the City; ( v) the fees
for the bond ratings and any travel or other expenses incurred incident thereto; and (vi) the premium
for municipal bond insurance policy pertaining to the Bonds.
(b) The Underwriters shall pay (i) all advertising expenses in connection with the offering
of the Bonds; (ii) the cost of the preparation and printing of all the underwriting documents; and (iii)
the fee of McCall, Parkhurst & Horton L.L.P. for such firm's opinion required by Paragraph 8(e)(6)
hereof.
11. Notices. Any notice or other communication to be given to the City under this
Purchase Contract may be given by delivering the same in writing at the address for the City set forth
above, and any notice or other communication to be given to the Underwriters under this Purchase
Contract may be given by delivering the same in writing to U.S. Bancorp Piper Jaflray Inc., 1100 ·
Louisiana Street, Suite 3430, Houston,_Texas 77002, Attention: Dale Lehman.
12. Parties in Interest This Purchase Contract is made solely for the benefit of the City
and the Underwriters (including the successors or assigns of any Underwriter) and no other person
shall acquire or have any right under this contract. The City's representations, warranties and
agreements contained in this Purchase Contract that exist as of the Closing, and without regard to
any change in fact or circumstance occurring subsequent to the Closing, shall remain operative and
in full force and effect, regardless of (i) any investigations made by or on behalf of the Underwriters,
and (ii) delivery of any payment for the Bonds hereUI1der; and the City's representations and
warranties contained in Paragraph 6 of this Purchase Contract shall remain operative and in full force
and effect, regardless of any termination of this Purchase Contract.
10
13. Severability. If any provision of this Purchase Contract shall be held or deemed to
be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any
jurisdicti9n or jurisdictions, or in all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule o(public policy, or any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or unenforceable in any other case
· or circumstances, or of rendering any other provision inoperative or unenforceable to any extent
whatever.
14. Choice of Law. This Purchase Contract shall be governed by and construed in
accordance with the laws of the State of Texas.
15. Execution in Counterparts. This Purchase Contract may be executed in any number
of counterparts, all of which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Purchase Contract by signing any such counterpart.
16. Section Headings. Section headings have been inserted in this Contract as a matter
of convenience of reference only, and it is agreed that such section headings are not a part of this
Contract and will not be used in the interpretation of any provisions of this Contract
17. Status of the Underwriters. It is understood and agreed that for all purposes of this
Contract and the transactions contemplated hereby the Underwriters have, in their role as
underwriters, acted solely as independent contractors and have not acted as financial or investment
advisors, fiduciaries or agents to or for the City, whether directly or indirectly through any person.
The City recognizes that the Underwriters expect to profit from the acquisition and potential
distribution of the Bonds.
[Execution page follows.]
11
18. Effective Date. This Purchase Contract shall become effective upon the execution
of the acceptance hereofby the Mayor of the City and shall be valid and enforceable as of the time
of such acceptance.
This 12th day of July, 200 I
By:
City of Lubbock, Texas
Attest:
City Secretary
City ofLubbock, Texas
Very truly yours,
U.S. Bancorp Piper Jafilay Inc.
Prudential Securities Incorporated
By: U.S. Bancorp Piper Jafilay Inc.
Authorized Representative
12
Ordinance No. 2001-00043
EXHIBIT A
Schedule of Maturities, Interest Rates, Yields and Redemption Provisions
City of Lubbock, Texas Electric Light and Power System
Revenue Bonds, Series 2001
Maturity
(4/15)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2021
Principal Interest Rate
Amount (¾)
$460,000 4.000
460,000 4.000
460,000 4.000
460,000 4.000
460,000 4.250
460,000 4.250
460,000 4.250
460,000 4.350
460,000 4.400
460,000 4.500
460,000 4.625
460,000 4.750
460,000 4.900
460,000 5.000
460,000 5.000
460,000 5.150
460,000 5.150
460,000 5.200
920,000 5.250
Yield
(¾)
2.80
3.25
3.54
3.73
3.89
4.08
4.25
4.37
4.48
4.58
4.75
4.86
4.96
5.06
5.13
5.19
5.24
5.28
5.32
The Bonds maturing on and after April 15, 2013 are subject to redemption prior to maturity at the
option of the City on April 15, 2012 .or any date thereafter at a price of par plus accrued interest to
the date of redemption. In addition, the Bonds maturing on April 15 in the year 2021 (the "Term
Bonds'') are subject to mandatory redemption prior to maturity. The Term Bonds shall be redeemed
by the Paying Agent/Registrar in part prior to maturity for the principal amount thereof and accrued
interest to the date of redemption, and without premium, on the dates and in the principal amounts
as set forth in the following schedule:
(*) Final maturity.
Bonds Maturing 4/15/21
Redemption Date
4/15/20
4/15/21*
A-1
Principal
Amount
$460,000
460,000
EXHIBITB
OPINION OF THE CITY ATTORNEY
U.S. Bancorp Piper Jaffiay Inc.
Prudential Securities Incorporated
% U.S. Bancorp Piper Jaffray Inc.
1100 Louisiana Street
Suite 3430
Houston, Texas 77002
Ladies and Gentlemen:
August 16, 2001
Ordinance No. 2001-00043
I am the City Attorney for the City of Lubbock, Texas (the "City") at the time of the issuance
and sale of the "City of Lubbock, Texas Electric Light and Power System Revenue Bonds, Series
2001," in the aggregate principal amount of $9,200,000 (the "Bonds"), pursuant to the provisions of
an ordinance duly adopted by the City Council of the City on July 12, 2001 (the "Ordinance").
Capitalized terms not otherwise defined in this opinion have the meanings assigned in the Purchase
Contract.
In my capacity as City Attorney to the City, I have reviewed such agreements, documents,
certificates, opinions, letters, and other papers as I have deemed necessary or appropriate in rendering
the opinions set forth below.
In making my review, I have assumed the authenticity of all documents and agreements
submitted to me as originals conformity to the originals of all documents and agreements submitted
to me as certified or photostatic copies, the authenticity of the originals of such latter documents and
agreements, and the accuracy of the statement contained in such documents.
Based upon the foregoing, and subject to the qualifications and exceptions hereinafter set
forth, I am of the opinion that under the applicable laws of the United States of America and the State
of Texas in force and effect on the date hereof:
1. Based on reasonable inquiry made of the responsible City employees and public officials, the
City is not, to the best of my knowledge, in breach of or in default under any applicable law
or administrative regulation of the State of Texas or the United States, or any applicable
judgment or decree or any ~ agreement, loan agreement, bond, note, resolution, ordinance,
agreement or other instrument to which the City is party or is otherwise subject and, to the
best of my knowledge after due inquiry, no event has occurred and is continuing that, with
the passage of time or the giving of notice, or both, would constitute such a default by the
City under any of the foregoing; and the execution and delivery of the Purchase Contract and
the Bonds, and the adoption of the Ordinance and compliance with the provisions of each of
such agreements or instruments does not constitute a breach of or default under any
applicable law or administrative regulation of the State of Texas or the United States or any
applicable judgment or decree or, to the best of my knowledge, any trust agreement, loan
agreement, bond, note, resolution, ordinance, agreement or other instrument to which the
City is a party or is otherwise subject; and
B-1
2. Except as disclosed in the Official Statement, no litigation is pending, or, to my knowledge,
threatened, in any court in any way (a) challenging the titles of the Mayor or any of the other
members of the City Council to their respective offices, (b) seeking to restrain or enjoin the
issuance or delivery of any of the Bonds, or the collection of taxes levied or to be levied to
pay the principal of and interest on the Bonds, (c) contesting or affecting the validity or
enforceability of the Bonds, the Ordinance or the Purchase Contract, ( d) contesting the
powers of the City or any authority for the issuance of the Bonds, or the adoption of the
Ordinance, or (e) that would have a material and adverse effect on the financial condition of
the City, including, particularly on the financial condition of the Electric Light and Power
System of the City.
This opinion is furnished solely for your benefit and may be relied upon only by the addresses
hereof or anyone to whom specific permission is given in writing by me.
Very truly yours,
B-2
Callahan, Diane
From:
Sent:
To:
Cc:
Subject:
Jones, Dorothy
Wednesday, July 11, 2001 3:08 PM
Callahan, Diane; Hackler, Jenny
Dransfield, Robert; Esquivel, Ed
Documents to be converted from WordPerfect to Word
Ordinance No. 2001-00043
Gwen has provided me with 23 pages of documents which Jim McDougle returned to her upon
his departure. We need your assistance in identifying these lists, assigning priorities
to these lists, etc., so that we can assure that you will have your documents, as
requested, and in a timely manner. We would sincerely appreciate your assistance in
identifying these documents and assigning appropriate deadlines.
1. There is a list of GP GO 2001 documents which contain instructions "Please convert the
yellow docs to Word documents under same matter#. Name each Word version GP GO 2001
. Same Author: RD06101 ... Need by August." Gwen is currently working on printing
these documents, running the WordPerfect document through DocXChange, DocXTools and
styling the documents.
2. There is a list of GP Sales Tax Rev 2001 documents which contain instructions "Please
convert the yellow to Word documents under same matter#. Name each: Word version GP
SALES TAX REV 2001 ... Same Author: RD061.l. Need by August." The WordPerfect version
of these documents will need to be printed and attached to the list. Gwen can then run
the WordPerfect documents through DocXChange, DocXTools and style the documents.
3. There is a list McKinney REV 2000 documents which contain the instructions "Please
convert all WordPerfect docs to Warder under same matter number(?) Name each "Word
version McKinney REV 2000 ... " The WordPerfect version of these documents will need to
be printed and returned with the list, if this list is not duplicative of one that was
done by Jim prior to his departure.
4. There are three pages of documents designated GP GO 2001. The instructions are
"Please convert the yellow highlighted docs to Word under the same matter number. Name
each Word version GP GO 2001" and on the 3rd page the instructions change to "Please
convert the yellow docs to Word under the same matter number. Name each Word version GP
SALES TAX REV 2001." There is an additional comment "No rush". We are concerned that
these documents may now be more time sensitive. The WordPerfect version of these
documents will need to be printed and returned with the list.
5. There is a list MCKINNEY REV 2000 documents which contain the instructions "Please
convert the yellow to Word under the same matter#. Please name each, Word version
MCKINNEY REV .2000." There is also a notation "No deadline -low priority." Please let us
know if these documents are still considered low priority. The WordPerfect version of
these documents will need to be printed and returned with the list.
6. There is a list LUFKIN ELEC 01. No instructions. Please let us know a deadline for
these documents. The WordPerfect version of these documents will need to be printed and
returned with the list.
7. There is a list MALTA ISO 2001. No instructions. Please let us know a deadline for
these documents. The WordPerfect version of these documents will need to be printed and
returned with the list.
8. There is a list MAUD ISO Election 2001. No instructions. Please let us know a
deadline for these documents. The WordPerfect version of these documents will need to be
printed and returned with the list.
9. There is a list NACOGDOCHES ISO BOND ELECTION. No instructions. Please let us know
a deadline for these documents. The WordPerfect version of these documents will need to
be printed and returned with the list.
10. There is a list PLANO ISD REF. No instructions. Please let us know a deadline for
these documents. The WordPerfect version of these documents will need to be printed and
returned with the list.
1
11. There is a list POLK COUNTY T.ll,X NOTES, POLK COUNTY ELEC. No instructions. Please
let us know a deadline for these documents. The WordPerfect version of these docu~ents
will need to be printed and returned with the list.
12. There is a list ROCKWALL ISO. No instructions. Please let us know a deadline for
these documents. The WordPerfect version of these documents will need to be printed and
returned with the list.
13. There is a list STAMFORD COUNTY LINES ISO. No instructions. Please let us know a
deadline for these documents. The WordPerfect version of these documents will need to be
printed and returned with the list.
14. There is a list STINNETT ELEC 2000. No instructions. Please let us know a deadline
for these documents. The WordPerfect version of these documents will need to be printed
and returned with the list.
We have several extraneous documents.
1. City of McKinney. This document contains a note "Please convert this to Word in
columns, under same matter#. Thanks, Jenny." Is this a document that still needs ~o be
done?
2. Tarrant County Housing Fianance Corporation Multifamily Housing with a notation
"Style/fix". Is this a document that still needs to be done?
3. Board of Trustees of Wharton County Junior College District. This document has a
yellow sticky note: "Restyle like previous page" Is this just a copy of the document?
Has it been completed?
4. The Midland County Housing Finance Corporation Single Family Mortgage Revenue Bonds,
Series 1997. Only notations on the document are JH08174 ... 09404400 ... 005261.
Please let me know the status of this document.
The lists are in my office. I will be happy to bring them down, if you think one might
belong to you.
We look forward to completing these projects in a timely manner. Thank you for your
cooperation in helping us accomplish this task.
Dorothy Jones
Dallas Trainer
Fulbright & Jaworski L.L.P.
2141855-8182
djones@fulbright.com
Dorothy Jones
Dallas Trainer
Fulbright & Jaworski L.L.P.
2141855-8182
djones@fulbright.com
2
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
GENERAL CERTIFICATE
§
§
§
§
§
Ordinance No. 2001-00043
We, the undersigned, Mayor, Managing Director of Finance and City Secretary, respectively,
of the City of Lubbock, Texas (the "City"), DO HEREBY CERTIFY as follows:
1. Relative to Nonencumbrance
Save and except for the pledge of the income and revenues of the City's Electric Light and
Power System to the payment of (i) principal and interest to become due with respect to the
outstanding and unpaid:
(a) City of Lubbock, Texas, Electric Light and Power System Revenue
Refunding Bonds, Series 1991A, dated July 15, 1991, now outstanding in the
principal amount of $400,000;
{b) City of Lubbock, Texas, Electric Light and Power System Refunding
Revenue Bonds, Series 1995, dated June 15, 1995, now outstanding in the principal
amount of $8,150,000; and
{c) City of Lubbock, Texas, Electric Light and Power System Revenue
Bonds, Series 1998, dated January 1, 1998, now outstanding in the principal amount
of $7,805,000;
(d) City of Lubbock, Texas, Electric Light and Power System Revenue
Refunding and Improvement Bonds, Series 1999, dated January 15, 1999, now
outstanding in the principal amount of $13,250,000;
{hereinafter collectively referred to as the "Outstanding Bonds") and the proposed "City of Lubbock,
Texas, Electric Light and Power System Revenue Bonds, Series 2001" dated July 1, 2001 (the
"Bonds") and (ii) a power supply contract with the West Texas Municipal Power Agency, said
income and revenues of the System have not been pledged or hypothecated in any other manner
or for any other purpose; and the Outstanding Bonds, the Bonds and the aforementioned contract
evidence the only liens, encumbrances or indebtedness of the System or against the income and
revenues of such System.
2. Relative to No-Default.
The City is not in default as to any covenant, condition or obligation prescribed by any
ordinance authorizing the issuance of the Outstanding Bonds and all interest, sinking and reserve
funds for such bonds have been fully maintained in accordance with the provisions of the
ordinances authorizing the Outstanding Bonds.
#45057193vl <
3. Relative to Income and Revenues.
The following is a schedule of the gross receipts, operating expenses and net revenues of
the System for the years stated:
Fiscal Year Gross Operating Net
Ending 9-30 Receipts Expenses Revenues
1996 $60,714,224 $44,756,958 $15,957,266
1997 63,185,595 50,199,268 12,986,327
1998 70,903,644 55,780,777 15,122,867
1999 64,260,424 50,932,204 13,328,220
2000 74,319,918 66,101,040 8,218,878
4. Relative to Utilitv Properties.
The electric light and power utility properties owned, operated and maintained by the City
currently provides electricity to approximately 58,431 customers.
As of the date hereof, no question is pending and no proceedings of any nature have been
instituted in any manner questioning the City's right and title to its utility properties or its authority
to operate the same.
4. Relative to Rates and Charges.
The current monthly rates and charges for services provided by the System are as shown
in Exhibit A attached hereto and incorporated herein by reference and made a part of this certificate
for all purposes.
5. Relative to City Officials.
Certain duly qualified and acting officials of the City are as follows:
WINDY SITTON
ALEX "TY" COOKE
BOB CASS
DEBRA B. FORTE
REBECCA GARZA
ANITA BURGESS
BEVERLY HODGES
6. Relative to lncomoration.
MAYOR
MAYOR PRO TEM
CITY MANAGER
DEPUTY CITY MANAGER
CITY SECRETARY
CITY ATTORNEY
DIRECTOR OF FINANCE
The City is incorporated under the general laws of the State of Texas, and is operating under
the Home Rule Amendment to the Texas Constitution, Section 5, Article XI, as amended in 1912.
The City Charter was originally adopted at an election held on December 27, 1917, and said Charter
has not been amended or revised in any respect since January 18, 1992, the date of the last
Charter Amendment Election.
#45057193vl< -2-
WITNESS OUR HANDS AND THE SEAL OF THE CITY OF LUBBOCK, TEXAS, this the
12th day of July, 2001.
(City Seal)
#45057193vl< -3-
CITY OF LUBBOCK, TEXAS
Rebecca Garza
City Secretary
0416478
Ordinance No. 2001-00043
EXHIBIT A
Monthly Rates and Charges
~ONTHLY ELECTRIC RA us
Electtic rates in the City are set by City Council Ordinance and were the S/lllle for LP&L and Southwestern except for chun::h. school
and municipal rates. and minor variations in billing policies unul June. 2001, In November 1m. LP&L started using their own rue!
cost recovery factor which was different from the fuel cost recovery factor used by Southwestern. Dunng Fiscal Y oar Ended 9. JQ.
00, L!'&L billed an average of S0.058905 per kWh. Starting 111 June, 200!. LP&L is simplifying it.< rate structure ,o be more
compatible with a newly purc~a.sed billing systom.
Residential and General Service Ralcs(EffectiveJunc, 2001)
Approximanely 7S% of LP&L customm are billed under the rate schedules shown below. Special rate schedules are lvadable for cenain customers such as churches. city SttCCt lighting. etc. These rates now include the full 3% minchisc within the rate s!Tllcture.
The previous version only includod 2% with Ille additional 1% being billed sc,par.il'.OIJI.
Residential
Service Availability Charge
All kilowatt hour.s ("kWh•) per mondl@S0.0404 per kWh wed during summer mondls
All kWh per month@ S0.03636 per lr.Wb wed during winw months
Summer Moruhs: Jww-Sepcember
Winier Monw: October -May
J::!!!!: Fuel Cost b:overy (I)
Service Availability Charge:
Cost per lr.Wh for all addm-1 lr.W In -of 10 lr.W durillg a SIIIIIIMl' momll Costperlr.Wh for all addm-1 lr.W In excess of 10 lr.W durin;a winta'momb
rust 1,000 kWh per momb
Next 6,000 kWh permondl
All addilional kWh per,-m
J::!!!!: Fuel Cost b:overy ( I)
S 4, 70 per month
SIO, tO per month
$3.00
$7.00
0.0515 per lr.Wb* (Summer) 0.0465 per 11:Wb* (Winter)
0.02$3 per kWb
0.0101 per kWh
Minimum Charge: Tbc Demald Chqe. No dcmlnd sba1I be tlkm at !em !ban 50% of hi&MS demand CSUlblishcd in 12 months
endm& wi1h -momll.
Semcit Availabillly:
Cos per kWh for all adcllliallll lr.W ill-of200 lr.W
F'irslOO,OOO lr.Wll111Mpsmcadl
Nat 1$0.000lr.Wlluslpcmcadl
All addiCloall lr.Wll uslplll'mcadl
~F'uelOlllJt-,(1)
S 1,815.00
S 9.00
0.0059 per kWb
o,ooJ, per kWh
0.0034 per kWh
~ Tbt....icblrp. Nodlmadillllllbetam•lemlban60'Kiofmohi&MSdemlndesllllli.!hedin t2
iiiiimli wilblllll-lllllllb.
miiiiiicoc bccmly. AppJicllkm olftiel cost recovery C---ll'O u follows:
L Priply DisUib1111m1 Fuelil'owwCOilt ltecovgY F.,_
The Prima'), Di11ribu1ice Fuel/Po-Cost It-, F_. sba11 be billed • a me of o.981.W times the Secondary FCA
($1111 SectloG U below). applied per ki1oWC '-111d llball 1!1P1Y whal !111'\'iCe is--·~ !ban or equal IO 12 kV
llldlelldll!ft69kV.
II. ~ Oislribulion Fueli'l'owlrCOIII Rccom F-
The Sccondlry Disut!Nlioa Fuel/Power Cost Recovery FIICIDr will be determined in acc.ordance with !he following
fonnllla:
The sum of Ille IOlal luel COSII (inclusive of all eosts inCWffd by LP.tL in procurin1 i\icl) used· for the month in
LP&L 's power plalla
Plus, die toall of all power pw,:hucd for the mood! by LP.t.L
Pws/Mi11111 any l(ijusunent for underlo•er collectioa of !he llieL;,owet eost recovery factor from previous months (see
below).
The ld,iustlllenl for undlr or o•er collection of the fuel/power cost recovery factot will be amortized over an eighteen ( l S)
momh period ~ the dalll ill which the undlr or over collectica occwnid. Subject to !he !imiwions set forth in this
parqnpb, die City Mlnaae, or, if deripwed by Ille City Mama«, Ille Direclor of Electric Utilities. shall determine the
adj-foresb ai>en mondl. Howner. in no C\'fflt shall the adjusunent be less than llt8th of!he total under or over
coUeclioa.
The sum or all lhae -will be divided by the estinullld etecmc sales for the current month to determine the
Fuel/Power Cost Recovery Faeter, or in SUIIIIIIII')':
Sccondlry FCA • (Gas Cost+ Pun:hased Power Cost+/. over/under adjusunents)ll<Wh sales.
The~ fao:tolS sball be billed per kWh 111d :shall l!)ply when _.,;c;,: is mound It less thin 12 kV.
m. Tl'IIIISlllisslo Fuel/Power Cost Rccom F1!IC:lllr
The Transmlssica Fuel/Power Cost b:overy F-mall be billed 1t a ra1!1 of0.941347 times the Secondary FCA. applied
per ldlow111-hour and :shall apply what scrviee is mcllnd at llfl8IAlt !hall or equal to 69 tV.
Attorney General of Texas
P.O. Box 12548
Capitol Station
Austin, Texas 78711
Attention: Public Finance Division
Ordinance No. 2001-00043
July 12, 2001
RE: "City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2001",
dated July 1, 2001
Ladies and Gentlemen:
Enclosed herewith is the Initial Bond of the above series and a Signature and No-Litigation
Certificate relating thereto, executed and completed except as to date.
When the record of proceedings relating to the issuance of the above referenced series and
the Initial Bond have been approved by your office, this will be your authority to date the Signature
and No-Litigation Certificate and deliver such Initial Bond to the Comptroller of Public Accounts for
registration. It is further requested that five (5) copies of your approving opinion be included with
the Initial Bond sent to the Comptroller.
Should there be a change in circumstances which would alter or modify the certifications or
recitals contained in such Certificate, particularly the absence of litigation or a change in the office
of Mayor or City Secretary, the undersigned or other official of the City will notify you at once by
telephone or other means. You may thus be assured that the certifications and statements
appearing in the Signature and No-Litigation Certificate are accurate and complete at the time the
Bonds are finally approved unless notice to the contrary has been given in the manner
aforementioned. ·
Very truly yours,
#45057205v1<
Ms. Melissa Mora
Economic Analysis Center
Comptroller's Department
P. 0. Box 13528, Capitol Station
Austin, Texas 78711
Ordinance No. 2001-00043
July 12, 2001
Re: "City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2001",
dated July 1, 2001
Dear Ms. Mora:
The Initial Bond of the above described series is to be delivered to your office for registration
when the same has been approved by the Office of the Attorney General.
After the same has been registered by your office, please forward the same by overnight
delivery, together with four (4) copies of the Attorney General opinion with the Comptroller's
accompanying registration certificate, to the City's Bond Counsel, Fulbright & Jaworski L.L.P., 2200
Ross Avenue, Suite 2800, Dallas, Texas, 75201, Attention: Mr. Ed H. Esquivel.
Please note delivery of the Bonds is scheduled to occur in Dallas, Texas, on August 16,
2001. Should circumstances develop that would prevent your office from forwarding the Initial Bond
in accordance with the above instructions and ensure that the Initial Bond will be in Dallas by
August 15, 2001, please contact Bond Counsel for a change in the above instructions regarding the
shipment of such Bond following their registration by your office.
Very truly yours,
#45057205vl<
Fulbright & Jaworski L.L.P.
Attorneys at Law
2200 Ross Avenue, Suite 2800
Dallas, Texas 75201
Ordinance No. 2001-00043
July 12, 2001
RE: "City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series 2001",
dated July 1, 2001
Gentlemen:
In regard to the issuance and delivery of the captioned series of bonds, you are authorized
to date and deliver each of the following documents to the purchasers thereof, to wit:
(1) Signature and No-Litigation Certificate;
(2) Certificate as to Tax Exemption; and
{3) Closing Certificate;
all in conformity with the terms of the Purchase Contract, dated July 12, 2001.
Should any events or circumstances develop or occur prior to the delivery of such
documents to the purchasers which would cause any of the representations, warranties and
statements appearing in any of such instruments to be incorrect, misleading or inaccurate, the City
will notify you immediately of the same. You may thus be assured that, unless advised to the
contrary, the representations, warranties and agreements appearing in such documents are true,
accurate and complete in all respects at the time of the delivery of the above referenced series of
bonds.
Very truly yours,
#45057205v1<
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
CERTIFICATE OF CITY SECRETARY
§
§
§
§
§
Ordinance Ho. 2001-00043
I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY as
follows:
1. On the 14th day of June, 2001, the City Council of the City of Lubbock, Texas,
convened in regular session at its regular meeting place in the City Hall of said City; the duly
constituted members of the Council being as follows:
WINDY SITTON
ALEX "TY'' COOKE
VICTOR HERNANDEZ
T. J. PATTERSON
DAVID NELSON
FRANK MORRISON
MARC McDOUGAL
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
all of said persons were present at said meeting, except the following: Marc McDougal
_______________ . Among other business considered at said meeting,
the attached ordinance (the "Ordinance") entitled:
"AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS,
ELECTRIC LIGHT AND POWER SYSTEM REVENUE BONDS, SERIES
2001 '; prescribing the forms, terms, and provisions of said bonds; pledging
the net revenues of the City's Electric Light and Power System to the
payment of the principal of and interest on said bonds; enacting provisions
incident and related to the issuance, payment, security, sale and delivery of
said bonds, including the approval and distribution of an Official Statement
pertaining thereto and the approval and execution of a Paying
Agent/Registrar Agreement and a Purchase Contract; and providing an
effective date."
was introduced and submitted to the Council for first reading. After presentation and due
consideration of the Ordinance, and upon a motion being made by T. J. Patterson
and seconded by David Nelson , the Ordinance was approved on first reading by the Council
by the following vote:
#45057202v1<
6 voted "For" 0 voted "Against" 0 abstained
all as shown in the official Minutes of the Council for the meeting held on the aforesaid date.
2. On the 12th day of July, 2001, the City Council of the City of Lubbock, Texas,
convened in regular session at its regular meeting place in the City Hall of said City; the duly
constituted members of the Council being as follows:
WINDY SITTON
ALEX "TY'' COOKE
VICTOR HERNANDEZ
T.1J. PATTERSON
DAVID NELSON
FRANK MORRISON
MARC McDOUGAL
)
)
)
)
)
)
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
all of said persons were present at said meeting, except the following: _N_._A_. ______ _
_________ .. Among other business considered at said meeting, the Ordinance was
submitted to the Council for second reading and final passage and adoption. After presentation and
due consideration of the Ordinance, and upon a motion being made by T ;J. Patterson
and seconded by Marc McDouga1 , the Ordinance was duly passed and adopted on second
reading to be effective immediately by the following vote:
7 voted "For'' 0 voted "Against" 0 abstained
all as shown in the official Minutes of the Council for the meeting held on the aforesaid date.
3. The attached Ordinance is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the City Council of said City
on the date of the aforesaid meetings are those persons shown above and, according to the
records of my office, advance notice of the time, place and purpose of each meeting was given
to each member of the Council; and that said meetings and the deliberation of the aforesaid public
business were open to the public and written notice of said meetings, including the subject of the
above entitled Ordinance, was posted and given in advance thereof in compliance with the
provisions of V.T.C.A., Government Code, Chapter 551, as amended.
#45057202vl< -2-
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the
seal of said City, this the 12th day of July, 2001.
J?,! L~ d'-d; Ct ~ "=
City Secretary <iS
City of Lubbock, Texas
(City Seal)
#45057202vl< -3-
Ordinance No. 2001-00041
CERTIFICATE OF CITY SECRETARY
THE STATE OF TEXAS
COUNTY OF LUBBOCK
CITY OF LUBBOCK
§
§
§
§
§
I, the undersigned, City Secretary of the City of Lubbock, Texas, DO HEREBY CERTIFY
as follows:
1. On the 24th day of May, 2001, the City Council of the City of Lubbock, Texas,
convened in regular session at its regular meeting place in the City Hall of said City; the duly
constituted members of the Council being as follows:
WINDY SITTON
ALEX "TY" COOKE
VICTOR HERNANDEZ
T. J. PATTERSON
DAVID NELSON
FRANK MORRISON
MARC McDOUGAL
}
}
}
}
)
)
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
all of said persons were present at said meeting, except the following:
none Among other business considered at said
meeting, the attached ordinance (the "Ordinance") entitled:
"AN ORDINANCE authorizing the issuance of 'CITY OF LUBBOCK, TEXAS,
TAX AND MUNICIPAL DRAINAGE UTILITY SYSTEM SURPLUS
REVENUE CERTIFICATES OF OBLIGATION, SERIES 2001'; specifying
the terms and features of said certificates; providing for the payment of
said certificates of obligation by the levy of an ad valorem tax upon all
taxable property within the City and a lien on and pledge of the net
revenues _from the operation of the Municipal Drainage Utility System; and
resolving other matters incident and related to the issuance, sale,
security, payment and delivery of said certificates, including the approval
of a Paying Agent/Registrar Agreement and Purchase Contract and the
approval and distribution of an Official Statement; and providing an
effective date."
was introduced and submitted to the Council for first reading. After presentation and due
consideration of the Ordinance, and upon a motion being made by T. J. Patterson and
seconded by Frank Morrison, the Ordinance was approved on first reading by the Council by the
following vote:
All voted "For'' None voted "Against" None abstained
all as shown in the official Minutes of the Council for the meeting held on the aforesaid date.
45047144.1
2. On the 14th day of June, 2001, the City Council of the City of Lubbock, Texas,
convened in regular session at its regular meeting place in the City Hall of said City; the duly
constituted members of the Council being as follows:
WINDY SITTON
ALEX "TY" COOKE
VICTOR HERNANDEZ
T. J. PATTERSON
DAVID NELSON
FRANK MORRISON
MARC McDOUGAL
)
)
)
)
)
)
MAYOR
MAYOR PRO TEM
COUNCILMEMBERS
all of said persons were present at said meeting, except the following: ________ _
Ha.re McDougal . Among other business considered at said
meeting, the Ordinance was submitted to the Council for second reading and final passage and
adoption. After presentation and due consideration of the Ordinance, and upon a motion being
made by Alex "Ty" Cooke and seconded by Frank Morrison , the
Ordinance was duly passed and adopted on second reading to be effective immediately by the
following vote:
6 voted "For" 0 voted "Against" o abstained
all as shown in the official Minutes of the Council for the meeting held on the aforesaid date.
3. The attached Ordinance is a true and correct copy of the original on file in the
official records of the City; the duly qualified and acting members of the City Council of said City
on the date of the aforesaid meetings are those persons shown above and, according to the
records of my office, advance notice of the time, place and purpose of each meeting was given
to each member of the Council; and that said meetings and the deliberation of the aforesaid
public business were open to the public and written notice of said meetings, including the
subject of the above entitled Ordinance, was posted and given in advance thereof in compliance
with the provisions of V.T.C.A., Government Code, Chapter 551, as amended.
45047144.1 - 2 -
IN WITNESS WHEREOF, I have hereunto signed my name officially and affixed the seal
of said City, this the 14th day of June, 2001.
City Secretary
City of Lubbock, Texas
(City Seal)
45047144.1 -3-
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CITY OF LUBBOCK, TEXAS
$9,200,000
ELECTRIC LIGHT AND POWER SYSTEM
REVENUE BONDS, SERIES 2001
JULY 12, 2001
FINANCIAL ADVISORY SERVICES
PROVIDED BY:
::J:sr SOlJlll\l'EST COMPANY
fN1ESLtfE.'1T B.4F!KERS
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-CITY OF LUBBOCK
TABLE OF CONTENTS -
-RATING REPORTS ............................................................ ······· .... ··········· ................... 1
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-ELECTRIC LIGHT AND POWER SYSTEM
REVENUE BONDS, SERIES 2001 ................................................................................ 2
COMPARABLE SALES ................................................................................................ 3
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-UNDERWRJTING SYNDICATE PERFORMANCE ............................................................. 4
1
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Moody's Investors Serrice
Global Credit Research
Lubbock (City of) TX
Contacts
Kristin Button
Douglas Benton
Linda Lipnick
Moody's Rating
Issue
214-220-4383
214-220-4381
212-553-1617
Electric Light and Power System Revenue Bonds, Series 2001
Sale Amount $9,200,000
Expected Sale Date 07/10/01
Rating Description REVENUE BONDS
Municipal Credit Research
New Issue
Published 2 Jul 2001
Rating
A1
MOODY'S ASSIGNS A1 RATING TO THE CITY OF LUBBOCK'S $9.2 MILLION
ELECTRIC LIGHT & POWER SYSTEM REVENUE BONDS, SERIES 2001
AFFECTS $68.3 MILLION IN DEBT
Opinion
Moody's Investors Service has assigned an A1 rating to the City of Lubbock's Electric
Light and Power System Revenue Bonds, Series 2001. At the same time, Moody's has
affirmed the A 1 rating on the systems outstanding revenue debt. The A 1 rating
incorporates management's ability to maintain system operations in a sound manner
providing adequate coverage of debt service and a satisfactory debt ratio while operating
in a highly competitive environment. Proceeds from this $9.2 million issue will be used for
system improvements.
A key factor in the A 1 rating is the ability of Lubbock Power and Light (LP&L) to provide
electricity at a competitive rate, an average of 5.29 cents per kilowatt hour comparable to
Moody's public power median of 5.27 cents per kilowatt hour but less than the average
retail rate in Texas which is approximately 6 cents. Leading to the competitive rate is the
fact that LP&L has been in direct competition with Southwestern, a wholly-owned
subsidiary of Xcel Energy Services, for several years. In the earlier part of the decade
each company serviced about 50% of the area; however, with the recent growth in
Lubbock, LP&L has enlarged its service area and now serves approximately 67% of all
customers. Given the competitive market that already exists in Lubbock, Moody's
believes that deregulation impacts, which will not happen in this area until 2007, will be
minimal on the City's system.
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Fiscal 2000 net revenues provide adequate 1.5 times coverage of debt service but weak
1.34 times coverage of projected maximum annual debt service requirements on system
debt. These coverage levels include the large transfers made from system revenues to
the General Fund. Moody's has some concern over the transfer, which was $8 million in
fiscal 2000, because of the prominence of the transfer relative to general fund operations.
The risk comes in any decreases of system revenues, which could negatively impact debt
service coverage or General Fund operations. This concern is somewhat mitigated by the
$80 million in reserves maintained by LP&L and the recent policy to start lessening the
amount of the transfer. Fiscal 2001 is expected to be the first fiscal year, in three years,
to result in a positive net income versus a net loss. In previous fiscal years, increased
natural gas prices had a significant impact on the system's budget however, because of
the competitive environment in which LP&L operates, the system was unable to adjust
rates to address this significant increase in fuel supply costs. Moody's A 1 rating
incorporates LP&L's challenges to maintain competitive rates while dealing with the
expenditure pressures resulting from increased fuel costs.
In fiscal 2000, the city generated approximately 58% of its power requirements
(compared to 39.8% three years ago) and purchased the remainder from Southwestern.
The system currently has 342 megawatts of generation capacity. This capacity is
approximately 94% of peak plant demand projected for fiscal 2001. Capacity increased in
2000, when the West Texas Municipal Power Agency (WTMPA) began operation of a 40
megawatt combined cycle generator of which LP&L receives 85% of the total capacity of
this project. Moody's believes that capacity will continue to be a challenge for the system
in the near and long term, but that system officials have established appropriate
measures to address future needs.
Moody's believes that the regional importance and diversity of the city's economy will
continue to cushion the effects of volatility in the oil and agriculture industries. In recent
years continued growth in the health care sector as well as growth in the cotton industry
has contributed to strengthening of the area economy. Growth and diversity in other
sectors has also had a positive effect on the economy and helped to offset the closure of
Reese Air Force Base, which is currently being redeveloped as a research and business
park. LP&L has a contract with their largest customer, Texas Tech University enhancing
stability for the system. Economic growth has also translated into moderate customer
base growth. This growth coupled with increases in service have allowed LP&L to record
an almost 2.0% annual growth rate in the customer base over the past four years. This is
significant due to the unique relationship between LP&L and Southwestern.
Debt position of the system has increased but equates the median of other electric
systems at 30%. Contributing to the system's modest debt position is the fact that in
recent years a number of capital needs, as well as maintenance has been funded from
operations. In addition to debt issued by the system, LP&L is responsible for 85% of the
debt issued by WTMPA (approximately $25.9 million) for the new generation facility.
These payments are considered an O&M expense of the system. Due to steady
increases in peak demand cycles, and the cost benefit of generating versus purchasing
power, it is likely that LP&L will need to construct additional capacity of 80 megawatts
within the next four years.
Outlook
The outlook for the A 1 rating on Lubbock's Power and Light Revenue Bonds is stable.
Moody's believes that officials will continue to maintain the system in a sound manner
resulting in continued satisfactory coverage ratios on system debt service requirements.
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Although growth and diversification in and around the city will drive moderate growth in
the system's customer base, debt needs of the system are anticipated to be manageable
going forward. The stable outlook is also based on Moody's expectation that the system
will reverse the trend of net losses in the 2001 fiscal year.
KEY STATISTICS:
Number of Accounts: 58,431
Fiscal 2000 Operating ratio: 90.6%
Fiscal 2000 Debt ratio: 30%
Debt service coverage: 1.51
Maximum debt service coverage: 1.34 x
Payout of principal (10 years}: 69%
ALL INFORMATION CONTAINED HEREIN IS COPYRIGHTED IN THE NAME OF MOODY'S INVESTORS SERVICE, INC.
-("MOODY'S"), AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED,
REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR
STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER
OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All
information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of
the possibility of human or mechanical error as well as other factors, however, sueh information is provided "as is" without
warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the
-accuracy, timeliness, completeness, merehantability or fitness for any particular purpose of any such information. Under no
circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused
by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the -
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control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection,
compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect,
special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if
MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any sueh
information. The credit ratings, if any, constituting part of the information contained herein are, and must be construed solely
as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO
WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS
GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be
weighed solely as one factor in any investment decision made by or on behalf of any user of the Information contained herein,
and each sueh user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of,
and each provider of credit support for, each security that it may consider purchasing, holding or selling. Pursuant to Section
17(b) of the Securities Act of 1933, MOODY'S hereby discloses that most issuers of debt securities (including corporate and
municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment
of any rating, agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,000 to
$1,500,000.
MADE IN U.S.A
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Ralings Semca
5'5' Water Street. l8th Floor
New Yark. NY 10041-000 l
Tel 212 438-2066
Reference No.: 989471
Ms. Debra Forte
City of Lubbock
1625 13th Street
P.O. Box 2000
Lubbock, TX 79457
Ste.Pm]. Mwphy
Managing Director
Public Finance Ratings
Standard & Poor's tZ
A Division of 'f1re McGraw-Hill Cmnpamcs
July 3, 2001
Re: $9,200,000 City of Lubbock, Texas, Electric Light and Power System Revenue Bonds, Series
2001, dated: July 1, 2001, due: April 15, 2021
Dear Ms. Forte:
Pursuant to your request for a Standard & Poor's rating on the above debt obligations, we have reviewed
the information furnished to us and, subject to the terms and conditions of the MEMORANDUM OF
AGREEMENT on the reverse side hereof, have assigned a rating of' A+' to the obligations. S&P views
the outlook for this rating over the intermediate to longer term as stable.
Please note that the ongoing information required includes annual audits and budgets and, for revenue
bond ratings in connection with construction financing, progress reports, not less often than quarterly,
covering the project being financed and should be forwarded to:
Standard & Poor's Ratings Services
Public Finance
55 Water Street, Muni Drop Box No. 1, 38-3-10 -New York. NY 10041-0003
S&P relies on the issuer and its counsel, accountants and other experts for the accuracy and
completeness of the information submitted in connection with the rating. In addition, it should be
understood that the rating is not a "market" rating nor a recommendation to buy, hold or sell these
securities. Please note that the rating, as is the case with all of S&P's municipal ratings, does not
address the likelihood that interest payable on the Bonds may be deemed or declared includable in the
gross income of Bondholders by the relevant authorities at any time.
In the event that you decide to include this rating in an Official Statement, prospectus or other offering
literature, we request that you include S&P's definition of the rating together with a statement that the
rating may be changed, suspended or withdrawn as a result of changes in, or unavailability of,
information.
We are pleased to have been of service to you. Thank you for choosing Standard & Poor's Ratings
Services. If you have any questions, please contact us.
amh
cc: Mr. Vince Viaille, Vice President
First Southwest Company
. . . ~ryuly y0urs, ~;?,'¾
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STANDARD ~-Fll~-t-¾:_. -. ~NAN~O..~~~
&POOR'S
Publication date: o~. llhi!J.01
Reprinted from RatingsDirect
Analysis
Lubbock, Texas; Utility, Retail Electric
Analyst: Peter V Murphy, New York (1) 212-438-2065; Edward R McGlade, New York (1) 212-438-2061
Rationale
The 'A+' rating on Lubbock, Texas' Electric Light & Power System (LP&L)
revenue bonds reflects the city-owned electric system's:
• Stable, growing service area;
• Competitive rates; and
• Good financial management, despite a decline in cash position during
fiscal 2000.
Offsetting these strengths is the continued direct retail competition with
Southwestern Public Service (SPS), LP&L's main wholesale provider of
electricity, and a concentration in fuel source.
The bonds are secured by a first-lien pledge of net revenues of LP&L.
A business profile of '5', which is average for retail electric systems, is also
assigned. The business profile is on a 1-10 scale, with a score of 1 being the
best.
Lubbock, with a population estimated at 199,564, is the county seat of
Lubbock County. The city benefits economically from its role as a regional
retail and medical center, as well as from being the home of Texas Tech
University. Each of these factors contributes to a stable economy and a
favorable unemployment rate that historically has been below the national
average. The April 2001 unemployment rate is estimated at 2.2%.
Lubbock Power and Light, the state's third-largest municipal electric system, is
in the unique position among municipal electric utilities in Texas of facing
direct competition within its service territory. LP&L competes directly with
SPS. Historically, however, LP&L has met the challenge, and has continually
made market share gains over the long term. The customer base is
predominantly residential, in terms of customers and MWh sales. The largest
individual customer is Texas Tech University at 9.1% of revenues. Texas
Tech is served under a 30-year contract for electric service with LP&L that
expires in 2020. By focusing on customer service and reliability, LP&L has
secured two-thirds of the customer base.
The Lubbock city council has exclusive authority to set rates for both its own
electric system and SPS within the city's limits. The city council relies on the
outcome of public utility commission rate proceedings for SPS' rates as a
benchmark for adjusting rates for the two utilities. LP&L's rates can therefore
be tracked with the rates charged by SPS. On average the system's rates are
competitive by state and national standards averaging 5.54 cents per kWh in
2000.
The system's financial position deteriorated as of Sept. 30, 2000, due to
unrecovered fuel cost increases, but is ordinarily characterized by strong
coverage and sound liquidity. Debt service requirements decline rapidly after
2006 with a maximum maturity of 20 years. A low debt burden is reflected in
LP&L's 78% equity ratio in 2000. Coverage of annual debt service dipped in
2000 to 1.6 times (x) due to rising natural gas prices that have not yet been
fully recovered. Annual debt service coverage has historically been higher, at
around 3x.
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Due to concerns about reliance on SPS, management is in the process of
developing plans for additional generation. LP&L recently added additional
capacity through its membership in the West Texas Municipal Power Agency
(WTMPA), the output of which the agency is entitled to an 85% share.
Furthermore, all of LP&L's power purchases are made via WTMPA.
Outlook
The stable outlook reflects Standard & Poor's expectation that coverage levels
will rebound toward historical norms as management ultimately recovers fuel
costs from its customers, and that management will actively manage its power
portfolio to reduce operating risks associated with concentrated power and
fuel supplies.
Economy
Lubbock is the ninth largest city in Texas with a population estimated at about
201,061, and benefits economically from its roles as a regional retail and
medical center, the county seat of Lubbock County, and the home of Texas
Tech University. Each of these factors contributes to a stable economy and a
favorable unemployment rate that historically has been below the national
average. The April 2001 unemployment rate is estimated at 2.2%.
Services, trade, and state and local government are the leading employment
sectors. Lubbock is the hub of a retail trade area that serves 26 counties in
west Texas and eastern New Mexico. As a result, per capita retail sales
remain above state and national averages. Similarly, Lubbock's hospitals and
medical-related facilities serve a large area, and health care services are an
important component of the local economy. Enrollment at the campus of
Texas Tech University is 22,000. At the same time, the university employs
approximately 8,535. Other major employers include Lubbock Independent
School District with 3,442 employees, Covenant Health System (5,900);
Texas Tech University Health Sciences Center (2,295); and the city of
Lubbock (2,164). Reflecting a large service employment sector and student
population, per capita wealth and income indicators remain about 10% below
the state and national averages.
Business Profile
Lubbock's business profile of 5 on a 10 point scale reflects stable operations,
management's efforts to diversify its resources, the system's success
competing with SPS, a growing service area, competitive rates, and a strong
relationship with its largest customer, Texas Tech University. Also reflected
are some capacity concerns, as well as plant age and efficiency. LP&L is
already well positioned for deregulation given the competition with SPS within
the city limits and the current efforts of the utility to maintain a high quality of
customer service in order to maintain customers.
Operations
LP&L currently operates 13 generating units capable of providing 279 MW of
capacity, an amount equal to 88% of the system's 2000 peak demand.
Because of the age of the facilities, the units provide primarily peaking
capacity and as a result provided only about 55% of the system's energy
requirements in 2000. The balance of the system's energy requirements are
provided on a contract with SPS that extends through 2004. Under the
contract, LP&L can purchase up to 75 MW of firm capacity and additional
emergency energy and "nonfirm" energy subject to availability. Availability has
been an issue. SPS has curtailed LP&L purchases and LP&L has had to shop
for economy purchases. Currently LP&L has arrangements with other
providers; however, transmission and tight markets remain as constraints.
Lubbock's has a 20-MW combustion turbine cogeneration unit that was
installed in 1990 and is located on the Texas Tech University campus. This
base-load unit is gas fired and Texas Tech purchases the steam produced by
this unit.
Generation is 100% gas fired (although the system has the capability to use
diesel on several units). Fuel requirements are met by several contracts with
varying maturities. Due to transmission interconnection constraints, LP&L is
limited in its ability to purchase power from sources outside the state. As a
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result, management recently acquired a 40-MW combustion turbine at an
existing plant site. A second phase added a heat recovery unit that would
power existing units (22 MW) at the site to be used for peaking capacity.
Financing for these projects was through the West Texas Municipal Power
Agency, with LP&L retaining an 85% share of the output of the project.
Markets
Lubbock Power and Light is in the unique position of lacking an exclusive
franchise to serve in its service territory. It competes directly with
Southwestern Public Service, a subsidiary of Xcel Energy, in most of its
service territory. Yet, without a rate advantage, but by focusing on customer
service and reliability, LP&L has secured 66% of the customer base. The
customer base predominantly is residential, in terms of customers (85%) and
MWh sales (42%), as indicated by a relatively low system load factor of 45%.
The largest individual customers are Texas Tech University at 9.1 % of
revenues, the city of Lubbock at 8.3% of revenues, Plains Co-op Oil Mill at
3.9% of revenues, and Lubbock Independent School District at 3.3% of
revenues. Texas Tech has entered into a 30-year contract with Lubbock
Power that expires in 2020. The remaining six largest customers each
account for less than 1 % of revenues. While LP&L competes for customers in
a large portion of the existing service area, newly annexed areas will be
served exclusively by LP&L.
Competitive Position
The Lubbock city council has exclusive authority to set rates for both LP&L
and SPS within the city's limits. The city council relies on the outcome of
public utility commission rate proceedings for SPS' outside city rates as a
benchmark for adjusting rates for the two utilities in the city. Therefore, until
the city began to account for fuel cost recovery according to its own
methodology, rates had been generally the same as those for SPS'
customers. On average the system's rates are competitive and below the
state and national standards. During the summer of 2000, the disparity
between SPS & LP&L's rates increased dramatically, as the city sought to
recoup rising fuel costs with increased rates. As a result, for several months,
net changeovers favored SPS. However, by November 2000 and through
April 2001, LP&L regained its historical upper hand.
Regulation
The city council has the authority to set rates for LP&L and must approve
rates for SPS for customers within the city limits. Historically, however, the city
has relied on the state's public utility commission, which has jurisdiction over
SPS' rates for customers outside of the city limits, in setting rates for SPS
customers within the city. While the city bases its rates on cost of service,
historically their rates have tracked those of SPS. In June 2001, the state
enacted HB 1692, which essentially exempts investor-owned utilities
operating outside of ERCOT (the Electric Reliability Council of Texas) from
the major provisions of the state's electric industry deregulation statute,
Senate Bill 7. HB 1692 delays until 2007 key provisions relating to divestiture
of generation assets, and customer choice.
Finances
Historically, the system's financial position is characterized by strong
coverage of annual debt service, hovering around 3x from 1996-1999.
However, fiscal 2000 results indicate a dip in coverage to about 1.6x, due to a
spike in fuel costs not fully recovered by the board from ratepayers. Coverage
of maximum annual debt service (MADS), (occurs in 2002), based on 2000
revenues is 1.34x, while MADS coverage based on 1999 figures is 2.18x.
Debt service requirements decline rapidly after 2006 with a maximum maturity
of 20 years. A low debt burden is reflected in Lubbock Power's 78% equity
ratio in 2000. System liquidity also declined in fiscal 2000, with year-end
unrestricted cash and investments totaling $1.04 million, or just 5 days'
expenses. The rate stabilization fund was also depleted somewhat, and is
targeted for an increase to an amount equal to 5% of operating revenues. The
fiscal 2001 budget indicates a 6% increase in revenues, and a widening of
LP&L's operating margin, as fuel costs are recouped. However, combined
fiscals 2000 and 2001 operations stilt result in a slight deficit. Annual transfers
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from the electric utility are calculated based on a combination of asset value,
system revenue, direct cost allocation, and in-kind services. The city expects
to reduce transfers over time, and has recently adopted some changes to the
transfer methodology.
LP&L's five-year capital improvement program includes $89 million of
projects, including $40 million for an 80-MW power project to be financed with
debt issued through WTMPA The remaining projects include $15 million for
distribution lines, and various other plant, transmission, and distribution
projects.
Published by Standard & Poor's. a Division of The McGraw-Hill Companies, Inc. Executive offices: 1221
Avenue of the Americas, New York, NY 10020. Editorial offices: 55 Water Street. New York, NY 10041.
Subscriber services: (1) 212-438-7280. Copyright 2001 by The McGraw-Hill Companies, Inc.
Reproduction in whole or in part prohibited except by permission. All rights reserved. Information has
been obtained by Standard & Poor's from sources believed to be reliable. However. because of the
possibility of human or mechanical error by our sources, Standard & Poor's or others, Standard &
Poor's does not guarantee the accuracy, adequacy, or completeness of any information and is not
responsible for any errors or omissions or the result obtained from the use of such information. Ratings
are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any
securities.
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Fff<B
FITCH !RC:A. l>UH Ko FllliLl'5
Tax Supported
New Issue
Ralina•
New Issue
Tax. a11d MUJ1icipal Drainage Utility
System Surplw; Rc:vrmue
C'..crti ficatcs uf Obligation.,
Series 2001 ...................................... AAl·
Outatandlng Debt
Gcm:rul Obligation Bonds ................... M-t-
Certificates ofOhligatiom, ................... M •
Allaly•ts
Jose A. Hernandez
l Sl2 322-5317
j"~c.ht:mllndez(!{Uitchratings.com
Dc1u~las Scott
I ~12 322-5321
douglas.scott(.QJtitcluatings.com
•••u.r Contact
AmJy Dun:lwm
C.11.'ih and Debt Milllagcr-
1 806775-2149
abureham@m.1il.ci.l11bbock.n:.11s
Mew Issue Details
S3S,000,000 T1111 1md Munici(lJll Dl1&in11ge
Utility System Suiplus Revenue Certificates
of Obligarioo, Series 2001, 11rc schc::dulw tu
r;el} via negotiation on June 12 through a
syndicate m.,nagcd by Salomon Smith 'fbrncy
Inc. TI1c certificates arc dated June I, 2001
and will mature serially Feb. 15, 2002· 2031.
Certit\C3tes maturi.11g onor after Feb. 15, 2011
arc 5ubjcct to optio11al ralcmplion on ur 11ftcr
Feb. IS, 2010 al par pluti uccrutd interest.
Sa:u.-ily; The t:ertilii:utcs urc puyablc frmn 11
continuing ad valnrcm LWl levy, suhjcct tu ll
$2..50 per $100 assessed value limitation for
1111 purpcses imposl!d by the city 1:h11~r, and e.
pledge of surplus net revenues of the
m11ni1;ip11l dr;Linag,: utility sy~l,:m,
Purpose: Ccniticatc proceeds will be \lsed to
pay cnntrac'l\18.I nhligatinn!I In he incurred for
dr11inagc irnprovcmcnt~ in the dty llJld project-
related profcs~ional «:TViccq.
Jun• 11, 2001
Public Finance
Lubbock,Texas
• Outlook
The 'AA+' rating incmpon1tc.s the steady growth of the local economy,
sound financial management and ~Its, ,md very low tax-supported
debt hurden. Economic development continues to be a priority for
community leaders, and recent n:sults include an incl'Clll!C in
employment levels and a com:spunding low um.-mploymcnt rate of
2.2%. The property tax base has demonstrated continued growth, a.'I
has saks tax n:vcnuc:. The dirccl debt burden is V\."T)' low and is retired
rapidly. The steady ec,,nomic rerfom1ance, C(),npetent rnnnagt:rnenl
staff, and the consistently favorable financial results for general fund
opcratiolL~ render a stable outlook for this credit.
• Ratln9 Considerations
Lubboc.:k is the primary bui;inc:i;s 1100 service centc:r for west Texas,
whose economy consists primarily of manufacturing, trade,
government, arul agriculture. With an estimated population of 20 l ,O<i t
for 2001, it is the largest city in the region and ninth most populou,; in
the state. Mol'C than 200 manufacturing plants arc located in the city,
and COiton production has a signiJicant \.-conomic impact in the area.
The city also offers the most comptehellllive health cc1rc scrviccs in the
area and i.'I home to several institution,; of higher ~1ucation.
Excellent financial and adminii;tr11tive management is a hallmark of
Lubbock, as demonstrated by consistently sound operating 1·erullll and
fund balances. Audited figures for fiscal 2000 recorded a $94R,400
increase in the undesignatc:d portion orthc gcn\.-r11l fund balance, which
is maintained at a minimum two months of opc:ra1ing exp<.'1lditurcs by
policy. Also. for fiscal 2000, the cash posirion of the general fund
shows an improvement from lhc prior reporling period, and Fitch
expects I his component of finances tu continue improving as advances
to other funds are gradually reversed. Sales hi~ culh:cliollll for fiscal
2000 demonstrated a 7.6% increase over fiscal 1999 and for liscal
2001, I\ preliminary projection c~timatcs collection.-. at about $600,000
over budget. Conservatively appronching lhis genc:rdl fund revenue
soun:e, the: folcal 200 I sales tax budget was reduced slightly from the
prior year ei;timate. Al51..1 for fiscal 2001, the propcr1y tax rate was
reduced one cent per $100 ai,sesi;ed valuation (AV) from the pl'Cvious
year. Growth in taxable AV for fiscal 20111 registere<l 11 7.5% increase
over the prior period, and preliminary estimates for fiscal 2002 project
a modest rise in values, primarily related to new improvements.
Direct tax-supported debt burden is very low at $276 per capita and
O.R¾ of taxable AV. It is also o.moni7.ed r1tpidly, wilh 62.6% n:lircd in
10 yc:an;. Much of 1hc: city•~ debt th1t plcdgc:i tax Jcvy support is self
supporting, with enterprise operations paying debt service through
transfers. This is.'lue is de~itned to he i:elf suprorting n& well, from
storm w11t.c:r n:vc:nuc::;.
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111<.JI lOC.\. DUF'f., rmus
• Strengths
•
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J Ughly regarded administrative and linanci11l
m1magement staff.
Consistently sound lirnmcial (1peratit1g remit!!.
Very low direct debt burden th11t ii. rapidly
amortized and a manageable capital plan.
• Risk
• Although steadily growing and divcrsifyina::,
somewhat limited .::convmy 11nd tax hose.
• Dellt
Of the aprmximate $17S.4 million. o~ general
obligation (GO) and certificate of ubhgatiun (CO)
dcbl c11mnlly outstanding, $6(>.5 million i11 t:upponed
by the waterworks system, $6.2 million_ ~om the
solid waste disposal systt:m, and $50.6 million from
the i,;ewer system. Lubbock Power and Light (LP&L)
has $32.6 million outstanding in tt:vcnm: bonds
pa~ble soh,-:ly li',,m net revenues of the electric light
and power system.
Ml>fc lhan 70"/4 of Lubbock resident$ voting on the
September 1999 rcfercndwn authorized $37.4 million
of GO bonds for street, drainage, tr.affic, and paxks
projects. Lubbock's capital budget for fiscal 2001
includes $48.9 millio" ,)f project expenditures for
several city funcrioos, including general pu~sc, the
electric system, waterworks, sewer, sohd walll:c,
storm, and thi.: airport. Thi: fi:ical y1:ar:i 2001-2005
capital improvement plan totals slightly more tlian
$181.2 million for all funds. Sources to fund the plan
include Clr,erating funds, C:011, revenue bonds, federal
and state grants, and the remaining$~~ n1i11io~ ?f C'~
authorization. The city docs not ant1e1patc ra1:nng ll.s
dcbl scrvici:pmpt:rly tax levy to accommodate: the new
GO auth~1rity, as the issuance schedule will ~nd
with retirement of a similar amount of out'ltlndmg
c1cbt. Later this year, the ciry expects to issue $6
million in COs for the construction of an cast-west
freeway.
The city's direct debt burtten iR very ll,w ut $276 Pl;T
capit11 and 0.8% of tuablc AV. The payout rate ts
above avernge, with JJ% retin:d in five years and
62.6% in 10 years. Debt ~rvice represente,! 1;liglilly
less than 9% of gcncrnl itnd debt service fund
cxpt:nditun::s in fiscal 2000. On a per capita basis,
overall debt is alliO low at $770 and moderate as a
percentage oftaxabh: AV at 2.J'Yo.
Lubbock, T e>til!il
2
Public Finance
Debt Statement
($000)
current Offering
Tax and Drllin1tge Utility Sr,item Ceriifialtes
Outatandin9 Debt
Ga11era1 Ollllgallon
Cortlllcatos cl ObHgallon
Total Direct Debt
Less: Sell'-Suppor1ing
Total Net Direct Debt
0Vel1apping Debt
Total Overall Net Debi
Debt Ratios
Direct Debi Per Capita ($)*
A&% of Taicabl,i, Asi,-Dd Valu,i,lion ..
Ovarall Dab! Par Capita ($)'
As% ofTaicable Assassod Valuation....,
'Population: 201.061 (2001 alilimBIBJ.
35,000
79,658
95.150
210.408
.15Ul1
55,578
....ll9.J.9.lj
154.774
276
0.8
710
2.3
.. Tax.ble 89!18"8CI WlluatiOll. $B,B38,779,6ell I~ 2001).
• Financ ..
Audited figures for fiscal 2tKIO year end rCliults ~g~in
dt."IIlCnstratcd the cffi:ct of strong and COMerwt1ve
financial 111;,.nagement and policies, with ll Sl6.6
million in the general fund balance, of which $JJ.K
million w.is undesignated. This 11:vcl rcprcsmtcd
16% or expenditures and transfers out. The general
fimd liquidity position, in the form of cash and cash
c:quivalcnts, improved from a significantly low
position of the prior year. Advances to and
receivables fmm other city funds were the reason for
the ca.•h po,ition dectine and. although no1 a
subi;tantiHI cunc.:m, Fitch cx.pccb the cash position to
continue b1creai.i11g as ll\e advam:c:s n..-vcnc.
For fiscal 2000, the major geperal fund revenue
sources were property taxes (31%), saleR taxes
(32%). lnmsler& (16%), and franchise fees {R%').
Total revenue11 and transfers were up about 4.4%
from fiscal t 999 levels. Sales JU. revenues enjoyed a
banner year, ending 7.6"1., hlgher thnn fiscal 1999
rc.-sults to total $27.1 million. Lubbock re1;idents have
authoriud lhc: collection of an additional one-eighth-
cent sales tax for !he express purpose of reducing ad
valorem taxc.11. For fiscal 20fl0, this source: g.:nmitcd
i\bout SJ million. Major expenditure categories for
the general fund were public safely, compri~ing 49%,
of expenses, and civic services (library, nrls, and
1>arks and recreatiou) cum,uming 11nollu::;r 16%.
The fiscal 200 t budget reduced the total property tall.
rate by l.lne cent to $0.57 per SI 00 AV, primarily from
the debt service component of the rate. r.x11enditures
for the general fond an: budgdcd for $88.7 million, a
$4.5 million increase from the prior year. Property
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Public Finance
F_1,_r:11_1_rit_:•. ?''F" •_•_11~_:i __ .vs_· -----------------------~---'---'----'-----'---'--
r.ixes (.32%), .sales taxes (30%), tnmsfors (16%), and
&anchisc fees (7%) were budgeted to provide the
primary resource.,; to mpport expenditures, including
J1Ublic i;afety (55%), civic services (21%), gcn1:Tal
government (8%), imd ttansportation (7%). The
rc~iscd gcru.·:uil fund budget for fi51.,"ftl 2001 reflects a
S600,000 incn:usc ovtt budgeted sales tnc revenuei;, a,;
well a.~ other surpluses. vmich will men:: than offset
hight.-r than cxpcctc.-d tucl and energy costs.
Ei:iSCntially, gcncr.11 riind revcmieli lln(i expendiL11res
are expected to balance for fiscal 2001.
Fitch's 'A+' rating of LP&L n:flccts the utility's
su-engthll of competitive retail rates, low cast
generation, favorable customer mix, and the city's
growing economic base. However, recently, Fitch
revised the Rttling OuUook on LP&L lo Ncgalivc
fra1n Stahle in regpom:e to Lr&L's increasing power
eost.11 due to natural gas prices and timing is.,ues
asli0ci11lcd with lhcir 11bilily \o p11:.s those oostii to
cimtomet&. LP&L'i; retail rate ne"ibility is limited, 11s
it directly competes with Southwestern Public
Service lo provide: electric ~ici: in Lubbock. Abo
considered in the Negative Rating Outlook is the
above-average transfer to the general fund, a
contributing factor lo LP&L':1 S7 million net loss in
fi11cal 2000. llisltlrically, 1.P&L'.s linancial
perfonnancc has been sound, dcmomtmrcd by an
equity component of 74% and debt service coverage
co1uistenrly ab,we 2.:S times. l'r,r m,ll'e infornmtio11,
51;1: Pitch Rcsc1m,:h on .. Lubbod; Power & Light,
Texas," dated Feb. 12, 2001, av1:1ilabk on Fitch's web
site at www.fitchratingx.com.
• Drainage Utility System
Lubbock em:ahli!1hed a Stonn water or dminage utility
in August 1993 and began asse..~sing a drainage fee in
liscul 1994. ft:; primary m;pom;ibilitics arc meeting the
requirements of lhe city's poll11l11nt discharsc
eliminatiot1 permit, maintaining the storm waler utility
Eco110Mlc I ndlcatora
(Ftseal Years Ending Sept 30)
TAV{$00Dl % Cha!!ll• Po~l•tlon
19112 4,741,608 0.5 181.493
1993 4,6~7,750 (1.6) 187,981
1994 4,910,783 s.2 190,038
1995 5,067,312 3.6 191,020
1996 5.399,356 6.1 193,064
1997 5.567.073 3., 195,367
1998 5,630,249 4.7 198,£179
1999 6,019,588 3.2 191.117
2000 6,176,964 2.6 199,445
2001·· 6,638,780 75 201,061
3
database, and designing ru11.1 con&lfUC.1i11g slOrm sewer-
related projects. On June 14, the city council will
comider 11nd is expected lu 11dopt :.tonn wlrt\.'f me
ir\\,'feru!CS tor bolh relii<tcntial and commercial
customers to provide sufficient fundirig to repay the
hon~ a,; well as to pmvide for operations. The
expected tru1sfer of liform water-related functiom; from
the general furd to the cutaprisc fund in the upcoming
llscal year will shut approximately $600,000 in
c11penses. The improvcmmb fWldcd by this and a
projected $29.6 million certificate issue in fi!ICal 2004
wiU miliplc signi6cllnt Rood threats in the southern
portion of the city that have occurred in the past.
The city ordinance crnating rhe system a"d fund also
reserves the right to is.'IUe obligationi; that may be
sccun:d by a lien on net revenues that has priority
over tbat securing Ibo p11ymcmt of the certificates. The
now of nmds for gro&S rcvcnuc11 lln: fir.;t applied to
operation and maintenance expenses: second lo the
payment, security, and benefit of prior lien
obligations; arid third lu the payment of the
certificates 1111d additional obligalions. After
satisfying these requirements, remaining net revenue:.
may be used for any lawful city purpose.
• llconomv
The local econorr1y, although not as broad a.\
comparable highly rated creditll., is rcl151>1Rlbly
diverse. It consists mainly of wholesale and retail
trade, followed elo~ly by scrviccs, where the largest
percentage of job growth has occurred in the past lO
ycan.. The government sector nli;o has II ISfF
presence in the local economy, including Texas Tech
University, Lubbock Independent School District.
and municipal and county govemmcnl. Health can: is
a significant component of the service,; sector. which
provides the most comprehensive health services
available in west Texai; and eiastem New Mexico.
Agricultun: also haii a major economic impact on the
%Chang• Salas raxH ($ootr __ --.. .. _ %Chan11•
0.2 16,386 3.0
D.3 20,036 22.3
1.1 22,022 9.9
O.!> 20,083 (8.B)
1.1 22,983 14.4
1.2 24,391 6.1
0.7 25,003 2.S
0.2 2$,198 0.8
1.2 27.121 1.6
0.8 27.438 1.2
Lubbol;:k, Te,qii
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Public Finance
flTCll lBCA. IIVff ~ l'l ll-.1.PS -----------
lacome statement -General and Debt Service Fund&
(SOOD, Fiscal Years Ended Sept 30)
Pmpeny T&11111!i
Salee TaxB!i
Fral'!Chia T-
lntergommmantal
Charges for SelVicus
FinH and F<llfeiluros
Mir;c;ullanuoU$
O!har Revenue
TrRllllfe!!!ln
T ot81 Revenues/Transfer& In
Debt591Vi1.-o
Genaral Govommcnt
Financial/Managemu11t SCNlces
Streets
Park$ tllld Recntalion
Fire
Polle&
Olhar Public Safety and Serviculi
Other Exp1111di!l111111
Tranlil'en; Oul
T olal Ellpendilures/T ranlfol'$ OUt
lilel SU!Plus
Cl•m1ral Fund Only
Re\lonUC$
Expenditures
Not Change
T r;m,sfcrs 11'1
T tilllSfC!'S Out
Excess of RuvonuUll/Transter:s In Over
Ei.pcnC111VrwTr~en Out
Talal FundBalanco
Iv-. % af Expenditures and Tram.for$ 001
UnreseMld Fund Balanca
/1.s %ofExpendilUre!I endTran&far& Oul
Ul'ldesigrlt,ted Fund Balance
Aili % of l:>q,endltures and Transfer11 Out
NOie! N\Jllll)lltll m1y 1101 add d1111., roundi1111.
1911
30.DD!I
22,828
5.181
1.417
2,728
3,144
3,665
l.687
ll..1§§
84,-402
8,511
3.4112
'-360
3,29'2
$,751)
13,800
21.224
9,103
4,645
9,030
84,1!11
211
61,931
tHl,650
(4.719)
13,786
(9,030)
17
17,613
2$.4
16.979
22.4
12,700
16.B
area in the fonn of cotton and sorghum farming,
Cotton fanning in the Lubbock and 25-¢liunty area
produces 11ppru11imately 60% of the total gt.ate crop
and 1~•;., of the nation's. The constn11::rion sector is
enjoying steady activity, with a healthy level uf
pcnnits isiiucd in 2000 of$200.4 million.
Market Lubbock, Inc., created to promote eoonomic
development and funded primarily by a three cent per
$100 AV property tax. has been successful in
attracting commercial establishments and eApansions,
1917
31.328
24,251
5,439
885
3,5Z2
3,480
2,684
1,753
~ 88,B06
8,995
5,004
1,41H!
4,993
12,348
13,898
20,520
6,063
3,546
11,212
87,1185
821
64,508
67,778
{3,272)
15.284
(11,212)
800
tG,474
23.4
16.437
20.8
13,477
17. 1
1998_
32,069
24,!115
7,128
918 4,016
3.3~3
2,251
2.159
J.lmll 92,799
6,718
5,762
1,585
5,007
12,667
1,.468
22,013
ll.368
2,710
12,455
91.753
t.046
67,526
70,584
(3,058)
16.030
(12,454)
518
18,991
22.9
16,929
20.4
13,548
18.3
1999
33.333
25.1Q6
6.235
576
4,033
3,335
2,094
1,698
~
89,952
8,$76
6,143
1,762
5,195
12,&31
15,617
23,479
6,282
2.638
...ml 92.348
(2,396)
88.477
73,745
(5.267)
13,452
(9,927)
(1.742)
17,248
20.6
15, 1'48
18.1
12.615
15.3
34.107
27.121
IUl20
366
<1,210
2.83'
1,887
2,318
-13..m
93,101
7,7a9
G,193
1,919
5,440
13,445
17,080
25.561
6.6158
2,302
7,526
113.884
<m,1
71,881
78,819
(6.738)
13,637
(7,525)
(6281
f6,621
19.3
14,521
18.9
13,784
11!.0
offsetting s01ne contractinn previom;ly exr.)erienced in
the manufacturing .sector. The Lubbock Reese
Redevelopment Authority is responsible for
coordinttling lhc: transilion or lhc lunn~r pilot !raining
base 11., civilian use and has received federal grants,
a.,; well aK city funding eannarked for economic
development. Another economic initiative Lubbock
is significantly involved in is the Ports-to-Plains
Corridor Coalition, whose objective is to establish 11
route and mfriutructun:: to 1mpport mule from the
Texas-Mexico border through Lubbock to Denver.
•~will" tnn,11 hy J;,,1, ·O.~ ~ •••• !Cl,=< Pi..... NV, NV lllll04, T•lqlhn ... Nnl York, J.IIW,1l) <tll2A, 1212i,us l!500, l·U{2!2)41U 44J3:(11Hao. IL. (Jl2)J61 JIOO ... .,,. ()llJZl•
,110. I~""""'-011 4HD 7•17 4lll, t'a Ult 44 1ti 1417 l142; :Sm ft;im;isco, Cl\, l iOO t3J 4121. (•ll~J m-sn•. f'u (• 15) 7)2-5610 • ltq)rolftlf.~ni in wt-.,11; w;,, p:111 PNft~~r,,I ,_,
by P,:'11W•"'· f1ch tilld\lJ ON! buod on •t>1111uioft """'""'d li1>111 isNm, othlr obfii:tn. md,rw,it<n. lhcir •ll><lt~ nd o,lr,r .,....., Fil<;~ brli,..-.. t~ IJo ,vfi,l,h;. l'to'II d ... nv1 avdi ,.-
verify the tn,th or X'NQ:\."!' •f :wd in~ 'VA .... ,me .. "llll1 '-.,, .. opt, ~"" ... llf wi\l',.,lr111,wn -• tc:Mtlh ,\I i!ha~ ll\ '"' the •Nllll"11Abllk)' ,,r. lnft.rmot,H flr "' ~ faMlM. ..... .,.~ not-, JTC.Offll'l'Mlr,litMMI to ttlty. "~11. ~• hu~ ,ny -••m~~. """"'I"' 1h·, ,w .:arnmltftJ •o th:! ueq,mt.?t (llr~ prw:c. ttc JUIQntkty n# uy sicw"" mr apiinioilu 1nvat1H.. Gf W ,m.-tempr nauHt
tllf' 1u,.t;,ali!17 nr ~hi• 1111Uiit ffl u:ap-cM 1u aJty ~utily. t"'4.>ft; ,eecl"l'H tffl ft.om liwm, i~r;. jl'JIQIU(ln. other ob._,,,., ad \l'ldtnnirers iw Dffll: HC'.Wfttt'S 'Svrfl fen x,,cu1nltr ''HY
f'nun ~1.m1n inn,noo 1m 11me. 1nuna.m,OJC1,, t·11ctt wdf nte all or a numbrr o( mun iswod by i pm&,i:Ju iaut.t'. vr WI~ ur ii::..-.-.,,1~ lt:,,. ,..,..iµ.i\iv *m., ~ cianmh"* a,,.• Ut-ik
IU'lltWII fee. such lfti 1111:' tlpK'ltd to VIZY hm s l0.000 IQ s l,.!«J~OOO, The fAi~ .. , £11141tt;.~•··· m di-=mfnd&w1 nr. ,.,.,te, tty Fiitt• ittoll rw,r Ci"IIWrtUte a (Oftlll!!ftt •v flKh IO ust a ftcmt m.
M txpen: m con11ectt1Ja witb 1ftY rq:i,iniilxt .. at\!f"P'!I lilt'lltl HNii:r tic fuk.•l l.bCwtl~ lt-s. U.. M mt rNUW cft'll:1£-ftt.y oi t\ectranir c,ubHshins W distrbl.tion. ft~ch l.csoard, TMY' bf
inibbla HJ .. ~ NbM:,iltn ... ln n,n:c Ja:p i:ahi;t t'-", , .. , ... whlerd!lert.
Lubbock, Tsx.a11
4
2
--.l -----;::J 8 -09/15/81 03/02/82 08/17/82 02/01/83 07/19/83 01/03/84 06/19/84 12/04/84 05/21/85 11/05/85 04/22/86 10/07/86 03/24/87 09/08/87 02/23/88 08/09/88 01/24/89 07/11/89 12/26/89 06/12/90 ll/27/90 05/14/91 10/29/91 04/14/92 09/29/92 03/16/93 08/31/93 02/15/94 08/02/94 01/17/95 07/04/95 12/19/95 05/30/96 ll/14/96 05/01/97 10/16/97 04/02/98 09/17/98 03/04/99 08/19/99 02/03/00 07/20/00 01/04/01 06/21/01 0 0 0 '#-Rate a el N 0 0 .... t ; u ..,.-41 . i ! u u
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Final Numbers
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
SOURCES & USES
Dated 07/01/2001
SOURCES OF FUNDS
Par Amount of Bonds .................................................................................... .
Reoffering Premium ...................................................................................... .
Accrued Interest from 07/0l/200l to 08/16/2001... ...................................... ..
Delivered 08/16/2001
$9,200,000.00
29,495.20
53,058.13
TOTAL SOURCES........................................................................................ $9,282,553.33
USES OF FUNDS
Original Issue Discount (OID) ...................................................................... ..
Total Underwriter's Discount (0. 780%) ........................................................ .
Costs of Issuance ........................................................................................... .
Gross Bond Insurance Premium ( 33.9 bp) ................................................... ..
Deposit to Debt Service Fund ........................................................................ .
Deposit to Project Construction Fund ............................................................ .
Rounding Amount. ...................................................................................... ..
45,604.40
71,781.97
160,000.00
46,802.19
53,058.13
8,904,000.00
1,306.64
TOTAL USES................................................................................................ $9,282,553.33
First Southwest Company
Public Finance
File= Electric revenue bonds.sf-PRICING-Electric Revenue Bonds-SINGLE PURPOSE
7/11/2001 2:46 PM
Pagel
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Final Numbers -City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001 -
DEBT SERVICE SCHEDULE -Date Principal Coupon Interest Total P+I FISCAL TOTAL
8/16/2001
4/15/2002 460,000.00 4.000% 334,855.72 794,855.72
9/30/2002 794,855.72
10/15/2002 203,032.50 203,032.50
4/15/2003 460,000.00 4.000% 203,032.50 663,032.50
9/30/2003 866,065.00 -10/15/2003 193,832.50 193,832.50
4/15/2004 460,000.00 4.000% 193,832.50 653,832.50
9/30/2004 847,665.00
10/15/2004 184,632.50 184,632.50 -4/15/2005 460,000.00 4.000% 184,632.50 644,632.50
9/30/2005 829,265.00
10/15/2005 175,432.50 175,432.50
4/15/2006 460,000.00 4.250% 175,432.50 635,432.50 -9/30/2006 810,865.00
10/15/2006 165,657.50 165,657.50
4/15/2007 460,000.00 4.250% 165,657.50 625,657.50
9/30/2007 791,315.00 -10/15/2007 155,882.50 155,882.50
4/15/2008 460,000.00 4.250% 155,882.50 615,882.50
9/30/2008 771,765.00
10/15/2008 146,107.50 146,107.50 -4/15/2009 460,000.00 4.350% 146,107.50 606,107.50
9/30/2009 752,215.00
10/15/2009 136,102.50 136,102.50
4/15/2010 460,000.00 4400% 136,102.50 596,102.50 -9/30/2010 732,205.00
10/15/2010 125,982.50 125,982.50
4/15/2011 460,000.00 4.500% 125,982.50 585,982.50
9/30/201 I 711,965.00 -10/15/2011 115,632.50 115,632.50
4/15/2012 460,000.00 4.625% 115,632.50 575,632.50
9/30/2012 691,265.00
10/15/2012 104,995.00 104,995.00 -4/15/2013 460,000.00 4.750% 104,995.00 564,995.00
9/30/2013 669,990.00
10/15/2013 94,070.00 94,070.00
4/15/2014 460,000.00 4.900% 94,070.00 554,070.00 -9/30/2014 648,140.00
10/15/2014 82,800.00 82,800.00
4/15/2015 460,000.00 5.000% 82,800.00 542,800.00
9/30/2015 625,600.00
l""'I 10/15/2015 71,300.00 71,300.00
4/15/2016 460,000.00 5.000% 71,300.00 531,300.00
9/30/2016 602,600.00 -10/15/2016 59,800.00 59,800.00
First Southwest Company File = Electric revenue bonds.sf-PRICING -Electric Revenue Bonds-SINGLE PURPOSE
Public Finance 7/ll/2001 2:46 PM -
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City of Lubbock., Texas
Electric Light and Power System Revenue Bonds
Series 2001
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest TotalP+I
4/15/2017 460,000.00 5.150% 59,800.00 519,800.00
9/30/2017
10/15/2017 47,955.00 47,955.00
4/15/2018 460,000.00 5.150% 47,955.00 507,955.00
9/30/2018
10/15/2018 36,110.00 36,110.00
4/15/2019 460,000.00 5.200% 36,110.00 496,110.00
9/30/2019
10/15/2019 24,150.00 24,150.00
4/15/2020 460,000.00 5.250% 24,150.00 484,150.00
9/30/2020
10/15/2020 12,075.00 12,075.00
4/15/2021 460,000.00 5.250% 12,075.00 472,075.00
9/30/2021
Total 9,200,000.00 4,605,955.72 13,805,955.72
YIELD STATISTICS
Accrued Interest from 07/01/200 I to 08/16/2001 ........................................................................... ..
Bond Year Dollars ........................................................................................................................... .
Average Life .................................................................................................................................... .
Average Coupon .............................................................................................................................. .
Net Interest Cost (NIC) .................................................................................................................... .
True Interest Cost (TIC) .................................................................................................................. .
Bond Yield for Arbitrage Purposes .................................................................................................. .
All Inclusive Cost (AIC) .................................................................................................................. .
IRS FORM 8038
Net Interest Cost. ............................................................................................................................ .
Weighted Average Maturity ................................................................................ ,_ .......................... ..
Final Numbers
FISCAL TOTAL
579,600.00
555,910.00
532,220.00
508,300.00
484,150.00
53,058.13
$94,657.78
10.289 Years
4.8659031%
4.9587546%
4.9488287%
4.9164253%
5.1661945%
4.9155178%
10.121 Years
First Southwest Company
Public Finance
File = Electric revenue bonds.sf-PRICING Electric Revenue Bonds-SINGLE PURPOSE
7111/2001 2:46 PM
Page 3
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City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
DEBT SERVICE SCHEDULE
Date Principal Coupon Interest
9/30/2001
9/30/2002 460,000.00 4.000% 334,855.72
9/30/2003 460,000.00 4.000% 406,065.00
9/30/2004 460,000.00 4.000% 387,665.00
9/30/2005 460,000.00 4.000% 369,265.00
9/30/2006 460,000.00 4.250% 350,865.00
9/30/2007 460,000.00 4.250% 331,315.00
9/30/2008 460,000.00 4.250% 311,765.00
9/30/2009 460,000.00 4.350% 292,215.00
9/30/2010 460,000.00 4.400% 272,205.00
9/30/2011 460,000.00 4.500% 251,965.00
9/30/2012 460,000.00 4.625% 231,265.00
9/30/2013 460,000.00 4.750% 209,990.00
9/30/2014 460,000.00 4.900% 188,140.00
9/30/2015 460,000.00 5.000% 165,600.00
9/30/2016 460,000.00 5.000% 142,600.00
9/30/2017 460,000.00 5.150% 119,600.00
9/30/2018 460,000.00 5.150% 95,910.00
9/30/2019 460,000.00 5.200% 72,220.00
9/30/2020 460,000.00 5.250% 48,300.00
9/30/2021 460,000.00 5.250% 24,150.00
Total 9,200,000.00 4,605,955.72
YIELD STATISTICS
Accrued Interest from 07/01/2001 to 08/16/2001 .................................................................................. .
Bond Year Dollars ................................................................................................................................. .
Average Life .......................................................................................................................................... .
Average Coupon .................................................................................................................................... .
Net Interest Cost (NIC) .......................................................................................................................... .
True Interest Cost (TIC) ........................................................................................................................ .
Bond Yield for Arbitrage Purposes ........................................................................................................ .
All Inclusive Cost (AIC) ........................................................................................................................ .
IRS FORM 8038
Net Interest Cost. ................................................................................................................................... .
Weighted Average Maturity .................................................................................................................. .
Final Numbers
Total P+I
794,855.72
866,065.00
847,665.00
829,265.00
810,865.00
791,315.00
771,765.00
752,215.00
732,205.00
711,965.00
691,265.00
669,990.00
648,140.00
625,600.00
602,600.00
579,600.00
555,910.00
532,220.00
508,300.00
484,150.00
13,805,955.72
53,058.13
$94,657.78
10.289 Years
4.8659031%
4.9587546%
4.9488287%
4.9164253%
5.1661945%
4.9155178%
10.121 Years
First Southwest Company
Public Finance
File ; Electric revenue bonds.sf-PRICING -Electric Revenue Bonds-SINGLE PURPOSE
7/11/2001 2:46 PM
Page 4
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Maturity
4/15/2002
4/15/2003
4/15/2004
4/15/2005
4/15/2006
4/15/2007
4/15/2008
4/15/2009
4/15/2010
4/15/2011
4/15/2012
4/15/2013
4/15/2014
4/15/2015
4/15/2016
4/15/2017
4/15/2018
4/15/2019
4/15/2021
Total
First Southwest Company
Public Finance
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
PRICING SUMMARY
Type ofBond Coupon Yield Maturity Value
Serial Coupon 4.000% 2.800% 460,000.00
Serial Coupon 4.000% 3.250% 460,000.00
Serial Coupon 4.000% 3.540% 460,000.00
Serial Coupon 4.000% 3.730% 460,000.00
Serial Coupon 4.250% 3.1190% 460,000.00
Serial Coupon 4.250% 4.080% 460,000.00
Serial Coupon 4.250% 4.250% 460,000.00
Serial Coupon 4.350% 4.370% 460,000.00
Serial Coupon 4.400% 4.480% 460,000.00
Serial Coupon 4.500% 4.580% 460,000.00
Serial Coupon 4.625% 4.750% 460,000.00
Serial Coupon 4.750% 4.860% 460,000.00
Serial Coupon 4.900"/o 4.960% 460,000.00
Serial Coupon 5.000% 5.060% 460,000.00
Serial Coupon 5.000"/o 5.130% 460,000.00
Serial Coupon 5.1500/4 5.190% 460,000.00
Serial Coupon 5.150% 5.240% 460,000.00
Serial Coupon 5.200% 5.280% 460,000.00
Tenn I Coupon 5.250% 5.320% 920,000.00
9,200,000.00
BID INFORMATION
Par Amount of Bonds ..................................................................... .
Reoffering Premium or (Discount) ................................................. .
Gross Production ........................................................................... ..
Total UndeJWTiter's Discount (0.780"/o) ......................................... .
Bid (99.045%) ................................................................................ .
Price
100.780%
101.201%
101.155%
100.912%
101.517%
100.847%
100.000%
99.865%
99.425%
99.375%
98.957%
99.023%
99.434%
99.406%
98.664%
99.567%
99.000%
99.080%
99.145%
$9,200,000.00
(16,109.20)
$9,183,890.80
$(71,781.97)
9,112,108.83
Accrued Interest from 07/01/2001 to 08/l6/2001............................ 53,058.13
Total Purchase Price........................................................................ $9,165,166.96
Bond Year Dollars ......... :................................................................. $94,657.78
Average Life................................................................................... 10.289 Years
Average Coupon.............................................................................. 4.8659031%
Net Interest Cost (NlC) ................................................................. ..
True Interest Cost (TIC) ................................................................. .
4.9587546%
4.9488287%
Final Numbers
Dollar Price
463,588.00
465,524.60
465,313.00
464,195.20
466,978.20
463,896.20
460,000.00
459,379.00
457,355.00
457,125.00
455,202.20
455,505.80
457,396.40
457,267.60
453,854.40
458,008.20
455,400.00
455,768.00
912,134.00
9,183,890.80
File = Electric revenue bonds.sf-PRICING Electric Revenue Bonds-SINGLE PURPOSE
7/11/2001 2:46 PM
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Final Numbers
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
PROOF OF BOND YIELD@ 4.9164253%
Date Cashflow PVFactor Present Value Cumulative PV
8/16/2001 l.OOOOOOOx
4/15/2002 794,855.72 0.9682694x 769,634.50 769,634.50
10/15/2002 203,032.50 0.9450384x 191,873.51 961,508.01
4/15/2003 663,032.50 0.9223647x 611,557.77 1,573,065.79
10/15/2003 193,832.50 0.9002350x 174,494.80 1,747,560.59
4/15/2004 653,832.50 0.8786363x 574,480.94 2,322,041.53
10/15/2004 184,632.50 0.8575557x 158,332.66 2,480,374.19
4/15/2005 644,632.50 0.8369809x 539,545.12 3,019,919.31
10/15/2005 175,432.50 0.8168998x 143,310.78 3,163,230.09
4/15/2006 635,432.50 0.7973005x 506,630.63 3,669,860.72
10/15/2006 165,657.50 0.7781714x 128,909.92 3,798,770.64
4/15/2007 625,657.50 0.7595012x 475,187.63 4,273,958.27
10/15/2007 155,882.50 0.7412790x 115,552.42 4,389,510.69
4/15/2008 615,882.50 0.7234940x 445,587.28 4,835,097.97
10/15/2008 146,107.50 0.7061357x 103,171.72 4,938,269.69
4/15/2009 606,107.50 0.6891938x 417,725.54 5,355,995.23
10/15/2009 136,102.50 0.6726584x 91,550.49 5,447,545.72
4/15/2010 596,102.50 0.6565198x 391,353.08 5,838,898.80
10/15/2010 125,982.50 0.6407683x 80,725.60 5,919,624.40
4/15/201 I 585,982.50 0.6253948x 366,470.41 6,286,094.81
10/15/2011 115,632.50 0.6103901x 70,580.93 6,356,675.74
4/15/2012 575,632.50 0.5957454x 342,930.43 6,699,606. I 7
10/15/2012 104,995.00 0.581452lx 61,049.56 6,760,655.73
4/15/2013 564,995.00 0.5675017x 320,635.62 7,081,291.36
10/15/2013 94,070.00 0.5538860x 52,104.06 7,133,395.41
4/15/2014 554,070.00 0.5405970x 299,528.57 7,432,923.98
10/15/2014 82,800.00 0.5276268x 43,687.50 7,476,611.48
4/15/2015 542,800.00 0.5l49678x 279,524.51 7,756,135.99
10/15/2015 71,300.00 0.5026125x 35,836.27 7,791,972.26
4/15/2016 531,300.00 0.4905536x 260,631.15 8,052,603.42
10/15/2016 59,800.00 0.478784lx 28,631.29 8,081,234.71
4/15/2017 519,800.00 0.4672970x 242,900.96 8,324,135.67
10/15/2017 47,955.00 0.4560854x 21,871.58 8,346,007.24
4/15/2018 507,955.00 0.445l429x 226,112.54 8,572,119.78
10/15/2018 36,110.00 0.4344628x 15,688.45 8,587,808.24
4/15/2019 496,110.00 0.424039l x 210,370.02 8,798,178.25
10/15/2019 24,150.00 0.4l38654x 9,994.85 8,808,173.10
4/15/2020 484,150.00 0.4039358x 195,565.50 9,003,738.60
10/15/2020 12,075.00 0.3942444x 4,760.50 9,008,499.10
4/15/2021 472,075.00 0.3847856x 181,647.64 9,190,146.74
Total 13,805,955.72 9,190,146.74
DERIVATION OF TARGET AMOUNT
Par Amount of Bonds ............................................................................................................... $9,200,000.00
Reoffering Premium or (Discount) ........................................................................................... (I 6, I 09.20)
Accrued Interest from 07/01/2001 to 08/16/2001.. ................................................................... 53,058.13
Bond Insurance Premium ....... ( 33.9 bp) .................................................................................. (46,802.19)
Original Issue Proceeds ............................................................................................................ $9,190,146.74
First Southwest Company
Public Finance
File = Electric revenue bonds.sf-PRICING -Electric Revenue Bond,·-SINGLE PURPOSE
711 ll200I 2:46 PM
Page 6
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Final Numbers
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
DERIVATION OF FORM 8038 YIELD STATISTICS
Maturity Issuance Value Price Issuance PRICE Exponent Bond Years
8/16/2001
4/15/2002 460,000.00 100.780% 463,588.00 0.6638889x 307,770.92
4/15/2003 460,000.00 101.201% 465,524.60 l.6638889x 774,581.21
4/15/2004 460,000.00 101.155% 465,313.00 2.6638889x 1,239,542.13
4/15/2005 460,000.00 100.912% 464,195.20 3.6638889x 1,700,759.64
4/15/2006 460,000.00 101.517% 466,978.20 4.6638889x 2,177,934.44
4/15/2007 460,000.00 100.847% 463,896.20 5.6638889x 2,627,456.53
4/15/2008 460,000.00 100.000% 460,000.00 6.6638889x 3,065,388.89
4/15/2009 460,000.00 99.865% 459,379.00 7.6638889x 3,520,629.61
4/15/2010 460,000.00 99.425% 457,355.00 8.6638889x 3,962,472.90
4/15/2011 460,000.00 99.375% 457,125.00 9.6638889x 4,417,605.21
4/15/2012 460,000.00 98.957% 455,202.20 l0.6638889x 4,854,225.68
4/15/2013 460,000.00 99.023% 455,505.80 l l .6638889x 5,312,969.04
4/15/2014 460,000.00 99.434% 457,396.40 12.6638889x 5,792,417.19
4/15/2015 460,000.00 99.406% 457,267.60 13.6638889x 6,248,053.68
4/15/2016 460,000.00 98.664% 453,854.40 14.6638889x 6,655,270.49
4/15/2017 460,000.00 99.567% 458,008.20 15 .663 8889x 7,174,189.56
4/15/2018 460,000.00 99.000% 455,400.00 l 6.6638889x 7,588,735.00
4/15/2019 460,000.00 99.080% 455,768.00 17.6638889x 8,050,635.31
4/15/2020 460,000.00 99.145% 456,067.00 18.6638889x 8,511,983.81
4/15/2021 460,000.00 99.145% 456,067.00 19.6638889x 8,968,050.81
Total 9,200,000.00 9,183,890.80 92,950,672.06
IRS FORM 8038
Weighted Average Maturity= Bond Years/Issue Price........................................................................... 10.121 Years
Total Interest from Debt Service ............................................................................................................ .
Accrued Interest from 07/01/2001 to 08/16/2001 .............................. ,, .................................................. ..
Reoffering (Premium) or Discount. ........................................................................................................ .
4,605,955.72
(53,058.13)
16,109.20
Total Interest........................................................................................................................................... 4,569,006.79
NlC Interest/ (Issue Price * Average Maturity)................................................................................... 4.9155178%
Bond Yield for Arbitrage Purposes ....................................................................................................... .. 4.91642S3%
First Southwest Company
Public Finance
File Electric revenue bonds.sf-PRICING -Electric Revenue Bonds-SINGLE PURPOSE
711112001 2:46 PM
Page 7
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Maturity
4/15/2002
4/15/2003
4/15/2004
4/15/2005
4/15/2006
4/15/2007
4/15/2008
4/15/2009
4/15/2010
4/15/2011
4/15/2012
4/15/2013
4/15/2014
4/15/2015
4/15/2016
4/15/2017
4/15/2018
4/15/2019
4/15/2021
Total
City of Lubbock, Texas
Electric Light and Power System Revenue Bonds
Series 2001
SUMMARY OF UNDERWRITER'S DISCOUNT
Concession +Takedown = Total Issuance Value
0.250% 0.250% 460,000.00
0.250% 0.250% 460,000.00
0.250% 0.250% 460,000.00
0.375% 0.375% 460,000.00
0.375% 0.375% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500"/4 460,000.00
0.500% 0.500% 460,000.00
0.500% 0.500"/4 460,000.00
0.500% 0.500"/o 460,000.00
0.500% 0.500% 920,000.00
9,200,000.00
UNDERWRITING & ISSUANCE EXPENSES
Total Management Fees (0.075%) ................................................................................................... .
Total Average Takedown (0.450%) ................................................................................................. .
Total Underwriters Expenses (0.255%) .......................................................................................... ..
TOT AL UNDERWRITING SPREAD (0.780%) ............................................................................ .
Final Numbers
Total Takedown
1,150.00
1,150.00
1,150.00
1,725.00
1,725.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
2,300.00
4,600.00
41,400.00
$6,900.00
$41,400.00
$23,481.97
$71,781.91
First Southwest Company
Public Finance
File = Electric revenue bonds.sf-PRICING -Electric Revenue Bonds-SINGLE PURPOSE
7/11/2001 2:46 PM
Page8
3
I , I J J I I I J J J I . I I J I J COMPARABLE SALES City of Lubbock Harris County Health Garland ISO Mansfield ISO Nachogdoches ISO $9,200,000 $126,600,000 $42,455,000 $63,300,000 $34,810,000 Electric Light & Power General Obligation General Obligation General Obligation System Revenue Bonds Revenue Bonds Unlimited Tax Unlimited Tax Unlimited Tax 7/12/2001 7/9/2001 7/9/2001 7/9/2001 7/9/2001 Maturity Aaa/Ambac AA Aaa/PSF Aaa/PSF Aaa/PSF 2001 2002 2.80% 2.83% 2.82% 2003 3.25% 3.28% 3.28% 2004 3.54% 3.53% 5.53% 3.55% 2005 3.73% 3.73% 3.73% 3.75% 2006 3.89% 4.18% 3.88% 3.88% 3.90% 2007 4.08% 4.36% 4.03% 4.03% 4.05% 2008 4.25% 4.51% 4.21% 4.21% 4.23% 2009 4.37% 4.66% 4.33% 4.33% 4.35% 2010 4.48% 4.78% 4.44% 4.43% 4.46% 2011 4.58% 4.88% 4.53% 4.55% 4.55% 2012 4.75% 5.01% 4.73% 4.70% 4.70% 2013 4.86% 5.11% 4.84% 4.84% 4.87% 2014 4.96% 5.21% 4.94% 4.94% 4.97% 2015 5.06% 5.31% 5.04% 5.04% 5.08% 2016 5.13% 5.38% 5.11% 5.11% 5.14% 2017 5.19% 5.44% 5.17% 5.17% 5.20% 2018 5.24% 5.49% 5.23% 5.22% 5.19% 2019 5.28% 5.53% 5.26% 5.27% 5.23% 2020 5.32% 5.56% 5.29% 5.30% 5.30% 2021 5.32% 5.58% 5.31% 5.32% 5.32% 2022 5.62% 5.36% 5.36% 2023 5.62% 5.36% 5.36% 2024 5.62% 5.42% 5.40% 2025 5.62% 5.42% 2026 5.62% 5.42% 2027 2028 2029 2030
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$9,200,000
City of Lubbock, Texas
Electric Light and Power System
Revenue Bonds, Series 2001
Orders
U.S. Bancorp Piper Jaffray Inc. $3,950,000
Prudential Securities Inc. 4,135,000
Total Orders $8,085,000
Ordinance No. 2001-00043
REPORT OF CERTIFIED PUBLIC ACCOUNTANT
THE STATE OF TEXAS
COUNTY OF LUBBOCK
§
§
§
I, the undersigned, of the firm of Robinson Burdette Martin Seright & Burrows, L.L.P,
Certified Public Accountants, Lubbock, Texas, DO HEREBY MAKE the following report:
1. According to the books and records of the Electric Light and Power System (the
"System") of the City of Lubbock, Texas, the gross revenues, operation and maintenance expenses
and net revenues of the System for the fiscal year ending September 30, 2000 are as follows:
Gross
Revenues
$74,319,918
Maintenance and
Operation Expenses
$66,101,040
Net
Revenues
$8,218,878
2. In our opinion, the net revenues of the System for such fiscal year are equal to at
least one and one-half (1-1/2) times the average annual principal and interest requirements of the
City's outstanding "City of Lubbock, Texas, Electric Light and Power System Revenue Refunding
Bonds, Series 1991A", dated July 15, 1991, "City of Lubbock, Texas, Electric Light and Power
System Refunding Revenue Bonds, Series 1995", dated June 15, 1995, "City of Lubbock, Texas,
Electric Light and Power System Revenue Bonds, Series 1998", dated January 1, 1998, "City of
Lubbock, Texas, Electric Light and Power System Revenue Refunding and Improvement Bonds,
Series 1999", dated January 15, 1999 and the proposed "City of Lubbock, Texas, Electric Light and
Power System Revenue Bonds, Series 2001", dated July 1, 2001, and, further that said net
revenues are equal to at least one and one-fifth (1-1/5) times the maximum annual principal and
interest requirements of all such aforesaid revenue bonds.
(Notary Seal)
#45057174vl<
ROBINSON BURDETTE MARTIN, SERIGHT
& BURROWS L.L.P.
Certified Public Accountants
Notary Public, St